1. presented by Mr. Picharn Sukparangsee “Structuring and Negotiating Joint Ventures Contracts – Procedures and Key Legal Risks” “Structuring and Negotiating Joint Ventures Contracts – Procedures and Key Legal Risks” the Conference on the Conference on “2nd Negotiating, Drafting & Managing Risks on COMMERCIAL CONTRACTS” arranged by : arranged by : Ideal Forum Co., Ltd. From : at From : 17 to 18 July 2014 at Pullman G. Hotel, Silom, Bangkok,

2. STRUCTURING AND NEGOTIATING JOINT VENTURES CONTRACTS – PROCEDURES AND KEY LEGAL RISKS I.Understanding procedures and negotiating process relating to forming a joint venture II.Key agreements and documents involved in negotiation III.Drafting rights and obligations as well as contributions of the parties IV.Analyzing key legal risks and dispute issues in forming a joint venture V.Pitfalls in drafting and designing joint ventures contracts. 2

3. I.UNDERSTANDING PROCEDURES AND NEGOTIATING PROCESS RELATING TO FORMING A JOINT VENTURE Joint venture as opposed to consortium in terms and work, profits and loss and members as individual and legal entity Unincorporated joint venture or incorporated joint venture Purpose of joint venture such as manufacture and distribution of products or completion of a construction project Details of products to projects to be carried out Territories of distribution of the products Planning for direct or indirect shareholding in a joint venture Arrangement for composition of the board of directors Division of positions of the management of a joint venture company (CEO, CFO, COO, plant manager, accounting manager, financing manager) Matters to be managed by each of joint venture partners Legal and tax issues to be taken into consideration 3

4. II.Key agreements and documents involved in negotiation joint venture agreement/ shareholders agreement supply agreement engineering agreement technical assistant agreement licensing agreement service agreement memorandum of association articles of association list of shareholders 4

5. III.DRAFTING RIGHTS AND OBLIGATIONS AS WELL AS CONTRIBUTIONS OF THE PARTIES definitions and interpretations establishment and purpose of the JV company corporate and individual shareholding authorised and issued share capital notice of a general meeting, quorum of a general meeting and resolution of a general meeting matters to be approved by a general meeting -simple majority or absolute majority voting rights or non-voting rights board of directors, composition of the board, change of any member of the board, notice of a board meeting, quorum of a board meeting, resolution of a board meeting 5

6. matters to be approved by the board number of directors and authorized directors level of authorization- International, regional and local management – CEO,CFO, COO, MD and President business plan to be approved by the board of directors meeting financing - equity financing, debt financing and quasi- financing guarantee and letter of comfort bank accounts establishment and expansion of facilities representations and warranties – company duly organised and in good standing, due execution and delivery of the agreement, representations and warranties true, correct and accurate, not pending or threatened litigation III.DRAFTING RIGHTS AND OBLIGATIONS AS WELL AS CONTRIBUTIONS OF THE PARTIES 6

7. undertakings - change of shareholding structure, sale, transfer of disposal of assets, sale and lease back, mortgage, pledge, lien, lease and other encumbrances of assets, approval of business plan, limit of capital expenditures, entering into agreements, capital increase or reduction mutual cooperation supply of raw materials and sale of finished products exclusive export of products and pricing formula know-how and technology non-competition appraisal mechanism book of accounts, accounting, accounting year, accounting standards, annual and quarterly financial - audit - internal audit and external audit III.DRAFTING RIGHTS AND OBLIGATIONS AS WELL AS CONTRIBUTIONS OF THE PARTIES 7

8. dividend- dividend pay-out policy, annual and interim dividends confidential information right of inspection right of first refusal tag along provisions drag along provisions initial public offering listing of shares on stock exchange notices termination governing law jurisdiction III.DRAFTING RIGHTS AND OBLIGATIONS AS WELL AS CONTRIBUTIONS OF THE PARTIES 8

9. IV.ANALYZING KEY LEGAL RISKS AND DISPUTE ISSUES IN FORMING A JOINT VENTURE affiliated companies- holding company, subsidiary, related companies conditions precedent to be fulfilled differences between representations, warranties, undertakings and covenants Are closing provisions the same as the completion provisions ? matters to be approved by the management matters to be approved by the board of directors matters to be approved by a general meeting of shareholders majority – absolute majority and simple majority legal and beneficial ownership inconsistency between provisions of joint venture agreement and provisions of the articles of association of a joint venture company 9

10. single or series and limit of capital expenditure non-competition between joint venture parties and their affiliated companies commercial loan, syndicated loan, issuance and offer of new securities, call option, put option, securitization, derivatives property fund, infrastructure fund, Real Estate Investment Trust or REIT Is floating charge provided under law of Thailand ? What does negative pledge affect granting of security ? addition financing – accumulated profits, income from business operation, borrowing from joint venture partners, borrowing from financial institution, increase in share capital, initial public offering,issuance and offering of new securities, project finance IV.ANALYZING KEY LEGAL RISKS AND DISPUTE ISSUES IN FORMING A JOINT VENTURE 10

11. security arrangement- mortgage of land, buildings and machinery and equipment, pledge of shares, personal guarantee, outright assignment or conditional assignment conversion of a private company to a public company or a listed company free transfer of shares unless prohibited and restricted by law JV company as a separate legal entity shall apply for a tax ID card and VAT registration distribution of profits by a joint venture Company to its members is exempted from tax. taxes implication on dividend, interest, capital gains, sale of goods, service fee and royalties confidential information and protection of intellectual property conflict of interest of shareholders and directors IV.ANALYZING KEY LEGAL RISKS AND DISPUTE ISSUES IN FORMING A JOINT VENTURE 11

12. right of first refusal, tag along and tag along private company becoming listed company assignment and transfer of rights and obligations lease of real property and assignment selection of legal counsels or accountants human resources, no solicitation of executives and employees of the joint venture company, and additional employment of executives and employees arbitration or litigation governing law, choice of law and conflicts of law IV.ANALYZING KEY LEGAL RISKS AND DISPUTE ISSUES IN FORMING A JOINT VENTURE 12

13. IV.PITFALLS IN DRAFTING AND DESIGNING JOINT VENTURES CONTRACTS be aware of due diligence before preparation of joint venture agreement failure to comply with all laws and regulations including foreign business law, Revenue Code, Customs Act improper cross shareholding structure different interpretation on percentage of shareholding in an affiliate company and level of affiliated companies beneficial ownership not enacted in domestic law memorandum of understanding, term sheet, head of agreement, agreement issuance of a letter of comfort or a letter of guarantee pricing and amount of shares pricing and amount of goods payment for shares and delivery of shares 13

14. restriction on transfer of shares and exceptions financial statements not updated liabilities and hidden liabilities loopholes in share transfers at different levels (at the first company, at the second company) put and call options addition financing (equity or debt financing) financial obligations and security after a majority shareholder becoming a minority shareholder ignore tax issues on agreements such as technical assistance agreement and service agreement licenses expired no stamp duty affixing on an instrument IV.PITFALLS IN DRAFTING AND DESIGNING JOINT VENTURES CONTRACTS 14

15. default of payments potential default claims by sellers and contractors potential problems in real estate no other joint venture on the same products in the territories with other non- joint venture partners non-competition at the level of the domestic company as separated from any foreign operating companies protection of trade mark, patent, copyright, know-how, trade secrets and other intellectual property keep confidential information right of inspection of documents and information of the joint venture company no clear dispute resolution settlement appraisal of assets at the time of a deadlock fair market value, replacement value and liquidation value IV.PITFALLS IN DRAFTING AND DESIGNING JOINT VENTURES CONTRACTS 15

16. validity, binding and enforcement of agreement control by a majority shareholders at expense of a minority shareholder management of a joint venture company by a dominating party assignment and exceptions costs and expenses to be proportionately borne by each of joint venture partners gross-up provisions in an agreement between two companies in the same jurisdiction encumber on leased land and problem on assignment termination of agreement and surviving obligations IV.PITFALLS IN DRAFTING AND DESIGNING JOINT VENTURES CONTRACTS 16

17. rehabilitation and bankruptcy of a parent company of a joint venture partner initial, subsequent waivers and non-waiver mutual settlement, a deadlock, right of first refusal, non-exclusive jurisdiction, foreign arbitration, bankruptcy law, set-off and good moral and public order no partnership but a separate joint venture company and no joint liability of joint venture shareholders foreign judgment with no automatic enforcement in a domestic country IV.PITFALLS IN DRAFTING AND DESIGNING JOINT VENTURES CONTRACTS 17

18. Mr. Picharn Sukparangsee Mr. Picharn Sukparangsee SIAM CITY LAW OFFICES LIMITED 20 th Floor, Rajanakarn Building, 183 South Sathorn Road, Bangkok 10120, Thailand Tel: (662) 676-6667 – 8 Fax: (662) 676-6188-9 E-mail : picharn@siamcitylaw.compicharn@siamcitylaw.com Thank you for your kind attention. 18