Established a Sino-foreign joint venture contract (bit production)

table of Contents

Foreword

1) Both parties to the joint venture

2) Establishment of a joint venture company

3) Purpose, scope and scale of production and operation

4) Total investment and registered capital

5) Responsibility of the parties to the joint venture

6) Technology transfer

7) Product sales

8) Board of Directors

9) Management organization

10) Procurement of raw materials and equipment

11) Preparation of the company

12) Labor management

13) Tax, finance, audit

14) Joint venture period

15) Dissolution and liquidation

16) Insurance

17) Modification, modification and release of the contract

18) Liability for breach of contract

19) Force majeure

20) Applicable law

21) Settlement of disputes

22) Contract text and text

23) Contract effective and other

Subsidiary File I. Technology Transfer Agreement

Subsidiary file II. Product sales agreement

Attached file III. Accounting program

Foreword

_____ and _____ According to the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures and other relevant laws and regulations of China, in accordance with the principle of equality and mutual benefit, through friendly consultations, agreed to jointly invest in the production and sales of _____ bites in the People's Republic of China , specially entered into this contract.

The first joint venture

The parties to this contract are: _____

Legal address:_____

Telegraph: _____ PO Box: _____

Legal representative:

Name: _____ Position: _____ Nationality: _____

_____

Legal address:_____

Telex: _____ postal telecommunications box: _____

Legal representative:

Name: _____ Position: _____ Nationality: _____

Article 2 Establishment of a joint venture company

In accordance with the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures and other relevant laws and regulations in China, both parties decided to establish a joint venture company in China to establish a joint venture _____ drill bit.

2.1 The Chinese name of the joint venture company is: _____

The English name is: _____

2.2 Legal address of the joint venture company: _____

2.3 All activities of the joint venture company must comply with the laws, decrees and relevant regulations of the People's Republic of China.

2.4 The joint venture company is organized as a limited liability company. Party A and Party B are responsible for the debts of the joint venture company with their respective contributions. The parties share profits according to the proportion of the capital contribution in the registered capital and share the risks and losses.

Article 3 Purpose, scope and scale of production and operation

3.1 The purpose of the joint venture between Party A and Party B is to use _____ advanced manufacturing technology, technical plagiarism, and scientific management methods to manufacture and sell _____ drill bits with international advanced level. Continuously improve product quality, make the quality and price of the joint venture company's products competitive in the international market, improve the economic efficiency of the enterprise, and enable the investors to obtain satisfactory economic benefits.

3.2 Scope of production and operation: The joint venture company produces and sells _____ drill bits of various types and sizes and all other types of _____ drill bits developed and put into operation by Party B during the joint venture.

The JV Company is also engaged in the following activities related to production and sales operations;

Provide the necessary technical services for the products sold;

Research and development _____ bit new products to better serve users.

3.3 Production scale: After the joint venture company is put into production for the first _____ years, when it is fully produced, it should have the production capacity of _____ drills of various sizes and models.

Article 4 Total Investment and Registered Capital

4.1 The total investment and registered capital of the joint venture company are both _____ US dollars, and the investment of both parties is _____ US dollars, which is _____% of the total registered capital.

4.2 After the joint venture company is officially put into operation, both parties will reinvest in part of the profits of the first _____ years to develop new processes, increase production or increase liquidity.

4.3 Both Party A and Party B shall contribute as stated in Sections 1.1 and 1.2 of the “Dealing Agreement” of the Attachment File IV of this contract. The physical part of the capital contribution shall be priced according to the price agreement. The physical ownership of the capital contribution is owned by the joint venture company and is exempt from any mortgage, pledge, lien, etc.

4.4 The joint venture company shall pay land use fees annually in accordance with the regulations of the local government of China.

4.6 During the period of joint venture, neither Party A nor Party B may withdraw its registered capital in any name or manner.

Article 5 Responsibilities of the parties to the joint venture

5.1 Party A is responsible for completing the following matters:

5.1.1 To apply for approval, registration, and business license for the establishment of a joint venture company to the relevant Chinese authorities.

5.1.2 Assist the joint venture company in handling all possible tax reduction and exemption application procedures.

5.1.3 Assist the joint venture company in handling the procedures for opening an account and obtaining loans from the relevant bank.

5.1.4 Apply to the land administration for the application for land use rights.

5.1.5 Organize the civil engineering design and construction of the joint venture company's plant and engineering facilities.

5.1.6 According to the items listed in Article 1.1 of the “Funding Agreement” of the attached file of this contract, cash, machinery and equipment shall be provided within the prescribed period.

5.1.7 Assist in the formalities for import declaration of machinery and equipment provided by Party B for the capital contribution.

5.1.8 Assist the joint venture company to purchase equipment, materials, raw materials and communication facilities in China.

5.1.9 Assist the joint venture company to contact the implementation of water, electricity, gas and other energy, transportation and other infrastructure.

5.1.10 Assist the joint venture company in recruiting management personnel, technicians, workers and other personnel in China who are qualified for their jobs.

5.1.11 Assist foreign staff in handling the required entry visas, work permits and travel procedures.

5.1.12 Assist in the settlement of accommodation, medical care, transportation, etc. of employees of the joint venture company.

5.1.13 Assist Party B to handle the foreign exchange remittance procedures of Party B.

5.1.14 Handle other matters entrusted by the joint venture company.

5.2 Party B is responsible for completing the following items:

5.2.1 Provide cash, machinery, tools, raw materials, etc., as listed in Article 1.2 of the “Funding Agreement” in Attachment 4 of this contract.

5.2.2 Assist the joint venture company to obtain loans from foreign banks.

5.2.3 Provide necessary equipment installation, commissioning and trial production technicians.

5.2.4 Train technicians, workers and managers of the joint venture company.

5.2.5 Ensure that the joint venture company's products are returned to the contract, and that the joint venture company is closely coordinated with Party A in various ways to achieve the balance of foreign exchange balance.

5.2.6 Assist the joint venture company to purchase equipment and raw materials on the international market.

5.2.7 Assist Chinese personnel to apply for the required entry visa and necessary procedures.

5.2.8 Assist in the settlement of accommodation and transportation of Chinese personnel abroad.

5.2.9 Handle other matters entrusted by the joint venture company.

Article 6 Technology Transfer

6.1 Party A and Party B agree that Party A will sign a technology transfer agreement with Party B on behalf of the joint venture company to obtain the advanced technology required for the operation of the joint venture company, including product design, manufacturing process and production management technology and various test methods, material formulations and product quality. Standards, quality assurance, etc.

6.2 Party B provides the following guarantees for the transfer of technology:

6.2.1 All the technology transferred to the joint venture company is practical, complete, accurate, reliable, and meets the requirements of the joint venture company. The quality of the products produced according to the transfer technology can reach the quality standards of similar products of Party B, and the output can meet the requirements. Production capacity.

6.2.2 All information specified in the technology transfer agreement shall be provided to the joint venture company on time.

6.2.3 During the period of validity of the entire contract of the joint venture company, Party B guarantees that all new technologies that have been improved and developed and used for production will be provided to the joint venture company in a timely and complete manner.

6.2.4 Technical training for workers of technical personnel of the joint venture company shall be carried out in accordance with the provisions of the technology transfer agreement so that they can grasp the transferred technology in a timely manner.

6.2.5 Provide technical support deemed necessary by the joint venture company.

6.2.6 Party B will help China to test and evaluate the thermal stability _____ product.

Article 7 Product Sales

7.1 Party B is responsible for underwriting the annual output of the joint venture company _____ products, but at most _____ only, the remaining products will be sold by the joint venture company to the domestic market and the international market determined according to the principle of “Product Sales Agreement” in the attached file of this contract.

7.2 If Party B fails to complete the underwriting quantity as stipulated in Article 7.1, the amount of the uncompleted underwritten products shall be the proportion of the total number of products to be completed, and the profits or equivalent imported raw materials shall be compensated to For a joint venture company, when the sales volume exceeds _____ years, the excess amount can be used as compensation for the underwriting of the next year.

7.3 By the unanimous approval of the board of directors and the approval of the Chinese examination and approval authority, the joint venture company may establish branches within and outside China.

7.4 The products of the joint venture company use the product trademark of Party B and indicate that it is made in China.

