EXHIBIT 10.78
JOINT VENTURE CONTRACT
FOR
TANGSHAN PANDA HEAT AND POWER CO., LTD.
TABLE OF CONTENTS
ARTICLE 1 General Principle
ARTICLE 2 Two Parties of the Joint Venture
ARTICLE 3 Name and Address of the Joint Venture Company
ARTICLE 4 Purpose and Business Scope of
the Joint Venture Company
ARTICLE 5 Total Investment and Registered Capital
ARTICLE 6 Responsibilities and Duties of the Parties
ARTICLE 7 Board of Directors
ARTICLE 8 Business Administrative Organization
ARTICLE 9 Purchase of Materials
ARTICLE 10 Preparation Work
ARTICLE 11 Personnel Administration
ARTICLE 12 Foreign Currency Control
ARTICLE 13 Financing, Taxing and Auditing
ARTICLE 14 Terms of the Joint Venture
ARTICLE 15 Insurance
ARTICLE 16 Amendment, Termination and Release of the
Contract
ARTICLE 17 Obligation of the Party Breaching the
Contract
ARTICLE 18 Force Majeure
ARTICLE 19 Laws Applicable
ARTICLE 20 Arbitration
ARTICLE 21 Validity of the Contract
ARTICLE 22 Language of the Text
ARTICLE 1
GENERAL PRINCIPLE
1.1. In accordance with the stipulations of "The Law of the
People's Republic of China on Chinese-Foreign Equity Joint
Ventures" and other related laws and rules, and on the basis of
equality and mutual benefit Luannan County Heat & Power Plant of
Tangshan City, Hebei Province, the People's Republic of China
(PRC) and Pan-Western Energy Corp., LLC (a subsidiary of Panda
Energy Corp. In Dallas, Texas, U.S.A) of Cayman Islands, British
West Indies, both agree to establish a Joint Venture Company with
joint investment and hereby sign this contract.
ARTICLE 2
TWO PARTIES OF THE JOINT VENTURE
2.1. Luannan Heat & Power Plant (hereinafter referred to as
Park A) is a registered company in PRC, its statutory address
being Benchengzhong Street, Luannan County, Hebei Province, PRC
and statutory representative being Zhao Xiucheng, General
Manager of Party A, with Chinese nationality.
Pan-Western Energy Corp., LLC (hereinafter referred to as
Party B) is a registered company in Cayman Islands, British
West Indies with its statutory address being ▇▇▇▇▇▇ and ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, P.O. Box 309, ▇▇▇▇▇▇ Town,
Grand Cayman, Cayman Islands, British West Indies and statutory
representative ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman and President of
Party B. with U.S.A. nationality.
ARTICLE 3
NAME AND ADDRESS
OF THE JOINT VENTURE COMPANY
3.1. Full Chinese name for the Joint Venture Company shall be:
3.2. Full English name for the Joint Venture Company shall be:
TANGSHAN PANDA HEAT AND POWER CO., LTD. (hereinafter referred
to as JVC).
3.3. The registered address of JVC shall be at Benchengzhong
Street, Luannan County, Tangshan City, Hebei Province, PRC.
ARTICLE 4
PURPOSE AND BUSINESS SCOPE
OF THE JOINT VENTURE COMPANY
4.1 The company shall be based and run on sound and lawful
business principles and principles of equality and mutual benefit
with the aim of selling its products and services at a profit
acceptable to the compare.
4.2. The company shall manufacture and sell electricity, steam
and their by-products in the Chinese domestic market.
4.3. The total production capacity of the company shall be
approximately:
(i) Steam generation of 184,200 million kcal. per year and
electricity generation of 325 million kwh per year at
capacity of 50,000 kw
(ii) The production capacity may be changed from time to
time by agreement of the Parties.
ARTICLE 5
TOTAL INVESTMENT AND REGISTERED CAPITAL
5.1. JVC shall be a limited liability company. The liability of
both Parties to the company shall be limited to their amount of
capital investment.
