JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT ("Agreement"), made and entered into as of this
23rd of January, 2018, by and between:
Blissey
Berries
manufacturing
Ice
Cream,
corporation,
Inc. (Blissey
with
offices
at
Berries),
Korean-based
344-3,
Donong-dong,
Namyangju, Gyeonggi-do, Seoul, South Korea; and
-and-
Perfect Distribution, Inc. (Perfect), a Philippine distribution company, with
offices at 5th Floor Bench Tower, 5th Street, Taguig, 1634 Metro Manila
Each of Blissey Berries and Perfect is referred to hereinafter as a “Party”
and collectively referred as the “Parties”.
RECITALS
WHEREAS, Blissey Berries is engaged in the business of manufacturing
and supplying ice cream products across Asia.
WHEREAS, Perfect is engaged in the business of domestic logistics,
operation, and distribution of fast-moving consumer goods.
WHEREAS, the parties desire to establish between them a joint venture
company (the Company) in order to collaborate in the manufacturing and
exportation of Blissey Berries ice cream products to the Philippines and to be
distributed to the market chains in the country.
NOW, THEREFORE, the PARTIES for and in consideration of the foregoing
covenants, the parties agreed as follows:
ARTICLE I GENERAL DEFINITIONS
The following comprise the general definitions of terms utilized in this Agreement:
1.01. Applicable Period means the 12-month period ending on the last day of the last full
calendar month preceding the date of termination of this Agreement.
1.02. Books means the records and books of account of the Company (a) in which
complete entries have been made in accordance with the Philippine Accounting
Standards (PAS) and Philippine Financial Reporting Standards (PFRS), (b) for
which all transactions required to be reflected by PAS and PFRS have been
reflected and (c) for which accurate and complete records of the material
properties and assets of the Joint Venture has been kept in accordance with PAS
and PFRS.
1.03. Business Day means any day other than a Saturday, Sunday or other day on which
commercial banks in the Philippines or South Korea are required or authorized by
Law or executive order to be closed.
1.04. Capital contribution means contribution actually made by the Parties such as
properties, equipment, and cash contributions in the form of equity and/or debt.
1.05. CEO of the Company means the Chief Executive Officer of the Company, who
shall be the most senior executive manager of the Company.
1.06. Competitor means:
a.
With respect to Blissey Berries: Magnolia, Selecta, DFA Milk, Cache Valley,
Baskin-Robbins, Nestle, Blue Bell Creameries, Breyers, and their respective
affiliates; and
b.
With respect to Perfect, Top Creamery, Jijan Business Circle Internationa,
GSL International, and VRB Food Products.
1.07. Dispute means any dispute, controversy or claim arising out of, or relating to, this
Agreement or the performance, interpretation, breach, termination or validity
hereof.
1.08.
Distributable Profit means any profits available for distribution in respect of a given
Financial Year (a) after making up all accumulated losses of previous years of, and
taking into account any profits required to be made by, the Company, and
(b) where the aggregate net income of the Company has been greater than zero
for such Financial Year.
(The loophole arises from the phrase "after making up all accumulated losses of previous years."
This stipulation allows for the possibility of manipulating the financial statements by intentionally inflating the
accumulated losses from previous years. By doing so, a company could reduce or eliminate the distributable profit for a
given financial year, even if the current year's net income is positive.
Here's an example to illustrate the potential loophole:
Let's say a company wants to minimize the distributable profit for a particular financial year, even though it has a positive
net income. The company can intentionally overstate the accumulated losses from previous years by manipulating the
financial statements or using accounting techniques.
By increasing the accumulated losses, the company can create the illusion of a significant deficit, thereby reducing or
eliminating the distributable profit for the current financial year. This manipulation allows the company to retain profits
that would have otherwise been distributed to shareholders or other stakeholders.
It's important to note that intentionally manipulating financial statements is unethical and may be illegal in many
jurisdictions. It can lead to severe consequences, such as legal actions, fines, reputational damage, and loss of trust from
investors and other stakeholders.
To ensure the contract is robust and addresses this potential loophole, it may be necessary to include additional clauses
or provisions that prevent intentional manipulation of accumulated losses or require external audits to validate the
accuracy of the financial statements.
