MODEL
OF A JOINT VENTURE/SHARE HOLDERS AGREEMENT BETWEEN TWO COMPANIES HOLDING EQUAL
SHARES IN THE JOINT VENTURE COMPANY TO BE INCORPORATED FOR A PARTICULAR PROJECTTHIS
AGREEMENT executed at_______________ on the day of___________________BETWEEN:
M/S. ABC PRIVATE LIMITED.(herein
after referred to as the "ABC", which expression shall, wherever the
context so requires or admits, mean and include, its successors and assigns).A
N D: M/S.XYZ PRIVATE LIMITED,(here
in after referred to as the "XYZ ", which expression shall, wherever
the context so requires or admits, mean and include, its successors-in-title
and assigns);WITNESSES
AS FOLLOWS:I.
WHEREAS
ABC is engaged in business of ____________________ and have the necessary
experience and expertise in that field;II.
WHEREAS
the XYZ are doing ____________________________________ and have the necessary
experience and expertise in that field;III.
WHEREAS
the parties hereto have decided to float a project of _______________________________
( hereinafter referred to as the "PROJECT");IV.
WHEREAS
ABC and XYZ both having the necessary infrastructure and the capabilities of
providing the services required for the project have agreed to form a Joint
Venture Company for the Project and ABC and XYZ are desirous of entering into
an Agreement for constituting Joint Venture Company in terms hereof;V.
WHEREAS
the Parties hereto for the said Project have decided to form a Joint Venture
Company and whereas subject to all necessary consents, licences, permissions
and authorities to be procured for the formation and incorporation of the joint
venture Company in the State of India, with the principle object, inter alia,
being that of ____________________;VI.
WHEREAS
ABC and XYZ are desirous of recording the Agreement with regard thereto and the
agreement arrived at between them;VII.
NOW
THIS AGREEMENT WITNESSESTH AS FOLLOWS:1. It is agreed between
the parties hereto to constitute a new Company which will be incorporated under
the provisions of the Companies Act, 1956 and the Parties further agree that
the said Company shall carry on its business in the name and style of "XYZ
- ABC PRIVATE LIMITED" or any other name as may be mutually agreed between
the parties hereto, (hereinafter referred to as the "SAID COMPANY" or
"JOINT VENTURE COMPANY")2. It is agreed that the
terms and conditions of this Agreement shall govern the relationship of ABC and
XYZ and the rendering of services under this Agreement and any subsequent
Agreement;3. It is agreed between
the Parties hereto that the share holdings of the said Company shall be held by
XYZ and ABC in the ratio of _% belonging to XYZ and _% belonging to ABC;4. The Company shall be
incorporated in the State of _________, after following all the provisions of
the Companies Act, 1956 including any amendments from time to time, required
for the incorporation thereof. The Registered Office of the Joint Venture
Company shall be situated at "__________", ___, ________ Road,
___________________;5. It is agreed between
the Parties hereto that the said Company shall have as its object of business
recorded in the Memorandum of Association & Articles of Association inter alia
_____________________________________________________________________;6. It is agreed between
the Parties hereto that the authorised capital of the said Company shall be
Rs.______ /- (Rupees _______only) divided into ______equity share of
Rs.__________ /- (Rupees _________only) each;7. The Parties hereto
shall jointly approve the Memorandum and Articles of Association of the said
Company taking into consideration the principle objectives as set out in
Paragraph 5 above;8. ABC shall on
incorporation of the Joint Venture Company subscribe to ___% of the authorised
share capital and the XYZ shall on the incorporation of the said Company
subscribe to __% of the authorised share capital, and pay for such shares on
call made by the said Company towards the said shares, within the period
prescribed;9. The Parties further
agree that the authorised capital of the said Company may be increased from
time to time as per the Provisions of the Companies Act and as per the
financial requirements of the said Company and as approved by the Board of
Directors/General Body Meeting and it is further agreed that on the authorised
capital being increased ABC and XYZ will be entitled to subscribe thereto in
equal ratio and only after the other Party by written notice under
acknowledgement rescinds the offer to apply for additional shares will the
other be entitled to subscribe for those share not applied for;10. ABC and XYZ agree
that till such time as the project is being handled by the Joint Venture
Company, ABC and XYZ shall always have equal representation on the Board.