5.2. The total investment of the company shall be US $29,500,000,
and the registered capital of the company shall be US
$11,800,000. The contribution made by Party A shall be US
$2,360,000, accounting for 20% of the registered capital; the
contribution made by Party B shall be US $9,440,000, accounting
for 80% of the registered capital.
The rest of the total investment exceeding the registered capital
shall be settled by international financing and JVC shall be
responsible for the payment of debt obligations, interests and
financing costs.
The Parties shall share the profits, losses and risks in
proportion to their investment contributed.
5.3. Party A and Party B shall invest in the following way:
Party A: With land use rights, material objects and cash capital
contributions made at or during the times specified in Section
5.4. Party B: With cash capital contributions made at or during
the times specified in Section 5.4.
5.4. The total investment shall be fully made by the Commercial
Operation Date of the power and steam production facility (the
"Facility") to be owned by JVC (the "Commercial Operation Date"), with
registered capital contributions to be made according to the percentage
ownership of each Party.
Both Parties shall contribute five percent (5%) of the
registered capital in their respective proportion within thirty
(30) days after the business license is issued and contribute up
to fifteen percent (15%) of the registered capital in their
respective proportion within one hundred and eighty (180) days
after the business license is issued. Each Party shall guarantee
the payment of the remaining eighty five percent (85%) of the
registered capital to be sufficient to meet the requirements of
the Joint Venture project progress and within two years after the
establishment of JVC.
5.5. The registered capital of JVC shall not be reduced during
the joint venture period, but can be increased if either Party
reinvest with their profits distributed.
5.6. If either Party desires to transfer its capital investment
to a third Party, whether totally or partially, it should be
agreed upon by the other Party and approved by the authorities
concerned, and the other Party shall have the first night of
refusal to purchase which right must be exercised (if exercised),
within thirty (30) days after notice of such proposed transfer is
received. The other Party may waive its first right of refusal to
purchase, but shall reserve the right to choose a subsidiary or
affiliate Party as the assignee. The conditions for such transfer
from one Party of JVC to a third Party shall not be more
favorable than the conditions given to the other Party of JVC.
5.7. During the preparation period of JVC project and before
formal start of production, neither Party shall transfer its
capital investment.
5.8. Any increase, transfer of the registered capital of JVC
should be unanimously agreed upon by the Board of Directors and
approved by the authorities concerned, and must be registered
with the local industrial and commercial administration bureau.
5.9. The Parties shall agree upon a project development budget
and shall share all costs incurred pursuant to such budget
proportionately (in accordance with registered capital
contributions).
ARTICLE 6
RESPONSIBILITIES AND DUTIES OF THE PARTIES
6.1. Party A shall, in addition to its contribution of capital
investment, have responsibilities and duties to assist JVC in the
handling of the following matters concerned:
(i) To assist the company in handling matters such as the
application for approval registration and the obtaining of
business licenses from relevant Chinese departments;
(ii) To assist JVC and EPC in applying for and
obtaining all possible tax reductions and exemptions
according to Chinese law;
(iii) To assist JVC and EPC in matters concerning the
purchase of equipment and machinery, the customs
declaration of imported equipment and transportation
of supplies within China;
(iv) To assist JVC in contacting and implementing the
basic facilities of water, electricity,
transportation and communication, etc..
(v) To assist JVC in the employment of local Chinese
staff, technicians, workers and other required
personnel;
(vi) To assist foreign personnel sent by Party B to
work in JVC in obtaining necessary entry visas, work
permits and permit for travel on business within
China;
(vii) To assist in other matters
entrusted by JVC.
