Joint Venture Agreement
THIS AGREEMENT , made this (…)day of (…)
Between (…) a complex work organization
Established under the laws of the (…) Federal Republic of (…)
With executive offices in (…) (…)
Hereinafter referred to as (…) ,
A corporation incorporated under the Laws of (…)
With an office and place of business at (…) ,
Hereinafter referred to as (…)
Whereas (…) is engaged in (…) derivatives in particular (…) ; and whereas (…) is desirous of assisting in the further substantial development of the (…) industry of (…) and the Republic of (…) and to this end is willing and able to make available necessary raw materials , particularly (…) to supply a (…) plant as hereinafter defined ; and whereas , (…) possesses the necessary technical competence , knowledge , experience and ownership of processed to design and supervise the construction and operation of such plant ; and
Whereas , (…) and (…) consider that (…) provides a suitable domestic mark for the further development of the (…) industry and justifies the construction of such plant ; and
Whereas (…) and (…) consider that (…) provides a suitable domestic market for the further development of the (…) industry and justifies the construction of a worldscale (…) plant ; and
Whereas , accordingly (…) and (…) have agreed to from a partnership and joint venture for the construction and operation of such a (…) which shall be carried out by means of a legal entity , hereinafter called (…) , established under the laws of (…) , as provided in Article 3 hereof , upon the terms and conditions hereinafter provided ; and
Whereas , (…) and (…) consider that due to the technological interrelation of each constituent plant with the others such (…) plant can only attain the anticipated production and be operated as one fully integrated entity and thet none of its constituent plants can exist without the others and accordingly (…) Undertakes to ensure that during the term of this Joint Venture Agreement as hereinafter defined , (…) will continue in the legal from herein contemplated and specified in Article 3 hereof ; and
Whereas , although each of the plants can only be constructed in terms of a fully integrated complex , the completion of the entire project depends upon the successful construction and operation of each phase as set out in Article 12 hereof ; and
Whereas , although it is intended that (…) shall sell its production primarily in (…) , for such export sales as are contemplated by the parthmers herein (…) will have the benefit of (…) world – wide sales and administrative network ; and
Whereas , (…) requires a continual supply of (…) and (…) for its European plants both for the supply of certain raw materials to (…) prior to the final start – up of (…) plants , and for its own internal uses ; and
Whereas , (represent that it can it can and will be able to supply (…) with quantities of such raw materials as hereinafter provided ; and
Whereas , such representation is a fundamental principle of (…) interest and participation in a parthership and joint venture with (…) ; and
Whereas , (…) represents that it can and will obtain from the Governments of (…) , the Republic of (…) and any agencies thereof and other competent authorities all necessary permits , approvals , exemptions, procedures and confirmations for the performance of this Joint Venture Agreements and the establishment and opration of (…) as herein contemplated ; and
Whereas , (…) and (…) intend that the provisions of this Joint Venture Agrements shall be interpreted in equity as hereinafter provided and that always be mindful of (…) best interest .
Now therefore , the parties hereto agree as follows :
ARTICLE 1 . DEFINITIONS
1.1 Unless otherwise required by the context , the following definitions of certain terms hereafter used in this Joint Venture Agreement shall apply for the purpose of this Agreement :
1. (…) means (…) , or any other organization under the Laws of to which the whole or any part of (…) shall be transferred or assigned .
2. (…) means (…) , or any other corporation to which the whole or any part of the undertaking of (…) , as aforesaid , shall be transferred .
3. " Start – up Date " means the date on which any part of the plant has been accepted by (…) as in accordance with the design spcifivations thereof , and the nemal operation of any part of the plant for the production , storage and disposition of the products has been undertaken by or on behalf of (…) , but not earlier than the date on which deliveries of any of the products for sale to third parties in (…) shall have started .
4. (…) means the legal entity to be formed by (…) in (…) as an independent business organization , whit liability toward third parties limited to the amound of is asstes and the liability of (…) in its participation as specified in Article 4 hereof , commonly called an Enterprise , in accordance whit Article 3 hereof and bye means of which the Joint Venture shall be carried out .
5. " Day " means a day of 24 houes .
6. " Dollars " means Untied States of America dollars (U$$) .
7. Cents' means United States of American Cents (U$$0.01) .
8. ( Currency ) means (…) .
9. " Effective Data " means the date on which this Joint Venture Agrement has been registere , as provided in Article 2.1 hereof .
10. " Government " means the Government of (…) .
11. " Land " means the Plant Site of (…) hectares at (…) to be made available by (…) as provided in Articles 4 and 8 hereof .
12. " Plant " means the process facilities for producing the products , storage tanks , pipelines , shoretanks , service facilities , including laboratory , administration building (s) , first – aid clinic , shop (s) and warehors (s) , Control and switch – house (s) and field maintenance shack (s) . Also included are such movable equipment , as may required to operate , administer , maintain and service the process facilities truck loading rack (s) , steam and electric power generation and distribution facilities,waste disposal facilities , (…) and(…),parking area, roadways , fences and such various items of earthwork e.g. flood dykes or landscaping , as may be deemed necessary by the management of (…) for protection and improvement of the property .
13. " Ton " means a metric ton .
14. " Year " means a Calendar year of the Gregorian calendar .
15. (…) means the (…) produced by the (…) described in Article 10 hereof .
16. (…) means the (…) produced by the (…) described in Article 10 hereof .
17. (…) means the (…) produced by the (…) described in Article 10 hereof .
18. (…) means the (…) produced by the (…) described in Article 10 hereof .
19. (…) means the (…) produced by the (…) described in Article 10 hereof .
20. (…) means the (…) produced by the (…) described in Article 10 hereof .
21. (…) means the (…) referred to in Article 6 hereof and meeting the specification set out in Annex D hereto .
22. (…) means the (…) produced by the (…) described in Article 10 hereof .
23. " Participation " means the contributions made by (…) under Article 5 hereof which have a legal bearing and consequences in relation to the distribution ratio of the profits between partners , and no other consequences unless stated in this Joint Venture Agreement .
24. " Statute " means the genetal By _ Laws of (…) as set out in Annex A hereto.
25. " Payments of Obligations to the Social Communty " means all income taxes and other taxes , and contributions to social security benefist , prescribed from time by (…) laws or rules which create legal obligations having general application .
26. " Workers " Council " means the Workers " Council and / or Assembly of workers of (…) .
27. " The partners " means (…) and when Jointly referred to as parties to this Joint Venture Agreement .
28. " The Products " means (…) Produced by (…) for internal consumption or sale .
29. " Know-how " means all inventions and trade secrets , methods , technical information , data , shop practices . plans , drawings , like prints and specifications and process engineering possessed by (…) at thd beginning of each phase relating to the (…) referred to in Article 10.5 hereof and comprising part of (…) Participation in (…) as specified in Article 4 hereof .
30. " Third – parties " means any person or other legal entity other than (…) ( which in this respect shall include only those members of (…) which are members at the date of execution of this Joint Venture Agreement ) .
ARTICLE 2 . APPROVAL AND REGISTRATION OF THE JOINT VENTURE AGREEMENT
2.1 (…) forthwith upon execution , shall submit this Joint Venture Agreement to the Federal committee (…) for registration . (…) shall obtain registration and notify (…) as and when the Joint Venture Agreement has bees so registered ; (…) and shall immediately inform (…) of that fact .
2.2 When this Joint Venture Agreement has been signed by the Parthners , it is understood and (…) warrants that no subsequently enacted decree , act or regulation of the Federal Govermment of (…) or the Government of the Republic of (…) , or any or teir agenies , shall have a retroactive effect on the rights and interests of the Parhners under this Joint Venture Agreement to the extent that such act , decree or regulation would adversely affect this Joint Venture Agreement , or the partners , except in respect of payments of obligations to the Social Connunity . Any application of such adverse act to the relationships established by this Joint Venture Agreement shall give (…) cause for seeking remedy according to the other provisions of this Jiont Venture Agreement , including is termination .
ARTICLE3.ESTABLISHMENT OF THE JOINT VENTURE LEGAL ENTITY.
3.1 (…) hereby agree that (…) shall be established for the purpose of production , storage , transportation and sale of the Products , and of such other products as the parhners may agree upon at any time during the term of this Joint Venture Agreement , primarily for use and sale in (…) .
3.2 (…) shall have a participation of (…) per cent ((…)%) , and (…) shall have a participation of (…) per cent ((…)%) in (…) Their respective rights and obligations other than those provided by Laws of (…) or the statute of (…) , shall be defined and set forth hereinafter .
3.3 The Statute of (…) shall be in the from annexed hereto Annex A and shall contiain provisions necessary or approriate to the conduct of (…) business in the manner consistent with this Joint Venture Agreement and in accordance with the basic rights of the Partners , as set forth herein . In the event of a discrepancy between this Joint Venture Agreement and the Statute of (…) or any other similal regulatory instrument of (…) , the provisions of this Jiont Venture Agreement shall prevail .
