Preview of our top selling Joint Venture Agreement
Dana / Donfeng Axle - Equity Joint Venture Contract
Exhibit 10-U(2)
*** indicates where a confidential portion has been omitted and filed separately with the Commission
EQUITY JOINT VENTURE CONTRACT
PREAMBLE
Whereas, DONGFENG AXLE CO., LTD. (hereinafter referred to as DAC) is a limited liability company incorporated in accordance with the laws of the People's Republic of China at the date hereof, whose shareholders are DONGFENG MOTOR CO., LTD. (hereinafter referred to as DFL) and DONGFENG (SHIYAN) INDUSTRIAL COMPANY (hereinafter referred to as DONGFENG INDUSTRY) and DONGFENG MOTOR CORPORATION (hereinafter referred to as DFM).
DFL, an equity joint venture company established in accordance with the laws of the People's Republic of China, and DANA Corporation (hereinafter referred to as DANA CORPORATION), a corporation established in accordance with the laws of the Commonwealth of Virginia, United States of America, entered into a Letter of Intent on September 24th, 2003, pursuant to which DFL and DANA agree to set up an equity joint venture company (hereinafter referred to as JVC) in Xiangfan Municipality, Hubei Province, PRC. DFL and DANA CORPORATION agree that the investment of DANA CORPORATION in the JVC will be carried out by DANA MAURITIUS LIMITED, a one hundred percent (100%) wholly owned subsidiary of DANA CORPORATION with limited liability established in accordance with the laws of Republic of Mauritius (hereinafter referred to as DANA).
In accordance with the Joint Venture Law (as defined hereinafter), the Joint Venture Regulations (as defined hereinafter) and other relevant laws and regulations of the PRC, DFL and DANA, adhering to the principles of equality and mutual benefit, agree after friendly consultations as follows:
ARTICLE 1
DEFINITION
1.1 DEFINITIONS
In this Contract, unless the context otherwise requires, the following expressions have the following meanings:
AFFILIATE means, in relation to any Party, any enterprise, corporation, partnership, trust or other entity (excluding the JVC) directly or indirectly controlling or controlled by or under direct or indirect common control with that Party; CONTROL for the purposes of this definition being taken to mean direct ownership of fifty percent (50%) or more of the registered capital, stocks or the voting rights of such enterprise or entity.
ANCILLARY CONTRACTS is defined in Article 30.1(a).
APPROVAL AUTHORITY is defined in Article 30.2(a).
ARTICLES OF ASSOCIATION means the Articles of Association of the JVC of even date herewith.
BOARD means the Board of Directors of the JVC.
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BREACHING PARTY is defined in Article 24.1(a).
CHINESE GAAP means the Generally Accepted Accounting Principles applicable in the PRC.
COMMERCIAL VEHICLES means those vehicles described in Article 4.2(b).
COMPANY TERM is defined in Article 22.1(a).
CONFIDENTIAL INFORMATION means Information relating to the business affairs, financial information, technology and know-how, and trade secrets of any Party or its Affiliate(s) and the JVC, obtained from that Party or its Affiliate(s) or obtained from any third party in the course of discussing, considering or implementing this Contract.
CONTRACT means this Equity Joint Venture Contract for the establishment of the JVC.
DANA means Dana Mauritius Limited, a limited liability company duly established and validly existing under the laws of the Republic of Mauritius.
DELEGATES means the General Manager, the Executive Deputy General Manger and the Deputy General Managers delegated to the JVC by either Party and other management and technical personnel to be delegated to the JVC upon agreement by both Parties.
DELEGATE AGREEMENT means the DFL Delegation Agreement or the DANA Delegation Agreement entered into between the JVC and DFL or DANA CORPORATION respectively.
DEPUTY GENERAL MANAGER and DEPUTY GENERAL MANAGERS means, respectively, each of the four (4) Deputy General Managers of the JVC individually and collectively.
DFL means Dongfeng Motor Co., Ltd., a Sino-foreign joint venture enterprise duly established by Dongfeng Motor Group Company Limited and Nissan China Company Limited and validly existing under the laws of the PRC.
EFFECTIVE DATE is defined in Article 30.2(a).
