Joint Venture Agreement

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Joint Venture Agreement Powered By Docstoc
					This Joint Venture Agreement is used when two or more individuals or business entities
combine or collaborate on a particular project or undertaking. It specifies that each
party has an equal interest in the joint venture and sets forth each party's rights and
responsibilities. Details relating to administration and operation, termination and dispute
resolution are also included in the agreement. This document in its draft form contains
many of the standard provisions commonly found in a joint venture agreement and may
be customized to fit the needs of the contracting parties. This agreement should be
used when individuals or companies collaborate to form a joint venture.
                        JOINT VENTURE AGREEMENT

THIS JOINT VENTURE AGREEMENT (the "Agreement"), made and entered into as of this __
day of ____________, 201___, by and between ______________ [NAME OF FIRST PARTY]
of __________ [ADDRESS, COUNTY AND STATE OF PARTY 1] (hereinafter, "Party 1")
and ___________ [NAME OF PARTY 2] of ___________ [ADDRESS, COUNTY AND
STATE OF PARTY 2] (hereinafter "Party 2").

{Instruction: Joint ventures can be between parties who are all individuals, or between parties
that are all business entities, or between a combination of these.}
{Instruction: When identifying the parties, provide the full legal names of any individual-
parties, and the official business names of any business-parties.}



1.01           ____________ [NAME OF PARTY 1] and ______________ [NAME OF
PARTY 2] (hereinafter, collectively, the “Joint Venturers” and singularly, the “Joint Venturer”)
wish to enter into an exclusive joint venture agreement (the “Joint Venture”) for the purposes of
_________________________; and
{Instruction: Describe the nature of the joint venture business.}

1.02           Each of the Joint Venturers shall have an undivided equal share and interest in the
Joint Venture (“Proportionate Share”).

               NOW THEREFORE in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
(“Parties”) hereto hereby agrees as follows:

2.00           BACKGROUND

2.01            The Joint Venturers hereby form a joint venture for the purpose of carrying out all
acts which are necessary or appropriate directly or indirectly to cause or effect or accomplish the
goal(s) set out in clause 1.01, above, and to engage in other such activity as may be considered
by the Joint Venturers to be necessary or desirable in connection with the foregoing.

2.02           No partnership is created by this Agreement. Nothing contained in this
Agreement shall be deemed to constitute the Joint Venturers as partners nor as agents of the
other nor any other relationship whereby either could be held liable for any act or omission of the
other. Neither Joint Venturer shall have any authority to act for the other or to incur any
obligation on behalf of the other or of the Joint Venture other than as specifically provided by
this Agreement. Each Joint Venturer covenants to indemnify the other from all claims, losses,
costs, charges, fees, expenses, damages, obligations and responsibilities incurred by a Joint
Venture by reason of any action or omission of the other outside the scope of the authority that is
specifically provided by this Agreement.

2.03           Except as provided in this Agreement, each Joint Venturer may independently
engage in any business endeavor whether or not competitive with the objects of the Joint
Venture, without consulting the other Joint Venturer and without in any way being accountable
to the Joint Venture.

2.04          The Joint Venture shall be carried on under the name or names as the Joint
Venturers shall agree. Documentation, signage and advertising shall include
"_______________" or words having a similar intent.
{Instruction: This clause is optional. If Parties want to agree on a name for their venture, it
should be put here. If not, this clause may be deleted or crossed out.}

2.05           The Joint Venturers shall be responsible for the liabilities and obligations of the
Joint Venture in accordance with their respective Proportionate Share, save that any liability or
obligation incurred by one Joint Venturer without the written consent of the other or as otherwise
provided in this Agreement shall be the sole liability or obligation of the Joint Venturer incurring
the same, without any right to contribution from or indemnity by the other Joint Venturer.

2.07           If either Joint Venturer, with the consent of the other Joint Venturer, becomes
liable, indebted or a guarantor for moneys borrowed or other obligations incurred by the Joint
Venture, the other Joint Venturer shall indemnify the first Joint Venturer to the extent of the
Proportionate Share of the other Joint Venturer.


