JOINT VENTURE AGREEMENT

between

COMPANY NAME

and

COMPANY NAME

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Table of Content

2


JOINT VENTURE AGREEMENT FOR ESTABLISHMENT OF
A JOINT VENTURE COMPANY LIMITED
This JOINT VENTURE AGREEMENT (the “JV Agreement”) is made this _____ day
of ______ in accordance with the Law on Investment, the Law on Enterprises, the Law
on Land, the Law on Residential Housing and their relevant guiding legislation, and other
relevant Laws of Vietnam as the same may be amended from time to time by and
between:
A.

PARTY A
COMPANY……………., a company duly organized and existing under the laws
of the Cayman Islands:
Registered Address

:

Business Address

:

Business Registration
Certificate/Certificate of
Incorporation No.

:

And
B.

PARTY B
INVESTMENT GROUP CORPORATION, a company duly organized and
existing under the laws of Vietnam:
Registered Address

:

Business Address

:

Business Registration Certificate/ :
Certificate of Incorporation No.


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INTRODUCTION:
(A)

The Parties have agreed to form a joint venture company in Vietnam to carry out
on a plot of land with an area of 9,023 square meters (the “Net Land Area”)
located at Phuoc Long B Ward, District 9, Ho Chi Minh City, Vietnam as identified
in Schedule 2 (Map and Details of the Land) (the “Land”) the development and
operation of high-rise residential buildings with shop-houses and facilities on the
Land for sale to those who are permitted to purchase houses in Vietnam and for
doing business in relevant services by the JVC for the duration of the Term
pursuant to the Investment Certificate, this JV Agreement, the Charter and the Laws
of Vietnam (the “Project”).

(B)

The Parties have agreed to regulate their affairs on the terms and conditions set
out below.

NOW THEREFORE IN CONSIDERATION OF THE PROMISES AND THE
MUTUAL COVENANTS HEREIN THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1.
1.1

DEFINITIONS AND INTERPRETATION

Definitions
Any capitalized words or expressions that are defined in Schedule 1 shall, when

used in this JV Agreement (including the Introduction and the Schedules), have the
meanings ascribed to them in Schedule 1.

1.2

Interpretations
This JV Agreement shall be read, interpreted and constructed in accordance with
the following rules:
(a)

When “Article”, “Section”, “Appendix”, “Exhibit” or “Schedule” is
capitalized in the Agreement, it refers to an article, section, appendix, exhibit
or schedule of the Agreement.

(b)

“Including” and any other words or phrases of inclusion shall not be
construed as terms of limitation, so that references to “included” matters shall
be regarded as non-exclusive, non-characterizing illustrations. Without
limiting the foregoing, the words “including” or “includes” shall be
respectively read and construed as meaning “including, without limitation” or
“includes, without limitation”, unless expressly specified otherwise.

(c)

Titles and captions of or in this JV Agreement, the cover sheet and table of
contents of this JV Agreement, and language following article or section
references are inserted only as a matter of convenience and in no way define,
limit, extend or describe the scope of this JV Agreement or the intent of any
of its provisions.

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(d)

Whenever the context requires, the singular includes the plural and the plural
includes the singular, and the gender of any pronoun includes the other
genders.

(e)

Each appendix, exhibit and schedule referred to in this JV Agreement is
hereby incorporated by reference into this JV Agreement and is made a part
of this JV Agreement as if set out in full in the first place that reference is
made to it.

(f)

Any reference to any statutory provision includes each successor provision
and all applicable laws as to that provision.

(g)

A reference to an agreement or document (including a reference to this JV
Agreement) is to such agreement or document as amended, supplemented,
novated or replaced, except to the extent prohibited by this JV Agreement or
that other agreement or document.

(h)


Acknowledging that the Parties have participated in the negotiation and
drafting of this JV Agreement, if any ambiguity or question of intent or
interpretation arises as to any aspect of this JV Agreement, it shall be
construed as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favouring or disfavouring either Party by virtue of the
authorship of any provision of this JV Agreement.

(i)

Except where specified otherwise in this JV Agreement, a reference to or
contemplating the VND equivalent of a USD amount shall mean such USD
amount converted into VND, applying the inter-bank USD to VND exchange
rate set by the State Bank of Vietnam from day to day.

ARTICLE 2.

ESTABLISHMENT OF A JOINT VENTURE COMPANY

2.1 Agreement to Establish the JVC
The Parties agree to establish the JVC on the terms and conditions of this JV
Agreement, and subject to the issuance of all State Approvals by all State
Authorities.
2.2 Name of the JVC
The Vietnamese name of the JVC shall be:
The English name of the JVC shall be:
The abbreviated name of the JVC, in both English and Vietnamese shall be:
2.3 Address of the JVC
The registered address of the JVC shall be at:……………………
2.4 Other Offices
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The JVC may open sales offices, representative, branch and regional offices in such
cities and provinces in Vietnam as approved by the Members’ Council and the State
Approval of the State Authority of Vietnam.
2.5 Compliance With the Laws of Vietnam
The JVC shall abide by the Laws of Vietnam in respect of all its activities.
2.6 The JVC as a Limited Liability Company
The JVC shall be a limited liability company with two (02) members. The liability
of each Party hereto shall be limited to the amount of such Party’s contribution to
the Charter Capital. The amount of the contribution to the Charter Capital by the
Parties is as set out in Article 4 and the JVC’s Member Registration Book which is
made and kept by the JVC at the JVC’s head office. Subject to the foregoing
limitation of liability, and in accordance with Laws of Vietnam, the Parties shall
share the profits in proportion to, and up to a maximum of, their respective capital
contributions to the Charter Capital, except otherwise agreed in writing by the
Parties or approved by the Members’ Council from time to time.
2.7 The Charter
The JVC shall be organized under a charter (the “Charter”), which shall be deemed
to be an integral part of this JV Agreement.
2.8 Term of Operation
The Term of the JVC shall be 50 years (the “Term”) from the Effective Date. The
Term is renewable for another term should any Party so requests in writing not less
than 24 months prior to the expiry of the initial term subject to the consent of the
Licensing Authority and the unanimous approval of all members of the Member’s
Council present at a Member’s Council meeting and voting in accordance with the
Charter. If the Term of the JVC is not renewed, then the JVC shall be dissolved in
accordance with the terms of this JV Agreement and the Charter and the Laws of
Vietnam.
2.9 Investment Protection

