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Form No. 13
Joint Venture Agreement
THIS AGREEMENT is made on _________________,
BETWEEN
. . . . . . . . . . . . . . . . , a Company registered under the Companies
Act, 1956 and having its registered office at. . .. . . . . . . . . India, here-
inafter referred to as “. . . . . . . . . “ (which expression shall mean and
include its successors and assigns) of the first part :
AND
. . . . . . . . . . . . . . . . , a Company organised and existing under the laws
of. . . . . . . . . . . . . . . . and having its offices at . . . . . . . . . . . . . . . . ,
hereinafter referred to as “. . . . . . . . . . . . . . . . ” (which expression shall
mean and include its successors and assigns) of the second part :
AND
. . . . . . . . . . . . . . . PRIVATE LIMITED, a Company incorporated under
the Companies Act, 1956 and having its registered office at . . . . . . . . .
. . . . . . . , India, hereinafter referred to as “the JVC” (which expression
shall mean and include its successors and assigns) of the third part :
WITNESSETH
WHEREAS
A. . . . . . . . . . . . . . . . . has for many years been engaged in the
research and development, manufacture and sale of . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . as well as of other complementary
products and accessories, hereinafter referred to as the Products
and as defined in Article I A of the Technical Collaboration and
Licence Agreement (hereinafter known as the Technical Collabora-
tion Agreement) to be signed between. . . . . . . . . . . . . . . . and
the JVC, and is in possession 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.
B. . . . . . . . . . has, through the past activities of . . . . . . . . . (here-
inafter referred to as “. . . . . . .”), considerable knowledge in the
manufacture and marketing of the above type of Products in India
and desires firstly to merge this latter company into . . . . . . and
then to separate the filters activities out from. . . . . . . . .into the
JVC with. . . . . . . . . . . . . . . . for the manufacture and sale of
the Products in and outside India, upon the terms and conditions
set out hereinafter in Clause 7.12.
C. . . . . . . . . . and. . . . . . . . . have entered into an Agreement for
Non-Disclosure of confidential information dated . . . . . . . 20.......,
relating to non-disclosure by . . . . . . . . . to. . . . . . . . . of certain
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confidential information as a preliminary to the negotiations for
the incorporation of the proposed JVC.
D. By a Memorandum of Understanding between . . . . . . . . . and .
. . . . . . . . dated . . . . . . . . , (hereinafter called “the MOU”), the
parties thereto agreed that, subject to the fulfillment of certain
conditions precedent therein specified, they would participate in
the organisation and promotion of a joint venture company to be
called . . . . . . . . . (the JVC) on the terms and conditions therein
stated;
E. . . . . . . . . . and. . . . . . . . . have fixed certain additional condi-
tions precedent for the implementation of the object and clauses
of this Agreement, namely :
1. that the filters operations of. . . . . . . . . , to be separated out for
inclusion in the JVC, shall be available at any time to the JVC for
the manufacture of PRODUCTS as defined in Clause A of Article I
of the Technical Collaboration Agreement.
2. that. . . . . . . . . will transfer to the JVC the entire undertaking of
the Filters Division as a going concern, including assets for the
manufacturing activities of the JVC free and clear of all encum-
brances, charges and liens.
3. that the transfer of such Filters Division and activities of the for-
mer. . . . . . . . . as have been agreed on by . . . . . . . . . and . . .
. . . . . . for the JVC shall be transferred to the JVC by ...........
dt. . However, nothing shall prevent the Parties from agreeing, if
necessary, to extend the period.
F. . . . . . . . . . and. . . . . . . . . have jointly promoted and organised
the JVC;
G. The JVC was incorporated under the Companies Act, 1956, on the
dt............ , with the registered office at . . . . . . . . . , India;
H. . . . . . . . . . and. . . . . . . . . desire to record the following Agree-
ment to regulate their future relationship as shareholders of and
joint partners in the JVC.
NOW IT IS HEREBY AGREED BY AND AMONG THE PARTIES AS
FOLLOWS :
1. JOINT VENTURE COMPANY
1.1 ____ and ______ agree to participate as shareholders of and joint
venture partners in the JVC, and agree to exercise their respective
voting rights at meetings of the members of the JVC and to cause
the JVC and the Directors respectively nominated or appointed by
them on the Board of Directors of the JVC to vote at Board meet-
ings and otherwise in such manner as duly to perform, effectuate
and implement the terms and conditions of this Agreement and to
prevent the taking by it or by them or by any third party of any ac-
tion contrary to, or motivated by an intention to defeat, the terms
of this Agreement.
1.2 The JVC was incorporated on. . . . . . . . . , dt. . . . . , as a Private
Limited Company under the Companies Act, 1956, (hereinafter re-
ferred to as “the Act”) vide Certificate of Incorporation No. . . . . . .
. . . , issued by the Registrar of Companies,. . . . . . ..
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2. CORPORATE NAME
2.1 The name with which the JVC has been registered, is . . . . . . . . .
PRIVATE LIMITED.
2.2 It is a basic term of this Agreement that the names or marks ‘. . .
. . . . . . ’ or ‘. . . . . . . . . or their respective logos, as a part of the
corporate name and style of the JVC, or as a part of the corporate
logo or letterhead, stationery, packaging or other materials used by
. . . . . . . . . or . . . . . . . . . or any hybrid variation thereof, or any
other use thereof, shall cease to be so used if, at any time,. . . . . .
. . . or. . . . . . . . . ceases to have such minimum shareholding in
the capital of the JVC as shall be mutually agreed upon.. . . . . . . .
. and. . . . . . . . . shall each enter into separate Name Protection
Agreements with the JVC containing such terms and conditions as
may be mutually agreed. The articles of association of the JVC shall
include provisions embodying the principal terms and conditions of
the said Name Protection Agreements. . . . . . . . . and . . . . . . . . .
agree to use and exercise their voting rights as members of the JVC
to ensure that the JVC shall honour and implement the said name
protection Agreements.
2.3 . . . . . . . . . agrees and undertakes to procure from . . . . . . . . .
Limited (hereinafter known as “. . . . . . . . . ”) an Agreement in favour
of the JVC providing for the use and benefit of the name and mark
. . . . . . . and for the user of the . . . . . . . . trade mark and trade
name in the usual form and on the usual terms on which. . . . . . .
. . has granted such permission to the companies of the . . . . . . . .
. Group. . . . . . . . . . agrees to permit the JVC the use of the trade
name/mark/logo on such terms and conditions as may be mutually
agreed upon between . . . . . . . . . and . . . . . . . . . .
2.4 For the use of the words ‘. . . . . . . . . ‘ and ‘. . . . . . . . . ’ in the
corporate name of the JVC, the JVC shall pay to . . . . . . . . . and .
. .. . . . . . . . . . . . . . equally, a lumpsum onetime fee of Rs.. . . . . .
. . . each and also annual fee for the use of the respective logos as
may be mutually decided by . . . . . . . . . . . . and . . . . . . . . . . . .
. . . . . . .
2.5 The JVC shall also pay to . . . . . . . . . and / or . . . . . . . . . actual
legal expenses for defence and protection of the. . . . . . . . . /. . . .
. . . . . trade name/mark/logo used by the JVC.
