International Joint Venture Agreement

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International Joint Venture Agreement Powered By Docstoc
					This is a strategic alliance where two or more people or companies agree to contribute
goods, services and/or capital to a common commercial enterprise, where either one of
the parties is located outside the United States, or if the joint venture will carry out
activities or transactions outside of the United States. This document in its draft form
contains numerous of the standard clauses commonly used in these types of contracts,
as well as optional language to allow for customization to ensure the specific terms of
the parties' agreement are addressed. This agreement should be used by individuals or
small businesses that want to enter into a joint venture with an international business
partner.
           INTERNATIONAL JOINT VENTURE AGREEMENT



This International Joint Venture Agreement (the “Agreement”) made the ____ day of _________
20__ (“Effective Date”) by and between _____________________________ ("Party 1") whose
offices         are        located       at         _________________________           and
___________________________________ ("Party 2") whose offices are located at
_______________________________, hereinafter collectively referred to as the “Parties” or
“Joint Venturers”.

RECITALS:

  Whereas, Party 1 is engaged in the business of [Describe business of Company 1] and the
Party 2 is engaged in the business of [Describe business of Company 2].


  Whereas it is the intention of the Parties to associate themselves as Joint Venturers, and not as
partners, in the formation of a Joint Venture, for the purpose of engaging generally in the
business provided for by terms and provisions of this Agreement.

I.       FORMATION:

1.1    Joint Venturers hereby associate themselves to form a Joint Venture pursuant to the laws
of the State of _________________ upon the terms and conditions herein for the purpose of
carrying out the works in accordance with the Agreement.

1.2     The obligations of the Joint Venturers in relation to the works and under this Agreement
shall be several and not joint or joint and several.


II.      NAME AND PRINCIPAL PLACE OF BUSINESS:

2.1   Name.    The name under which the Joint Venture will be conducted is
__________________.

2.2      Principal Place of Business.

The Joint Venture shall be maintained its principal place of business at [Insert Full Address]. The
Joint Venture may re-locate its office from tie to time or may have additional offices as the Joint
Venturers may determine.


III.     PURPOSE OF THE JOINT VENTURE:


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3.1     The purpose of the Joint Venture will be to [Describe the business purpose and activities
of the Joint Venture].
3.2     The Joint Venturers agree and declare that this association for the carrying on of a Joint
Venture business operation does not, and is not intended to create a partnership, for either legal
or taxation purposes.

3.3    The Joint Venturers recognize that all the Parties are, and will continue to be engaged in
the conduct of their respective businesses for their own account.

3.4    The Joint Venture is authorized by the Joint Venturers to engage in activities within the
United States or in any foreign territory or country where the purpose and activities of the Joint
Venture are lawful. The Joint Venture is prohibited from engaging in any activities in any
country where to do so, would be unlawful.


IV.      TERM AND TERMINATION:

4.1    Term. This Joint Venture shall commence on the Effective Date and shall continue in
existence until termination due to any of the reasons below.

4.2    Termination. The Joint Venture shall be dissolved upon the happening of any of the
following events

      (A) If it becomes apparent that a party to the Agreement has become insolvent or has had a
      receiver appointed or has called a meeting of creditors or resolved to go into liquidation
      (except for amalgamation or reconstruction while solvent) or has suffered a petition for
      compulsory winding up.

      (B) The sale or other disposition, not including an exchange of all, or substantially all, of the
      Joint Venture assets.

      (C) Mutual and unanimous agreement of the Parties.

      (D) In the event that a party commits a material breach of any of its obligations under this
      Agreement, and such party fails (i) to remedy that breach within ___ days after receiving
      written notice thereof from the other party to such agreement or (ii) to commence dispute
      resolution under such agreement, within ___ days after receiving written notice of that
      breach from the non-breaching party or Parties, the non-breaching party or Parties may
      immediately terminate this Agreement, upon written notice to the breaching party.

      (E) In the event of termination of this Agreement, the Parties shall return or destroy all forms
      of Confidential Information provided to them under this Agreement within 30 days after such
      termination or expiration, provided, however, that each party may retain one copy of such
      Confidential Information for the sole purpose of use in any litigation resulting from this
      Agreement or the activities undertaken pursuant thereto, and further provided that each party



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      shall retain full use of Confidential Information as provided under this Agreement to the
      extent it relates to any of the rights accrued to a party hereunder prior to such termination or
      expiration.

      (F) Termination of this Agreement shall not relieve the Parties of any obligation accruing
      prior to such termination, nor shall it encumber any of the rights accrued to a party hereunder
      prior to such termination or expiration. Termination of this Agreement pursuant to Article
      4.2. A - E shall not limit any other rights and remedies of the terminating Party.

V.       PERCENTAGE OF PARTICIPATION:

5.1    The Joint Venturers shall contribute capital to the Joint Venture in the following
proportions: [Instruction: The Parties should indicate whether all transactions will involve
U.S. Dollars or another currency]


       Joint Venture Partner                                    Percentage




5.2      Allocation of net profits and net losses.

   (A) Net profit:
The net profit (if any) derived from the Joint Venture shall, subject to Article 7 be divided
between the Joint Venturers in the following proportions:


       Joint Venture Partner                                    Percentage




    (B) Net Losses:
In the event that a net loss arises from the Joint Venture such net loss shall be borne by the Joint
Venturers in the following proportions

       Joint Venture Partner                                    Percentage



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5.3      Return of capital contributions.

   (A) No Joint Venturers shall have the right to withdraw his or her capital contributions or
demand or receive the return of his capital contributions or any part thereof, except as otherwise
provided in this Agreement.

    (B) The Joint Venturers shall not be personally liable for the return of the capital contribution
or any part of thereof, except as otherwise provided in this Agreement.

   (C) The Venture shall not pay any interest on capital contributions of any Joint Venture.

5.4      Distribution.

Proceeds of the Joint Venture shall be distributed to the Joint Venturers, pro rata, based on their
respective capital contributions as set forth in Article 5.1.


VI. `    RESPONSIBILITIES OF THE JOINT VENTURERS:

6.1   Obligations of Parties. The respective obligations of the Parties are as follows:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___________________________________________________


VII.     EXPENSES:

7.1    Any costs and expenses incurred by the Joint Venturers prior to the Effective Date shall
not be reimbursed by the Joint Venture to the Joint Venturer concerned, unless agreed to in
writing by all Parties.




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VIII. BOOKS OF ACCOUNT AND AUDIT:

8.1     Books. The Joint Venturers shall ensure that proper books of account of the Joint
Venture shall be kept and may be examined by any of the Joint Venturers at any time. Each Joint
Venturer shall be at liberty to make such extracts there from as it may think fit by itself or its
agents.

8.2    Audits. An audit of the accounts of the Joint Venture shall be conducted not less than
annually by auditors to be appointed by the Parties.

8.3     Bank Account. The Joint Venture shall operate a bank account with such bank as the
Parties shall from time to time nominate.

   (A) The bank account shall be opened in the name of the Joint Venturers or such business or
firm name as the Joint Venturers shall agree and all checks shall be signed by a representative
nominated by Company 1 and countersigned by a representative nominated by Company 2.

   (B) All the Joint Venture moneys shall as and when received be paid into or deposited with
such bank to the credit of the Joint Venture and all costs of the Joint Venture shall be paid from
such account.

8.4    Method of Accounting. The Joint Venturers agree and understand that the method of
accounting used by the project manager in accordance with the law for tax purposes shall be the
GAAP method. The accounting year will be the calendar year.


IX.      RESTRICTIONS:

9.1     Neither Joint Venturer shall lease, sell, assign or in any other way transfer, mortgage,
deal with or in any way encumber its interests in the Joint Venture or any part thereof without
first obtaining the written consent of the other Joint Venturer, which consent shall not be
unreasonably withheld in the case of a mortgage, charge or lien or encumbrance where the same
is created for the purposes of this agreement or any obligation hereunder.


X.       INDEMNITY:

10.1 Each Joint Venturer shall indemnify and keep indemnified the other Joint Venturer from
and against all and any loss, claim, damage, action, suit, demand, cost, interest, charges and
expenses of any kind whatsoever which the other Joint Venturer may suffer or incur or be called
upon to suffer or incur by virtue of any breach or default by the first mentioned Joint Venturer of
any of its obligations or duties arising hereunder and each Joint Venturer hereby indemnifies and
undertakes to keep indemnified the other Joint Venturer against all or any liability for loss or
damage caused by an act, matter or thing done or omitted to be done on the part of the Joint


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Venturer, its servants, employees, representatives or agents or as a consequence of the Joint
Venturer or its servants, agents, employees or representatives assuming any obligation or
responsibility on behalf of the other Joint Venturer.


XI.      CONFIDENTIALITY & INTELLECTUAL PROPERTY:

11.1 It is contemplated that by entering into this Joint Venture, the Parties will be in a position
to exchange proprietary and confidential information. Each of the Parties hereto agrees to
maintain the confidentiality of any proprietary or confidential information of the other party
hereto that may be disclosed to the respective Parties hereto in connection with the Joint
Venture. Any information of the respective Parties, including personal finances, other business
ventures, assets, liabilities, etc. shall hereto be deemed to be proprietary or confidential,
unless expressly provided to the contrary. Upon the termination of the Joint Venture, each party
agrees to promptly return to the other any confidential information of such other party. The
provisions of this Article shall survive the termination, for any reason, of this Agreement or the
Joint Venture.
11.2 Intellectual Property Rights. Intellectual Property rights are defined as any and all
patents, patent applications, know-how, trademarks, trade mark applications, trade names,
registered design, copyright, database rights or other similar intellectual property rights created,
developed, subsisting or used in connection with the Joint Venture and whether in existence at
the date hereof or created in the future.

11.3 Intellectual property developed solely by an employee or employees of a party or jointly
by an employee or employees of one party with an employee or employees of another party or
Parties in the performance of the Joint Venture will be jointly owned by all Parties.

11.4 The Parties hereby offer licenses to each other for the Intellectual Property or copyrights
owned by each Party developed before the execution of this Agreement and which may be used
in the performance of the Joint Venture. Each Party shall be deemed to have granted the other
Parties a royalty-free, non-exclusive and non-assignable license to make use of any such
documents or other material and data or other information and devices or processes in the
context of the performance of the Joint Venture. The licensee/s shall have no right to reproduce,
copy, alter, reverse engineer, and sell the licenses granted by the licensor.

11.5 All Parties warrant that no documents or other material and data or other information and
devices or processes will be provided for use in connection with the performance of the Joint
Venture which infringe any third Party intellectual property rights;

11.6 No Party shall disclose or pass on any information concerning the business of the other
Parties or that of their customers or utilize, other than in connection with the affairs of the Joint
Venture for the purposes of this Agreement, information trade or professional secrets of said
other Parties, and all Parties shall procure that their employees, agents and sub-contractors shall
observe these conditions.

11.7     In the event that a claim for the infringement of third party Intellectual Property Rights is



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made or intimated against one Joint Venturer in relation to documents or other material, data and
other information or devices and processes provided to that party by another for use in the
performance of the Joint Venture, the said other party shall indemnify the other against any and
all costs, expenses, damages or other losses suffered or payments made by the Joint Venturer in
connection with the claim and any associated judgment or settlement.

11.8 No party shall use in any advertising, promotional or sales literature the name of any
other party without prior written consent.


XII.     REPRESENTATIONS AND WARRANTIES:

12.1 Authorization. Each Party represents and warrants to the other that it has the legal right
and power to enter into this Agreement and to fully perform its obligations hereunder, and that
the performance of such obligations will not conflict with its charter documents or any
agreements, contracts, or other arrangements to which it is a Party. Both parties represent that
they have all required licenses and permits from their respective countries required for the
performance of their respective obligations in this Joint Venture.

12.2 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION AND EXTENDS NO WARRANTY
OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-
INFRINGEMENT.
12.3 Limitation of Liability. IN NO EVENT WILL A PARTY, ITS DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER
PARTIES FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR
CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR ACTION OF
CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR
OTHERWISE, ARISING OUT OF THIS AGREEMENT. EACH PARTY REPRESENTS AND
WARRANTS TO THE OTHER PARTIES THAT IN CARRYING OUT ITS OBLIGATIONS
UNDER THIS AGREEMENT IT WILL NOT KNOWINGLY VIOLATE OR INFRINGE THE
VALID AND ENFORCEABLE INTELLECTUAL PROPERTY RIGHTS, INCLUDING
THOSE CONFERRED BY A VALID, ENFORCEABLE US PATENT, OF ANY THIRD
PARTY, NOR AID AND ABET THE OTHER PARTIES IN ANY SUCH VIOLATION OR
INFRINGEMENT.


XIII. NON-COMPETITION:

13.1        Each party hereby agrees that during the term of the Agreement and for a period of
one (1) year immediately following the termination of the Agreement for any reason, whether
with or without good cause or for any or no cause, with or without notice, each Party
shall not, without the prior written consent of the other Parties, (i) serve as a partner, employee,
consultant, officer, director, manager, agent, associate, investor, freelancer, or otherwise for, (ii)
directly or indirectly, own, purchase, organize or take preparatory steps for the organization of,



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or (iii) build, design, finance, acquire, lease, operate, manage, invest in, work or consult for or
otherwise affiliate with, any business in competition with or otherwise similar to the other
Parties’ business(es). This Article 13 (“Non Competition”) shall survive any termination of this
Agreement.