The activities of the JVC and the interests of the Parties shall be protected by the
Laws of Vietnam. The JVC shall have rights as provided for in the Investment
Certificate and in any other State Approvals granted or to be granted by any State
Authority in Vietnam and in all applicable treaties (including investment protection
and double taxation treaties) now or any time in the future in force between
Vietnam and other relevant countries.
ARTICLE 3.

BUSINESS LINES, SCOPE OF OPERATION OF THE JVC
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3.1

Business lines
The business line of the JVC shall be:

(a)

3.2

Doing business in real estate management services; and
(b)

Doing business in real estate (including the creation, new construction, sale
and lease of residential units and lease of commercial space); and

(c)

Doing related services to the above business in accordance with the Laws of

Vietnam.

Scope of activities
The scope of activities of the JVC are:

(a)

to invest, develop, construct and manage high-rise residential buildings with
residential and commercial amenities on the Land;

(b)

to lease and/or sell the apartment units to organizations and individuals or any
other individual or organization (including Vietnamese and non-Vietnamese organizations
and individuals) that are permitted to purchase or lease property pursuant to the Laws of
Vietnam;

(c)

to engage in all activities listed in the business lines (including the investment
and development of other real estate projects subject to the approval from State
Authorities), Article 3.1 herein, and the Investment Certificate;

(d)

to engage in all lawful activities relating to such purposes.
ARTICLE 4.
LAND
CHARTER CAPITAL
4.1


VALUE,

TOTAL

INVESTMENT

CAPITAL

AND

Land Value
(a)

The Parties agree that the value of the Land (which includes the value of the
right to use the Land, the value of the right to develop the Land and other
efforts and expenses by Party B to improve upon the Land and obtain the
LURC under the JVC’s name for the implementation of Project in accordance
with the Development Parameters) is US$ 7,037,940 (Seven Million Thirty
Seven Thousand Nine Hundred Forty United States Dollars) (“Land Value”),
subject to adjustment in price as set out in Article 4.2 below. The Land Value
is based on a valuation of US$780 (Seven Hundred and Eighty United States
Dollars) per square meter against the Net Land Area and with the current

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status of telecommunication, public roads, electricity, water supply and
sewage connections.
(b)


The Land Value shall include, and Party B shall assume full responsibility for,
the following:
(i)

All fees and costs to obtain the 1:500 master plan approval for the Land
from the relevant State Authority, specifically with the Approved
Parameters of the Project satisfying Development Parameters;

(ii)

All fees and costs required for conversion of the land use purpose of the
Land to residential and commercial uses according to the Approved
Parameters;

(iii) All land use fees, land rental, land use right transfer tax, registration
fees relating to land, and any other amounts charged by the relevant
State Authority in respect of the Land and other taxes, charges, costs
and expenses payable for the transfer of the Land to the JVC (until the
LURC is issued to the JVC) for the purpose of the Project;
(iv) All expenses for relocation, demolition, compensation and site
clearance of the Land (including ensuring that any and all
encroachment by other onto the Land are removed and cleared); and
(v)

4.2

Infrastructure procedures costs to be payable for ensuring infrastructure
facilities (including telecommunication, public roads, sewerage, water,
electricity) of adequate capacity for the purpose of the Project are

approved by the State Authority and connected to the boundaries of the
Land.

Land Value Adjustment
The Parties agree that within 60 days from the later date of obtaining (i) the official
written statement from the relevant State Authority to approve the Development
Parameters for the Project (the “Approved Parameters”) or (ii) the LURC under
the name of Party B, if:
(a)

the recognized area of the Land as set out in the LURC of Party B deviates
from the Net Land Area in the Development Parameters by 5% or more; or

(b)

the Approved Parameters is different to the Development Parameters in any
aspects,

the Parties shall re-negotiate to adjust proportionately the Land Value and agree on
the Approved Parameters in a signed written document (the “Adjustment
Minutes”).
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If the Parties fail to agree on the terms of the Adjustment Minutes within the given
60 days period, Party A shall have the right (but shall not be obliged) to
immediately terminate this JV Agreement on the subsequent date after the expiry of
the mentioned 60 days period. And if Party A exercises its right of termination
under this Article 4.2, Party A shall be released from any and all its obligations
under this JV Agreement.

