JOINT VENTURE AGREEMENT

BETWEEN
ZTE CORP. AND PT GALIAN TAMBANG
WITHIN THE FRAMEWORK OF
LAW NUMBER 1 OF 1967 ON FOREIGN CAPITAL INVESTMENT
This joint venture agreement made and entered into as of the 24 th of
March 2006, by and between:
I.

ZTE CORP, a corporation duly established and existing

under the laws of Chicago, United States of America, domiciled
and having its registered office at Chicago (hereinafter called as
ZTE) in this matter represented by Mr. Benny Prasetyo, S. H., in
her capacity as the attorney-in fact, by virtue of a certain Power
of Attorney dated 22nd March 2006, a photocopy of which is
attached hereto, and as such for on behalf and in the name of
ZTE.

II.

PT GALIAN TAMBANG, a limited liability company duly

organized and existing under the laws of Republic of Indonesia,
domiciled in Jakarta, Indonesia, and having its principal office at
Menara Rajawali 26th floor Jl. Mega Kuningan Lot 5.1, Kawasan
Mega Kuningan, Jakarta (hereinafter called as GALIAN
TAMBANG) in this matter represented by Mr. Bambang Tetuko
in his capacity as the President Director, and Mr. Andi Ahmad in
his capacity as the Commissioner of, and as such for and on
behalf the name of GALIAN TAMBANG.

WITNESSETH: That
A.

WHEREAS, ZTE is a United State of America based company

providing technology assistance to mining operations worldwide
and its focus of operation is in a high technology exploration to

determine the most productive mining deposits.

B.

WHEREAS, GALIAN TAMBANG is a national advisory company

operating in Indonesia.

C.

WHEREAS, ZTE intends to establish a joint venture company in

Indonesia.

D.

WHEREAS, subject to the terms herein set forth and the

approval of the President and Badan Koordinasi Penanaman
Modal (BKPM) in form and substance acceptable to the Parties,
as the Parties have agreed to establish the company pursuant to
the Investment Law and other prevailing laws and regulation in
Indonesia.

E.

WHEREAS, the parties have agreed to apply to the BKPM for

approval to establish the company in the framework of the
Investment Law, under such terms and conditions mutually
approved by the parties.

Now, therefore, in consideration of mutual covenants and agreements

contained herein, the parties have agreed to enter into this agreement
under the following forms and conditions.
Article 1
DEFINITIONS
In this agreement, the following terms shall, except where the
context otherwise requires, bear the meanings set out below:
a.

Agreement means this joint venture agreement as from time

to time amended or supplemented, including its exhibits and
appendices, if any, attached thereto.

b.

Article of association means the articles of association of the

company,

which

are

incorporated

in

the

deed

of

establishment of the company substantially in the form and

substance set out to this agreement.

c.

Authorized capital means the authorized capital of the

company.

d.

BKPM means Badan Koordinasi Penanaman Modal or the

Indonesian Coordinating Board for Capital Investment.

e.

Company means the joint venture company to be formed

pursuant to Article 2 of this agreement.

f.Dollar or $ means the official currency of the United States of

America.
g.

Exploration is an activity which goal is to get information

about the geological condition to find and to predict how much
nature reserve of oil and gas in the specified work place of
mining regulated by the government of Indonesia.

h.

Investment Law means the Law Number 1 of the Year 1967

concerning Foreign Capital Investment as amended.

i.

Mining advisory means advises based on the result of

exploration which covered the benefit and loss about the
geological condition.

j.

MLHR means the Minister of Law and Human Rights.

k.

Parties mean ZTE, GALIAN TAMBANG, and shall include any

other person. If any, who becomes a shareholder of the
company, and party means any one of them as the context
shall require.

l.

President means the President of the Republic Indonesia.

m.

Shares means certificates used as a proved of company

ownership and giving the right to the owner to get dividend
and capital gain.

