JOINT VENTURE AGREEMENT
THIS AGREEMENT is entered into this [ 1st ] day of [ June, 2008 ] by and between [ X, INC. ] a corporation organized and existing under the laws of the Republic of Korea(hereinafter referred to as "Korea"), with its principal office at [ 159, Samsung-dong, Kangnam-ku, Seoul, Korea ] (hereinafter referred to as "X") and [ Y CO., LTD. ] a company organized and existing under the laws of the State of [ New York, United States of America ], with its principal office at [ 140, 51st, West, New York, N.Y., United States of America ](hereinafter referred to as "Y").
WITNESSETH:
WHEREAS, [ X ] is engaged in the business of [ promoting the sale and distribution of various goods ] in Korea; and
WHEREAS, [ Y ], which is engaged in the business of [ manufacturing and selling the computers and possesses valuable technology, considerable skill and experience relating to the design and manufacture thereof in the United States ]; and
WHEREAS, the parties hereto desire to establish a company in Korea, for the principal purpose of [ engaging in the business of manufacturing and selling of the computer ].
NOW THEREFORE, for and in consideration of the premises and mutual covenants herein contained, [ X ] and [ Y ] hereby agree as follows:
Section 1.00 DEFINITIONS
When used in this Agreement, each of the terms set forth in this section shall have the meaning indicated:
1.01 "NEWCO"
The joint stock company to be incorporated under the laws of Korea by the parties hereto in the manner provided in section 3.00 hereof, and to be known in Korean as "[ NEWCO Chusic Hoesa ]" and in English as "[ NEWCO Co., Ltd. ]".
1.02 "EFFECTIVE DATE"
The date of the signing of this Agreement.
1.03 "ASSOCIATED AGREEMENTS"
Those agreements related to this Agreement which are to be entered into between or among [ X ], [ Y ] and NEWCO, as the case may be, pursuant to section 4.00 hereof.
1.04 "SHARES"
Those shares of par value common voting stock which are to be issued by NEWCO to the promoters of NEWCO and the parties hereto in exchange for their respective contributions which are to be made pursuant to section 3.00 hereof, as well as any additional shares of the capital stock NEWCO which may be issued from time to time pursuant to section 7.00 hereof or otherwise.
1.05 "AFFILIATE"
Any corporation, other juridical entity, partnership or other business enterprise :
1.05.1 which owns or controls, directly or indirectly, fifty percent(50%) or more of the voting rights with respect to the election of directors of either party hereto;
1.05.2 of which fifty percent (50%) or more of the voting rights with respect to the election of directors is owned or controlled, directly or indirectly, by a party hereto;
1.05.3 of which fifty percent (50%) or more of the voting rights with respect to the election of directors is owned or controlled, directly or indirectly, by any corporation, other juridical entity, partnership or other business enterprise qualifying under sub-paragraph 1.05.1 or 1.05.2 above.
Section 2.00 APPROVALS BY GOVERNMENTS
2.01 Promptly after the execution of this Agreement, [ Y ] shall make application to the appropriate authorities of the Korean Government for approvals under the Enforcement Rules of the Foreign Investment Promotion Act, of the acquisition by [ Y ] of shares of NEWCO and of the technical assistance to be rendered to NEWCO by [ Y ] pursuant to certain of the Associated Agreements, and for such other licenses or approvals therefor under the Foreign Exchange Transactions Act as may be required by said Law. Such licenses or approvals, if any, must include assurance by the Korean Government of the convertibility and remittance in United States dollar currency to a bank in [ the United States of America ] designated by [ Y ] of any and all dividends, royalties, interest payments, reimbursable costs, and repatriated capital and any other payment to [ Y ] contemplated under this Agreement and all Associated Agreements, during any period in which any such agreements are in effect. [ X ] will extend all reasonable assistance to [ Y ] in obtaining such licenses or approvals.
2.02 Promptly after the execution of this Agreement, [ Y ] shall prepare and file applications for such rulings, licenses or other approvals as it may be required to obtain pursuant to the [ United States Export Control Act ] in connection with the disclosure to and use by NEWCO of [ Y ]'s Technical Information in accordance with this Agreement or any of the Associated Agreements.
