332
!
24
per cent. (50%) of the said first issue of the share capital shall be subscribed by the
Electric Company."
77
יי
5 (6). Subsequent issues of the share capital of the China Company" shall be offered for subscription to the registered shareholders in proportion to their boldings, at the time such issue is made. In the event that any of the shareholders of the China Company fail for any reason whatsoever to subscribe and pay for their proportion of such issues, such unsubscribed shares will be offered for subscription to the other registered shareholders in proportion to their holdings of the share capital of the company, at such time.
-L
5 (c). Provided, however, that at no time during the continuance of this agreement shall the proportion of the issued share capital owned by the Ministry be less than twenty-five per cent (25 %), and that at no time during the continuance of this agreement shall the proportion of the issued share capital owned by the
Electric Company" be less than twenty-five per cent. (25 %).
..
T
6(a). The affairs of the China Company" shall be managed by a board of directors. The functions, powers and disabilities of such board of directors shall be those usually exercised and imposed upon boards of directors of similar companies, except as the same shall be lawfully varied pursuant to the provisions of this agreement, or the charter and by-laws of the China Company."
6 (6). The number of the directors of the ** China Company at the outset shall be five. The chairman of the board of directors shall be elected by and from among the directors, and shall have a vote upon all questions.
6(c). Each director shall hold office for one year and until his successor has been duly elected and qualified. Each director shall be elegible for re-election Vacancies upon the board of directors shall be filled in the same way as directors are originally elected.
6(d). The general manager of the "China Company" shall be nominated and appointed by the board of directors.
7. It is the spirit of this agreement and of the parties hereto that the personnel of the China Company shall be as largely as possible Chinese, and preference shall be given to Chinese.
:י
11
8. The Ministry agrees to sell to the China Company its repair shop at Shanghai, including land, buildings, machinery and material, for gold $ and the China Company
agrees to incorporate the same with its factory. retaining as largely as possible the present personnel, and continuing to carry out the functions and responsibilities of the present repair shop towards the "Ministry." 9 (a). The Electric Company agrees that during the continuance of this agreement, the "China Company shall have the exclusive rights for China under all its patents, and to all its latest inventions and improvements, upon the terms and conditions set forth in a contract between the China Company" and the
Electric Company.”
9 (b.) The Electric Company agrees to give the China Company" during the continuance of this agreement, all technical, engineering and manufacturing information which it possesses or may procure, and which is needed for the proper and economical operation of the China Company," and shall give assistance to the China Company" in every way, to the end that the China Company sball have, whenever needed, the benefits of the Electric Company's" wide and varied experience.
•
■
21
9 (c). The Electric Company agrees to offer advice and assistance in conducting an engineering laboratory in China, where problems of the " China Company and the Ministry" will be studied and the best solution sought. If desirable, such problems will be submitted to the laboratories of the "Electric Company," wherever situated.
*
9. (d). The Electric Company
agrees to give to the China Company" all information and latest and best methods of operation, telephone and telegraph service procurable. for the Ministry." from the American Telephone and Telegraph Company of the United States, and from other operating companies and systems.
9(e). The Electric Company" agrees to receive into its own workshops and engineering departments. at the expense of the "China Company number of Chinese engineers. for the purpose of instructing them in the various a reasonable branches of the business proposed to be carried on by the "China Company."
10 (a). In order to assist in developing the China market, the China Company will give first preference in purchasing material and supplies. to such made in China, and made and sold by the Chinese companies,
"
--
25
10 (6). When the "China Company" cannot get materials or raw materials and applies in China, and when the price of such material is not favourable, the “China Company may ask the Electric Company" to procure the same, and the "Electric Company agrees to use its great purchasing power in doing so at the same low prices at which similar raw materials and supplies are furnished to other allied companies of the "Electric Company."
11 (a) When the Ministry requires machinery, apparatus or other materials in connection with the telephone and telegraph systems, the Ministry “shall place wh the China Company" such order which the China Company" is in a position to fill in the time to be agreed upon, provided, however, that the prices shall he reasonable and as favourable as those charged by other similar first-class manufacturers for similar materials of like quality; but this, of course, shall not be in the nature of unfair competition. that is, the prices shall be such as to provide a reasonable margin over-the cost of labour, material, and the necessary expenses of doing business. All other orders which the China Company" is not in a position to fill at the time, may be placed elsewhere.
.[
11(b). If orders for machinery, apparatus and other material placed with the China Company" are not furnished within a period agreed upon and in accordance with the requirements of the "Ministry" after due notice to the "China Company" the Ministry may place such orders elsewhere,
12. This agreement shall continue for a period of twenty (20) years from the date hereof, and thereafter unless one year's notice in writing of intention to terminate is given by either party to the other, but if, as a result of such notice, the parties cannot agree as to the continuance of this agreement. then the Ministry shall have the right to purchase the shares of the Electric Company" at a fair and reasonable price according to the condition of business and property of the Company
at that time.
13. The parties hereto further agree to execute any additional contracts, papers and documents that may be agreed upon by both parties, and may be necessary to carry out the spirit and intent of this agreement.
14 ). This agreement is written in triplicate, in the Chinese and English languages. One copy in each language shall be retained by the Ministry," one copy in each language shall be retained by the "Electric Company," and one copy in each language shall be handed to the China Company" when established.
14 (6). In the event of dispute as to the meaning of any provision hereof. the English text shall control.
+-
14 (c). Any question arising under this agreement shall be referred for decision, at the option of either party, to a board of disinterested arbitrators of five, selected as follows: two to be chosen by the Ministry and two to be chosen by the Electric Company," and the chairman to he selected by the four so appointed; and the decision and cost thereof of this board of arbitration, by majority vote thereof, shall be final and binding upon the parties hereto.
In witness whereof, his Excellency, Yeh Kung Cho, Vice-Minister of the Ministry of Communications, has hereunto affixed his signature and the seal of the Ministry of Communications of the Government of the Republic of China, party of the first part, to these present, and Gerald Swope. has hereunto affixed his signature as vice-president of the Western Electric Company, Incorporated. and as attorney of the Nippon Electric Company (Limited), both parties of the second part, to these presents.
(Signatures.)
Q