3.4 (…) as the pathner considered by (…) law as the founder of (…) shall be responsible for the legal establishment of (…) as hereinafter described .
Whithin ninety (90) days after the Effective Data , (…) shall register the Act on the Foundation of (…) with the District Economic Court of (…) and take all other steps necessay in compliance with the (…) Laws and Regulations concerning the registration of such Joint Venture . (…) shall keep (…) informed of all steps in such registration and shall promptly provide (…)with copies of documents pertaining thereto and translations thereof .
3.5 shall be established taking into account the technological entirety , interrelationship and interdependence of its constitutent plants , as a single working organization which is an indendent self – managing organization without basic organizations of associated work having been set up within its framework , commonly called an Enterprise .
3.6 The establishment of (…) shall be in two phases as provided by Articles 5.31 of the (…) Law on Constiution and Entry into the Court Register of Organization of Associated Labour (hereinafter called "Law on Enterprise " ) .
(i) Phase One , during which (…) shall have the status of an " Enterprise under Construction " as provided bye Articles 5-24 of the Law on Enterprises , shall start with the registration of the Act on Foundation fo (…) referred to in Article 3.4 hereof and continue until the Start –up Date of the fitst of the plants in Phase One as defined in Article 12 hereof whereupon (…) may be constituted in accordance with Articles 25-31 of the Law on Enterprises .
(ii) Phase Two shall consist of the constitution of (…) through the election of the Workers " Council , adoption of the statute of (…) and the registration of the constitution of (…) with the District Economic Court of (…) .
3.7 (…) , as the legal founder of (…) shall ensure that during Phase One of the establishment of (…) , the management of (…) , as contermplated by Article 5 of this Joint Venture Agreement , particularly in respect to the competenes of the Business Board and the General Director and Assistant General Director , is adopted and followed .
3.8 (…) until the registration of the constitution of (…) , shall always exercise its legal power as the founder of (…) and ensure both that during Phase One of the establishment of (…) , the affairs of (…) are conducted and also that the constitution of (…) in Phase Two including the adoption of the statuted of (…) is carried out in accordance with the providions of this Joint Venture Agreement .
3.9 At no time shall (…) have any libility for the debts (…) other than as provided in Article 34 , hereof .
3.10 Subject to Article 12 , (…) will install , own and operate the following plants with the following approximate initial capacities :
(a) An (…) with a (…) , utilizing (…) and (…) generated by the (…) plant .
(b) A (…) with a (…) .
(c) A (…) with a (…) .
(d) A (…) with a (…)
(e) A (…)
(f) A (…) with a (…)
(g) A (…) with a (…) of (…) and (…) .
(b) A (…) plant with (…) .
3.11 (…) shall at its cost obtain all the necessary initial permit approvals and the like and prepare the pemit approval applications and project documentation necessary for the implementation of this Joint Venture Agreement .
(…) shall assist (…) in the timely provision of the necessary basic information required for such permit approvals and project documentation .
3.12 It is the intention of the Partners that (…) operates as an independent single working organization . Without derogation to the foregoing sentence , the partners agree that (…) shall become a member of (…) under the conditions and limitations set out in Annex B hereto . (…) Warrants that such membership shall in no way have any bearing upon the conduct of any of the organs and the management and business pliicy of (…) and that (…) shall have only thouse right in the management and business plicy of (…) which it may exercise according to the provisions of this Joint Venture Agreement . Any change in the Status of ( …) within (…) must have the prior approval of both (…) .
3.13 It is understood by the partners that the Workers' Council and the Management of (…) will carry out theit functions pursuant to good production and commercial practices . recognized and followed bye leading organization engaged in international business .
ARTICLE 4 . CAPITAL AND ADDITIONAL
4.1 It is estimated that the total capital investment required by (…) for the construction and operation of the plant will be U$$ (…) ( dollars (…)) equivalent to (…) (…) .
This total amount includes cost of construction , (…) , storage , loading facilities , engineering , and any other costs , fee for know-how , land and working capital . However the figure of U$$ (…) is only the best estimatd of the partners available at thd date of signature of this Joint Venture Agreement . In the event that the total capital investment of (…) is greater or less than U$$ (…) , then the Participation of the Partners and the Loans to (…) as hereinafter' provided shall be increased or decreased according , but always in such a way that they remain in the same proportion to each other as herein provided , provided that the values of land and Know-how set out in Article 4.2-4.6 shall always remain the same .
The aforementioned capital investment required shall be raised and utilized as follows but always in such a manner that at each phase the Participation of the partners is thirty per cent ((…)%) of total capital investment at original undepreciated book value and the loans plus depreciation hereinafter mentioned are seventy per cent ((…)%) of such total capital investment .
4.2 The Participation of the partners shall be U$$ (…) (dollars(…)) and shall be as follows :
(a) (…) participation shall be (…) per cent ((…)%) of (…) and shall consist of :
(i) Land valued at = U$$ (…)
(ii) Cash in convertible currency = U$$(…)
Total = U$$ (…)
(Equivalent to dinars (…)
(b) (…) Participation shall be (…) per cent ((…)%) of (…) and shall consist of :
(i) Know-how valued at = U$$ (…)
(ii) Cash in convertible currency from (…)
Resources outside of (…) = U$$ (…)
(iii) Cash in convertible currency raised from half the (…) of (…) from
(…) in (…) in convertible currency pursuant to an (…) between (…) signed prior to but in contemplation of this Joint Venture Agreement = U$$ (…)
Total U$$ (…)
(Equivalent to (…) (…))
4.3 The sums mentioned in Article 4.1 and 4.2 have been converted into (…) as of the date of signature of this Joint Venture Agreement at the median rate published by the National Bank of (…) for solely the purpose of registration of this Joint Venture Agrrment with the Federal Committee for (…) of (…) .
4.4 In Phase One as set out in Article 12 hereof :
(a) (…) shall contribute its Participation as follows :
(i) Land as referred to in Article 8.1 hereof , valued as $(…)
((…) dollars ) .
(ii) the remainder in cash .
(b) (…) shall contribute its Participation as follows :
(i) Know – how for the (…) plants valued at U$$ (…) ((…) dollars) , which shall be contributed evenly over the engineering and construction period of phase One .
(ii) the remainder in cash .
(c) The remaining cash requirements for the said phase One shall be raised by loans in accordance with this Article 4 and shall be equal to (…)% of the total capital investment for phase One .
4.5 In pahse Two as set out in Article 12 hereof :
(a) (…) shall contribute its participation in cash .
(b) (…) shall contribute its participation as foolows .
(i) Know – how for the (…) plants valued as U$$ (…) ((…) dollars) , which shall be contributed evely over the engineering and construction period of phase Two .
(ii) the remainder in cash .
(c) The remaining cash requirements for the said phase Two shall be raised by loans in accordance with this Article 4 and shall be equal to (…)% of the Total capital investment for phase Two .
4.6 In phase Three as set out in Article 12 hereof :
(a) (…) shall contribute its participation in cash .
(b) (…) shall contribute its participation as follows .
(i) Know – how for the (…) valued as U$$ (…) ((…) dollars) , which shall be contributed evenly over the engineering and construction period of phase Three .
(ii) the remainder in cash .
(c) The remaining cash requirements for the said phase Three shall be raised by loans in accordance with this Article 4 and shall be equal to (…)% of the Total capital investment for phase Two .
4.7 The cash contributions of the partners specified in Article 4.2- 4.6 shall be in convertible currency .
4.8 A special capital account hereinafter called " The Nominal Capital Account " shall be established in the books of account of (…) in which the participartion of each party shall be recorded in dollars at its nominal value . Any subsequent increase of the participation of the partners contributed in (…) or any hard currency equivalent shall be converted into dollars for entry in the Nomimal Cpital Account at the official median rate extablished by the National Bank of (…) as at the date Upon which any part ot the partners respective participations are made . Any revaluation or devaluation of the dollar or (…) shall in no way affect the relations existing between the partners on the Nominal Capital Account at the time of devaluation or revalution and consequently the distribution ratio of the profit of (…) between the partners .
The Nominal Capital Account shall be established at date upon which registration of the Act on Foundation of (…) with the District enonomic Court of (…) takes place .
4.9 To the exten that the profitability of (…) permits it , early years ' depreciation will used to finance the later phases and reduce the borrowings provided for in Article 4.10 and 4.11 , as specified in Article 21.4 hereof .
