{"id":42794,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/sino-foreign-guangdong-utstarcom-telecommunication-co-ltd-joint.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"sino-foreign-guangdong-utstarcom-telecommunication-co-ltd-joint","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/sino-foreign-guangdong-utstarcom-telecommunication-co-ltd-joint.html","title":{"rendered":"Sino-Foreign Guangdong UTStarcom Telecommunication Co. Ltd. Joint Venture Contract &#8211; Chinese Guangdong Nanfang Telecommunication Group Co. and UTStarcom Inc."},"content":{"rendered":"<pre>\n                           SINO-FOREIGN JOINT VENTURE\n\n                 GUANGDONG UTSTARCOM TELECOMMUNICATION CO. LTD.\n\n\n                                    CONTRACT\n\nARTICLE 1 GENERAL\n\n         In accordance with the 'Law of the People's Republic of China\nSino-Foreign Equity Joint Venture enterprise' and other relevant laws and\nregulations, Chinese Guangdong Nanfang telecommunication Group Co. and UTStarcom\nInc., adhering to the principle of equality and mutual benefit, agree to jointly\ninvest to set up a joint venture enterprise. The contract hereunder worked out.\n\nARTICLE 2 PARTIES OF THE JOINT VENTURE\n\n         Chinese Guangdong Nanfang telecommunication Group Co. (hereafter\nreferred to as Party A), registered with Guangzhou City of Guangdong province in\nChina, and its legal address is at Guangzhou City.\n\n         Legal representative:      Name: Li Yisheng\n\n                                    Position: Chairman of the board\n\n                                    Nationality: China\n\n         UTStarcom Inc. (hereafter referred to as Party B), registered in\nU.S.A., and its legal address is at Alameda, California, U.S.A.,\n\n         Legal representative:      Name: Lu Hongliang\n\n                                    Position: CEO\n\n                                    Nationality: U.S.A.\n\nARTICLE 3 ESTABLISHMENT OF JOINT VENTURE COMPANY\n\n         3.1 In accordance with the 'Law of the People's Republic China on\nSino-Foreign Equity Joint Ventures Enterprise' and other relevant laws and\nregulations, both parties of the Joint venture agree to set up a equity joint\nventure company in business of manufacturing and operating telecommunication\nequipment.\n\n\n                                       -1-\n\n\n\n         3.2 The name of joint venture company is Guangdong UTStarcom telecom\nCo. Ltd. The name in English is: GUANGDONG UT STARCOM TELECOM CO. LTD. The legal\naddress of the joint venture company is No. 4, JiangBei YunShan DongLu, Huizhou\nCity, Guangdong province, P.R.C.\n\n         3.3 All activities of the joint venture company shall be governed by\nthe laws, decrees and pertinent rules and regulations of the People's Republic\nof China.\n\n         3.4 The organization form of the joint venture company is a limited\nliability company. The profit, risks and losses of the joint venture company\nshall be shared by the parties in proportion to their contributions of the\nregistered capital.\n\nARTICLE 4 THE PURPOSE OF THE JOINT VENTURE COMPANY\n\n         The joint venture company will operate on the basis of fair, legality,\nequality, mutual benefit, and enhance the economic cooperation and technical\nexchanges, to raise economic results and ensure satisfactory economic benefits\nfor each party by improving the product quality, decreasing the cost, quickly\ndelivery, and improving after-sale service, and gaining competitive position in\nthe world market and national market through advanced, appropriate and\nscientific management. \n\nARTICLE 5 THE PRODUCTS AND BUSINESS SCOPE\n\n         The joint venture company manufacture and operate telecom subscriber \naccess network set product, provide maintenance service after the sale of the \nproducts; research and develop new products. The production scale may be: \noutput value for the year 1996 is [*]; output value for the year 1997 is [*]. \nThe production scale may be increased with needs of the market. \n\n         5.1 Starting period: joint manufacture and sale of optical terminal \nproducts [*] by using [*] technology; digital loop carrier system [*]; \nhigh-rate digital subscriber lines HDSL; Access network systems [*] and [*]; \nproducts used for the connection of intelligent network and other products \nrelevant to subscriber access network.\n\n         5.2 Joint develop manufacture period: manufacture and sale of access \nnetwork systems incorporating digital loop system [*] and other subscriber \naccess products.\n\n         5.3 The products manufactured and operated by the joint venture company\nshall be exclusive in [*] market and both parties shall not solely or with other\nthird party to establish a company to manufactured and sale the same products\nthe joint venture company manufactured.\n\nARTICLE 6 TOTAL AMOUNT OF INVESTMENT AND THE REGISTERED CAPITAL\n\n         6.1 The total amount of investment of the joint venture company is \n[*]. The registered capital is US$2.4 million. Party A shall invest [*], \naccounting for 51% of the total amount of investment, and Party B shall \ninvest [*], accounting for 49% of the total amount of investment. \n\n[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY \nWITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT \nTO THE OMITTED PORTIONS.\n\n                                       -2-\n\n\n\n\nParty A will pay [*], accounting for 51% of the registered capital; and \nParty B will pay [*], accounting for 49% of the registered capital.\n\n         6.2 Party A shall contribute the ReiMinBi equivalent to be determined\nin accordance with the quoted rate of exchange published by the people's bank of\nChina on the month of payment. Party B shall contribute US dollar in cash.