JOINT VENTURE AND SHAREHOLDER
AGREEMENT
This JOINT VENTURE AGREEMENT AND SHAREHOLDER AGREEMENT
is made on the ......... day of ................... 2005, by and among XYZ,
an Italian company, having its registered office at ………., Via ………. , duly
registered with the Companies Registry under No. ………, duly represented herein
by its legal representative Mr. ………… (hereinafter referred to as «XYZ»),
and
X, a company having its registered office at ...................................,
......................, ......................, with its Organization duly
registered with the .................................................. under
No. ............, duly represented herein by its legal representative
................................................, (hereinafter referred to as
«X»)
RECITALS
Whereas,
XYZ is a leading company engaged in the design, manufacture and sale, in
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Whereas,
XYZ has accumulated an unique know-how in the field, as well as a
considerable experience for the appreciated quality of the design, for the high
level of quality and for the technology of its products;
Whereas,
XYZ also produces and sells materials for the manufacture and the
installation of .......... with components inserted, as better defined in
Exhibit A.
Whereas,
the products and components of XYZ incorporate patents, designs,
technologies, know - how developed by XYZ, as better defined in Exhibit B, as
well as registered trademarks ........... and ........... of XYZ, that
distinguish exclusively its products;
Whereas,
XYZ has acquired a considerable experience in adapting, modifying, and
realizing machinery for the production, installation and assembly of .......... with components inserted for various purposes;
Whereas,
X has been for years and is presently engaged in the field of products in.....................,
it employees specialized personnel in the field of products and has developed a
considerable experience in the .................. market in the field of
production and sale;
Whereas,
X is presently interested in a negotiation of a license and supply
agreement for the use of ..........
with components inserted with XYZ;
Whereas,
XYZ is interested to develop its presence in the
...................... market, which presents several opportunities for the use
of the products and components of XYZ, through the incorporation of a
company as a joint venture company with
X, named Newco, under the terms set forth herein
(hereinafter referred to as «Newco»);
Whereas,
[HYPOTESIS TO MAKE CHOICE ON]
HYP. A
object of Newco will be the sale of
products, with components inside in the
industry, products and components of XYZ, obtaining from XYZ the rights
for selling and installation, Know-how and Trademark licenses of ........... e
........... trademarks, of the products with
components inside, using said components and giving for manufacture such
components to X to the aim of assembly of
.......... with components
inserted;
HYP. B
object of Newco will be the
production and sale of products,
with components inside in the
industry, products and components of XYZ, obtaining from XYZ the rights
for selling and installation, Know-how and Trademark licenses of ........... e
........... trademarks, of the products with
components inside, using said components and machinery and giving for
manufacture such components to X to the aim of assembly of .......... with components inserted;
Whereas,
X desires to participate with XYZ in the sale of .......... with components inserted, using the components
supplied by XYZ and furnishing labour for the
assembly and installation as well as other services, as better defined in
Exhibit C;
Whereas,
XYZ and X, therefore, desire to incorporate a «corporation» organized
and existing under the laws of the State of .................., but qualified
to do business in the State of ......................, whose Shareholders or Quotaholders will be the Parties to this Agreement under
the terms and conditions hereafter, to carry out - upon a free license for the
use of patents and trademarks of XYZ - the marketing (and also the
manufacturing on Hyp. B) of the final products;
Whereas,
XYZ desires to supply Newco components for
assemblage and production of ..........
with components inserted, to the aim of
enabling Newco to its market promotion and assigning
to X assembly of components on behalf of Newco;
Now, therefore, in consideration of the premises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by the Parties;
THE PARTIES THEREFORE AGREE AS FOLLOWS:
1. DEFINITIONS
The following terms used in this Agreement shall have the meanings set
forth below:
- the «Agreement» shall mean this
Newco Joint Venture and Shareholders or Quotaholders Agreement, as the same may be amended by
writing by the Parties from time to time hereafter, including its Exhibits
which are part of it;
- the «Newco»
shall mean the jointly owned company to be incorporated by XYZ and X pursuant
to this Agreement and its Articles of Association and Bylaw, Enclosed to this
Agreement (Exhibit F);
- the «Parties» shall mean the
two companies XYZ and X;
- the «Products» shall mean purposes, similar products assembled by X
using components supplied by XYZ, trademarks and patents .......... with magnetically or electrically
- controlled components inserted for all
industrial and residential of XYZ and installed by X after the marketing and/or
sale by Newco.