4.10 (…) and (…) will , at any time , make available to (…) loans in (…) in the propotion (…) of the total loan needs of (…) (…) undertakes to ensure that (…) will contribute its share of these loans as required by (…) For this prupose , (…) and (…) in their own name and for the use of (…) , intend to raise foreign currency loans up to an amount of U$$ (…) million . The taking up of such foreign loans shall not place (…) in a worse position legally , financially or otherwise than if no such foreigen loans had been taken up . in particular failure by (…) and (…) to raise foreign loans shall not relieve (…) and (…) of their fundamental obligation to make available to (…) loans as described in the first sentence of this Article 4.10.
4.11 The loans estimated at the equivalent of U$$ (…) (dollars (…)) to be raised by (…) as provided in Article 4.2-4.6 other than those from (…) and (…) mentioned in Article 4.10 and 4.14 shall be at rates and terms acceptable to and agreed upon in advance of commitment by the partners . such loans shall be secured by (…)'s assets and the guarantee of (…) obtained by (…) prior to the Effective Date . Such loans shall be in (…) in so far as (…) does not require convertible currency . It is understood that (…) will be able to purchase the equipment which it needs to import into (…) under such regimes as referred to in Article 14.5 which will enable it to buy foreign currency for (…) for the payment of the said import . All costs associated with the securing of such loans abroad or locally as the case may be and the repayment of them shall be borne by (…) out of its operating income , except that if (…) has to take any loans in convertible for (…) requirements , (…) will assume the exchange risk on such loans up to an amount of U$$ (…) (dollars) (…)) .
4.12 (…) agree that in purchasing its equipment (…) shall favorably consider suppliers from countries which make available Export Financing Schemes . In this respect (…) and (…) will cooperate with (…) so that (…) may in accordance with Article 4.10 take up loans available from any such Export Financing Schemes , as well as from financial credits connected with those schemes , at conditions better than could be obtained from alternate financial sources available to (…) . The Financial Department of (…) aggress to make joint calls , with (…) , on Financial Institutions providing Export Financing Schemes which could be used in connection with the purchase of equipment for (…) . This financing scheme shall in no way impede the Management of (…) from obtaining the best possible equipment for (…) at lowest cost to (…) . This cooperation is dependent upon (…) obtaining the benefit of the regimes referred to in Article 14.5 hereof .
4.13 All repayments of principal on loans taken by (…) will be repaid out of fixed capital depreciation .
4.14 The (…) loans from (…) and (…) contemplated in Article 4.10 hereof will be subject to the following terms and conditions :
Repayment of principal will be effected as follows :
Repayment in eight (8) years with a grace period unitl six (6) months after the start – up of each plant for which the loan was made However the above will be subject to the following limitations :
The grace priod will last unitl the Business Board of (…) decides that early years " depreciation is not needed any longer to finance Phases Two and Three of the project .
Repamyent will be made out of depreciation after deduction of net principal repayments of loans from other sources . Depreciation will be the maximum allowed by the Law of (…) , provide that this does not exceed :
(a) the amount of cash flow generated by (…)
(b) the depreciation calculated under the double declining balance ethod with ten (10) years' life .
The full amount of available depreciation as , defined above , will be used to repay the principal of outstanding loans (…) and (…) agree to adjust the repayment period of their loans to fit the above principal repayment method . The interest rate charged on any outstanding amount of the (…) and (…) loans will be (…) per cent ((…)% ) per annum . However , if at any time the interest rate charged to prime borrowers in (…) for loans in (…) exceeding a five years ' period falls below (…) per cent ((…)%) , the interest rate charged to (…) for the loans described in this Article 4.14 shall be adjusted accordingly to shch rate . During the time form the first draw Odown until the end of the six (6) months grace period for each plant referred to above , the interst will be capitalized and included in the principal amount of the loans . (…) shall enter into loan agrrements with (…) incorporating the foregoing procisions within sixty (60) days of the Registration of the Act on Foundation of the (…) in the form set out in Annex M hereto .
4.15 The partners shall not be required to provide to (…) financing of any nature in addition to their participations and other obligations as provided in this Article 4 .
4.16 In addition to the pervious financing source , (…) will take full advantage of the working capital Financing schmes available in (…) . This will not affect the amount of loan obligations of (…) and (…) under Article 4.10 and 4.14 .
4.17 The loans from (…) and other sources as provided for in Article 4.10 and 4.11 shall always be utilized by (…) simultaneously and in the same proportion to the total loan requirements of (…) , The Partners shall have agreed prior to the signature of this Joint Venture agreement on a rough cash flow projection for (…) , attached as Annex N .
4.18 The financial structure described in this Article 4 is conditional upon the successful realization of the (…) between (…) signed prior to but in contemplation of this Joint Venture Agreement . It , for any reson, there shall be a shortfall in the cumulative (…) in (…) contemplated in this (…) , then (…) cash participation here under will be reduced by half the coumulative (…) shortfall and (…) cash participation hereunder will be reduced by (…) times the reduction in (…) cash participation . The Business Board of (…) will then meet to decide on an appropriate course of acton , regarding its financial and investment program . In no case , however , will (…) be obliged to undertake more convertible currency risk or convertible currency retenition quota commitments than it would have had do if there had been no shortfall (…) .
ARTICLE 5 . BUSINESS BOARD AND MANAGEMENT
5.1 The partners bereby acknowledge that (…) has the technical knowledge experience and expertise necessary to supervise and adequately control the technical and commercial operation of (…) .
Therefore , the partners agree that , within the provision of Laws of (…), (…) shall participate in the management of (…) , through the Jointly appointed and administrative personnel to certain management positions
5.2 (…) shall be administered and managed by the following organs :
- The Workers ' Council
- The Business Board
- The Management
5.3 The Workers Council shall exercise its inalienable rights under the Laws of (…) , and the business Board shall exercise those powers which are by this Joint venture Agreement within its competence .
5.4 The Business Board .
1. The Business Board of (…) shall consist of six persons of whom two shall be appointed by (…) and two by (…) , and either (…) or (…) ( as the case may be ) shall be entiled at time to remove any member or member of the Business Board of (…) so nominated by them , and subject to the statute of (…) , to appoint anather or others in his or their place or places . Any such appointment or removal shall be made by notice in writing to (…) by (…) or (…) ( as the case may be ) with a copy to the other relevant party . In addition , the General Director and Assistant General Director of (…) shall be members of Business Board . A quorum for all decisions of the Business Board shall be a majority of the Business Board present and voting of whom at least one must be a member who has been nominated as a member ao the Business Board present and voting of whom at least one must be a member who has been nominated as a member of Business Board by (…) and (…) respectively . The Partners shall also nominate two persons each to act as substitute for the members of the Business Board nominated by them There shall be other members of Business Board .
2. The President of the Business Board of (…) shall be nominated by (…) and approved by the Business Board of (…) , which approval shall not be unreasonabley withheld : the Vice President shall be nominated by (…) and approved by the Business Board of (…) which approval shall not be unreasonably withhed .
3. The President of the Business Board shall summon meetings thereof and prepare the agenda thereof . Meetings must be summon meetings thereof and prepare the agenda thereof . Meetings must be summoned at the request of any member , and such items as such member requests must be included in the agenda for the meeting . The Minutes of the meetings of the Business Board shall be kept in English and (…) the English version of which shall be binding .
4. If any issue raised at any meeting of the Business Buard of (…) is put to a vote , such members shall have one vote each . Decisions shall be made by the unanimous vote of the members . in the event that no decision can be reached by reason of lack of unanimity , and lack of decision can negatively influence the envisaged operation of (…) , the question shall be referred to the General Direction of (…) , for their final decision .
5. The Business Board shall have the powers sufficient and necessary to establish the general policy of (…) and to enable its members to protect the respective interest of the parters hereto . The general policy of (…) shall include (but not be limited to ) all essential and principal decisions and questions of financial production sales and pricing matters as well as general management matters . The Business Board shall discharge its responsibilities in accordance with the Laws of (…) and the Statute of (…) .
6. The Business Board shall in particular have the following powers :
- To approve the proposal to the Workers council for the appointment of the General Director ( such approval shall be validly made solely by the votes of the members nominated by (…)) ;
- to approve the proposal to the Workers Council for the appointment of the Assistant General Director (such approval shall be validly made solely by the votes of the members nominated by (…)) ;
- to approve the Annual Accounts and Finacical Stiatements for Presnation to the Worker's Council ;
- to decide upon financial policy , and particularly : investement decisions , reinvestments of profits , decisions on medium and longterm lonas or credits ; choice of banks , authority to sign financial documents, depreciation rates , allocations to the reserve fund and to other funds , methods for evaluation of invenserve fund and to other funds , methods for evaluation of inventories ;
- to to decide upon the commercial policy, including ; export import sales price and conditions , methods of marketing , lovnterm commitments for the dupply of material to (…) and the conclusion of agency and / or representative agreements ;
- to determine the nember if working posts and qualifications for these posts in accordance with technological requirements ;
- to approve proposals for appointment and conditions for employment of all foreign personnel ;
- to decide upon other matters foresenin this Joint Venture Agreement to be within the competence of this Business Board .