4.3

Payment of the Land Value
(a)

(b)

4.4

In consideration of the Charter Capital contribution of Party B as set out in
Article 4.5 (b) and Article 4.6(b) below and subject to the terms and
conditions herein, the JVC shall pay Party B an amount equal to the Land
Value (which is subject to adjustment in accordance with Article 4.2) minus an
amount of US$2,411,382 as the difference between the Land Value and the
Charter Capital contribution of Party B (the “Difference”). The Difference
payable by the JVC to Party B shall be made in accordance with the following
schedule:
(i)

Within fifteen (15) days from the date of obtaining the LURC in the
name of the JVC, the JVC shall pay an amount equivalent to 70% of
the Difference to Party B; and

(ii)

Within 15 days from the date of obtaining the Project’s approval,
construction permit (or equivalent approval for commencement of
construction for the Project), the JVC shall pay the remaining 30% of
the Difference to Party B.


For the purpose of this Article 4.3, the Parties agree and confirm that the
exchange rate for conversion of USD to VND for the purpose of payment of
the Difference shall be the average of buying and selling rate published by
Vietcombank – Ho Chi Minh City Branch on the date of actual payment (the
“Exchange Rate”). The Parties agree further that if the Exchange Rate
exceeds the exchange rate at VND20,085 per 1 US$, the exchange rate for
conversion of USD to VND for the purpose of payment of the Difference shall
be deemed to be VND20,085 per 1 US$.

Total Investment Capital
The Total Investment Capital of the JVC shall be US$ 40,000,000 (in words: Forty
Million United States Dollars), and shall be provided by:
(a) Charter Capital as set out in Article 4.5, and
(b) Loans as set out in Article 4.10.

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4.5

Charter Capital
The Charter Capital of the JVC shall be US$ 8,037,940 (Eight Million Thirty Seven
Thousand Nine Hundred and Forty United States Dollars), and shall be contributed
by the Parties in the following proportion:
(a)

Party A shall contribute 70% equivalent to US$5,626,558; and

(b)


Party B shall contribute 30% equivalent to an amount of US$ 2,411,382

and the Parties acknowledge, for the avoidance of doubt, that their respective
Interests, and voting rights on the Members’ Council, shall be determined by
reference to their respective percentage contributions actually made, and committed
to be made, to the Charter Capital.
The above Interests may be changed during the Project in accordance with the
provisions of this JV Agreement or by mutual agreement of the Parties.
4.6

Schedule and manner of Contribution to Charter Capital
The contributions of the Parties to the Charter Capital shall be made in accordance
with the following schedule:
(a)

Party A shall contribute in total the amount of US$5,626,558 (Five Million
Six Hundred Twenty Six Thousand Five Hundred and Fifty Eight United
States Dollars) in cash to the Charter Capital within ten (10) Working Days
from the date of issuance of the LURC under the JVC’s name with the
Development Parameters ; and

(b)

Party B shall contribute its Charter Capital contribution in the form of the
land use right value of the Land to the JVC within forty five (45) Working
Days as from the Effective Date.

The above schedules may be changed by mutual agreement in writing by the Parties
and subject to approval of the State Authority if required.
4.7


Increase in Charter Capital
(a)

By resolution of the Members’ Council, the JVC may increase its Charter
Capital by way of:
(i)

Increasing the contributed capital of the Parties;

(ii)

Increasing the Charter Capital relative to the increased value of assets
of the JVC; or

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(iii) Raising contributed capital from new members.
(c)
4.8

The increase of Charter Capital which is approved by the Members’ Council
must be registered with the Licensing Authority.

Decrease in Charter Capital
(a)

By resolution of the Members’ Council, the JVC may reduce its Charter
Capital by way of:

(i)

Returning part of the contributed capital to members in proportion to
their respective shares of contributed capital in the Charter Capital of
the JVC if business operation has been carried out continuously for
more than two years from the Effective Date; and at the same time
ensuring that debts and other property obligations may be paid in full
after returning part of the contributed capital to members;

(ii)

Redeeming shares of capital contribution as stipulated in the Charter;
and

(iii) Reducing the Charter Capital corresponding to the reduced value of
assets of the JVC.
(b)
4.9

The decrease of Charter Capital which passed by the Members’ Council must
be registered with the Licensing Authority.

Issuance of Capital Contribution Certificate
(a)

With respect to Party A, the JVC shall issue the Capital Contribution
Certificate to Party A evidencing the amount and percentage of its
contribution to the Charter Capital upon each time that Party A makes the
capital contribution to the JVC;


(b)

With respect to Party B, the JVC shall issue the Capital Contribution
Certificate to Party B evidencing the amount and percentage of its
contribution to the Charter Capital upon Party B’s completion of its capital
contribution to the JVC by obtaining the LURC under the JVC’s name or
subsequently upon each time that Party B makes any capital contribution to
the JVC.

4.10 Loans
Subject to the approval of the Members’ Council, the JVC may obtain loans from
either Party or their Affiliates or financial institutions to cover the shortfall between
the Total Investment Capital and the Charter Capital (the “Loans”) in order to
conduct its business activities.
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4.11 Members’ Financing
(a)

Within ninety (90) days from the date of submitting the plan to obtain Loans
by the General Director, if the JVC is unable to obtain Loans, or the Loans
obtained is insufficient for funding the business activities of the JVC, Parties
shall, or cause their Authorized Representatives in the Members Council to,
resolve that the funding of the shortfall (the “Additional Contribution”) by
the Parties be made in either of the following manner:
(i)

by an increase of the Charter Capital of the JVC by the amount of the
Additional Contribution by way of increasing the capital contributed by

the Parties, where the Additional Contribution shall be allocated to each
Party in proportion to its Interest; or

(ii)

by Parties providing a loan in the amount of the Additional Contribution
with each Party participating in proportion to its Interest at an interest
rate of two (2) per cent above three month SIBOR (accrued daily and
compounded monthly) (the “Members’ Loan”).