6.2. Party B shall in addition to its contribution of capi
tal investment have responsibilities and duties to assist
JVC in the handling of the following makers concerned:
(i) To assist JVC and the EPC Contractor to procure,
per specifications and instructions of JVC, the
advanced and applicable machinery and equipment from
the international market, and provide related
information in that regard;
(ii) To assign technical personal to be responsible
for the check and test, installation and maintenance
of the machinery and equipment introduced, train
technical personnel and workers of JVC;
(iii) To assist JVC in arranging for financing
of the Facility,
(iv) Subject to the direction of JVC, to manage the
development, construction and operation of the
Facility;
(v) To assist in other matters entrusted by JVC.
ARTICLE 7
BOARD OF DIRECTORS
7.1. The official date of obtaining the business license of JVC
is the date of the establishment of the Board of Directors.
The Board of Directors shall be the highest authority of JVC and
decide all major issues concerning JVC.
7.2. The Board of Directors shall be composed of five (5)
directors, one (1) of which shall be from Party A and four (4)
from Party B. From within the Board of Directors, Party B shall
appoint a chairman. There shall be two (2) vice chairmen to be
respectively appointed by Party A and Party B. The directors
shall hold the office for a period of four (4) years. The term of
office may be renewed by the nominating Party.
7.3. Issues which require unanimous decision of the Board of
Directors shall include:
(i) Amendment of the Articles of Association of JVC;
(ii) Increase or assignment of the registered capital of
TVC;
(iii) Merger of JVC with another corporation;
(iv) Extension, termination and dissolution of the Joint
Venture and the liquidation and wind-up thereof;
(v) Other major issues that the Board of Directors deems it
necessary to have unanimous affirmative votes.
All issues except for the above shall be decided by majority vote
of the directors then present at any board meeting (including
special board meeting) at which a quorum is present. Unless
waived by Party A's director or Party A, the quorum shall include
one Party A's director.
7.4. The chairman of the board is the statutory representative of
the JVC. When the chairman cannot carry out his obligations for
whatever reason, he can authorize a vice chairman to act on his
behalf.
7.5. The board meeting shall be convened at least once a year and
shall be sponsored by the chairman. At the request of at least
two (2) of the directors, the chairman shall convene a special
board meeting.
ARTICLE 8
BUSINESS ADMINISTRATIVE ORGANIZATION
8.1. JVC shall set up its business administrative organization
which shall be responsible for daily management of the company.
The business administrative organization shall have one (1)
general manager and two (2) deputy general managers. The general
manager shall be recommended by Party B, and each Party shall
recommend one (1) deputy general manager. General and deputy
general managers shall be appointed by the Board of Directors and
their tenures of office shall be four (4) years.
The obligation of the general manager is to carry out all the
decisions of the Board of Directors, organize and be responsible
for the routine business administrative work of JVC. The deputy
general managers shall assist the general manager in his work.
Decisions of important issues in the day-to-day business of JVC
shall be valid only when they are signed by both the general
manager and Party A's deputy general manager. Issues requiring
joint signatures shall be stipulated by the Board of Directors.
8.2 The business administrative organization of JVC shall
consist of certain departments and the manager of each department
shall be directly responsible to the general manager (or as
otherwise specified by the general manager or the Board of
Directors).
8.3. The general manager and each deputy general manager can be
dismissed at any time through the resolution passed at the board
meeting if they are found to practice graft or be seriously
derelict of their duties or with the approval of the Party
recommending such person for any reason.
ARTICLE 9
PURCHASE OF MATERIALS
9.1. As for the procurement of materials, fuels, fittings, means
of transport and office appliance (hereinafter referred to as
materials) required by JVC, priority should be given to China
under the same condition.
ARTICLE 10
PREPARATION WORK
10.1. During the preparation and construction period of the Joint
Venture, a preparation group should be set up directly under the
Board of Directors, which shall consist of three (3) persons, one
(1) from Party A and two (2) from Party B. A group leader shall
be recommended by Party B, and a deputy group leader by Party A.
The group leader and deputy group leader should be appointed by
the Board of Directors.