7. Any of the above- listed powers can be delegated by the Business Board to the General Director and Assistant General Director , for their joint dedision , However , matters relating to production in general , plant capacity and technology , marketing and finanction control shall be delegated by the Business Board to Assistant General Director for his sole decision , subject to the provisions of Article 5.4.9 .
8. The Business Board shall make proposals to the Workers ' Conucil on the following matters for decision of the Workers ' Council :
Director , Assistant General Director and Foreign personnrl ;
- adoption of the Annual Accounts and Financial Statements in the from prescribed by (…) Law ;
- adoption of annual palns of each year incorporating :
a) annual budget plan ,
b) manufacturing plan ,
c) marketing plan ,
d) annual profit plan:
The annual budget plan shall contain the total amount of personal incomes (gross salaries) planned for the year, which shall be made on the basis of the aggregate; of individual salaries of all cmploycss which shall be on the same level as the individual salaries in comparable industries in (...).
- determination of conditions for employment of foreign personnel;
. allocation to the Common Consumption Fund on the following
(a) the proposal made bye the Business Board for each year will he based on the best possible estimates of the required cxpanditurc from the Common Consumption Fund in the following year in respect of hosing required for workers, allowances for workers' annual vacations, training, and other itcrnx decided hy the Business Board;
(b) the allocation shall not exceed in any year ten per cent (10%) of total gross salaries of all (...) workers. the term " gross salaries" shall mean net salaries received hy working members plus social insurance and other compulsory contributions based on personal income.
9. Should the Workers' Council of (...) disagree with any of the above proposals of the Business Board, then the Workers' Council will immediately put torward ultcrrnativc proposals or alternative methods of achieving the policy or programme decided upon by the Business Board, and the Business Board may accept any such altcnativc of resubmit a proposal modified III the light of the alternative proposed by the Workers' Council. In no event shall the Workers' Council make a
decision whichdcs not have the prior agreement of the Business Board, but only in so far as such matters arc within the competence or the Business Board.
5.5 The Management of (…)
1.The Management of (…) shall consist of the General Director, Assistant General Director and Officers of (...).
2. The General Director shall be proposed by (...) and approved by the Business Board which approval shall not be unreasonably withcld. He shall be appointed for a period of four years from the date or his takin office and many be reappointed for a further such period or periods.
3. The General Director will be chid executive of (...), and he will represent (...) hcforc (...) authorities and alii third persons. Following the decision of the Business Board, he shall rcdclcgatc his general or special authority to represent (…) to the Assistant General Director, Officers and other crnplvcss of (…), as the case may be.
4. The General Director shall be responsible to ensure that all decisions of Workers' Concil and the Business Board of (...) arc put into offect.
5. The General Director shall also be responsible for the legality and compliance with the provisions of this Joint Venture Agreement of all acts of the Workers' Council, the Business Board, the Management and other bodies or (...) and to this end he shall be kept informed of their activities.
6.The Assistant General Director shall be proposed by
(...) and approved by the Business Board , which approval shall not be unreasonably withheld. his term of office shall be for be for periods of four years with the possibility of unlimited re-election and he shall be removed from office at any lime pursuant to a request by (...) 10 that effect.
7. The Assistant General Director shall be in charge 01 all matters concerning production, marketing and financial control or otherwise as heretofore stipulated. He shall report to the General Director unlcs., the Business Board decides that for some mutters he will be responsible directly to the Business Board.
8. The Officers of (...) shall be (in addition 10 the General director and the Assistant General director) Directors or Managers proposed by the Business Board. All of such Officers shall report in I'ulfilmellt of their respective elutes to the General Director, except; the Financial Controller, the Production Director and the Commercial Director, all of whom shall be proposed by (...) and shall report in the fulfilmcnr of their management responsibilities so the Assistant General Director. The General Director shall be kept inforrnacd of the activites of these Officers.
9. In any event any authority to approve expenditures or lake decisions that may he delegated hy the Business Board to the General Director and / or Assistant General Director hereunder shall not be such as to entitle the General Director and Assistant General Director,either jointly or severally, to approve capital expenditures or take any decision which may result in a cost or expense for (...) in excess of US$ 100.000(dollars one hundred thousand) or its equivalent. Any other expenditures shall be subject to an authorization policy to he cstahlishcd by Business Board. Such lunit.uions in respect of expenditures shall he suhject to an .ruthoriz.uion policy to he established by the Business Board. Such limitations in resped of expenditures shall he registered with the Economic Court in (...) uplln the estahlishment ol (...).
10. The Statute of (…) shall always contain provisions to implement the foregoing paragraphs.
Article 6: Supply of RAW Materials to (...)
6.1 (…) shall supply to(...) from the start-up dates of the individual plants a) -e) specified in Article 3.10 here of until the start-up dates of the individual plants f)h) specified in Article 3.5 her of (and in the casc of (...) throughout the term of this .loint Venture Agreement)the nccessary raw materials [or such plants, namely:
6.2 The prices for such raw materials shall he at the equivalent of West luropcan market prices F.O.B(...). (...) production sites less (…) .
6.3 (...) and (…) sal1enter into a contract for the supply of such raw materials within sixty (60) days of the Registration or the Act on Founation of (...). The contract shall be the from set out in Annex Chcrcto.
6.4 (...)shall snpply to (...)from the date ol start-up of the (...) referred to in Article 3.10 hereof throughout the term ol this Joint Vanture Agreement (…) requircmcnts of ( ... ).
6.5 The price for (...) shall be calculated on the basis set out Annex D hereto.
6.6 (...) shall enter into a contract for the supply of such naphtha within sixty (60) days of the Registration of the Act of Foundation on (...).
The contract shall he in the torm set out in Annex D hereto.
Article 7: Supply of RAW Materials to (…)
7.1 (...) agrees to make availahle to (…) for consumption in the
latter's plants for the term of the Joint Venture the following quantities
of (...) :
7.2 The price payable hy (...) for such supplies shall he calculated in
accordance with the formula set out in Annex E hereto and within sixty (60) days from the Effective Date the Partners shall enter into a contract for such supplies in the form set out in Annex E hereto.
7.4 In addition to the quantities of (...) Jspecified Article 7.1, (...) shall
have the right, if it wishes, to purchase on the same terms and conditions as specified in Article 7.2 and 7.3. (...) due to its (...)for reasons recognized hy the Business Board, at its estimated fully capacity of (...).
7.5 Additionally (...) shall grant (...) a right of first rclusul on the same terms and conditions as specified in Article 7.2 and 7.3 on any quantities of (...) in addition to those committed to (...) under this Joint Venture Agreement and on (...) on terms similar to those for the supply of (...) taking into account the lower value and utility of (…) industry.
7.6 (...) shall ohtain from the Government of (...) in advance of the signature of this Joint Venture Agreement full assurances that (...) will he able to ohtain quantities of (...) to fulfill its (...) ohligations to (...) and to (...).(...) shall have provided (...) with written evidence thereof before thcxccution of this Joint Venture Agreement.
Art icle 8: Land
8.l (...) shall transfer to (...) hectares or land selected for the plant site. Such transfer shall constitute (...) capital investment contribution or land referred 10 in Article 4.4 a) i. hereof.
8.2 Such land shall have the benefit of all permits Easemenls and the like, as (...) requires tor its opera lions contemplated by this Joint Venture Agreement, including rights in or over other land such as casements, rights of way, or other rights in or over other land such as casements, rights or way, or other rights or a similar nature, and shall be free from all encumbranees.(...) shall obtain Ior (...) at no cost to(...) all righls needed. including any rights or permits relating to waste disposal and water intake.
Article 9: Description of Land
9.1 The land 10 be transferred by (...) hereunder is the parcel or land delineated in red on the plan attached hereto as Annex F comprising (...) hectares situated at (...) (...).
9.2 (...) warrants that it is entitled 10 transfer to (...) a tree and unencumbered title to such land and that it will indemnity and hold (...) harmless in respect of any and all third party claims relating to such land.
9.3 Transfer or the land Irorn (...) to (...) shall be made at the request or the Business Board of (...) and shall be Iollowcd immediately by an appropriate registration in the land books or the local courts staling that the light to usc the land has been irrevocably transferred to (...) lor the duration or this Joint Venture Agreement.
Article 10: Design, Construction and Initial Operation
10.1 The partners shall in accordance with Article 12 hcrcof. as of the Effective Date, carry out with all speed and dispatch all necessary work to construct the Plant and put it into operation.
10.2 The Partners will, immcdiatclv following the Registration of the Act of foundation of (…), cause a Technical Services and Assistance Agreement in the form scl out in Annex C,hcrclt) to he executed between (..) in which will be set forth the sen pc and the terms andconditions for the performance of and reimbursement for technical services and assistance rendered to (...), in addition to the ohligations and respective contributions specified in this Joint Venture Agreement or subscqucntlv provide in the License Agreement referred to hereinafter.
