Joint Venture Agreement
This Joint Venture Agreement (the “Agreement”) is entered on the (………………..) day of……………….., 20….
BETWEEN
XYZ Pvt Ltd a company incorporated under the Companies Act, 2013 and having its Registered Office at ……………..(address), through its authorized signatory appointed by board vide board resolution dated …………… (hereinafter called “the XYZ” which expression shall include its successors, legal representatives and assigns);
AND
ABC, a partnership firm, formed and registered under the Indian Partnership Act, 1932, having its principal office at …………………….(address) through its authorized signatory appointed by partners dated …………… (hereinafter called “the ABC” which expression shall include its successors, legal representatives and assigns).
Each of the XYZ and the ABC are also referred to herein as a “Party” and collectively as “Parties”.
Whereas the XYZ has …… Years’ experience in manufacture of computers hardware’s and possession some of confidential know-how relating to the manufacture and marketing of the Products and possesses various rights of intellectual property and patents on certain of the Products.; and
Whereas the partners of ABC have for many years been engaged in the research and development, of computer software’s, and is in possession of confidential know-how relating to the Products and possesses various patents on certain of the Products.
Whereas the Parties are interested in carrying on business jointly in the India by manufacturing and sale of complete package of computer system including inbuild software’s ( ……………….. ) (hereinafter the “Product”); and
Whereas the Parties have entered in to a Memorandum of Understanding dated (…………) to provide for the basic terms and conditions for entering into the Agreement;
NOW IT HAS BEEN AGREED BY AND BETWEEN THE PARTIES HEREOF AS UNDER:
1) Joint Venture Company
The JVC will incorporate as a Private Limited Company under Provisions of the Companies Act, 2013, (hereinafter referred to as “the Act”) and carry on its business in the name and style of “……………” or any other name as may be mutually agreed between the parties. (hereinafter called “JVC”)
2) Registered Office
The Registered office of the JVC shall be located at……………..
3) Share Capital
a) The authorised share capital of the JVC is Rs……………divided into ……………..Equity shares of Rs. …….each.
b) Issued and paid-up share capital of the JVC is Rs……………. divided into …………….equity shares of Rs……….. each.
c) All equity shares shall be of the same class and shall be alike in all respects and the holders thereof shall be entitled to identical rights and privileges, including without limitation, to the rights with respect to dividend, voting and the distribution of assets in the event of voluntary or involuntary liquidation, dissolution or winding up of the JVC.
d) Unless otherwise agreed to in writing parties that the paid up and subscribed equity share capital of the JVC in the following proportion:
XYZ : ……… %
ABC : ………%.
Parties shall exercise their voting rights as members of the JVC in such a way as to ensure that the said proportions shall always be maintained.
4) Board of Directors
a) The management of the JVC shall be vested in the Board of Directors consisting of Four Directors. Each party have right to appoint Two directors.
b) Meeting of the Board shall be held at least once in a quarter. The minimum number of meetings required to be held under the Act shall always be complied with. The meeting of the Board shall normally be held at registered office of the company, unless otherwise agreed upon by the Parties.
c) At least fourteen (14) days’ prior written notice of all meetings of the Board shall be given to each of the Directors. There shall be attached to each notice of the meeting of the Board an agenda of the matters to be discussed and decided at the Board meeting. The Board shall not be entitled to take any decision on the matters not provided in the agenda. However, in case of urgency any meeting of the Board can be held at a shorter notice with the approval of all the Directors.
d) Quorum for the meeting of the Board shall not be complete unless one representative of each Party is present at the meeting. However, if at a duly convened meeting of the Board, a representative of either of the Parties are not present (the “Absenting Party”), the meeting shall be adjourned by the JVC. If at the adjourned meeting also a representative of the Absenting Party is not present the quorum shall be deemed to be complete and the Board shall be entitled to take decision on the items mentioned in the agenda. However, the Absenting Party shall have the right to express its consent or dissent on the matters through telephone or Internet.
e) If no resolution or decision can be passed or taken by the Board at its meeting in respect of any matter, as the case may be, giving rise to a deadlock or an impasse between parties, the Parties shall convene another Board meeting within a period of 21 days from the date on which such deadlock and shall use their best efforts to resolve such deadlock to their mutual satisfaction through negotiations conducted in good faith. If at such Board meeting, the above deadlock or impasse continues to remain unresolved, then and in such event, within sixty (60) days of such deadlock continuing, the Parties shall hold a General meeting to resolve the deadlock. Any decision taken at such General meeting shall be final and binding on the Parties.
6) Meetings of the Shareholders
a) General meetings of the JVC shall be called from time to time to direct and control the business of the Company and the Board shall decide the time, place and agenda for convening such meetings subject to the Articles and the applicable requirements of the
b) Notwithstanding anything contained herein, at least twenty-one (21) days clear prior written notice of any meeting of the Shareholders of the JVC shall be given to all the Shareholders and
c) No business shall be transacted at any meeting of Shareholders or any adjournment thereof, unless a proper quorum is present at the time when the meeting proceeds to business and throughout the A quorum for a general meeting shall not be deemed to have been constituted unless one representative of each party is present.
7) Books of Accounts, other records and Audit
a) The JVC shall ensure that its books and records are maintained with a view to accurately reflect its financial positions and are kept in accordance with the requirements of the Act.
b) The JVC shall prepare its Balance Sheet, Profit and Loss Accounts and such other financial statement as may be directed by the Board on a quarterly basis and submit the same within a period of 15 days from the close of each quarter for the approval of the
c) A reputed and mutually acceptable firm of Chartered Accountants shall be appointed as the Auditors of the JVC to carry out the statutory audit of the JVC. However, the Parties shall be free to appoint at their cost any firm of Chartered Accountant or any other qualified person to carry out the independent audit or inspection of the financial position of the JVC or a management audit of the functioning of the JVC.