1.09. Financial Year means the financial year of the Company being January 1 to
December 31.
1.10. Laws means all applicable laws, regulations, rules and orders of any governmental
authority, securities exchange or other self-regulatory body, including any
ordinance, statute or other legislative measure and any regulation, rule, treaty,
order, decree or judgment.
1.11. Products mean the Blissey Berries products to be sold and distributed by Perfect
across the Philippine region.
All products as referred to in “ANNEX 1: Products" incorporated herein by
reference.
1.12. Profits mean excess cash after payment of the direct expenses of the Joint
Venture.
1.13. Other Terms and Conditions means all terms, conditions, limitations, and
modifications not covered hereof.
ARTICLE II FORMATION
2.01. The joint venture formed by this Agreement (The Company) will conduct its
business under the name “Inside Scoop Venture”, and will have its registered
address at 5th Floor W Fifth Building, 5th Avenue, Taguig, Metro Manila. The
Company shall be considered a joint venture between the Parties in all respects,
and in no event shall this Agreement be construed to create a partnership or any
other fiduciary relationship between the Parties.
2.02. The liability of each Party with respect to the Company shall be limited to its
contribution to the share capital. Neither Party shall have any liability to any third
party in respect of the debts or obligations of the Company.
2.03. Each Party shall comply with the provisions of this Agreement in relation to its
investment in the Company and in transacting business with the Company and
shall exercise its rights and powers in accordance herewith and so as to give effect
to this Agreement.
2.04. The Parties shall ensure that the Company will conduct business solely and strictly
in accordance with this Agreement.
ARTICLE III GENERAL PROVISIONS
3.01. The business of the Company shall be to enter the ice cream industry and
distribute the products in the different market chains in the Philippines. As
opportunities are identified and contracts entered into, they will be added as an
addendum to this Joint Venture Agreement and will be governed in accordance
with this document.
3.02.
The Company shall commence on the date first above written and shall continue
in existence for a period of 10 years and 6 months until terminated, liquidated, or
dissolved by law or as hereinafter provided. It is understood that this Company is
renewable by mutual agreement of the parties. Based on the parties’ initial
proposals, it is contemplated that the joint venture project will continue as long as
they are viable and ongoing service is required by the company and end user or
agency of the Philippine government. (While the contract provides some flexibility, there
may still be potential loopholes or issues that could arise.

Lack of defined criteria for renewal: The contract does not explicitly outline the criteria
or process for renewing the company. It simply states that renewal is based on mutual
agreement. This ambiguity could lead to disagreements or disputes between the parties
when the time for renewal comes.  Include specific criteria in the contract that must be met
for the company to be renewed. For example, you can outline performance metrics, financial targets,
or specific milestones that need to be achieved for the renewal to be considered.

Lack of clarity on termination process: The contract does not specify the procedures for
terminating the company. It mentions termination by law or as provided in the contract, but
the specific circumstances or conditions for termination are not clearly defined. This lack
of clarity could result in disputes if one party wishes to terminate the company but the other
party disagrees.  Clearly outline termination provisions: Include explicit provisions in the
contract that detail the circumstances under which the company can be terminated. Specify the
conditions, events, or breaches that would give rise to termination rights for either party.

Subjectivity of "viability" and "ongoing service": The contract mentions that the joint
venture project will continue as long as it remains viable and ongoing service is required.
However, these terms are subjective and open to interpretation. Disagreements may arise
regarding what constitutes viability or ongoing service, potentially leading to disputes over
the continuation of the project.  Clearly define terms such as "viability" and "ongoing service"
within the contract to minimize potential disputes. You can provide specific benchmarks, metrics,
or objective criteria that will be used to evaluate the viability or ongoing service requirements.