3. REGISTERED OFFICE
3.1 The office of the JVC shall be located at. . . . . . . . . , India, in the
State of. . . . . . . . . . Any change in the location of the registered
office will be with the mutual agreement of . . . . . . . . . and . . . . .
. . . . .
4. OBJECTS
4.1 The main object of the JVC as stated in its memorandum of associa-
tion is the development, manufacture and distribution of. . . . . . . . .
. . . . . . . . . as well as of other complementary products and acces-
sories (hereinafter referred to as “the PRODUCTS”) and as defined
in the Technical Collaboration Agreement to be signed between. . . .
. . . . . and the JVC. . . . . . . . . . and. . . . . . . . . . . . . . . . . agree
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that any change in the said business activity of the JVC will require
the written consent of . . . . . . . . . and . . . . . . . . .
5. SHARE CAPITAL
5.1 The authorised share capital of the JVC on its incorporation is Indian
Rs.. . . . . . . . . (Rupees. . . . . . . . . only).
5.2 As of the date of this Agreement, the issued and paid up share capi-
tal of the JVC is Rs.. . . . . . . . . (Rupees . . . . . . . . . only) divided
into . . . . . . . . . equity shares of Rs.10 each.
5.3 Any increase in the authorised or issued and paid up share capital
shall be effected only with the mutual agreement of. . . . . . . . .
and . . . . . . . . . In the event a capital increase becomes necessary
to safeguard the desired business growth of the JVC, in particular
through investments, the agreement cannot be refused either by. . .
. . . . . . or . . . . . . . . . . If no resolution or decision can be passed
or taken by the Board of Directors at its meeting in respect of such
an increase in capital, the procedure provided in Clause 11 will be
applied.
5.4 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 re-
spect to dividend, voting and the distribution of assets in the event
of voluntary or involuntary liquidation, dissolution or winding up of
the JVC.
5.5 If and when the JVC shall issue any additional shares, the JVC shall
first offer such shares to the existing shareholders in proportion to
the equity shares then owned by each of them, subject to compliance
with the conditions, if any, imposed by applicable law. In case such
offer is not accepted within twelve (12) weeks of the offer, the JVC
shall offer such shares to a body(ies) corporate within the . . . . . .
. . . Group or . . . . . . . . . Group, which is acceptable to. . . . . . .
. . and . . . . . . . . . , subject to the condition that. . . . . . . . . and .
. . . . . . . . shall at all times be responsible and liable to discharge
all their obligations to the JVC and to each other. The word ‘Group’
shall mean only the parent, holding, subsidiary, associate or affiliate
company of . . . . . . or. . . . . . as the case may be.
5.6 Unless otherwise agreed to in writing,. . . . . . and . . . . . . agree to
participate at all times in the paid up and subscribed equity share
capital of the JVC in the following proportion :
. . . . . . : 50%
. . . . . . : 50%
. . . . . . and . . . . . . 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.
5.7 . . . . . . and . . . . . . shall cause the JVC to issue shares to them-
selves in the amounts and manner provided for in this Agreement.
6. . . . . . . ’S CONTRIBUTION
6.1 . . . . . . agrees to acquire equity shares in the share capital of the
JVC of the value of Rs.. . . . . . (Rupees . . . . . . only), in partial
appropriation of the consideration for the sale of. . . . . . ‘s . . . .
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. . Business Undertaking to the JVC at such premium as may be
determined by the Board of Directors of the JVC.
6.2 . . . . . . agrees that it will use its best endeavours to enable the
JVC to obtain, if necessary, long term loans from Indian Financial
Institutions / Banks in an amount sufficient to finance ongoing
operations and planned expansions on terms and conditions to be
mutually agreed upon.
6.3 . . . . . . and. . . . . . will use its best endeavours to ensure that the
financial resources of the JVC shall be sufficient for the construction
and maintenance of the plant and for the working capital necessary
for normal operations. In the event that additional financing is re-
quired for completion of the plant / project, . . . . . . /. . . . . . shall
use its best endeavours to arrange for sufficient long term loans
on terms and conditions mutually acceptable, the interest and / or
financial charges shall be paid by the JVC to. . . . and / or . . . . ,
6.4 ____ shall assume responsibility for any past liability / defaults of
the former. . . . . . . . . . . . and shall indemnify the JVC if costs to
the JVC arise from any past actions of the former . . . . . . , or for
any defaults arising from the merger of . . . . . . with . . . . . . or
separation of the undertaking of the former . . . . . . . . into the JVC.
7. . . . . . . ’S CONTRIBUTION
7.1 . . . . . . agrees to acquire equity shares in the share capital of the
JVC, of the value of Rs…… (Indian Rupees. . . . . . . only) for cash
at such premium as may be determined by the Board of Directors
of the JVC.
7.2 . . . . . . will enter into with the JVC and execute a separate Techni-
cal Collaboration and Licence Agreement (hereinafter known as the
“Technical Collaboration Agreement”) by which . . . . . . will agree
to provide to the JVC a licence of the knowhow of its products and
processes, and any updates / improvement of the same, developed
during the term of the Technical Collaboration Agreement, in respect
of . . . . . . and containing improvements to the PRODUCTS made
during the term of the Technical Collaboration Agreement in respect
of the PRODUCTS for a consideration (provided hereinbelow) and
payable in the manner approved by the Government of India / RBI
in the Letter of Approval. The Technical Collaboration Agreement
shall include a provision to the effect that the parties thereto shall
be bound by the terms and conditions stipulated by the Government
of India / RBI in the Letter of Approval.
7.3 . . . . . . shall grant the JVC an exclusive non-transferable licence
to manufacture the PRODUCTS in India in accordance with. . . . . .
’s technical knowhow and exclusive licence to sell the products in
India as hereinafter provided in clause 7.12 hereof and further in the
Technical Collaboration Agreement through the intervention of . . .
. . . and as per deliberations of the Board of Directors and consulta-
tion between . . . . . . and the JVC to sell PRODUCTS outside India
as provided in Clause 7.12 hereof. The said Technical Collaboration
Agreement may not be transferred or assigned by the JVC to any
third Party without the written consent of . . . . . . ‘
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7.4 The term “Technical Knowhow” shall mean. . . . . . ’s drawings,
designs, plans, trade secrets, formulae and manufacturing proce-
dures and methods and other technical information relating to the
assembly, manufacturing, quality control, testing and servicing of
the PRODUCTS.
7.5 If any of the PRODUCTS is protected by an Indian patent granted
to. . . . . . which is valid at the commencement of the Technical
Collaboration Agreement, or which may be granted during the term
thereof, . . . . . . shall grant the JVC without further payment, the
right for the term of such patent to make, use and sell such PROD-
UCTS, even if the term of such patent extends beyond the term of
the Technical Collaboration Agreement.
7.6 . . . . . . shall permit a mutually agreed number of qualified em-
ployees of the JVC (see Technical Collaboration Agreement, Article
IV) to visit and be trained at one or more of. . . . . . ‘s plants to be
decided by. . . . . . , in order to become familiar with the methods
of manufacturing the PRODUCTS. The said visits / training shall
be provided for by . . . . . . free of charge, but the JVC shall be re-
sponsible for the salaries, air fare, living expenses and any and all
other costs incurred by such employees.