3.01            ___________________ [NAME OF PERSON OR PARTY WHO WILL BE
ASSUMING THESE DUTIES] shall on, behalf of the Joint Venture, be responsible for all
administrative duties (the “Administration” or the "Administrator") for the Joint Venture
including all accounting, sales, marketing, invoicing, collections, payables and banking. Such
Administration shall be carried out and reported to the Joint Venture on a monthly or less-
frequent basis, as may be agreed upon by the Joint Venture.


4.01          A monthly administration fee (the “Administration Fee”) to compensate
_____________ [NAME OF PERSON OR PARTY GIVEN IN 3.01, above] for the
Administration of the Joint Venture, will be paid by the Joint Venture. This fee will be at a rate
of _____________ ($______) Dollars per month, commencing on the date that the Joint Venture
becomes established. The first Administration Fee payment shall be made on the _____ day of
the second month following the establishment of the Joint Venture and thereafter on the _____
day of each and every month.

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4.02           After payment of all expenses related to the operation of the Joint Venture, any
profits generated from this Joint Venture will be divided equally between ___________
[PARTY 1] and _______________ [PARTY 2] and paid out on ______________ in each
year/month after the commencement of the Joint Venture.
{Instruction: Specify when any profits will be paid to all Parties. For example, "Within 7 days
of the end of each month." "Within 2 weeks of the end of each calendar year." etc.}

4.03            Rehabilitation funds will be secured in a manner agreeable to both of the Parties
as per current industry practices.

5.00            OPERATIONS

5.01     As part of its/his/her Administration duties ___________ [NAME OF
ADMINISTRATOR] shall do the following:

        (a)     maintain reasonable and thorough written records of the Joint Venture.

        (b)     upon      request     of    ______________         [PERSON        REQUESTING],
                ________________ [PERSON RESPONSIBLE FOR RESPONDING TO A
                REQUEST] shall supply copies of, or reasonable access to review, such
                supporting verification business activities of the Joint Venture. {Instruction: In
                the first space, provide names of Party 1 and Party 2, as well as any other
                person(s) authorized to review such records; for example, a party's accountant,
                spouse, lawyer, etc.}

        (c)     permit _________________, at its expense, the right to audit the applicable books
                and Records of the Joint Venture, including without limitation computer files
                related to the Joint Venture. {Instruction: same as in clause 5.01(b), directly

5.02           _________________ [NAME OF PERSON RESPONSIBLE FOR
ENSURING THE FOLLOWING] at the cost of the Joint Venture, shall maintain strict
compliance with all applicable environmental, health or safety laws, regulations, order or
approvals throughout the term of the Joint Venture and thereafter.

5.03            The Joint Venture shall be responsible solely for the payment of any increases in
either the realty or business taxes in respect to the operation of the Joint Venture, if applicable
and further; the Joint Venture shall be responsible for any tax imposed by any government

5.04           Neither Joint Venturer shall sell, transfer, assign, pledge, hypothecate, mortgage,
or in any other manner encumber its interest in the Joint Venture except as specifically provided
in this Agreement without the written consent of the other. Notwithstanding the foregoing, each
Joint Venturer may pledge or hypothecate its interest in the Joint Venture to a
Canadian/American chartered bank or registered trust company as security for loans, provided

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that where a fixed charge or security interest is given, the lender shall acknowledge and agree to
be bound by the provisions of this Agreement in the event of realization of its security.

5.05           Party 1 and Party 2 shall establish regular meetings to review and discuss all
matters relevant to the operation of the Joint Venture. On an annual basis, or at such other
intervals as may be necessary, Party 1 and Party 2 will develop a business plan for the operation
of the Joint Venture, which will be used by the Joint Venture as a guide for the operation thereof.


6.01           The Term of this Agreement shall commence on the date of execution and end on
the earlier of ________ [days/months/years] [SPECIFY WHICH TIME PERIOD] from the
date that Joint Venture operations commence, or, on the date of termination as may be
established pursuant to paragraph 6.02, below.
{Instruction: if there is no expected or anticipated end date, Parties may choose a far-off date;
for example, "99 Years."}

6.02           At any time during the Joint Venture, if it is reasonably determined that it is no
longer commercially feasible according to the general standards of the industry, to profitably
continue the Joint Venture, then Party 1 or Party 2 may terminate the Joint Venture upon
reasonable notice to the other and Party 1 and Party 2 shall comply with the following conditions
in a timely manner prior to the effective date of termination:

        (i)     The Joint Venture shall make all payments due under the Agreement up to and
                including the termination date; and

        (ii)    Party 1 and Party 2 shall comply with all other terms and conditions of the
                Agreement up to the termination date.

7.00            DISPUTE RESOLUTION

7.01           If the Parties to this Agreement disagree about any aspect of this Agreement, or
about the performance or non-performance by the other party, the Parties will try to resolve the
dispute through mediation.

        (b)     Such Party shall give the other Party, in writing:
                (i)   notice of the proposed reviewable aspect of this Agreement;
                (ii)  evidence supporting the proposed reviewable aspect this Agreement; and,
                (iii) any requests for information from the other necessary to determine the

        (c)     Such a request will be answered within _________ ( ) days.

        (d)     After exchanging any information required by this Agreement, the Parties will
                meet personally (or through their personal representatives) to resolve the issues in

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                dispute. If they come to an agreement, the Parties will sign and date an amending
                agreement before witnesses.

        (e)     If the Parties cannot agree within ______ ( ) days of the request for disclosure
                they will try to resolve the issue through mediation.

        (f)     Either Party may determine if mediation is necessary in order to resolve an issue,
                and that Party shall give written notice that it intends to invoke this clause and the
                name of the mediator it wishes to use. The Parties will then meet with that
                mediator, within ______ ( ) days of receipt of such notice, or earlier if
                appointments are available. The Party who first invokes this clause shall be
                initially responsible for any costs associated with the mediation, pending any
                agreement made by the Parties or Court Order.

        (g)     The mediator shall discuss the disagreement with the Parties and attempt to work
                out a mutually satisfactory solution. In conducting any mediation, the mediator
                may collect such information from third Parties as, in the discretion of the
                mediator, is required to assist in resolving the dispute, and the Parties will sign
                any necessary authorizations to permit this.

        (h)     If the dispute cannot be resolved by the Parties in the forgoing manner, it may be
                resolved by a court of competent jurisdiction on application of either Party or,
                upon mutual agreement, by an arbitration conducted in accordance with the
                arbitration laws of the applicable jurisdiction.

        (i)     If the Parties elect arbitration, the Parties will jointly select an arbitrator and will
                share equally arbitration costs. If the Parties fail to appoint an arbitrator, either
                Party may apply to a Judge of the relevant court having jurisdiction to appoint an
                arbitrator to determine such dispute. The decision of the arbitrator shall be final
                and binding on the Parties.

8.00            GENERAL

8.01           The Parties agree to act in good faith and hereto agree to do all acts and things,
and enter into such other documents and agreements so that all of the terms and conditions of
this Agreement will be carried out at all relevant times as herein required to assure compliance.

8.02            All communications which may be or are required to be given by either Party to
the other, shall (in the absence of any specific provision to the contrary) be in writing and or sent
by prepaid registered mail or by facsimile transmission (provided the sender obtains evidence or
verification of transmission receipt) to the Parties at their following respective addresses and
telecopier numbers:

        To _______________at: [NAME OF PARTY 1]


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        Fax: (____) ___________

        To _______________ at: [NAME OF PARTY 2]



        Fax: (____) ___________

and if any such payment or communication is sent by prepaid registered mail, it shall, subject to
the following sentence, be conclusively deemed to have been received on the third business day
following the mailing of it and, if delivered or telecopied, it shall be conclusively deemed to have
been received at the time of delivery or transmission. Notwithstanding the foregoing provisions
with respect to mailing, in the event that it may be reasonably anticipated that, due to any strike,
lock-out or similar event involving an interruption in postal service, any payment or
communication will not be received by the addressee by no later than the third business day
following the mailing of it, then the mailing of any payment or communication as mentioned
shall not be an effective means of sending it but rather any payment must then be sent by
delivery, and any communication by delivery or facsimile. Either Party may from time-to-time
change its address by notice to the other in accordance with this Section.