Article 2
FORMATION OF COMPANY

2.1

Formation
Both parties will cause a new company to be formed under the
provisions of The Foreign Investment Law (Act No. 1/1967, as
amended) as Penanaman Modal Asing Company (hereinafter
referred to as company) to engage in the business described in
Article 3 hereof, both parties shall closely cooperate and
consult with each other in respect to the procedures and
particulars of the organization registration of the company.

2.2

Name and Domicile

(i) The name of the company is PT ZTE GALIAN TAMBANG
or any other name as will be acceptable to the parties and
MLHR.
(ii) Part of the name of the company that reflects ZTE gets a
fully protection that it will not be changed though ZTE
become a minority in the company or ZTE has to pull out
from Indonesia for some reason.
(iii) The company shall be domiciled in Jakarta, Indonesia but
shall

be

entitled

to

open

branch

offices

and

or

representative offices both elsewhere in Indonesia and

abroad.
2.3

Articles of Association
(i) The Articles of associations of the company shall be made
and executed in the form and substance which shall
incorporate the substantive provisions may be provided for
in the articles of association.
(ii) In the event that by reason of MLHR policies or otherwise
it shall in any respect proven not to be possible to have the
Articles of Association in consistence with this agreement,
the parties hereto shall use their best efforts to negotiate
and arrive at mutually acceptable solutions which shall be
nearest to the extent agreed in this agreement among the

parties hereto.
Article 3
OBJECTS AND PURPOSES
The objects and purposes to be offered and performed by and through
the company inside Indonesia in connection with this agreement shall
include the following:
To explore the most productive mining deposits in Indonesia which
operate with high technology and to give mining advisory based on the
exploration results.
Article 4
THE CAPITAL, SHARES, AND SHAREHOLDING RATIO
4.1

The Capital
(i) The authorized capital of the company shall be US $
5.000.000,00 (five millions dollars) which amount shall be
fully paid in within 5 (five) years from the date of
incorporation of the company as to be determined in
connection with tax facilities period and achievement of the
production target.
(ii) The issued capital of the company shall be 25% (twenty
five percent) of the authorized capital at the establishment
of the company.
(iii) The paid-up capital of the company shall be US $
2.500.000,00 (two millions and five hundred thousand
dollars), which amount is to be fully paid in at the date of
incorporation of the company in proportion to their
respective share ratio in the form of cash or in kind/capital
goods.
(iv) The capital investment of the company consists of in cash

or in kind/capital goods.
4.2

Participation
(i) The following parties will be participants and shareholders
in the company:
ZTE: 85% (eighty five percent) of the total shares
GALIAN TAMBANG: 15% (fifteen percent) of the total
shares
(ii) The shares shall be issued to the parties in the ratios
mentioned in paragraph 4.2 of this Article and these ratios
shall not be deviated from except as agreed to by both
parties.

Article 5
PROFIT
5.1

All profit accrued from the undertaking shall not be divided

between the both parties in proportion to the ratios of shares
held by each party. Based on the agreement between both
parties, all profits will be divided by the proportion of:
ZTE: receive 80% (eighty percent) of total amount profit
GALIAN TAMBANG: receive 20% (twenty percent) of total
amount profit

5.2

Within 5 (five) years after the establishment of the company, all

profits shall be divided between the both parties in proportion to
the ratio of shares held by each party as mentioned in
paragraph 4.2 article 4 above.

Article 6


Article 7

Article 8
.

.
Article 9

..
Article 10
APPLICABLE LAW
The validity, construction, and performance of this agreement shall be
governed by and interpreted in accordance with the laws of Indonesia.

Article 11
ARBITRATION
Any dispute arising from this agreement or the breach thereof which

cannot be resolved by mutual agreement shall be finally settled under

the Rules of Arbitration of the Indonesian National Board of Arbitration
(Badan Arbitrase Nasional Indonesia) BANI, by arbitrators appointed in
accordance with said rules and decision of such arbitration shall be
accepted as final and binding by the parties. The place of arbitration will
be Jakarta.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed in duplicate original in English language on
this 26th day of March 2006 at Jakarta, and retain one copy each.
ZTE
TAMBANG

GALIAN