\n\n         6.3 The registered capital shall be paid in two installments. The first\ninstallment shall be remitted amount of [*] within [*] after the date\nof issuance of the joint venture company's business license. The second\ninstallment will be [*], it shall be remitted within [*] after the date\nof issuance of the business license. \n\n         6.4 The net profit at the end of the year shall be determined in\naccordance with the quoted rate of exchange for RMB and USD published by the\npeople's bank of China.\n\n         6.5 In case any party to the joint venture intends to assign all or\npart of his investment subscribed to a third party, consent shall be obtained\nfrom the other party to the joint venture, and approval from the examination and\napproval authority is required. When one party to the joint venture assigns all\nor part of his investment, the other party has preemptive right.\n\nARTICLE 7 RESPONSIBILITY OF EACH PARTY TO THE JOINT VENTURE\n\n         7.1 Responsibilities of Party A:\n\n         -        Handling applications for approval, registration, huskiness\n                  license; Organizing the design and decoration of the\n                  engineering facilities of the joint venture company; and\n                  handling processing import and export Customs declaration and\n                  transportation within Chinese territory;\n\n         -        Assisting the joint venture in recruiting Chinese management\n                  personnel, technical personnel, workers and other personnel\n                  needed;\n\n         -        Assisting the joint venture in developing domestic products\n                  market; \n\n         -        Assisting foreign workers and staff in applying for the entry\n                  visa;\n\n         -        Responsible for handling other matters entrusted by the joint\n                  venture company.\n\n         7.2 Responsibilities of Party B:\n\n         -        Handling selecting advanced and suitable equipment and\n                  providing relative information, selecting good quality and\n                  importing good quality equipment;\n\n         -        The importing contract shall be approved by the board of\n                  meeting and send to the authority for control;\n\n[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY \nWITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT \nTO THE OMITTED PORTIONS.\n\n                                       -3-\n\n\n\n         -        Providing free manufacturing technology for the current\n                  products and training for the management of the joint venture\n                  company.\n\n         -        Responsible for handling other matters entrusted by the joint\n                  venture company.\n\nARTICLE 8\n\n         8.1 Party B is possessed of the starting products technology, and\nresponsible for passing on the technology to the technical personnel of the\njoint venture company; the joint venture company and Party A shall not disclose\nor licenses the starting technology. The technology developed after the joint\nventure company established shall be possessed by the joint venture company.\nParty A and Party B shall not disclose and license the technological secrets.\n\n         8.2 Party A responsible for the provide market for the products of the\njoint venture company, especially in Guangdong. In the same conditions, the\nproducts of the joint venture company shall be given priority for using in\nGuangdong province. And Party A shall assist to the joint venture company to\npublicize the products and extend influence.\n\nARTICLE 9 SELLING OF PRODUCTS \n\n         9.1 The products of joint venture company will be sold both on the\nChinese market and on overseas market, the export part accounting for [*], [*]\nfor domestic market. With the development of the production scale, the\nproportion of the export will be increased. \n\n         9.2 The market for the products of the joint venture company will \nbased in Guangdong and radiate to [*].\n\nARTICLE 10 THE BOARD OF DIRECTORS \n\n         10.1 The date of registration of the joint venture company shall be the\ndate of the establishment of the board of directors of the joint venture\ncompany. The board of directors are composed of five directors, of which 3 shall\nbe appointed by Party A, 2 shall be appointed by Party B. The chairman of the\nboard shall be appointed by Party A, and its vice-chairman by party B. The\nhighest authority of the joint venture company shall be its board of directors.\nIt shall decide all major issues. As for other matters, approval by majority\nshall be required. The chairman of the board is the legal representative of the\njoint venture company. Should the chairman be unable to exercise his\nresponsibilities for some reasons, he shall authorize the vice-chairman or any\nother directors to represent the joint venture company temporarily.\n\n         10.2 The board of directors shall convene at least one meeting every\nyear. The meeting shall be called and presided over by the chairman of the\nboard. The chairman may convene an interim meeting based on a proposal made by\nthree third of the total number of directors. Minutes of the meeting shall be\nfiled.\n\n[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY \nWITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT \nTO THE OMITTED PORTIONS.\n\n                                       -4-\n\n\nARTICLE 11 BUSINESS MANAGEMENT\n\n         11.1 The joint venture company shall establish a management office as\nfollows: General manager Office, development department, marketing department,\nfinancial department, production department. With the development of the\nbusiness, the joint venture company may set up office or branch overseas and\nHong Kong area.