ENVIRONMENTAL LAW means any PRC national, provincial, municipal, or local law, judicial decision, regulation, rule, judgment, order, decree, injunction, permit or governmental restriction or any agreement with any governmental authority, whether now or hereafter in effect, relating to the environment, human health and safety or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances as defined therein, wastes or materials.
ESTABLISHMENT DATE means the date on which the JVC is established as specified in Article 3.1.
EVENT OF FORCE MAJEURE is defined in Article 26.1.
EXCHANGE RATE means the median of the US$ and RMB buying and selling rates quoted by the People's Bank of China on the date the relevant payment or transaction
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occurs.
EXECUTIVE DEPUTY GENERAL MANAGER means the Executive Deputy General Manager of the JVC.
EXEMPTED TARGET is defined in Article 20.3.
FACTORY A means all the facilities, structures, buildings and improvements constructed and/or currently under construction, which are located at Land I.
FACTORY B means all the facilities, structures, buildings and improvements constructed and/or currently under construction, which are located at Land II.
FACTORY C means all the facilities, structures, buildings and improvements constructed and/or currently under construction, which are located at Land III.
FACTORY means Factory A, Factory B and Factory C individually; and FACTORIES means Factory A, Factory B and Factory C collectively.
FEASIBILITY STUDY REPORT means the feasibility study report prepared by the Parties for evaluating the technical and commercial feasibility of establishing an axle equity joint venture company in the Hubei Province, PRC.
FERC means a Foreign Investment Enterprise Foreign Exchange Registration Certificate.
GENERAL MANAGER means the General Manager of the JVC.
INFORMATION means information of whatever nature and whether written, oral, visual, pictorial, held electronically or otherwise, whether in whole or in part.
JOINT VENTURE LAW means the Law of the People's Republic of China on Equity Joint Ventures Using Chinese and Foreign Investment.
JOINT VENTURE REGULATIONS means the Implementing Regulations of the Law of the People's Republic of China on Equity Joint Ventures Using Chinese and Foreign Investment.
JVC means the PRC equity joint venture company established pursuant to this Contract.
LAND I means that certain parcel of land (Land Lot Number: 9-13-14-2 and Land Use Rights Certificate Number: 0913014-2) with a total area of approximately 134,319.10 square meters located on Jiefang Road, Xiangfan Municipality, Hubei Province, which the JVC will lease from DFM pursuant to the Land Lease Contract.
LAND II means those certain parcels of land (Land Lot Number: 9-5-242 and 9-5-743 and Land Use Rights Certificate Number: 0905242 and 0905743) with a total area of approximately 106,877.30 square meters located on No.1 Wudang Road, Maojian District, Shiyan Municipality, Hubei Province, PRC, which the JVC will lease from DFM pursuant to the Land Lease Contract.
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LAND III means those certain parcels of land (Land Lot Number: 9-8-9, 9-8-14, 9-8-219, 9-8-4, 9-8-1, 9-8-13, 9-8-2 and 9-8-220 and Land Use Rights Certificate Number: 0908009, 0908014, 0908219, 0908004, 0908001, 0908013, 0908002 and 0908220) with a total area of approximately 318,915.30 square meters located on Maojian Hall, Maojian District, Shiyan Municipality, Hubei Province, PRC, which the JVC will lease from DFM pursuant to the Land Lease Contract.
LAND IV means that certain parcel of land with an area of approximately 3,000 square meters located on No. 68 Migong Road, Xiangfan Municipality, Hubei Province, PRC, to which the JVC has exclusive use rights.
LAND means Land I, Land II, Land III or Land IV individually or Land I, Land II, Land III and Land IV collectively.
LAND LEASE CONTRACT means a land lease contract entered into between DFM and DAC on July 9, 2003.
NON-BREACHING PARTY is defined in Article 24.1(b).
OFFICE BUILDING means all the facilities, structures, buildings and improvements constructed and/or currently under construction, which are located at Land IV.
PARTY means DFL or DANA individually; and PARTIES means DFL and DANA collectively.
PERSON means any corporation, association, partnership, trust, body, entity, individual, or enterprise legal person.
PRODUCTS is defined in Article 4.2(b).
PRC means the People's Republic of China, (including Mainland China, the Hong Kong Special Administrative Region, Taiwan and the Macau Special Administrative Region), but for the purpose of this Contract, refers only to Mainland China.
