AMENDMENT AGREEMENT
TO THE CONTRACT AND ARTICLES OF ASSOCIATION
OF GUANGDONG UT STARCOM COMMUNICATIONS CO. LTD.
Party A: Guangdong South Communication Group Co., China
Party B: UT Starcom Inc., USA
In accordance with the Laws of the People's Republic of China on Joint
ventures Using Chinese and Foreign Investment and the relevant regulations of
its Implementations, Party A and Party B enter into agreement to amend the
contract and articles of association as following:
Part One: Party A and Party B enter into the following complementation
agreement on the amendment of the relevant articles in the
original contract of Guangdong UT Starcom Communication Co. Ltd:
1. Article 5 in original contract 'The Joint Venture Company produces,
sells associated products of communication subscriber access network
system, provides maintenance and service of products, studies and
develops new products' is revised into 'The Joint Venture Company
designs, develops, assembles, produces, sells and installs hardware and
software of system (including wireless access network and cable access
network), optical terminal equipment, intelligence value-adding business,
personal communication and multi-media, data and information network and
other communication systems, and provides maintenance, repair, and
technical consultation and services of its own products.'
2. Article 6.1 of the original contract 'the total investment of the Joint
Venture company is [*] and the registered capital is [*]. The investment
of Party A is [*], accounting for 51% of the total investment and the
investment of Party B is [*], accounting for 49% of the total
investment. Party A contributes 1,224,000 US dollars to the registered
capital, accounting for 51% and Party B contributed 1,176,000 US dollars,
accounting for 49% of the registered capital' is revised into 'both the
total investment and the registered capital are 4,000,000 US dollars.
Party A's investment and contribution to the registered capital is
1,960,000 US dollars, accounting for 49% of the total investment and
registered capital. Party B's investment and contribution to registered
capital is 2,040,000 US dollars, accounting for 51% of the total investment
and registered capital.'
3. Article 10.1 of the original contract 'other matters shall be decided by
majority's approval' is revised into 'the holding of Board meetings
requires the participation of four-fifths of Directors. Directors
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
may present appointment letters to instruct someone else to attend the
meeting and vote on their parts. Except for matters which must be
unanimously approved by Directors attending the Board meeting in
accordance with the Laws of the People's Republic of China on Joint
Ventures Using Chinese and Foreign Investment, the drawing of the three
types of funds of the Joint Venture Company and the profit distribution
plans shall require the approval of four-fifths of the Directors who
attend the Board meeting. Other matters shall be decided with the
approval of one-seconds of the votes.''
4. Article 11.2 'Deputy General Manager shall be nominated by General
Manager and appointed by Board of Directors' is revised into 'Deputy
General Manager shall be nominated by Party A and appointed by Board of
Directors.'
5. Article 11.3 is revised into 'General Manager is responsible for the
management organization of The Joint Venture Company and in charge of
the implementation of the resolutions of Board of Directors and of the
routine operation and management of the Joint Venture Company. Important
matters shall be decided by General Manager and Deputy General Manager
together. Deputy Manager shall assist the General Manager and shall take
his or her place when he or she is unable to fulfill his or her duties.'
The duties of the General Manager:
(1). Formulating operation and management regulations and taking
corresponding measures to ensure that the regulations shall be observed
and carried out by all departments in accordance with the policies
adopted by Board of Directors;
(2). Formulating and being responsible for every operation and management
plan and ensure its execution;
(3). Organizing activities of the Joint Venture Company according to the
rules and regulations of the Joint Venture Company;
(4). Achieving the financial plans of the Joint Venture Company in accordance
with the operation plans approved by Board of Directors;
(5). Deciding the appointment and removals of other management staff and
workers;
(6). Executing the annual operation plans ratified by Board of Directors;
(7). Regularly report the operation status to Board of Directors, including
the forecast of future operation activity, important opportunities and
existing market competition status;
(8). Being responsible for external affiliation, executing every documents of
the Joint Venture Company and fulfilling other duties appointed by Board
of Directors.
The duties set by (1) and (6) shall be carried out together by General
Manager and Deputy General Manager. In case the General Manager and
Deputy General Manager fail to enter into agreement, the relevant
matters shall be submitted to Board of Directors.
6. Article 11.6 is revised into 'General Manager and Deputy General Manager
shall not hold the same positions in economic organizations besides
Party A and Party B. The Directors, General Manager,
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
Deputy General Manager shall not participate in other economic
organizations in competition with the Joint Venture Company.'
7. Article 16.2 'the termination before the end of the time limit of the
Joint Venture Company or the Cancellation of the contract shall be
approved unanimously by Board of Directors and shall be submitted to
examination and approval authority for approval' is shifted after
'unable to continue the operation' and 'the Observant Party may apply
for the approval of the original examination and approval authority to
dismiss the Joint Venture Company or look for other joint venture
partners to undertake the delinquent party's rights and obligations in
the joint venture contract, and may also claim the delinquent party's
not paying or not paying enough contributed capital in accordance with
the laws' shall be added to the end of the article.