Article 8 Board of Directors

8.1 The date of registration of the joint venture company is the date of establishment of the board of directors of the joint venture company.

8.2 The board of directors consists of _____ directors, of which Party A delegates _____ name and Party B delegates _____ name. The chairman of the board of directors shall be appointed by Party A, and the vice chairman shall be appointed by Party B. The directors and the chairman of the board shall serve for a term of _____ years, and the appointed party shall continue to be appointed for re-election. Party A and Party B may at any time withdraw the members of the board appointed by them by written notice.

8.3 The board of directors is the highest authority of the joint venture company and determines all major matters of the joint venture company. The following major matters must be unanimously approved by the board of directors before a resolution can be made:

8.3.1 Amendment of the articles of association of the joint venture company;

8.3.2 dissolution of the joint venture company; or extension of the joint venture company's joint venture period;

8.3.3 increase in the registered capital of the joint venture company;

8.3.4 Merger of the joint venture company with other economic organizations;

8.3.5 Transfer of the capital contribution of either party to the joint venture;

8.3.6 Appointment and dismissal of the general manager and deputy general manager;

8.3.7 Hire an auditor registered in China;

8.3.8 Decide to establish branches within and outside China;

8.3.9 Matters that both parties to the joint venture consider to be material matters and must be unanimously approved by the board of directors;

Other matters may be resolved by a majority.

8.4 The chairman of the board of directors is the legal representative of the joint venture company. If the chairman is unable to perform his duties for any reason, he may authorize the vice chairman or other directors to act on his behalf.

The board meeting shall be convened at least once a year, and the meeting shall be conducted as follows:

8.5.1 The board meeting shall be convened and presided over by the chairman or by a written authorized representative;

8.5.2 The meeting shall generally be held at the place where the legal address of the joint venture company is located. The special circumstances shall be determined by the board of directors at the meeting place;

8.5.3 The chairman of the board of directors may convene an interim board meeting upon the proposal of more than one-third of the directors;

8.5.4 Board meetings shall be held only when more than two-thirds of the directors are present. Directors may not attend the meeting for any reason. They may issue written entrustment to authorize others to attend and vote on their behalf. All legal members attending the board meeting shall form a meeting. Quorum, each with one vote;

8.5.5 The board meeting shall be well documented. The resolution shall be in both Chinese and English. The minutes of the meeting shall be filed together with the power of attorney received during the meeting, together with the power of attorney received during the meeting;

8.5.6 During the adjournment of the meeting, the resolutions made in accordance with the written vote of the directors shall have the same effect as the decisions of the board meeting.

8.6 In addition to the director's other duties, the joint venture company does not pay the salary of the board of directors. The travel, transportation, accommodation subsidies and conference expenses incurred by the directors or directors in writing during the board meeting shall be paid by the whole company in accordance with the amount approved by the board of directors.

Article 9 Administrative agencies

9.1 The joint venture company shall have a management organization responsible for the daily operation and management of the company. The management organization has one general manager and one deputy general manager. The first general manager is recommended by the _____ party. The first deputy general manager is recommended by the _____ party and appointed by the board of directors for a term of _____ years. The next president and deputy general manager shall be appointed by the board of directors.

9.2 The general manager's duties are to implement the resolutions of the board meeting, preside over the day-to-day operation and management of the joint venture company, and the deputy general manager assists the general manager.

9.3 The JV Company may establish a number of departments, each of which is responsible for the matters assigned by the General Manager and the Deputy General Manager.

9.4 The general manager and deputy general manager may engage in malpractice or serious dereliction of duty. They may be replaced at any time after the decision of the board of directors.

Article 10 Procurement of raw materials and equipment

10.1 The production equipment, raw materials, and transportation tools required by the joint venture company shall be purchased in China preferentially under the same conditions of quality, price and delivery date.

10.2 When the joint venture company needs it, it can entrust Party B to purchase equipment abroad or entrust Party A to purchase equipment in China. The entrusted party can withdraw the handling fee of _____. In the purchase process, the other party of the entrusted party has the right to send people to participate in the purchase work when it deems it necessary.

10.3 The foreign raw materials and prices entrusted by Party B to the purchase of Party B shall be the same as the preferential prices sold by Party B to its subsidiaries.