8.03            This Agreement shall inure to the benefit of, and be binding upon, Parties hereto
and their respective successors and assigns, and be registered on title. Any prior encumbrances
shall specifically acknowledge this Joint Venture agreement.

8.04            Neither party shall be liable in damages or have the right to terminate this
Agreement for any delay or default in performance hereunder if such delay or default is caused
by conditions beyond its control including, but not limited to Acts of God, government
restrictions, wars, insurrections and/or any other cause beyond the reasonable control of the party
whose performance is affected.

8.05           This Agreement may be signed in two or more identical counterparts each of
which will be deemed to be an original and all of which together will constitute one and the same

8.07           The Parties hereto agree that this Agreement may be transmitted by facsimile,
electronic mail or such similar device and that the reproduction of signatures by facsimile,
electronic mail or such similar device will be treated as binding as if originals and each party
hereto undertakes to provide each and every other party hereto with a copy of the Agreement
bearing original signatures forthwith upon demand.

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8.08            This Agreement shall be governed by and construed in accordance with the laws
of the Province/State of _______________ and the applicable laws of Canada/United States.
{Instruction: delete or cross out the country that does NOT apply.} The Parties hereto submit
to the non-exclusive jurisdiction on the Courts of _______________ [PROVIDE LOCATION
to any dispute, claim or other matter arising under this Agreement.

8.09            SEVERABILITY. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of any such provision in such
jurisdiction in any other respect and of the remaining provisions herein shall not be affected or
impaired thereby.

                IN WITNESS WHEREOF the Parties have executed this Agreement as of the
day and year first written above.

  in the presence of:                        )
Witness                                      )       (Name, if Individual)
Witness                                      )       (Name, if Individual)


                                                     (Company Name, if applicable)

                                                   Name: __________________
                                                   Title: ___________________
                                                   I have authority to bind the

                                                     (Company Name, if applicable)

                                                     Name: __________________

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                                Title: __________________
                                I have authority to bind the

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                                         ADDENDUM "A"

                                        ARTICLE I
                                OVERVIEW OF JOINT VENTURE

1.01 Business Purpose. The business of the Joint Venture shall be as follows:
{Instruction: Repeat description, as already given in Clause 1.01, at beginning of document.}

1.02 Term of the Agreement. This Joint Venture shall commence on the date first above written
and shall continue in existence until terminated, liquidated, or dissolved by law or as hereinafter

                                       ARTICLE II
                                   GENERAL DEFINITIONS

The following comprise the general definitions of terms utilized in this Agreement:

2.01 Affiliate. An Affiliate of an entity is a person that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control of such entity.

2.02 Capital Contribution(s). The capital contribution to the Joint Venture actually made by the
Parties, including property, cash and any additional capital contributions made.

2.03 Profits and Losses. Any income or loss of the Partnership for federal income tax purposes
determined by the Partnership's fiscal year, including, without limitation, each item of
Partnership income, gain, loss or deduction.

                                     ARTICLE III
                          OBLIGATIONS OF THE JOINT VENTURES

 ______________ [NAME OF ADMINISTRATOR] is responsible for all operations and
decisions of the Joint Venture and will be compensated for providing various services.