2.03 Except with respect to the obligation hereby acknowledged by the parties to cooperate in good faith in the diligent prosecution of the applications referred to in paragraphs 2.01 and 2.02 above, this Agreement shall remain wholly executory and conditional until such time as full authorization required by the provisions of Paragraphs 2.01 and 2.02 shall have been obtained.
Section 3.00 FORMATION OF NEWCO
3.01 Organization and Registration
As soon as practically possible after the EFFECTIVE DATE, [ X ] and [ Y ] shall cause NEWCO to be organized and registered under the laws of Korea. The registered principal office of NEWCO shall be located at [ 123, Shinsadong, Kangnamku, Seoul, Korea ]. The parties hereto shall closely cooperate and consult with each other with respect to the procedures and particulars of the organization and registration of NEWCO.
3.02 Articles of Incorporation and Regulations of the Board of Directors
At the time of the organization and registration of NEWCO pursuant to Paragraph 3.01 hereof, the parties hereto shall cause NEWCO to adopt the Articles of Incorporation annexed hereto and marked as Exhibit [ 1 ], and the regulations of the Board of Directors annexed hereto and marked as Exhibit [ 2 ].
3.03 Authorized and Paid-in Capital
At the time of the organization and registration of NEWCO pursuant to Paragraph 3.01 hereof, NEWCO shall have an authorized capital of [ \10,000,000,000. ] and a paid-in capital of [ \5,000,000,000. ].
3.04 Capital Contributions by [ X ] and [ Y ]
Of the initial paid-in capital of NEWCO, [ X ] and promoters designated by it shall contribute in cash the sum of [ \2,500,000,000. ] in exchange for the issuance by NEWCO of [ 500,000. ] shares of common voting stock of NEWCO having a par value of [ five thousand Won (\5,000) ] per share. [ Y ] shall contribute in cash the sum of [ \2,500,000,000. ], in exchange for the issuance by NEWCO of [ 500,000. ] shares of common voting stock of NEWCO having a par value of [ five thousand Won (\5,000.) ] per share. [ X ] and [ Y ] shall pay such amounts above to the [ bank name ] bank account, in the name of NEWCO, in Korean Won.
3.05 Ratio of Shares : According to this Agreement, [ X ] and [ Y ] shall have [ ]% and [ ]% of the total shares of NEWCO, respectively.
3.05 Formation Costs
All costs and expenses of the formation of NEWCO shall, to the extent the same are not incurred or assumed by NEWCO, be borne equally by the parties hereto. Expenses incurred by each party up to time of execution of this Agreement, including travel expenses and legal fees, shall be borne by the party so incurring such expenses.
3.07 Preemptive Rights
[ X ] and [ Y ] shall have preemptive rights for the new shares, convertible bonds and other equity securities that shall be issued after the formation of NEWCO, in proportion to their ratio of shares.
Section 4.00 ASSOCIATED AGREEMENTS
[Immediately, after the registration of NEWCO, the following agreements shall be entered into between the relevant parties :
(i) License Agreement between [ Y ] and NEWCO
(ii) Management Assistance Agreement between [ X ] and NEWCO
(iii) Distributorship Agreement between [ X ] and NEWCO
(iv) Plant and Equipment Lease Agreement between [ X ] and NEWCO
(v) Personnel Transfer Agreement between NEWCO and [ X ]
(?) Technical Assistance and Technology Transfer Agreement between NEWCO and [ Y ]
Section 5.00 MANAGEMENT OF NEWCO
5.01 Meetings and Resolutions of Shareholders
Meeting of the shareholders shall be held in Korea or at such other place as the Board of Directors shall determine subject to the unanimous written consent of the shareholders. Except as otherwise provided by the Articles of Incorporation of NEWCO or as otherwise required by mandatory provisions or Korean law, resolutions of a general meeting of the shareholders of NEWCO shall be adopted by a majority vote of the shareholders present at a meeting at which more than half of total number of shares issued are represented in person or by proxy. To the extent now or hereinafter permitted by law, shareholders shall have the right to act by written consent in lieu of holding a general shareholder's meeting. All other matters concerning shareholders shall be determined in accordance with the Articles of Incorporation of NEWCO, or as otherwise required by mandatory provisions of law.
