JOINT VENTURE CONTRACT OF MANUFACTURER OF PRODUCTS This contract is made on the date of between Shanghai Building Materials Import Export Corporation organized under the laws of the Peoples Republic of China, having its principle office at
JOINT VENTURE CONTRACT OF MANUFACTURER OF PRODUCTS
This contract is made on the date of between Shanghai Building Materials Import & Export Corporation organized under the laws of the People’s Republic of China, having its principle office at Shanghai, the People’s Republic of China (hereinafter called Party A) of the First Part. And The Global Construction Supplies Company organized under the laws of the USA, having its principle office at … Ohio, USA, (hereinafter called Party B) of the Second Part.
按照中华人民共和国法律组成的上海建筑材料进出口公司，其总公司在中华民共和国，上海市,为第一方（以下简称甲方）与 受制于美国法律的环球建筑物资供应公司，其总公司在美国，俄亥俄州，为第二方（以下简称乙方）于 订立本合同。
WHEREAS Party A desires to use Party B `s technology and trademark to manufacture and sell Road Marks in China and overseas markets;
WHEREAS Party B desires to co-operate with Party A to manufacture and sell Road Marks in China and overseas markets, and
WHEREAS both parties consider these objectives can best be achieved by the formation of a joint venture company under the relevant laws, rules, and regulations of the People’s Republic of China;
NOW THEREFOF, in consideration of the premises and the covenants described hereinafter, Party A and Party B agree as follows:
Article 1 ESTABLISHMENT OF THE JOINT VENTURE COMPANY
1.1 In accordance with the Law of the People’s Republic of China on Joint Venture Using Chinese and Foreign Investment and other relevant Chinese laws and regulations, both parties agree to set up a joint venture limited liability company (hereinafter called the joint venture company ).
1.2 The Chinese name of the joint venture company, as agreed upon, is Highway construction materials supply company.
1.3 The English name of the joint venture company, as agreed upon, is Superhighway Construction Supplies Company (abbreviated as SCSC ).
双方同意该合营公司的英文名称为Superhighway Construction Supplies Company(缩略为SCSC)。
1.4 The principle of SCSC and its registered address is … Shanghai, the People’s Republic of China.
1.5 The organization of the joint venture company is a limited liability company. Each party to the joint venture company is liable to the joint venture company within the limit of the capital subscribed by it. The profits, risks and losses of the joint venture company shall be shared by the parties in proportion to their contributions of the registered capital.
1.6 The expenses of incorporation shall be shared equally between Party A and Party B.
1.7 All activities of the joint venture company shall be governed by the laws, decrees and pertinent rules and regulations of the People’s Republic of China.
Article 2 PURPOSE, SCOPE AND SCALE OF PRODUCTION AND BUSINESS
2.1 The purpose of the parties to the joint venture is in conformity with the wish of enhancing the economic cooperation and technology exchanges, improving the product quality, developing new products, and gaining competitive position in the world market in quality and price by adopting advanced and appropriate technology and scientific management so as to raise economic results and ensure satisfactory economic benefits.
2.2 The productive and business scope of the joint venture company is to manufacture Road Marks, provide instructions and directions for construction, collect quality data from practical use for research and improvement.
2.3 The production capacity in the first 12 months after the joint venture company put into operation is
In the second 12 months when the component parts are produced by the joint venture company itself, the production capacity is With the development of production and successful operation, the variety of product may be increased to kinds.
合营公司开始生产后首期12个月的生产力为 。当合营公司自己生产零部件时，第二期12个月的生产力为 。随着生产和经营有成效地发展，产品品种可能会增加到 种。
Article 3 REGISTERED CAPITAL第三条 注册资本
3.1The registered capital of the joint venture company is Renminbi Yuan (equivalent to US $ 10,000,000.-), which will be contributed by Party A and Party B equally.
Party A`s contribution甲方投资
Premises (to be evaluated by joint group) 厂房（由合营双方联合组织进行评估）
Machines and equipment机器、设备
Total (accounting for 50% of the registered capital) 总计（占注册资本50%）
Party B’s contribution乙方投资
Cash (to be converted from US dollars according to the exchange rate in effect on the data this Contract becomes effective)
Technology (including technical data, know-how and trademark, to be evaluated by joint group)
Component parts supplied供应零部件
in the first 12 months首期12个月
Total (accounting for 50% of the registered capital) 总计（占注册资本50%）。
3.2 The total investment shall be fully made within 12 calendar months commencing from the date on which the business license is issued to and obtained by the joint venture company. To
facilitate construction of the factory premises, an initial investment is to be made in cash by Party A and Party B each amounting to Renminbi …Yuan, which shall be paid within one month after the incorporation of the joint venture company (i.e. after the business license is issued and obtained). The balance of the investment including the evaluation of property and the right to the use of land, etc. shall be fulfilled within the aforementioned 12 calendar months.
3.3 In case any party to the joint venture intends to assign all or part of its investment subscribed to a third party, consent shall be obtained from the other party to the joint venture, and approval from the examination and approval authorities is required. When one party to the joint venture assigns all or part of its investment, the other party shall have the preemptive right to purchase.
Article 4 BOARD OF DIRECTORS第四条 董事会
4.1 The date of registration of the joint venture company shall be the date of the establishment of
the board of directors of the joint venture company.
4.2 The board of directors is composed of six directors, of which three shall be appointed by Party A, three 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. Their terms of office may be renewed if continuously appointed by the relevant party.
4.3 The highest authority of the joint venture company shall be its board of directors. It shall decide all major issues concerning the joint venture company. Unanimous approval shall be required before any decisions are made on major issues. As for other matters, approval by majority or a simple majority shall be required.
4.4 The chairman of the board is the legal representative of the joint venture company. Should the chairman be unable to exercise his responsibilities for some reasons, he shall authorize the vice chairman or any other directors to represent the joint venture company temporarily.
4.5 The board of directors shall convene at least one meeting every year. The meeting shall be called and presided over by the chairman of the board. The chairman may convene an interim meeting based on a proposal made by one third of the total members of directors. Minutes of meeting shall be placed on file.
Article 5 BUSINESS MANAGEMENT OFFICE第五条 经营管理机构
5.1 The joint venture company shall establish a management office which shall be responsible for its daily management. It shall have a general manager, appointed by Party A, and a deputy general manager, appointed by Party B. Their terms of office are four years.
5.2 The responsibility of the general manager is to carry out the decisions of the board of directors and organize and conduct the routine work of the joint venture company. The deputy general manager shall assist the general manager in his work.
5.3 In case of graft or serious dereliction of duty on the part of the general manager and/or the deputy general manager, the board of directors shall have the power to dismiss them at any time.
Article 6 RESPONSIBILITIES OF PARTIES第六条 合营各方的责任
Responsibilities of Party A甲方责任：
6.1 to apply for and obtain the business license, to make tax registration and obtain all possible tax reductions and exemptions according to the laws of the People’s Republic of China;
6.2 to organize construction of the factory premises, to install machinery & equipment, to settle the fundamental facilities, such as water, electricity, communication and transportation etc. ;
6.3 to obtain necessary entry visas for foreign staff and workers and provide convenience for their traveling on business in China;
6.4 to recruit Chinese staff, engineers, technicians, workers and translators;
6.5 to apply to the Bank of China or any other banks approved by the State Administration of Exchange Control for the opening of foreign currency and Renminbi accounts;
Responsibilities of Party B 乙方责任
6.6 to expedite shipment of machinery, equipment and component parts; to provide technology and send technical personal for installing, testing and inspecting;
6.7 to train Chinese technical personnel and workers at Party B’s plants and/or other locations agreeable to both parties according to the training programs duly agreed upon;
6.8 to solve problems concerning technology, operation and management, which may arise in the course of production;
6.9 to collect appropriate scientific and technical information as well as economic and legal information that may be of use to the normal operation of the joint venture company.
Article 7 PURCHASE OF NEEDFUL MATERIALS第七条 购买所需材料
7.1 In purchase of required raw materials, fuel, parts, means of transportation and articles for office use, the joint venture company shall give first priority to purchase in China where conditions are the same.
7.2 In case the joint venture company entrusts Party B to make purchases on overseas markets, persons appointed by Party A shall be invited to take part in the purchasing.
Article 8 SALE OF PRODUCTS第八条 产品的销售
8.1 The product of the joint venture company shall be sold both on Chinese market and on oversea market. The export part accounts for 50%, whereas the other 50% is for domestic market. Party B shall be responsible for the sale of the products abroad.
8.2 The joint venture company may directly sell its products on the international market. It may also sign sales contracts with Chinese or foreign trade companies, entrusting them to be its sales agents.
8.3 The joint venture company may set up sales branches both in China and abroad subject to the approval of the relevant Chinese Department. The function of the sales branches, besides sales, is to collect user’s comments on product quality and give instructions for the correct use of the products.
Article 9 LABOUR MANAGEMENT第九条 劳动管理
9.1 Labor contract covering employment, dismissal and resignation of the staff and workers of the joint venture company, and their production tasks, wages, awards and punishment, holidays and paid leaves of absence, labor insurance and welfare benefits, labor protection, labor discipline and other matters shall be signed between the joint venture company and the Trade Union of the company as a whole, or between the company and its staff and workers on an individual basis in accordance with the “Regulations of the People`s Republic of China on Labor Management in Chinese-Foreign Joint Ventures”.