Part Two: Party A and Party B enter into the following complementation
agreement on the amendment of the relevant articles in the
original articles of association of Guangdong UT Starcom
Communication Co. Ltd:
1. Article 5 of the original articles of association 'The Joint Venture
Company produces, sells associated products of communication subscriber
access network system, provides maintenance and service of products,
studies and develops new products' is revised into 'The Joint Venture
Company designs, develops, assembles, produces, sells and installs
hardware and software of system (including wireless access network and
cable access network), optical terminal equipment, intelligence
value-adding business, personal communication and multi-media, data and
information network and other communication systems, and provides
maintenance, repair, and technical consultation and services of its own
products.'
2. Article 10 of the original articles of association 'the contribution of
Party A and Party B is set below: Party A contributes [*], accounting
for 51% of the registered capital and Party B contributes [*],
accounting for 49% of the registered capital' is revised into 'Party A
contributes 1,960,000 US dollars, accounting for 49% of the registered
capital and Party B contributes 2,040,000 US dollars, accounting for 51%
of the registered capital.'
3. Article 30 of the original articles of association 'the following matters
shall have the approval of four-fifths of Directors of Board: the
drawing of the three types of funds of the Joint Venture Company and
the profit distribution plans. Other matters shall be decided by the
majority's approval of the Directors' is revised into the following
matters shall have the approval of four-fifths of Directors of Board:
the drawing of the three types of funds of the Joint Venture Company and
the profit distribution plans. Other matters shall be approved by
one-second of the votes.'
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4. Article 32 'Deputy General Manager shall be nominated by General Manager
and appointed by Board of Directors' is revised into 'Deputy General
Manager shall be nominated by Party A and appointed by Board of
Directors.'
5. Article 33 is revised into 'General Manager is responsible for the
management organization of The Joint Venture Company and in charge of the
implementation of the resolutions of Board of Directors and of the
routine operation and management of the Joint Venture Company. Important
matters shall be decided by General Manager and Deputy General Manager
together. Deputy Manager shall assist the General Manager and shall take
his or her place when he or she is unable to fulfill his or her duties.'
The duties of the General Manager:
(1). Formulating operation and management regulations and taking
corresponding measures to ensure that the regulations shall be
observed and carried out by all departments in accordance with the
policies adopted by Board of Directors;
(2). Formulating and being responsible for every operation and management
plan and ensure its execution;
(3). Organizing activities of the Joint Venture Company according to the
rules and regulations of the Joint Venture Company;
(4). Achieving the financial plans of the Joint Venture Company in
accordance with the operation plans approved by Board of Directors;
(5). Deciding the appointment and removals of other management staff and
workers;
(6). Executing the annual operation plans ratified by Board of Directors;
(7). Regularly report the operation status to Board of Directors,
including the forecast of future operation activity, important
opportunities and existing market competition status;
(8). Being responsible for external affiliation, executing every
documents of the Joint Venture Company and fulfilling other duties
appointed by Board of Directors.
The duties set by (1) and (6) shall be carried out together by General
Manager and Deputy General Manager. In case the General Manager and
Deputy General Manager fail to enter into agreement, the relevant
matters shall be submitted to Board of Directors.
6. Article 36 is revised into 'General Manager and Deputy General Manager
shall not hold the same positions in economic organizations besides
Party A and Party B. The Directors, General Manager, Deputy General
Manager shall not participate in other economic organizations in
competition with the Joint Venture Company.'
7. Article 38 'the Accounts Regulations of the People's Republic of China
on Joint Ventures Using Chinese and Foreign Investment' is revised into
'the Accounts Regulations of the People's Republic of China on Foreign
Investment Enterprises.'
8. Article 47 'the Detailed Implementation Rules of the Income Tax Law of
the People's Republic of China on Joint Ventures Using Chinese and
Foreign Investment' is revised in 'the Detailed
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
Implementation Rules of the People's Republic of China on Foreign
Investment Enterprises and Foreign Company.'
9. Article 48 'the Provisional Regulations of the People's Republic of
China on Foreign Currency Administration' is revised into 'the
Regulations of the People's Republic of China on Foreign Currency
Administration.'
10. Article 53 'the Labor Management Regulations of the People's Republic of
China on Joint Ventures Using Chinese and Foreign Investment' is revised
into 'the Labor Management Regulations of the People's Republic of China
on Foreign Investment Enterprises.'
Part Three: Party A and Party B enter into agreement that the amendment of
the original contracts and articles of association shall become
effective after the approval and maintenance of the file of the relevant
authorities concerned.
Part Four: This agreement is made out in duplicate. Each party shall hold one
copy.
Party A: Guangdong South Communication Party B: UT Starcom Inc., USA
Group Co., China
Representative: Representative:
Date: December 11, 1997 Date: December 11, 1997
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
Contract and Articles of Association - Guangdong UT Starcom Communications Co. Ltd.
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