PRC FINANCIAL STATEMENTS is defined in Article 16.3(a)(iv).
QCDD means quality assurance capability for Q, competitive pricing advantage for C, delivery time meeting the requirements of the production and operational model for D, and research and development capability for D.
R&D CENTER is defined in Article 9.6(a).
REPRESENTATIVE means in relation to a Party, a director, officer, employee, agent, servant or professional adviser of a Party or one of its Affiliates.
RMB means Renminbi, the lawful currency of the PRC.
SAFE means the State Administration of Foreign Exchange, its provincial branch in Hubei Province or its local branch in Xiangfan Municipality, as appropriate.
SAIC means the State Administration of Industry and Commerce, its provincial branch in Hubei Province or its local branch in Xiangfan Municipality, as appropriate.
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SENIOR MANAGERS is defined in Article 12.1(b)(iii).
SPA means the Sale and Purchase Agreement for the acquisition by Dana of an aggregate fifty percent (50%) of the registered capital of Dongfeng Axle Co., Ltd. entered into among DFL, Dongfeng Industry, DFM and Dana on the even date herewith.
U.S. or U.S.A. means the United States of America.
US GAAP means Generally Accepted Accounting Principles applicable in the United States of America.
US GAAP FINANCIAL STATEMENTS is defined in Article 16.3(a)(v).
US$ means United States Dollars, the lawful currency of the United States of America.
WARRANTIES is defined in Article 5.4(b).
ARTICLE 2
PARTIES
2.1 CHINESE PARTY
The Chinese party to this Contract is Dongfeng Motor Co., Ltd. in English and [CHINESE CHARACTER] in Chinese (DFL), a Sino-foreign equity joint venture with limited liability duly organized and validly existing under the laws of the PRC with its legal address at 84 Baiye Road, Wuhan Economic Development Zone, Wuhan City, Hubei Province, PRC. The legal representative of DFL is:
Name: MIAO WEI
Position: Director of Board
Nationality: Chinese
2.2 FOREIGN PARTY
The foreign party to this Contract is Dana Mauritius Limited in English and [CHINESE CHARACTER] in Chinese (DANA), a corporation duly established and validly existing under the laws of the Republic of Mauritius, with its legal address at Level 6, One Cathedral Square, Pope Hennessy Street, Port Louis, Mauritius. The legal representative of DANA is:
Name: Robert E. Pollock
Position: Director
Nationality: United States of America
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ARTICLE 3
THE JVC
3.1 ESTABLISHMENT OF THE JVC
In accordance with the Joint Venture Law, the Joint Venture Regulations and other relevant laws and regulations of the PRC, the Parties hereby agree to establish an equity joint venture company with limited liabilities (i.e. the JVC) pursuant to the terms of this Contract and the Articles of Association. The JVC shall be deemed to be duly established on the date set forth in the JVC's business license issued by the SAIC (the ESTABLISHMENT DATE).
3.2 NAME AND ADDRESS OF THE JVC
(a) The name of the JVC shall be Dongfeng Dana Axle Co., Ltd. in English
andP. [CHINESE CHARACTER] in Chinese.
(b) The legal address of the JVC shall be: 10th Floor, Torch Building, Hi-Tech
Industry Development Zone, Xiangfan, Hubei Province, PRC.
(c) Upon the expiration of the Company Term or any early termination of the
JVC, or if at any time during the Company Term DFL ceases to be a Party to
this Contract or if DFL's equity interest falls below 50% of the
registered capital of the JVC or if there is a change in the shareholding
structure of or in the name of DFL or for any other reason, upon DFL's
request, the JVC shall forthwith change its name by removing the word
"Dongfeng" in English and "[CHINESE CHARACTER]" in Chinese from its name
without replacing it with any similar word or expression.
Upon the expiration of the Company Term or any early termination of the
JVC, or if at any time during the Company Term DANA ceases to be a Party
to this Contract or if DANA's equity interest falls below 50% of the
registered capital of the JVC or if there is a change in the shareholding
structure of or in the name of DANA or for any other reason, upon DANA's
request, the JVC shall forthwith change its name by removing the word
"Dana" in English and "[CHINESE CHARACTER]" in Chinese from its name
without replacing it with any similar word or expression.