(b)

If the Additional Contribution is less than or equal to US$4,600,000 (the
“Capped Additional Capital”) and any Party is unable to fund its portion of
the Additional Contribution (the “Non-Contributing Party”), the other Party
may (but shall not be obliged to) contribute the shortfall (the “Contributing
Party”). In such a case the Interest of the Non-Contributing Party shall be
diluted and the Interest of the Contributing Party shall be increased
accordingly.

(c)

If the Additional Contribution is more than the Capped Additional Capital, the
Parties agree that the provision in Article 4.11(b) above shall be applied in
respect of the amount equal to the Capped Additional Capital, and in respect
of the amount in excess of the Capped Additional Capital, in the event that
any Party fails to make their portion of contribution or lending (the
“Borrower”), the other Party (the “Lender”) may (but shall not be obliged
to) make additional advance for the shortfall to the JVC on behalf of the
Borrower at an interest rate of 11% above the base interest rate prescribed by

the State Bank of Viet Nam and treat such additional advance as a loan to the
Borrower (the “Debt”). The Debt and its interest shall be paid by the
Borrower to the Lender upon the profit distribution of the JVC to the Parties
by deducting the same amount from the profit to be distributed to the
Borrower. In this case, notwithstanding Article 4.11(a)(ii), if the Additional
Contribution is financed by way of Members’ Loan (not by way of increase
of Charter Capital in accordance with Article 4.11(a)(i)), the portion of
Members’ Loan equal to the Debt lending by the Borrower to the JVC shall
enjoy no interest.

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(d)

To the extent required by the applicable laws the Parties shall and/or cause
the JVC to carry out and execute necessary procedures and documents to give
the effect to the arrangement contemplated under this Article 4.11.

(e)

Parties hereby agree that:
i)

the interest rate stipulated in Article 4.11(a)(ii) shall be applicable to
loans made in USD foreign currency, and therefore, if Party B, in
accordance with Laws of Vietnam, is unable to make the loan to the
JVC in USD, such loan shall be made in VND but shall be converted
into USD for calculation of interest; and


(ii)

the interest rate stipulated in Article 4.11(c) shall be applicable to loans
made in Vietnamese Dong (VND), and therefore, if Party B advances
the Debt in USD, the Debt will be converted into VND for the purpose
of calculation of interest only, but the repayment currency for both of
the Debt and any accrued interest shall be in USD.

ARTICLE 5.
5.1

ASSIGNMENT OF THE CHARTER CAPITAL

Assignment
(a)

Subject to the Laws of Vietnam and the Charter, Party A may assign the
whole of its Interest to a third party subject to the right of first refusal of Party
B under Article 5.2 of this JV Agreement. Party B shall only be entitled to
transfer, assign or otherwise dispose of the whole or part of its Interest upon
completion of all of Party B’s obligations stipulated in Article 6.4(a) to
Article 6.4(j) and subject to the right of first refusal of Party A under Article
5.2 of this JV Agreement. For the avoidance of doubt, any transfer of Interest
of Party B shall not affect the right to use the Land and the right to implement
the Project of the JVC as contemplated in this JV Agreement. Any purported
transfer, assignment or disposition made not in accordance with this Article
5.1(a) shall be null and void.

(b)


Any Party may transfer, assign or otherwise dispose of its Interest at any time
to its Affiliate provided that such Affiliate agrees in writing that it shall,
immediately prior to it ceasing to be an Affiliate of such Party, promptly
transfer the relevant Interest back to such Party or, subject to Article 5.1(b)(i),
another Affiliate of such Party. For the avoidance of doubt, any transfer of the
Interest of Party B to its Affiliate shall only be permitted upon Party B’s
completion of all its obligations stipulated in Article 6.4(a) to Article 6.4(j)
and not causing any effects to the right to use the Land and the right to
implement the Project of the JVC as contemplated in this JV Agreement.
For the purpose of this Article 5.1(b), each Party undertakes that it shall, and
shall procure that its Authorized Representatives on the Members’ Council
13


shall, at all times vote in favor of any such transfer of Interest between other
Party and its Affiliate.
(c)

No assignment or other disposal shall be effective until:
(i)

the assignee agrees in writing and in a legally binding way in terms
reasonably acceptable to the non-transferring Party, that it will comply
with every provision and condition of this JV Agreement, the Charter
and the Investment Certificate;

(ii)

the assignment is approved by the Members’ Council of the JVC; and


(iii) the assignment shall be registered with or approved by the Licensing
Authority, if so required.
5.2

Procedures
Except where the provisions of Article 7.16 apply in respect of a transfer of Interest
provide otherwise, when a Party desires to assign its Interest in the Charter Capital,
the procedures set out below shall be followed. For the avoidance of doubt, a Party
may only transfer to a third party the whole but not a part of its Interest in the
Charter Capital.
(a)

Subject to Article 5.1above and 5.2(b) below, if a Party (the "Transferring
Party") wishes to transfer, assign or otherwise dispose of all (but not part of)
its Interest (a "Transfer Interest"), that Party must first send a written notice
offering the Transfer Interest to the other Party (the "Non-Transferring
Party") and the notice of offer ("Offer") must contain:
(i)

the Transferring Party's intention to dispose of the Transfer Interest;

(ii)

the terms of the proposed transfer including the proposed price for the
Transfer Interest (the "Proposed Price"); and

(iii) the identity of the proposed third party to which the Transfer Interest
shall be offered if the Offer is not accepted by the Non-Transferring
Party.
(b)


The Non-Transferring Party may, within thirty (30) days of the date of receipt
of such Offer, agree to purchase the Transfer Interest by giving written notice
to the Transferring Party, which notice shall be accompanied by a deposit
equal to seventy percent (70%) of the Proposed Price. If the Non-Transferring
Party fails to give such written notice within such thirty (30) day period
and/or fails to pay the deposit, the Non-Transferring Party shall be deemed to
have elected not to purchase the Transfer Interest and, within the next thirty
(30) days thereafter, the Transferring Party shall be free to offer the Transfer
Interest to any third party at a price at least equal to the Proposed Price.
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(c)

5.3

The JVC’s Buy-back of Interest
(a)

5.4

If the Non-Transferring Party agrees to purchase the Transfer Interest, the
Transferring Party shall be bound, upon the approval of the relevant State
Authority and payment of the balance of the Proposed Price by the NonTransferring Party, to transfer the Transfer Interest to the Non-Transferring
Party. If the Non-Transferring Party fails to pay the balance of the Proposed
Price within thirty (30) days after the relevant State Authority’s approval of
the proposed transfer of the Transfer Interest, then the Transferring Party shall
be entitled to keep the deposit, and, thereafter, shall be entitled to transfer the
Transfer Interest to any third party at any price. If the relevant State Authority

does not approve the transfer within thirty (30) days of the date on which the
State Authority’s approval was applied for, then the Transferring Party shall
return the deposit to the Non-Transferring Party and this transaction will be
cancelled. Thereafter, any transfer, assignment or other disposal of any
Interest by any Party shall comply in full with this Article 5.

A Party may request the JVC to buy back its paid-up Interest in the JVC if
such Party (or its Authorized Representative) has voted against a resolution of
the Members’ Council regarding:
(i)

the amendment or addition to the Charter concerning the rights and
obligations of the Members or the Members’ Council; or

(ii)

the restructuring of the JVC.

(b)

The request for buy-back of a Party's Interest in the JVC must be made in
writing and submitted to the JVC within fifteen (15) days from the date of the
resolution on the matters specified in Article 5.3(a), and in respect of which
such Party (or its Authorized Representative) voted against such matter.

(c)

The price for the buy-back shall be subject to agreement by the relevant Party
and the Members’ Council, failing which the JVC must buy back the Interest
at the market price determined by an average price of three (3) independent

internationally renowned banks appointed by the Members’ Council within
fifteen (15) days of receiving the request for buy-back from the relevant
Party. Payment for such buy-back shall only be made if the JVC still has
adequate resources to pay for other debts after buying back the relevant
Interest in the JVC.

(d)

If the JVC cannot make the payment for more than 2 (two) months from the
request to buy-back, the requesting Party shall have the right to dispose of the
Interest in accordance with Articles 5.1 to 5.2 of this JV Agreement.

Consent
15


No Party shall mortgage, pledge, charge or otherwise encumber or permit any third
party’s interest to subsist in respect of all or any part of its Interest without prior
written consent by the other Party and subject always to the Laws of Vietnam.
ARTICLE 6.
6.1

RIGHTS AND OBLIGATIONS OF THE PARTIES

Rights of Parties
The Parties shall have the following rights:

6.2

(a)


To attend or appoint their authorized representative(s) (with respect to an
institutional or corporate Member) to attend and vote in the Members’ Council
Meetings in proportion to that Member's Interest in the JVC;

(b)

to check, review, search, copy or extract from the Members Registration Book,
transaction recordings and monitoring books, accounting books, annual financial
statements, minutes or resolutions of Members’ Council meetings, and other
papers and documents of the JVC;

(c)

to receive profits of the JVC in accordance with this JV Agreement, the Charter
and the Laws of Vietnam;

(d)

to receive the value of the JVC's remaining assets in proportion to the Party's
paid-up Interest in the JVC when the JVC is dissolved or liquidated;

(e)

to have priority in contributing additional capital to the JVC when the JVC
increases its Charter Capital in accordance with the Charter and this JV
Agreement;

(f)


to transfer or dispose of part or the whole of the Party's paid-up Interest in the
JVC in accordance with the Laws of Vietnam, Article 5 of this JV Agreement and
the Charter;

(g)

to request the JVC to buy back the Party's Interest in the JVC in accordance with
this JV Agreement, the Charter and the Laws of Vietnam;

(h)

to request the Chairman to convene an Members’ Council Meeting or convene an
Members’ Council Meeting if the Chairman fails to convene the meeting as
provided for in the Charter;

(i)

such other rights of the Members as stipulated in the Charter, this JV Agreement
and the Laws of Vietnam

Obligations of Parties

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In addition to those specified herein, the Members shall have the following
obligations:
(a)

to make its Capital Contribution in full and on time as described in Article 4;


(b)

to observe the Charter and this JV Agreement;

(c)

to abide by the decisions of the Members’ Council;

(d)

to procure that their Authorized Representatives shall vote:
(i)

in favour of the appointment of the Chairman, the General Director and
the Chief Accountant pursuant to Article 7.7 and Article 8.2,
respectively;