10.3 The plant will be designed (except to the extent that ( ...)may furnish process design scrvices in accordance with the aforementioned Technical Services and Assistance Agrcclncnt) and will be constructed by a competent and reputable enginccring couuactur or contractor cceptable to (...) pursuant to a lump-sum contract contracts awarded on the basis of competitive hidding. In the event that lump-sum competitive bidding is not desirable. other bases of bidding will be selected with primary consideration being given to economy , reliability, competence and time of completion. Taking into account (…)best interests, the services of a similarly competent and reputable engineering contractor or consultant may be uscd to prepare the instructions to bidders required for lump-sum competitive bidding, based on a cost-plusfee contract for services. Similarly, the engineering services of an equally competent and reputable firm may he required to , assist in the engineering, management. project excluded from the lump-sum bidding to make that bidding more advantageous for (…) including assistance necessary for the start-up of the piant. (...) shall give (...) all assistance necessary in the conclusion of these contracts.
10.4 Decisions with respect to processes, plant location, olfisitc and transport facilities and such other decisions rdating to the plant, as arc required to he m.ulc prior to the registration of ( .. ), will be made having regard to such engineering and other studies, as the Partners may determine to be carried out (...) shall provide the necessary process and project engineering personnel (approximately 60 persons) required for the proper execution of the project under terms and conditions as specified in the Technical Services and Assistance Agreement. (...) shall also provide qualified technical and administrative personnel, as needed in accordance with as Agreement in the form set out in Annex H hereto.
10.5 The processes contained in the Know-how of (...) are those lor l hc production of the products in the plants referred to in Article 12 hereto and arc more fully described in the License AgreemLnt referred to ill Article10.7 hereto.
10.6 The plants to be constructed and operated pursuunt to this Joint Venture Agreement in addition to complying whit (...) requirements shall meet the safely, environmental and ecological standards in force from lime to time in (...) own plants.
10.7 A License Agreement shall be entered into by (...) and (...) in cousidcration o[ part of (...) Participation referred to in Article 4 hereof.
Such License Agreement shall he executed in the form set out in Annex I hereto immediately following the registration of (...).
10.8 (...) shall reimburse (...) for the traveling and other expenses of the (…) ernployess temporarily assigned to (...) for the purpose of carrying out any of (...) obligations under this Joint Venture Agreement and its Annexes. Any temporary assignment in excess of two months shall entitle such person, during the engineering, construction and start-up, to hring his family to (...) at (...) cost. Such anticipated expenditures are more full set out in the Technical Service and Assistance Agreement referred to in Article 10.2 hereof,
10.9 (… ) shall pay all expenses incurred in sending its employees out side or (…) for training or for any other purposes.
10.10 Patent Rights accruing from inventions made by (...) employees shall he the exclusive property of (...), except for specific grant back of rights provided for by the License Agreement.
10.11 (...) will make available to (...) future technical information and Know-how owned or controlled by it related to the production of the products by the processes specified in Article 10.5 hereof and the License Agreement therein referred to and shall receive therefore each year a royalty calculated on a net sales basis for all sales except those to (...) (which in this respect shall include only those members of (...) which were members at the date of execution of this Joint Venture Agreement), (...) and (...) for their own use at the following rates.
(…) - (...) %
(…) - (…) %
(…) - (…) %
(…) - (...) %
(... ) - (...) %
(…) - (…) %
(which mean's (...) and any other products ruanufucturcd in the (. . .)')
Net sales basis means the sales price F.O.B. (...) plant, no deduction having been made in respect or export sales for the deduction made by (...) under Article 13.3 hereof Such royalty shall be paid as provided In the said License Agreement on a quarterly basis.
Article 11: Foreign (...) Personnel and Training
11.1 The employment of foreign nationals by (...) will be limited in number as far as reasonably practicable, and after due consideration of merit, ability, experience and availability,(...) personnel shall be recruited Of promoted to replace foreign nationals. It is understood and agreed, however, that (...) nominees to the Business Board and Management or (...) and the personnel to be loaned by (...) to (...) organizatioll, as further provided herein may be foreign nationals unless specified to the contrary in this Joint Venture Agreenebt (...) shall make available to (...) qualified and sufficient personnel for the proper planning and operation of (...) in accordance with the terms of the Technical Services and Assistance Agreement referred to in Article 10 hereof. In addition and according to the technological and management requirements of (...) may from time to time propose the appointment or further managers of (...) reporting to the Assistant General Director, particularly for specialist functions. The Business Board and Worker', Council of ( ... ) shall not unreasonahly withhold its consent to such proposals.
11.2 It is further understood and agreed that ( ... ) will reimhurse (…) for the amount or the actual cost to ( ... ) or salaries and employee benefits (including expatriate benefits and tax adjustments, ir any,) of all personnel made available to ( ... ) in accordance with the cstnblishcd policies of (...) together with travel expeness rcasonublv incurred by such personnel.
11.3 (...) undertakes to ensure that all (...) personnel uansfcned to (...) shall be able to import and export personal and household ctlccts under the most luvorablc conditions provided by the Customs Laws of (...) and that there will be availablc to such (...) personnel housing racilities suitable to their requirements as specified in Article 14.2 hereof.
11.4 The Partners will give full support to (...) and will each respectively make such of its facilities, as each deems appropriate, available so that (...) can prepare and execute plans and programmers for the training of such number of (…) nationals as may be required for the purpose or (...) particular emphasis will given to the training of (...) nationals to replace expatriate personnel, thus arrording trained (...) nationals every possible opportunity for occupying responsible positions in the operations and mamagement of (...) subject to Article 11.1 hereof, and to this effect ( ... ) will provide technical assistance in the training of (...) personnel at its plants and premises by qualified (...) staff in the management, operations and maintenance of the plant. All reasonable expenses incurred in connection with this training by such (...) trainees shall be borne by (...).
Article 12. Start-up of Production
12.1 The partners anlicipate that the plants of (...) will have the following Start-up Dales:
Phase One Fourth Quarter 19 (...) :
(a) The (…) plant
(b) The (..... ) plant
(c) The (..... ) plant
Phase Two fourth Quarter 19 (...) :
(a) The (…) plant
(b) The (..... ) plant
Phase Three Fourth Quarter 19 (...) :
(a) The (…) plant
(b) The (..... )
Phase One Fourth Quarter 19 (...):
(c) The (...)
12.2 The Business Board of (...) will institute an aurhorizauon policy for the approval of all major expenditures which shall include consideration of relevant technological data. Such action will take place at the beginning of the implementation of each phase. For phase One the Business Board shall take into account the revised and up-date economic vibility and results projected for that phase and in parucul.ir the members of the Business Board appointed by (...) shall take into account (...) evaluation if its ability to operate successfully within the local (...) environment and system .
12.3 The initiation of and commitment of capital to phases Two and Three referred to in Article 12.1 hereof shall only be made upon a decision of the Business Board. Such decision shall not be considered by the Business Board until the partners have determined in good faith both that phase One is proceeding successfully as herein contemplated and that any changes that may have occurred either in the financing program contemplated in Article 4 hereof or in the techmolouical development of the (...) industry have not reduced the ability of (...) to proceed on a sound and viable financial basis.
Article 13 : Sale of Production
13.1 The Partner anticipate that, subject to paragraph 13.2 hereof, the products shall be sold primarily in (...) and abroad according to the decision of the Business Board of (...) pursuant to Article 13.2 hereof.
13.2 Quantities of the products shall be sold for export each year sufficient to provide the foreign exchange necessary for the transfer of (...) share of profit of (...) and for the service and repayment of any hard currency loans made to (...) under Article 4 hereof, and the royalty payable to (...) under Article 10.11 hereof. (...) shall assist (...) in making any and all export sales and quantities of the products shall be purchased by ( ... ) for resale outside of ( ... ), and (…)and (...) shall enter into a sales and purchase agreement in respect thereof in the form set out in Annex J hereto within sixty (60) days of the Registration of the Act on Foundation of (...) .
11.3 On all export sales of (...) under Article 13.2 bove (except for sales to (...) own use) (...) shall deduct (...) per cent ((…)%) of the net sales price for its own account to cover selling, general technical service and administrative cost. Net sclcs priee means the price paid by the customer less all freight and distrihution costs, duties and taxes incurred in shipment to the customer, equivalent to a price F.O.B. (…) plant.
13.4 Without derogation to the provisions of the foregoing paragraphs of this Article 13 and with the prior consent of the Business Board, sales of products outside of (...) may from time to time be invoiced directly by (...) provided that such export sales are economically
sound and that such sales could not have been obtained by (…).
