Looking for an agreement? Search from over 1 million agreements now.

Agreement Relating To Joint Venture

This is an actual contract by Sheldahl.
Browse the agreement preview below and buy the entire agreement for $35
Search This Document
Exhibit 10.23


AGREEMENT RELATING TO JOINT VENTURE
-----------------------------------


This AGREEMENT RELATING TO JOINT VENTURE is made and entered into this 1st day of August, 1995, by and between SHELDAHL, INC., a corporation established and existing under the laws of the State of Minnesota having its principal place of business at 1150 Sheldahl Road, Northfield, MN 55057-0170, U.S.A. ("SHELDAHL"), JIANGXI CHANGJIANG CHEMICAL PLANT, a corporation established and existing under the laws of China, having its principal place of business at 1 Qianjin Road (E), Jiujiang Jiangxi China 332006 ("JCCP"), HONG KONG WAH HING (CHINA) DEVELOPMENT CO., LTD., a corporation established and existing under the laws of Hong Kong having its principal place of business at 14 Westlands Road, 3/F C, Aik San Factory Building, Quarry Bay, Hong Kong ("WAH HING"), and JIUJIANG FLEX CO., LTD., a corporation established and existing under the laws of China, having its principal place of business at 1 Qianjin Road (E), Jiujiang Jiangxi China 332006 ("SNW").


Jiujiang Wahhing Norinco Electronics Industry Co. Ltd. is an enterprise with foreign investment (a limited liability company) established by JCCP and WAH HING to manufacture and to sell flexible copper laminates and associated coverfilms and tapes. Jiujiang Wahhing Norinco Electronics Industry Co. Ltd. was registered and approved by the city government of Jiujiang in Jiangxi province in China on August 18, 1994.


During the establishment of Jiujiang Wahhing Norinco Electronics Industry Co. Ltd., SHELDAHL expressed its interest in participating as an equity owner of Jiujiang Wahhing Norinco Electronics Industry Co. Ltd. after assessing its strategic planning and technical competitive advantages. After a series of discussions, both JCCP and WAH HING have agreed to have SHELDAHL participate as an equity owner of Jiujiang Wahhing Norinco Electronics Industry Co. Ltd.


BACKGROUND:


A. JCCP is actively engaged in the business of developing, manufacturing and marketing various kinds of electronic material in China and the international markets.


B. SHELDAHL is actively engaged in the business of developing, manufacturing and marketing flexible copperclad laminates and associated coverfilm tapes throughout the world.


C. Wah Hing is actively engaged in the businesses of manufacturing and marketing toys, real estate development, construction contracting and investment development.


D. The following additional agreements ("Additional Agreements") are being entered into this date: (i) Manufacturing


1


Agreement; (ii) Marketing and License Agreement; and (iii) Agreement Relating to Payments.


E. All three parties desire to establish a long-term business relationship through investment in SNW.


NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein, the parties agree as follows:


1. Purpose, Scope, Duration.


1.1 JCCP, SHELDAHL and WAH HING have decided to jointly form a limited liability company in Jiujiang, Jiangxi China under the name Jiujiang Flex Co., Ltd. The formation of the company is based on principles of shared risk, shared management and shared profit. The duration of SNW shall be thirty (30) years, unless extended by mutual agreement of the parties.


1.2 The total investment of SHELDAHL, WAH HING and JCCP in SNW is approximately $5,000,000. SNW is expected to have the capability to produce 600,000 square meters of flexible copperclad laminates and 600,000 square meters of associated coverfilm tapes.


1.3 The purpose and scope of SNW shall be to manufacture and sell flexible copperclad laminates and associated coverfilm tapes through SNW's distribution channels in China (including Taiwan, Hong Kong and Macau) and to SHELDAHL for resale in all other markets.


1.4 Neither JCCP nor WAH HING shall, while it owns shares in SNW and for a period of three years after it sells its shares in SNW, manufacture or market, directly or indirectly, for sale anywhere in the world, products which are competitive with products manufactured or marketed by SNW. Neither JCCP nor WAH HING shall, directly or indirectly pursue business opportunities related to the technology licensed to SNW by SHELDAHL except through SNW.