7.7 . . . . . . shall assist the JVC in the selection of machinery, equipment
and tools for the JVC and for establishing research and development
facilities with respect to the PRODUCTS.
7.8 So long as . . . . . remains a shareholder of the JVC, . . . . . agrees
:
(a) that the JVC will be the only channel for its future activities
in the field of development and production of the PRODUCTS
in India and distribution of the PRODUCTS in India subject
to clauses 7.14 and 18.6;
(b) that it will not associate itself with any other person in India
or create any other subsidiary or office in India for any such
activity without the prior written permission of . . . . . . .
(c) that after the JVC commences commercial production of any
of the PRODUCTS, the JVC will be the only channel for dis-
tribution of its product/s sold, but not produced in India, and
as appropriate, for any new product/s introduced by . . . . . .
into India subject to clause 7.14; and
(d) to enter into a Distribution and Sales Representative Agree-
ment with the JVC for such product/s as per clause 7.14.
7.9 . . . . . . agrees to enter into a Trade Marks Registered User Agree-
ment with the JVC in respect of such of its trade marks relating to
the PRODUCTS as are registered in India, and to grant to the JVC a
separate Common Law Licence to use in India such of its trade marks
relating to the PRODUCTS as are not so registered. The Registered
User Agreement and the Common Law Licence shall be drawn in the
standard form used by . . . . . . with such modifications thereto as
may be mutually agreed. Both the Agreements shall be granted by
. . . . . . to the JVC on a royalty free basis.
7.10.1 During the subsistence of this Agreement, if any technology devel-
oped by the JVC is transferred to . . . . . . for use in manufacture
of . . . . . . . . . . . . , . . . . . . agrees to pay to the JVC a technology
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transfer fee which shall be mutually negotiated by and between .
. . . . . and the JVC.
7.10.2 If in the case of any of the Licenced Products covered by the
Technical Collaboration Agreement to be entered into between
. . . . . . and the JVC, any technology shall be developed by the
JVC, whether by improvement of the PRODUCTS or otherwise, no
technology transfer fee will be payable by . . . . . . to the JVC for
such transfer.
7.11 All royalty payments herein shall be made by the JVC to . . . . . .
in half yearly instalments within 30 days from the close of each
period of six months in any financial year of the JVC.
7.12 EXPORT
7.12.1 . . . . . . and. . . . . . shall consult to plan production and invest-
ment programme to enable the JVC to attain quality and price
levels, which will not only allow it to gain a substantial share of
the Indian market, the first priority, but will also enable it to be
used by . . . . . . ‘s worldwide marketing network as a significant
sourcing operation for export sales out of India. The position and
the strategy to be adopted shall be reviewed and decided by the
Board of Directors of the JVC.
7.12.2 The JVC shall have an exclusive right to market the PRODUCTS
as defined in Article I A of the Technical Collaboration Agreement
in. . . . . . As regards other countries, any business strategy of
the JVC will be submitted to the Board of Directors of the JVC
who will decide according to the procedures mentioned in Clause
10 of this Agreement whether this strategy is to be followed up, by
which party and on what conditions. The parties to this Agreement
recognise that there must be no infringement of existing contrac-
tual commitments of . . . . . . in other countries. The Board shall
also decide questions of branding and packaging in such cases.
However, package will carry name of the JVC and country of origin,
i.e. India. Decisions on export of PRODUCTS by the JVC must be
decided by a majority of three (3) out of four (4) directors or any
similar proportion as may result from a change in the number of
directors. Questions referring to export of PRODUCTS by the JVC
will be decided exclusively by the JVC and Clause 11, i.e. the
Deadlock Clause shall not apply.
7.13 So long as . . . . . . remains a shareholder in the JVC, . . . . . .
agrees to give to the JVC a licence of any new technology or know-
how which . . . . . . may develop in respect of the PRODUCTS, on
terms and conditions to be mutually agreed.
7.14 . . . . . . hereby agrees to appoint the JVC its Distributor for its
other products in India for a period of 2 (two) years from the incor-
poration of the JVC upon terms to be agreed upon between . . . . .
. and the JVC for which purpose. . . . . . and the JVC shall enter
into a Distribution Agreement. Should the results be considered
insufficient, . . . . . . shall be free to terminate the Distribution
Agreement after the initial period of 2 (two) years and seek other
means of distribution of its products in India, barring those manu-
factured by the JVC.
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7.15 JVC shall possess its own sales force for marketing its PRODUCTS
to customers for Original Equipment and Original Equipment
Spares sales and PRODUCTS for industry. After-market sales for
the automotive products shall be carried out by the sales organisa-
tion of . . . . . . and the PRODUCTS will be sold to . . . . . . for it
to sell the same in the after-market, and for this purpose the JVC
will enter into a Distribution Agreement with. . . . . . which will be
valid for a term of four (4) years initially and will be renewable by
mutual consent at the end of the term.
7.16 The JVC shall upon its incorporation, ratify, consent to and agree
to be bound by the Agreements mentioned in clauses 7.14 and
7.15.
8. TRANSFER AND SALE OF SHARES
8.1 Neither Party shall mortgage, pledge or charge the shares, except
as collateral security to secure temporary loans obtained in the
ordinary course of business, without the prior written authorisa-
tion from the other Party.
8.2 . . . . . . and. . . . . . agree that there will be a restriction on the
transfer of shares to the extent that neither of them will be entitled
to transfer its shareholding wholly or in part to any other person
or party, save and except to the extent as follows:
8.2.1 The transfer of shares within the. . . . . . Group and within the .
. . . . . Group shall be permitted with the prior written consent of
the other party, which consent shall not be unreasonably withheld
and subject to the condition that . . . . . . and . . . . . . shall at all
times be responsible and liable to discharge all their obligations
to the JVC and to each other. The word “Group” shall mean only
the parent, holding, subsidiary, associate or affiliate company of.
. . . . . or. . . . . . as the case may be.
8.2.2 Except as provided in clause. . . . . . .,. . . . . . shall not sell or
otherwise transfer to any third party all or any part of the shares
owned by it in the JVC unless the said shares have first been offered
to . . . . . . at the fair market value as determined on the basis of
the relevant audited financial statements of the JVC and certified
in writing by the auditors of the JVC who in so doing, shall act as
valuers and not as arbitrators or such value as is determined or
permitted by applicable law. . . . . . shall have twelve weeks after
the receipt of the notice to accept such offer and, subject to its
obtaining all necessary corporate, Government and other approv-
als, to pay in cash the full purchase price of the shares offered
for sale within four weeks of receiving such approvals. If. . . . . .
shall decline to accept such offer, then in that event . . . . . . will
be entitled to offer the said shares to any third party (herein called
“the Permitted Transferee”), PROVIDED however, that if . . . . . .
is unable to acquire any shares so offered by . . . . . . because
of restrictions imposed by the Indian Government, . . . . . . shall,
in that event, have a right to require. . . . . . to sell the shares so
offered to persons designated or approved by . . . . . . who are
legally capable of acquiring the said shares. PROVIDED further
that, offer of shares for sale by. . . . . . to a third party as aforesaid
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shall not be at a price lower than that which had been offered by
. . . . . . to . . . . . . for a period of six (6) months from the date
of such offer. After the expiry of the period of six (6) months, the
offer shall expire.
8.2.3 . . . . . . shall not sell or otherwise transfer to any third party all
or any part of the shares owned by it in the JVC, unless the said
shares have first been offered to. . . . . . at the fair market value
as determined on the basis of the relevant audited financial state-
ments of the JVC and certified in writing by the auditors of the JVC
who in so doing, shall act as valuers and not as arbitrators.. . . . .
. shall have twelve weeks after the receipt of the notice to accept
such offer and, subject to its obtaining all necessary corporate,
Government and other approvals, to pay in cash the full purchase
price of the shares offered for sale within four weeks of receiving
such approvals. If. . . . . . shall decline to accept such offer, then
in that event. . . . . . will be entitled to offer the said shares to any
third party (herein called “the Permitted Transferee”), PROVIDED
however, that if. . . . . . is unable to acquire any shares so offered
by. . . . . . because of restrictions imposed by the Indian Govern-
ment,. . . . . . shall, in that event, have a right to require . . . . .
. to sell the shares so offered to persons designated or approved
by. . . . . . who are legally capable of acquiring the said shares.
PROVIDED further that, offer of shares for sale by. . . . . . to a
third party as aforesaid shall not be at a price lower than that
which had been offered by . . . . . . to. . . . . . for a period of six
(6) months from the date of such offer.
8.2.4 In any case, the party acquiring the said shares shall be required
to sign an undertaking addressed to the non-selling party and to
the JVC undertaking to observe and perform all the terms and
conditions of this Agreement as if it had been a party thereto.
8.2.5 It is agreed that no shares in the JVC shall be transferred except
in accordance with this Agreement or in such other manner as . .
. . . . and. . . . . . shall agree in writing.
8.2.6 Nothing herein contained shall prevent . . . . . . or. . . . . . , subject
to all necessary approvals, from selling, transferring or assigning
any or all of its or their shares to a wholly owned subsidiary or any
such corporation wholly owned by the holding company of . . . . .
. or. . . . . . , PROVIDED that if either . . . . . . or. . . . . . or if the
holding company or either of them disposes of its shareholding in
such subsidiary or corporation, it shall offer such subsidiary’s or
corporation’s entire shareholding in the JVC to the other of them.
8.2.7 If there is an agreed transfer of the shareholding of. . . . . . in the
JVC,. . . . . . agrees that, in that case to ensure that . . . . . . will
continue to render or ensure the rendering of its full technologi-
cal support to the JVC as provided in the Technical Collaboration
Agreement between . . . . . . and the JVC.
8.2.8 Notwithstanding anything contained hereinabove, if. . . . . . or
its. . . . . . division shall be acquired or taken over by any other
person, entity, company, or a body corporate which has either by
itself or through an affiliate or subsidiary, made a material financial
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investment in, or granted manufacturing rights concerning any
products similar to the Licenced Products to an Indian Company
or body corporate, which is in direct or indirect competition with
the JVC, or if . . . . . . becomes a subsidiary or affiliate of any such
company or body corporate,. . . . . . shall have a right to terminate
this Agreement under clause 24.3 hereof by giving or delivering
a ninety days written notice to. . . . . . Upon such termination,
. . . . . . shall sell its entire shareholding in the JVC to. . . . . . ,
the purchase price being decided upon in terms of clause 8.2.2
hereof. The technology transferred by. . . . . . to the JVC shall be
continued to be utilised by the JVC and the Technical Collabora-
tion Agreement entered into between. . . . . . and the JVC shall be
terminated.
8.2.9 Notwithstanding anything contained hereinabove, if . . . . . . or any
other. . . . . . Group Company which has made a material finan-
cial investment in the JVC is acquired or taken over by any other
person, entity, company, or a body corporate which has either by
itself or through an affiliate or subsidiary made a material financial
investment in, or granted manufacturing rights concerning any
Products similar to the Licenced Products to an Indian Company
or body corporate, which is in direct or indirect competition with
the JVC, or if . . . . . . or such. . . . . . Group Company becomes a
subsidiary or affiliate of any such company or body corporate,. . .
. . . shall have a right to terminate this Agreement under clause
24.3 hereof by giving or delivering a ninety days written notice to.
. . . . . Upon such termination,. . . . . . shall sell its entire share-
holding in the JVC to . . . . . . , the purchase price being decided
upon in terms of clause 8.2.3 hereof.
9. BOARD OF DIRECTORS
9.1 The Board of Directors of the JVC shall consist of four (4) Direc-
tors or such other even number, as may be mutually agreed.
9.2 So long as. . . . . . or other Group Companies shall own between
forty (40%) per cent and fifty (50%) per cent of the total equity
share capital of the JVC, . . . . . . shall have the right to appoint
two (2) Directors (or other number as per clause 9.1); if . . . . . .
and or other Group Companies’ shareholding falls below forty per
cent (40%) but not below twenty five per cent (25%),. . . . . . shall
have the right to appoint one (1) Director; under twenty five per
cent (25%) will not appoint any director; these shall not be liable
to retire by rotation.. . . . . . shall have the right to remove any
such Director or Directors and to appoint another or others in his
or their place and fill any vacancy in the office of such Director
or Directors. If. . . . . . ’s equity stake falls below twenty five per
cent (25%), . . . . . . may nonetheless invite . . . . . . to appoint
a director to the Board for consultative purpose. Such a director
will, however, no longer possess the powers as per Clause 10.
9.3 Similarly, so long as . . . . . . or other Group Companies shall own
between forty (40%) per cent and fifty (50%) per cent of the total
equity share capital of the JVC, . . . . . . shall have the right to
appoint two (2) Directors (or other number as per clause 9.1); if.
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. . . . . and or other Group Companies’ shareholding falls below
forty per cent (40%) but not below twenty five per cent (25%),. . . .
. . shall have the right to appoint one (1) Director; under twenty
five per cent (25%) will not appoint any director; these shall not be
liable to retire by rotation.. . . . . . shall have the right to remove
any such Director or Directors and to appoint another or others in
his or their place and fill any vacancy in the office of such Direc-
tor or Directors. If. . . . . . ’s equity stake falls below twenty five
per cent (25%),. . . . . . may nonetheless invite . . . . . . to appoint
a director to the Board for consultative purpose. Such a director
will, however, no longer possess the powers as per Clause 10.
9.4 In the event. . . . . . ’s and / or its other Group Companies’ or . . .
. . . ’s and / or its other Group Companies’ shareholding increases
beyond 60% it shall have the right to appoint three (3) Directors
or such other number as will be in the proportion of two-third and
one-third of the total number of Directors.
9.5 In the event that the Directors of the JVC are liable to retirement
by rotation under the Act, the retirement and reappointment of
the Directors shall take place in accordance with the provisions
of the Act.
9.6 . . . . . . and . . . . . . agree to use their voting rights to effectuate
the said system of appointment and election of Directors elaborated
herein.
9.7 Neither. . . . . . nor. . . . . . shall be entitled to remove the Director
or Directors nominated or appointed by the other.
9.8 Not less than thirty (30) days notice, excluding public holidays, (as
defined in the Act or any reenactment thereof), shall be given of
meetings of the JVC’s Board of Directors to all Directors whether
in India or outside India, by registered airmail and facsimile (called
FAX) and. . . . . . ’s written confirmation of receipt of this FAX. An
emergency meeting of the Board may be held on giving fourteen
(14) days notice by FAX. However, in either case, a copy of the
notice shall be sent by FAX to the Directors who will be for the
time being outside India. No Board Meeting shall be held without
a quorum comprising at least one (1) director appointed by . . . .
and . . . . .
9.9 The Board of Directors shall, at the request of any Director who
is absent from the State of Maharashtra for a period of not less
than three months, appoint a person of the choice of . . . . or. . .
. . . , as the case may be, as alternate Director on the Board.
9.10 Any vacancy on the Board of Directors may be filled by the party
which had nominated or appointed the Director whose place on
the Board has become vacant.
9.11 One of the Directors appointed by . . . . . . shall be appointed as
Chairman of the JVC’s Board for the first two years of the opera-
tions of the JVC from the date of incorporation of the JVC. The
Chairman shall be liable for re-election. Should the party of which
the Chairman is a nominee Director disengage itself from the JVC,
the Chairman shall automatically tender his resignation from the
post.
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9.12 The JVC shall also have a Vice Chairman who shall preside at
meetings of the Board of Directors or of the shareholders in the
absence of the Chairman. The Vice Chairman shall be a Director
selected mutually by . . . . . . and. . . . . . .
9.13 In the event of an equality of votes at any meeting of the share-
holders or of the Board of Directors, the Chairman shall not have
a second or casting vote.
10. POWERS OF THE BOARD
Neither the JVC itself, nor the JVC’s Board of Directors, nor a
committee thereof, (whether at a Board meeting or at a committee
meeting or by circular resolution or otherwise) nor its Managing
Director / Chief Executive Officer nor any other Director or Officer
shall take any action in respect of any of the matters specified
below, except upon the affirmative vote of a majority of the Direc-
tors, which majority shall include at least one (1) of the permanent
non-retiring Directors respectively appointed or nominated by. . .
. . . and . . . . . . under clauses 9.2 and 9.3 hereof :
10.1 Employment or removal of the Chief Executive Officer or Managing
Director / Whole-time Director of the JVC, or the Heads of -
(a) Marketing, or
(b) Finance, or
(c) Production.
10.2 Negotiating for or taking long term loans (for a term exceeding 24
months) or an amount exceeding Rs. . . . . . . (rupees. . . . . . . . .
. . . ) or altering any material term or condition of any such loan.
10.3 Creating any mortgage, charge or other encumbrance on or in
respect of any of the JVC’s properties or assets.
10.4 Increasing or reorganising the authorised or subscribed share
capital of the JVC.
10.5 The issue of further shares from the authorised, but unissued
share capital.
10.6 The issue of preference shares or debentures, whether convertible,
non-convertible or partly convertible.
10.7 Short term borrowings (term not exceeding twenty-four [24] months),
in excess of ten per cent [10%] of the amount of the gross sales
turnover of the JVC as disclosed in its latest audited Profit and
Loss Account for the last preceding financial year of the JVC,
(hereinafter referred to as ‘the Turnover’).
10.8 Recommending a dividend or paying an interim dividend.
10.9 Filling vacancies on the Board of Directors other than those Direc-
tors nominated or appointed by . . . . . . or. . . . . . .
10.10 Entering into contracts with. . . . . . or . . . . . . or companies, firms
or other persons affiliated or interested with or related to either of
them.
10.11 Entering into any contract, the term of which exceeds two (2) years
and the value of which exceeds five per cent [5%] of the Turnover
other than normal contracts entered into in the ordinary course
of business.
10.12 Purchasing, leasing or otherwise acquiring machinery, equipment
or other assets having a value, in any single transaction, of more
than five per cent [5%] of the Turnover.
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10.13 Purchasing, leasing or otherwise acquiring or selling or otherwise
transferring any immovable property, or any interest in such im-
movable property owned by the JVC, of any value.
10.14. Providing loans to third parties or guaranteeing the obligations
of third parties, other than loans to, or guarantees concerning
employees of the JVC, in either case of an amount exceeding Rs.
. . . . . . (rupees. . . . . . ) per transaction.
10.15 Supplying goods or services on credit or generating accounts re-
ceivable or advances to suppliers and/or ancillaries of an amount
exceeding five per cent [5%] of the Turnover in any single transac-
tion, within a ceiling of ten per cent [10%] of the Turnover in any
fiscal year of the JVC.
10.16 Formulating or approving long term management plans, annual
financing, operating, production and sales plans and capital bud-
gets, manpower and personnel compensation plans and counter
measures against labour disputes, formulating of R&D plans and
working programmes, and any material modifications thereto.
10.17 Selling, exchanging or otherwise transferring any machinery, equip-
ment or other assets of the JVC having a value, in any transaction,
of more than five percent of the Turnover.
10.18 Undertaking any new business or substantially expanding the
business contemplated hereunder.
10.19 Recommending to the members a firm of Chartered Accountants
to be appointed as auditors of the JVC.
10.20 Negotiating for or acquiring any licence or right from third parties
in respect of manufacturing technology, patents, trademarks or
other intellectual property.
10.21 Granting any sub-licence in respect of technical knowhow, trade
secrets, patents, copyright or other intellectual property obtained
by the JVC from. . . . . . or any third party.
10.22 Instituting, except in the case of an emergency, abandoning or
compromising any action, suit or other legal proceedings, except
in the case of routine debt collection matters.
10.23 Negotiation for or forming a subsidiary of the JVC or subscribing
to the equity shares of any other company.
10.24 Negotiating for the merger or amalgamation of, or merging or
amalgamating the JVC, with any other company, or negotiating
for the sale of, or selling its undertaking or undertakings to any
third party.
10.25 Adopting or modifying trade marks for use on the PRODUCTS
manufactured by the JVC.
10.26 Changing or relocating the registered office or principal place of
business of the JVC.
10.27 Considering or approving any matter concerning the winding-up of
the JVC or the notification of its financial status to any statutory
authority.
10.28 Calling, convening or adjourning any annual or extraordinary
general meeting of the members of the JVC, and the approval of
the draft notice convening such meetings, and the approval of the
Balance Sheet and Profit and Loss Account to be submitted to
the shareholders at such meetings.
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10.29 Altering the objects clause in the Memorandum of Association of
the JVC.
10.30 Lending or advancing any money to Directors or their relatives.
10.31 Changing in any way the Articles of Association.
10.32 Decisions concerning the marketing and sales strategy of the JVC,
except as provided in Clause 7.12.2.
10.33 Decisions concerning the voluntary liquidation of the JVC.
10.34 Decisions concerning the remuneration of Directors, subject to the
provisions of the Act or any re-enactment thereof.
10.35 Any other important policy matters to be agreed upon in writing
by . . . . . . and . . . . . . .
11. DEADLOCK
If no resolution or decision can be passed or taken by the Board
at its meeting in respect of any of the matters listed in Clause 10
or clause 5.3 of this Agreement, as the case may be, giving rise to
a deadlock or an impasse between. . . . . . and . . . . . . , the Par-
ties shall convene another Board meeting within a period of 20
days from the date on which such deadlock or impasse arose, and
shall use their best efforts to resolve such deadlock or impasse 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 or impasse continuing, the Parties
shall hold a special meeting of the Chairman of. . . . . . and the
Managing Director of . . . . . . to resolve the deadlock or impasse.
Any decision taken at such special meeting shall be final and bind-
ing on the Parties. In the event such deadlock or impasse is not
resolved at such special meeting, then the deadlock or impasses
shall be referred to arbitration in accordance with the provisions
of Clause 37 of this Agreement.
12. APPROVAL OF SHAREHOLDERS
In case any of the matters specified in sub-clauses 10.1 to 10.35
requires to be approved by the shareholders of the JVC, the said
approval shall be accorded by a special resolution passed at a
general meeting.
13. MANAGEMENT OF THE JVC
13.1 The JVC shall have its own professional management. The JVC
shall have a Managing Director / Chief Executive Officer who will
be responsible for the management of the JVC.
13.2 The appointment, reappointment or removal and the terms and
conditions of service of the Managing Director / Chief Executive
Officer shall be determined by the Board of the JVC.
13.3 The Managing Director / Chief Executive Officer shall function
subject to the supervision, direction and control of the Board of
Directors and on such terms and conditions as are approved by
the Board of Directors of the JVC, and, if required by law, by the
shareholders or the Government of India. The Managing Director
/ Chief Executive Officer shall be entrusted with such substantial
powers of management as the Board may decide from time to time
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and be in charge of and responsible to the JVC for the conduct of
the business of the JVC and shall be responsible to ensure full and
due compliance with all the statutory laws, rules and regulations
required to be complied with by the JVC and/or by the Board of
Directors of the JVC.
13.4 The JVC shall have a Company Secretary, who will be respon-
sible for the compliance with, and ensure that there should be
no default, non-compliance, failure, refusal or contravention of
any of the statutory provisions and in particular the provisions
of the Companies Act, 1956, or any other laws, rules, regulations
or directions which the JVC or its Directors is or are required to
observe, perform or implement.
13.5 Qualified and experienced managerial, technical, marketing and
other officials shall be appointed for the operation and conduct
of the business of the JVC after mutual consultation between. . .
. . . and . . . . . .
14. AUDITORS AND LEGAL ADVISERS
14.1 The annual audit of the books of account of the JVC shall be made
each year immediately following the close of the financial year, by a
chartered accountant appointed after having been selected jointly
by . . . . . . and . . . . . . .
14.2 The legal advisers and solicitors of the JVC shall be appointed by
the Board of the JVC after having been selected jointly by . . . . .
. and . . . . . .
15 BOOKS OF ACCOUNT
15.1 The JVC shall maintain its books of account in the English Lan-
guage. They shall be open for inspection by the authorised rep-
resentatives of . . . . . . and. . . . . . A regular monthly reporting
system will be established by and for the Board of Directors.
15.2 The financial year of the JVC shall be a period of twelve months,
April to March. The accounting year of the JVC for Indian tax
purposes shall be the fiscal year prescribed by the Income tax Act,
1961, which at present is a period of twelve months from April 1
to March 31.
16 DIVIDEND POLICY
The Board of Directors of the JVC shall have the authority to
determine, subject to any requirements of the Indian laws, the
amount and timing for the declaration and payment of any divi-
dend or the making of any other distribution of its profits by the
JVC. . . . . . and . . . . . . agree that, subject to the provisions of
the Act and other applicable laws, the JVC shall declare and pay
at least 33% (thirty-three per cent) of after tax profits subject to
the exigencies of business and unless otherwise decided by the
shareholders and repatriate the dividend to. . . . . . within 42
days (forty two) days of its declaration by bank transfer to . . . . .
. as per the latter’s instructions. The JVC shall strive to declare a
dividend corresponding to at least 20 (twenty) percent return on
investment by the Parties subject to available / surplus profits.
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17 REGULATION OF ACQUISITION OF EQUITY INTERESTS
Neither. . . . . . nor . . . . . . shall at any time, either directly or in-
directly, acquire or attempt to acquire the whole or any part of the
equity interest in the capital of each other, whether by themselves
or by their holding, subsidiary, affiliate or associate company.
18. NON COMPETITION
18.1 . . . . . . covenants that during any period in which . . . . . . holds
shares in the JVC or the JVC is continuing in the business of the
manufacture and sale of the Products in accordance with the Tech-
nical Collaboration Agreement, . . . . . . will not control or engage
directly or indirectly in accordance with the Technical Collabora-
tion Agreement either as owner, partner, shareholder or otherwise,
save as a nominal shareholder for information purposes, in any
business carried on in India competing with the Products.. . . . .
. will ensure that this applies also to other companies belonging
to the same group as ______ and its subsidiary companies.
18.2 ______ covenants that as long as it holds shares in JVC it will ar-
range to supply components and machinery to the JVC against
written orders and on payment at prices mutually agreed from
time to time.
18.3 ____ covenants that so long as ____ holds shares in the JVC or
the JVC is continuing in the business of the manufacture and sale
of the Products in accordance with the Technical Collaboration
Agreement with ______, or subsequent agreements with ______ of
similar nature ____ shall not either directly or indirectly enter into
any agreement or arrangement with any party to manufacture and
/ or to sell any similar or competing Products. ____ will ensure
that this applies also to its subsidiary companies.
18.4 ____ covenants that as long as it holds shares in the JVC it will
arrange to supply components and machinery to the JVC against
written orders and on payment at prices mutually agreed from
time to time.
18.5 ____ and ______ covenant that they will similarly not enter directly
into or allow the JVC to enter into any agreement or arrangement
with any party that could be prejudicial to the interests of either
Party.
18.6 ______ further agrees that it shall not license or transfer any technical
knowhow in respect of any of the PRODUCTS for the manufacture
of the same in India by any third party as long as ______ or any
other company in the ______ group has an equity interest in the
JVC unless for imperative commercial reasons and then only with
the prior written approval of the JVC, which consent shall not be
unreasonably withheld.
19 TECHNICAL COLLABORATION AGREEMENT
19.1 ____ and ______ shall cause the JVC to execute the Technical Col-
laboration Agreement and, upon grant to the JVC of necessary
permissions from the Government Authorities of India, cause the
JVC to commence the establishment and operation of the factory
to manufacture and market the PRODUCTS.
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19.2 If in process of reviewing the Technical Collaboration Agreement
lodged with it for filing, the RBI requires any modification thereof,
____ and ______ shall consult with each other and with RBI and
shall endeavour to comply with such requirements.
20 PRE-FORMATION COSTS
____ and ______ will bear their own costs, in relation to the for-
mation of the JVC contemplated by this Agreement, except the
expenses incurred for the formation and incorporation of the JVC
which will be borne and paid for by the ____ and reimbursed by
the JVC after its incorporation.
21. MEMORANDUM AND ARTICLES OF ASSOCIATION
21.1 ____ and ______ agree that no resolution for the amendment of the
Memorandum or of the Articles of Association of the JVC shall be
passed in any meeting of the JVC or its Board, unless mutually
agreed to in advance in writing.