10.2. The preparation group shall be responsible for auditing of
engineering design, signing of contract project agreements,
organizing the procurement and checking of the related equipment,
materials and other goods, working out the general schedule of
the construction plan for the budget, controlling financial
payment and design-making on the construction; responsible for
the control and management of documents, blue prints, files, and
data when the construction is in progress.
10.3. The preparation group shall be responsible for the
auditing, supervision, check; and test of the project design,
quality, equipment and materials.
10.4. The staff organization of the preparation group and their
salaries and expenditures shall be entered into the construction
budget upon approval of the Board of Directors.
10.5. The preparation group shall be canceled upon the approval
of the Board of Directors after the construction is completed and
the procedure of transfer is implemented.
ARTICLE 11
PERSONNEL ADMINISTRATION
11.1. With regard to employment dismissal, wages, labor
insurance, welfare and reward and penalty of the workers of
JVC, the Board of Directors should discuss and work out a labor
contract and then implement it in accordance with the
"Provisions of the People's Republic of China on Labor
Management in Chinese-Foreign Equity Joint Venture" and the
methods of its implementation. The Labor Contract, after its
signing, should be kept in the file of the local labor
administration department.
11.2. Staff members of JVC have the right to establish their
trade union and take part in its activities in accordance with
the stipulations of the "Trade Union Act of the People's
Republic of China".
ARTICLE 12
FOREIGN CURRENCY CONTROL
12.1. Foreign currency of JVC shall be handled according to the
"Interim Provisions of People's Republic of China on the
Administration of Foreign Currency" and related stipulations.
12.2. JVC shall open a foreign currency account in the Bank of
China with its business license. All legal income of JVC may be
converted and all the foreign exchanges shall be deposited in
the foreign currency account of its opening bank and all
expenses and financing payments in foreign currency of JVC
shall be paid out of the foreign currency account of its
opening bank.
ARTICLE 13
FINANCING, TAXING AND AUDITING
13.1. Financial accounting of JVC shall be made in accordance
with the rules and regulations of financial accounting in PRC as
stipulated for joint venture enterprises using Chinese and
foreign investment.
13.2. The fiscal year of JVC starts from the 1st day of January
and ends on the 31st day of December of each year. All the
accounting certificates, documents, reports and account books
should be written both in English and Chinese.
13.3. JVC should pay all the taxes required according to the
related laws and stipulations of PRC.
13.4. JVC should draw reserve funds, enterprise development funds
and welfare and reward funds according to the stipulations of
"The Law of the People's Republic of China on Chinese-Foreign
Equity Joint Ventures", the ratio of which funds to be drawn each
year should be decided by the Board of Directors according to the
status of business of JVC.
13.5. For accounting and auditing, JVC should hire accountants
and auditors registered in PRC, and report these results to the
Board of Directors and the General Manager. If Party B is willing
to hire auditors of another country for auditing of the annual
finance, Party A should agree, but all charges shall be paid by
Party B.
13.6. Within the first three months of the business year, the
Debit/Credit accounts of the last business year, documents of
profit/loss accounts and profit sharing plan should be initiated
by the General Manager and submitted to the Board of Directors
for review and approval.
ARTICLE 14
TERMS OF THE JOINT VENTURE
14.1. The term of JVC shall be twenty three (23) years commencing
on the date of establishment of JVC. The date of the acquisition
of the business license for JVC shall be the date of its
establishment. It is necessary to submit an application to the
department in charge for the extension of the term of JVC twelve
(12) months prior to the expiration of the term of JVC provided a
motion is initiated by one of the Parties and approved
unanimously by the Board of Directors.
14.2. In accordance with the laws, JVC should be liquidated upon
the expiration of JVC or termination of the business in advance.
The liquidated properties should be distributed according to the
ratio of investment made by Party A and Party B. For purpose of
liquidation distributions, all contract rights, land use rights
and other tangible or intangible properties shall be valued on a
fair market value "going concern basis". The liquidation
appraisal shall be conducted by a public accountant registered in
PRC.