13.5 The remainder of the products shall be marketed in (…) by (...)
Directly , In this respect (...) shall seek at all times and within the price
policy principles of the Government of (...) to so price its products sold
in (...) that it generates the income necessary to fulfill the investment
criteria and objectives upon which the participation in (...) by (...) has been predicated and maintain the future purchasing power on world markets of the cash flow of (…). To this end (...) endeavors by itself and in conjunction with other relevant (...) authorities for the introduction and application of the mechanism of automatic adjustment of final products sales prices in the (...) domestic market so that (...) can automatically increase its sales prices for the products in (...) in the event of increase its sales prices for the products in (...) in the event of increase to (...) in the cost of its raw materials, energy or labor, or changes in the rate of exchange between world market and (...) domestic prices for the products.
Article 14 Incentives
14.1 The Partners acknowledge that to enable the plant to be competitive on a world- scale it is necessary for the Governments of (...) and (...) as well as (...) and the local authorities in (...) to make certain incentives in respect of infrastructure, imports and exports available tothe Partners or (...).
14.2 In this respect (...) undertakes that the following incentives on infrastructure will have been made available 10 (...) by the pertinent authorities in sufficient time to allow the timely start-up of the (...) plants which they arc intended to support.
Article 15. Foreign Exchange
15.1 (...) warrants that (...) is entitled under the Laws of (...) to utilize curnulativcly :
(a) one-third of the foreign exchange generuted by the export of goods and services by (…) for the remittance of profits due to (...) and for the repayment to (…) of the participation made by il under Article 4 hereof;
(b) foreign exchange which (...) is entitled to purchase in an amount equal to the countervail of a certain percentage (currently fifty per cent (50%) of the depreciation of equipment) for hereof, for the servicing and repayment of loans and for the purchase of equipment ;
(c) a further amount of one-fifth or the foreign exchange generuted by the exports and services of (...) (known us the retention quota), for the purposes specified in (a) and (b) above together with other foreign exchange pavmcnts such as the payment of royalty tees and payments under the Technical Services and Assistance Agreemcnt referred to in Article 10 :
(d) foreign exchange allocated by the Federal Government of (...) to (...) under special import quotas for the importation of equipment such that all equipment may by imported under the conditions specified
Article 14.5 hereof;
(e) foreign exchange allocated by the Federal Government of (…) to
(...) for the importation of all raw materials to be imported by (…) for
the operations of its plants.
15.2 Without derogation to the provisions of Article 13 hereof, in the event that after 1981 the level of export sales of (...) sufficient for it to ensure the transfer of profits to (...) together with the fulfillment of its other foreign exchange obligations cannot he profitahly obtained within the economic parameters foreseen by the partners , (...) will assign to (...) foreign exchange rights acquired by (...) by deliveries to (...) under Article 7 of this Joint Venture Agreement up to the amount of foreign exchange required for payment or loans, license fees and other payments as regulated by the Foreign Exchange Law of (...) Such assignments shall be at no cost to (...) but (...) shall purchase the necessary foreign exchange with its own (...) at the selling rate of exchange prevailing on the date of purchase.
15.3 Non -(...) members of the Business Board and employees of (...) and their families shall nol be restrained from freely retaining or disposing of any of their funds or assets outside (...), and shall be free to impor: such foreign funds into (...) as arc required for their own needs and not for speculation. Such persons shall not be allowed to effect in (...) exchange transactions of any kind through channels other than any ofiicially authorized bank or such other channels as the Government shall approve.
Article 16 . Taxation
16.1 Any income tax payable on (...) share of the profit (...) shall deducted by (...) paid to the appropriate authority and shall be charged to the gross share of profit atlributable to (...) shall provide (...) with receipts for such taxes paid on behalf of (...).
Article 17. Confidential Nature of Information
17.1 Neither of the Partners nor (...) shall, without the written consent of the others, disclose to any third party any reports, records, scientific and technical data sales contracts, commercial transactions and /or other similar information of a confidential nature relating to the operations of (...). This obligation shall not apply to such information which is published , in the public domain, already in the possession of the Partner concerned or (...) as the case may be, or comes into their party which has the right to disclose the same.
Article 18. Force Majeure
18.1 Where any force majeure occurrence such as, but not limited to war, fire, flood, accident, riot, strike, lock-out, break-down of facilities, act of God, act of Government authority, or any events beyond the reasonable control of either Partner, or of (...) renders impossible of hinders the performance of any obligation or the exercise of either partner of (…) to perform such obligation or exercise such rights by virtue of such occurrence shall not be treated as a failure or omission to comply with this Joint Venture Agreement. The performance of any such obligation or the exercise of any such right, insofar as it is still possible and/or appropriate, shall be made when such force majeure occurrence is at an end .
18.2 The Partner or (...) as the case may be, suffiering a force majeure occurrence (as defined in this Article 18), shall remedy the situation with all possible dispatch. However, if the performance of any obligation or the exercise of any rights is rendered impossible, hindered or delayed by such a force majeure occurrence for a period exceeding twelve (12) consecutive months, the partners shall. If practicable, consult together as to the best means or overcoming the applicable occurrence of force majeure, but if they shall fail to achieve a solution or if consultation shall be impracticable, then wither partner may refer the situation to arhitration under Article 24 for solution.
18.3 Nothing contained in this Article 18 shall prevent either party from referring to arbitration under Article 24 the question of whether or not an occurrence of force majeure (as defined in this Article 18)) has taken place or whether or not this Joint Venture Agreement should be dissolved because of total impossibility of performance.
Article 19. Transfers
19.1(…) may at any time tranfer all or any part of its participation in (...) to any company which is wholly·owned subsidiary of (...) or its subsidiaries, with the prior written consent or (...), which sall not be unreasonably withheld, provided that the transferee company shall undertake with (...) to observe and perform all the rights and obligations of (…) under this Joint Venture Agreement. In the event (...) wishes to make such transfer to a third party other than a company specified in this paragraph the provisions of Article 23 shall apply.
19.2 No changes in the corporate organization or set-up of either Partner shall have any effect on the rights and obligations of the partner under this Joint Venture Agreement and its Annexes.
19.3 Except as specified in this Article 19 the interests or the Partner not transferable.
Article 20. Guarantee of Pcrtorrnancc and Continuity
20.1 The Partner shall carry out the terms and provisions of this Joint Venture Agreement in accordance with the principle of mutual good will and good faith and respect the spirit as well as the letter of the said terms and provisions.
20.2 Measures and actions hI' either Partner of any nature to annul. amend or modify the provisions of this Joint Venture Agreement. shall only be made possible by the mutual written consent of the partners.
20.3 Without prejudice to the other rights of the Partner herein contained, where (...) suffers losses or costs due to the delay or default of either Partner, that partner shall bear losses or costs independently so that they have no negative impact upon the other Partner or (...).
Article 21. Financial Policy
21.1 It is the intention of the Partner that where in respect of any accounting period the operations of (...) result in a profit. as defined in Article 33, alter provision for reserves required by the Laws of (...) applicable on the Effective Date (which are to be borne by the partner rather than by (...) alone) have been made, the remaining profit shall be available lor distribution to the Partner. It shall he the policy of the Partner to have(...) regularly distribute the full amount of the profits. subject to Article 16 hereof.
21.2 The profit shall be distributed in the same proportion as the participation of the Partner as specified in Article 4 hereof except for the profit realized through export sales (...) .
21.3 The Partner agree to maintain their respective parlicipation in the proportion of (...) per cent ((...)%) to (...) and (...) per cent ((…)%) to (...) However in this respect the Partner agree to consider favorahly the utilization of profits earned and available for distribution for further contrihutions of their respective participations as provided in Article 4 hereof.
21.4 The Partner agree that the sums allocated for depreciation of fixed assets and know-how shall be always utilized in accordance with Article 4 hereoL(...) per cent ((...)%) of the remainder of sums so allocated shall be used for the widening of the material basis of work according for which such (...) per cent ((…)%) will be utilized shall be decided by the Workers Council, in consultation with the Business Board. The widening of the material basis of work means investments for the improvement of the productivity of (...) and the conditions of work therein. It is contemplated that US$ (...) out of the estimated total capital investment of US$ (...) will be financed out of depreciation as specified in Article 4.9 hereof.
21.5 If there are in any business year of (...) uncovered losses, the partners by means of the Business Board shall meet to decide upon an appropriate course of action within the Laws of (...).
Article 22. Term of Agreement
22.1 This Joint Venture Agreement shall remain in forcc indefinitely from the Effective Date, suhject to Article 23 hereof.