21.2 It is expressly agreed that whether or not the Memorandum and/or
the Articles of Association of the JVC fully incorporate the provi-
sions of this Agreement or any of them, ____’s and ______’s rights
and obligations shall be governed by this Agreement which shall
prevail in the event of any ambiguity or inconsistency between the
two.
21.3 ____ and ______ agree to ensure that the JVC will duly adopt, ratify
and confirm this Agreement and that it shall, if so required and
agreed, be made a part of its Articles of Association by an altera-
tion of the Articles of Association of the JVC.
22. CONFIDENTIALITY AND EXCLUSIVITY
22.1 Neither ____ nor ______ will discuss or negotiate with any other
corporation, firm or other person, or entertain or consider any
inquiries or proposals relating to the manufacture in India of the
PRODUCTS save with prior written agreement of the other Party.
22.2 ____ and ______ agree not to discuss, negotiate or enter into any
similar arrangement for the manufacture, marketing or sale in
India of the PRODUCTS without the prior written agreement of
the other Party.
22.3 All proprietary or confidential information shall be transmitted in
writing with a marking on such transmittals of the term ‘confiden-
tial’ or words to that effect. In the event proprietary or confidential
information is transmitted verbally, the transmitting party shall
within thirty days after such verbal transmission, advise the receiv-
ing party, in writing of the fact that such information is proprietary
and confidential. Proprietary and confidential information shall not
include information which has been disclosed to third parties, is
previously known to the receiving party, or which the third party
learns of through a third party who legitimately possesses such
information, or which is independently developed by the receiving
party. In order to further the joint venture contemplated herein,
it may be necessary for ____ and ______ to reveal to each other
certain information concerning operations or technical knowhow
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which is of a proprietary or confidential nature. Both ____ and
______ agree to keep confidential all proprietary and confidential
information disclosed by each to the other and not to disclose any
such information for their own purposes. At each other’s request,
both ____ and ______ will promptly return any drawings, plans,
specifications, equipment, lists or other documents that may have
been supplied by one to the other.
23. TERM
This Agreement shall commence upon the effective date hereof, and
subject to the provisions hereof, shall thereafter continue in full
force and effect until terminated in accordance with the provisions
contained herein.
24. TERMINATION
This Agreement may be terminated :
24.1 By the mutual consent of ____ and ______.
24.2 This agreement shall be terminated in the following events:
24.2.1 If either ____ or ______ 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 compa-
nies becomes applicable to it or if a receiver is appointed to take
possession of its undertaking, property or assets.
24.2.2 In the event there is a substantial change in the ownership or
management of the other Party.
24.2.3 In the event the Technical Collaboration Agreement shall be pre-
maturely terminated for whatever reason in accordance with the
provisions thereof.
24.2.4 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.
24.3 In respect of clauses 24.2.1 to 24.2.4 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.
24.4 If either ____ or ______ shall have committed or knowingly permit-
ted 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 ca-
pable 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
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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.
24.5 In the event that the laws or regulations of the Republic of India
or .............. Country shall at any time be or become such that
this Agreement cannot continue to be enforced or performed ac-
cording to its terms, including without limitation, the ability of
____ or ______ if they so desire to retain their respective ownership
and voting interests in the JVC in accordance with this Agree-
ment, then ____ and ______ shall endeavour to make appropriate
changes in this Agreement or in the Articles of Association of the
JVC for the satisfactory continuation of this joint venture. In case
such endeavour does not succeed, either party shall have the right
to terminate this Agreement by serving upon the other a written
notice of not less than ninety (90) days.
24.6 In case the termination arises through a default by either ____
or ______ as hereinbefore mentioned, the one not in default shall
at its option, subject to all necessary approvals and applicable
laws, have the right to purchase and/or to name a purchaser or
purchasers of the shares and other financial interest of the de-
faulting party in the JVC at the fair market value thereof to be
certified by the Auditors of the company and such option shall be
exercised by a notice in writing served on the defaulting party by
the one not in default within ninety days from the termination of
this Agreement. In case the termination arises by virtue of Article
24.5 hereinabove, the party other than the one whose country’s
laws or regulations make the continuation of this Agreement im-
possible, and the endeavour to make appropriate changes in the
Agreement or articles of association does not succeed, shall at its
option, subject to all necessary approvals and applicable laws, have
the right to purchase and/or to name a purchaser or purchasers
of the shares and other financial interest of the other party in the
JVC at the fair market value thereof to be certified by the Auditors
of the company and such option shall be exercised by a notice in
writing served on the other party within ninety (90) days of the
termination of this Agreement.
24.7 The termination of this Agreement shall be without prejudice to
any claim or rights of action previously secured to it by one Party
against the other Party. The JVC shall on either Party selling its
/ his shares in the JVC continue its activities as the Venture of
the Party except that the JVC will not use the name of ______ in
any manner and for any purpose whatsoever unless ______ is not
a selling but a surviving Party.
24.8 In the event that either ____ or ______ is not a selling but a surviv-
ing Party, the JVC shall change its name so as to delete therefrom
the word ‘__________’ or ‘______’ as the case may be and in the
event of termination of this Agreement, the JVC shall change the
name of the company so as to include no longer the name of the
terminating Party, within a period of three (3) months from the
date of such termination. Similarly, if ______ is the selling Party,
no Products sold later than six (6) months after the date of such
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termination shall bear the name of ______ and all written reference
to ______ by ____ or the JVC shall be stopped.
24.9 ____ and ______ shall use their best efforts to obtain from the
appropriate agencies of the Government of India, all consents,
approvals, licences, permissions, validations or authorisations
in form and substance satisfactory to both parties that may be
required and necessary for the execution, delivery, performance
and observance of all the provisions of this Agreement by the JVC.
24.10 In the event that such necessary approvals, licences or validations
are not obtained within 180 (one hundred and eighty) days from
the date of signature of this Agreement by the Parties and unless
extension of the said period is agreed upon in writing by ____ and
______, either Party shall have the right to declare this Agreement
null and void.
25. NON-WAIVER
Non-admission or delay on the part of any party hereto in requir-
ing the due and punctual fulfillment by any other party or parties
hereto of the obligations of such other party hereunder shall not
be deemed to constitute a waiver by the omitting or delaying party
of any of its rights to require such due and actual fulfillment.
26. CONSTRUCTION
26.1 This Agreement sets forth the entire Agreement and understanding
among the parties with respect to the subject matter hereof and
merges all discussions and negotiations among them, and none of
the parties shall be bound by any conditions, warranties, under-
standings or representations with respect to such subject matter
other than those expressly provided herein or duly set forth on or
subsequent to the date hereof in writing and signed by a proper
and duly authorised officer of the party to be bound thereby.
26.2 The Articles, paragraph and other headings contained in this
Agreement are for general reference and guidance and shall not be
conclusive as to the meaning or interpretation of this Agreement.
26.3 The words and expressions not expressly defined in this Agreement
shall, as far as permissible, bear the same meaning as understood
in the Act, or any statutory modification thereof in force at the
time of entering into this Agreement.
