EXHIBIT 10.17
Joint Venture Contract
for
Beijing International High-New Tech Products
Exhibition Consultant Service Company
Beijing CRI Development Company (hereafter referred to as Party Aand
Innovacom, Inc., (hereafter referred to as Party B) have agreed to sign this
contract on September 12{th} of 1997 in Beijing of the People's Republic of
China.
Article One
General Principle
In the principle of mutual benefit And equity and through friendly
discussions, Party A and Party B have agreed to create a joint venture of
Beijing International High-tech products Exhibition consultant Service Company
according to "The Law of the People's Republic of China on Joint Ventures Using
Chinese and Foreign Investment" and "The Law of the People's Republic of China
on Company" as well as other concerned regulations and this contract. The two
parties agreed to sign this contract as follows.
Article Two
Parties of the Joint Venture
2.1 The parties who signed the contract are:
(1) Party A is Beijing CRI Development Company, a legal entity under
Chinese law which has registered in Beijing. Its legal address is, ▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇.
It's legal representative
Name: ▇▇▇ ▇▇▇▇▇▇▇
Position: General Manager
Native: China
(2) Party B is InnovaCom, Inc., a legal entity under U.S. Law. Its
legal address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇
Position: Chairman
Native: the United States
Article Three
Representations and Warranties
Provided by the parties
3.1 Party A represents and warrants to party B that:
(1) It is an organization duly organized and validly exhisting under the
Laws of China and has full legal right, power and authority to enter into this
contract and to perform its obligations hereunder.
(2) Party A has the rights to have business with any companies, to sign
contracts and its representative is legal and can execute its obligations
validly.
(3) The execution, delivery and performance of this contract by party A
does not violate any provisions of its organization or foundation documents,
any contract or instrument to which it is a party or by which it or its assets
are bound, or any law, decree, regulation or order of China.
(4) It has obtained, or will obtain prior to the Registration, all
approvals, consents or licences from, and has given, or will give prior to
registration, all notices to all necessary governmental committees,
departments, councils, ministries or other bodies which are necessary to enable
it to enter into this contract and to perform its obligations hereunder,
including but not limited to the establishment, ownership, funding but
operation of Joint Venture.
3.2 Party B represents and warrants to party A:
(1) It is a company duly organized and validly existing under the Laws
of the USA and has full legal right, power and authority to enter into this
contract and to perform its obligations hereunder.
(2) Party B has the rights to have business with any companies and sign
contracts and its representative is legal and can execute its obligations
validly.
(3) The execution, delivery and performance of this contract does not
violate any provisions of its organizational or foundation documents, any
contract or instrument to which it is a party or by which it or its assets are
bound, or the laws of the jurisdiction of incorporation of InnovaCom or any
other law, decree, regulation or order of the United States or the State of
California or any local municipal governmental body having authority over its
business.
(4) No governmental approvals, consents or licenses are required to be
obtained by it under laws of its jurisdiction of incorporation in order to
enable it to enter into this contract and perform its obligations hereunder
except for expoprt licenses or other governmental approvals as may be required
for the sale, transfer or other disclosure of technical data equipment.
Article Four
Establishment of the Joint Venture Company
4.1 Establishment of the Joint Venture Company
The two parties have agreed to establish this Joint Venture Company
according to "The Law of the People's Republic of China on Joint Ventures Using
Chinese and Foreign Investment". "Law of the People's Republic of China on
Companies" and other Chinese laws, administrative regulations as well as this
contract.
4.2 Name and address of the joint venture company:
(1) Name of the company in Chinese: (Chinese characters not translated)
(2) Name of the company in English: Beijing International High-New Tech
Products Exhibition Consultant Service Company
(3) Legal address of the company: ▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇.
4.3 Organization form of the company
It is a company Ltd. The two parties will be liable for debts of the
company with their registered fund. The two parties will share profits or bear
the risks and losses according to their registered funds.
4.4 Laws and regulations:
The Joint Venture Company is a legal entity under Chinese laws and it is
an independent and legal qualification. The venture's business will be
protected and administered by Chinese laws, decrees and concerned regulations.
Article Five
Objectives and Scope of its Business
5.1 The objectives of its business is to rent an exhibition centre to
display high-new tech products from the United States and other foreign
companies and provides year round service. Chinese companies, enterprises and
individuals can come to visit, discuss to set up their joint venture
enterprises and other cooperative business. The venture may have other
projects. The joint venture company will receive exhibition fees and service
fees to pay their costs of rents, translation and promotion, in order to
promote the establishment of other joint ventures and development of other
business.
Article Six
Total Investment and Registered Fund
6.1 Total investment
Total investment of the company is three hundred thousand US dollars (US$
300,000).