1.5 Except for SHELDAHL's obligations under the Manufacturing Agreement and the Marketing and License Agreement, SHELDAHL shall be free to pursue other business opportunities outside of SNW. SHELDAHL may grant a license under the Technical Information and the Industrial Property Rights of SHELDAHL to manufacture Licensed Products in any country in Asia other than third parties which would manufacture the Licensed Products in mainland China, Taiwan, Hong Kong or Macau. In such event, SHELDAHL agrees to purchase, in replacement of its 120,000 square meter commitment under the Manufacturing Agreement, a total of 150,000 square meters of Licensed Products which are flexible copperclad laminates each year during the period beginning with


2


such license granted and ending the tenth (10th) Royalty Year. In the event SHELDAHL desires to grant such a license, it agrees to inform the Board of Directors of SNW six (6) months before the license grant and discuss and consider with the SNW Board of Directors SNW's participation. If SNW desires to participate, SHELDAHL shall give special consideration to such request.


2. Formation and Capitalization.


2.1 The name of the company is Jiujiang Flex Co., Ltd. JCCP shall cause the joint venture to be approved under the laws of China and in connection therewith, shall cause Articles of Association to be filed and approved as required by China law.


2.2 The total investment of SHELDAHL, WAH HING and JCCP in SNW is approximately $5,000,000 which is equal to 100% equity ownership interest. JCCP will contribute to SNW the manufacturing facilities, the secondary equipment inside mainland China, the supporting infrastructure of the factory and the right to use the land and will receive 40% ownership in SNW. WAH HING will contribute to SNW certain imported equipment and capital and will receive 40% ownership interest in SNW. All equipment and facilities shall be free and clear of any rights of third parties and title to such items shall be transferred to SNW. SHELDAHL will provide SNW with licensed technology valued at $900,000 and technical assistance valued at $100,000 (as specified in both the Marketing and License Agreement and the Manufacturing Agreement) and will receive 20% ownership interest in SNW valued at $1,000,000 and the payments required under the Additional Agreements. Each party shall provide SNW with a clear and separate list of all investment items from each party with such items verified by the parties. SNW will submit the complete list of all investment items to the China Business Registration Agency which will verify the investment and issue the legal binding verification report. The parties will utilize this Agency report as the basis to determine the exact value of the contribution from each party to calculate the ownership interest of each party.


2.3 All expenses related to the formation and organization of SNW shall be paid by SNW. Other than those costs, each party shall pay their respective costs and expenses of finalizing the transactions contemplated by this Agreement.


3. Management of SNW.


3.1 The Board of Directors of SNW shall become effective the date when SNW receives governmental approval.


3.2 The Board of Directors consists of 8 Board members, out of which JCCP shall have 3 members; WAH HING shall have 3 members; and SHELDAHL shall have 2 members. The Chairman


3


of the Board is from WAH HING. The Vice Chairmen are from JCCP and SHELDAHL. The term of the Chairman of the Board, Vice Chairman of the Board and each Board member is four (4) years. Board members' terms may be renewed after approval by the party which they represent. Each party shall notify the Board in writing when it decides to replace its designated Board member.


3.3 The overall management and control of the business and affairs of SNW shall be vested in the Board of Directors. Each member of the Board of Directors shall be entitled to one vote. Each party shall be entitled to remove and replace its designated directors. Five directors shall be required for all meetings of the Board of Directors; provided, that no meeting shall be held unless one director designated by each party is present. The initial President of SNW responsible for its day-to-day operations shall be Mr. Guo You-Wi. All successors to Mr. Guo You-Wi, and all other officers of SNW shall be appointed and removed by the Board of Directors.


3.4 JCCP, WAH HING and SHELDAHL, as shareholders, will cause SNW to be operated and managed in a manner that is fair to all shareholders of SNW.


4. Consents. The written consent of the Board of Directors and JCCP, WAH HING and SHELDAHL must be obtained prior to SNW:


a. authorizing, issuing or acqui
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |