VIEWS: 917 PAGES: 5 CATEGORY: Joint Venture Agreements POSTED ON: 4/11/2010
A joint venture (JV, sometimes hyphenated 'J-V') is a legal entity formed between two or more parties to undertake an economic activity together. The JV parties agree to create, for a finite time, a new entity and new assets by contributing equity. They then share in the revenues, expenses, and assets and the control of the enterprise. The venture can be for one specific project only - when the JV is referred, more correctly as a consortium (as the building of the Chunnel) - or a continuing business relationship. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements, franchise and brand use agreements, management contracts, rental agreements, for ‘’one-time’’ contracts. The JV is dissolved when that goal is reached.
[Logo Goes Here] [Address] [City, State, Zip] www.WebsiteGoesHere.com XXXX PARTNERS – OOOO PARTNERS JOINT VENTURE AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the Parties herein agree to constitute themselves as Strategic partners, henceforth, "Strategic partners" for the purposes before mentioned, and intending to be legally bound hereby, the parties hereto, after first being duly sworn, do covenant, agree and certify as follows: Joint Venture. _______________(“XXXX”) and/or its assigns and _________________(“OOOO”) located at: ______________________________________________ _______________ (“OOOO”) is a [Description of Company Goes Here] XXXX is a [Description of Company Goes Here] The parties will form a special purpose limited liability company (“Joint Venture LLC”) which will amongst other things pursue different ___________________________________________________ __________________________________________________________________________________. The membership would be 50/50 partnership between OOOO and XXXX. OOOO and XXXX will act as co-managers of the Joint Venture LLC, with the right to take action in accordance with a pre-approved budget and business plan. An Operating Agreement will be entered into prior to the expiration of the due diligence and/or feasibility periods. Capital Contribution. OOOO will contribute investment banking, processing, legal and due diligence fees that need to be paid to _____________. Obligations, Duties, Compensation and Financial Matters. The following are the agreed upon obligations, duties, compensation and financial matters of the parties: 1. OOOO and XXXX will raise $000,000MM with the assistance of ______________________ Advisors and will co-manage the investments from the fund raise. 2. OOOO and XXXX will split management fees, equity and consideration from any and all capital (equity/debt/mezzanine/etc.) that result in management and investment of the $000,000MM fund that is raised by Navigant. 3. OOOO and XXXX jointly agree to sign a 5-year NDNC, which can be set aside in part or in whole upon mutual signed release. 4. In the event that the parties want to terminate this agreement, a buyout price will be mutually determined. In the event that a mutually determined buyout price cannot be agreed upon, then 3 different valuations will be done. The valuations will be completed by credible, industry certified and Page 1 of 5 Initials _____ Initials _____ recognized valuations firms. One valuation firm will be determined by OOOO, the second valuation firm will be determined by XXXX, and a third valuation firm will be mutually agreed upon. The three values will be averaged by adding the three values together and dividing by three. This average of the three values will be the buyout price. Operating Agreement. Within 15 days of signed acceptance of this joint venture OOOO will provide XXXX with a proposed operating agreement for the Joint Venture LLC together with a timeline and use of first phase capital contributions. As soon as reasonably practical XXXX will submit to OOOO written suggestions for any proposed changes to the operating agreement of OOOO; such that the parties can have a mutually approved form of operating agreement within 30 days from signed acceptance of this joint venture. XXXX at its sole discretion may accept and or reject all or any conditions reviewed and may withdraw from the joint venture during the due diligence period and if the parties cannot agree on the form of the operating agreement and preliminary budgets and business plan during the 30-day period following acceptance of this joint venture. The operating agreement for the Joint Venture LLC will contain a “Buy/Sell” covenant which will provide that if the parties after five years from the formation of the Joint Venture LLC, either party can elect to sell its interest, and if not sold within 6 months of such listing, a party can elect to buy the interest of the other member for the amount the other member would have received pursuant to the terms of the Operating Agreement had the ownership interest been sold. In lieu of being bought out, the other partner could elect to buy out the partner making the initial purchase offer for the amount such initially offering partner would have received if the partner’s assets were sold at the appraised value or other agreed value. Any such buyout would be required to close within 90 days from the date the buyout is initiated. The parties, as they move towards a completed transaction, may mutually elect to develop a more specific purchase/joint venture agreement, which would further clarify information, conditions, and terms discovered during the due diligence period. This agreement would be completed and acknowledged prior to the expiration of the due diligence period. Books, Records, Bank Accounts, Checking. At all times during the term hereof, Joint Venture LLC shall keep or cause to be kept, at the principal place of business of the Joint Venture LLC or at such other place as the Joint Venture LLC may determine, books and accounting records for the business and operations of the Joint Venture LLC. Such books shall be open to inspection by OOOO and XXXX, or their authorized representatives, during reasonable working hours. The accounting for the Joint Venture LLC purposes, including the determination of "net profits" and "net losses" shall be in accordance with generally accepted accounting principles consistently applied. The Joint Venture LLC shall engage the services of an accountant who shall be selected with the mutual approval of both parties. All funds of the Joint Venture LLC shall be deposited in an account or accounts in the name of the Joint Venture LLC at such bank or banks as may from time to time be selected by the Joint Venture LLC. Upon the reasonable written request of a either OOOO or XXXX, for purposes related to the interest of that party - and at the requesting party’s cost, delivery to the requesting Party within a reasonable period of time requested financial information required as understood in this agreement. The Joint Venture LLC will provide OOOO and XXXX with income statement for the initial three-month, six-month, or nine- month period of the current fiscal year ended more than 30 days prior to the date of the request, and a balance sheet of the Joint Venture LLC as of the end of that period will be provided. The Joint Venture LLC shall cause an annual report to be provided to OOOO and XXXX not later than 120 days after the close of the Joint Venture LLC s fiscal year. Such report must contain the Joint Venture LLC 's balance sheet as of the end of the Joint Venture LLC s fiscal year and an income statement and statement of changes in financial position for such fiscal year. The financial statements referred to shall be Page 2 of 5 Initials _____ Initials _____ accompanied by the report thereon, if any, of the independent accountants engaged by the Joint Venture LLC. The Joint Venture LLC shall send or shall cause to be sent to OOOO and XXXX, within 90 days after the end of each fiscal year a copy of the Joint Venture LLC’s complete federal, state, and local income tax or information returns for the fiscal year. Confidential Information. Parties may acquire from each other information of a competitively sensitive or proprietary nature in connection with the Joint Venture, and that information is confidential and proprietary. The Parties agree to hold such Confidential Information in strict confidence and to use and disclose the same only for purposes of fulfilling obligation under this contract. The Parties agree that they will use reasonable and commercially acceptable care and not allow any unauthorized person access to Confidential Information, either before or after the termination of this Agreement, and that the Parties will take all action reasonably necessary and satisfactory to protect the confidentiality of the Confidential Information, including enforcing operating procedures to minimize the possibility of unauthorized use or copying of Confidential Information. These restrictions shall not apply to (a) information generally available to the public; (b) information released by OOOO generally without restriction; or (c) information independently developed or acquired by the Parties without reliance on protected information of the Parties or the Parties’ clients. The Parties agree to provide notice to each other immediately after learning of or having reason to suspect a breach of any of the confidentiality obligations set forth in this Agreement. Notwithstanding the foregoing restrictions, the Parties may disclose information to the extent required by an order of any court or other governmental authority, but only after the Party subject to such order has notified the Party to be harmed by such disclosure, and given that Party a reasonable opportunity to obtain protection for such information in connection with such disclosure. During and after the term of this Joint Venture, OOOO shall maintain the confidentiality of and shall not furnish, release, disclose or otherwise make available to third parties, in any form whatsoever, without the prior written consent of XXXX, any names, addresses, telephone or fax numbers, email information & addresses, business plans, production processes, financial projections or other information, written or oral (the Confidential Information), relating to any joint venture partners, merger/acquisition candidates, securities dealers and market-makers, investment opportunities, or sources of capital made known to seller by XXXX or whom OOOO learned of, directly or indirectly, from XXXX. OOOO recognizes and acknowledges that the Confidential Information shall be considered the property of XXXX and that XXXX has expended considerable time and expense in obtaining and developing the Confidential Information and this information is considered a benefit assisting the seller in its procurement. IN OOOO shall
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