6.2 Total registered fund
The total registered fund is three hundred thousand US dollars (US$
300,000).
6.3 Forms of registered fund
(1) Form of party A's registered fund:
The share will be in cash of eight hundred twenty thousand US dollars and
two hundred yuan of Renminbi (RMB 820200 yuan), converted to US dollars of one
hundred thousand (US$ 100,00). Party A's share is 34 percent (34%)
(2) Form of party B's registration fund
Party B's share will be in cash of two hundred thousand US dollars (US$
200,000) and the share is 66 percent (66%).
6.4 The joint venture can not reduce its registered fund during the
period of its operation.
6.5 Deadline of the registered fund
The registered fund should be handed over within 30 days after the company
registered.
6.6 Certificate of the registered fund
After one party paid its registered fund. it should be examined by China
Registered Accountants Society with its examination report. Another
certificate will be issued with the signatures of Chairman and Vice Chairman of
the company.
6.7 Transfer and mortgage of the registered fund
(1) Consent by the board of directors and priority of purchase:
In case one party intends to make a complete or partial transfer of its
interest in the venture, it shall provide notice of the proposed transfer to
the other party, who shall have an option for thirty (30) day from receipt of
notice of the proposed transfer to agree to purchase the interest at the same
price and on the same terms and conditions contained in the notice. In the
event two or more parties receiving the notice choose to exercise the option to
purchase the interest described in the notice. The selling party shall sell
the interest to the other party on a pro rata basis. If the other party didn't
inform the selling party within thirty (30) days. then the selling party must
sign a contract and confirm to execute the obligations of the selling party
(2) Goverment's approval
The transfer and selling of the above-mentioned interest must be reported
to the organization which approved the joint venture and then the transfer will
come into effect. When the party received the approval. it must arrange the
registered procedure in the local bureau of industry and commerce.
6.8 Increase of registered fund
Subject to the agreement of the Board of Directors, the parties have the
right to make additional investments proportional to their shares to the
initial regisetered fund or in other proportions. After it is inspected by
approval organizatiion, the company must arrange the change of the registered
fund in local bureau of industry and commerce.
Article Seven
Rights and Obligations of the Parties.
7.1 The parties in the venture, in addition to their rights stipulated
in the contract, have the
following rights:
(1) To participate in the management of the venture as determined by the
contract and applicable law;
(2) To share the results of operation of the venture in the amount and
forms provided for by this contract;
(3) To give its profits to other participants or third party in
accordance with the rules of the contract and applicable law;
(4) To have free access to any information and data concerning the
activities of the venture, the state of its assets, profits and losses.
7.2 Parties in the venture, along with their obligations stipulated in
the contract, will have the following obligations:
(1) To make initial and additional contributions to the registered fund
as determined by the contract and decisions of the Board;
(2) To participate in the management of the venture as determined by the
contract;
(3) To provide the venture with the information necessary for the
efficient activities of the Joint Venture if such information is not considered
by the parties as confidential;
(4) To assist the venture in achieving the objects of its activity by
advertising its service and by other means.
7.3 The parties shall make every effort to expand the activities of the
venture. The parties undertake to not enter into any other joint venture or
other form of activity competing with or adversely affecting the activities of
the venture.
Article Eight
Rights and Obligations of Party A
8.1 In addition to its rights stipulated in other articles of the
contract, party A has the following rights:
Party A insists on that after the registered fund arrived, party A's
registered fund should not be used. Only after enough companies have signed
aggreementsto participate in the exhibition and expenses can be met,
approximately ($800,000), can Party A's registered fund be used. If due to
decrease of exhibitors and the venture has loss, party B will bear the
responsibility and not use party A's registered fund. When the venture is in
normal operation, if party A wants to transfer its share, Party B has the
priority to purchase party A's share.
8.2 In addition to its obligations stipulated in other articles of the
contract, party A has the following obligations:
(1) To promptly and timely obtain all required governmental licenses,
permits and approvals to allow the venture to carry out its activities;
(2) To promptly and timely obtain the rights to use facilities,
electricity, water supply, heating, telephone and telecommunications permits
necessary for the operation of the facility;
(3) To promptly and timely obtain visas for representatives of
InnovaCom, staff of the venture and clients of the venture, and to assist in
obtaining all permitting and custom procedures associated with business trips
and shipping and receiving of venture's cargos;
(4) To ensure obtaining necessary rights to the venture to carry out its
activities as defined in the present contract;
(5) To ensure obtaining guarantees of governmental, legislative and
other competent bodies to protect foreign investments in acceptable for
international banking institutions;
(6) To officially inform all diplomatic commercial and other foreign
representatives on setting up the venture with party A participation and of
services provided by it;
(7) To assist the venture in its establishment and operations in China
including assistance in its registration as a legal entity, in the opening of
hard currency accounts in China, in renting and or acquisition of office and
other premises;
(8) To assist the venture on terms to be agreed in an efficient
advertising and realization of its services and in finding clients for the
venture;
(9) To assist the venture office with telecommunication facilities,
including one international telephone direct line, one international facsimile
direct line, one line for computeer communication, and all public utilities
necessary for the operation of the venture on terms and conditions to be
agreed; and
(10) To assist the venture to make use of Chines laws, regulations to get
preferential policies on tax and foreign investment.