5.02 The Board of Directors of NEWCO
Except as otherwise required by mandatory provisions of law or provided for in the Articles of Incorporations of NEWCO, responsibility for the management, direction and control of NEWCO shall be vested in the Board of Directors of NEWCO. The Board of Directors may delegate authority for management of NEWCO to officers of NEWCO in accordance with resolutions duly passed and as consistent with the Articles of Incorporation and mandatory provisions of law.
5.02.1 The directors of NEWCO shall be elected at general meetings of shareholders. The Articles of Incorporations of NEWCO shall provide for the election of [ eight ] Directors and it is understood and agreed by the parties hereto that [ four (4) ] of the Directors of NEWCO shall be individuals nominated by [ X ], and [ four (4) ] of the Directors shall be individuals nominated by [ Y ].
5.02.2 Meetings of the Board of Directors of NEWCO shall be convened and conducted not less than [ once ] during each accounting period of NEWCO. Meetings of the Board of Directors shall be called by the President of NEWCO or such other officer or Directors as may be designated by the Board of Directors; provided, however, that [ X ] agrees to cause the President of NEWCO or such other officer or director as may be designated by the Board of Directors as aforesaid and who has been nominated by [ X ], to convene a Board of Directors meeting at any time when [ Y ] indicates that in its opinion there is an important reason for holding such a meeting.
5.02.3 The parties hereto shall cause Directors of NEWCO nominated by them in accordance with Paragraph 5.02.2 hereof to submit to the Board of Directors for approval any matter requiring such approval pursuant to the Articles of Incorporation, the next section hereof or regulations of the Board of Directors of NEWCO.
5.03 Representative Directors
NEWCO shall have not more than two (2) Representative Directors who shall be appointed by the Board of Directors of NEWCO from among the members of said Board in the following manner :
5.03.1 The parties hereto shall initially cause the Board of Directors of NEWCO to appoint only one(1) Representative Director, who shall be an individual nominated by [ X ] and acceptable to [ Y ].
5.03.2 In addition to the Representative Director elected in accordance with above sub-paragraph 5.03.1 hereof, [ Y ] shall have the option at any time to request that one of the Directors of NEWCO nominated by [ Y ] and acceptable to [ X ] shall be elected as the second Representative Director. In the event such request is made by [ Y ], the parties hereto shall immediately cause the Board of Directors of NEWCO to elect such additional Representative Director. Such additional Representative Director shall be resident in Korea and shall be a full-time employee or officer of NEWCO.
5.04 President and Vice-President
5.04.1 NEWCO shall have a President who shall be the representative Director nominated by [ X ] and acceptable to [ Y ] in accordance with sub-paragraph 5.03.1 hereof. The president shall serve as the Chief Executive of NEWCO and, subject to the authority of the Board of Directors, shall carry out the daily business of NEWCO and shall preside at meetings of the Board of Directors.
5.04.2 NEWCO may have a Vice-President who shall be a Director nominated by [ Y ] and acceptable to [ X ]. Should an additional Representative Director be elected in accordance with sub-paragraph 5.03.2, such additional Representative Director shall serve as the Vice-President. The Vice-President shall assist the President of NEWCO and shall preside at meetings of the Board of Directors in the absence of the President.
5.05 Auditor
NEWCO shall have [ one(1) ] statutory auditor who shall be nominated by [ X ] and acceptable to [ Y ].
5.06 Cooperation in Election of Directors, Representative Director(s) and Auditor
Each of the parties hereto hereby covenants and agrees to vote its shares of NEWCO, and to cause the Directors of NEWCO nominated by it to cast their votes, so as to appoint as Directors, Representative Director(s) and auditor of NEWCO, as the case may be, individuals qualified under the foregoing provisions of this section 5.00. In the event of the death, incapacity, resignation or the removal of a Director, Representative Director or Auditor prior to the end of his term of office, each of the parties hereto agrees to vote its shares of NEWCO, and to cause the Directors of NEWCO nominated by it to cast their votes, so as to appoint as his replacement a nominee qualified under the said foregoing provisions of this section 5.00.
5.07 Accounting Period and Books of Account
5.07.1 Accounting Period
The accounting period of NEWCO shall commence on [ January 1st ] of each year and end on [ December 31st ] of the such year; provided, however, that the first accounting period of NEWCO shall commence as of the date of organization of NEWCO pursuant to Paragraph 3.01 hereof and end on December 31st of that year.
5.07.2 Books of Account
NEWCO shall keep accurate books of account and financial and related records in accordance with generally accepted Korean accounting practices, standards and procedures as prescribed by the firm of accountants to be designated pursuant to the following paragraph.
5.07.3 Audit
At the end of each accounting period of NEWCO, the books of account and records of NEWCO shall be audited, at the expense of NEWCO, by a firm of certified public accountants licensed to practice, and of recognized standing, in Korea, and mutually acceptable to the parties hereto. Such firm of independent public accountants shall prepare for and supply to [ X ] and [ Y ] certified financial reports suitable for use by each of the parties hereto in connection with its financial and tax reports.
5.07.4 Reporting and Inspection of NEWCO Records
Promptly after the close of each semi-annual period, NEWCO shall submit to each of the parties hereto in the Korean and English languages the balance sheet and profit and loss statement of NEWCO in respect of such semiannual period. Further, NEWCO shall make available at its principal place of business to each of the parties hereto, or to its designated representative(s), its books of account and record, if and when either party hereto shall so request.
Section 6.00 BUSINESS OF NEWCO
6.01 Corporate Purpose of NEWCO
The corporate purpose of NEWCO shall be to carry out the business listed in Article [ - ] (Corporate Purposes) of its Articles of Incorporation annexed hereto and marked as Exhibit [ 1 ]. Initially, however, the parties contemplate that NEWCO will engage in the manufacture and sale of products(hereinafter referred to as the "Products") to be produced by it under the license granted by [ Y ] in accordance with the License Agreement annexed hereto and marked as Exhibit [ 3 ].
6.02 Sale of Products
NEWCO shall sell its products in Korea only to [ X ] in accordance with the Distributorship Agreement annexed hereto and marked as Exhibit [ 5 ] and [ X ] shall have the exclusive right to distribute NEWCO's products in Korea.
6.03 Export of Products
Except as otherwise specifically agreed to, NEWCO shall have the right to export the Products throughout the world; provided, however, that the quantity of the Products for export and the quantity of the Products or sale to [ X ] shall be determined upon consultation of the parties hereto.
6.04 Selling Price for Products
Prices for the Products to be sold to [ X ] or to be exported, pursuant to paragraphs 6.02 and 6.03, shall be fixed by NEWCO after consultation with [ X ] and [ Y ]; provided, however, that the prices for the Products so fixed shall be competitive in the market in which the Products are sold.
6.05 Non-Competition
The parties hereto agree not to manufacture or sell or cause its AFFILIATES to manufacture or sell in Korea, either directly or indirectly, any products which are competitive with the Products.
6.06 Plant and Equipment of NEWCO
[ X ] shall lease to NEWCO the whole of its laboratory building and manufacturing facilities located in [ 1-2 Banwol-kongdan, Ahnsan-city, Kyunggi-do, Korea ] in accordance with the Plant and Equipment Lease Agreement annexed hereto and marked as Exhibit [ 6 ].
6.07 NEWCO Personnel
[ X ] shall transfer to NEWCO all of its employee currently assigned to its laboratory in accordance with the Personnel transfer Agreement annexed hereto and marked as Exhibit [ 7 ].
Section 6.10 OPERATIONS OF NEWCO
6.11 Settlement between the Parties
The parties hereto shall make mutual agreement in writing prior to perform the following business administrations or operations of NEWCO:
i) modification, amendment and deletion of Article of Incorporation;
ii) change in shareholders list or capital stock, including but not limited to, issuance of new shares, capital increase or capital reduction;
iii) obtaining a loan for purposes other than issuance of bonds or company operation;
iv) merger or acquisition for the other company or business;
v) liquidation or dissolution;
vi) disposition of all or part of the assets not less than the amount of [ ]; or
vii) other material changes in business of NEWCO.
6.12 Dividends
NEWCO shall distribute dividends to its shareholders according to the accounting of each fiscal year. Date, procedure, currency and tax in regards of such distribution shall be arranged by written agreement between the parties hereto.
Section 6.20 ACCOUNTING AND REPORT
6.21 Accounting
Accounting of NEWCO shall be consistent with the accounting standards, customs and practice generally acceptable in the Korean legal system, and shall comply with accounting standards, customs and practice internationally acceptable.
6.22 Account Book
NEWCO shall maintain and furnish account books and records. Any party hereto or authorized representative thereof (including their delegator) shall have right to inspect such account books and records during normal business hour.
6.23 Audit
Yearly financial statement of NEWCO shall be audited by the accounting firm that appointed by board of directors of NEWCO, at least [ ] times with [ ] years, at the expense of NEWCO.
6.24 Business Report
NEWCO shall provide quarterly business report to [ X ] and [ Y ].
Section 7.00 FINANCING
7.01 Working Capital
NEWCO shall obtain its necessary working capital over and above its share capital by commercial borrowing in Korea. If, as a condition to granting any such loan, the lender requires guarantee(s), the parties shall undertake to provide the guarantee(s), each is in proportion to its equity interest in NEWCO. In the event NEWCO is unable to borrow funds considered by [ X ] and [ Y ] to be necessary, the parties agree to lend(directly or indirectly) to NEWCO the necessary funds in the ratio of their shareholdings in NEWCO up to such amounts as they may from time to time mutually agree upon. Each party shall make each loan to NEWCO, unless otherwise agreed, on the same terms and conditions regarding duration, interest, repayment and otherwise, as the corresponding loan made by the other party.
7.02 Manner of Providing Additional Equity Capital
The Parties agree that, should it be determined by agreement between them in accordance with sound and prudent business practices that additional equity capital is required for NEWCO beyond that to be contributed pursuant to section 3.00 hereof, such additional equity capital will be provided by [ X ] and [ Y ], each in proportion to its equity interest in NEWCO. Such additional capital may be contributed in cash, or upon agreement of the parties, in machinery, other equipment, technology or other contributions in kind at fair market value. Upon the contribution of such capital to NEWCO the parties shall receive additional shares of common voting stock in an amount equal to their contribution.
7.03 Condition for Obligation of [ Y ]
Anything to the contrary in this section 7.00 notwithstanding, [ Y ] shall not be required to provide any guarantee, loan or additional equity capital for NEWCO unless and until it shall first obtain such governmental authorizations, licenses or other approvals as may be necessary or desirable under applicable laws or regulations in force at the time; provided, however, that [ Y ] agrees to exert its best efforts to obtain such approvals. Should [ Y ] fail to obtain such approvals and therefore fail to provide its share of any guarantee, loan or additional equity capital, the parties shall consult to determine further steps, if any, which might be taken; provided that [ X ] will be under no obligation to provide its share of guarantee, loan or additional equity capital.
Section 8.00 TRANSFERS OF SHARES
8.01 General Restriction on Transfer Etc.
Except as otherwise expressly provided for in this section 8.00, [ X ] and [ Y ] mutually covenant and agree not to sell, assign, pledge or in any other manner transfer title of rights to, or otherwise encumber, any of the shares of NEWCO held by them, or preemptive rights to new shares allotted to them, respectively, or to take any action leading to or likely to result in any of the foregoing; provided, however that this restriction shall not be construed as prohibiting a general charge or pledge created upon the whole or the major portion of the assets of [ X ] or [ Y ].
8.02 Right of First Refusal
Each party to the extent permitted by law hereby extends to the other party a right of final refusal with respect to the sale of the share of NEWCO held by it. Accordingly if at any time either party desires to transfer all or any portion of the shares of NEWCO held by it, such party shall first offer to sell said shares to the other party. Any such first offer shall be made in writing, and shall state the suggested purchase price per share and other terms and conditions. Further, any such first offer shall state that the offer being made shall remain effective until whichever of the following events shall first occur:
(i) dispatch of written notice of rejection by the party to whom such offer is made of the first offer so extended; or
(ii) a lapse of [ ninety (90) ] days after the date of receipt of such first offer.
If the terms and conditions proposed by the offer of are not agreeable to the other party, the parties shall negotiate in good faith during the [ 90 days ] after the date of receipt of such first offer in an attempt to reach agreement. Acceptance of any such first offer which has been made pursuant to this Paragraph 8.02 shall be effective upon receipt by the party who made such offer of acceptance thereof, if receipt of acceptance occurs within [ ninety(90) days ] after the date of receipt of such offer.
8.03 Failure or Refusal to Accept First Offer
If, after a first offer has been extended pursuant to Paragraph 8.02 hereof, the offeree shall refuse or fail to accept the offer for all or any portion of the shares of NEWCO so offered, the offeror shall have the right, for a period of [ one hundred and twenty (120) days ], to offer such shares or the remaining portion thereof, as the case may be, to any third party, at the same or higher purchase price per share and on the same terms and conditions as were offered to the other party hereto; provided that any transfer of shares of NEWCO to a third party pursuant to this Paragraph 8.03 shall be conditioned upon the full and unconditional assumption by such third party transferee in writing of all of the obligations of the transferor provided for in this Agreement and all other agreements(or the agreement of the transferor to continue to perform such agreements) entered into pursuant to this Agreement. If the transfer shall not sell all or any portion of the said shares within the said period of [ one hundred and twenty(120) days ] or shall wish to sell the same at a lower price and/or different terms and conditions than were offered to the other party hereto, before selling such shares or any of them, the transferor shall first offer such shares to the other party hereto in accordance with the provisions of Paragraph 8.02 hereof.
8.04 General Requirement of Governmental Approvals
Prior to effectuation of any transfer of the share of NEWCO pursuant to the foregoing provisions of this section 8.00, both or either of the parties hereto shall make application for and obtain such governmental approvals as shall be necessary in connection with any such transfer as aforesaid or acts or transactions relating thereto.
8.05 Effect of Failure to Obtain Requisite Governmental Approvals
The failure to obtain any governmental license or other approval for which application is made pursuant to Paragraph 8.04 hereof shall in no event be interpreted to give the offeror the right to offer the shares in question to a third party, or otherwise to permit the offeror to sell, assign, pledge or in any other manner transfer title in, or rights to, such shares. Further, in the event that any such governmental approval for which application may be filed as aforesaid shall not have been obtained within [ninety (90) days] subsequent to the date of filing an application thereof, if the offeror continues to desire to dispose of the shares of NEWCO in respect of which the first offer has been made and accepted, unless the parties hereto otherwise mutually agree, all appropriate procedures shall be instituted leading to the retirement by NEWCO of all such shares, including but not limited to the delivery and cancellation of any share certificate representing such shares and the consequent reduction by NEWCO of its paid-in capital. The redemption price for any such shares shall be the price at which such shares were offered to the other party hereto subject to the relevant law and government ruling.
8.06 Limitation of Obligations upon Sale of SHARES
If either party sells or otherwise disposes of all or substantially all of its shares of NEWCO in accordance with the provisions of this Agreement, the obligations and liabilities of such party under this Agreement shall terminate except as otherwise expressly provided herein.
Section 9.00 PAYMENT AND TAXES
9.01 Manner and Place of Payments
Any and all payments to be made to [ Y ] by NEWCO in consequence of or in connection with the acts or transactions comprehended or contemplated by this Agreement and the Associated Agreements, including but not limited to dividends, royalties, interest payments, reimbursable expenses and repatriated capital, shall be made, except as otherwise provided herein, in Korean Won or in United States Dollars at a bank or such other address in Korea or in [ the United States of America ], as the case may be, all as may be designated in writing by [ Y ] to NEWCO from time to time.
9.02 Withholding Taxes
Any sum required under Korean tax laws to be withheld by NEWCO for the account of [ Y ] from payments due to [ Y ] shall be withheld and shall be promptly paid by NEWCO to the appropriate tax authorities; and the parties hereto shall cause NEWCO to furnish [ Y ] official tax receipts or other appropriate evidence issued by the Korean tax authorities sufficient to enable [ Y ] to support a claim for credit, in respect of any sum so withheld, against [ United States ] income taxes.
Section 10.00 CONFIDENTIALITY OF INFORMATION
10.01 Duty of Secrecy and Confidentiality
Except to the extent that disclosures to NEWCO may be permitted by any of the ASSOCIATED AGREEMENTS, each party hereto agrees to keep strictly secret and confidential all information obtained from the other party hereto or NEWCO which is designated as confidential by said other party or NEWCO, as the case may be. To that end, all records, copies, reproductions, reprints and translations of such information shall be plainly marked to indicate the secret and confidential nature thereof and to prevent unauthorized use or reproduction thereof.
10.02 Restriction on Use
The parties hereto agree that they shall not use any confidential information obtained from the other party or from NEWCO for any purpose whatsoever except in a manner expressly provided for in any of the ASSOCIATED AGREEMENTS.
10.03 Limitations and Survival of Obligations
Such obligations, as undertaken by the parties hereto pursuant to this section 10.00, shall survive termination of this Agreement and shall remain in effect and be binding on the parties hereto for a period of [ seven (7) years ] after the termination of this Agreement except for information that becomes part of the public domain or is received from an independent source.
Section 11.00 TERM AND TERMINATION
11.01 Term
The term of this Agreement shall begin as of the EFFECTIVE DATE and shall continue in force and effect for an indefinite term thereafter, until NEWCO shall be dissolved or otherwise cease to exist as a separate entity, or until this Agreement is sooner terminated pursuant to the following provisions of this section 11.00.
11.02 Events of Termination
Should any of the following events occur, i.e.:
11.02.1 either party becomes insolvent, or files a petition in bankruptcy or for reorganization, or has such a petition filed against it which is not dismissed within [ ninety (90) days ] or
11.02.2 either party makes an assignment or like arrangement for the benefit of its creditors, or is dissolved or liquidated (except pursuant to a merger, consolidation, spin-off or like arrangement which in the reasonable opinion of the other party would not have a material adverse effect on the ability of the party to perform its obligations hereunder and under the ASSOCIATED AGREEMENTS and which would not, in the other party's reasonable opinion change the nature of the party in a manner to the substantial detriment of the other party); or
11.02.2.1 either party fails to obtain permits and licenses from the governmental authorities legally necessary to establish NEWCO within [ ] days after the execution date of this Agreement or it becomes illegal to begin or continue the business of NEWCO due to amendment of laws or regulations or change in governmental policy.
11.02.2 either party commits a breach of this Agreement or the ASSOCIATED AGREEMENTS and such breach has a material and adverse effect on the implementation or performance of this Agreement or the ASSOCIATED AGREEMENT, or on the successful operation of NEWCO, and such breach remains unremedied for [ sixty (60) days ] after written notice thereof; or
11.02.3 it becomes illegal for either party to perform its obligations, or receive payments to which it is entitled, hereunder or under the ASSOCIATED AGREEMENTS;
11.02.4 there arises a difference of opinion between the parties in respect of any major matter relating to the operation of NEWCO and such difference is not resolved by negotiations in good faith between the parties for a period of [ ninety (90) days ] after a shareholders' or directors meeting at which meeting the parties could not resolve the difference between them;
11.03 In case of 11.02.3 and 11.02.4, the party not in breath or not subject to the illegality, respectively, shall have the option, upon written notice, of purchasing the shares of the other party at fair value as determined by independent appraisal(or as agreed between the parties) subject to the relevant law and government ruling, or of proceeding to a dissolution of NEWCO. In case of 11.02.1 and 11.02.2 the parties shall, when and if permitted by law, proceed to a dissolution of NEWCO.
11.04 iIn the case of 11.02.5, the parties shall proceed to dissolution of NEWCO unless they agree to a sale of the Shares to one party or the other.
11.05 Survival of Rights, Duties and Obligations
Termination of this Agreement for any cause shall not release either party hereto from any liability which at the time of termination has already accrued to the other party hereto or which thereafter may accrue in respect of any act or omission prior to such termination, nor shall any such termination hereof affect in any way the survival of any right, duty or obligation of either party hereto which is expressly stated elsewhere in this Agreement to survive termination hereof.
Section 12.00 INTERPRETATION
12.01 Applicable Law
The validity, construction and performance of this Agreement shall be governed by and interpreted in accordance with the laws of Korea.
12.02 Governing Language
This Agreement may be executed in English and in other languages (including Korean). In the event of any difference or inconsistency among different versions of this Agreement, the English version shall prevail over in all respect.
12.03 Arbitration
Any dispute arising out of or in connection with this contract shall be finally settled by arbitration in Seoul in accordance with the Arbitration Rules of legal representative.
12.04 Effect of Headings
The headings to sections and paragraphs of this Agreement, excepting those in section 1.00 hereof, are to facilitate reference only, do not form a part of this Agreement, and shall not in any way affect the interpretation hereof.
12.05 Modification, Etc. of Agreement
This Agreement embodies the entire agreement of the parties with respect to the subject matter hereof and supersedes and cancels any and all prior understandings or agreements, verbal or otherwise, in relation hereto, which may exist between the parties. No oral explanation or oral information by either of the parties hereto shall alter the meaning or interpretation of this Agreement. No amendment or change hereof or addition hereto shall be effective or binding on either of the parties hereto unless reduced to writing and executed by the respective duly authorized representatives of each of the parties hereto.
12.06 Non-Waiver
The waiver, expressed or implied, by either of the parties hereto of any right hereunder or against any failure to perform or breach hereof by the other party hereto shall not constitute or be deemed a waiver of any other right hereunder or against any other failure to perform or breach hereof by such other party, whether of a similar or dissimilar nature thereto.
Section 13.00 Representations and Warranties
The parties hereto represent and warrant the following, which are true and accurate, and agrees that such representations and warranties consist material covenants of this Agreement. Either party shall reimburse or indemnify any loss, damage and expense incurred from false or inaccurate representations and warranties. Either party shall notify the other party in writing and shall take appropriate measures according to the other party's response, if there is any causes that may affect such representations and warranties.
13.01 Authorization
This Agreement has been legally executed by the parties hereto and lawfully binds the parties to valid and enforceable liabilities according to the terms of this Agreement. Either party has valid and lawful powers and right to make execution of this Agreement and perform all liabilities under this Agreement, and such execution and performance is legally consented pursuant to each party's necessary internal procedures.
13.02 Laws, Articles of Incorporation, and Approval of Governmental Authorities
Execution and performance of this Agreement shall not : (i) violate articles of the incorporation of each party, (ii) violate any applicable laws, regulations, and governmental approval, (iii) constitute any breach or nonperformance of any material agreement to which the party is a party or by which it is materially bound, or cause any acceleration to its obligation.
13.03 Causes Affecting the Other Party
Either party shall not be under bankruptcy, revitalization, insolvency, moratorium or other status that may adversely affect right of the other party and not be under status which may cause such condition.
Section 14.00 MISCELLANEOUS
14.01 Assignment
This Agreement, and all rights and obligations hereunder, are personal as to the parties hereto and shall not be assigned by either of the parties hereto to any third party without the prior written consent thereto by the other party hereto; provided, however, that either party hereto may assign this Agreement, without such prior consent of the other party hereto, in connection with a transfer of all or substantially all of its shares of NEWCO in accordance with section 8.00 hereof, or with an assignment to any corporation acquiring all or substantially all of its assets to or any surviving or newly formed corporation in connection with a merger or amalgamation involving such assigning party, subject to a prior undertaking in writing by the assignee assuming all of the obligations and duties of the assigning party under this Agreement and further subject to the issuance of any governmental authorizations, licenses or rulings then required under applicable law in connection with such assignment.
14.02 Force Majeure
A party hereto shall not be liable to the other party for any loss, injury, delay, damages or other casualty suffered or incurred by the latter due to strikes, riots, storms, fires, explosions, acts of God, war, action of any government or any other cause beyond the reasonable control of the party, and any failure or delay by either party hereto in performance of any of its obligations under this Agreement due to one or more of the foregoing causes shall not be considered a breach of this Agreement.
14.03 Severability
In the event any term or provision of this Agreement shall for any reason be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other terms or provisions hereof; in such event, this Agreement shall be interpreted and construed as if such term or provision, to the extent, same shall have been held invalid, illegal or unenforceable, had never been contained herein.
14.04 Notices
Except as otherwise provided in this Agreement, all notices required or permitted to be given hereunder shall be in writing and shall be valid and sufficient if dispatched by registered airmail, delivered personally, or sent by telex or cable(confirmed by letter sent the same day).
IN WITNESS WHEREOF, and having been approved by the Board of Directors of each of the parties, the parties hereto have caused this Agreement to be executed by their duly authorized representatives on the day and year first set forth above.
Exhibits :1. The Articles of Incorporation
2. The Regulations of the Board of Directors
3. License Agreement between [ Y ] and NEWCO
4. Management Assistance Agreement between [ X ] and NEWCO
5. Distributorship Agreement between [ X ] and NEWCO
6. Plant and Equipment Lease Agreement between [ X ] and NEWCO
7. Personnel Transfer Agreement between [ X ] and NEWCO
8. Technical Assistance and Technology Transfer Agreement between [ Y ] and NEWCO
[ X, INC. ]
BY :
[ Y, CO., LTD. ]
BY :
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