3.3 LIMITED LIABILITY COMPANY
The JVC shall be a limited liability company. Each Party's liability shall be limited to the amount of the JVC's registered capital subscribed by the Party, and no Party shall have any other liability to the JVC or to any third party jointly or severally in excess of such amount. The Parties shall share the profits and, subject to the above, bear the risks and losses in accordance with the ratio of their capital contributions as set out in Article 5.2.
3.4 LEGAL PERSON STATUS
The JVC shall be a legal person under the laws of the PRC.
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3.5 COMPLIANCE WITH LAW
All activities of the JVC shall be governed and protected by the relevant published laws, regulations, decrees and rules of the PRC, and by the terms of this Contract and the Articles of Association of the JVC. The Parties recognize that in carrying out its obligations under this Contract, each Party shall also be subject to and must abide by applicable laws, regulations, decrees and rules of the jurisdiction of its establishment or its ultimate parent's establishment.
ARTICLE 4
PURPOSE, BUSINESS SCOPE AND SCALE OF PRODUCTION
4.1 PURPOSE
The purpose for the Parties to establish the JVC is to:
(a) establish the JVC to be a technologically advanced manufacturing
enterprise in the PRC of world class capabilities that will attain high
operating performance standards and will conduct activities of research,
design, manufacture and sale of Commercial Vehicle axle products and
specialty vehicle axle products, all of which are asbestos-free and meet
the environmental requirements of PRC and produce and sell related spare
parts and components as well as provide after-sales services; and
(b) allow the Parties to earn satisfactory profits.
4.2 BUSINESS SCOPE
(a) The business scope of the JVC shall be to design, manufacture, promote,
and sell Commercial Vehicle and specialty vehicle axle products and
related spare parts and components, to research and develop new
applications of such asbestos-free Commercial Vehicle and specialty
vehicle axle products for the domestic PRC market, and to provide
after-sales services and engineering support for such Commercial Vehicle
and specialty vehicle axle products, as well as to engage in other
business activities to promote the purpose and success of the JVC.
The detailed business scope of the JVC includes:
(i) to research, design, manufacture, develop, promote and sell
Commercial Vehicle axle products, specialty vehicle axle products
and related parts and components, but specifically excluding outdoor
power equipment products and off-highway vehicle axle products;
(ii) to sell in the China market the above-mentioned products and provide
after-sales services;
(iii) to sell in the Hong Kong Special Administrative Region, Taiwan, and
the Macau Special Administrative Region and in the international
market as provided in Article 10.2 below;
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(iv) to provide technical consultation services with respect to the axle
products and components of the JVC;
(v) to import from DANA and distribute in the PRC vehicle axle products;
(vi) to research, design, develop, produce, promote, handle, deal in,
sell or market only products that have no asbestos-containing
materials or products; and
(vii) to engage in other business activities to promote the purpose and
success of the JVC.
(b) Specifically, the axle products to be manufactured or sold by the JVC
shall be the following products (the PRODUCTS) for commercial vehicles
(trucks having a gross vehicle weight above 4 tons as well as medium and
large buses and coaches, collectively "COMMERCIAL VEHICLES") and specialty
vehicles (i.e., occupational vehicles, fire and rescue vehicles, dump
trucks, and cement trucks) but excluding outdoor power equipment products
or off-highway products:
(i) single and tandem drive axles;
(ii) non-driving steer axles;
(iii) pusher, tag and trailer axles;
(iv) drive steer axles;
(v) low floor bus axles;
(vi) brake components; and
(vii) hubs, drums and rotors.
(c) The JVC will also manufacture and sell asbestos-free axle products for
light vehicles (having a gross vehicle weight less than 4 tons). DFL and
DANA will discuss forming a separate joint venture for the light axle
business and other matters relating to the development of the light axle
business.
4.3 ESTIMATED SCALE AND QUALITY OF PRODUCTION
(a) The Parties estimate that the JVC shall formally commence operation after
the issuance of the business license by SAIC, and the estimated annual
production for that year will be set out in the Feasibility Study Report.
Thereafter, the production capacity and scale of production may be
expanded subject to the conditions of increased market demand and other
economic conditions favoring expansion.