Mr.____________ shall be the Nominee Director of ABC and Mr._________________
of XYZ Group being the First Directors who shall hold the Office for entire
period of the project, save and except both of them will not be liable for
retirement. The number of Directors will be ______in total, ___ from ABC and
_____from XYZ;11. It is further agreed
between the Parties that in the event of any of the Director from any of the
group retiring/being removed/dying or becomes unable to perform the duties of a
Director or for any reason ceases to be employed by the Party that nominated them
then such party shall promptly by written notice served to the other party name
in Successor thereof so that the strength of the Board of Directors remains
same as before;12. Meetings of the Board
of Directors for the transaction of business of the Joint Venture may be
called, subject to reasonable notice by the Directors of either party.13. The Board of
Directors shall have full responsibility and authority for the performance of
the Company including but not limited to assignment of services between the Parties,
preparation of the schedule of services, settlement of disputes and any other
items affecting the performance of services under this Agreement;14. The Board of
Directors shall constitute a committee being the Executive committee for the
execution of the work of the Project Agreement and the said committee shall
consist of one representative of ABC and another from XYZ and at all times
there shall be equal representative on the said committee from ABC Group and
the XYZ Group;15. The Executive
Committee shall be:a. Responsible for the
direction and management of the Work in accordance with the policies and
procedures established by the Board of Directors;b. Responsible for the
Co-ordination of the Work; andc. ____________________________________________
The Board of Directors may from time to time change the existing Executive
Committee by replacing its representatives, however the representation of ABC
and XYZ shall always be equal on such committee;1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16. Action and decisions
of the Board of Directors shall be by unanimous vote and shall be final, and
conclusive and binding upon both ABC and XYZ;17. In the event the
Board of Directors is unable to reach any unanimous decision, ABC and XYZ agree
that the matter in controversy shall be referred to Mr.__________ with regards
to matter relating to _________________________ and _____ Mr._____ with regards
to matter relating _________________________________ who shall make an interim
decision which may be subject to arbitration if the parties hereto do not accept
the decision;18. The Parties agree
that the Board of Directors shall by and large conduct business of the said
Company on the basis of the Agreement arrived at between them under this
Agreement or mutually agreed between them in writing from time to time between
them, giving effect to the understanding arrived at between them under this
Agreement;19. The Parties further
agree that until mutually agreed in writing by and between the parties hereto
the said Company shall not:a. increase or re
organise its authorised capital;b. amend the Memorandum
of Association & Articles of Association;c. dissolve or liquidate
the said Company;d. in any manner deal
with and dispose off or create any charges with regards to the assets of the
said Company or its business;e. Amalgamate with any
other Company;f. to stand and
guarantee in any manner for any other parties or any other person/s without the
prior consent and without the Special Resolution of the General Body Meeting of
the said Company;1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20. Each of the Parties
hereto agree that they shall perform their obligations as set out in Clause 24,
25 and 26 with regards to the said Company so as to complete the project
undertaken by the said Company as a successful venture;21. The Parties further
agree that as the nature of business undertaken by the Parties is relating to
the Project to date which will get transformed to the said Company, any
business which has been set out in the Memorandum of Association of the said
Company shall be done by XYZ and ABC through the said Company only;22. ABC and XYZ shall
furnish all necessary know how experience, expertise, man power, managerial
assistance to make success of the project undertaken by the said Company;23. The Joint Venture
Company shall share, in the manner provided for in the Agreement, the
obligations and responsibilities for the services to be performed for the
Project as described in this Agreement. Both ABC and XYZ shall give strategic
input to the Joint Venture Company to perform the specific services as given
below:24. Both ABC and XYZ will
give their input for:- Marketing, project management, i.e., monitoring of the
execution of the project from the stage of commencement to completion and
property management thereon;Identifying
Consultants and Contractors, finalisation and awarding tenders to all
Contractors and Consultants;Any
other services required to fulfill the needs of the project;1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.21.22.23.24.25. ABC shall give their
inputs on procurement and work of all design and technical consultants;26. XYZ shall give their
input in liasoning with local authorities, Government for obtaining permissions
for Plan sanction including all the approvals required from various
Governmental Agencies for the purpose of construction and completion of the
Project.27. Neither ABC nor XYZ
shall enter into any separate agreement/s with ______________ for services in
connection with this Project as long as the association between ABC and XYZ
with regards to the Project is in existence;28. The Services required
of the parties to Joint Venture Agreement shall be limited to the performance
of services required under this Agreement;29. ABC and XYZ intend
that the responsibilities and obligations set out in this agreement shall be
borne and performed by each of the party as stated herein and the financial
contribution as and when required for the Company shall be in proportion of
their participation as provided in clause 3 of this Agreement;30. It is agreed between
ABC and XYZ that for the purposes of ------------------------------------ the
same shall be done by ABC and XYZ together and for the said purpose ABC and XYZ
will constitute and form another company in which both ABC and XYZ will have
equal shares and XYZ and ABC will have equal representation on board at all
times;31. The Parties agree
that as the Parties shall be working in co-ordination with each other and for
the furtherance of the interest of the said Company and during the course of
work any information, expertise or knowledge material, documents or trade
secret exchanged between the parties shall be kept secret and neither parties
hereto shall divulge the same to any Third Party in any manner whatsoever and
accordingly the parties shall on the incorporation of the said Company include
a Clause in the Memorandum and Articles of Association to maintain the trade
secret between the parties hereto/shareholder/Directors or anyone employed by
the said Company and accordingly the parties shall also execute such document
between them after incorporation of the said Company as may be necessary and as
advised;32. It is agreed between
the Parties that amounts received by the Joint Venture Company will be allotted
to ABC and XYZ equally The distribution so made will be irrespective of the
expenses that may be incurred by either XYZ or ABC towards their staff or
expenses or any other head of accounts;33. It is agreed between
the ABC and XYZ that for the compliance of their respective obligation to be
fulfilled in terms of this Agreement and after meeting the basic expenses of
the joint venture company, the amounts in hand of the Joint Venture Company
will be distributed between ABC and XYZ in the respective proportion set forth
in Clause 3 of this Agreement. Upon completion of this Agreement, funds
remaining after payments of outstanding indebtedness of the Joint Venture
Company shall be distributed to the respective Parties in the same proportion
as set forth in Clause 3 above;34. Should the Board of
Directors determine that additional funds are required for the performance of
the Project Agreement for any reasons or to pay losses arising there from or to
eliminate any deficits resulting from prior overpayments to the ABC or XYZ, the
Parties shall within 14 working days after the decision of the Board of
Directors contribute such funds in proportions set forth in Clause 3 of this
Agreement;35. In the event of any
of the Party does not contribute for any reasons such funds as may be
determined under Clause 34 above the other party may at its discretion bring in
the amounts to be contributed by the other party or any part thereof at its
discretion and in this event the Other party will be liable for payment of the
amounts to the Party contributing in excess along with interest at the rate of 22%
per annum or any part thereof to be calculated from the date of contribution to
repayment;36. It is agreed between
the parties that the amounts that may become payable in terms of Clause 34
above by the Party failing to contribute in terms of Clause 34 the Party
contributing the amounts will be entitled to the said amounts at the first
instance from the amounts to be disbursed and out of the share of the Party
defaulting in payment along with the interest as stipulated in para 35 and
thereafter if any amounts are balance to the share of the party defaulting will
be taken by him;37. It is agreed between
parties hereto that the Joint Venture company will employ necessary persons for
the purpose of services to be rendered for the project and for the purpose of the
project and the said personnel will be employed by mutual consent of both XYZ
and ABC. The salary and payment with regards to the said employees shall be
borne by the said Joint Venture Company;38. It is agreed between
XYZ and ABC that in the event that either XYZ or ABC or its personnel are
required to render service to the Joint Venture company either in sales
promotion or any other area of work of the project, then in that event, all the
actual expenses incurred will be reimbursed to either XYZ and or ABC as the
case may be. The nature of expenses permitted for reimbursement are set out in
Annexure ______ hereto;39. The Parties hereto
agree that on the incorporation of the said Company, the said Company in its
first meeting shall ratify what has been agreed hereunder;40. The Parties after the
execution of this agreement shall finalise between them the master plan
charting out the plan for execution of the project, setting goals, time frames,
manner and method of implementation of the project, the day to day operations
and manner in which the said company would handle the entire project;41. The said Company
shall appoint an independent Chartered Accountant who shall perform such duties
as determined by the Board of Directors which shall include regular audit accounts
of the said Company file all necessary forms, applications, accounts with the
concerned authority as may be necessary and as per the Provisions of the
Companies Act, or any other Statutory Authority with regards to the said
Company. For the purpose of this agreement the certified figure of the
independent Chartered Accountant shall be final conclusive and binding upon the
parties;42. The Parties hereto
agree that all the preliminary expenses with regards to the incorporation of
the said Company including all the costs, charges, expenses, professional fees,
out of pocket expenses that may be incurred during the incorporation and
formation of the said Company and incidental to the establishment of the said
Company shall be borne by and paid for by the said Company;43. The Board of
Directors shall appoint an Accountant for the Joint Venture Company who shall
maintain the day to day books of the Company on the generally accepted
accounting principles;44. The Board of
Directors may authorise one or more bank accounts in any bank nationalised or
private and the said Bank account/s for all purposes shall be operative under
the joint signature of the representative/s of ABC and XYZ;45. All payments received
by the Joint Venture, in connection with this Agreement, shall be promptly
deposited in the aforementioned Joint Account and invoices received by the
Joint Venture shall be paid by Cheque drawn against the Joint account;46. Records of the Joint
Venture which are required pursuant to law to be retained beyond the duration
of this Agreement shall be retained at such place(s) as determined by the Board
of Directors and the cost thereof shared by the parties in proportion to their
respective interest as described in Clause 3 of this Agreement;47. Joint Venture
property shall consist of the capital contributions described in Clause 8 of
this Agreement and any other property obtained with the funds of the Joint
Venture. The Joint Venture property shall be identified and recorded in the
Joint Venture accounts;48. This Agreement
represents the entire and integrated agreement between the Parties and
supercedes all priornegotiations, representations and agreements, either
written or oral. The Agreement may be amended only by written instrument signed
by each Party to this Agreement;49. Neither party shall
assign this Agreement without the written consent of the other;50. The right of any
person, firm or corporation, claiming by, through or under any Party
(including, but not limited to judgement or other creditors, receivers,
trustees, assignees, executors and administrators), to assert any claim against
the right of interests if any Party shall be limited in any event to the right
to claim or receive after completion of the Project Agreement, and after the
doing of the accounts of the Joint Venture, the proportional interest of such
Party as described in Clause 3 of this Agreement, and then only subject to the
equities of the other Party as set forth in this Agreement;51. The Parties to this
Agreement, respectively bind themselves, their successors, assigns and legal
representatives to the other Party with respect to all covenants of this
Agreement;52. All public statements
and releases, including the issuance of photographs, models and renderings, for
all media for the duration of this Agreement, are subject to the prior approval
of the Board of Directors;53. In subsequent
presentations made by the Joint Venture, in any brochures publicity material in
any form of media with regards to the Project and any logo mark devised by the
Joint Venture Company or any development/drawing that can be and which
constitutes any intellectual property shall be the intellectual property of the
Joint Venture Company and will be dealt in the manner set out herein54. If determined by the
Board of Directors or required under the Project Agreement, intellectual
property, reports, analysis, contracts, designs, drawings, specifications and
other instruments of service prepared pursuant to this Agreement shall be
registered, patented, copyrighted and secured as intellectual property rights
as per the provision of law and in the name of the Joint Venture. The Joint
Venture Company shall have the ownership and rights and privileges of all
intellectual property rights acquired in the course of the Project and in so
far as it is consistent with this Agreement XYZ and ABC will be entitled to use
such intellectual property for any of its purpose including to prepare
documents for other projects based on such Project information without any
payment thereof so long as they are equal shareholders of the Joint Venture
Company in terms of this agreement and not otherwise;55. Neither of XYZ nor
ABC shall assign or transfer the intellectual property rights and interest so
acquired or established pursuant to this agreement by the Joint Venture Company
in the course of its Project, nor permit reproduction of Project documents
otherwise then stated in clause 53 above, in any manner resulting in
infringement or violation of any of the intellectual property rights secured by
the Joint Venture Company during the course of the Project except upon written
consent of the other Party;56. Documents prepared
specifically for this Project by one of the Parties to this Agreement may not
be copyrighted solely by that Party. Each Party hereby grants the other and the
Joint Venture a licence to use and reproduce such documents in furtherance of
this Agreement and Project;57. The Parties further
agree that as far as the registered Office of the Company is concerned, the
same shall be at _________________________________________or at mutually agreed
place provided always that the Registered Office shall be at __________ State
of _________, India;58. It is further agreed
between the Parties hereto that during the existence of this Agreement and the
incorporation of the said Company if there being any change in Law which may
affect the incorporation of the said Company as agreed between the Parties
hereto then in that event, the Parties hereto may mutually agree to terminate
this Agreement without any claim of damages by either party and in the event of
there being any pre incorporation expenses incurred by the Parties hereto, the
same shall be shared equally between the ABC and the XYZ;59. In the event of there
being any dispute which may result into a dead lock situation between XYZ and
ABC, the Parties before invoking the rights set out in Clause 59 of this
Agreement, the Party expressing that the other Party is in breach shall give a
written notice of any situation likely to result in dead lock, putting forth
all the details of the nature of dispute and the Parties will resolve the said
dispute between 14 days of such written notice being received after which
period, the Parties may refer the dispute to Arbitration as per the provisions
of Clause 70;60. It is agreed between
the parties that in the event of there being a dead lock situation with regard
to the management of Joint Venture Company then in that event it is agreed
between the parties hereto that for the purposes of removing the dead lock any
one of the parties hereto who may chose to value the share held by it and on
such valuation done by that party the other party will have the first option to
either acquire at that price the shares of the party valuing it or sell its
shares to the valuing party and the party valuing the shares will have no
option but to either sell its share at the valuation set, to the other party or
to acquire the shares of the other party at that value as the case may be;61. No Party will be
entitled to sell transfer, pledge, mortgage, charge, encumber or otherwise
dispose off or create any lien on or interest in, any of its shares in the
Joint Venture Company, save and except as per Clause 63 below;62. In the event of any
one of the Party decides to dispose off its shareholding, which shall always be
the entire shareholding, it shall give notice of its intent of disposal to the
other Party, and the other Party will have the right to acquire the entire
shareholding on the valuation of the shares done by an Independent Chartered
Accountant appointed by both the Parties or identify a buyer for the purchase
of the entire shareholding within a period of 12 weeks from the receipt of the
written notice from the Party intending to sell, after which period, the Party
intending to sell its shareholding will be entitled to dispose of the shares to
any third party. Any notice with regards to intend to sell the shareholding or
refusal to acquire the shareholding, shall be done through Registered Post
Acknowledgement Due.63. Notwithstanding the
provisions setout in Clause 61, either of the Parties to this agreement would
be entitled to transfer its shareholdings to any of its subsidiary or affiliate
Companies, may be one or more such subsidiary or affiliate Companies and the
shareholding of such transferee shall be clubbed for the purpose of the total
shareholding of XYZ or ABC as the case may be. The Transferee shall be bound by
the terms and conditions of this Joint Venture Agreement. For the purpose this
agreement parties hereto agree that the meaning subsidiary /affiliate companies
shall mean such companies wherein the Party desiring to transfer the share
holding in the Joint Venture Company should have at least 51% shares in such
affiliate or subsidiary as the case may be64. In the event of the
Project being completed and in the event of there being no other project being
undertaken the XYZ shall be entitled to take over the Joint Venture Company at
Book Value, however the name of the Joint Venture Company will stand changed
and XYZ shall not use the name of the Joint Venture Company. If XYZ does not
desire to acquire the Company, the XYZ and ABC shall jointly sell the Company
to any Third Party and the sale proceeds to be shared equally. The Party shall
not be permitted to use the name of XYZ ABC;65. The Parties hereto
agree that the address set out in the title of this Agreement are the true
addresses and the notice/s may be issued to them at the said address in the
event of there being any change of address, the same shall be intimated to all
the Parties failing which any notice/s served on the existing address shall be
deemed to be good service on the addressee;66. Any amendments to
this Agreement shall be done with the consent of the Parties and in writing.
Otherwise nothing shall be binding on the Parties hereto;67. This Joint Venture
will commence as of the date of this Agreement. It is further agreed that the
terms and conditions of this Agreement shall be an agreement governing the
shareholder of the Joint Venture Company including where ever it relates to the
provisions of share holding its transfers, conduct of the business by the
parties hereto and conduct of the Board of Directors and the constitution of
the Board of the Joint Venture Company and the terms set out herein;68. This Agreement shall
remain in full force and effect until terminated by written agreement of the
Parties or until the Project has been completed and all Joint Venture Property
and money has been distributed in accordance with this Agreement and even after
the incorporation of the Joint Venture Company as a shareholders agreement;69. The obligation of
each party to contribute in accordance with this Agreement to the satisfaction
of all debts and liabilities of the Joint Venture shall survive the termination
of this Agreement;70. It is further agreed
between the Parties hereto that in the event of there being any dispute with
regards to this Agreement or any of the terms hereof or the interpretation of
any of the terms of the Agreement or any dispute arising under the said
Agreement, the same shall be referred to the Arbitration of two Arbitrators
appointed by each of the Parties hereto i.e., ABC and the XYZ and the
Arbitration proceedings shall be as per the provisions of the Arbitration and
Conciliation Act, 1996 and the venue of such Arbitration proceedings shall be
held and conducted in _________________alone;71. This Agreement shall
be binding upon the Parties hereto and their successors in title and all the
shareholders of the Joint Venture Company and their respective heirs,
executors, administrators, successors in title and assigns as the case may be;72. If any provision of
this Agreement shall, under any circumstance, be deemed invalid/inoperative to
an extent, such invalidity shall not invalidate the whole Agreement, but the
said invalid or inoperative provision shall be construed as not to be contained
in this Agreement;73. The provisions of the
Companies Act, 1956 would apply with regard to the governing of the Joint
Venture Company otherwise than what has been agreed by and between the Parties
hereto;74. It is agreed by and
between the Parties hereto that the Courts at____________________ alone shall
have jurisdiction with regards to this Agreement and the seat of Arbitration
shall be _________ and the Arbitration proceedings shall be in English; IN
WITNESS WHEREOF, the PARTIES hereto have executed this AGREEMENT in the
presence of the Witnesses attesting hereunder: SIGNED SEALED AND DELIVEREDBY
THE WITHIN NAMED ABCPRIVATE
LIMITED REPRESENTEDBY
ITS MANAGING DIRECTOR INTHE
PRESENCE OF THE FOLLOWINGABCWITNESSES:1)2)SIGNED
SEALED AND DELIVEREDBY
THE WITHIN NAMED XYZPRIVATE
LIMITED REPRESENTEDBY
ITS MANAGING DIRECTOR INTHE
PRESENCE OF THE FOLLOWINGXYZWITNESSES:1)2)