Joint venture contract

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Joint venture contract

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  1. Revised JV contract DATED _____, ___ JOINT VENTURE CONTRACT between A COMPANY and B COMPANY
  2. TABLE OF CONTENT CHAPTER I - GENERAL..................................................................................................4 ARTICLE 1: DEFINITIONS..........................................................................5 ARTICLE 2: AGREEMENT TO CONVERSION OF THE COMPANY.................6 ARTICLE 3: NAME AND ADDRESS OF THE COMPANY...............................6 ARTICLE 4: LIMITED LIABILITY AND JURIDICAL STATUS OF THE COMPANY ................................................................................................................6 ARTICLE 5: CHARTER ..............................................................................7 ARTICLE 6: EFFECTIVE DATE...................................................................7 CHAPTER II - OBJECTIVES AND SCOPE OF ACTIVITY OF THE COMPANY. 7 ARTICLE 7: OBJECTIVES AND SCOPE OF BUSINESS OF THE COMPANY. . .7 ARTICLE 8: PROJECT IMPLEMENTATION SCHEDULE................................7 CHAPTER III - CAPITAL OF THE COMPANY...........................................................8 ARTICLE 9: CAPITAL OF THE COMPANY ..................................................8 ARTICLE 10: REDUCTION, INCREASE OF THE CHARTER CAPITAL ...........8 ARTICLE 11: ASSIGNMENT OF SHARES ...................................................9 CHAPTER IV - RESPONSIBILITIES OF EACH PARTY...........................................9 ARTICLE 12: RIGHTS AND OBLIGATIONS OF THE COMPANY ...................9 ARTICLE 13: RESPONSIBILITIES OF THE PARTIES....................................9 ARTICLE 14: WARRANTS AND REPRESENTATIONS OF THE PARTIES ....11 CHAPTER V - FINANCE OF THE COMPANY..........................................................11 ARTICLE 15: FINANCIAL OBLIGATIONS..................................................11 ARTICLE 16: DIVISION OF PROFITS .......................................................11 ARTICLE 17: TAX OBLIGATIONS.............................................................11 ARTICLE 18: FOREIGN EXCHANGE ........................................................12 ARTICLE 19: BANK ACCOUNT................................................................12 ARTICLE 20: INSURANCE ......................................................................12 CHAPTER VI - ACCOUNTING AND STATISTICS...................................................12 ARTICLE 21: ACCOUNTING AND STATISTICS.........................................12 ARTICLE 22: AUDIT ...............................................................................13 ARTICLE 23: FISCAL YEAR .....................................................................13 CHAPTER VII - MEMBERS’ COUNCIL, MANAGEMENT AND STAFF..............13 ARTICLE 24: MEMBERS’ COUNCIL..........................................................13 ARTICLE 25: MANAGEMENT OFFICE ......................................................14 ARTICLE 26: RECRUITMENT OF PERSONNEL.........................................15 CHAPTER VIII - DISSOLUTION, LIQUIDATION OF THE COMPANY, AND TERMINATION OF THE JV CONTRACT..................................................................15 ARTICLE 27: DISSOLUTION OF THE COMPANY ......................................15 ACTICLE 28: LIQUIDATION OF THE COMPANY.......................................15 ARTICLE 29: TERMINATION OF THE JV CONTRACT................................15 CHAPTER IX - OTHER PROVISIONS........................................................................16 ARTICLE 30: CLAIMS FOR DAMAGES ....................................................16 ARTICLE 31: SETTLEMENT OF DISPUTES...............................................16 ARTICLE 32: FORCE MAJEURE................................................................17 ARTICLE 33: CONFIDENTIALITY..............................................................17 Joint Venture Contract. Page 2
  3. ARTICLE 34: CIRCUMSTANCES NOT STIPULATED IN THE JV CONTRACT AND IN THE CHARTER...........................................................................17 ARTICLE 35: NO WAIVER.......................................................................18 ARTICLE 36: LANGUAGE OF THE JV CONTRACT.....................................18 ARTICLE 37: AMENDMENTS AND MODIFICATIONS OF THE JV CONTRACT ..............................................................................................................18 ARTICLE 38: GOVERNING LAWS............................................................18 ARTICLE 39: SEVERABILITY....................................................................18 ARTICLE 40: NOTICES............................................................................19 .............................................................................................................19 ARTICLE 41: HEADINGS.........................................................................19 ARTICLE 42: SIGNING ..........................................................................19 Joint Venture Contract. Page 3