Article Nine
Rights and Obligations of Party B
9.1 In addition to its rights and obligations stipulated in other
articles of the contract, party B has the following obligations:
(1) To market and promote the services of the venture. To confirm to
invite forty (40) companies which will pay eight hundred thousand US dollars
(US$800,000) to the joint venture. If there are more than forty companies to
participate in the exhibition, each of the rest of the companies must still pay
twenty thousand US dollars (US$20,000) to the joint venture. The temperary and
professional exhibitions will be paid separately. The two parties will discuss
the cost separately.
(2) To organize the management of the venture in accordance with
international standards on terms and conditions to be agreed;
(3) To organize the venture staff training in the USA or other western
countries on terms and conditions proposed by InnovaCom and approved by the
Board;
(4) To assist the venture in finding clients among foreign firms,
companies and corporations;
(5) To assist the venture in obtaining foreign entry visas for party A's
representatives, the Chinese venture staff, and clients of the venture
travelling on the venture's business;
(6) To assist the venture in selecting foreign highly professional staff
for the venture which should be agreed by the joint venture.
Article Ten
Board of Directors
10.1 Board of Directors:
(1) The date of the venture's registration is the day of the founding of
the Board of Directors.
(2) The board is consisted of five (5) directors (including the
Chairman). Party A will appoint two directors and party B will appoint three
(3) directors.
(3) Normally, term as directors is for three years. They can be
directors for another term if they are appointed by their party.
(4) Reasonable expenses used by the directors for their business in
China will be covered by the venture.
(5) Approved by the Board, the directors can be as general manager or
deputy general manager of the venture.
(6) The Chairman will be appointed by party B and he is the legal
representative of the venture. He can execute his power according to "The Law
of the People's Republic of China on Joint Ventures Using Chines and Foreign
Investment" and "Law of the People's Republic of China on Company" as well as
the regulations of the Board of Directors of the venture.
(7) The venture will have a Vice-Chairman who will be appointed by party
A.
10.2 The power of the Board of Directors:
(1) The Board of Director is the highest body of the venture.
(2) The following items will be decided by all members of directors or
their representatives with unanimous approval by votes.
(a) Ractification of contract and statitue;
(b) To integrate, unite with other organizations or to set up affiliated
organizations;
(c) Reorganization and dissolution of the venture;
(d) Increase or transfer of the venture's registered fund;
(e) The important signing, supplement, amendament, termination or
transfer of the venture's contract;
(f) The mortgage of the venture's fund and assets;
(g) Members of auditors, procedures of audition and proposals.
(3) All propsoals must be put forward in the meetings of the Board of
Directors and should be approved by directors or their representatives
attending the meetings by votes of over a majority of the Board.
(4) If all directors decided the matters with unanimous written notices,
it is not necessary for the board to call the meetings. The notices will be in
file. The decisions have the same effect as the votes cast by the directors.
Article Eleven
Organization of Operation and Management
11.1 Organization of Management
The Chairman will be responsible overall for the venture's operation. The
general manager will be in charge of daily work who is under the leadership of
the Board of Directors. The venture will have one general manager and one
deputy general manager. The general manager will be appointed by party A and
the deputy general manager will be appointed by party B. They will be approved
and appointed by the Board of Directors with the term of three years. They can
be changed by majority votes of the meetings of the Board of Directors. If
thee general manager or deputy general manager have the full term or ousted by
the Board of Directors, the new members will be proposed by their parties and
should be approved by the Board of Directors.
11.2 Responsibility and power of the general manager:
The general manager will be responsible to the Board of Directors and
execute his business appointed by the Board of Directors. The general manager
is in charge of venture's finance, daily management and operation. The deputy
general manager will assist the general manager. They should have regular
meeting to discuss their work, study and handle the important matters in daily
operations.
11.3 If the venture uses its stamp for business with other companies, at
least it should be agreed by one director from both sides or agreed by the
general manager by signature. Registration procedure should be carried out.
11.4 Expenses of the venture of fortythousand yuan (RMB) or over that
figure, at least it should be approved by one director from both sides with
their signatures.
