Shandong Quanxin
Stainless Steel Co.
Joint Venture
Contract
Chapter 1: General
Provisions
“In
accordance with the Laws of the People’s Republic of China on
Joint Ventures Using Chinese and Foreign Investment (the
“Joint Venture Law”) and other relevant Chinese laws
and regulations, Shandong Jinpeng Copper Co., Ltd., and Hong Kong
Hanbang Investment (hereinafter referred to as the
“Parties”), in accordance with the principles of
equality and mutual benefit, and through friendly consultations,
agree to jointly invest to set up a Chinese Foreign Joint Venture
(the “Joint Venture”) in National Hi-Tech Industrial
Development Zone of Zibo, Shandong Province of the People’s
Republic of China.
Chapter 2: Parties of
the Joint Venture
Article
1
Parties
to this Joint Venture Agreement (“Contract”) are as
follows:
Shandong Jinpeng Copper
Co., Ltd., (hereinafter referred to as Party A), registered in
Shandong province, China, and its legal address is at Zouping,
Shandong Province, China.
Legal
representative:
Name:
Zhang Ke
Position:
Chairman
Nationality:
Chinese
Hong Kong Hanbang
Investment, (hereinafter referred to as Party B), registered in
Hong Kong, and its legal address is at Suite #1007-8, Hungshen
Buiding, #77 Chonghong Road, Hong Kong.
Legal
representative:
Name:
Steven Chen
Nationality:
Hong Kong,
China
Chapter 3:
Establishment of the Joint Venture
Article
2
In accordance with the
Joint Venture Law and other relevant Chinese laws and regulations,
both parties agree to set up one Chinese Foreign Joint Venture
limited liability company, the Joint Venture.
Article
3
The name of
the Joint Venture is Shandong Quanxin Stainless Steel Co., Ltd.
Article
4
The registered address
of the Joint Venture is East End of Zhongrun Ave., National Hi-Tech
Industrial Development Zone.
Article
5
All activities of the
Joint Venture shall be governed by the laws, decrees and pertinent
rules and regulations of the People's Republic of China.
Article
6
The organizational form
of the Joint Venture is a limited liability company. Each party to
the Joint Venture is liable to the Joint Venture within the limit
of the capital subscribed by it. The profits, risks and
losses of the Joint Venture shall be shared by the parties in
proportion to their contributions to the registered
capital.
Chapter 4: The
Purpose, Scope and Scale of Production and Business
Article
7
The goals of the Parties
to the Joint Venture are to continue to improve the product
quality, expand production, develop new products, and gain a
greater position in world markets by adopting advanced and
appropriate technology, scientific management methods, and
international marketing efforts. The goal is to make
additional profit by marketing and selling products domestically
and internationally.
Article
8
The business scope of
the Joint Venture is to produce stainless steel tubes/strips,
stainless steel sheets/plates and other stainless steel
products.
Article
9
The production capacity
of the Joint Venture is expected to reach 60,000 tons of stainless
steel products per year after the Joint Venture received the
investments from the Parties.
Chapter 5: Total
Amount of Investment and the Registered Capital
Article
10
The total
amount of investment of the Joint Venture is $US
29,600,000.
Article
11
The registered capital
of the Joint Venture shall be $US 26,600,000, of which:
Party A has $US
13,300,000, accounting for 50%;
Party B has $US
13,300,000, accounting for 50%.
The discrepancy between
the Total Investment Amount and the Registered Capital is to be
made by Joint Venture obtaining a loan from the third
party.
Article
12
Party A will fulfill its
investment in the Joint Venture by contributing cash in sum into JV
bank account within 6-month of the issuance of business
license.
Party B will also
fulfill its investment in the Joint Venture by contributing cash in
sum into JV bank account within 6-month of the issuance of business
license.
Article
13
If a Party receives an
acceptable offer for all or a part of its interest in the Joint
Venture from a third party, the receiving party is required to
obtain the approval of the other party and then submit to the
registration authority for its approval. Furthermore, the
other party has the preemptive rights to purchase the whole or
partial shares.
Chapter 6:
Responsibilities of Each Party to the Joint Venture
Article
14
Party A and Party B
shall be respectively responsible for the following
matters:
Party A:
1.
Handling of applications
for approval, registration, business license and other matters
concerning the establishment of the Joint Venture from relevant
departments in China;
2.
Processing the
application for the right to the use of a site to the authority in
charge of the land;
3.
Providing its cash
contribution as required under Articles 10, 11 & 12;
4.
Assisting foreign
workers and staff in applying for entry visas, work licenses and
handling their travel procedures;
5.
Responsible for handling
other matters as requested by the Joint Venture.
Party B:
1.
Providing its cash
contribution as required under Articles 10, 11 & 12;
2.
Assisting the Joint
Venture in recruiting Chinese management personnel, technical
personnel, workers and other personnel as needed;
3.
Assisting the Joint
Venture in expanding international markets and in all foreign
affairs;
4.
Responsible for handling
other matters as requested by the Joint Venture.
Chapter 7:
Sales
Article
15
The products of the
Joint Venture shall sell in both domestic and international market,
in which the international market will account for 30% of the total
sales.
Article
16
The product logo of the
Joint Venture shall be approved by the Board of
Directors.
The date of registration
of the Joint Venture shall be the date of the establishment of the
Board of Directors of the Joint Venture.
Chapter 8: The Board
of Directors
Article
17
The Board of Directors
is comprised of five directors, of which three shall be appointed
by Party A, and two by Party B. The chairman of the board
shall be appointed by Party A, and its vice-chairman by Party B.
The term of office for the directors, chairman and
vice-chairman is four years, and their term of office may be
renewed if re-appointed by the relevant party.
Article
18
The highest authority of
the Joint Venture shall be its Board of Directors. A 2/3
majority call shall decide all issues concerning the Joint Venture.
Unanimous approval shall be required for the following major
issues;
1.
Amendment of the
Articles of Association;
2.
Dissolution of the Joint
Venture;
3.
Adjustment of the
registered capital of the Joint Venture; and
4.
Merger of the Joint
Venture with another organization.
At least one director
from each party shall attend the directors’
meeting.
Article
19
The Chairman of the
Board is the legal representative of the Joint Venture.
Should the chairman be unable to exercise his
responsibil