8) Technical Collaboration and License Agreement
a) Parties will execute a separate Technical Collaboration and License Agreement by which they will agree to provide to a license of the know-how of its products and processes, and any further updates / improvement of the same, developed during the term of the Technical Collaboration Agreement, in respect of Product and containing improvements to the product made during the term of the Technical Collaboration Agreement.
b) Parties shall grant the JVC an exclusive non-transferable license to manufacture the of product in India in accordance with technical knowhow and exclusive license to sell the products in India as per deliberations of the Board of Directors. The said Technical Collaboration Agreement may not be transferred or assigned by the JVC to any third Party without the written consent of parties.
9) Non-Competition/Confidentiality
The parties agree and acknowledge that, as a result of negotiating, entering into and performing this Agreement, each party has and will have access to certain of the other party’s Confidential Information. Each party also understands and agrees that misuse and/or disclosure of that information could adversely affect the other party’s business. Accordingly, the parties agree that, during the Term of this Agreement and thereafter, each party shall use and reproduce the other party’s Confidential Information solely for purposes of this Agreement and only to the extent necessary for such purpose and shall restrict disclosure of the other party’s Confidential Information to its employees, consultants or independent contractors with a need to know and shall not disclose the other party’s Confidential Information to any third party without the prior written approval of the other party. Notwithstanding the foregoing, it shall not be a breach of this Agreement for either party to disclose Confidential Information of the other party if required to do so under law or in a judicial or other governmental investigation or proceeding, provided the other party has been given prior written notice and the disclosing party has sought all commercially reasonable safeguards against any further dissemination prior to such disclosure.
10) Dispute Resolution/Arbitration
Any dispute, controversy or claim arising out of or relating to or in connection with this Agreement, or the breach, termination or validity hereof shall be finally settled by arbitration in accordance with the Rules of arbitration of the Indian Council of Arbitration and the award made in pursuance thereof shall be binding on the Parties. The seat of arbitration will be at……………………..(place).
11) Force Majeure
Notwithstanding anything to the contrary contained herein, the parties of this agreement shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.
12) Governing Law
This Agreement shall be governed by and construed in accordance with the laws of India.
13) Termination of Agreement
a) This Agreement may be terminated by the mutual consent of parties.
b) This agreement shall be terminated in the following events:
i) If either party goes into liquidation, whether voluntary or compulsory, or becomes insolvent, or makes a composition with its creditor, or if any law for the relief of financially sick companies becomes applicable to it or if a receiver is appointed to take possession of its undertaking, property or assets.
ii) In the event the JVC becomes insolvent or goes into liquidation or has a receiver appointed to take possession of its undertaking or makes a composition with its creditors or ceases to carry on business.
iii) In respect of clauses hereinabove, the Agreement shall be terminated by either party by giving the other party which is affected by any of the said events, not less than ninety (90) days written notice on the expiry of which notice, this Agreement shall stand terminated.
iv) If either party shall have committed or knowingly permitted a breach of any of the covenants, conditions or agreements hereinbefore contained and on its part to be performed or observed, the party not in default may serve on the party in default a notice specifying the breach in writing, and requiring it within ninety days to make good the same in the case of a breach capable of being made good, or to pay the party or parties that has / have served such notice adequate compensation in the case of a breach not capable of being made good, and if the party served with such notice shall not within the period of ninety (90) days aforesaid comply with the said notice, then the party that served such notice may serve on the other, thirty days (30) notice in writing to terminate this Agreement and on the expiry of the said notice, this Agreement shall stand absolutely terminated. No right or remedy contained in this Agreement is intended to be exclusive of any other right or remedy, and each and every right or remedy given hereunder shall be cumulative and in addition to any other right or remedy now or hereafter existing in law, or in equity or by statute.
14) Miscellaneous
a) JVC shall at all times maintain an independent identity, as distinct from its parties.
i) Parties undertake that they will not dispose of their shareholding in the first three years of the Agreement. Thereafter if either of them wishes to dispose of its shareholding to a third party, it can do so only upon satisfaction of the following conditions that an offer must first be made to the other Party by delivery of fifteen day’s prior notice in writing, to purchase the shares proposed to be transferred on the same terms and conditions as would be offered to any third
b) Modifications of and amendments to this Agreement shall be effective only if made in writing and signed by the parties.
c) Any notice required or permitted to be given hereunder shall be in writing and sent by registered mail, postage prepaid or facsimile transmission or by Regd. Post AD and shall be addressed to the addresses mentioned below:
If addressed to the ABC, Mr. ………………..
………………..
………………..
If addressed to XYZ, Mr. ………………..
………………..
………………..
If addressed to JVC, at the registered office or such other addresses and numbers as any of the Parties may from time to time designate by notice in writing to the other. The notice shall be deemed to be served when first received.
d) Severability.—The invalidity of any portion of this Agreement shall not affect the remaining portion of this Agreement or any part thereof and this Agreement shall be construed as if such invalid portion or portions had not been inserted therein. The Parties will replace an invalid provision or fill a gap with valid provision, which most closely approximates the intent and economic effect of the invalid provision.
IN WITNESS whereof the Parties hereto have duly executed this Agreement the day and year first above written.
XYZ
Authorized signatory
ABC
authorized signatory
Witnesses
1. …………………………….
2. ……………………………..
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