Article Twenlve
Taxation and Insurance
12.1 Taxation
Employees of the venture should pay tax according to Chines laws and
administrative regulations on taxation. The venture will do its best to exempt
from tax according to the Chinese law for important equipment, technologies,
conusming articles, softwares and other matters.
12.2 Insurrance
The venture will make insurance in the registered insurance company in
China. The Board of Directors will decide the value of insurance.
Article Thriteen
Term of the Joint Venture
13.1 Term of the Joint Venture
The term of the joint venture is fifteen years. The date of the founding
of the joint venture will be the day of the registration.
13.2 Postpone of the term
One party can make proposal which should be approved by the Board of
Directors unanimously to apply for postponement of the joint venture and they
must apply six months before the termination.
Article Fourteen
Reorganization and Liquidation of
the Joint Venture
14.1 The venture can be reorganized or liquidated. The reorganization
may take the form of transfer of shares or withdraswal of a party. The
decision will come into effect only after it is agreed by the two parties and
approved by the original approval department.
14.2 The venture may also be liquidated before the end of the term of the
contract due to mutual agreement of fully property settlement.
Article Fifteen
Non-Performance or Breach
15.1 If one party doesn't perform its obligations stupilated in the
contract and the statute, or seriously breaches the contract or regulations in
the statute, or if party B failed to invite forty companies to attend the
exhibition, or if party A failed to invite two hundred enterprises to attend
the exhibition, then the joint venture can't reach its business aim. That will
be deemed that the party breached the contract which terminated the contract.
The other party has the right to ask compensation from the party who breached
the contract and it has the right to terminate the contract ahead of time. If
the other party continues to conduct the business, it is also deemed as the act
of breach.
15.2 The party that can't fulfil its obligations or can't completely
fulfil its obligations, thus causing losses to the other party, it should be
liable to the other party. If losses are caused by the two parties, they will
be liable for their respect responsibility according to the actual conditions.
Article Sixteen
Settlement of Disputes and the
Applicable Laws
16.1 The contract, its effect, explanation, fulfilment and settlement of
disputes are under the jurisdiction of laws of the People's Republic of China.
16.2 All parties will settle their disputes through friendly
negotiations. Disputes among the parties which cannot be resolved within ninty
(90) days of formal notice, will be referred to China International Foreign
Trade Arbitration Commission or to United Arbitration organization in
Stockholm, Sweden.
16.3 During the period of arbitration for the dispute, the two parties
will continue to perform other articles in the contract.
16.4 During the period of the arbitration, the two parties will not
defend their own amnesty or the relating rights, which will obtruct the
procedures of the arbitration.
Articles Seventeen
Force Majeure
17.1 Force majeure referred to earthquake, typhoon, flood, fire, war and
other s beyond the control of the venture which lead to the non performance of
the contract. the affected party will be obliged immediately within fifteen
days of the event to inform the other party by fax. The party should provide
all detailed information of the event which will be proved by the authorized
department of the government. According to the degree of the event, the two
parties will decide whether to terminate the contract, or partly perform the
contract, or extend the contract.
17.2 No party will be liable for the non-performance caused by the force
majeure.
17.3 Either party whose performance has not been impaired shall have the
right to issue a termination notice under regulations of the contract when an
event of force majeure is impairing the activity of the venture for more than
180 consecutive days.
Article Eighteen
The Contract in Force
The contract will be in force from the date of its signing by the parties.
Additional documents attached to the contract will be effective as the
contract.
Article Ninteen
Other Provisions of the Contract
19.1 All notices, written records will be sent by registered letters, fax
or handed over the following addresses:
Party A: Beijing CRI Development Company
▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
Post Code: 100866
Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
Fax: ▇▇-▇▇-▇▇▇▇-▇▇▇▇
Party B: InnovaCom, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇. USA
19.2 If one party changed its address, it should inform the other party
ahead of time by registered letter or by fax. The stamp of post office will be
the prove, or date of fax sent, or three days to hand it to the other party.
19.3 The official language of the venture will be English, the operative
language will be English and Chinese. All documents will be in English.
19.4 Founding and liquidation of the joint venture will be announced
publicly. The content of the announcement will be decided by the two parties.
19.5 The contract is signed with three original copies in English, three
copies in Chinese which are equally valid, one copy in English and one copy in
Chinese for each party. One copy in English and one copy in Chinese will be
sent to the Approval Department of the government.
By: /S/ ▇▇▇ ▇▇▇▇ ▇▇▇▇ By: /S/ ▇▇▇▇ ▇▇▇ 17 SEPT. 97
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇
Legal Representative Legal Representative
Beijing CRI Development Company InnovaCom, Inc. USA
