example jv agreement

7/25/2019 Example JV Agreement

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AGREEMENT

THIS SHAREHOLDERS AGREEMENT made at Mumbai this

_________________ day of ___________ in the Christian Year .. BY

AND AMONG;

(I) ..;

(II) ; AND

(III) ..(which expression shall unless it be repugnant to the

context or meaning thereof shall be deemed to mean and include its

subsidiary and holding Companies and their respective successors and

assigns) of the THIRD PART;

For the sake of brevity the parties of the First Part, Second part and the

party of the Third part shall be collectively referred to as Parties;

IT IS HEREBY AGREED, RECORDED AND CONFIRMED BY AND

AMONGST THE PARTIES HERETO AS UNDER:-

1. RECITALS AND OBJECTIVES:

(a) The Group has more than . experience

. in the area of . and ..

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(b) . offers a wide and comprehensive range of ..

products under their various registered trade marks

. in the industrial sectors of

(c) The recognizes the need to

.

(d) Each parties recognized the interest of implementing a

synergetic approach of their markets and customers in India

.

(e) . The copy of Memorandum and Articles of

Association of the Company is annexed asAnnexure 1to

this agreement.

(f) .

(g) The authorized share capital of the Company is Rs.

./- (Indian Rupees .. only) divided into

(Words .) Equity Shares of Rs.

./- (.) each, which the Company may

increase from time to time.

(h) The issued and paid up capital of the company is

. each,

(i) The initial subscribers to the Memorandum of Association

were:-

(1) Mr. .

And

(2) Mr. .

(j) Subsequently, . was also issued shares upto .. of

total issued and paid up capital of the Company.

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(k) The present shareholding pattern of the company is as

follows:-

(i) -

(..)

(ii) . - .

()

-----------

Total

========(l) . can be invited to participate in the

Company after joint agreement between parties

.. and after following the due process of law in

accordance with the Companies Act, 1956.

(m) The Company shall promote the sales of the product of the

.. .. and advertise and generate

a market of prospective clienteles under the brand/trade

name of the Company ..

(o) The Company will also act as the . partner of

products or any other . products with

mutual consent of parties of the First and Second Part.

(p) The area of the operational activities of the Company shall be

initially restricted only to India .

(q) The parties to this agreement are hereby ..

2. DURATION:

(a) The Company shall use its best efforts and endeavors for

with protection of all the Intellectual

Property Rights of Mder. If any disagreement arises between

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the parties at any stage, the Company will be dissolved or

wound up (in accordance with the provisions of the

Companies Act, 1956) or taken over by one group and all the

rights and obligations of the parties shall come to an end as

set out hereinafter.

4. MANAGEMENT OF THE COMPANY:-

(a) The Company shall be managed by its Board of Directors

which shall presently consist of ..

The name of the Directors is as under:-

(i) )

(ii) . )

(iii) ______________________ )

(iv) )

(v) )

(vi) ______________________ )

(b) (i)The Board of Directors meeting of Company shall be held as

per the provisions of Companies Act 1956 with at least

fifteen days notice (in English language with sufficient

details/agenda) to each Director. In case of special and

emergency meetings the notice period can be reduced or

waived with the Written Consent of a majority of the

members of the Board of Directors, which majority shall

include at least one Director from the ..and one

from ...

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(ii) A majority of the Directors shall be necessary to form a

quorum for a valid Board of Directors meeting. If the meeting

of the Board could not be held for want of Quorum, then

unless the articles otherwise provide, the meeting shall

automatically stand adjourned till the same day in the next

week, at the same time and place, or if that day is a public

holiday, till the next succeeding day which is not a public

holiday, at the same time and place. The Board of Directors

shall supply each Director with a copy of the minutes of

such meeting reflecting any resolutions passed at such

meeting for approval as soon as practical (but in no event

later than 10 Business days following such meeting).

(iii)Subject to the applicable Law, the Directors shall be

permitted to participate in Board meetings by teleconference

or .. Notwithstanding the foregoing, the Board

may act by a written resolution on any matter, except

matters that by Law may only be acted upon at a meeting.

Subject to the applicable Law, no written resolution shall be

deemed to have been duly adopted by the Board unless such

written resolution has been circulated to each member of the

Board and approved by the requisite number of Directors as

provided in various clauses in this Agreement.

(iv) Subject to the provisions of this Agreement and applicable

Law, the Board of Directors shall have full authority with

respect to the management of the Company.

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(c) The parties shall exercise their voting rights at Board

Meetings and General Body Meetings and to uphold and

effectuate the provisions of this Agreement.

(d) The Company has its Bank Account with . Bank,

which bank account, as also any new bank accounts shall be

operated by the Directors of the for convenience

as they are based in India.

5. SHAREHOLDERS MEETINGS:

All Shareholder Meetings shall be held in accordance with the

following procedures:

(a) Regular Shareholders Meetings shall be held once annually

with at least 21 days advance notice to each shareholder in

the Company, unless all the shareholders consent to a

shorter notice period. Special Shareholders Meetings may be

called by the Board on 21 days advance notice to each

shareholder, unless all the shareholders consent to a shorter

notice period.

(b) Notices of Shareholder Meetings shall specify the place, date

and time of the meeting and set forth in full and sufficient

details the business to be transacted thereat together with a

copy of the draft resolutions and no business shall be

transacted at such meeting unless the same has been stated

in the notice convening the meeting.

(c) The quorum for the Shareholders Meeting shall consist of at

least two shareholders, such shareholders attending a validly

convened meeting, proper notice of which has been served on

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each of the shareholders in accordance with this Agreement,

the Charter Documents and the requirements of Law. If no

quorum is present, the meeting shall be adjourned to the

same day, place and time in the next succeeding week (it

being understood that the agenda for such adjourned

meeting shall remain unchanged) until such time as the

required quorum is present. Actions, decisions and

resolutions of the shareholders shall be taken (i) upon the

affirmative vote of a majority of the shareholders present at a

validly convened Shareholders Meeting or (ii) upon the

unanimous written consent of all the shareholders. The

Chairman of the Board of Directors shall also be the

chairman for all the Shareholders Meetings.

(d) The Shareholders shall be permitted to participate in the

Shareholder Meetings by proxy, teleconference or

videoconference (but only to the extent permitted by Law).

Any person possessing a proxy or power of attorney or other

such written authority with respect to any Equity Shares

shall be able to vote on such Equity Shares and participate

in the meetings as if such a person was a Shareholder of the

Company.

(e) In the event of proxy voting, the Shareholder shall inform the

Company at least 7 days prior to the date of the meeting, the

name, address and contract details of such proxy.

6. MAINTENANCE OF BOOKS AND RECORDS:

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(a) The Company shall keep true and accurate books of account

and records in English in accordance with generally accepted

accounting principles in effect from time to time in India and

in a manner necessary for compliance with any requirements

of Law that are applicable to the Company. The relevant

financial statements and information including profit and

loss account, Cash Flow Statement, Summery Performance

etc. shall be furnished to ...

7. OBLIGATIONS OF THE PARTIES:

(a) The obligations of the Company are as under:-

(i) .

(ii) .

(iii) To use the technology know-how, patent, trademark,

process and other intellectual properties and

diversified methods and aspects of manufacturing

assigned by to the Company in the best

possible manner and extent.

(iv) To make full efforts and to use its best endeavor for

generating sales, promotion and prospective clientele

including but not limited to the following area of

operations namely:-

* .

*

* ..

* ..

*

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* ..

* ..

* ..

.

(v) If mutually agreed by the parties, to further extend the

operations in . and to undertake

. on the basis of the technology, know

how etc.

(vi) To plan, set up, and establish the Company for all its

operational purposes

(vii) To recruit and/or appoint, qualified, expert persons

such as Chartered Accountants, Lawyers, Company

Secretary, Marketing professionals etc. as may be

required for carrying on the activities of promotion,

sales, manufacturing, supervision, Marketing,

Finance, Support Staff etc., as may be required by the

Company for its day to day functioning.

(viii) To apply for and obtain various licenses, permissions

and other statutory compliances as may be required

for commencing and running the activities of the

Company from any statutory body or authority.

(ix) To defray all the operating expenses from the said

bank account, such as salary, wages, rents, electricity

charges, repairs, maintenance etc., and all other

general expenses which are necessary for the purpose

of running and conducting business, including but not

limited to VAT, Service Tax and other Mandatory

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Charges, Property Taxes, etc., and further to meet with

all the expenses of the Company.

(x) To keep confidential all or any commercial, scientific or

technical information brought into the Company; to

promote, market and sell all the products under the

Company brand/trade name; and to raise invoices in

the name of the Company irrespective that the

products are imported, manufactured or finished by

the Company.

(xi) To expand the business of the Company by all lawful

methods and processes.

(xii) The Company shall indemnify each Director

(collectively the Indemnified Persons) against any

losses, claims, damages, liabilities, judgments, fines,

obligations and expenses of any kind or nature

whatsoever (including any investigative, legal and other

expenses incurred in connection with, and any

amounts paid in settlement of any pending or

threatened legal action or proceeding) arising in the

course of their functioning office as Directors and to

the extend that such Indemnified Person may at any

time become subject to or liable for directly or

indirectly in connection with their status as Directors

or Officers of the Company or any of their acts, deeds,

things or service to or on behalf of the Company,

except where such claims arise out of the gross

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negligence, willful misconduct or fraud of such

Indemnified Persons.

(xiii)It shall not issue any additional Equity Shares or

convertible instruments after the date hereof without

the unanimous written consent of all the shareholders

of the Company and this restriction is with a view to

ensure that the agreed ratio of shareholding of the

.

(b) The obligations of ..are as under:-

(i) From time to time, bring its financial contribution into

the Company for investment as also to meet all the

running costs of the Company in the proportion of its

share holding in the Company. Since .. is a

foreign Company, at all times it may not be directly

permitted by Reserve Bank of India to bring in funds

to the Bank Account of the Company. In such

circumstances, . shall arrange for Bank

Guarantee/s (of a mutually acceptable Bank) letters of

credit etc. in favour of the Company for the required

amount either in rupees or foreign currency.

(ii) To permit and make available its technology, known-

how, patent, name, trademarks, processes, intellectual

property and diversified methods and aspects of

manufacturing and marketing to the Company and to

make available appropriate technical support,

assistance. To share the profits and loss of the

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Company to the extent of its share holding in the

Company.

(iii) To provide assistance and co-operation to the

Company to raise loans from private parties, banks or

financial institutions either jointly with the

...

(iv) To assign its existing clientele in India and Indian sub-

continent in favour of the Company so that the

Company can operate as its sole representative for the

said regions.

(v) To devote sufficient time, efforts and resources for

ensuring success of the SPV.

(vi) During the validity period of this agreement, not to

enter into any agreement for establishment of similar

business relations as those presently established with

the under this Agreement with some

third party in India in respect of the same products

and in the same area of operations.

(vii) Not to commercialize the market or sell its product

within the restricted area of activities and operations

being India and Indian sub-continent henceforth

through any other persons other than the Company.

(viii)To keep confidential all/any scientific commercial or

technical information brought into the company

including the list of clients or prospective clients of the

company. This obligation will cease as soon as such

information becomes public.

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(ix) Not to enter in any investment process and/or to

create any debt in the name of the Company, save and

except in the normal course of the business, without

the consent of the ...

(c) The obligations of the are as under:-

(i) To comply with all formalities with the ROC, the RBI

and all other statutory/regulatory authorities.

(ii) From time to time bring their financial contribution

into the Company for investment as also to meet all

running cost of the Company in proportion of its share

holding in the Company.

(iii) To promote the sales of the wide and comprehensive

range of paints and coating products presently

manufactured by .. and/or its subsidiaries in

the area of its operations being India and Indian sub-

continent and also to bring in their commercial and

networking contacts and experience.

(iv) To advertise, market and generate new clientele for the

purpose of the SPV.

(v) To share the profits and loss of the Company to the

extent of its share holding in the Company.

(vi) To provide assistance and co-operation to the

Company to raise loans from private parties, banks or

financial institutions either jointly with the or

individuality.

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(vii) To devote sufficient time, efforts and resources for

ensuring success of the SPV.

(viii)Henceforth, not to enter into any agreement for

establishment of similar business relations as those

presently established with .. with some third

party in respect of the same products and/or in the

same area of operations, either in India or Indian sub-

continent.

(ix) To keep confidential all/any scientific commercial or

technical information brought into the company

including the list of clients or prospective clients of the

company. This obligation will cease as soon as such

information becomes public.

(x) Not to enter in any investment process and/or to

create any debt in the name of the Company, save and

except in the normal course of the business, without

the consent of .

8. BREACH, TERMINATION, AND CONSEQUENCES OF

TERMINATION:

(a) In the event of any breach of the terms and conditions

recorded herein by either party, the aggrieved party shall give

a notice in writing to the defaulting party to remedy the

breach within a period of thirty (30) days from the date of

receipt of the notice. If the defaulting party fails to remedy

the breach within the aforesaid period, this Agreement shall

ipso facto stand terminated without any further notice. Such

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termination shall be without prejudice to the other rights

and remedies available to the parties in law.

(b) Upon termination of this Agreement in terms of (a) above:

(i) Each party shall not carry on business of promotion,

sales, manufacturing etc under the Company name (or

otherwise) or utilize its brand/trade name technology,

know how etc. or solicit or attempt to solicit the clients

of the Company.

(ii) In the above circumstances, the shares of the parties

and assets of the Company shall be valued by the

reputed firm of Chartered Accountants in India to

ascertain the fair market value of the said shares and

assets.

(iii) If the .. refuses to Purchase the said

shares of the Mder within sixty (60) days of the

written notice sent by the , and the

. offering the said shares at the valued

price, in that event the said shall be entitled

to sell their shares to any third party/outside person

at the price as may be deem fit and proper by the

Mder and vice versa.

(iv) If . successfully purchases the shares of

, in that event it shall

9. VOLUNTARY WINDING UP OF THE COMPANY:

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(a) The parties of the Second and third part agrees to dissolve,

liquidate and wind up the Company, following the due

process of law, in the following cases:-

(i) Acquisition or Merger of .. or the

. with any Company competing

in any place of the World in the same area of activities.

(ii) Co-operation by one of the aforesaid parties with a

competitive entity within the markets to which this

agreement extents.

(iii) Voluntary decision by the Board of Directors to wind

up the company.

(iv) In case any sentence against one of the above referred

parties is made for any breach of its fiscal or legal

obligations in the designated area of operation.

10. RELATIONSHIP OF THE PARTIES:

This Agreement and Understanding between the parties is on a

principal-to-principal basis for the purpose of operating the

company and this Agreement shall not create a partnership,

agency or any other fiduciary relationship among themselves.

11. BENEFIT OF THE AGREEMENT:

This Agreement is solely for the benefit of the parties hereto. For

avoidance of doubt, this agreement does not and shall not confer

rights upon a person who is not a party to this Agreement.

12. EXCLUSIVITY AND RESTRICTIONS:

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(a) The parties shall not be directly and/or indirectly entitled to

assign their interest under this Agreement to any third

party/outside party without the written consent of the other

party and any attempt to do so will be void and not binding

on the other party.

(b) The Company will be the sole vehicle for conducting the

business within the specified Regions as recorded in this

Agreement. Both the parties covenant and agree that they

shall not, so long as they are connected with the Company,

engage in any proposed activities which are or could directly

or indirectly be competitive with the Business of the

Company including soliciting any customer or prospective

customer of the Company investing in any company engaged

in the same or a similar business as the Company and to

assist any person in any way directly or indirectly in any

activities which are competitive with the Business of the

Company. This restriction is applicable to only the specified

businesses of the company and for the specified region

(territories) only. In case of any doubt, the parties should

take the consent of each other.

13. AGREEMENT, ARRANGEMENT AND MODIFICATION:

(a) This Agreement shall constitute the entire agreement

between the parties hereto in relation to the subject matter

hereof and supersedes all prior understandings, letters of

intent, contracts ,emails,etc., whether oral or written,

between the parties hereto.

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(b) This Agreement shall insure to the benefit of and be binding

upon the parties and their respective successors, assigns

and subsidiaries (if any) and nothing in this Agreement,

expressed or implied, is intended to confer on any person

other than the parties and their successors, assigns and

subsidiaries any rights, remedies, obligations or liabilities

under or by reason of this Agreement.

(c) This Agreement may be modified, varied or amended only by

a written instrument duly executed by each of the parties

hereto.

14. ADDITIONAL DOCUMENTS:

The parties shall from time to time execute and deliver such

further documents as may be reasonably required to give proper

and true effect of and to this agreement.

15. INVALIDITY:

If any term or provision in this Agreement is held to be illegal or

unenforceable, in whole or in part, under any enactment or rule of

law, such term or provision or part to that extent will be deemed

not to form part of this Agreement but the enforceability of the

remainder of this agreement will not be affected.

16. WAIVER:

Any term or condition of this Agreement may be waived at any

time by the party that is entitled to the benefit thereof, but no

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such waiver shall be effective unless set forth in a written

instrument duly executed by or on behalf of the party waiving

such term or condition. No waiver by any party of any term

or condition of this Agreement, in any one or more instances,

shall be deemed to be or construed as a waiver of the same or

any other term or condition of this Agreement on any future

occasion. All remedies either under this Agreement or by law

or otherwise afforded, will be cumulative and not alternative.

17. OUT OF POCKET EXPENSES:

All out of pocket expenses by way of legal expenses, cost for

formation of the Company, Stamp duty charges, cost of preparation

of this agreement etc. shall be to the account of the Company.

18. NOTICES AND CORRESPONDENCE:

All notices, demands or requests required or permitted under this

Agreement must be in writing, and shall be made by hand delivery,

certified mail, or a similarly internationally recognized courier

service or facsimile, as follows:

(i)

(ii) .

..

_________________

_________________

19. APPLICABILITY OF LAWS, DISPUTES, ARBITRATION AND

JURISDICTION OF COURTS:

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(a) The parties shall at all times and from time to time comply

with the rules, regulations, notifications of Indian laws

including of the Reserve Bank of India (RBI), The Securities

and Exchange Board of India (SEBI) and/or any other

statutory body or authority and to comply with provisions of

the Foreign Exchange Management Act, 1999 (FEMA),

Companies Act 1956 and other statutory provisions. The

parties shall co-operate each other for the same.

(b) This Agreement and any disputes, claims or controversies

arising from, related to or in connection with this Agreement

shall be constructed in accordance with the Laws of the

Republic of India without regard to its conflict of law

principles.

(c) In the event that any dispute, difference, claims, questions

or controversies arise relating to this agreement or

interpretation thereof or as to any non compliance, non-

payment, breach of termination or any other matters

incidental or consequential thereto, the parties shall

endeavor to resolve the same mutually and amicably. If the

parties are unable to resolve their differences amicably, the

same shall be referred to the sole Arbitration in accordance

with the provisions of the Arbitration and Conciliation Act,

1996 or any other arbitral law in force in India. The

Arbitration shall be held India and the proceedings shall be

conducted in English Language. Each party shall have a

right to be represented by Advocates, Attorneys and Counsel

of their choice. All the documents submitted as evidence in

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such proceedings shall be submitted in their original

language with an English Translation.

(d) The Arbitrator shall have no power to add to, modify or

change any provision of this Agreement.

(e) Notwithstanding the foregoing, each Party hereby

acknowledges that the remedies at law of the other Parties

for a breach or an apprehended breach of this Agreement

would be inadequate and, in recognition of this fact, either

Party, in addition to all other remedies that may be available,

shall be entitled to seek equitable relief in the form of specific

performance, injunction or any other equitable remedy from

the Court of competent jurisdiction at .

(f) Unless otherwise terminated in accordance with the terms

hereof, this Agreement and the rights and obligations of the

Parties hereunder shall remain in full force and effect for as

long as any proceeding pursuant to Arbitration are pending.

(g) Subject to the above,the Courts at . shall have

exclusive jurisdiction to try and entertain all disputes arising

between the parties hereto.

IN WITNESS WHEREOF the parties have caused this

Agreement to be duly executed as of the date hereof.

THE COMMON SEAL of the )

Withinnamed. )

. )

.. )

)

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)

)

.. )

.)

. )

THE COMMON SEAL of the )

Withinnamed ..

.. )

.

.

)

SIGNED AND DELIVERED BY the )

.. )

)

)

. )