ARTICLE IV INITIAL CAPITAL AND CAPITAL CONTRIBUTIONS
4.01. The Parties hereto shall contribute initial capital to the Company in the form of cash
or extended loans to the Company in accordance with the loan agreements
entered into by each Party and the Company:
Blissey Berries’ Contribution:
Cash
PHP135,000,000.00
Perfect’s Contribution:
Cash
PHP165,500,000.00
All contributions to the Company shall be made by the Parties in accordance with
their respective percentages in the Company at such time and pursuant to the
same terms and conditions. Except for the Initial Contributions, any required
contributions to the Company shall be subject to the unanimous approval of the
Management Team. For the avoidance of doubt, the Parties agree that in the event
the Team approves unanimously the additional contribution to the capital of the
Company by the Parties, such additional contributions shall be made in the form
of cash. On the establishment date of the Company, the Parties shall subscribe
their respect shares and contribute their respective capital. Likewise, they shall
appoint the initial directors of the Company.
(Here's how the loophole could be exploited:

Delaying or blocking additional contributions: If one party in the contract does not wish to
contribute any additional funds to the company, they could potentially use their influence within the
Management Team to delay or block the unanimous approval of any additional contributions. This
could hinder the growth or capitalization of the company and put the other party at a disadvantage.

Unequal distribution of capital: The clause states that all contributions should be made in
accordance with the parties' respective percentages in the company. However, if one party refuses
to contribute or delays their contributions, it could lead to an unequal distribution of capital among
the parties. This could result in an unfair imbalance of control and decision-making power within
the company.
To address this potential loophole and mitigate any conflicts or issues arising from it, it is advisable to
consider the following:

Define a specific timeframe: Set a deadline or specific timeframe within which additional
contributions must be made. This would prevent undue delays or blocking of contributions.

Alternative dispute resolution mechanism: Include a provision for resolving disputes related to
additional contributions, such as arbitration or mediation. This would help resolve conflicts between
the parties if they cannot reach a unanimous decision.

Voting rights adjustment: Consider adjusting the voting rights or decision-making power within
the Management Team to reflect the parties' capital contributions. This would help ensure a fair
distribution of control and decision-making authority.

Consequences for non-compliance: Clearly state the consequences or penalties for noncompliance with the contribution requirements. This could serve as a deterrent against intentionally
delaying or blocking contributions.
4.02. A bank account at Hongkong and Shanghai Banking Corporation Ltd. (HSBC) shall
be opened by Perfect on behalf of the Company.
ARTICLE V TRANSFER OF INTEREST
5.01. No Party shall transfer any right, title or interest therein or thereto to any third-party
transferee or otherwise create or permit or suffer to be created or exist, whether by
operation of law or otherwise, any encumbrance over any shares held by it or any
right, title or interest therein or thereto for the benefit of any third party without the
prior written consent of the other Party. Any purported transfer or encumbrance in
violation of this Article shall be null and void, and the Company and the Parties shall
not register or recognize any such transfer or encumbrance.
ARTICLE VI OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES
6.01. The Parties will have joint responsibility for financial decisions and expenditures of
the Company. The Company will be responsible for the on-site operations of the
business and will disburse funds according to a budget pre-approved by the
Parties. Any expenditure of funds not previously approved by the parties will be
submitted for approval at the time of the request.
6.02. The following shall be the obligations and responsibilities of Perfect Distribution,
Inc.:
a.
It shall make its contributions to the the Company in the manner required
by this Agreement;
b.
It shall use its best efforts to promote the products of the Company and
maximize the sale of the products in the Philippines;
c.
It shall provide reasonable assistance to Company in promotional activities
with respect to the Products (as provided in Annex 1);
d.
Use reasonable efforts to leverage the governmental relations expertise in
the Philippines to facilitate the Company’s access to the Philippine market; and
e.
Assist the Company in other matters as reasonably requested by the Team.
6.03. The following shall be the obligation and responsibilities of Blissey Berries, Inc:
a.
It shall make contributions to the Company in the form and manner required
by this Agreement;
b.
It shall provide marketing and technical information concerning the
products, including samples of brochures, instructional materials, advertising
literature, and other product data in the English language;
c.
It shall provide the technical information concerning the packaging of the
product to be translated in the English Language. It shall also be responsible for
the costs of translation and the printing of the translated materials; and
d.
Assis the Company in other matters as reasonably requested by the Team.