  4. JOINT VENTURE CONTRACT BASED ON: 1) Law on Investment, passed by National Assembly of Vietnam on 29 November 2005; 2) Decree No. 108/2006/ND-CP dated 22 September 2006 guiding a number of articles of Law on Investment; 3) Other relevant laws and regulations. This Joint Venture Contract is made and signed on this day of 30 March 2007 in Vietnam by and between the following Parties: A. THE VIETNAMESE PARTY Company Name: A Company Head Office: [____] Telephone: [____] Authorized Representative: [____] Title: [____] Nationality: [____] ID No.: [____]. (Hereinafter referred to as the “Vietnamese Party”) B. THE FOREIGN PARTY Company Name: B Company Head Office: [____] Telephone: [____] Facsimile: [____] E-mail: [____] Authorised Representative: [____] Title: [____] Nationality: [____] Passport No.: [____] (Hereinafter referred to as the “Foreign Party”). The Parties hereto have mutually agreed to sign this Joint Venture Contract (Hereinafter referred to as the “JV Contract”) with the terms and conditions hereunder set forth: CHAPTER I - GENERAL Joint Venture Contract. Page 4
  5. ARTICLE 1: DEFINITIONS In this JV Contract, the following words and terms shall have the meanings as ascribed to them hereinafter: 1.1 ''Members’ Council” shall mean the Members’ Council of Company as defined in Article 24 hereinafter. 1.2 “Charter” shall mean the charter of Company to be executed by the Vietnamese Party and the Foreign Party in accordance with this JV Contract. 1.3 ''Dong” shall mean the lawful currency of Vietnam. 1.4 “Feasibility Study” means the written analysis of the feasibility of the Project prepared by the Parties and attached to the Investment License Application. 1.5 “Foreign Party” shall mean B Company. “Vietnamese Party” shall mean A Company. 1.6 “Parties” shall mean the Vietnamese Party and the Foreign Party collectively; and “Party” shall mean either of the Vietnamese Party or the Foreign Party, as the context requires. 1.7 “Investment Licence” shall mean the investment license issued by the Licensing Authority or a competent authority in Vietnam for the establishment and the operation of Company. 1.8 “Investment Certificate” shall mean the investment certificate issued by the Certificate Issuing Authority for approval on the re-registration of the Company. 1.9 “JV Contract” shall mean this Joint Venture Contract concluded by the Parties for the purpose of establishing Company and all annexes, agreements, schedules and documents attached hereto. 1.10 “Laws of Vietnam” shall mean relevant laws, regulations and any other legal writings of the Socialist Republic of Vietnam as amended or re-enacted from time to time. 1.11 “Licensing Authority” shall mean Hanoi People’s Committee and/ or a competent authority of Vietnam, which is responsible for the approval and issuance of the Investment License within its authority under the Laws of Vietnam. 1.12 “Certificate Issuing Authority” shall mean Department of Investment and Planning or any competent authority of Vietnam, which is responsible for issuance of the Investment Certificate within its authority under the Laws of Vietnam. 1.13 “Project” shall mean the project on “production, manipulation, processing and sale of high quality fashion jewellery” which are jointly carried out by the Parties. Joint Venture Contract. Page 5
  6. 1.14 “Total Investment Capital” shall mean the capital to be employed by Company for implementation of the Project, comprising of its fixed and working capital, including loans necessary for its operations. 1.15 “Loan Capital” shall mean the loan capital specified in Article 9 hereof. 1.16 “Charter Capital” shall mean the charter capital specified in Article 9 hereof. 1.17 ''USD'' shall mean the lawful currency of the United States. 1.18 “Vietnam” shall mean the Socialist Republic of Vietnam. ARTICLE 2: AGREEMENT TO CONVERSION OF THE COMPANY The Parties, in accordance with the applicable laws, hereby agree to re-register the existing joint venture company. Accordingly, the Company shall be conversed into a limited liability company having two members or more. ARTICLE 3: NAME AND ADDRESS OF THE COMPANY 3.1 The name of Company in Vietnamese is “X Company”. The name of Company in English is “X Company”. The transaction name of Company is “X”. 3.2 The legal address of Company’s office and workshop will be at _____. 3.3 The Company shall be entitled to open branch(s) and/ or representative office(s) in the provinces and cities in Vietnam, subject to the considerations of Company, with the approval of the Members’ Council, the Certificate Issuing Authority or other competent authorities of Vietnam under the laws. 3.4 The Company may, upon the decision of the Members’ Council, change its head office or any branch office and establish branch offices or other places of business in Vietnam or elsewhere. ARTICLE 4: LIMITED LIABILITY AND JURIDICAL STATUS OF THE COMPANY 4.1 The Company is a limited liability company having the juridical person status, under the Laws of Vietnam with the effect from the date of the Investment Certificate. During the course of its operation, Company shall observe with the Laws of Vietnam, the provisions of the JV Contract, the Charter and the Investment Certificate. All activities of Company and the respective interests of the Parties shall be protected by the Laws of Vietnam. 4.2 The Parties shall not be liable for any debts or obligations of Company except: Joint Venture Contract. Page 6