ARTICLE 15
INSURANCE
15. 1 Each engineering project of JVC should be insured by the
People's Insurance Company of China. The procedures shall be
handled by the department in charge.
ARTICLE 16
AMENDMENT TERMINATION AND RELEASE
OF THE CONTRACT
16.1 When amendment is made to this contract and its appendixes,
it shall not be valid unless a written agreement is signed by
both Parties and submitted to and approved by the applicable
governmental authorities (the "Authorities") concerned.
16.2 With the unanimous agreement of the Board of Directors and
approval of the Authorities concerned, JVC can be terminated
prior to the original term or the contract be terminated in
advance if the JVC is incapable of going on with the business for
certain reasons.
ARTICLE 17
OBLIGATION OF THE PARTY
BREACHING THE CONTACT
17.1. If either Party fails to contribute the amount of the
investment committed by the time stipulated in Article 5 of the
contract, the Party breaching the contract shall pay the Party
observing the contract 0.3% of the total amount of investment
overdue each three (3) months counting from the 30th bank date
overdue. Should the Party breaching the contract fail to
contribute the amount of capital it committed for six (6) months,
apart from the total sum of 0.6% of above-mentioned fines, the
Party observing the contract has the right to request the Party
breaching the contract to fully implement the contract within a
specified period or terminate the contract according to Article
16 of the contract and demand the Party breaching the contract to
compensate for its losses.
17.2. Obligation should go to the Party if it is that Party's
fault that elects the implementation or complete implementation
of the contract and its appendixes. Each Party shall be liable
for the breach of the contract, if the fault is due to both
Parties.
17.3. In order to guarantee its registered capital contributions,
Party B should provide a bank guarantee or guarantee from Panda
Energy Corp. of U.S.A. for its registered capital contributions.
ARTICLE 18
FORCE MAJEURE
18.1. As the consequence of Force Majeure, such as war,
earthquakes, typhoons, floods, fires or other natural calamities,
which cannot be predicated, or the happening or consequence of
which cannot be prevented or avoided (such as prolonged strikes),
and directly affects the execution of the contract, or execution
of the contract according to the terms stipulated in the
contract, the Party that encounters the Force Majeure should
notify the Party by fax or other most immediate means available
of the incident. Valid documents to certify the detailed
happenings of the accident, and valid documents to certify the
reasons of its inability to fulfill or completely fulfill, or the
necessity to postpone the fulfillment of the contract, should be
submitted to the other Party within thirty (30) days of the
accident, and should be certified by the notarization department
of the region where the accident took place. Disputes arising
from cases of Force Majeure shall be resolved through
negotiations between the two Parties as to whether to terminate
the contract or partially release the obligations of the affected
Party, or postpone the fulfillment of the contract according to
the effect of the accident on the fulfillment of the contract If
the maker cannot be resolved within fourth five (45) days through
negotiation, at the request of either Party, it shall be settled
through arbitration.
ARTICLE 19
LAWS APPLICABLE
19.1. The signing, validity, explanation and implementation of
this contract should abide by the laws of the People's Republic
of China.
ARTICLE 20
ARBITRATION
20.1. Should any dispute arise from the implementation of or
relating to the contract, both Parties shall resolve them through
friendly negotiations. If the discrepancies cannot be solved by
negotiations, they should be submitted to the Arbitration
Committee of China Council for the Promotion of International
Trade for solution, whose decision shall be final and legally
binding on both Parties. The arbitration shall be conducted in
both Chinese and English with both languages having equal weight.
20.2. During the process of arbitrator, the contract should be
executed with no interruption, except for those parts relating to
discrepancies under arbitration.
