Exhibit 10.2
Management of Foreign Joint Venture
UNIVERSAL SENSORS, INC.
Contract
April 12, 2005
Table of contents
<PAGE>
Chapter 1
General
..........................................................3
Chapter 2
Joint venture parties
............................................3
Chapter 3
The Joint venture.............
...................................4
Chapter 4
The objective of joint venture and operation scope
...............4
Chapter 5
Total registered capital, investment ratio, and method
of
investment.....................................................4
Chapter 6
Responsibilities for each
party...................................5
Chapter 7
Technology transfer & Valuation of technology
....................6
Chapter 8
Board of directors
...............................................6
Chapter 9
Management structure
.............................................7
Chapter 10 The
labor management, the composition of labor union..............8
Chapter 11
Equipment, raw material purchase, commodity inspection
...........8
Chapter 12 Tax
affairs, finance and appropriation of profit .................9
Chapter 13 Term,
disbandment, liquidation of the joint capital .............10
Chapter 14
Insurance
.......................................................10
Chapter 15 The
responsibility for breaking the contract ....................10
Chapter 16 Force
majeure ...................................................11
Chapter 17
Dispute solution
................................................11
Chapter 18
Governing
Laws...................................................11
Chapter 19 The
contract becomes effective and others .......................12
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<PAGE>
Management of Foreign Joint Venture
{UNIVERSAL SENSORS, INC.}
CONTRACT
Chapter One: General
All parties agree to sign this joint venture agreement to set up
"UNIVERSAL
SENSORS, INC." based on the principle of unanimous equality and
benefit, This
agreement complies with "Management of Foreign Joint Venture
Enterprise Law of
the People's Republic of China" and the Chinese relevant laws and
regulations,.
Chapter Two: Joint Venture Parties
Article 2.1: Parties of Joint Venture:
Party A: [TEXT]
(hereinafter "HX")
Registration: Shanghai Business Administrative Management
Bureau
Address: 14 Luo Mountain road, suite 260, Lane1700, Pudong
newly
developed area, Shanghai
Tel: 021-58547577
Fax: 021-58547577
Legal Representative: Hanlin Chen
Position: Chairman of board
Nationality: PRC
Party B: SENSOR
SYSTEM SOLUTIONS, INC. (hereinafter "3S")
Registration: CA, U.S.A.
Address: 45 Parker, Suite A, Irvine, CA 92618, U.S.A.
Tel: 001-949-855-6688
Fax: 001-949-855-6685
Legal Representative:
Michael Young
Position: CEO
Nationality: U.S.A.
Party C: China
Automotive Systems, Inc. (hereinafter "CAAS")
Registration: Hong Kong
Address: Central, HK
Tel: 00852-25267572
Fax: 00852-25267572
Legal Representative: Hanlin Chen
Position: Chairman of board
Nationality: PRC
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<PAGE>
Chapter Three: The
Joint Venture
Article 3.1: All parties agree to establish [TEXT] (hereinafter
"USI"), English
name is: "UNIVERSAL SENSORS, INC." by Chinese-foreign joint venture
management
way.
The joint venture's legal address is: No. 1 Guanshan group 1,
Hun-Lun building,
Wuhan, Hubei Province.
USI can establish branch offices in any cities of China or other
countries, if
it's necessary. But it has to be discussed in the board, and report
to related
authorized government department.
Article 3.2: All of activities of USI must comply with the laws and
related
stipulation of People's Republic of China, and its legitimate
management rights
is protected by People's Republic of China.
Article 3.3: USI is formed by three parties according to the
Chinese law, and is
registered in China as a limited liability company. All parties
will share the
profit, risk and loss proportional to the percentage of its
investment.
Chapter Four: The Objective of Joint Venture and Operation
Scope
Article 4.1: USI's business objective: To achieve satisfactory
financial returns
through funding cooperation and technology transfer, and to
introduce products
that are competitive worldwide in terms of quality and price
through advanced
technology and scientific management. USI's operation scope:
Development,
production and sale of sensor and related electronic products.
USI's is targeted
to produce 4 million sensors annually with an annual sales of
RMB300 millions.
Chapter Five: Total registered capital, investment ratio, and
method of
investment
Article 5.1: USI's total investment is USD 14 millions, registered
capital is
USD 10 millions.