(b) In recognition of the importance of the development and production of
quality products to the success of the JVC, the JVC shall do its utmost to
ensure that the JVC shall obtain and continue in effect certification of a
world class quality system.
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4.4 LOCATION
(a) The JVC's operations will be located on the Land of the JVC and other
locations mutually agreed upon by the Parties. The JVC shall optimize the
process and logistics of the business of the JVC in the best interests of
both Parties.
(b) The JVC may from time to time, as it deems necessary and after approval by
the Board and the Approval Authority, establish branch organizations
within the PRC to promote the JVC, the Products, and to provide
information and advice to the customers of the JVC with respect to the
installation and uses of the Products.
ARTICLE 5
TOTAL INVESTMENT AMOUNT AND REGISTERED CAPITAL
5.1 TOTAL INVESTMENT AMOUNT
The total investment amount of the JVC shall be Renminbi One Billion Five Hundred Million (RMB 1,500,000,000).
5.2 REGISTERED CAPITAL AND CONTRIBUTION RATIOS
The registered capital of the JVC shall be Renminbi Five Hundred Million (RMB 500,000,000), of which DFL shall contribute Renminbi Two Hundred and Fifty Million (RMB 250,000,000) accounting for fifty percent (50%) and DANA shall contribute Renminbi Two Hundred and Fifty Million (RMB 250,000,000) accounting for fifty percent (50%).
5.3 CONTRIBUTIONS OF THE PARTIES
(a) DFL shall contribute to the JVC 50% of the registered capital of DAC,
which has been subscribed and fully paid up by DFL as of the date hereof,
representing 50% of the registered capital of the JVC.
(b) DANA shall contribute to the JVC 50% of the registered capital of DAC,
which DANA has acquired from DFL, Dongfeng Industry and DFM pursuant to
the SPA and which has been subscribed and fully paid up by DFL, Dongfeng
Industry and DFM as of the date hereof, representing 50% of the registered
capital of the JVC.
5.4 REPRESENTATIONS AND WARRANTIES OF THE PARTIES
(a) DFL represents and warrants to DANA and the JVC with respect to DAC,
including without limitation all matters relating to its business,
finance, assets and properties those representations and warranties (DFL
REPRESENTATIONS AND WARRANTIES) set out in Schedule 8.1A of and other
representation and warranties and undertaking in the SPA.
(b) DANA represents and warrants to DFL and the JVC with respect to DANA's
acquisition of 50% of the registered capital of DAC pursuant to the SPA
those
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representations and warranties (DANA REPRESENTATIONS AND WARRANTIES) set
out in Schedule 8.1B of and other representation and warranties and
undertaking in the SPA.
For the purposes of this Contract, the DFL Representations and Warranties
and DANA Representations and Warranties are collectively referred to as
the WARRANTIES.
(c) The Warranties shall be deemed to be repeated immediately before the
Establishment Date with reference to the facts then existing.
(d) The rights and remedies of any Party under this Contract including those
in respect of the Warranties, shall not be affected, and the other Party's
liabilities under this Contract shall not be released, discharged or
impaired, by (i) the completion of each Party's capital contributions to
the registered capital of the JVC, (ii) any investigation made into the
affairs of such other Party by that Party or any Affiliate of that Party,
or (iii) any event or matter whatsoever, other than a specific and duly
authorised written waiver or release by that Party.
(e) Without prejudice to Article 24 below, each of the Parties hereby agrees
to indemnify and keep the JVC and the other Party fully indemnified from
and against all claims, demands, actions, damages, losses, costs,
obligations, penalties, liabilities and expenses brought or made against
or suffered or incurred by the JVC and/or such other Party as a result of
or in respect of any breach by that Party of any Warranties applicable to
that Party.
(f) Both Parties agree that a claim for indemnity against one Party hereto
under Article 5.4(e) above, whether asserted by the JVC or by the other
Party, may be made by such other Party on behalf of itself and/or on
behalf of the JVC.
5.5 TIMING OF CAPITAL CONTRIBUTIONS BY THE PARTIES TO THE JVC
The date of capital contribution by the Parties to the JVC shall be deemed to be the Completion Date as defined in the SPA. DFL's obligation with respect to its capital contributions to the JVC shall be deemed fully discharged on the Completion Date. DANA's obligation with respect to its capital contributions to the JVC shall be deemed fully discharged on the date which DANA has made full payment toward the Purchase Price (as defined in the SPA) in accordance with the terms and conditions of the SPA.