ARTICLE 21
VALIDITY OF THE CONTRACT
21.1. All the articles of the contract including appendixes
(Articles of Association of JVC, certificates of Party A's
tangible capital contributions and list of equipment to be
imported) are indispensable parts of this contract.
21.2. The contract including its appendixes shall be valid only
where it has been approved by the Ministry of Foreign Trade and
Economic Cooperation or its entrusted inspection departments.
21.3. Any communication relating to the rights and obligations of
the two Parties should be made in written form, except notices,
telegrams and faxes. The addresses stated in Article 2 of the
contract are statutory addresses for correspondence between the
two Parties. Any change in the statutory address should be
notified to the other Party thirty (30) days in advance.
ARTICLE 22
LANGUAGE OF THE TEXT
22.1. This contract is written both in English and Chinese. The
contract in both languages is of equal validity.
This contract for Tangshan Panda Heat and Power Co., Ltd. is
signed by the authorized representatives of both Parties in
Shijiazhuan City, Hebei Province, China, as follows:
Party A: Party B:
Luannan County Pan-Western Energy Corp.,LLC
Heat & Power Plant
Zhao Xiucheng ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Manager Senior Vice President
Witnessed by:
China National Machinery Import & Export Corp.
Bai Congyong
General Manager of Overseas Enterprises Div.
Dated on Sept. 4, 1994
AMENDMENT
TO
JOINT VENTURE CONTRACT
FOR
TANGSHAN PANDA HEAT & POWER CO., LTD.
This amendment is made and entered into on July 19, 1996 by and
between Party A Luannan County Heat & Power Plant of Hebei
Province, China through its duly authorized agent and Party B
Pan-Western Energy Corp., LLC. of British Cayman Islands through
its duly authorized agent, both of which JV Parties to Tangshan
Panda Heat & Power Co., Ltd.
WHEREAS, adjustments are required for amounts of capital
contributions, their respective proportion to registered capital
and means of such contributions by the Parties to Tangshan Panda
Heat & Power Co., Ltd.;
NOW THEREFORE, through consultation, the Parties have agreed to
the following amendment to the Joint Venture Contract for
Tangshan Panda Heat & Power Co., Ltd. executed by and between the
Parties on September 4, 1994:
1. Delete the original Article 5.2 in its entirety, to be
replaced by a new Article 5.2, which stipulates as follows:
" 5.2 The total investment of the JVC shall be US$29,800,000, and
the registered capital of the Company shall be US$11,920,000. The
contribution made by Park A shall be US$l,440,417.6, accounting
for 12.08% of the registered capital, the contribution made by
Party B shall be US$10,479,582.4, accounting for 87.92% of the
registered capital.
The rest of the total investment exceeding the registered capital
shall be made up by a shareholder loan provided by Party B to the
JVC. JVC shall be responsible for the payment of debt
obligations, interest and financing costs on such shareholder
loan.
The Parties shall share the profits, losses and risks in
proportion to their investment contributed. "
2. Delete the original Article 5.3 in its entirety, to be
replaced by a new Article 5.3, which stipulates as follows:
"5.3 Party A and Party B shall each invest in the following way:
Party A: With cash capital contributions made at or during the
times specified in Section 5.4;
Party B: With cash capital contributions made at or during the
times specified in Section 5. 4. "
3. The above-cited new Article 5.2 and Article 5.3 shall take
effect from the date upon which the amendment is approved by the
original examination and approval authority that approved the
above JV Contract. This amendment is made in both English and
Chinese, both of which shall be equally authentic.
IN WITNESS WHEREOF, the Parties, intending to be legally bound,
have caused their respective authorized agents execute this
amendment as of the date and year set forth hereinabove.
Party A: Luannan County Heat & Power Plant
Hebei Province, China
By:
Position:
Party B: Pan-Western Energy Corp., LLC.
British Cayman Islands
By:
Position:
AMENDMENT
TO
JOINT VENTURE CONTRACT
FOR
TANGSHAN PANDA HEAT & POWER CO., LTD.
