What is a Joint Venture Agreement and why is it important?

A Joint Venture Agreement is a legal document that outlines the terms and conditions between two or more parties collaborating on a specific project or business activity. It is important because it clarifies each party's rights, responsibilities, and profit-sharing arrangements, reducing the risk of misunderstandings and disputes.

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AGREEMENT OF INCREASE IN JOINT VENTURE INVESTMENT In order to ensure that the intention of Chapter 3 Article 9 of the Joint venture contract is able to be easily achieved, and to allow the production capacity to be expanded to 50,000 tonnes per annum, both parties agree, one year after establishment of the joint venture, to increase total investment of the joint venture to RMB 95 million. In accordance with his the following is agreed to. Article 1. Investment Amount and Percentage of Investment Party A is to contribute all required production equipment as their investment, with the exclusion of the equipment already contributed, worth RMB 22.9 million. Party B shall contribute foreign exchange equivalent to RMB 34.362 million. Article 2. Increase in Investment Method and Time. 1) Party A undertakes according to their responsibility under articles 9 and 18 of the contract, at the same time as Party A completes clause 2 below, to provide to the joint venture all required equipment in one installment as their increase kin investment. 2) Party B shall, within one year after issuance of the joint venture's business licence, to provide their further investment. Article 3. Supplementary 1) Both parties undertake to, within 30 days after fulfilling obligations under the above two articles, to arrange for Chinese registered accountant to issues a certificate certifying the contributions and to provide such certificate to Wuhan Foreign Investment Office and Wuhan Bureau of Commerce to complete formalities. 2) If either party can not make their contributions by 31 December 1997, then the delaying party shall be subject to the following penalty. Starting from 1 January 1998, for the first quarter of 1998 0.5% of the uncontriubted capital per quarter, for the second quarter of 1998 2.5% of the uncontriubted capital per quarter, and thereafter 5% of the uncontriubted capital per quarter. 3) This penalty shall be made by the delaying party directly to the other party, and unrelated to the joint venture. Article 4. There shall be six copies of this agreement, to be retained by each party as well as given to the relevant government department. Article 5. This agreement is an integral part of the joint venture contract and has the same legal effect. Party A Party B Wuhan Dong Feng Paper Mill Company Orient Financial Services Ltd Representative : Li Yi Chun Representative Nils A Ollquist Position: Mill Manger Position: Managing Director Nationality : Chinese Nationality : Australian

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