ARTICLE VII ALLOCATIONS
7.01. The Company shall distribute to the Parties 50% of the Distributable Profits in
respect of each Financial Year, and unless a different percentage is agreed to by
the Board on a unanimous basis.
7.02. Commencing on the date hereof and ending on the termination of the business of
the Company, all profits, losses and other allocations to the Joint Venture shall be
allocated as follows: 3% Royalties based on Gross Sales shall be given to Blissey
Berries. After which, the profit after taxes shall be divided 45% to Blissey Berries
and 55% to Perfect.
7.03. The Management Team shall make such plans as it deems desirable for the
investment of profits remaining after paying income tax and making allocations to
any relevant reserve funds in accordance with any applicable Laws.
ARTICLE VIII CONFIDENTIAL INFORMATION
8.01. The Recipient of any confidential information while this Agreement is in effect shall:
a.
keep the confidential information confidential;
b.
keep the confidential information secure so as to prevent unauthorized
access by any third party, and not make any copies or reproduce the confidential
information except for the purpose of disclosing such confidential information;
c.
not disclose the confidential information to any person other than with the
prior written consent of the Company or the Party that disclosed such confidential
information, as the case may be; and
d.
not use the confidential information for any purpose other than the
performance of its obligations under this Agreement.
8.02. The Recipient may disclose the confidential information to its directors, officers,
employees, agents, consultants and advisors (Recipients) who are actually
engaged in, and need to know, the confidential information for the purposes
expressly set forth in this Agreement, who have been informed of the confidential
nature of the confidential information, who have been advised that such
information is to be kept confidential and who have entered into enforceable written
confidentiality agreements with the Recipient agreeing that the confidential
information shall not be used for any other purpose. The Recipient agrees that it
shall cause its Representatives to observe all terms of this Article of and be
responsible for any breach thereof.
8.03. The Parties agree that confidential information shall not include information that is
already known to the Recipient without restriction on use or disclosure prior to
receipt of such information from the Disclosing Party; or is received by the
Recipient from a third party who is not under any obligation to maintain the
confidentiality of such information. The Recipient shall have the obligation of
demonstrating that such an exception to the definition of confidential information
exists.
8.04. The Recipient acknowledges and agrees that the Disclosing Party would be
irreparably damaged by any unauthorized disclosure or use of any confidential
information in violation of this Article. Without prejudice to the rights and remedies
otherwise available to the Disclosing Party, the Recipient, therefore, agrees that
the Disclosing Party shall be entitled to equitable relief, including an injunction or
specific performance, in the event of any breach or threatened breach of the
provisions of this Article by the Recipient or its Representatives. Such remedies
shall not be deemed to be exclusive remedies but shall be in addition to all other
remedies available at law or equity to the Disclosing Party.
8.05. In the event that the Recipient or any of its Representatives become legally
compelled, either by deposition, interrogatory, request for documents, subpoena,
civil investigation, demand, order or other legal process, to disclose any of the
contents of the confidential information, the Recipient shall, to the extent that it
does not violate any applicable Law, (i) promptly notify the Disclosing Party prior
to any such disclosure to the extent practicable and (ii) cooperate with the
Disclosing Party in any attempts it may make to obtain a protective order or other
appropriate assurance that confidential treatment shall be afforded the confidential
information.
8.06. The confidential information of the disclosing Party shall remain the property of the
Disclosing Party and the disclosure of any confidential information by the
disclosing Party shall not confer on the Recipient any right over such confidential
information unless otherwise specified hereunder.
8.07. Unless otherwise specified hereunder, the Disclosing Party shall have no
responsibility or liability resulting from the Recipient’s receipt or use of any
Confidential Information, and makes no representation or warranty, express or
implied, in respect of any confidential information or the accuracy, completeness
or reasonableness thereof or that such confidential information will remain
unchanged.
ARTICLE IX MANAGEMENT
9.01. The following individuals in the following positions will comprise the Joint Venture’s
management (The Management Team). The Management Team will be structured
such that the management will be able to carry out the business effectively.
Senior Management – Blissey Berries
Gabornes, Princess Michelle
Montallana, Emily
Senior Management – Perfect Distribution
Abaigar, Zynie Shine
Cebu, Vanessa, Chief Financial Officer
Diasanta, Jirahmae
Golong, Krissa Joy
CEO
Devora, Nicx
9.02. The Management Team shall be the highest authority of the Company and shall
direct the overall supervision and control of the business of the Company. The
Management Team shall be required to make all major decisions of the Company
as well as all decisions outside the day-to-day business of the Company, provided
that it shall delegate certain of its authority over day-to-day operational and
managerial matters to the CEO. The resolutions of the Team shall be adopted in
accordance with this Agreement.
9.03. The management organization of the Company shall consist of the following senior
managers: one CEO, one Chief Financial Officer (CFO) and such other officers
that the Team may designate from time to time as being necessary for the
operation of the Company.
9.04. The initial CEO shall be nominated by the Company and appointed by unanimous
approval of the Team. All subsequent CEOs shall be nominated and appointed by
unanimous approval of the Team, as well. The CFO shall be nominated and
appointed by the unanimous approval of the Team. The remaining Senior
Managers shall be appointed by the CEO.
9.05. The Team shall have the right to dismiss, remove and replace the CEO for any
reason, by unanimous approval of the Management Team. The CEO shall have
the right to dismiss any other Senior Manager for any reason at any time. If the
CEO or any of the other Senior Managers resigns, is dismissed or dies or becomes
incapacitated, his successor shall be nominated and appointed by the
Management Team.
9.06. Subject to the direction and control of the Team, the CEO shall work full time and
shall be responsible for the Company’s day-to-day operations. The CEO shall
exercise the rights and responsibilities conferred upon him or her by this
Agreement and shall implement the resolutions of the Team. Without limiting the
foregoing, the CEO shall:
a.
prepare and submit to the Management Team for approval the Business
Plans and, at least 30 days prior to the beginning of each Financial Year, the
Annual Plan for the Group;
b.
prepare and submit to the Management Team financial statements
regarding the Company’s operations; and
c.
prepare a list of information which can be disclosed by the Parties to the
public, for approval by the Parties within 30 days after the last day of each
Financial Quarter.
9.07. The Management Team shall make all decisions with respect to the general
compensation guidelines of Managers, and the CEO shall determine the amount
of such compensation for management personnel within the set guidelines. The
Company shall be responsible for all costs relating to the compensation of
management personnel.
9.08. All the Senior Managers (other than the CEO) shall be under the leadership of,
and report to, the CEO. The CEO shall determine the rights and responsibilities of
each Senior Manager in addition to those set forth in this Agreement or the Charter
Documents.
9.09. The CFO shall assist the CEO in managing the financial and accounting work of
the Company and shall examine and sign the financial plans, credit plans,
accounting reports, and major expenditures of the Company. The CFO shall keep
true and accurate records and accounts and prepare quarterly financial reports for
the Management Team and other periodic financial statements as required, the
CEO, any Party or applicable Laws. Such reports and statements shall be
prepared in accordance with the PAS and PFRS, as well as the applicable laws
with the respective forms and guidelines required by the Parties in relation to the
reports and statements
9.10. The CFO shall also be in charge of examining and checking the financial receipts
and payments, accounts and other information of the Group to verify that
formalities are complied with, records are accurate, revenue and expenditures are
balanced and reasonable, the financial and accounting system of the Company is
adhered to, and shall report on such matters to the CEO and the Management
Team.
ARTICLE X FINANCIAL ACCOUNTING AND AUDITING SYSTEM
10.01. The Company shall follow the following in the Financial System and Reporting:
a.
The Financial and Accounting System of the Company shall be formulated
and adopted by the Management Team based on the recommendations of the
CEO, which shall be prepared based on suggestions of the CFO, and shall be in
accordance with any applicable Philippine laws, the particular circumstances of the
Company and those methods and principles that are consistent with PAS and
PFRS, the Korean IFRS and GAAP in relation to the Company if required for the
statutory filings in South Korea, and the operating and financial procedures and
requirements of Blissey Berries and Perfect in relation to the preparation of the
financial reports and statements required by such Party.
b.
The Financial and Accounting System shall be implemented by the CFO
after being approved by the Management Team.
c.
The Company shall use PHP as its accounting unit. Cash, bank deposits,
as well as outstanding claims and debts, gains, expenses and so forth in other
currencies, shall be recorded in the actual currency in which they are acquired,
incurred, received or disbursed, and converted into PHP for Company accounting
purposes.
d.
The financial statements prepared for the Company consist of the balance
sheet, the statement of operation, and the statement of cash flow. All financial
statements shall be prepared in English, shall be true and complete and shall fairly
represent the financial position of the Company as of the date of each such
statement and the results of operations and cash flow for the financial period
covered thereby, subject in the case of unaudited statements to normal year-end
audit adjustments.
e.
The Company shall submit quarterly financial statements to the
Management Team within 30 days after the last day of each Financial Quarter.
Within 45 days after the last day of the second Financial Quarter, the Auditor will
perform an interim review and submit the results thereof to the Management Team.
The Company shall submit annual financial statements, including the Auditor’s
report of its audit of such statements, to the Management Team within 45 days
after the last day of each Financial Year. The Parties agree that the Company shall
use reasonable efforts to submit monthly financial statements to the Management
Team within 30 days after the last day of each monthly accounting period,
commencing after such date as the Company determines that it has staff and
resources such that it is reasonably practicable for it to do so.
f.
Within 45 days after the last day of each Financial Year, the Company shall
deliver to the Parties such financial reports and information regarding the activities
and operations of the company.
10.03. The independent auditor of the Company (Auditor) shall be selected by the
Management Team and shall be one of the four major international accounting
firms who is capable of performing accounting work meeting both domestic
accounting standards and international standards and the procedures and
requirements of the Parties. The initial Auditor shall be Ernst & Young Philippines.
If the Management Team determines that the Auditor is unable to meet or perform
its duties according to such standards, procedures or requirements, it may replace
such Auditor or retain another auditor, at the Company’s expense, to supplement
or adjust the work of the Auditor or to perform specific accounting or auditing tasks.
10.04. The Company shall pay taxes in accordance with National Internal Revenue Code
(NIRC). The Parties agree to negotiate in good faith any cooperative arrangements
that would result in the maximization of the tax benefits available to each of the
Parties and the Company, and that any such cooperative arrangement may be
varied based on good faith negotiations between the Parties if such variation is
required to so maximize such tax benefits; provided that, any such cooperative
arrangement shall not be varied if it may result in any taxation or other financial
consequence that is disadvantageous to either Perfect, Blissey Berries, or the
Company; provided further that, the Company shall seek to minimize the overall
tax burden of the Company irrespective of any deduction permitted against
royalties paid to Blissey Berries.
ARTICLE XI INDEMNIFICATION OF THE JOINT VENTURERS
11.01. The parties to this Agreement shall have no liability to the other for any loss
suffered which arises out of any action or inaction if, in good faith, it is determined
that such course of conduct was in the best interests of the Company and such
course of conduct did not constitute gross negligence or willful misconduct. The
parties to this Agreement shall each be indemnified by the other against losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by it in connection with the Company.
ARTICLE XII NON-EXCLUSIVITY
12.01. No exclusivity is formed by virtue of this Joint Venture Agreement and neither Party
shall be obliged to make offers to others related to any business.
ARTICLE XIII TERMINATION AND DISSOLUTION
13.01. Either Party shall have the right to terminate this Agreement, effective as of the
end of the Initial Term or any Renewal Term, by providing the other with written
notice of termination at least thirty (30) days prior to the end of such Initial Term or
Renewal Term. Neither Party shall have the right to terminate this Agreement at
any other time, unless such termination is mutually agreed to by the Parties hereto.
The Company shall terminate as provided in this Agreement.
13.02. The Company shall be dissolved upon the happening of any of the following
events:
a.
The adjudication of bankruptcy;
b.
Filing of a petition for bankruptcy pursuant to the provisions of the law;
c.
Withdrawal or removal of either of the parties;
d.
The sale or other disposition, not including an exchange of all, or
substantially all, of the Joint Venture assets; or
e.
Mutual agreement of the Parties.
ARTICLE XIV EXERCISE OF BUYOUT IN CASE OF TERMINATION
14.01. If the termination of this Agreement arises as a result of any event described in the
provisions of this Agreement, the Terminating Party shall have the right (the
Termination Purchase Right) to purchase the entire equity interest in the Company
of the other Party (the Non-Terminating Party). The Terminating Party shall, by
written notice (Buyout Notice) to the Non-Terminating Party, notify the NonTerminating Party that it elects to purchase the entire interest of the NonTerminating Party in the Company at a price equal to the Applicable Buyout Price.
The Buyout Notice shall be irrevocable and, upon delivery of same to the NonTerminating Party, shall constitute a binding agreement by the Parties to purchase
and sell the interest of the Non-Terminating Party in the Company. The closing of
the sale of the interest in the Company shall occur on a date to be determined by
the Terminating Party, but in any event not later than two (2) months following
delivery of the Buyout Notice. At such closing, the Non-Terminating Party shall
deliver such duly executed instruments of transfer and other documents required
in connection with such transfer and the Terminating Party shall deliver payment
in full by wire transfer of immediately available funds.
ARTICLE XV BREACH OF CONTRACT
15.01. A Party shall be in breach of this Agreement or any Other Agreement to which it is
a party if:
a.
it fails to perform, or suspends its performance of, its obligations under this
Agreement or such Other Agreement to which it is a party, and if it does not
commence correction of such failure within 30 days, and complete such
correction within 60 days, following receipt of written notice of such failure
from the other Party or the Company, which notice must specify the nature
of the alleged breach in reasonable detail; or
b.
if any of the representations and warranties made by such Party hereunder
or in any of the Other Agreements to which it is a party is untrue or
inaccurate in any material respect.
ARTICLE XVI GOVERNING LAW AND DISPUTE RESOLUTION
16.01. This Agreement shall be governed by and construed in accordance with the laws
of the Philippines, without regard to conflicts of law principles. All claims arising out
of or relating to the Agreement, its interpretation, validity and enforcement shall be
governed by, and construed and interpreted in accordance with the laws of the
Philippines and resolved solely pursuant to binding arbitration. The provisions of
the Civil Code shall be suppletory in character during litigation.
16.02. The Parties shall attempt to resolve any Dispute through friendly consultation.
Such consultation shall begin immediately after one Party has delivered to the
other Party a written request for such consultation stating specifically the nature of
the Dispute. If within 30 days following the date on which such notice is given the
Dispute cannot be resolved, the Dispute shall be referred to, and finally resolved
by, arbitration upon the request of any Party with Submission Notice to the other
Party. The arbitration of dispute shall be conducted in the RTC of Taguig City.
ARTICLE XVII UNCERTAINTY
17.01. The Parties recognize the uncertainty of the law with respect to certain provisions
of this Agreement and expressly stipulate that this Agreement will be construed in
a manner that renders its provisions valid and enforceable to the maximum extent
possible under applicable law. To the extent that any provisions of this Agreement
are determined by a court of competent jurisdiction to be invalid or unenforceable,
such provisions will be deleted from this Agreement or modified so as to make
them enforceable and the validity and enforceability of the remainder of such
provisions and of this Agreement will be unaffected.
ARTICLE XVIII MISCELLANEOUS PROVISIONS
18.01. The Company shall keep adequate books and records at its place of business, 5 th
Floor W Fifth Building, 5th Avenue, Taguig, Metro Manila setting forth a true and
accurate account of all business transactions arising out of and in connection with
the conduct of the Joint Venture.
18.02. In the event that any provision of this Agreement shall be held to be invalid, the
same shall not affect in any respect whatsoever the validity of the remainder of this
Agreement.
18.03. This Agreement constitutes the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof, and there are no
agreements, understandings, restrictions or warranties among the Parties other
than those set forth herein provided for.
18.04. The headings, titles and subtitles used in this Agreement are for ease of reference
only and shall not control or affect the meaning or construction of any provision
hereof.
18.05. Except as may be otherwise specifically provided in this Agreement, all notices
required or permitted hereunder shall be in writing and shall be deemed to be
delivered in the official mailing address, at 5th Floor W Fifth Building, 5th Avenue,
Taguig, Metro Manila. Any mail, postage prepaid, certified or registered mail, return
receipt requested, addressed to the parties at their respective addresses set forth
in this Agreement or at such other addresses as may be subsequently specified
by written notice.
18.06. The parties hereto covenant and agree that they will execute each such other and
further instruments and documents as are or may become reasonably necessary
or convenient to effectuate and carry out the purposes of this Agreement.
18.07. This Agreement shall not be amended, altered or changed except by a written
agreement signed by the Parties. Unless expressly agreed, no amendment shall
constitute a general waiver of any provisions of this Agreement, nor shall it affect
any rights, obligations or liabilities under or pursuant to this Agreement which have
already accrued up to the date of amendment, and the rights and obligations of the
Parties under or pursuant to this Agreement shall remain in full force and effect,
except and only to the extent that they are so amended.
18.08. No delay on the part of any Party in exercising any right hereunder shall operate
as a waiver thereof, nor shall any waiver, express or implied, by any Party of any
right hereunder or of any failure to perform or breach hereof by any other Party
constitute or be deemed a waiver of any other right hereunder or of any other
failure to perform or breach hereof by the same or any other Party, whether of a
similar or dissimilar nature. Failure of a Party to exercise any of its rights under this
Agreement shall in no way be considered a waiver of the right to so exercise at
any later time.
18.09. This Agreement contains the entire agreement and understanding between the
Parties, superseding all prior contemporaneous communications, representations,
agreements, and understandings, oral or written, between the Parties with respect
to the subject matter hereof. This Agreement may not be modified in any manner
except by written amendment executed by each Party hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Blissey Berries, Inc.
Princess Michelle Gabornes
President
Perfect Distribution, Inc.
Emily Montallana
President
Article 1191 and Article 1380 of the Philippine Civil Code both pertain to the concept of rescission,
but they apply to different situations and have distinct requirements. Here's a breakdown of the
differences between the two provisions:
Article 1191 (Rescission under Breach of Reciprocal Obligations):
- Article 1191 deals with rescission in cases of breach of reciprocal obligations. Reciprocal
obligations are those that arise from the same cause, where the performance by one party is
dependent on the simultaneous fulfillment of the other party's obligation.
- Under Article 1191, if one party fails to fulfill their reciprocal obligation or performs it
unsatisfactorily, the other party has the right to rescind the contract. Rescission essentially seeks
to undo the contract and restore the parties to their original positions before the contract was
entered into.
- For rescission to be invoked under Article 1191, the following elements must be present:
1. A breach of obligation by one party;
2. The breach is substantial or fundamental;
3. The injured party communicates the intent to rescind to the defaulting party through a judicial or
notarial act; and
4. The defaulting party fails to remedy the breach within a reasonable period.
Article 1380 (Rescission for Contracts Affected by Vice of Consent):
- Article 1380 deals with rescission in cases where a contract is affected by a vice of consent. A
vice of consent refers to defects in the consent or agreement of one or both parties at the time of
entering into the contract, such as mistake, fraud, undue influence, or violence.
- Under Article 1380, a contract may be rescinded if there is a defect in consent that renders the
contract voidable. Rescission seeks to invalidate the contract due to the presence of the vices of
consent and restore the parties to their original positions.
- For rescission to be invoked under Article 1380, the following elements must be present:
1. The existence of a vice of consent (e.g., mistake, fraud, undue influence, violence);
2. The consent was given based on the false representation or improper pressure;
3. The consent was a determining factor in the parties' agreement to enter into the contract; and
4. The injured party communicates the intent to rescind to the other party.
In summary, Article 1191 applies to rescission in cases of breach of reciprocal obligations, while
Article 1380 applies to rescission in cases where a contract is affected by a vice of consent. The
specific circumstances and requirements for invoking rescission differ under each provision. It is
advisable to consult with a lawyer to understand how these provisions apply to your specific
situation.