XIV. DISPUTE RESOLUTION:

14.1 The Parties hereto shall endeavour to resolve any differences of opinion which may arise
between them with respect to the provisions of this Agreement by negotiation between
themselves personally or with the assistance of their attorneys and unless in the opinion of any
party, acting reasonably, the matter in dispute is of such a significant nature to warrant it being
addressed otherwise, no party shall commence any public proceedings until the negotiations have
failed to produce a resolution. In furtherance of the provisions of this paragraph, all Parties
hereby agree to make themselves available on short notice and to negotiate promptly and in good
faith, any matter any party may wish to negotiate.

14.2 The Parties agree to obtain the assistance of a mediator should any party be of the opinion
that the assistance of a mediator would assist in an expeditious and amicable resolution of the
matter in dispute. The costs of any such mediator shall be shared equally by all of the Parties
involved in the dispute.

14.3 If negotiations are conducted with the assistance of a mediator and no agreement is
reached, the mediator shall be instructed to proffer no opinion as to the position maintained by
any party and to make no report unless directed to do otherwise, in writing, by all of the Parties.

14.4 The Parties hereto agree that no report of anything said or of any admission or
communication made in the course of the negotiations or mediation hereinbefore described shall
be used as evidence or shall otherwise be admissible in any legal proceeding, except with the
consent, in writing, of all of the Parties.

14.5 If in the opinion of any party, acting reasonably, it is unlikely to expect the matter in
dispute as between the Parties to be resolved by continued negotiations or continued mediation
as hereinbefore provided, or if the matter is of such a significant nature to warrant it being
addressed otherwise, then the matter in dispute shall be submitted to and shall be subjected to
binding arbitration pursuant to the rules of the American Arbitration Association. The prevailing
party shall be awarded reasonable attorneys’ fees and costs.


XV.      APPLICABLE LAW, JURISDICTION, VENUE:

15.1           This Agreement shall be construed as to both validity and performance and
enforced in accordance with and governed by the laws of the State of [Insert Name of State],
without giving effect to any conflict of laws with any state or foreign territory or country. The
Parties agree that venue and jurisdiction for all matters related to this Agreement shall be in
____________ County, State of ________________, United States.



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XVI. BINDING FORCE:

16.1           This Agreement shall bind and endure for the benefit of the Joint Venturers and
their successors and permitted assigns and transferees.


XVII. NOTICES:

17.1            All notices required by these conditions to be written may be served by letter or
fax. Notices to such Joint Venturer shall be served at their address shown previously in this
Agreement or such other address as such Party may have notified in writing to the others. The
notice shall be deemed to have been received:
(a)     In the case of delivery by hand, when delivered; or
(b)     In the case of pre-paid post, on the second day following the day of posting; or
(c)     In the case of facsimile, on acknowledgement by the recipient facsimile receiving
equipment, provided that the facsimile is confirmed by post.


XVIII. MISCELLANEOUS

18.1 Relationship of Parties. Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency or employer-employee relationship between the Parties. No
party shall incur any debts or make any commitments for the other, except to the extent, if at all,
specifically provided herein.

18.2 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which together shall be deemed to be one and the same
instrument.

18.3 Headings. All headings in this Agreement are for convenience only and shall not affect the
meaning of any provision hereof.

18.4 Binding Effect. This Agreement and all rights and obligations hereunder shall inure to the
benefit of and be binding upon the Parties and their respective lawful successors and assigns.

18.5 Assignment. Neither Party may assign, directly or indirectly, all or part of its rights or
obligations under this Agreement without the prior written consent of the other Party, which
consent shall not be unreasonably withheld or delayed.

18.6 Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise
modified only by means of a written instrument signed by all of the Parties. Any waiver of any
rights or failure to act in a specific instance shall relate only to such instance and shall not be
construed as an agreement to waive any rights or fail to act in any other instance, whether or not
similar.




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18.7 Severability. In the event that any provision of this Agreement shall, for any reason, be
held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision hereof, and the Parties shall negotiate in good faith to modify the
Agreement to preserve (to the extent possible) their original intent.

18.8 Entire Agreement. This Agreement constitutes the entire agreement of the Parties and
supersedes all prior communications, understandings and agreements relating to the subject
matter hereof, whether oral or written.



EXECUTED on the date set out at the commencement of this agreement.

[FIRST PARTY]                                                             [SECOND PARTY]



Authorized Signature                                                      Authorized Signature




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DOCUMENT INFO
Description: This is a strategic alliance where two or more people or companies agree to contribute goods, services and/or capital to a common commercial enterprise, where either one of the parties is located outside the United States, or if the joint venture will carry out activities or transactions outside of the United States. This document in its draft form contains numerous of the standard clauses commonly used in these types of contracts, as well as optional language to allow for customization to ensure the specific terms of the parties' agreement are addressed. This agreement should be used by individuals or small businesses that want to enter into a joint venture with an international business partner.