Article 23 Termination of Agreement
23.1 This Joint Venture Agreement may be terminated under the following cnnditinns :
(a) In the event at any time of a breach of any substantive term of this Joint Venture Agreement by one Partner, or as provided in Article 26.3 hereof, the other Partner shall request by notice in writing the Partner in breach or the Worker's Council of (...) to remedy such breach within sixty (60) days of the date of such notice. If the Partner in breach or the Worker's Council shall fail to remedy such breach as requested and within the time specified, the other Partner may terminate this Joint Venture Agreement forthwith upon thirty (30) days prior notice in
(b) At any time after (...) years from the Effective Date upon not less than six (6) month's prior notice in writing to the other Partner, the Partners as hereinafter specified may terminate this Joint Venture Agreement for reasonable cause. Reasonable cause may include, but not be limited to, any of the following circumstances :
(i) changes in the amount of income tax payable by (...) on its share of the profit of (...) adversely affecting the amount of (...) profit expectations which shall entitle (...) to terminate.
(ii) inability of (...) other than due to its own fault to remit its share of the profit of (…) as defined in Annex K hereof which shall entitle (...) to terminate.
(iii) the generation by (...) of profits in (...) consecutive years which are (...) per cent (( ... )%) or more below the profit plan for those years agreed upon by the Business Board or failure for two consecutive years of the Business Board and Worker's Council to agree upon a profit plan which shall entitle either Partner to terminate. The Worker's Council shall not unreasonably withhold its agrccment to the profit plans proposed by the Business Board ; (iv) repeced lack of acceptance by the Board of (…) or (…) substantive proposals for the management of (…) which shall entitle partner to terminate ;
(v) change in the legal structure of (…) made by any of the workers of (…) since such changes would be contrary to the intention of the partners , as expressed in this Joint Venture Agreement , which shall entitle (…) to terminate .
Any notice of termination of this Joint Venture Agreement given by either parthner under this Article 23 (b) shall specify the reasonable cause upon which such notice is founded .
(c) As provided in Article 25.2 hereof .
(d) As provided in Article 23.2 hereof .
23.2 Upon termination of this Joint Venture Agreement as provided in paragraph 23.1 of this Article , the terminating party (hereinafter called ' Terninator' ) shall offer its interest for purchase by the other party . If the price named in such offer and the other terms and conditions of sale shall be unaccrptable to the other parther , (and the other partner must notify the Terminator of its acceptance or rejection of the latter's offer within sixty (60) days of receipt of the offer ) the Terminator shall have the rights to secure a bona – fide offer for the interest from a third party . The Terminator shall re- offer its interest of the other partner at the price so determined and other partner shall have the right within sixty (60) days to accept or reject the offer .
If the offer is rejected the Terminator shall be free to dispose of the interest elsewhere within sixty (60) days at a price no lower than that at which the interest was offered to the other partner pursuant to this paragraph.
23.3 (i) In the event a satisfactory disposal of its interest is not achieved by the Terminator under paragraph 23.2 of this Article 23. if the Terminator is (...) shall pay to (...) an amount equal to (...) point (…) ((... )) times the average of the three (3) years projected profit or (…) after deduction of royalties which would otherwise have been payable by (...) hereunder, and after the deduction of (...) income tax the financial years immediately foolwing the date of termination that would have been withheld of (...) share of the profit of (...) had this Joint Venture Agreement continued in effect. Such amount shall be calculated by an independent firm of Certified Public Accountants, or their appropriate equivalent, established in Switzerland, who shall make such calculation using the standards specified in Annex L hereto.
(ii) In any event, the amount payable by (...) hereunder shall not be less than the aggregate of :
(a) the amount of (...) participation in (...) as recorded in the Nominal Capital Account of (...) at the date of termination of this Joint Venture Agreement , and
(b) where the net value, after deduction of liabilities, of any surplus and reserves accumulated in the accounts of (...) and the trade value of the assets and goodwill of (...) , exceeds the amount of the combined participations of the partner (as recorded in the Nominal Capital Account at the time termination of this Joint Venture Agreement), part of the value of such surplus and reserves assets and goodwill equal to the proportion of (...) participation in (...) at the time of the termination of this Joint Venture Agreement. However, where such net value is less than (...) participation, as specified in a) above, or is a negative value, (...) shall still receive at least the amount specified in a) above except that where there arc any losses of (...) upon termination of this Joint Venture Agreement and such termination is due to (...) fault. Unless it can be proved that such losses have been caused by (...) fault or any activity of the self-management organs of (...) contrary to the provisions of this Joint Venture Agreement or any act of the Governments, or any governmental or public authority in (...), the amount specified in a) above shall be reduced by a percentage of such losses equal to the ratio of (...) participation in (...) to the total participation of the partner in (...) at the time of termination of this Joint Venture Agreement. Provided that (...) shall always and in any event receive the value of its know-now actually contributed as part of its participation under Article 4 hereof in the amount provided in that Article.
23.4 In the event that (...) can prove that any part of the know- how and technology contributed by (...) under this Joint Venture Agreement shall, at the date of termination of this Joint Venture Agreement, have been superceded by technologies in this area of third parties to such an extent the thereby it would render (...) unprofitable and uncornpctitive (and for this purpose it must be taken into consideration as to whether or not the average of (...) selling prices comparatively remains equal to or more favorable than third party average prices for sales in the (...) market. Provided that such prices of (...) and the costs relating thereto, including but not limited to the cost of raw materials purchased at recognized competitive prices, have not been adversely affected by acts of the (...) Federal and/or Republic Governments or any agency thereof, subsequent to the execution of this Joint Venture Agreement), then (...) shall not be liable to pay to (...) the amount spccil'icd in Article 23.3ii) above, but only the amount specified in Article 23.3 ii) above, but only the amount specified in Article 23.3 i) above
23.5 The amount payable by (...) under this Article 23 shall be paid by (...) in convertible currency as follows :
(a) In the event of termination of this Joint Venture Agreement for breach thereof by (...) or the Worker's Council of (...), in (...) ((...)) equal hair-yearly installments, the first of which shall be due and paid six (6) months after the receipt by (...) of notice of termination by (...).
(b) In the event of termination of this Joint Venture Agreement for the first of which shall be due and paid six (6) months after receipt by (...) of notice of termination by (...) .
(c) In the event of termination by either Partner for reasonable cause under Article 23.1 of this Joint Venture Agreement.
(i) (...) per cent (( ... )%) of the amount payable or a sum equal to (...) participation in (...) as registered in the Nominal Capital Account whichever is the greater shall he paid to (...) within six (6) months of the receipt of notice of termination by the other Partner.
(ii) the balance shall he paid in (...) equal hair-yearly installments, the first of which shall he due one year Irom the receipt or the said notice of termination.
Interest shall be charged and payahle on the outstanding halance of the total amount under a) b) and c) as the case may be, and shall be determined at the commencement of each half-yearly, (starting with the date of receipt of notice of termination) in respect of the amount payable at the end of that period and shall be the six monthly London interbank rate for dollar borrwings as published in the London Financial Times or any other British puhlications plus two per cent (2%).
23.6 The performance of (...) obligations under this Article 23 shall be guaranteed by (...) which guarantee (...) undertake to deliver to (...) within sixty (60) days of the Elfcctivc Date. Any costs of such guarantee shall be horne by (...).
23.7 Termination of this Joint Venture Agreement shall not apply to (...) obligations under this Article 23 and the provisions of Articles 17,24 and 25 hereof, such termination shall be without prejudice to any accrued or accruing rights and liahlities arising out of the operation of this Joint Venture Agreement prior to its termination hereunder.
23.8 In the event of termination of this Joint Venture Agreement, (...) by (...) under Article 4 hereof and defined in Article 10 hereof only in the plant installed under the terms of this Joint Vanturc Agreement in (...).
23.9 If this Joint Venture Agreement is terminated by either party, (...) ohligation to supply future technical information per Article 10.10 shall cease. However, the obligation of (...) to secrecy and nondisclosure will remain in effect on (...) or its successors .
Article 24. Arhitration
24.1 Any dispute arising from the carrying out or interpretarion of this Joint Venture Agreement, which cannot be resolved amicably by the Partners, and any other matter specifically referred to arbitration under, any provision of this Joint Venture Agreement, shall be submitted to arbitration, in compliance with the Rules of Conciliation and Arhitration of the International Chamber of Commerce in Paris , France.
24.2 The seat of such arbitration shall be Zurich, Switzderland and the arbitration shall be carried out by a Board of three(3) arbitrators in which(...) shall nominate one member and (...) shall nominate one member and the Chairman of the Board shall be independent and nominated by the president of the International Chamber of Commerce in accordance with its Rules referred to in Article 24.1 hereof. In reaching a decision, the Board of Arbitration shall first apply the provisions of this Joint Venture Agreement, interpreted in equity, and should this not prove sufficient for a decision, then the Laws of Switzerland unless a specific question is regulated by a compulsorily provision of the Laws of (...).
Article 25. Exaction of Awards
25.1 Any decision or award of the International Chamber of Commerce made in pursuance of Article 24 hereof, shall be enforceable in any competent court of law. To this effect, neither partner shall interpose any procedural objection to the enforcement of any such decision by the other partner through any competent court of law.
25.2 If the Partner liable to carry out a final decision or award given in accordance with this Joint Venture Agrecmcnt fails to comply therewith the time specified for compliance or, if no timc is specified. within six(6) months alter the communication thereof to the Partners, the Partner in favor which the decision or award has been given shall be entitled to terminate this Joint Venture Agreement upon thirty (30) day's prior notice in writing to the other Partner. Any such decision of termination shall be without prejudice to any accrued or accruing rights and liahilities arising out of the operation of this Joint Venture Agreement prior to its termination hereunder, including such other rights, sums or damages as may have been awarded by the Arbitration Board.
Article 26. Accession by (...)
26.1 Immediately upon the Registration of the Act on Foundation of (...) (...) shall insure that (...) shall sign a copy of this Joint Venture Agreement the effect of which signature shall be that (...) shall become entitled to the benefits and subject to the obligations of this Joint Venture Agreement insofar as such benefits and obligations are relevant to (...) and thenceforth this Joint Venture Agreement shall be construed as if (...) were a party hereto, hut only tor the purposes of performing this Joint Venture Agreement.
26.2 At the same time (...) shall ensure that the Worker's Council of (...) shall accept the provisions of this Joint Venture Agreement and undertake to carry out its activities in such manner that the provisions of the Joint Venture Agreement are fulfilled.
26.3 Failure of the Worker's Council to carry out its activities in accordance with the terms of this Joint Venture Agreement shall be deemed a breach thereof entitling (...) to terminate this Joint Venture Agreement.
Article 27. Changes in (...) Legislation
27.1 Should the Laws of (...) relating to participation in such enterprise as is contemplated by this Joint Venture Agreement and to the relations established thereby, be amended to be more favoruble to either or both of the Partners, then , provided either Partner is not put at a disadvantage thereby, this Joint Venture Agreement shall be anended to take advantage of such new legislation.
27.2 In this respect in particular, in the event that the (...) becomes a convertible currency, then for so long, as it remains convertible, the provisions of Article 15 shal1 not apply.
Article 2S, Language of Text
28.1 This Joint Venture Agreement is made in English and (...) but in case of dispute the English version shall prevail.
Article 29, Applicable Laws
29,1 This Joint Venture Agreement shall be construed and interpreted in accordance with the plain meaning of its terms. Except for the mandatory provisions thereof, the Laws of (...) shall apply only where specifically referred to and incorporated herein.
Article 30, Notices
30.1 The addresses of the Partner for the purposes of this Agreement shal1 be (...) or such other addresses as either of them may, by notice, as below provided, to the other of them and to (…) determine from time to time.
30.2 Any notice, consent or agreement to be given by either Partner to the other shall be given by sending the same by prepaid cable, telex or registered airrnal to the address in or as modified pursuant to 30.1 above, and any such notice, consent or agreement so sent shall he deem to have been served at the expiration of the seventeenth day alter the same shall have been delivered to the communication office or posted, and in proving such service, it shall be sufficient to prove that the message or letter containing the notice, consent or agreement was properly addressed and delivered or posted with prepaid postage.
Article 31. Performance
31.1 Any rights or obligations to be exercised or perlformed hereunder bv (...) shall be deemed to be fulfilled if (...) causes the same to be exercised or performed by any company wholly-owned by it or its wholly-owned subsidiaries, provided, however. that (...) shall remain preimarily responsible for the due fulfillment of its obligations and undertakings under this Joint Venture Agreement.
31.2 (...) hereby specifically delegates the performance of its oblipations hereunder to and (...), until further notice from (…), hereby agrees to deal with, in respect of the performance of this Joint Venture Agreement ,(…).
Article 32. Additional Understandings
32.1 The Partner shall determine the definitive name of (...) prior to its registration.
Article : 33. Accounting
33.1 (a) The legal books of (... ) shall be maintained according to the principles of accounting specified by the Laws of (…) .
The management hooks shall also be maintained in accordance with (…) accounting practices so that audit statements can be provided for the purpose of reporting (...) income to (...). The partner understand the following words to have the meaning herein set out in respecd of the managelllent hooks.
These are sales proceeds as invoiced to customers less non revenue items such as purchased transportations, sales returns and allowances. II is the net amount realized at the production point, after deduction from the amount invoiced to the customers, all shipping costs, insurance, duty and sales taxes incurred by manufacturer between production point and sales.
The passing of title legally determines when a sales is completed. The act of invoicing- together with delivery or shipment- is generally regarded as the monent when revenue is recognized.
The term 'net sales' is used in connection with operation revenue arising from the sales of products and services in the ordinary course of business.
COST OF SALES
The accounting system shall be designed to fully account for total cost. Each expenditure is classified, at the moment of commitment, in such a manner as to allow management to monitor the operations by (function as well as by type of expenes. The total cost of operations or manufacturing cost includes.
Purchased Raw Materials Consumed
Purchased Fuels and Utilities Consumed
Total Wages and Salaries including Fringe Benefits Contract Labour and Services
Maintenance Materials Consumed
Supplies and Pacbging Materials Consumed
Depreciation or Plant Building and Equipment
Other Operating Costs such as (inter alia) Telephone,
Conununications. Travel, Insurance, Taxes.
Manufacturing cost is related to each unit of product produced during the accounting period, providing the basis to value finished product transferred to inventory. The inventory value of cost per unit moves to cost of sales, matching cost with revenue at the time of sales. Sales revenue kss cost or sales cquuls gross margin. Gross margin less technical service, selling and administrative expenses gives operating margm.
Manpower costs include cost of wages, salaries and fringe benefit expenses for employees during any designated accounting period. Manpower costs must he clearly recognized as an dement of intrinsic added value or products and operations and distinctively separated from dixtriburion of earnings to investors.
Depreciation is computed on the lull cost of an asset. Lives used take into consideration obsolescence due to technological development and changing economic conditions and also physical deterioration. Normally, depreciation rates arc those prescribed by the applicable Laws of (...) and applied in accordance with the provisions of Article 4 hereof.
PROFIT BEFORE TAX
Profit before lax is defined as the profit trorn sales alter deducting cost of sales, selling and administrative expenses and financial charges such as interest expense.
PROFIT AFTER TAX
Profit alter lax is defined as profit before tax less provision for any applicable texes which are based on income. Profit after tax in a board sense is the net result from operations for a specific accounting period.
The Profit of (...) to be distributed in accordance with Article 21 shall he determined in accordance with Annex K hereto.
33.3 (...) shall permit (...) auditors, presently (...), to discharge their responsihility towards (...) , regardless of and in addition to the auditing firm retained hy (...) in (...).
33.4 (...) shall endeavor to obtain from the competent (...) authorities the permission for (...) to participate in the clering system of (...) and its suhsidiaries (currently its European subsidiaries), having the objective of netting the cash in and out flows of (...) with such companies. Such netting should in no way affect the rebates granted to (...) on the gross amount of exported products.
Article 34. Limited Liability
34.1 (...) being a separate legal person shall have no liability whatsoever for the debts or any other liabilities of wither of the Partner. The Partner shall have no liability whatsoever,beyond their liahilities of participations in (...), for the debts and any other liabilities of (...), except for (...) responsibilities during the foundation of (...).
34.2 These limitation of liabilities of the Partners and of (…) shall be provided for in the Statue of (...) and registered with the District Economic Court of (...).
Article 35. OPIC Insurance
35.1 (...) has applied to Overseas Private Investment Corporation (hcrcinuttcr called 'OPIC') for the issuance of a policy of insurance in respect of (...) participation in (...) as set out in this Joint Venture Agreement. The issuance of such a policy is conditional upon the prior execution of this Joint Venture Agreement. The issuance of such a policy of insurance by OPIC to (...) is a condition subsequent of (...) execution of this Joint Venture Agreement. If OPIC rcfuses to grant such a policy under terms and conditions acccptable to (...), this Joint Venture Agreement may be rescinded forthwith by (...).
Article 36. Representative Office
36.1 In consideration of (...) investmcnts in (…) in (...) and (...) and the supplies from (...) to (...) and exports from (…) connected with these investments, and in view of the importance which (...) places upon the growth of its normal exports to (...) in products not yet planned for investment in (...) requires an expansion of the scoop of activity of its preset representative office in (...) to include commercial representation for these purposes.(...) shall use its best efforts to assist (...) in obtaining the necessary permission from the competent authurities for this expanded scoop of activity of activity for (...).
Article 37. Execution
37.1 It is understood and agreed that before the execution of this Joint Venture Agreemellt both Partners have obtained approvals of their respective authorities, namely (...) by is Worker's Council, and (...) by its Board of Directors, and that the Partners have duly notified each other of these approvals.
IN WITNESS WHEREOF, the Partners have signed this Joint Venture Agreement the day and year first hereinbefore written.