  7. a) Only up to the amount of its respective subscribed contributions in the Charter Capital of Company as required from time to time in accordance with this JV Contract and shall have no liability to Company or to any third party; or b) For any other debts or obligations as are expressly assumed by the Parties under this JV Contract. 4.3 Subject to the foregoing limitation of liabilities, the Parties shall share the profits, losses and risks in the ratio of Foreign Party is ___percent (__%) and Vietnamese Party is ____ percent (__%). ARTICLE 5: CHARTER The Company has its Charter in order to enable its legal conduct of operation. If any discrepancy is found between this JV Contract and the Charter, then the provisions in this JV Contract shall prevail and the Parties shall take all appropriate actions to have the Charter amended so that it is consistent with this JV Contract. If mandatory law or regulation prohibits amendment of the Charter, the Parties agree that the Charter shall to the greatest extent possible and permitted by law be construed in accordance with the JV Contract and the Parties’ intentions, alternatively the Parties shall take all appropriate actions to reach an alternative solution, which is in accordance with the JV Contract and the Parties’ intentions. ARTICLE 6: EFFECTIVE DATE 6.1 This JV Contract shall become effective upon the date of execution as first written above and replace all and any previous documents on the same subject issue. 6.1 This JV Contract shall remain in force and effect until the expiration of the project term or earlier termination thereof by the Parties in accordance with the terms and conditions hereof and the laws of Vietnam. CHAPTER II - OBJECTIVES AND SCOPE OF ACTIVITY OF THE COMPANY ARTICLE 7: OBJECTIVES AND SCOPE OF BUSINESS OF THE COMPANY 7.1 The Parties agree to establish Company for a profitable business, strengthening of market position and improvement of competitiveness. The objectives and scope of business of Company are _____. 7.2 The objectives and scope as set out in Article 7.1 are subject to the terms and conditions of this JV Contract and the Charter. ARTICLE 8: PROJECT IMPLEMENTATION SCHEDULE 8.1 The Parties shall unanimously agree to apply to the Certificate Issuing Authority for the term of ____ years for the project commencing from date of the Investment Licence. This term can be extended in the future, subject to the agreement of the Parties and the approval of Certificate Issuing Authority. Joint Venture Contract. Page 7
  8. 8.2 The concrete Project implementation schedule shall be prepared and agreed upon by the Parties, and implemented in a prompt and appropriate manner to serve Company’s benefits and purposes in accordance with this JV Contract and the Charter. CHAPTER III - CAPITAL OF THE COMPANY ARTICLE 9: CAPITAL OF THE COMPANY 9.1 Total Investment Capital The Total Investment Capital of the Project shall be USD ____ (_____US Dollars). 9.2 Charter Capital of Company The Charter Capital of Company shall be USD ____ (_____US Dollars). 9.3 Contributions of the Parties Foreign party shall contribute USD ____ (____ US Dollars) which is equal to ____ percent (__%) of the Charter Capital in the form of cash, machinery and equipment. Vietnamese party shall contribute USD ____ (____ US Dollars) which is equal to ____ percent (__%) of the Charter Capital in the form of cash, machinery and equipment. 9.4 Loan Capital During process of activities, the Company may be obtain loans, borrowings or other means of financing from the Parties, bank or other credit or financial institutions in Vietnam or abroad, in compliance with the procedures as required by the Laws of Vietnam, as contribution to the Total Investment Capital to meet operational demands of Company. ARTICLE 10: REDUCTION, INCREASE OF THE CHARTER CAPITAL 10.1 During the process of its operation, Company shall not be entitled to reduce the amount of its Charter Capital. Any increase in the Charter Capital of Company shall require the unanimous approval of the Members’ Council and shall be submitted to the Certificate Issuing Authority for approval. 10.2 In case where it is necessary to increase the Charter Capital of the Company, the Members’ Council shall consider increasing the Charter Capital by reinvestment of the earned profits of Company or by calling for new capital contribution from the Parties or by calling a third party to joint into the Company. Any increase charter capital must be subject to the unanimous consent of the Members’ Council and approval of the Certificate Issuing Authority. Joint Venture Contract. Page 8