- (ONLY IN HYP.B) the «Machinery» shall mean the plants and machinery
for the cutting of the slats, workbenches, punches for the punching of spacers
as better defined in Exhibit D;
-
the «Components» shall mean the raw materials and semi-worked elements for the
assembly of components inside the .......... as better defined in Exhibit A;
-
the «XYZ trademark» shall mean all the trademarks and symbols on the product,
as mentioned in the free license agreement in Exhibit E, in which the names
«...........» and/or «...........» are cited, as well as any initial letter «V»
or «F» or any other shortened wording which is unequivocally referred to the
names «...........» and/or «...........», used in connection with the
production, the sale, the marketing of the Products;
- the «XYZ Patents» shall mean the patents and every other industrial
property right, trade secret and know - how, which distinguishes exclusively
«...........» and «...........» products, as mentioned in the free license
agreement in Exhibit E;
- the «Shareholdings» (or "Quotas") shall mean the shares (or
quotas) of the capital of Newco;
- the «Territory» shall mean
............................................
2. FORMATION
AND OBJECTIVES OF NEWCO
2.1 Formation of Newco
Simultaneously, or as soon as possible thereafter, with the execution of
this Agreement, the Parties shall incorporate Newco
in the State of .................. and qualify it in the State of
......................, in accordance with this Agreement and with the terms of
the Articles of Organization. The Articles of Organization and the Bylaws have
been already signed by the Parties or their duly authorized representatives.
The Parties agree to execute all further documents as may be deemed
necessary or desirable for the incorporation of Newco,
therefore duly authorizing their representatives with power of attorney
executed before a Notary public and legalized in accordance with the laws of
the States of .................. and ...................... for the registration
of the Bylaws and related documents.
The Newco shall be a «Corporation» existing
and organized under the laws of the State of ...................
By the day of registration, subject to the signature of the Articles of
Association and to the approval of the acts by the appointed authorities, Newco shall become a legal entity and carry all the rights
and obligations of operations with third parties and shall be liable for
obligations as determined in the present Agreement.
2.2 Name and Location
The name of Newco shall be: «XYZ CORPORATION
......................» or such name or names that the Shareholders or Quotaholders may from time to time select, and its
registered office will be located in the State of .................. and its
headquarters in the State of ......................, at the following address:
.....................................
2.3 Objective of Newco
Subject to the terms of this Agreement, Newco’s activities shall be to market (or production on Hyp. B) the Products, under the Trademark and according to
the provisions set forth in the XYZ Patent license agreement, licensed to Newco, in the market of …………….., all for the benefit of the
Parties.
However, the Newco shall market the Products
in foreign markets only with the prior written authorization of XYZ.
(HYPOT. A) XYZ shall directly or indirectly supply to Newco Components, needed to produce Products, to the aim of
their future marketing, under the terms and conditions set forth in Exhibit A,
but Components will be previously delivered to the aim of assembly to X
Company, whose assembly is an additional investment in this Joint Venture and
which assembly is ruled by the Workmanship contract between Newco
and X Company, as set forth in Exhibit C.
(HYPOT. B) XYZ shall directly or indirectly supply to Newco Machinery and Components, needed to produce Products,
to the aim of their future manufacturing and marketing, under the terms and
conditions set forth in Exhibit A, but Components will be delivered to the aim
of assembly to X Company, whose assembly is an additional investment in this
Joint Venture and which assembly is ruled by the Workmanship contract between Newco and X Company, as set forth in Exhibit C.
Newco shall
reach a minimum output of ................... yearly, with the purpose of
creating a high quality of Products, capable of satisfying the expectations of
the customers, and to sell them in the market of .......................
The Parties also agree to hold confidential all trade and industrial
secrets and proprietary matters on any information related to the business or
the organization of the Shareholders or Quotaholders,
or on any further information related to the production, even after the
expiration of this Agreement, being the Parties liable for that and also for
the acts of their collaborators or employees.
Furthermore, the Parties undertake to hold confidential all trade and
industrial secrets and proprietary matters on any information related to the
business and the organization of Newco that shall be
developed by Newco during the time of this Agreement,
and to hold confidential and secret on any further confidential information and
proprietary matters about the marketing and production carried out by Newco, even after the termination of this Agreement, being
the Parties liable for that and also for the acts of their collaborators or
employees.
Newco shall also
carry out all the activities related, directly or indirectly, to the aim above mentioned, that shall be necessary,
adequate or desirable for the promotion or the carrying out of the main
business.
2.4 Expenses
Each of the Parties shall bear the cost of its legal fees related to
this Agreement. All necessary expenses
for the incorporation of Newco shall be borne by the
Parties at the same ratio as their respective shareholding in Newco.
Each of the Parties shall bear its own costs, if, for any reason, the
present Agreement is not signed, ratified or registered.
