Question: My company would like you to conducting legal due diligence reviews in respect of a Vietnamese Company – the Subsidiary in Vietnam of a Hong Kong Company which we intend to acquire. Please quote.

Answer:

We understand that Client would like us to conducting legal due diligence reviews in respect of a Vietnamese Company – the Subsidiary in Vietnam of a Hong Kong Company which Client intends to acquire. We therefore are grateful to present you our Legal Services Proposal for your review and consideration.

1.   SCOPE OF WORKS

Following works are proposed based on the request of Client. However, depending on the specific position/situation of Client, several work items may not be necessary. Meanwhile, other works may be required. SB Law shall immediately advise Client the same upon review documents of the case. However, any additional works shall not fall under the scope of this Legal Service Proposal Letter, but could be provided upon request.

(i) Conducting legal due diligence reviews in respect of the Target Subsidiary and producing a legal due diligence report in English covering specific matters, including

If there has been any changes in the Vietnamese local policy after the signing of the agreement between the parties, i.e. whether the use of land where the mine is located has changed (to tourist area or other purposes where mining operations cannot be carried out whether there has been any changes in  the  Vietnamese  local  policy after the signing of the agreement between the parties. In particular, whether the use of land where the mine is located has changed (to tourist area or other purposes where  mining  operations  cannot   be   carried   out;   (b)   if   such   changes would have any legal impediment to the target subsidiary in obtaining the relevant mining license, and whether it would have any other impact on the acquisition transaction; (c) If there is such a change – whether the purchaser has the right to terminate in accordance with the terms of the agreement and request a refund of the deposit from the seller; (d) If the buyer has the right to terminate under the agreement – to opine on whether the buyer would need to assume any additional obligations under the law of Vietnam; (e) potential litigation and contingent liabilities of the target company; (f) what other license, permission, consent, etc would be required for the target subsidiary to conduct the mining operation and related business activities, and whether there is any legal impediment to obtain the same and (g) any other matters relating to the acquisition as raised by the regulators, including but not limited to the Hong Kong Stock Exchange and the Securities and Futures Commission (if any);

(ii) Preparing a legal opinion in English as to the laws of Vietnam, addressed to and for the benefit of, including but not limited to, Client and its sponsor, covering matters relating to the Target Subsidiary covering the matters in (i) above and substance may be required by Hong Kong Stock Exchange and the Securities and Futures Commission;

(iii) Answering queries from Client, its sponsor, advisors and Hong Kong Stock Exchange and the Securities and Futures Commission in respect of Vietnamese law issues and matters relating to the Target Subsidiary, and working with other advisors of Client in preparing replies to such queries;

For avoidance of any doubt, the scope of work shall strictly adhere to following specific assumption:

  • The due diligence will be based essentially on results from searches of public records (if available) and documents provided by the Target Subsidiary and/or Client, and the relevant parties will cooperate to provide documents requested in full and in a timely manner;
  • While it may be necessary to work on-site at the Target Subsidiary, such field work (if any) will be limited to two or three days;
  • The scope of due diligence investigation is limited to matters set out in Item (i) above;
  • The due diligence documents will be available in Vietnamese or English;
  • Communication will be in English, and will mostly be via email and telephone;
  • For litigation and insolvency searches, there is virtually no public record in Vietnam, nor are court dockets available. SB Law will conduct general searches on public sources (such as the internet, certain online databases of governmental agencies, if any), and the information may be limited;
  • It may be required to undertake works involving preparation and submission for regulatory filings or approvals in Vietnam, for example, to rectify issues related to the Target Subsidiary to effect the restructuring of the Target Subsidiary for purposes of the Listing. While SB Law will provide general advice on what is required and how to deal with such requirements, and will assist Client and the Target Subsidiary to prepare key documentation, if we are requested directly to perform those regulatory procedures, there will be additional fees;
  • Most substantive works in connection with the legal due diligence in Vietnam and the issuance and update of the Vietnam legal opinion or due diligence report will be within a time span of up to four months, and no significant substantive works will be required thereafter;
  • The estimated fees presented below are, among others, based on our understanding of the Structure of the transaction based on information known by us, and our experience in similar cases. However, each transaction is different, and the transaction referred to above may develop differently than the parties anticipated, the scope of work may be enlarged to cover aspects not initially covered, and so on. In such case, if our estimated fees are exceeded, SB Law will also be entitled to discuss with Client to revisit our

2.     PROFESSIONAL FEE

The Price for performing the SB Law services as mentioned in item 1 above will be 3,650USD (Three thousand and six hundred and fifty US Dollar). The fee is exclusive of 10% VAT.

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