5.6 ADDITIONAL FINANCING AND ALTERATION OF REGISTERED CAPITAL
(a) In addition to the registered capital, the JVC shall have the power to
borrow any additional funds which it requires and to mortgage its assets
in relation to such borrowing. Neither Party shall be obligated to lend
funds to the JVC or to guarantee loans to the JVC from third parties or
financial institutions. However, if a Party does agree to make such loans
or guarantees, such Party shall be entitled to be paid interest and/or
related fees, subject to the relevant provisions of the laws and
regulations of PRC(pound and the terms and conditions of such loans
or guarantees shall be comparable to the terms and conditions of
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loans or guarantees the JVC could have obtained from a third party on a
negotiated and arm's length transaction.
(b) During the Company Term, the JVC may alter its registered capital with the
unanimous agreement of the Board and the approval of the Approval
Authority. In the event that the Board unanimously agrees that if there is
a financial or operational need to increase the registered capital of the
JVC in excess of that stated in Article 5.2 above and either Party is
either unwilling or unable for whatever reason to contribute to such
capital increases, the other Party, in its discretion, in addition to its
own subscription to such capital increase, can subscribe to the
unsubscribed portion of such capital increase. The terms and conditions of
such capital increase and subscription shall be stipulated in a separate
agreement to be entered into between DFL and DANA, subject to the
unanimous agreement of the Board and the approval of the Approval
Authority.
(c) Notwithstanding the provisions of the preceding two paragraphs,
(i) the Board shall make final decisions on all matters related to the
capital structure and funding requirement of the JVC;
(ii) Prior to the Completion Date (as defined in the SPA), DANA and DFL
will, based on recommendation from DANA's and DFL's financial team,
set the targets for additional fundings from the Parties for the
first 2 years after the JVC has been establishment;
(iii) Once the Board has decided that additional fundings from the Parties
are required, both Parties shall provide funding to the JVC up to
their pro rata shares of the aforesaid target by any of the
following options (A) a shareholder loan to the JVC, (B) a parent
guarantee supporting JVC's borrowing from any banks or financial
institutions, or (C) a standby letter of credit;
(iv) Each Party shall be entitled to choose any of the aforesaid options
and to substitute one option for the other at any time.
5.7 TRANSFER OF THE REGISTERED CAPITAL TO A THIRD PARTY OTHER THAN AN
AFFILIATE
(a) Subject to the provisions of paragraphs (b) and (c) of this Article 5.7
below, either Party may assign, sell or otherwise dispose of all or part
of its registered capital contribution to the JVC to a third party,
provided, however, that it first obtains the written consent of the other
Party and the approval of the Approval Authority if required.
(b) When a Party (the TRANSFERRING PARTY) wishes to assign, sell or otherwise
dispose of all or part of its registered capital contribution to the JVC
to a third party (other than a transfer by a Party to an Affiliate
pursuant to the provisions of Article 5.8 below (hereinafter the
TRANSFER), it shall notify the other Party in writing of (i) its wish to
make the Transfer, (ii) the interest it wishes to transfer, (iii) the
terms and conditions of the Transfer and (iv) the identity of
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the proposed transferee (the NOTICE). The other Party shall have a
pre-emptive right to purchase the whole of such interest on the terms and
conditions specified in the Notice.
(c) The other Party shall notify the Transferring Party within sixty (60) days
of actual delivery of the Notice whether it will purchase the whole of the
interest to be transferred. If the other Party fails to notify the
Transferring Party within such sixty (60) day period that it will purchase
such interest, it shall be deemed to have agreed to the Transfer to the
proposed transferee specified in the Notice, and the Transferring Party
may assign, sell or otherwise dispose of such interest to such proposed
transferee, on the terms and conditions set out in the Notice. The Parties
shall cause the directors to unanimously agree to such assignment, sale or
other disposition. The Transferring Party shall provide the other Party
with a duplicate of the executed written agreement with the transferee
within fourteen (14) days of the execution of the agreement.