Article 11 Preparation of the company

11.1 During the preparation and construction of the joint venture company, a preparatory group will be set up under the board of directors. The preparatory group consists of _____ people, including Party A _____ person, Party B _____ person, and Party A recommends a team leader. Party B recommends a vice group member. The team leader and deputy team leader are appointed by the board of directors.

11.2 The preparatory team is responsible for handling the following matters during the preparation period:

11.2.1 After approval by the representatives of Party A and Party B, sign and order the equipment, materials, appliances, etc., and perform them.

11.2.2 Acceptance and acceptance of all physical contributions from both parties, and inspection and acceptance of imported technical materials.

11.2.3 Installation and commissioning of organization equipment and auxiliary projects.

11.2.4 Prepare the construction and use plan during the preparation period, and be responsible for the financial payment during the preparation period.

11.2.5 Responsible for the collation and translation of technical materials.

11.2.6 Responsible for receiving, sorting, filing, etc. of all files, materials, etc. of the joint venture company.

11.3 All important file exchanges during the preparation period shall be effective and executed after being signed by both the deputy leader and the deputy leader.

11.4 The preparatory team shall report to the board of directors for approval and cancellation after the completion of the work of the equipment transfer test vehicle.

Article 12 Labor Management

12.2 The employment of the general manager and the deputy general manager and their salary, social insurance, and welfare shall be discussed and decided by the board of directors.

Article 13 Taxation, Finance, Audit

13.1 The JV Company shall pay various taxes in accordance with the relevant laws and regulations of the PRC, including local taxes, but the remittance tax of the profits related to Party B, the royalty fee for technology transfer and the withholding income tax for the entry fee shall be paid by Party B.

13.2 The employees of the joint venture company pay personal income tax in accordance with the Individual Income Tax Law of the People's Republic of China.

13.3 The JV Company shall, in accordance with the relevant provisions of the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures and the discussion of the Board of Directors, withdraw the reserve fund, the Enterprise Development Fund and the Staff Welfare Award Fund.

13.4 The financial accounting system of the joint venture company shall be formulated in accordance with the “Accounting System for Sino-foreign Joint Venture Enterprises of the People's Republic of China” and relevant laws and regulations, and shall be reported to the local financial department and the tax authorities for the record.

13.5 The fiscal year of the JV Company shall be in the Gregorian calendar year, from January 1 to December 31 of the Gregorian calendar. All self-made accounting vouchers, documents, statements, and books of the joint venture company are written in Chinese, with RMB as the accounting standard currency. The joint venture company adopts the double-entry bookkeeping method of borrowing and lending, and records the accounts according to the accrual basis. The statements are prepared in both Chinese and English at the end of the month, the end of the year and the end of the year. At the same time, the joint venture company shall provide Party B with a required accounting information in accordance with the method required by Party B. This information shall not be used as the basis for settlement of the joint venture company.

13.6 The financial audit of the joint venture company shall employ an accountant registered in China to review, audit the annual financial statements of the enterprise and the annual accounts, and issue an audit report. If either party believes that it is necessary to hire an auditor from another country to review the annual financials, the other party should agree, but all costs are borne by the employer.

All accounting files of the joint venture company shall be kept within the territory of the People's Republic of China. After the dissolution of the joint venture company, all the books and files will be kept by the original Chinese joint venture.

13.7 Within the first three months of each business year, the general manager shall prepare and prepare the financial statements of the previous year, including the balance sheet, profit and loss calculation form, tax report and profit distribution plan, which shall be submitted to the board of directors for review and approval.

Article 14 Term of the joint venture

The term of the joint venture company shall be _____ years from the date of issuance of the business license by the administrative department for industry and commerce of the People's Republic of China.

One year before the expiration of the joint venture, if the operating party requests to extend the duration of the joint venture in writing, the board of directors unanimously approves the agreement of the other party. Six months before the expiration of the period, the application report shall be submitted to the original examination and approval authority for approval, and the registration formalities for registration may be processed. Extend the duration of the joint venture.

Article 15 Dissolution and Liquidation

15.1 The joint venture company shall perform liquidation when the joint venture expires or the early termination contract is declared dissolved. At the time of liquidation, the company's board of directors proposes the principles of the liquidation procedure and the candidates of the liquidation committee, and reports to the competent department of the company for review.