  9. ARTICLE 11: ASSIGNMENT OF SHARES 11.1 Notwithstanding the provisions of this Agreement, both Parties undertake that the Vietnamese Party shall transfer all its remaining capital contributed in Company to the Foreign Party within ___ years from the date of this Agreement without any payment of the Foreign Party and arrange for all execution of relevant documents to fulfill the requirement of laws on this assignment. 11.2 No Party shall pledge or mortgage any of its capital contributed in Company, nor otherwise use such capital as collateral or for any other purpose. CHAPTER IV - RESPONSIBILITIES OF EACH PARTY ARTICLE 12: RIGHTS AND OBLIGATIONS OF THE COMPANY The Company shall have the rights, obligations set out in the Investment Certificate and any amendment thereof, or in any other license granted or to be granted to Company by the Certificate Issuing Authority or any other competent authority in Vietnam, and in accordance with the Laws of Vietnam. ARTICLE 13: RESPONSIBILITIES OF THE PARTIES Each Party shall fulfill its obligations and abide by the terms of this JV Contract and the Charter of Company, and shall carry out its respective responsibilities as below: 13.1 Responsibilities of the Vietnamese Party a) To negotiate with local authorities regarding essential juridical aspects and of official approvals of Company from any competent authorities in Vietnam; b) To provide fully and in a timely manner its Charter Capital Contribution for Company as set forth in this JV Contract; c) To take care of all local arrangements that relating to operation of Company, and to support Company in dealing with the relevant Government agencies on issues and formalities relating to the operation of Company; d) To assist Company to obtain all necessary permissions, including, without limitation, all entry permits, visas, working permits and travel permits for all expatriate personnel working for Company, comprising a part of Company’s management or performing services for Company; e) To introduce and assist Company in selecting and recruiting the qualified Vietnamese staffs for working for in Company; Joint Venture Contract. Page 9
  10. f) To appoint the representatives to the Members’ Council, and assist the Members’ Council in management and operation of Company; g) To provide necessary information on the demand for and availability of products in the local market and recommend measures for achieving effectiveness of the business operation of Company; h) To observe strictly the confidentiality provisions as stated in Article 33 of this JV Contract; i) To take whatever steps and measures as may be necessary to assist the Foreign Party to repatriate its shared profits from Company in accordance with the terms and conditions of this JV Contract; j) To assist solving other problems when reasonably requested by Company. 13.2 Responsibilities of the Foreign Party a) To provide the Vietnamese Party with all necessary documents as required by the Laws of Vietnam in order to complete the application for the Investment Certificate; b) To provide fully and in a timely manner its Charter Capital Contribution for Company as set forth in this JV Contract; c) To assist Company in setting up and implementing a quality assurance system at the expenses of Company; d) To organize the training and skill transfer program for the selected Vietnamese staff at the expenses of Company and under the terms and conditions to be agreed with Company; e) To assist Company in marketing Company’s business activities; f) To assist Company in sourcing, selecting, supplying and approving all raw materials that cannot be sourced locally. To assist in selecting and approving the local raw materials to be used for manufacture of the Products; g) To provide all the adequate and necessary assistance, advice expertise and information related to the development and management of Company; h) To appoint the representatives to the Members’ Council, and assist the Members’ Council in management and operation of Company; i) To assist solving other problems when reasonably requested by Company. Joint Venture Contract. Page 10
  11. ARTICLE 14: WARRANTS AND REPRESENTATIONS OF THE PARTIES 14.1 As of the date of the execution of this JV Contract, each of the Parties represents and warrants to the other that: a) it is a juridical person duly organized or established, validly existing and in good standing under the law of the jurisdiction of its organization; b) it has the authority to enter into this JV Contract and to carry out the business as contemplated herein; and c) this JV Contract, when executed by such Party and following the issuance of the Investment Certificate, is binding and enforceable against it. 14.2 Without prejudice to Article 32 of this JV Contract, either Party shall indemnify the other Party against any and all losses, including inter alia any related interest, penalties and reasonable legal counsel fees that may arise in the event that any of the foregoing representations and warranties is incorrect or inaccurate. CHAPTER V - FINANCE OF THE COMPANY ARTICLE 15: FINANCIAL OBLIGATIONS The Company shall fulfill all financial obligations to the Government of Vietnam in accordance with the Laws of Vietnam. ARTICLE 16: DIVISION OF PROFITS 16.1 In accordance with the ratio of the Charter Capital contribution of the Parties as stated herein above, the remaining profits of Company shall be allocated according to the decisions of the Members’ Council. 16.2 If the proportion of the contributions of the Parties to the Charter Capital changes, the rate of the remaining profits of Company allocated to the Parties shall be accordingly changed. ARTICLE 17: TAX OBLIGATIONS 17.1 The Company shall apply for all tax exemptions and reductions to which it is entitled according to the Laws of Vietnam. 17.2 The Company and the Parties shall be liable to pay the value added tax, corporate income tax and perform other financial obligations (if any) in accordance with the Laws of Vietnam, and in particular in accordance with the Certificate of Investment granted by the Certificate Issuing Authority. 17.3 In case there are some changes in the taxation regarding the enterprises with foreign invested capital, then such taxation rules shall be applied to Company. Joint Venture Contract. Page 11
  12. ARTICLE 18: FOREIGN EXCHANGE 18.1 Vietnamese currency shall be used for payment of all raw materials, equipment, machinery purchased in Vietnamese market, pay for electricity, water as well as wages to Company Vietnamese staff and workers. 18.2 Foreign currency, e.g. US Dollars, shall be used to make all purchases outside of Vietnam and to pay wages to Company foreign staffs and workers in accordance with the laws of Vietnam. 18.3 Foreign exchange available to Company shall be used in the following order of priority: a) Payment for the procurement overseas and import of all raw materials, equipment, spare parts and other materials for Company’s operation; b) Payment of expatriate personnel’s salary; c) Payment of the net shared profits of the Foreign Party as provided herein above; and d) Other payments, which the Members’ Council decides to be made in foreign currency, unless otherwise regulated by the Laws of Vietnam. 18.4 The Foreign Party shall be permitted to transfer abroad, in foreign currency, all its shared profits and other legal incomes, after having completed payment of applicable taxes, in accordance with the Laws of Vietnam. ARTICLE 19: BANK ACCOUNT The Company shall open its interest-bearing accounts in both Vietnamese and foreign currency at a Vietnamese bank or a joint venture bank or a branch of foreign bank established in Vietnam as agreed upon by the Members’ Council in accordance with the Laws of Vietnam. Upon approval and subject to conditions imposed by the State Bank of Vietnam, Company may also open foreign exchange accounts with foreign bank abroad. ARTICLE 20: INSURANCE The assets of Company shall be insured at any insurance company, which is licensed to operate in Vietnam. The Members’ Council shall decide on the coverage to be purchased and the insurance premium to be paid in accordance with the Laws of Vietnam and international practice. CHAPTER VI - ACCOUNTING AND STATISTICS ARTICLE 21: ACCOUNTING AND STATISTICS Joint Venture Contract. Page 12
  13. 21.1 The accounting system, books and records of Company shall be prepared and maintained in accordance with the prevailing Laws of Vietnam. 21.2 Financial statements including the balance sheet, profit and loss statement, cash flow statement and reports on the operations of Company shall be prepared monthly, quarterly and annually. 21.3 The monetary unit used in bookkeeping shall be in Vietnam Dong and US Dollars. Conversion of one currency into another currency used for purchases as well as accounting purposes shall be executed in accordance with the official exchange rate published by the State Bank of Vietnam at the time of actual payment. 21.4 All accounting records, invoices, books, and statements of Company shall be made, prepared and maintained in both the English and Vietnamese languages. 21.5 The depreciation rate of Company’s fixed assets shall be determined by the Members’ Council in compliance with the Ministry of Finance's current regulations with respect to depreciation rates. ARTICLE 22: AUDIT A registered auditing firm of international repute licensed or authorized to carry out audits in Vietnam shall be engaged by Company as its auditor, to examine and verify the financial receipts, expenditures and accounts, including the annual accounts, and shall submit its report to the General Director and the Members’ Council. Such auditing firm shall be selected and decided by the Members’ Council. ARTICLE 23: FISCAL YEAR 23.1 The fiscal year of Company shall begin from January 1st of each calendar year and end on December 31st of the same year. 23.2 At the end of each fiscal year, Company shall prepare financial statements in both Vietnamese and English consisting of financial balance sheet, a profit and loss statement and other financial statements. The financial statements shall be examined and verified by a registered auditing company as stated in Article 22 above and shall be submitted to the Certificate Issuing Authority and other relevant Vietnamese authorities as required by the Laws of Vietnam, within three (3) months from the ending date of the fiscal year, and at the same time shall be sent to the Parties. CHAPTER VII - MEMBERS’ COUNCIL, MANAGEMENT AND STAFF ARTICLE 24: MEMBERS’ COUNCIL 24.1 The highest authority of Company shall be the Members’ Council of Company. The Members’ Council shall establish the long-term business plan, organization structure, appoint or remove the Chief Accountant and control overall management of the business of Company with the object of taking all reasonable and proper Joint Venture Contract. Page 13
  14. steps to make as large profits as possible while at the same time maintaining the value of the invested capital and sustaining the growth of Company. Thus, the Members’ Council is the highest authority of Company for the overall management of Company including finance and control, purchasing, and production and commercialization of Company’s products. It decides on all issues of Company, which is not solely related to the day-to-day business of Company. The Parties agree that Company’s taking in new suppliers and new customers of whichever nature as well as Company’s investments in plants, machinery and all other fixed or intangible assets shall be decided by the Members’ Council. 24.2 The Parties shall appoint their authorised representatives to the Members’ Council according to their respective Charter Capital contributions to Company. 24.3 In accordance with the ratio of the Charter Capital contribution stated above, the Members’ Council of Company shall consist of 03 persons of which the Vietnamese Party shall appoint 01 person and the Foreign Party shall appoint 02 persons. The appointment of the Member’s Representative by the Parties shall be made by written notification from the Parties to Company. 24.4 The term of office of the Member’s Representatives, including that of the Chairman and the Vice Chairman, shall be 3 years. The Chairman, the Vice Chairman and each of the Member’s Representative, unless he dies, resigns, retires, is incapacitated or is removed from office earlier, shall hold office for their terms. Each of the Member’s Representative may be re-appointed for the next terms. 24.5 The Members’ Council shall carry out its functions in accordance with the Charter and the Laws of Vietnam. The rights and obligations of the Members’ Council shall be specified in the Charter. ARTICLE 25: MANAGEMENT OFFICE 25.1 The Company may establish a Management Office (“MO”) to take responsibility for the day-to-day management of Company’s operation, if deem necessary. The MO shall consist of a General Director, a Deputy General Director and a Chief Accountant. The Members’ Council shall decide to appoint and/or dismiss the General Director, the Deputy General Director and the Chief Accountant. 25.2 The Chairman, the Vice Chairman or a Member of the Members’ Council may concurrently serve as the General Director or other management officers of Company. 25.3 The General Director, the Deputy General Director and the Chief Accountant of Company shall be appointed by the Members’ Council in the principle of unanimity. 25.4 The General Director shall be the legal representative of Company. Joint Venture Contract. Page 14
  15. 25.5 The General Director shall be required to discuss with the Deputy General Director the execution of resolutions of the Members’ Council relating to important issues, such as the organisational structure; appointment and removal of key personnel and approval of the business plan. In the event that the General Director and the Deputy General Director have different opinions, the opinion of the General Director shall be conclusive. However the Deputy General Director may reserve his or her opinion and raise it with the Members’ Council at its next meeting for consideration and decision. ARTICLE 26: RECRUITMENT OF PERSONNEL 26.1 All employees of Company shall be recruited and employed on the basis of labor contracts and the collective labor agreement, in accordance with the Laws of Vietnam and Company’s personnel regulations promulgated by the Members’ Council. 26.2 The Company shall apply social security and safe working environment for the sake of its employees in compliance with the Laws of Vietnam. CHAPTER VIII - DISSOLUTION, LIQUIDATION OF THE COMPANY, AND TERMINATION OF THE JV CONTRACT ARTICLE 27: DISSOLUTION OF THE COMPANY Under the cases provided in the Charter and upon the decisions of the Members’ Council, the JV Contract shall be terminated and Company shall be dissolved in the accordance with the regulations and procedures set forth under the laws. ACTICLE 28: LIQUIDATION OF THE COMPANY 28.1 The liquidation of Company shall be effected in accordance with the Charter. 28.2 After termination of all activities, the remaining assets of Company, having paid all debts and liabilities as stipulated by the Laws of Vietnam, shall be distributed to the Parties in accordance with the ratio of their contribution to the Charter Capital at the time of dissolution. ARTICLE 29: TERMINATION OF THE JV CONTRACT 29.1 This JV Contract shall be terminated after two years since the execution of this Contract. Upon that time, A Company shall transfer the remaining Charter capital to B Company without further consideration or requirement. At that time Parties shall arrange the execution of necessary documents, under the law requirements, so that the Company shall be conversed into a one-member limited liability company under the applicable laws. 29.2 In case of any early termination of the JV Contract before the above mention term, Parties undertake to arrange for the execution of necessary documents, under the law requirement, so that parties can liquidate the Company. Joint Venture Contract. Page 15
  16. CHAPTER IX - OTHER PROVISIONS ARTICLE 30: CLAIMS FOR DAMAGES 30.1 If Company suffers any cost, liability or loss, including but not limited to lost profits of Company, as a result of a breach of this JV Contract by a Party, the Party in breach shall indemnify and hold Company harmless in respect of any such cost liability or loss, including but not limited to interest paid or lost as a result thereof, however excluded indirect or consequential losses, if the Party in breach has only committed negligence (and not gross negligence and/or willful misconduct, in which case the Party in breach shall also be liable for indirect and consequential losses). 30.2 If the non-breaching Party suffers any cost, liability or loss directly as a result of a breach of this contract, the Party in breach shall indemnify and hold such non- breaching Party harmless in respect of any such cost, liability or loss incurred by non-breaching Party, however excluded indirect or consequential losses, if the Party in breach has only committed negligence (and not gross negligence and/or willful misconduct, in which case the Party in breach shall also be liable for indirect and consequential losses). ARTICLE 31: SETTLEMENT OF DISPUTES 31.1 All disputes, controversies or differences (collectively referred to as “disputes”) arising from this JV Contract, its interpretation, and implementation shall be first amicably settled by negotiations between the Parties. Failure to such amicable settlement, the disputes shall be finally settled by the competent court of Vietnam. 31.2 Notwithstanding clause 1 herein, in the event of a dispute, both the Vietnamese and the Foreign Party shall be entitled to request for arbitration, and each of the Parties individually and jointly hereby explicitly, unconditionally and irrevocably submit themselves to arbitration in the event of a dispute. If any of the Parties wish a dispute to be settled by arbitration, such request must be notified to the other Party in writing within reasonable time after the Parties’ failure to reach an amicable settlement. 31.3 In the event each of the Party has requested arbitration pursuant to clause 2 herein, the arbitration shall be within the auspices of the International Chamber of Commerce (ICC International Court of Arbitration) according to the ICC’s Rules of Arbitration as in force from time to time. The seat of the Arbitration shall be in Vietnam unless agreed otherwise between the Parties. The number of arbitrators shall be 3 (three), of which at least one (1) shall be knowledgeable within Vietnamese Law and at least 2 (two) shall be non-Vietnamese citizens and/or residents. The language of the arbitration shall be English, however with a Vietnamese translator present if the either Party requests so. The arbitral award shall be final and binding between the Parties. Joint Venture Contract. Page 16
  17. ARTICLE 32: FORCE MAJEURE 32.1 “Force Majeure” shall mean any of the following events, which causes any Party or both Parties to be unable to perform its or their obligations under this JV Contract, such as prohibition or acts by government or public agency, riot, war, hostility, public disturbance, strikes, other labor disputes and work stoppages, failure or difficulty of public utilities, epidemic, fire, flood, earthquake, storm, tidal wave or other acts of nature, and the other events beyond the reasonable control of the Parties. 32.2 No Party shall be liable to the other Party for any loss injury, delay, damages, or other casually suffered or incurred by the later due to the Force Majeure, and any failure or delay by any Party in performance of any of its obligations hereunder due to Force Majeure shall not be considered a breach of this JV Contract. 32.3 Notwithstanding the foregoing, in the event of Force Majeure, the Party which is prevented from performing its obligations hereunder due to such Force Majeure shall promptly notify, but in no event later than fourteen (14) days after the occurrence of such Force Majeure, the other Party in writing and shall exert its best efforts to mitigate the losses to the other Party or to remove the effects of such Force Majeure, to the full extent possible. Further, the Party affected by the Force Majeure, as soon as possible after the end of such Force Majeure, shall resume performance of its obligations and cure the effects of such Force Majeure. 32.4 If a Force Majeure does not end shortly, the Parties shall negotiate to prevent an excessively unfair result to any Party. In the event that a Force Majeure continues for longer than six (6) months, then any Party may unilaterally terminate this JV Contract and demand dissolution and liquidation of Company as provided in Articles 27 and 28 above, by a notice in writing to the other Party. ARTICLE 33: CONFIDENTIALITY 33.1 Each Party agrees to keep secret and confidential all information obtained pursuant to this JV Contract from the other Party or Company, which is designated or is reasonably considered as confidential by the other Party or Company, as the case may be. The Parties shall take all necessary precautions in a manner acceptable to the other Party furnishing the confidential information in order to keep secret and confidential such information and to restrict its use outside and beyond the scope of this JV Contract. 33.2 The Parties shall take all necessary steps to ensure that their officers and employees will comply in all respects with this Article 33. ARTICLE 34: CIRCUMSTANCES NOT STIPULATED IN THE JV CONTRACT AND IN THE CHARTER All other terms and conditions relating to the activities of Company but not stipulated in the JV Contract and the Charter of Company, shall be implemented by the Parties in Joint Venture Contract. Page 17
  18. accordance with the current provisions of the Laws of Vietnam and other provisions (if any) in the Investment Certificate granted by the Certificate Issuing Authority. ARTICLE 35: NO WAIVER The failure or delay of any Party to require performance by the other Party of any provision of, or any right or obligations under, this JV Contract, shall not constitute a waiver thereof, nor shall such affect that Party's right to thereafter require performance of such or any other provision, right or obligation. ARTICLE 36: LANGUAGE OF THE JV CONTRACT 36.1 This JV Contract is made in English and Vietnamese. Both versions shall be of equal validity. 36.2 The interpretation of the JV Contract shall be based on stipulations or the spirit of the JV Contract and the Charter. In case there is a different meaning of a same article of the English version and the Vietnamese version, and/or the interpretation of the JV Contract can not be based accurately on the stipulations of this JV Contract, interpretation shall be based on the will of the Parties and the stipulations of the Laws of Vietnam and the generally accepted international business practices and the wording of the Vietnamese version of the Charter and the JV Contract. ARTICLE 37: AMENDMENTS AND MODIFICATIONS OF THE JV CONTRACT Any amendment to, or modification of or rectification of this JV Contract shall be made by written agreement signed by duly representatives of each Party in both Vietnamese and English versions, each of which shall be equally authentic and shall become effective after being considered. ARTICLE 38: GOVERNING LAWS 38.1 The validity and performance of this JV Contract shall be constructed in accordance with, and governed by, the laws of Vietnam. 38.2 If there is any change in the applicable law, which may create any additional interest or privileges for Company or the Parties, the Parties shall take every appropriate measure necessary to procure Company to take advantage of such interest or privileges, or to enable Company to assist the Parties benefiting from and enjoying such interest or privileges. ARTICLE 39: SEVERABILITY The invalidity of any provision of this JV Contract shall not affect the validity of any other provision of this JV Contract. The right hereunder to claim indemnification for losses under this JV Contract shall not be impaired because of the legal invalidity of this JV Contract. Joint Venture Contract. Page 18
  19. ARTICLE 40: NOTICES 40.1 All notices given from one Party to the other Party under or in connection with this JV Contract shall be in writing and shall be valid and sufficient if dispatched by registered airmail (postage prepaid), delivered personally, or sent by fax/email (Confirmed by hard copy to the address and recipients as mentioned above in the item “Introduction about the Investors”. 40.2 Each Party may change its address for notice by notice given to the other Party in the manner set forth above. 40.3 Notices given as herein provided shall take effect upon the actual receipt by the other Party. ARTICLE 41: HEADINGS The headings of the articles of this JV Contract are inserted for convenience of reference only, and do not form a part of this JV Contract, and shall not in any way affect or be considered in the interpretation hereof. ARTICLE 42: SIGNING 42.1 This JV Contract is signed in Hanoi, Vietnam and replace the previously executed one. 42.2 The JV Contract shall be made into four (4) original counterparts in both English and Vietnamese languages and having equal validity. Each Party shall keep one (1) set, one (1) set shall be submitted to the Certificate Issuing Authority for Investment Certificate and one (1) set will be kept at Company IN WITNESS WHEREOF, the Parties hereto have caused this JV Contract to be signed in their respective names by their duly authorized representatives as of the date above written. For And On Behalf Of B Company Name : Title : For And On Behalf Of A Company Name : Title: Joint Venture Contract. Page 19
  20. Joint Venture Contract. Page 20
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