09:58     JIAODA HIGHTECH<00300> - Announcement (2)                           

    milling machine (Model No. WHN 110/130 (Q, MC));                          
                                                                              
    (2)     Floor type horizontal boring and milling                          
    machine (Model No. WRD 130/150 (Q)); and                                  
                                                                              
    (3)     Rotary table (Model No. ISO16, S16, S25 and S40)                  
                                                                              
    Principal terms of the JV Agreement:                                      
    The principal terms of the JV Agreement include, inter                    
    alia, the following:                                                      
                                                                              
    (1)     The total amount of investment of the JV Company                  
    shall be Euro10,000,000 (approximately                                    
    RMB108,000,000) and the registered capital of the JV                      
    Company shall be Euro5,000,000 (approximately                             
    RMB54,000,000). The JV Company shall be owned as to                       
    50% by the Company and as to 50% by Tos Varnsdorf,                        
    A.S. Each of the Parties shall contribute                                 
    Euro2,500,000 respectively. There is no specific                          
    provision under the JV Agreement regarding the way                        
    to deal with the funding difference between the total                     
    amount of investment and registered capital.                              
                                                                              
    (2)     The Company shall contribute Euro2,500,000                        
    (approximately RMB27,000,000), representing 50% of                        
    the registered capital, in the form of:                                   
                                                                              
    a.      construction, specialized equipment, fixtures and                 
    tools, measuring equipment, and office facilities                         
    amounting in aggregate to Euro1,640,000                                   
    (approximately RMB17,712,000); and                                        
                                                                              
    b.      Euro860,000 (approximately RMB9,288,000) in cash.                 
                                                                              
    (3)     Tos Varnsdorf, A.S. shall also contribute                         
    Euro2,500,000 (approximately RMB27,000,000) in the                        
    form of:                                                                  
                                                                              
    a.      industrial design, know-how and technology                        
    amounting in aggregate to Euro1,250,000                                   
    (approximately RMB13,500,000); and                                        
                                                                              
    b.      special fixtures and tools amounting in aggregate                 
    to Euro1,250,000 (approximately RMB13,500,000).                           
                                                                              
    (4)     The principal term of the JV Company shall be                     
    twelve years starting from the date of business                           
    license. Such term could be further extended with the                     
    approval of the Parties at least 2 years before its                       
    expiration.                                                               
                                                                              
    (5)     There shall be six directors standing in the                      
    board of directors of the JV Company. Each of the                         
    Parties shall appoint 3 directors with the chairman                       
    being appointed by Tos Varnsdorf, A.S. while the                          
    vice-chairman being appointed by the Company. Each                        
    director shall be entitled to one vote on any matter                      
    put to the board for decision. In general, any                            
    decisions of the board shall require the affirmative                      
    approval of not less than 4 directors.                                    
                                                                              
    (6)     The Company shall appoint the general manager                     
    of the JV Company, who shall be responsible for the                       
    day-to-day management and operation of the JV Company,                    
    while the Parties may nominate a deputy general                           
    manager.                                                                  
                                                                              
    (7)     A control committee, which is responsible to the                  
    Parties, shall be established to monitor the                              
    performance of the board of directors. The control                        
    committee shall have 4 members. The specific duties                       
    of the control committee is defined as follows: