DATED THIS …DAY OF … 2008 JOINT VENTURE CONTRACT

dated this …day of … 2008 joint venture contract between abc and xyz

DATED THIS …DAY OF … 2008
JOINT VENTURE CONTRACT
between
ABC
and
XYZ
TABLE OF CONTENTS
Article Page
A COMPANY 3
ARTICLE 1: DEFINITIONS 3
ARTICLE 2: AGREEMENT TO ESTABLISH THE COMPANY 5
ARTICLE 3: NAME AND ADDRESS OF THE COMPANY 5
ARTICLE 4: LIMITED LIABILITY AND JURIDICAL STATUS OF THE COMPANY 5
ARTICLE 5: CHARTER 6
ARTICLE 6: EFFECTIVE DATE 6
ARTICLE 7: OBJECTIVES AND SCOPE OF BUSINESS OF THE COMPANY 6
ARTICLE 8: PROJECT IMPLEMENTATION SCHEDULE 7
ARTICLE 9: CAPITAL OF THE COMPANY 7
ARTICLE 10: SCHEDULE OF CHARTER CAPITAL CONTRIBUTION 7
ARTICLE 11: CERTIFICATE OF PAID-IN CAPITAL 7
ARTICLE 12: DELAY IN MAKING CAPITAL CONTRIBUTION 7
ARTICLE 13: INCREASE OR REDUCTION OF THE CHARTER CAPITAL 8
ARTICLE 14: CAPITAL TRANSFER 8
ARTICLE 15: RIGHTS AND OBLIGATIONS OF THE COMPANY 9
ARTICLE 16: RESPONSIBILITIES OF THE PARTIES 9
ARTICLE 17: WARRANTS AND REPRESENTATIONS OF THE PARTIES 11
ARTICLE 18: FINANCIAL OBLIGATIONS 11
ARTICLE 19: DIVISION OF PROFITS 11
ARTICLE 20: TAX OBLIGATIONS 11
ARTICLE 21: FOREIGN EXCHANGE 11
ARTICLE 22: BANK ACCOUNT 12
ARTICLE 23: INSURANCE 12
ARTICLE 24: ACCOUNTING AND STATISTICS 12
ARTICLE 25: AUDIT 13
ARTICLE 26: FISCAL YEAR 13
ARTICLE 27: MEMBER’S COUNCIL 13
ARTICLE 28: GENERAL DIRECTOR 14
ARTICLE 29: DEPUTY GENERAL DIRECTOR AND CHIEF ACCOUNTANT 15
ARTICLE 30: RECRUITMENT OF PERSONNEL 15
ARTICLE 31: DISSOLUTION OF THE COMPANY 15
ARTICLE 32: LIQUIDATION OF THE COMPANY 16
ARTICLE 33: TERMINATION OF THE JV CONTRACT 16
ARTICLE 34: CLAIMS FOR DAMAGES 17
ARTICLE 35: SETTLEMENT OF DISPUTES 17
ARTICLE 36: FORCE MAJEURE 17
ARTICLE 37: CONFIDENTIALITY 18
ARTICLE 38: CIRCUMSTANCES NOT STIPULATED IN THE JV CONTRACT AND IN THE
CHARTER 18
ARTICLE 39: LANGUAGE 18
ARTICLE 40: AMENDMENTS AND MODIFICATIONS OF THE JV CONTRACT 19
ARTICLE 41: GOVERNING LAWS 19
ARTICLE 42: SEVERABILITY 19
ARTICLE 43: NOTICES 19
ARTICLE 44: HEADINGS 19
ARTICLE 45: SIGNING 20
JOINT VENTURE CONTRACT
FOR ESTABLISHMENT OF
A COMPANY
=========
in
the Socialist Republic of Vietnam
THIS JOINT VENTURE CONTRACT is made and executed on this ___ day of
______2006, in accordance with the Law on Investment dated 29 November
2005 and the Law on Enterprises dated 29 November 2005, in Hanoi, by
and between the following Parties:
A. THE ABC PARTY
Company Name:
Address:
Business Registration No.:
Telephone:
Fax:
Legal Representative:
Title:
Nationality:
(Hereinafter referred to as the “ABC Party”)
B. THE XYZ PARTIES
Company Name:
Address:
Cert of Incorporation No.:
Telephone:
Fax:
Legal Representative:
Position:
Nationality:
Passport No.:
(Hereinafter referred to as the “XYZ Party”).
The Parties hereto have mutually agreed to sign this Joint Venture
Contract (the “JV Contract”) with the terms and conditions hereunder
set forth:
ARTICLE 1: DEFINITIONS
----------------------
In this JV Contract, the following words and terms shall have the
meanings as ascribed to them hereinafter:
1.
“Application” shall mean the application/request for the
Invesment Certificate to the Licensing Authority for obtaining
the Invesment Certificate of the Company in accordance with the
terms and conditions of this JV Contract, to which this JV
Contract and the Charter and other relevant documents as
required by laws.
2.
“XYZ Party” shall mean ________________________.
3.
“ABC Party” shall mean _________________________.
4.
“Party” shall mean either of the ABC Party, XYZ Party, as the
context requires, and “Parties” shall mean the ABC Party and the
XYZ Party collectively.
5.
“JV Contract” shall mean this Joint Venture Contract the Parties
conclude for the purpose of establishing the Company and all
annexes, agreements, schedules and documents attached hereto.
6.
“Charter” shall mean the charter of the Company to be executed
by the ABC Party and the XYZ Party in accordance with this JV
Contract, on the same date with this JV Contract.
7.
“Company” shall mean the limited liability joint venture company
namely ________________ and established by the Parties pursuant
to this JV Contract and the Charter.
8.
“Business field” shall mean the business field of the Company as
defined in Article 7.1.
9.
“Member” shall mean the party (ies) making capital contributions
to the Charter Capital of the Company, including the Parties to
this JV Contract.
10.
“Members’ Council” or “Council” shall mean the members’ council
of the Company as defined in Article 27 below.
11.
“Member Representative” shall mean as defined in Article 27.2.
12.
“Member Register” shall mean as defined in Article 4.4.
13.
''General Director” shall mean as defined in Article 28 below.
14.
''Effective Date” shall mean the date on which the Investment
Certificate is issued.
15.
“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.
16.
“Investment Capital” shall mean the capital to be employed by
the Company for implementation of the Project, comprising of its
Charter and Loan Capital, as stated in the Investment
Certificate.
17.
“Charter Capital” shall mean the total amount of capital
contributed by the Parties and recorded in the Charter of the
Company in accordance with Article 9 hereof.
18.
“Loan Capital” shall mean the loan capital of the Company as
specified in Article 9 hereof.
19.
“Investment Certificate” shall mean the Investment Certificate
issued by the Licensing Authority or a competent authority in
Vietnam for the establishment and the operation of the Company.
20.
“Licensing Authority” shall mean the Hanoi People’s Committee,
which is responsible for the issuance of the Investment
Certificate within its authority under the Laws of Vietnam.
21.
“Project” shall mean the the project of Reconstruction of old
apartments Kim lien B4 and B14.
22.
''US$'' or “US Dollars” shall mean the lawful currency of the
United States of America.
23.
“VND” or “Vietnamese Dong” shall mean the lawful currency of
Vietnam.
24.
“Vietnam” shall mean the Socialist Republic of Vietnam.
ARTICLE 2: AGREEMENT TO ESTABLISH THE COMPANY
---------------------------------------------
2.1 The Parties, in accordance with the laws of Vietnam, hereby agree
to establish a limited liability company which has two members or more
in Vietnam for the business fields as mentioned in the Article 7
hereof.
ARTICLE 3: NAME AND ADDRESS OF THE COMPANY
------------------------------------------
1.
The name of the Company to be established shall be
“____________” in Vietnamese. The transaction name in English of
the Company shall be “____________” and the abbreviated name of
the Company shall be "_______________”.
2.
The legal address of the Company’s office will be at
______________ Vietnam.
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 the Members’ Council.
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
outside Vietnam and implement registration procedures in
accordance with the prevailing laws.
ARTICLE 4: LIMITED LIABILITY AND JURIDICAL STATUS OF THE COMPANY
----------------------------------------------------------------
1.
The Company is a limited liability company, having the juridical
person status, under the Laws of Vietnam with the effect from
the Effective Date. During the course of its operation, the
Company shall observe with the Laws of Vietnam, the provisions
of the JV Contract, the Charter and the Investment Certificate.
All activities of the Company and the respective interests of
the Parties shall be protected by the Laws of Vietnam.
2.
The Parties shall not be liable for any debts or obligations of
the Company except:
a.
Only up to the amount of its respective subscribed contributions
in the Charter Capital of the Company as required from time to
time in accordance with this JV Contract and shall have no
liability to the 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.
3.
Subject to the foregoing limitation of liabilities, the Parties
shall share the profits, losses and risks in proportion to their
respective subscribed capital contributions in the Charter
Capital of the Company at that time.
4.
The capital contributions by the Parties to the Charter Capital
shall be specified in Article 9 hereof and the Member
Registration book established by the Company and kept at its
head office.
ARTICLE 5: CHARTER
------------------
5.1 The Company has its own 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 have the Charter amended so that
it is consistent with this JV Contract.
ARTICLE 6: EFFECTIVE DATE
-------------------------
1.
This JV Contract shall become effective upon issuance of the
Investment Certificate by the Licensing Authority.
2.
This JV Contract shall remain in force and effect until the
Company ended its operations.
ARTICLE 7: OBJECTIVES AND SCOPE OF BUSINESS OF THE COMPANY
----------------------------------------------------------
1.
The Parties agree to establish the Company for a profitable
business, strengthening of market position and improvement of
competitiveness. The objectives and scope of business of the
Company shall be:
No.
Industry code
Industry name
1
2
3
4
5
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 Project implementation schedule shall be prepared and agreed
upon by the Parties, and implemented in a prompt and appropriate
manner to serve the Company’s benefits and purposes in accordance with
this JV Contract and the Charter.
ARTICLE 9: CAPITAL OF THE COMPANY
---------------------------------
1.
Charter Capital of the Company
The Charter Capital of the Company shall be VND _________ equivalent
to US$ ___________.
2.
Charter Capital Contributions of the Parties
The ABC Party shall contribute VND ______________ equivalent to
US$____________ in cash which is equal to ______ (____%) of the
Charter Capital.
The XYZ Party shall contribute VND ______________ equivalent to
US$____________ in cash which is equal to ______ (____%) of the
Charter Capital.
3.
Loan Capital
The Company may arrange for the loan at a 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
Investment Capital to meet operational demands of the Company.
ARTICLE 10: SCHEDULE OF CHARTER CAPITAL CONTRIBUTION
----------------------------------------------------
10.1 The Parties agree to make their respective Charter Capital
contributions, in cash and/or equipment in full and within four (04)
months from the date of issuance of the Investment Certificate.
ARTICLE 11: CERTIFICATE OF PAID-IN CAPITAL
------------------------------------------
1.
When each Party has made its full contribution of the Charter
Capital, the Company will issue a Certificate of Paid-in Capital
to such Party. Each Certificate of Paid-in Capital shall state,
inter alia, the name of the owner of the Charter Capital, the
amount of the Charter Capital issued, the percentage of ownership
of the Charter Capital thereby represented and the amount of
contribution to the Charter Capital paid up thereon. The
Certificate of Paid-in Capital shall be signed by the Chairman of
the Members’ Council and sealed with the seal of the Company.
ARTICLE 12: DELAY IN MAKING CAPITAL CONTRIBUTION
------------------------------------------------
1.
If either of the Parties hereto is unable to make its contribution
in accordance with the agreed schedule under Article 10, that
Party shall inform the other Party of the reasons for such delay
and take remedial measures not later than fifteen (15) days after
the due date for making the contribution and shall be held liable
to the other Party for any loss incurred thereby. If such remedial
measures are not performed or are not satisfactory to the other
Party, the other Party may terminate this JV Contract in
accordance with Article 33, and the Party in breach shall be
liable for all damages incurred by the other Party due to such
breach. Nevertheless, the contribution must not exceed 60 days
since the date of contribution specified in Article 10.
ARTICLE 13: INCREASE OR REDUCTION OF THE CHARTER CAPITAL
--------------------------------------------------------
1.
During the period of its operation, the Company shall not be
entitled to reduce the amount of its Charter Capital, except for
the following cases:
a.
as provided for in Article 13.3 hereof;
b.
redeeming shares of capital contribution as stipulated in
Article 7 of the Charter;
c.
reducing the Charter Capital corresponding to the reduced value
of assets of the Company.
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 the
Company or by calling for new capital contribution from the
Parties or taking in capital contributions from the new member(s).
Any increase in the Charter Capital must be subject to the
approval of the Members’ Council, and shall be registered with the
Licensing Authority.
3.
The Company may return part of the contributed capital to the
Parties in proportion to their respective shares of contributed
capital in the Charter Capital of the Company if the business
operation of the Company has been carried out continuously for
more than two (02) years from the date of the Investment
Certificate, and at the same time ensuring that debts and other
property obligations may be paid in full after returning
contributed capital to the Parties.
4.
Subject to the Laws of Vietnam, the Company may raise funds
locally by issuance of bonds and/or conversion of the Company into
a joint stock company and having its shares publicly listed in the
stock exchange of Vietnam, and in such case, the status of the
Company shall be accordingly adjusted in accordance with the
requirements of the Members’ Council and the Laws of Vietnam.
ARTICLE 14: CAPITAL TRANSFER
----------------------------
1.
If any Party desires to transfer all or part of its capital
contributed in the Company, such Party (“Transferring Party”)
shall first offer such amount of its capital contributed in the
Company by a written notice to the other Party (“Offeree Party”),
specifying the price and other terms and condition of transfer.
The Offeree Party shall have a right of first refusal to such
offer, and shall have sixty (60) days upon the receipt of such
notice (“Acceptance Period”) to respond in writing. If the Offeree
Party accepts the offer, the Transferring Party and the Offeree
Party shall apply for the registration of such transfer with the
Licensing Authority.
2.
If the Offeree Party refuses the offer or fails to respond within
the Acceptance Period, the Transferring Party may transfer its
capital contributed to the Company to any third party, provided
that:
a.
The sales and purchase must not be made at a price less than, or
on terms and conditions more favorable than, those specified in
the original offer to the Offeree Party, and the sales and
purchase must not be offered to any company that competes with the
Company; and
b.
The Transferring Party shall cause the transferee to execute and
deliver to the other Party a written undertaking, in the form and
substance acceptable to the other Party, to effect that the
transferee shall observe and be bound by all provisions of this JV
Contract and any agreement related hereto, and of the Charter and
the Investment Certificate, as if such transferee were a party
hereto and thereto.
3.
Any such transfer mentioned above shall not be valid unless
approved in writing by the Members’ Council of the Company and
registered with the Licensing Authority, if so required by the
Laws of Vietnam.
4.
If any capital gains should be realized in connection with such
transfer, the Transferring Party shall pay the applicable tax in
accordance with the Laws of Vietnam.
5.
No Party shall pledge or hypothecate any of its capital
contributed in the Company, nor otherwise use such capital as
collateral or for any other purpose unless otherwise approved in
writing by the Members’ Council.
ARTICLE 15: RIGHTS AND OBLIGATIONS OF THE COMPANY
-------------------------------------------------
1.
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 the Company by the Licensing
Authority or any other competent authority in Vietnam, and in
accordance with the Laws of Vietnam.
ARTICLE 16: RESPONSIBILITIES OF THE PARTIES
-------------------------------------------
Each Party shall fulfill its obligations and abide by the terms of
this JV Contract and the Charter of the Company, and shall carry out
its respective responsibilities as below:
1.
Responsibilities of the ABC Party
a.
To negotiate with authorities regarding essential juridical
procedures and of official approvals of the Company from any
competent authorities in Vietnam;
b.
To provide fully and in a timely manner its contribution to the
Charter Capital of the Company as set forth in this JV Contract;
c.
Support the Company in dealing with the relevant Government
agencies on issues and formalities relating to the operation of
the Company;
d.
To appoint the authorized representatives to the Members’ Council
and the Executive Officers, and assist the Members’ Council and
the General Director in management and operation of the Company;
e.
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
the Company;
f.
To observe strictly the confidentiality provisions as stated in
Article 37 of this JV Contract;
g.
To take whatever steps and measures as may be necessary to assist
the Foreign Parties to repatriate its shared profits from the
Company in accordance with the terms and conditions of this JV
Contract;
h.
To assist solving other problems when reasonably requested by the
Company.
2.
Responsibilities of the XYZ Party
a.
To provide the ABC 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 contribution to the
Charter Capital of the Company as set forth in this JV Contract;
c.
To assist the Company in setting up and implementing a quality
assurance system at the expenses of the Company;
d.
To organize the training and skill transfer program for the
selected Vietnamese staff at the expenses of the Company and under
the terms and conditions to be agreed with the Company;
e.
To assist Company in marketing the Company’s business activities;
f.
To find the foreign financial sources, advanced technologies for
the projects of company in order to maximize the efficiency of
implementation of such projects;
g.
To be responsible for sourcing, selecting all equipment, raw
materials that cannot be sourced locally to serve the best for the
Company operation;
h.
To provide all the adequate and necessary assistance, advice
expertise and information related to the development and
management of the Company;
i.
To appoint the authorized representatives to the Members’ Council
and the Executive Officers, and assist the Members’ Council and
the General Director in management and operation of the Company;
and
j.
To assist solving other problems when reasonably requested by the
Company.
ARTICLE 17: WARRANTS AND REPRESENTATIONS OF THE PARTIES
-------------------------------------------------------
1.
As of the date of the execution of this JV Contract, and as of
the Effective Date, 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 (applicable to the ABC Party and XYZ Party);
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.
2.
Without prejudice to Article 33 of this JV Contract, either
Party shall indemnify the other Party against any and all
losses, including but not limited to 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.
ARTICLE 18: FINANCIAL OBLIGATIONS
---------------------------------
18.1 The Company and the Parties shall fulfill all financial
obligations to the Government of Vietnam in accordance with the Laws
of Vietnam.
ARTICLE 19: DIVISION OF PROFITS
-------------------------------
1.
The Company shall, after payment of its corporate income tax,
annually certain proportion of at least 10% of the remaining
profits will be used for establishing a reserve fund. This will be
subject to the decision of the Members’ Council from time to time.
2.
In accordance with the ratio of the Charter Capital contribution
of the Parties as stated in Article 9 above, the remaining profits
of the Company shall be allocated to the Parties based on the
ratio of the Charter Capital contribution according to the
decisions of the Members’ Council.
ARTICLE 20: TAX OBLIGATIONS
---------------------------
1.
The Company shall apply for all tax exemptions and reductions to
which it is entitled according to the Laws of Vietnam.
2.
The Company and the Parties shall be liable to pay the value added
tax, corporate income tax, personal income tax and perform other
financial obligations (if any) in accordance with the Laws of
Vietnam, and in particular in accordance with the Investment
Certificate granted by the Licensing Authority.
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 the Company.
ARTICLE 21: FOREIGN EXCHANGE
----------------------------
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 the Company
Vietnamese staff and workers.
2.
Foreign currency, e.g. US Dollars, shall be used to make all
purchases outside of Vietnam.
3.
Depending on the prevailing law, foreign exchange available to the
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 the
Company’s operation;
b.
Payment of expatriate personnel’s salary and the expenses of the
Executive Officers;
c.
Payment of the net shared profits of the Foreign Parties in
accordance with Article 19 above; and
d.
Other payments, which the Members’ Council decides to be made in
foreign currency.
4.
The Foreign Parties 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 22: BANK ACCOUNT
------------------------
1.
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, the Company may also open foreign exchange
accounts with foreign bank abroad.
ARTICLE 23: INSURANCE
---------------------
1.
The assets of the 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.
ARTICLE 24: ACCOUNTING AND STATISTICS
-------------------------------------
1.
The accounting system, books and records of the Company shall be
prepared and maintained in accordance with the prevailing Laws of
Vietnam.
2.
Financial statements including the balance sheet, profit and loss
statement, cash flow statement and reports on the operations of
the Company shall be prepared monthly, quarterly and annually
subject to the decision of the Members’ Council.
3.
The monetary unit used in bookkeeping shall be in Vietnamese 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.
4.
All accounting records, invoices, books, and statements of the
Company shall be made, prepared and maintained in both the English
and Vietnamese languages.
5.
The depreciation rate of the 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 25: AUDIT
-----------------
1.
A registered auditing company of international repute licensed or
authorized to carry out audits in Vietnam shall be engaged by the
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 26: FISCAL YEAR
-----------------------
1.
The fiscal year of the Company shall begin on 1 January and end on
31 December of the same year. The first fiscal year shall commence
on the Effective Date and end on 31 December.
2.
At the end of each fiscal year, the 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
25 above and shall be submitted to the Licensing 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.
ARTICLE 27: MEMBER’S COUNCIL
----------------------------
1.
The Members' Council shall comprise all Members/Parties and shall
be the highest authority of the Company. The Members’ Council
shall establish the long-term business plan, organization
structure, appoint or remove the Executive Officers and control
overall management of the business of the Company with the object
of taking all reasonable and proper 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 the Company.
2.
The Parties shall appoint their own authorized representatives
(“Member Representative”) to the Members’ Council according to
their respective Charter Capital contributions to the Company.
Each Member Representative shall have the number of votes in
proportion to the authorized share of capital contribution of the
Party that appoints him/her.
3.
Each Member shall have the right to replace its Member
Representative to the Members' Council, including the Chairman, at
any time, provided that written notice thereof is given to the
Company and the other Member(s) at least seven (07) days in
advance. The Company shall notify the Licensing Authority of such
appointment or replacement of the Member Representative, within
seven (07) days from the date of appointment or replacement.
4.
Each Member Representative shall be appointed for the term so
authorized, and shall be entitled to serve for the next terms if
re-appointed by the Party that appoints him/her. If the Members’
Council has any vacancy because a Member Representative retires,
resigns, is incapacitated or dies, or is removed from office
earlier under Article 28.3 above, the Party that has appointed
such Member Representative shall appoint another representative
for replacement, who will serve for the balance of the term of the
Member Representative so replaced.
5.
The Members’ Council elects a Member Representative appointed by a
Party representing at least 50% of the Charter Capital to the
position of Chairman. The term of office of the Chairman shall be
one (01) year. The Chairman may be re-elected for next terms.
6.
The appointment of the Chairman of the Members’ Council shall be
completed not later than sixty (60) days from the Effective Date.
7.
The Members’ Council shall make decisions at its meetings. The
Members’ Council’s meetings shall be held and convened by the
decision of the Chairman of the Members’ Council according to the
need or upon the request of any Member or Group Member owned more
than 25% of the Charter Capital. Meetings of the Members' Council
shall presided over by the Chairman (or his nominated proxy).
8.
The Chairman shall convene and chair meetings of the Members'
Council and shall supervise and monitor the execution of decisions
of the Members' Council. The Chairman may appoint a person(s) to
assist him/her in discharging his/her responsibilities under the
Charter.
9.
The Chairman, Member Representatives may be paid the remuneration
or salary by the Company subject to the decision of the Members'
Council.
10.
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 28: GENERAL DIRECTOR
----------------------------
1.
The General Director shall be responsible for the management and
of the day-to-day operation of the Company. The General Director
is the legal representative of the Company and must permanently
reside in Vietnam; where he or she is away from Vietnam for over
thirty (30) days, he or she must authorize another person in
writing in accordance with the charter of the company to perform
the rights and obligations of the legal representative of the
Company.
2.
The General Director shall be approved and appointed by the
Members' Council based on the nominations of the Members and shall
serve under general oversight (and subject to the directives) of
the Members' Council in accordance with the Laws of Vietnam, the
and Charter this JV Contract. The General Director may also serve
as a Member Representative.
3.
The term of office of the General Director shall be one (01) year.
Successive terms are permissible. Notwithstanding the provisions
of Article 28.2, in the first term, the Parties agree that the
General Director shall be nominated by the ABC Party and be
approved and appointed by the Members’ Council.
4.
The rights and responsibilities of the General Directorare
stipulated in the Charter of the Company and the Company’s
regulations promulgated by the Members’ Council
5.
Salary and other allowances of the General Director shall be
solely decided by the Members’ Council.
ARTICLE 29: DEPUTY GENERAL DIRECTOR AND CHIEF ACCOUNTANT
--------------------------------------------------------
1.
The Deputy General Director and the Chief Accountant shall be
appointed by the Members’ Council in accordance with the Charter,
and shall be responsible to assist the General Director in the
management of the Company and report to the General Director.
2.
The rights and responsibilities of the Deputy General Director and
the Chief Accountant are stipulated in the Charter of the Company
and the Company’s regulations promulgated by the Members’ Council.
3.
Salary and other allowances of the Deputy General Director and the
Chief Accountant shall be solely decided by the Members’ Council.
ARTICLE 30: RECRUITMENT OF PERSONNEL
------------------------------------
1.
All employees of the 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 the Company’s personnel
regulations promulgated by the Members’ Council.
2.
Vietnamese citizens are given priority in recruitment by the
Company. Where high levels of management and technical skills are
required and which are not available in Vietnam, the Company may
recruit foreign experts provided a training program shall be
formulated for local replacement in the future.
3.
The Company shall apply social security, heath insurance and safe
working environment for the sake of its employees in compliance
with the Laws of Vietnam.
ARTICLE 31: DISSOLUTION OF THE COMPANY
--------------------------------------
In the following cases, the JV Contract shall be terminated and the
Company shall be dissolved in the accordance with the regulations and
procedures set forth in the Laws of Vietnam when:
1.
The Parties agree to discharge themselves of the performance of
their contractual obligations under this JV Contract through
negotiations duly approved by the Licensing Authority or any other
competent Vietnamese authority and in accordance with the Laws of
Vietnam;
2.
Upon occurrence of any of the circumstances as provided in Article
33 hereof, which may lead to the termination of this JV Contract;
3.
The court as referred to in Article 35 hereof declares the
termination of this JV Contract; or
4.
The Investment Certificate of the Company is withdrawn by the
Licensing Authority or any other competent Vietnamese authority,
in accordance with the Laws of Vietnam.
ARTICLE 32: LIQUIDATION OF THE COMPANY
--------------------------------------
1.
The liquidation of the Company shall be effected in accordance
with the Charter.
2.
After termination of all activities, the remaining assets of the
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 33: TERMINATION OF THE JV CONTRACT
------------------------------------------
1.
This JV Contract shall be terminated upon written notice of any
Party to the other Party, under the following circumstances:
a.
Any change in the Laws of Vietnam which may affect adversely the
existence or operation of the Company, the interests of all or any
Party, which is impossible for the Company or the Parties to
resolve;
b.
By any Party, if the other Party materially breaches any of its
obligations under this JV Contract and does not take adequate
measures to remedy such breach within sixty (60) days from the
date of receipt of written notice for remedy from the
non-breaching Party;
c.
By any Party, if the other Party shall be or becomes incapable for
a period of six (6) consecutive months of performing any of its
obligations under this JV Contract because of any event of Force
Majeure;
d.
In case of the Company or any Party's bankruptcy, liquidation or
dissolution, or suspension of operations or inability of paying
any debts as they become due; or
e.
The Company is unable to continue operating because of heavy
losses, or any other reasons, as determined by the Members’
Council;
2.
If this JV Contract is terminated pursuant to Articles 33.1.a),
33.1.b), 33.1.c), 33.1.d), and 33.1.e) hereinabove, the Parties
shall proceed to the dissolution of the Company in accordance with
the regulations and procedures set forth in the Laws of Vietnam,
unless they agree to the terms and conditions upon which a
transfer of the capital contributed in the Company to any Party or
to a third party may take place, provided that, such transfer is
comply with previaling regulations of Vietnam.
3.
If the JV Contract is terminated pursuant to Articles 33.1.b) and
33.1.d) above, the terminating Party shall have the option (which
option should be exercised only by written notice to the other
Party within thirty (30) days after the effective date of such
termination) either:
a.
To have the other Party transfer its capital contributed in the
Company to the terminating Party at the fair market value;
b.
To transfer its capital contributed in the Company to a third
party nominated by the terminating Party at the market value; or
c.
To proceed to a dissolution of the Company.
The fair market value shall be determined by an independent accounting
firm of international repute selected upon the agreement of the
Parties.
4.
The termination of this JV Contract for any reason shall not
release or exempt any Party from its responsibilities, commitments
or any obligations already incurred under this JV Contract, except
otherwise, there are other agreements between parties.
ARTICLE 34: CLAIMS FOR DAMAGES
------------------------------
If the Company suffers any cost, liability or loss, including but not
limited to lost profits of the Company, as a result of a breach of
this JV Contract by a Party, the Party in breach shall indemnify and
hold the Company harmless in respect of any such cost liability or
loss, including but not limited to interest paid or lost as a result
thereof. 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.
ARTICLE 35: SETTLEMENT OF DISPUTES
----------------------------------
1.
All disputes, controversies or differences (collectively referred
to as “disputes”) arising from this JV Contract, shall be first
amicably settled by negotiations between the Parties. Failure to
such amicable settlement, the dispute shall be settled by a court
of jurisdiction of Vietnam.
2.
During the period in which a conflict or dispute is being
resolved, the Parties shall, in all other respects except for the
matter being in dispute, continue performing their respective
obligations under this JV Contract.
ARTICLE 36: FORCE MAJEURE
-------------------------
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.
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.
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.
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, both parties shall discuss to find the solutions for such
Force Majeure, if fails to reach the solutions, then any Party may
unilaterally terminate this JV Contract and demand dissolution,
liquidation and termination of the JV Contract of the Company as
provided in Articles 31, 32 and 33 above, by a notice in writing
to the other Party.
ARTICLE 37: CONFIDENTIALITY
---------------------------
1.
Each Party agrees to keep secret and confidential all information
obtained pursuant to this JV Contract from the other Party or the
Company, which is designated or is reasonably considered as
confidential by the other Party or the 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.
2.
The Parties shall take all necessary steps to ensure that their
officers and employees will comply in all respects with this
Article 37.
ARTICLE 38: CIRCUMSTANCES NOT STIPULATED IN THE JV CONTRACT AND IN THE
CHARTER
----------------------------------------------------------------------
1.
All other terms and conditions relating to the activities of the
Company but not stipulated in the JV Contract and the Charter of
the Company, shall be implemented by the Parties in accordance
with the current provisions of the Laws of Vietnam and other
provisions (if any) in the Investment Certificate granted by the
Licensing Authority.
ARTICLE 39: LANGUAGE
--------------------
1.
The Company shall use English and Vietnamese in all its
activities. Further, the Parties shall use both English and
Vietnamese in all notices between themselves or with the Company.
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 or the
generally accepted international business practices.
ARTICLE 40: AMENDMENTS AND MODIFICATIONS OF THE JV CONTRACT
-----------------------------------------------------------
1.
Any amendment to, or modification of or rectification of this JV
Contract shall be made by written agreement signed by duly
representatives of Parties in both Vietnamese and English
versions, each of which shall be equally authentic.
ARTICLE 41: GOVERNING LAWS
--------------------------
1.
The validity and performance of this JV Contract shall be
constructed in accordance with, and governed by, the laws of
Vietnam.
2.
If there is any change in the applicable law, which may create any
additional interest or privileges for the Company or the Parties,
the Parties shall take every appropriate measure necessary to
procure the Company to take advantage of such interest or
privileges, or to enable the Company to assist the Parties
benefiting from and enjoying such interest or privileges.
ARTICLE 42: SEVERABILITY
------------------------
1.
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.
ARTICLE 43: NOTICES
-------------------
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 (Confirmed by hard
copy to the address and recipients as mentioned above in the first
part of this JV Contract.
2.
Each Party may change its address for notice by notice given to
the other Party in the manner set forth above.
3.
Notices given as herein provided shall take effect upon the actual
receipt by the other Party.
ARTICLE 44: HEADINGS
--------------------
1.
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 45: SIGNING
-------------------
1.
This JV Contract is signed in Hanoi, Vietnam.
2.
The JV Contract is written in Vietnamese and English in four
originals in each language and having equal validity. One original
of each language text shall be retained by each Member and two
originals of each language text shall be retained by the Company,
one of which shall be submitted to the Relevant Authority if
required by the Laws of Vietnam.
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.
SIGNED AND SEALED )
for and on behalf of the ABC Party )
_______________________________________
Full Name:
Position:
SIGNED AND SEALED )
for and on behalf of the XYZ Party )
__________________________________________
Full Name:
Position:
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JV Contract