(ii)

to approve the financing by the Parties in accordance with Article 4.11;

(iii) on any other matter which pursuant to the Laws of Vietnam requires
Members’ Council approval in such a manner so as to effect and
comply with the provisions of the Charter and this JV Agreement; and
(iv) such other obligations of the Members as stipulated in this JV
Agreement, the Charter and the Laws of Vietnam.
6.3

Responsibilities of Party A

In addition to other obligations under this JV Agreement, Party A shall:

6.4

(a)

together with Party B assist the JVC in arranging financing for the JVC
subject to the decision of the Members’ Council and the Laws of Vietnam;

(b)

render technical assistance to the JVC at such times, and from time to time, as
may be agreed by the Parties, for the purpose of the Project;

(c)

assist the JVC to obtain equipment, supplies and other materials not otherwise
available in Vietnam;

(d)

advise the JVC on recruitment of qualified Vietnamese and expatriate
personnel to work for the JVC and on their training and compensation; and

(e)

assist in other matters relating to the JVC as requested by Party B and as
Party A deems necessary and/or desirable.

Responsibilities of Party B

17


In addition to other obligations under this JV Agreement, Party B shall:
(a)

obtain, at its own cost, a new LURC for the Land with residential and
commercial uses in accordance with the Development Parameters under its
name within six (6) months from the signing date of this JV Agreement;

(b)

pay in full, at its own cost, the land use fees, taxes and costs for conversion of
land use purpose of the Land to residential and commercial uses in
accordance with the Development Parameters and obtaining the LURC under
its name;

(c)

at its own costs, complete the physical clearance of the Land and clear all
encumbrances, charges, mortgages, lien or third party rights on the land, and
ensure that any and all encroachment by other onto the Land shall be
removed and cleared, such that the JVC shall have vacant possession of the
Land;

(d)

at its own cost, obtain the 1:500 master plan approval for the Land from the
relevant State Authority, specifically with the Approved Parameters of the
Project satisfying the Development Parameters;


(e)

at its own cost to obtain necessary approvals/consents/agreements from
relevant State Authority and companies to ensure that telecommunication,
public roads, electricity, water supply and sewage system are of adequate
capacity for the purpose of the Project and located at the border of the Land.
For the avoidance of doubt, all costs and expenses in accordance with the
regulations of the State Authority for granting the above
approvals/consents/agreements and the expenses for construction and
installation of the above telecommunication, public roads, electricity, water
supply and sewage system so approved/licensed/agreed will be borne by the
JVC;

(f)

terminate any agreements with any prior potential investors or partners in
relation to the Land and the Project and settle all related issues so as to obtain
a complete discharge of Party B from any obligations towards such parties in
relation to the Land and the Project;

(g)

subject to Party A’s provision of sufficient documents needed for obtaining
the Investment Certificate as notified by Party B in writing, obtain, at its own
costs, the Investment Certificate within two (2) month from the earlier date of
(i) the date of submission of the application file for the Investment
Certificate; or (ii) the sixteenth day from Party A’s provision of sufficient
documents notified by Party B. For the avoidance of doubt, all fees and costs
for obtaining the Investment Certificate will be agreed by the Parties,


18


advanced by Party B then refunded by the JVC to Party B upon Party B’s
submission of legitimate and proper invoices;
(h)

obtain, at its own cost, the LURC under the JVC name within forty five (45)
Working Days from the Effective Date, and provide the JVC with legitimate
and proper invoices and supporting documents necessary for the JVC to
successfully claim the deduction of the full amount of the Land Value as
deductible expenses for corporate income tax purpose. In the event if Party B
fails to provide the JVC with legitimate and proper invoices and necessary
supporting documents Party B shall compensate the JVC of any loss in taxes
if any part of the Land Value is not deductible;

(i)

obtain basic design approval for the Project within one (1) month from the
date of receiving sufficient documents from JVC and/or Party A, where all
associated costs will be paid first by the Party B and then refunded by the
JVC upon Party B’s submission of proper and lawful invoice;

(j)

obtain Project approval, construction permits (or equivalent approval for
commencement of construction of the Project) within three (3) months from
the date of receiving sufficient documents from JVC/and or Party A, where all
associated costs will be paid first by the Party B and then refunded by the

JVC upon Party B’s submission of proper and lawful invoice;

(k)

together with Party A assist the JVC in arranging financing for the JVC
subject to the decision of the Members’ Council and the Laws of Vietnam;
and

(l)

assist in the above and other matters relating to the JVC as requested by Party
A as necessary and desirable to the JVC’s expenses.

ARTICLE 7.
7.1

7.2

MEMBER’S COUNCIL

Composition of the Members’ Council
(a)

The Member’s Council shall be the highest decision-making body of the JVC
and shall determine all major issues pertaining to the management of the JVC
save for those which it has delegated under this JV Agreement and the
Charter.

(b)


The Members’ Council shall consist of five (5) Authorized Representatives.
So long as each Party maintains its Interest as set out in Article 4.5, Party A
shall appoint three (3) Authorized Representatives and Party B shall appoint
two (2) Authorized Representative in accordance with the criteria and
conditions as provided by the Laws of Vietnam from time to time, if any.

Appointment and Term of the Authorized Representative
19


7.3

(a)

Each Party shall have the right to appoint any of its Authorized
Representatives at any time provided that such Party gives written notice to
the JVC, with a copy of such notice to other Party, and the relevant Licensing
Authority (if required) within seven (7) days of the appointment.