26.4 If any provision of this Agreement is invalid or unenforceable or
prohibited by the Law of the Country where it is to be performed,
this Agreement shall be considered divisible as to such provision
and such provision shall be inoperative and shall not be part of
the consideration moving from either Party to the other and the
remainder of this Agreement shall be valid and binding and of like
effect as though such provision was not included herein.
26.5 All remedies of either Party under this Agreement whether provided
herein or conferred by statute, civil law, common law custom or
trade usages, are cumulative and not alternative and may be en-
forced successfully or concurrently.
26.6 Nothing contained in this Agreement shall be deemed to consti-
tute a Party as the agent of the Party for any reason or purpose
whatsoever.
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2027
27 COUNTERPARTS
This Agreement shall be executed simultaneously in three (3) or
more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one (1) instrument.
28 AMENDMENTS
This Agreement shall not be amended, altered or modified except
by an instrument in writing expressly referring to this Agreement
and signed by ____ and ______ and approved where necessary by
the Government of India / RBI.
29 NON-ASSIGNMENT
____ and / or ______ shall not transfer or assign its rights, obliga-
tions or liabilities under this Agreement to any third party (other
than subsidiaries or associates or affiliates, that is companies under
its management and control) and such rights shall not inure to
the benefit of any other person or company including any trustee
in bankruptcy, receiver or other successor of either ____ or ______,
whether by operation of law, sub-licence, transfer of the business
or assets, merger, liquidation or otherwise without prior written
consent of the other and any such actual or purported assignment
or transfer without the consent of ____ or ______ as the case may
be, shall be null and void. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns,
without prejudice to the aforesaid.
30 ADDITIONAL DOCUMENTS
Each party hereto shall promptly execute and deliver such addi-
tional documents as are reasonably required by any other party
hereto for the purpose of implementing this Agreement, provided
that no such document shall be inconsistent with the provisions
hereof.
31 INDEPENDENT PARTIES
____ and ______ shall act in all matters pertaining to this Agree-
ment as independent parties and nothing contained herein shall
constitute either of them the agent or the partner of the other.
32 REPRESENTATIONS AND AUTHORITY
32.1 Each party represents and warrants that it is permitted by its re-
spective corporate charter and incorporating documents to enter
into this Agreement, and is not restrained, prevented or inhibited
by any contract or arrangement to which it is a party from en-
tering into this Agreement or undertaking the obligations herein
contained.
32.2 Each signatory to this Agreement represents and warrants that
he is duly authorised by the party for and on whose behalf he is
signing this Agreement to execute the same in a manner binding
upon the said party and that all corporate approvals and proce-
dures necessary for vesting such authority in him have been duly
obtained and complied with.
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2028
33 ACKNOWLEDGMENT BY JVC
The JVC hereby acknowledges, adopts and ratifies this Agreement,
and pledges itself to faithfully observe each provision of this Agree-
ment in so far as it is applicable to or binding on the JVC.
34 INDEMNITY
All warranties and representations made in this Agreement and
in the Assignment of Business between ____ and the JVC (the ‘As-
signment’) may be enforced against ____ either by the JVC or by
______. All indemnities on the part of ____ expressed or implied
in this Agreement, and in the Assignment shall apply to and be
enforceable not only by the JVC, but (subject to applicable Gov-
ernment approvals) by ______.
35 FORCE MAJEURE
Notwithstanding anything to the contrary in this Agreement, a
party hereto shall not be liable to the other party or parties for any
loss, injury, delay, damages or other injury suffered or incurred
by such other party due to strikes, lockouts, riots, storms, fire,
explosions, act of God, war, whether declared or not, Government
or Police action or any other cause which is beyond the reason-
able control of such party, nor shall any failure or delay by either
party hereto in the performance of any of its obligations under this
Agreement due to one or more of such causes be construed as a
breach of this Agreement or any of the Agreements as the case
may be for the purpose of it being considered as a default under
the termination clause or for any other purpose.
In case the Force Majeure clause comes into force, the party which
invokes this clause shall intimate to the other party and shall
make all possible efforts for early removal of such condition of
Force Majeure.
36 GOVERNING LAW
This Agreement (except the arbitration clause 37) shall be governed
by and construed in accordance with the laws of India.
37 ARBITRATION
Any dispute or difference arising under or in connection with
this Agreement or any breach thereof, which cannot be settled by
friendly negotiation and Agreement among the parties, shall be
finally settled by arbitration in accordance with the Rules of the
.............. Chamber of Commerce, ........., India. The arbitration
proceedings shall be held in ........, India. The arbitration Agree-
ment and the arbitration proceedings shall be governed by the laws
of India. The award of the Arbitration Court of Chamber shall be
final and binding upon the parties hereto.
38 NOTICES
All notices and other communications in respect of this Agreement
shall be given in writing in English by registered airmail, postage
prepaid, or by telex or facsimile to the party entitled thereto at its
JOINT VENTURE AGREEMENT
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2029
address set forth below, or such other address as it shall hereafter
designate for this purpose :
_____________________.
_____________________
Place ............. Country..............
Attn. : Company Secretary
Fax : ___________
Telex : ___________
________________________
________________________
________________________
________________________
Fax : _________________
Telex : _________________
JVC ________________________
_______________________
________________________
Fax : _________________
Telex : _________________
SIGNED AND DELIVERED for and on behalf of the
within named . . . . . . . . . . . . . . . . . . . . . . . . . .
by Shri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Title : Vice Chairman and Managing
Director, in the presence of
SIGNED AND DELIVERED for and on
behalf of the within named
. . . . . . . . . . . . . . . . . . . . . . . by
Shri. . . . . . . . . . . . . . . . . . . . . . . ;
Title Member of the Board of Management
Development & Sales, in the presence of
JOINT VENTURE AGREEMENT
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2030
SIGNED AND DELIVERED for and on
behalf of the within named ______ ______
PRIVATE LIMITED by, Shri ____________,
Title : Director, in the presence of
________________________
For Stamp Duty, Registration, FEMA Act, Rules, Regulations, RBI Master Circulars
on Foreign Exchange & FDI Policy see respective paras of Preliminary Notes.
See the Indian Stamp Act, 1899 (2 of 1899), Rates of Stamp Duty in various States,
eStamping and Compulsorily & Optionally Registrable Documents under the Registration
Duty, eStamping & Registration of Deeds & Documents.
See Notes, Comments & Model Forms of Company Documents in succeeding Part
on Company Documents & Deeds.
See Preliminary Notes & Steps for Incorporation of a Company, E-Filing of e-Forms,
Registration & Filing Fees, e-Stamping and Model Forms in respective succeeding Part/
Chapter on Company Documents & Deeds.
See Preliminary Notes on Guidance to Investors on the FDI cases requiring FIPB
Approval, NRI/PIO Investments, 100% EOU, STPI cases and Single Brand Retail cases,
Technology Collaboration Cases, Industrial Entrepreneurial Memorandum (IEM), Com-
posite Form for Foreign Collaboration & Industrial Licence [FC/IL, SIA] and the Approval/
Clearances Required for New Projects.
For FIPB Approval & Composite Form for Foreign Collaboration & Industrial Licence
[FC/IL, SIA] see respective preceding Forms.
JOINT VENTURE AGREEMENT