\n\n         11.2 The joint venture company shall have a general manager, appointed\nby Party B, two deputy general managers, appointed by the general manager,\ninvited by the board of directors.\n\n         11.3 The responsibility of the general manager is to report to the\nboard of directors and carry out the decision of the board meeting and organize\nand conduct the daily manufacture, technology and management of the joint\nventure company. The general manager represent the joint venture company within\nthe scope of authorized by the board of directors. And the general manager have\nright to appoint and remove personnel's and conduct other duty authorized by the\nboard of directors. Deputy managers shall assist the work of the general\nmanager. In case the general manager unavailable, deputy managers shall\nrepresent the duty of the general manager. \n\n         11.4 The term of office for the general manager and the deputy managers\nis four years whose term of office may be renewed if continuously invited by the\nboard of directors.\n\n         11.5 The Chairman, Vice Chairman and other Directors may hold posts\nconcurrently as General Manager, Deputy General Manager and other high-level\npositions appointed by the Board of Directors.\n\n         11.6 The General Manager, Deputy General Manager shall not hold\nconcurrent high-level positions in other economic organizations, and shall not\nparticipate in other organizations in competition with the Company.\n\n         11.7 The general Manager, Deputy General Manager and other high-ranking\nstaff shall submit written notice in three months' advance when they decide to\nresign.\n\n         11.8 During the period of preparation and construction, a preparation\nand construction office shall responsible for the joint venture company. The\npreparation and construction shall have one director appointed by Party A and\nvice director appointed by Party B. Appointed by Party B, it have members.\n\nIn case the above members have actions of graft and corruption, they can be\nremoved by the resolution of the board of directors and find out who will be\nblame.\n\nARTICLE 12 LABOR MANAGEMENT\n\n         12.1 The appointment of high-ranking administrative personnel\nrecommended by both parties, their salaries, social insurance, welfare and the\nstandard of traveling expenses etc. shall decided by the board of directors.\n\n\n                                       -5-\n\n\n\n         12.2 Labor contract covering the employment, dismissal and resignation,\nwages, labor insurance, warfare, rewards, penalty and other matters shall be\ndrawn up, approved by the board of directors and implement. The labor contract\nshall, after being signed, be filed with the local labor management department.\n\n         12.3 The staff and workers of the Company have the rights to set up a\nlabor union and to develop labor union activities in accordance with the Labor\nUnion Law of the People's Republic of China. The employees have right to set up\ntrade union.\n\nARTICLE 13 TAXES, FINANCE ACCOUNTING AND FOREIGN CURRENCY \n\n         13.1 The fiscal year of the joint venture company shall be from January\n1 to December 31. All vouchers, receipts, statistic statements and reports,\naccount books shall be written both in Chinese and English.\n\n         13.2 The joint venture of company shall pay taxes due in accordance\nwith the Income Tax Law of the People's Republic of China for Foreign Investment\nEnterprises and Foreign Enterprises, and apply for enjoying favorable treatment\nin accordance with relevant regulations.\n\n         13.3 The joint venture of company shall pay individual income taxes\naccording to relevant regulations of the Individual Income Tax Law of the\nPeople's Republic of China.\n\n         13.4 Allocation for reserved funds, expansion fund of the joint venture\ncompany and welfare funds and bonuses for staff and workers shall be set aside\nin accordance with the stipulations in the 'Law of the People's Republic of\nChina on Sino-foreign Equity Joint Venture enterprises.' The proportions of\nallocations shall be decided by the board directors according to the business\nsituations of the joint venture company.\n\n         13.5 Financial auditing of the joint venture company shall be conducted\nby an auditor registered in China and reports shall be submitted to the board of\ndirectors and general manager. If Party B propose to employ a foreign auditor\nregistered in other country to undertake annual financial audit, Party A shall\ngive its consent. All the expenses shall be borne by Party B.\n\n         13.6 In the first three months of each fiscal year, the manager shall\nprepare previous year's balance sheet, profit and loss statement and proposal\nregarding the disposal of profits, and submit them to the board of directors for\napproval.\n\nARTICLE 14 DURATION OF THE JOINT VENTURE \n\n         14.1 The duration of the joint venture company is 20 years. The\nestablishment of the joint venture company shall start from the date on which\nthe business license of the joint venture company is issued. An application for\nthe extension of the duration, proposed by one party and unanimously approved by\nthe board of directors, shall be submitted to the authority six months prior to\nthe expire date of the joint venture. \n\n\n                                       -6-\n\n\n         14.2 Upon the expiration of the duration or termination before the date\nof the expiration of the joint venture, liquidation shall be carried out\naccording to relevant laws. The liquidated assets shall be distributed in\naccordance with the proportion of investment contributed by Party A and Party B.\n\nARTICLE 15 LIABILITIES FOR BREACH OF CONTRACT\n\n         15.1 Should either Party A or Party B fails to pay on schedule the\ncontributions in accordance with the provisions defined in article 5 of this\ncontract, the breaching party shall pay to the other party 0.05% per day of the\ncontribution starting from the first 30 days after exceeding the time limit.\nShould the breaching party fails to pay after 90 days, it shall pay 4.5% of the\ncontribution to the other party, who shall have the right to terminate the\ncontact and to claim damages to the breaching party.\n\n         15.2 Should all or part of the contract and its appendices be unable to\nbe fulfilled owing to the fault of one party, the breaching party shall bear the\nresponsibilities thus caused. Should it be the fault of both parties, they shall\nbear their respective responsibilities according to actual situations.\n\n         15.3 In order to guarantee the performance of the contract and its\nappendices, both Party A and Party B shall provide each other the bank\nguarantees for the performance of the contract.\n\nARTICLE 16 THE AMENDMENT, TERMINATION AND DISSOLUTION OF THE CONTRACT \n\n         16.1 Amendment of the contract or other appendices shall come into\nforce only after the written agreement signed by Party A and Party B and\napproved by the original examination and approval authority.\n\n         16.2 In case of inability to continue operation due to heavy losses in\nsuccessive years or inability to fulfill the contract in accordance with\nstipulated in article 15.1, the contract shall be terminated before the time of\nexpiration after unanimously agreed upon by the board of directors and approval\nof approval authority. \n\nARTICLE 17 INSURANCE\n\n         All risks insurance policies of the joint venture company shall\nunderwritten with The People's Insurance Company of China. The detailed matter\nshall be fulfill in accordance with the stipulations of the approval authority.\n\nARTICLE 18 FORCE MAJEURE\n\n         Should either of the parties to the contract be prevented from\nexecuting contract by force majeure, such as earthquake, typhoon, flood, fire\nand war and other unforeseen events, and their happening and consequences are\nunpreventable and unavoidable, the prevented party shall notify the other party\nby cable\/fax on written without any delay, and with 15 days thereafter provide\nthe detailed information of the events and a valid document for evidence issued\nby the relevant public \n\n\n                                       -7-\n\n\nnotary organization for explaining the reason of its inability to execute or \ndelay the execution of all or part of the contract. Both parties shall, \nthrough consultations, decide whether to terminate the contract or to exempt \nthe part of obligations for implementation of the contract or whether to \ndelay the execution of the contract according to the effects of the events on \nthe performance of the contract. \n\nARTICLE 19 ARBITRATION \n\n         19.1 Any disputes arising from the execution of, or in connection with\nthe contract shall be settled through friendly consultations between both\nparties. In case no settlement can be reached through consultations, the\ndisputes shall be submitted to Chinese arbitration organization. The arbitration\naward is final and binding upon both parties. \n\n         19.2 During the arbitration, the contract shall be executed \ncontinuously by both parties except for matters in disputes.\n\nARTICLE 20 EFFECTIVENESS OF THE CONTRACT\n\n         20.1 The terms under this contract and its appendices (including joint\nventure company articles of association) are integral part of this contract.\n\n         20.2 The contract and its appendices shall come into force beginning\nfrom the date of approval of the approval authority.\n\n         20.3 Should notices in connection with any party's rights and\nobligations be sent by either party A or Party B by telegram or telex, etc., the\nwritten letter notices shall be also required afterwards. The legal addresses of\nparty A and Party B listed in this contract shall be the posting addresses. In\ncase the legal addresses change, the notice shall be sent to the other party\nprior to thirty days.\n\nARTICLE 21 GOVERNING LAW\n\n         The formation of this contract, its validity, interpretation, execution\nshall be governed by related laws of the People's of Republic of China.\n\nARTICLE 22 LANGUAGE\n\n         22.1 The contract shall be written in Chinese.\n\n         22.2 The headings in this agreement are inserted for convenience only\nand shall not be used to explain the contract.\n\n                  Party A: Chinese Guangdong Nanfang telecommunication Group Co.\n\n                  Party B: UTStarcom Inc.\n\n\n                                       -8-\n\n\n\n          Date: Dec. 8, 1995\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n                                      -9-\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9205],"corporate_contracts_industries":[9516],"corporate_contracts_types":[9613,9617],"class_list":["post-42794","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-utstarcom-inc","corporate_contracts_industries-telecommunications__equipment","corporate_contracts_types-operations","corporate_contracts_types-operations__jv"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42794"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42794"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42794"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}