This amendment is made and entered into this 18th
November, 1996 by and between Party A Luannan County Heat & Power
Plant of Hebei Province, China through its duly authorized agent
and Party B Pan-Western Energy Corp, LLC. of British Cayman
Islands through its duly authorized agent both of which JV
Parties to Tangshan Panda Heat & Power Co., Ltd.
WHEREAS, certain amendments are required for capital
contributions, responsibilities and duties of the Parties
concerning land use right as well as procedures for extension of
term of joint venture for Tangshan Panda Heat & Power Co., Ltd.
NOW THEREFORE, through consultation, the Parties have
agreed to the following amendment to the Joint Venture Contract
for Tangshan Panda Heat & Power Co., Ltd. executed by and between
the Parties on September 4, 1994:
1. Delete the original Article 5.9 in its entirety, to be
replaced by a new Article 5.2, which stipulates as follows:
"5.2 The total investment of the JVC shall be
US$29,800,000 and the registered capital
of the Company shall be US$11,920,000. The contribution
made by Party, A shall be US$1,440,417.6, accounting
for 12.08% of the registered capital;, the contribution
made by Party B shall be US$10,479,582.4 accounting for
87.92% of the registered capital.
The rest of the total investment exceeding, the
registered capital shall be made up by a shareholder loan provided
by Party B to the JVC. JVC shall be responsible for the payment
of debt obligations, interest and financing costs on such
shareholder loan.
The Parties shall share the profits, losses arid risks in
proportion to their investment contributed."
2. Delete the original Article 5.3 in its entirety to be replaced
by a new Article 5.3, which stipulates as follows:
"5.3 Party A and Party B shall each invest in the
following way:
Party A: With cash capital contributions made at or
during the times specified in Section 5.4;
Party B: With cash capital contributions made at
or during the times specified in Section 5.4. "
3. Add to Article 6.1 new sub-section (viii), which stipulates
as follows:
"(viii) for an initial 23 years of the JVC, to obtain in its
own name granted land use right for the land to be used by
JVC and make such granted land use right available to JVC
via transfer lease or other appropriate means."
4. Delete the original Article 14.1 in its entirety, to be
replaced with a new Article 14.1, which stipulates as follows:
"14.1 The term of JVC shall be for an initial period of
twenty-three (23) years commencing on the date of
establishment of JVC. The date of the acquisition of the
business license for JVC shall be the date of its
establishment. If Party B should notify Party A of its
intention to continue its participation in the JVC beyond
this initial 23 year term, then Party A shall submit an
application duly executed by authorized representatives of
the Parties to the department in charge for an extension of
the term of the JVC for the lesser amount of time, as
requested by Party B, or the maximum period permitted by
applicable laws and regulations twenty-four (24) months
prior to the expiration of the term of the JVC."
5. Add new Article 14.3, which stipulates as follows:
"14.3 Upon expiration of the initial twenty-three (23) year
term of JVC, if no extension is made of such term of the
JVC, then the assets of the JVC (other than land use right)
shall be valued as per their remaining value at that time
and distributed in accordance with the investment share of
the Parties at liquidation, regardless whether such land use
will expire or not. And such assets shall not be under-
valued due to any such expiration of land use right."
The above-cited new Article 5.2, Article 5.3, Article 6.1 (viii),
Article 14.1 and Article 14.3 shall take effect from the date
upon which the amendment is approved by the original examination
and approval authority that approved the above JVC contract. This
amendment is made in both English and Chinese, both of which
shall be equally authentic.
IN WITNESS THEREOF, the Parties, intending to be legally
bound, have caused their respective authorized agents execute
this amendment as of the date and year set forth hereinabove.
Party A:
Luannan County Heat & Power Plant
Hebei Province, China
By:
Position:
Party B:
Panda Heat & Power Co., Ltd.
British Cayman Islands
By:
Position: