Joint venture agreement by azeezatanda

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Prepared By: Omoyemi Olusunmade (Mrs.) Enitan Associates Barristers and Solicitors Enitan Suite Ampak Plaza (Ground Floor) Plot 3, Otunba Jobi Fele Way, Behind M. K. O. Abiola Gardens Alausa, Ikeja, Lagos. E-mail:

THIS JOINT VENTURE AGREEMENT made the ……… day of …………………, 2009 BETWEEN TULIP HEALTH LIMITED of 24, Olutayo Alao Street, River Valley Estate, Ojodu, Lagos State (hereinafter referred to as “THL” which expression shall where the context so admits include its assigns and successors in title) of the first part. AND MUTUAL BENEFITS HOME AND PROPERTY LIMITED of 233, Ikorodu Road, Ilupeju, Lagos State (hereinafter referred to as “MBHP” in this joint venture which expression shall where the context so admits include its assigns and successors in title) of the other part. WHEREAS: 1. Mutual Benefits Homes and Property Limited, a company incorporated under the laws of the Federal Republic of Nigeria and a wholly owned subsidiary of Mutual Benefits Assurance Plc, is engaged in development and marketing of properties. Tulip Health Limited is a health management, hospitality and real estate development company incorporated under the laws of the Federal Republic of Nigeria and engaged in real estate business. Tulip Health Limited has identified and commenced negotiation and acquisition of plots of land measuring approximately 107,273 square metres (around 120 plots), located at Isheri – Oke, Berger, Ogun State, Nigeria and has invited Mutual Benefits Homes and Property Limited to fund the perfection of the title to the land and carry out the development of the Land into several housing units with necessary infrastructures and amenities for sale to members of the public. The parties have now agreed to enter into a Joint Venture under this agreement by incorporating a special purpose company in Nigeria called MUTUAL TULIPS ESTATES LIMITED (hereinafter referred to as “the MTEL”) for the purpose of carrying out the development of the land into a housing estate under terms and conditions stated hereunder.




NOW THEREFORE IT AGREED AS FOLLOWS: 1. DESIGNATIONS In this agreement, the following words & expressions shall have the meanings hereby assigned to them, unless the context clearly indicates the contrary: a. b. c. d. 2. The “Agreement” means this Joint Ventures Agreement and any amendment thereafter. The “Joint Venture Company” means the Company formed by the parties and known as MUTUAL TULIPS ESTATES LIMITED. The “parties” or “party” means Mutual Benefits Homes and Property Limited and Tulips Health Limited jointly and severally. The “Development Project” means the development, construction and eventual sale of the housing units constructed on the land.

OBJECT OF THE AGREEMENT AND GENERAL PRINCIPLES: 2.1 Scope of the joint venture 2.1.1 The parties agree with one another to enter into a joint venture established for the objects set out in clause 2.2 and on the terms of this Agreement. The objects of the Joint Venture are: 2.2.1 Sourcing for funds for the development project


2.2.2 2.2.3 2.2.4 2.2.5

the carrying out of the development project; the funding of Development Project Expenditure; the Disposal of the Property; and the doing of such acts, matters and things as may be consistent with, necessary for or incidental to the attainment of any of the foregoing objects.

2.3 3.

The Joint Venture is limited to the objects set out in clause 2.2, and neither party may hold out that the Joint Venture extends to any other property or business.

TERMS AND CONDITIONS 3.1 THL and MBHP shall hold shares in the authorized share capital of MTEL in the ration of 30:70. 3.2 The parties agree that THL had spent N356million Naira in acquiring and perfecting the title on the land. In consideration of its 70% stake in MTEL, the parties has agreed that MBHP will pay THL the sum of N178 million as its equity contribution. 3.3 The parities agree that upon payment of N178 million by MBHP to THL, THL shall immediately cede and transfer its interest in the land to MTEL by executing a Deed of Assignment or other document transferring title in the land in favour of MTEL. 3.4 Mutual Benefits Assurance Plc, the parent company of MBHP shall facilitate and source for funding for the development project.


MANAGEMENT OF THE JOINT VENTURE COMPANY 4.1 The Board of Directors of MTEL (hereinafter referred to as “the Board”) has the responsibility to define the project planning, execution and monitoring and shall have power to negotiate and award contracts on behalf of MTEL, including sourcing for funding, appointment of contractors, consultants, etc. The Board shall ensure that the project is completed in accordance with the projected schedule for development and is implemented in good order, including sales of developed properties. BOARD OF DIRECTORS 4.2.1 The Board of Directors is the highest authority of the MTEL and in such a capacity, it shall decide on the general policy of MTEL and all other matters of primary importance, such as:I. Appointment of the Managing Director and any other member of the Management team and determination of their respective powers; II. Approval of financial programs; III. Approval of the annual balance sheets; IV. Appointment of contractors. V. Appointment of representatives or agents of the joint venture company; VI. General purchasing policy as to machinery and materials to be utilized; VII. Winding up of the Joint Venture Company and closure of its activities and accounts. The parties shall have equal representation on the Board of Directors MTEL. Appointment and replacement of Directors by a party will require a written notice to the other Party. The Board of Directors shall appoint one of them as Chairman of the Board of Directors. The Chairman shall not be entitled to a casting vote. Meeting of the Board of Directors shall be in the manner and procedure as determined by the Board at its first meetings.





4.6 The meetings shall be held at the head office of the Joint Venture Company, or elsewhere as the Board of Directors may decide from time to time. 4.7 The members of the Board of Directors (with the exception of the Managing Director) will not receive any remuneration, but their out – of – pocket expenses for travel and lodging caused by or connected to their attendance at Board meetings will be reimbursed by the Joint Venture Company. The Board must approve any such reimbursements. 4.8 The Managing Director shall be responsible for the day to day management of the JVC and ensure proper coordination and implementation of the development project. 4.9 The Managing Director shall report directly to the Board of Directors. 5. ACCOUNTS/RECORD KEEPING 5.1 A project account shall be opened by and in the name of the Joint Venture Company with a signatory each from the representatives of each party on the Board of Directors of the Joint Venture Company and the funds to be provided by any financier of the development project as well all proceeds from the project shall be paid into the said account. 5.2 The Board of Directors shall give the guidelines and directives on how the account shall be kept. 5.3 The Board of Directors shall direct a yearly internal auditing to be performed on the account of the JVC. 5.4 To the extent that, at the completion of the development project, any account or record must be kept pursuant to the provisions of local laws and regulations, same shall be kept at such place as the Board of Directors may decide, and the cost thereof shall be borne by the Joint Venture Company. 5.5 MTEL shall render to its shareholders, accounts and records monthly or as may be prescribed from time to time by the Board of Directors. 6. DURATION OF AGREEMENT This Agreement shall be deemed to have commenced on signature hereof and shall terminate on the earlier of: i. ii. 7. 7.1 7.2 The mutual agreement of the parties to terminate the Agreement. On the signing of a more detailed Agreement between the parties.

GOOD FAITH The parties’ record that they will negotiate with each other in good faith. Each party shall in its dealings with the other, display the utmost good faith and undertake to produce the doing of all things the performance of all act as may be required of it necessary for and incidental to the putting into event or maintenance of the terms and conditions of this joint venture. CONFIDENTIALITY AND NONCIRCUMVENTION. The parties agree not to disclose to any third party the existence or provisions of this joint venture without the consent in writing of the other third party first being obtained. Submissions to authorities to further the development are not affected by this clause. That the Parties will maintain complete confidentiality regarding each other’s business sources and their affiliates and associates and will disclose only to named

8. 8.1


parties pursuant to the express written permission of the Party who made the source available. 9. 9.1 ASSIGNMENT OF RIGHTS Subject to any requirement or condition provided for in the joint venture to this effect, none of the parties shall sell, assign or in any way encumber or transfer its rights, obligations and interest arising out of or connected to the joint venture without the written consent of the other party. FAILURE OF A PARTY Each party shall fully indemnify the other party for any and all losses or expenses incurred as a result of its failure to comply with the joint venture and / or contract or as a result of other defaults, which may materially adversely affect its participation in this joint venture. PARTY NOT TO BIND ANOTHER Nothing in this joint venture shall be taken or construed as allowing a party to bind the other or to act as representative of the other without such party’s prior consent in writing. FORCE MAJEURE For the purpose of this Agreement, any event which takes place independent of the will of the Parties and which is beyond their control in a way that cannot be foreseen or if foreseen, cannot be prevented will be considered force majeure. It shall also include such Acts of God arising after this Agreement has come into force or any other circumstances, which in any material respect makes the performance of this Agreement impossible or impracticable. Neither Party hereto shall be liable to the other for non-performance or delay in the performance of any of its obligation under this Agreement due to force majeure. If this continues for three (3) months, the parties hereto shall have consultations and decide on the steps to be taken. The Party relying on force majeure shall inform the other party in writing both about the beginning and the end respectively of the event(s). Such notice shall be sworn before a Notary Public or other competent person authorized to administer oaths as regards the reality and exact nature of the facts and date(s) of the force majeure. APPLICABLE LAW The Agreement and the relationship of the parties hereunder shall be governed by and construed in accordance with the Laws of Nigeria. 14. 14.1 ARBITRATION All disputes, differences, claims or question arising between the parties in connection with the joint venture that the parties are unable to settle amicably after their best endeavours to do so shall be finally settled by reference by either of the party to arbitration by a Sole Arbitrator appointed by the President for the time being of the Chartered Institute of Arbitrators UK (Nigeria Branch) in accordance with the provisions of the Arbitration laws or any statutory modification or re-enactment thereof for he time being in force in Nigeria. The venue of the Arbitration shall be Lagos.

10. 10.1

11. 11.1

12. 12.1






No addition to or variation, consensual cancellation of the Joint venture and no waiver of any right arising from the joint venture or its breach or termination shall be of any force or effect unless reduced to writing and signed by the parties. 16. WARRANTY

Each party warrants to the other party that it has power, authority and legal right to sign and perform this Agreement and that agreement has been duly authorized by all necessary authorities and constitutes a valid binding obligation on it in accordance with this joint venture. IN WITNESS WHEREOF the parties hereto have caused their hands and seals to be hereunto affixed the day and year first above written. The Common Seal of the within-named Assignor TULIP HEALTH LIMITED Was affixed in the presence of

_______________ DIRECTOR

____________ SECRETARY

The Common Seal of the within-named Assignee MUTUAL BENEFITS HOMES AND PROPERTY LIMITED Was affixed in the presence of

_______________ DIRECTOR

____________ SECRETARY

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