Members of the liquidation committee, Party A and Party B, each occupy _____, and members of the liquidation committee shall formulate a liquidation plan and report to the board of directors for implementation.

15.2 The liquidation committee conducts a comprehensive inventory of the property, physical objects, creditor's rights and debts of the joint venture company. The property is based on the book value and prepares a liquidation balance sheet and a property catalogue.

15.3 The remaining property of the joint venture company after the debt is settled shall be distributed according to the proportion of the capital contribution of Party A and Party B in the registered capital.

15.4 The entire liquidation process shall be carried out under the supervision of the competent department of the company.

Article 16 Insurance

All insurances of the joint venture company in China are insured by the People's Insurance Company of China. The investment insurance, insurance value, and insurance period are discussed and decided by the board meeting of the joint venture company in accordance with the regulations of the People's Insurance Company of China.

Article 17 Modification, Alteration and Dissolution of the Contract

17.1 After the contract is in force, any modification to this contract and its subsidiary files must be signed by both parties, and submitted to the original approval authority for approval.

17.2 Due to force majeure, the contract cannot be fulfilled, or because the joint venture company is unable to operate due to successive losses, the board of directors unanimously approves and reports to the original approval authority for approval, and the joint venture period and termination contract can be terminated early.

17.3 If a party fails to perform its obligations under the contractual charter or seriously violates the provisions of the contract, causing the joint venture company to fail to operate or fail to meet the business objectives stipulated in the contract, it shall be deemed that the defaulting party terminates the contract unilaterally, and the other party has the right to claim compensation from the defaulting party. And has the right to report to the original approval authority for approval of the termination contract in accordance with the contract. If Party A and Party B agree to continue to operate, the defaulting party shall compensate the joint venture company for economic losses.

Article 18 Liability for breach of contract

18.1 If either party A or Party B fails to submit the capital contribution in accordance with the relevant provisions of Article 4 of the contract, from the first month of overdue, one party overdue shall pay one per cent of the amount due. The fine is given to the other party. If the overdue period is less than one month, it shall be calculated in one month. If it is not submitted within three months of overdue, the defaulting party shall have the right to terminate the contract in accordance with Article 17.3 of this contract, except for a fine of 3% of the investment amount. The defaulting party is required to compensate for the loss.

18.2 If the contract and its subsidiary files cannot be performed due to the negligence of one party, or cannot be fully performed, the negligent party shall be liable for breach of contract. In the case of the fault of both parties, the two parties shall each bear their own liability for breach of contract and pay the default fee according to the actual situation.

Article 19 Force Majeure

Article 20 Applicable Law

The conclusion, validity, interpretation, performance and settlement of disputes of this contract are governed by the laws of the People's Republic of China.

Article 21: Settlement of disputes

21.1 All disputes arising out of or in connection with the execution of this contract shall be settled through friendly negotiation; if the negotiation cannot be resolved, it shall be submitted to the _____ Arbitration Institute for arbitration according to the arbitration procedure of the arbitration institution. The arbitral award is final and binding on both parties.

21.2 In the course of arbitration, this contract shall continue to be performed except for the part of the dispute in which the parties are engaged in arbitration.

21.3 Arbitration fees shall be borne by the losing party, except as otherwise provided by the Arbitration Commission.

21.4 The arbitration resolution will be written in both Chinese and English, and both texts will have the same effect.

Article 22 Contract Text and Text

This contract is written in both Chinese and English. Both texts are equally valid. If there is any discrepancy between the above two texts, the Chinese text shall prevail. The original Chinese and English versions of the contract are signed in quadruplicate, and Party A and Party B each save two copies.

Article 23: The contract enters into force and other

23.1 The following subsidiary files are entered into in accordance with the principles set out in this contract. The following subsidiary files are inseparable parts of this contract.

Subsidiary File I. Technology Transfer Agreement

Subsidiary file II. Product sales agreement

Attached file III. Accounting program

If the terms of the above-mentioned subsidiary files are inconsistent with the main contract, the main contract shall prevail.

Attached file one

Technology transfer agreement

table of Contents

1) General

2) Technology transfer content

3) Definition

4) Price