(b)

The letter of appointment of each Authorized Representative shall specify the
ratio of Interest in the Charter Capital represented by such Authorized
Representative, subject to changes of such Interest from time to time by a
written notice from the appointing Party to the JVC, with a copy of such
notice to other Party, and the relevant Licensing Authority (if required) within
seven (7) days of such notice.

(c)


Each Authorized Representative shall be appointed for a term of their
authorization and may serve consecutive terms if reappointed by the Party
appointing him. If a seat on the Member’s Council is vacated by the
retirement, resignation, illness, disability or death, or removal of the
Authorized Representative pursuant to Article 7.3 below, the Party which
appointed such Authorized Representative shall appoint a successor, who
shall serve for the remainder of the term of the Authorized Representative
being replaced.

Removal of the Authorized Representative
Any Party hereto may remove or replace its Authorized Representative appointed
by it at any time by giving written notice to the JVC, with a copy of such notice to
the other Party, and the relevant Licensing Authority (if required) within seven (7)
days of the removal or replacement.

7.4

No Personal Liability
No Authorized Representative shall have any personal liability for any act
performed in his capacity as an Authorized Representative except for acts
constituting violations of criminal laws of any jurisdictions to which he is subject.
No Authorized Representative has authority to bind the JVC unless expressly
authorized by the Member’s Council.

7.5

Compensation
Authorized Representatives shall not be paid salary by the JVC except when an
Authorized Representative is also an executive officer, employee or consultant of
the JVC.


7.6

Expenses to Attend Members’ Council Meetings

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Each Party shall bear its own costs for expenses incurred by its Authorized
Representative in connection with attending meetings in Vietnam. The JVC shall
bear the costs for Members’ Council meetings organized outside of Vietnam.
7.7

Chairman of the Members’ Council
The Chairman shall be elected by the Members’ Council amongst the Authorized
Representatives of Party A. The first office term of the Chairman of the Members’
Council is 5 years and subsequent terms shall be approved by the Members’
Council.

7.8

Responsibilities of the Members’ Council
The Members’ Council shall be the highest authority of this JVC and shall have a
number of responsibilities including:
(a)

deciding on the development strategy and annual business plan of the JVC;

(b)


deciding on the increase or decrease of the Charter Capital, the time and
method for mobilizing capital;

(c)

decide on the methods of investment and investment projects valued at over
50% of total value of assets recorded in the financial statements most recently
published by the JVC;

(d)

deciding on the methods of market development and marketing and
technology transfer; approve agreements of borrowing, lending and selling
assets valued at 50% or more of total value of assets in the financial
statements most recently published by the JVC or at a smaller ratio in
accordance with the Charter;

(e)

to elect, remove or dismiss the Chairman of the Member’s Council;

(f)

deciding to appoint, remove, dismiss, sign or terminate contracts with the
General Director, and other Key Management Personnel of the JVC as
provided for in the Charter;

(g)

deciding on salaries, bonuses and/or other benefits of the General Director and

other Key Management Personnel as provided for in the Charter;

(h)

adopting annual financial statements and plans for using or distributing profits
as well as handling losses of the JVC;

(i)

deciding on the management organization structure of the JVC;

21


7.9

(j)

deciding on opening of subsidiary companies, branches and/or representative
officers of the JVC;

(k)

amending and/or supplementing the Charter;

(l)

deciding on the JVC’s organization;

(m)


deciding on dissolution or bankruptcy of the JVC;

(n)

deciding to hire management company(ies), foreign consultancy company(ies)
and contractors(s) to be in charge of services relating to the Project;

(o)

approving the procurement of Facilities for the Project which exceeds the
authority of decision of the General Director;

(p)

the entry into any construction contract with a contractor’s fee of over US$
1,000,000; and

(q)

other rights and duties as provided for by the law and the Charter.

Members’ Council Meetings
Meetings of the Members’ Council shall be held upon request of the Chairman or
any Member. The Members’ Council first meeting shall be held within sixty (60)
days upon issuance of the Investment Certificate, except as otherwise agreed by the
Parties.

7.10 Place of Members’ Council Meeting
All meetings of the Members’ Council shall, unless otherwise agreed by the Parties,

be held at the registered head office address of the JVC.
7.11 Notice of Members’ Council Meeting
Meetings shall be held on fourteen (14) days prior notice thereof, provided that all
Authorized Representatives may waive such period by a written consent. Member
of the Members’ Council who are residents outside Vietnam (if any) shall be
notified by email or telefax in English. A notice of a Members’ Council meeting
shall contain the time and place for the meeting and an agenda in English for the
meeting.
The Chairman shall be responsible for giving such notice and for convening and
presiding over the meeting.
7.12 Quorum