9.2 The labor contract duly signed shall be filled with the local labor management authorities.
9.3 The appointment of high-ranking administrative personnel recommended by both parties, their salaries, social insurance, welfare and the standard of traveling expenses, etc. shall be decided by the board of directors.
Article 10 TAXES, FINANCE AND AUDIT第十条 税务、财务、审计
10.1 The joint venture company shall pay taxes in accordance with the stipulations of Chinese laws and other relevant regulations.
10.2 Staff and workers of the joint venture company shall pay individual income tax according to the “Individual Income Tax Law of the People’s Republic of China.”
10.3 The joint venture company shall establish its accounting system in accordance with the relevant regulations for financial accounting in China.
10.4 The fiscal year of the joint venture company shall be from January 1 to December 31. All vouches, receipts, statistics statements and reports, account books shall be written in Chinese. English may be used concurrently with mutual consent.
10.5 Financial checking and examination of the joint venture company shall be conducted by an auditor registered in China. Reports shall be submitted to the board of directors and the general manager.
10.6 The manager of the joint venture company shall , within 30 days after the end of its fiscal year, prepare an annual financial statement to be submitted to the board of directors for examination and approval. The financial statement shall include a balance sheet, profit and loss statement audited and certified as true and correct by an auditor registered in China.
Article 11 DURATION OF THE JOINT VENTURE第十一条 合资经营期限
The duration of the joint venture company is TEN years commencing from the date on which the business license of the joint venture company is issued. It may be extended for FIVE years upon mutual consent. The application for the extension of the duration shall be submitted to the examination and approval authority SIX months prior to the expiry date of the joint venture company.
Article 12 TERMINATION AND LIQUIDATION第十二条 停业和清理
12.1 In case of inability to fulfill the contract or to continue operation due to heavy losses in successive years as a result of force majeure, the duration of the joint venture contract shall be terminated before its expiration after unanimously agreed upon by the board of directors and approved by the original examination and approval authority.
12.2 Should the joint venture company be unable to continue its operation or achieve the business purposes stipulated in the contract on account of the fact that one of the contracting parties fails to fulfill its obligation or seriously violates the stipulations of the contract and article of association, the other party shall have the right to terminate the contract. The termination shall be approved by the original examination and approval authority.
12.3 Liquidation and the distribution of the liquidated assets shall be carried out in accordance with the contract stipulations and the relevant laws and regulations of the People’s Republic of China.
Article 13 ASSIGNMENT第十三条 转让
Assignment may be made if it is agreed upon by both parties as stipulated in Art. 3.3. However, it (the assignment) shall neither interrupt the normal operation nor affect the organization structure of the joint venture company during the process of assignment.
Article 14 INSURANCE第十四条 保险
During the term of this contract the joint venture company shall effect insurance against various risks preferably with the People’s Insurance Company of China, which handles claims promptly and equitably.
Article 15 FORCE MAJEURE第十五条 不可抗力
Should either party be prevented from executing the contract owing to an event of force majeure, such as earthquake, typhoon, flood, fire, explosion, war, insurrection, epidemic and quarantine restriction, the prevented party shall immediately notify the other party by telex or fax, and within 15 days thereafter provide a certificate issued by the relevant government authorities confirming such force majeure and explaining the reason for its inability to execute or delay the execution of all or part of this contract. Both parties shall therefore, through friendly consultations, decide whether to terminate the contract before its expiration or to delay executing all or part of this contract or exempt part of the contract obligations for implementation according to the effects of the event. If decision is made to continue the contract, the time for execution shall be extended by a period equal to the period of the delay caused by such force majeure.
Article 16 AMENDMENT AND ALTERATION第十六条 修改和变更
Amendments to and alteration of this contract or its appendices shall become effective only after a written agreement signed by both parties and approved by the original examination and approval authority.
Article 17 SETTLEMENT OF DISPUTES第十七条 正义的解决
Any disputes arising from the execution of, or in connection with the contract shall be settled through friendly consultations between the two parties. In case such consultations fail to settle the disputes, then the disputes shall be submitted for arbitration. In China, the arbitration shall be conducted by the Foreign Economic & Trade Arbitration Commission of the China Council for the Promotion of International Trade in accordance with its rules of
procedure, or the arbitration shall take place in a third country agreed upon by both parties in accordance with the rules of procedure of that country.
Article 18 APPLICABLE LAW第十八条 适用法律
The formation of this contract, its validity, interpretation, execution and settlement of disputes shall be governed by the relevant laws and regulations of the People’s Republic of China.
Article 19 LANGUAGE第十九条 文字
The contract shall be written in Chinese version and in English version. Both versions are equally authentic. In the event of any discrepancy between the two aforementioned versions, the Chinese version shall prevail.
IN WITNESS WHEREOF, the parties have executed this contract in quadruplicate by their duly authorized representatives as of the date first above written.
Party A: 甲方 Party B: 乙方