JOINT VENTURE AGREEMENT
THIS AGREEMENT made effective as of the _____ day of ______________, _______.
[JOINT VENTURER 1]
- and -
[JOINT VENTURER 2]
- and -
[JOINT VENTURER 3]
A. JV1 is a/n [individual resident in the Province of [province]/corporation duly incorporated
pursuant to the laws of [jurisdiction]];
B. JV2 is a/n [individual resident in the Province of [province]/corporation duly incorporated
pursuant to the laws of [jurisdiction]];
C. JV3 is a/n [individual resident in the Province of [province]/corporation duly incorporated
pursuant to the laws of [jurisdiction]];
D. JV1, JV2 and JV2 (the “Owners”) have identified a business opportunity that can be exploited if
they work together, generally described as [description of opportunity] (the “Opportunity”).
E. The Owners have decided to constitute a joint venture for the purpose of exploiting the
Opportunity (the “Joint Venture”).
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants
and agreements contained in this Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties, the parties hereby agree as follows:
1.1 The parties mutually confirm and agree that the recitals set out above are true and correct.
2. CONSTITUTION OF JOINT VENTURE
2.1 The Owners hereby constitute and form the Joint Venture as a joint venture and not as a
2.2 Each Owner shall hold an undivided interest in assets and undertaking of the Joint Venture, and
all profits and losses (if any), in the proportions set out below, as tenants in common:
JV1 .................................................................................................................. __%
JV2 .................................................................................................................. __%
JV3 .................................................................................................................. __%
2.3 Notwithstanding anything herein to the contrary, the parties are not and shall not be deemed to
be partners with one another, and nothing herein constitutes any party to be an agent of the other. No
Owner may enter into any contract, agreement or obligation of any kind binding on the other except as
expressly set out herein or as agreed to at the time by the other Owner.
2.4 It is acknowledged that the Joint Venture is constituted for the purpose of pursuing the
Opportunity described above, and for no other purpose. Nothing herein shall impair or limit any Owner
from pursuing any other commercial activity of any kind whatsoever, except as expressly set out herein
3. PRINCIPAL AREAS OF RESPONSIBILITY
3.1 In addition to any other responsibilities or functions agreed to between the parties from time to
time, it is understood and agreed that the parties will have responsibilities for the Joint Venture and its
assets as follows:
(a) JV1 will be primarily responsible for __________________;
(b) JV2 will be primarily responsible for __________________; and
(c) JV3 will be primarily responsible for __________________.
4. MANAGEMENT OF THE JOINT VENTURE
4.1 The Joint Venture will be managed by __________, keeping in mind the allocation of
responsibilities hereinbefore set out. _______ will report and account to ________ on a monthly basis, or
such other basis as they may agree upon from time to time. ________ shall be entitled to have full access
to the assets, property and books and records of the Joint Venture from to time as he may require on
reasonable prior notice to ___________.
4.2 Notwithstanding the foregoing, the following matters require approval of Owners holding at
least ____% ownership position in the Joint Venture, but after a meeting to discuss same has been held on
at least ___ days prior written notice to all Owners:
(a) ______________________; and
4.3 __________ shall act as a trustee for and on behalf of the Owners with respect to all Joint Venture
activities. All contracts, agreements, orders, invoicing, billings and expenses shall be incurred in the name
of and by and through ________.
4.4 The Joint Venture shall pay ________ a management fee for his management services as set out
above of $_________ per month, adjusted annually on a calendar year basis indexed to the Statistics
Canada Consumer Price Index for Prince Edward Island in each calendar year, which will be considered
an expense of the Joint Venture.
4.5 All Joint Venture income, expenses, receipts and disbursements will be reconciled monthly, and
________ will be provided with a report in that regard and paid its share of any profits without interest,
or shall pay its share of any losses, on a monthly basis. In the event of any conflict as to the calculation of
profits and losses from the Joint Venture, the decision of ________ accountants acting reasonably shall be
final and binding.
4.6 All profits and losses from the Joint Venture will be shared between the Owners in accordance
with the percentages set out in paragraph [no.] above.
5. RESTRICTIONS ON TRANSFER OF INTEREST
5.1 The Owners agree that they will not sell, assign, transfer, pledge, mortgage, charge, create a
security interest in, hypothecate or otherwise dispose of, encumber or deal with the whole or any part of
their respective interest in the Joint Venture except in accordance with the terms of this Agreement, or
except with the written consent of the other Owners.
5.2 Notwithstanding the foregoing, upon the death of an Owner, his interest in the Joint Venture and
the Joint Venture assets may devolve upon his spouse or any of his children or any combination of such
persons without requiring the approval or consent of the other Owners.
6. RIGHT OF FIRST REFUSAL & PIGGYBACK RIGHTS
6.1 Each Owner shall have a right of first refusal on the Joint Venture interest of the other as follows:
(a) no Owner shall agree to sell its interest in the Joint Venture or the Joint Venture assets to a third
party without offering the other Owners a chance to match the third party's offer in all material
(b) a full copy of any offer to purchase under sub-paragraph (a), containing complete particulars and
details of the third party's offer (the “Notice”), shall be delivered to the other Owner, who shall
have fourteen (14) business days to elect to exercise its right of first refusal, in which case it shall
complete the purchase upon the same terms proposed by the third party pro rata in accordance
with paragraph [no.], and failing which the first Owner may complete the transaction with the
third party on exactly the same terms as set out in the Notice to the other Owner.
(c) in addition to the option set out under paragraph [no.], in the event that the other Owner does
not wish to exercise the right of first refusal set out in paragraph [no.], and in addition does not
wish to accept the buyer as a co-owner of this Joint Venture, then, within the 14 days set out in
paragraph [no.], the other Owner may elect to require the buyer to purchase its interest in the
Joint Venture and the assets thereof on the same terms and conditions as set out in the buyer's
offer to the first Owner, adjusted pro rata in accordance with the percentages set out in
7. BUY/SELL PROVISION
7.1 In addition to the foregoing, any Owner may exercise a shotgun clause with respect to any other
Owner as follows:
(a) the first Owner shall deliver a written offer to purchase the other Owner's interest in the Joint
Venture upon the terms set out in the notice; and
(b) the second Owner shall have fourteen (14) business days to elect to either (i) sell its interest in the
Joint Venture to the first Owner upon the terms set out in the notice, or (ii) buy the interest of the
first Owner in the Joint Venture upon the terms set out in the notice (adjusted pro rata on account
of the percentages set out in paragraph [no.]) by delivering a written notice of the exercise of its
option in that regard to the first Owner, in which case the transaction shall be completed upon
the terms therein set out; and
(c) if the second Owner does not deliver written notice within the time period set out in sub-
paragraph (b), the second Owner shall be deemed to have agreed to sell its interest in the Joint
Venture to the first Owner upon the terms set out in the original notice;
(d) provided that no Owner may exercise this shotgun option within _______ months following the
effective date of this agreement, unless the other Owner is in default of its obligations hereunder.
8. SALE OF ALL JOINT VENTURE ASSETS AND WINDING UP OF JOINT VENTURE
8.1 Any time after ________________, any Owner may require that the all assets of the Joint Venture
be offered for sale (the “Sale”) as follows:
(a) the Owner requiring the Sale shall provide fourteen (14) days prior written notice to the other
Owner requiring a meeting of Owners to determine the manner of Sale, including Sale price and
(b) on the day so appointed, the Owners shall meet and negotiate in good faith to determine the
manner of Sale, includin