(d) If any Party fails to satisfy the following conditions during the transfer
of any part of its equity interest in the JVC, such transfer shall be
void:
(i) The contents of the transfer agreement actually executed by the
Transferring Party and the transferee shall be consistent with the
contents of the Notice;
(ii) The transferee has provided the non-Transferring Party a written
covenant letter (which shall be effective and in full force) with
the undertaking that the transferee shall fulfil the Transferring
Party's obligations under this Contract and shall be bound by this
Contract as if it were the original signing party thereof;
(iii) The approval by the Approval Authority and amendment registration
with registration authorities have been completed.
(e) If the other Party does not wish to or is unable to exercise its
pre-emptive right, it may not unreasonably withhold its consent to any
proposed Transfer by the Transferring Party. Notwithstanding any
provisions to the contrary, if the Transferring Party is DFL, DFL may not
transfer its equity interest in the JVC to any competitor of DANA which is
based in the PRC, Europe or North America, unless DANA has a direct or
indirect ownership interest in such competitor; and if the Transferring
Party is DANA, DANA may not transfer its equity interest in the JVC to any
competitor of DFL which is based in the PRC, unless DFL has an ownership
interest in such competitor. Moreover, if the capitalization, business
prospect, credit rating and such other business criteria of the proposed
transferee specified in the Notice as determined by an international
investment banking firm, are poorer than those of the Transferring Party,
the Transferring Party shall continue to be liable to the other Party for
the obligations of the Transferring Party hereunder after the Transfer.
5.8 TRANSFER OF THE REGISTERED CAPITAL TO AN AFFILIATE
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(a) Notwithstanding the provisions of Article 5.7, either Party may freely
assign its capital contribution to an Affiliate (which is not a competitor
(with respect to the Products) or owned by a competitor (with respect to
the Products) of the other Party or its Affiliates) after the following
conditions having been satisfied:
(i) such transferring Party shall guarantee that all of its
responsibilities and obligations under this Contract and under any
Ancillary Contracts to which it is a party shall remain valid and
unchanged as provided herein and therein, and
(ii) the Affiliate assignee shall be and have the ability to fully
perform all of such transferring Party's responsibilities and
obligations under this Contract; if any Ancillary Contracts to which
such transferring Party is a party have been assigned by such
transferring Party to its Affiliate assignee, the Affiliate assignee
shall fully perform all of such transferring Party's
responsibilities and obligations under such assigned Ancillary
Contracts; for those ancillary Contracts which have not been
assigned, such transferring Party shall continue to perform its
responsibilities and obligations under such non-assigned Ancillary
Contracts.
5.9 INVESTMENT CERTIFICATES
After the Completion Date, the JVC shall engage a major accounting firm registered in the PRC as mutually agreed by the Parties to verify the contributions and issue a verification report. Upon issuance of the verification report by the accounting firm, the JVC shall issue an investment certificate to each Party signed by the Chairman and Vice-Chairman of the Board, setting forth the following: (i) the name of the JVC, (ii) the Establishment Date, (iii) the name of the Parties and their respective capital contributions, (iv) capital contribution date, (v) the date of the verification report so as to confirm the amount contributed by each Party.
5.10 ENCUMBRANCE OF REGISTERED CAPITAL
No Party shall mortgage or otherwise encumber all or any part of its equity interest in the JVC without the consent of the other Party.
5.11 ANCILLARY CONTRACTS
(a) On the date this Contract is signed, the following Ancillary Contracts are
also signed or initialed by the relevant party or the Parties jointly (on
behalf of the JVC):
(i) Articles of Association of the JVC for the establishment of the JVC
in the form of Appendix 5.11(a)(i);
(ii) Technology and Know-How License Contract, in the form of Appendix
5.11(a)(ii), between DANA CORPORATION and the JVC;
(iii) Technical Assistance Contract, in the form of Appendix 5.11(a)(iii),
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*** indicates where a confidential portion has been omitted and filed separately with the Commission
between DANA CORPORATION and the JVC;
(iv) Long Term Supply Agreement, in the form of Appendix 5.11(a)(iv),
between DFL and the JVC;
(v) DFL Delegation Agreement, in the form of Appendix 5.11(a)(v),
between DFL and the JVC;
(vi) DANA Delegation Agreement, in the form of Appendix 5.11(a)(vi),
between DANA CORPORATION and the JVC...
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