                                          ARTICLE IV

4.01 Profits and Losses. Commencing on the date hereof and ending on the termination of the
business of the Joint Venture, all profits, losses and other allocations to the Joint Venture that
have not yet been disbursed shall be allocated as follows, at the conclusion of each fiscal year:
_________________ [NAME OF PARTY 1]. . . . . . . . 50%
_________________ [NAME OF PARTY 2] _____________ . . . . . . . . . 50%

                                    ARTICLE V

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5.01 Business of the Joint Venture. ______________ [PROVIDE PARTY'S NAME] shall
have full, exclusive and complete authority and discretion in the management and control of the
business of the Joint Venture for the purposes herein stated and shall make all decisions affecting
the business of the Joint Venture. At such, any action taken shall constitute the act of, and serve
to bind, the Joint Venture. __________ [PROVIDE PARTY'S NAME] shall manage and
control the affairs of the Joint Venture to the best of its ability and shall use its best efforts to
carry out the business of the Joint Venture. ____________ [PROVIDE NAME OF ANY
in or have any control over the Joint Venture business nor shall it have any authority or right to
act for or bind the Joint Venture.
{Instruction: Use this last sentence only if one or more Parties are "silent" and will not have
any of the described controls or authorities. Delete or cross out if this does not apply to any of
the Parties, or, write in "Not Applicable" in this space.}

                           ARTICLE VI

6.01 Validity of Transactions. Affiliates of the Parties to this Agreement may be engaged to
perform services for the Joint Venture. The validity of any transaction, agreement or payment
involving the Joint Venture and any Affiliates of the Parties to this Agreement otherwise
permitted by the terms of this Agreement shall not be affected by reason of the relationship
between them and such Affiliates or the approval of said transactions, agreement or payment.

6.02 Other Business of the Parties to this Agreement. The Parties to this Agreement and their
respective Affiliates may have interests in businesses other than the Joint Venture business. The
Joint Venture shall not have the right to the income or proceeds derived from such other business
interests and, even if they are competitive with the Partnership business, such business interests
shall not be deemed wrongful or improper.

                                          ARTICLE VII
                                PAYMENT OF EXPENSES
All expenses of the Joint Venture shall be initially paid by ___________ [PARTY'S NAME]
and shall be reimbursed by the Joint Venture.

                                   ARTICLE VIII

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 Joint Venture and such course of conduct did not constitute
negligence or 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 Joint Venture.

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                                          ARTICLE IX

9.01 Events of the Joint Ventures. The Joint Venture shall be dissolved upon the happening of
any of the following events:

(a) The adjudication of bankruptcy, filing of a petition pursuant to a Chapter of the Federal
Bankruptcy Act, withdrawal, removal or insolvency of either of the Parties.
(b) The sale or other disposition, not including an exchange of all, or substantially all, of the
Joint Venture assets.
(c) Mutual agreement of the Parties.

                                       ARTICLE X
                                MISCELLANEOUS PROVISIONS

10.01 Books and Records. The Joint Venture shall keep adequate books and records at its place
of business, setting forth a true and accurate account of all business transactions arising out of
and in connection with the conduct of the Joint Venture.

10.02 Validity. 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.

10.03 Integrated Agreement. This Agreement constitutes the entire understanding and agreement
among 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.

10.04 Headings. 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

10.05 Notices. Except as may be otherwise specifically provided in this Agreement, all notices
required or permitted here under shall be in writing and shall be deemed to be delivered when
deposited in the United States 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.

10.06 Applicable Law and Venue. This Agreement shall be construed and enforced under the
laws of the State of ________. [NAME OF STATE]

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10.07 Other Instruments. 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.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and
year first above written.

Signed, sealed and delivered in the presence of:

___________________________ __________________________
___________________________ ___________________________

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Description: This Joint Venture Agreement is used when two or more individuals or business entities combine or collaborate on a particular project or undertaking. It specifies that each party has an equal interest in the joint venture and sets forth each party's rights and responsibilities. Details relating to administration and operation, termination and an dispute resolution are also included in the agreement. This document in its draft form contains many of the standard provisions commonly found in a joint venture agreement and may be customized to fit the needs of the contracting parties. This agreement should be used when individuals or companies collaborate to form a joint venture.
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