All parties agree to following amount and ratio of investment:
HX will
invest USD 1 millions (10% of the registered capital)
3S will
invest USD 3 millions (30% of the registered capital)
CAAS will
invest USD 6 millions (60% of the registered capital)
Method of Investment:
HX and CAAS will invest in cash, land and building. Cash investment
will be done
in three installments in one year. 3S will invest with technology
and technology
transfer. Refer to "Technology transfer agreement" in the
attachment. The
exchange rate between RMB and foreign monetary is based on the
foreign exchange
rate announced by the National Foreign Exchange Administrative
Bureau at the
pay-in date.
4
<PAGE>
Article 5.2: Each party should use its own funding, assets without
collateral
claims, industrial property, and technology to invest in this joint
venture. Any
investment other than cash will need valid proof.
Article 5.3: None of the parties is allowed to, under USI's name,
take out a
loan, lease equipment or other property to be counted at its
portion of
investment. Any party can use USI's assets or the other party's
asset as
guarantee for its investment.
Article 5.4: The first installment of each party's investment
should be
transferred to USI's account in China within 3 months after the
execution of
this agreement and obtaining the business license for USI. Any past
due payment
will incur a 1% per month interest penalty.
Article 5.5: All pay-in investment has to be verified by an
accountant allowed
to practice in China. USI will issue proof of investment based on
this account's
report.
Article 5.6: If the fund is insufficient during operation, the
capital size can
be increased according to original ratio or a new ratio base on
unanimous
agreement and with government approval.
Article 5.7: USI can not reduce its registration capital during the
term of this
agreement.
Article 5.8: One party will have the first priority to purchase the
ownership of
the other party if the other party is considering selling all or
part of its
ownership.
Article 5.9: None of the parties can sell its ownership to any
other third party
at terms better than the terms offered to the other party. Any
transfer is
invalid if this requirement is not followed.
Chapter Six: Responsibilities for Each Party
Article 6.1: Following are responsibilities of each party:
6.1.1 HX:
(1)
Handle the whole
approval procedures about the establishment of USI,
and deal with all of its registration procedures before
starting
business.
(2)
Provide land and
factory building to USI(or assist USI to choose
factory location).
(3)
Before USI
starts business, HX is responsible for dealing with the
equipment and material import examination and approval procedure
and
the declaration to Chinese customs.
(4)
Is responsible
for the production, the management and the human
resource.
(5)
Before USI
starts business, apply visa for foreign employees, and
provide them the necessary convenient condition about working,
living and traffic transportation.
(6)
Deal with
everything that is included in this contract as well as
other matters that USI authorizes.
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<PAGE>
6.1.2 3S and CAAS:
(1)
Assist to handle
that USI entrusts about purchasing the equipment
and the raw material in the international market and so on the
related matters.
(2)
Responsible for
the product exporting of USI, and provide the
related information in the market.
(3)
Send out
administrators to co-operate with HX to manage USI
together, and also coordinate the production and management
business
of USI.
(4)
Handle other
matters that USI authorizes.
Chapter Seven: The Technology Transfer & Valuation of
Technology
Article 7.1: All parties must sign a technology transfer agreement
in additional
as this contract appendix according to the industry ownership and
the valuation
of technology, and report to original examined government
department to get
approval.
Article 7.2: Any
contracts about technology transfer which is signed by USI and
other companies must get approval from examined government
department.
Chapter Eight: Board of Directors
Article 8.1: The date that business license of USI get approved is
also the date
that the board is established.
Article 8.2: The board will be formed by 3 directors. HX, 3S and
CAAS each can
delegate one director. The chairman of the board will be assigned
by CAAS. The
number of directors can be increased or decreased by the approval
of board of
directors.
Article 8.3: The tenure for the directors of the board is 4 years
and can be
extended by their delegated companies.
Article 8.4: The board is the highest authority organization of
USI. It decides
all of significant matters of USI. Following events must get
identical agreement
by the directors who present in the board meeting:
(1)
Revise bylaws of
USI;
(2)
Disband USI;
(3)
Adjust USI
registration capital;
(4)
Any party
transfers its USI share to others;
(5)
Any party pawns
its USI share to the loaners.
(6)
Merger or
separation of USI;
(7) Mortgage property of
USI;
.............etc.
Article 8.5: Chairman of the board is USI's corporate
representative. When
chairman of the board cannot perform his/