22


A Members’ Council meeting shall be conducted if all participating Authorized
Representatives hold at least 75% of the Charter Capital.
If a quorum for a Members’ Council meeting is not present within thirty (30)
minutes after the time scheduled for the commencement of the Members’ Council
meeting, that Members’ Council meeting must be adjourned. The meeting may be
convened for a second time within fifteen (15) days from the date on which the first
meeting was intended to be opened. A meeting of the Members’ Council which is
convened for a second time shall be conducted where the participating Authorized
Representatives hold at least fifty per cent (50%) of the Charter Capital.
If a quorum for a Members’ Council meeting which has been convened for a second
time is not present within thirty (30) minutes after the time scheduled for the
commencement of the Members’ Council meeting convened for second time, that
Members’ Council meeting must be adjourned. The meeting may be convened for a
third time within ten (10) Working Days from the date on which the second meeting
was intended to be opened. A meeting of the Members’ Council which is convened

for a third time shall be conducted irrespective of the number of participating
Authorized Representatives and amount of Charter Capital represented by the
participating Authorized Representatives.
7.13 Proxy to Attend Meeting
If an Authorized Representative is unable to participate in a Members’ Council
meeting, the Member appointing him may issue a power of attorney and/or entrust a
proxy to participate in the meeting or to sign a resolution on the Member’s behalf.
The attorney-in-fact or proxy shall have the same rights and powers as the absent
Authorized Representative.
7.14 Voting
Each vote of each Authorized Representative shall be equivalent to the ratio of
Interest to the Charter Capital of the Party for which he is authorized to represent as
specified in the Letter of Appointment of such Party to him.
7.15 Resolutions of the Members’ Council
(a)

The Members’ Council shall pass resolutions within its authority by way of
voting at meetings or passing written resolutions.

(b)

A resolution of the Members’ Council shall be passed in a meeting in the
following cases:
(i)

It is approved by the number of votes representing at least 65% of the
aggregate capital of the attending Authorized Representatives, subject
to Article 7.15(b)(ii) and Article 7.15(d) below;
23



(ii)

Resolutions relating to the following issues must be approved by the
number of votes representing at least 75% of the aggregate capital of
the attending Authorized Representatives:
(A) the sale in one transaction of assets with a value of 50% of more
of the total value of assets recorded in the latest financial
statement of the JVC;
(B)

the re-organization or dissolution of the JVC; and

(C)

the amendment of and addition to the Charter;

(c)

In lieu of meeting of the Members’ Council, a written resolution may be
passed by the Members’ Council if such written resolution is sent to all
Authorized Representatives and approved by the Authorized Representatives
representing at least 75% of the Charter Capital, subject to Article 7.15(d)
below.

(d)

Resolutions of the Members’ Council relating to the first Annual Plan and
Annual Management Budget of the JVC shall be approved by a number of
votes representing at least 75% of the aggregate Interest represented by the

attending Authorized Representative (if submitted to a meeting of the
Members’ Council) or approved by the Authorized Representatives
representing at least 75% of the Charter Capital (if by way of collecting
written resolution).
In the event that the first Annual Plan and Annual Management Budget is not
approved by the Members’ Council at their first submission, the Parties shall
in good faith review, clarify and discuss areas of disagreement with a view to
arriving at a mutual agreement on the first Annual Plan and Annual
Management Budget, recognising that having an agreed Annual Plan and
Annual Management Budget is essential for the commencement of business
of the JVC, for amendment (if so agreed by the Parties) and re-submission by
the General Director to the Members’ Council, within 60 days from first
submission to the Members Council.
In the second submission to the Members’ Council, the first Annual Plan and
first Annual Management Budget shall be approved by a number of votes
representing at least 65% of the aggregate Interest represented by the
attending Authorized Representative (if submitted to a meeting of the
Members’ Council) or approved by the Authorized Representatives
representing at least 65% of the Charter Capital if by way of collecting
written resolution with the condition that these Annual Plan and Annual
Management Budget shall be reasonable and for the benefit of the JVC.

24


In respect of the Annual Plan and Annual Management Budget of the JVC for
subsequent years, if such is not approved by a number of votes representing at
least 75% of the aggregate Interest represented by the attending Authorized
Representative (if submitted to a meeting of the Members’ Council) or not
approved by the Authorized Representatives representing at least 75% of the

Charter Capital (if by way of collecting written resolution), then the
preceding year’s Annual Plan and Annual Management Budget shall apply
(subject to an increase of 15% in respect of expenses).
7.16 Deadlock
(a)

If the Members’ Council is unable to pass any proposed resolution for matters
set forth in Article 7.15(b)(ii) at two (2) consecutive Members’ Council
meetings, any Party may send the other Party a notice (the “Deadlock
Notice”) setting out the matter in dispute, its position and its reasons for
adoption of such position.

(b)

Following the issue of a Deadlock Notice, the Parties shall procure that the
most senior officers of each respective Party meet with one another and use
all reasonable endeavours to resolve as soon as possible the dispute which is
the subject of the Deadlock Notice.

(c)

If the Parties can not resolve the dispute which is the subject of the Deadlock
Notice within thirty (30) days as from the date of the Deadlock Notice, then:
(i)

in respect of the matters set forth in Article 7.15(b)(ii)(C), the proposed
change or other activity (as the case may be) shall not be proceeded
with and the status quo shall prevail; and

(ii)


in respect of the matters set forth in Article 7.15(b)(ii)(A) and Article
7.15(b)(ii)(B):
(A) either Party (the “First Party”) shall be entitled, within thirty
(30) days after the expiry of the said thirty (30) day period, to
serve on the other Party (the “Recipient”) a written notice (a
“Buy/Sell Notice”) signed by or on behalf of the First Party,
stating that the First Party is giving the option to the Recipient to
accept one of the following offers:
(I)

to purchase all of the Interest held by the Recipient for the
Deadlock Purchase Price (as defined below); or

(II)

to sell all of the Interest held by the First Party to the
Recipient for the Deadlock Sale Price (as defined below),

in each case on the terms specified in this Article 7.16(c)(ii).
25