3. TOTAL
INVESTMENT AND CAPITAL SHARE
3.1 Total Amount of Investment
From both Parties, Newco will have a total
initial amount of investment of approximately …….(USD), for the stock capital of Newco.
The Parties shall as soon as possible, not later than ...............,
develop a financial investment plan that shall calculate, among other things,
costs for starting Newco, labor costs, the costs for
the transfer of personnel of XYZ, if necessary, and other important relevant factors. The Parties
agree that all financial costs of Newco shall be at
X’s expenses. In the same way, the capital increases will be at X’s expenses,
provided that they shall have no effect, in any form, on the prorata shares of the Shareholders or Quotaholders,
notwithstanding any previous agreement with XYZ.
No liquid asset of a different kind shall be set up, if not otherwise
provided for by the Parties.
3.2 Registered Capital
By this Agreement, the Parties
hereby state that the starting capital of Newco
amounts to …….(USD), and that it will
be immediately paid by the Parties in cash, at the moment of the signature of
the Bylaws, and shall be divided as follows:
·
the contribution of XYZ shall be, directly or indirectly, of …….(USD),
equal to 50 % of the stocks or quotas of the capital (n. .......... stocks or
quotas).
·
The contribution of X shall be of …….(USD),
equal to 50 % of capital (n. ....... stocks or quotas).
Therefore, the final shares will be as follows :
XYZ shall have, directly or
indirectly, 50% (fifty per cent, n. ......... stocks or quotas) of Newco’s capital.
X shall have 50% (fifty per cent, n. ...... stocks or quotas) of the
capital of the same.
The Newco capital may be increased according
to Article 3 of this Agreement and to the Articles of Organization of Newco, and according to he financial and economical needs
of the same company, provided that the shares of the Parties remain the same,
being 50% owned by each Party notwithstanding any other investment by either
Party to Newco.
In the case of cash, the Parties shall pay their contribution within 30
days from the day of the decision concerning the increase of capital. For other kind of capital contributions the
same shall be made immediately upon the obtaining of the necessary governmental
approvals, if required.
3.3 Additional Capital
Contribution
By this Agreement, the Parties hereby state that, in addition to the
initial capital contribution of the Newco in order to
start the business of Newco and the carrying out of
company object, each of the following Parties shall contribute as follows:
XYZ:
- an exclusive and free license on the Trademarks and Patents of XYZ
(see Exhibit E);
- free assistance for the teaching and the technical and market training
of the employees of the Newco, also through the
dispatch of its employees, to the aim of enabling Newco
to perform its duties of marketing and distribution (see Exhibit G);
- (HYPOT. A) supply of Components
to Newco by XYZ, needed to assembly and installation
of such Components, previously delivered to X Company, to the aim of execution
by the latest, as additional until the
value of …….(USD) of the workmanship
(assembly and installation) on said Components;
-
(HYPOT. B) supply of Machinery and Components to Newco
by XYZ, needed to assembly and installation of such Components, stating that
components assembly is taken charge of by the latter for their following
assembly and installation until the value of…….(USD).
The total amount of the contribution of XYZ is estimated in
..............., which is equal to 50% of the investment in the Newco.
X will contribute to the initial capital of Newco
with:
- the cash - flow that shall be necessary to ensure the management and
the existence of the Newco and to promote the
marketing and promotion of the Products;
- the rooms for the offices;
- the labor, the assembly, the production and installation of the
Products at the cost price ;
- the supply of other components and materials that are necessary for
the production at the cost price ;
- the ordinary management of the Newco.
All as better defined in Exhibit G.
The total value of the investment of X is estimated in ........., which
is equal to 50% of the investment in the Newco.
3.4
Profit and Losses
Distribution of Newco’s
profit to the Shareholders or Quotaholders will be
pro rata to their respective shareholding, starting not earlier than the third
fiscal year.
The profit due to XYZ shall be paid by Newco
in …….(USD).
The profit due to X shall be paid in …………………….(USD).
The Parties recognize that it is in the interest of Newco to take all reasonable steps to ensure the
development of the distribution and/or sale and/or marketing activities of the
Products by the Newco, which will be based on the
market and financial conditions. To this
aim the Parties agree to retain sufficient earning in the Newco
before distributing profits to the Shareholders or Quotaholders
and provide Newco with sufficient funds according to
sound business practices.
In the case of losses, the Parties agree not to charge them on XYZ (OR SUBSTITUTE: "agree not to charge
them until the value of…USD) and also agree that X shall be liable for all
debts, liabilities and obligations of Newco,
exempting XYZ from any economic and financial liability, in consideration of
the contributions of XYZ and of the fact that X, among other things, is liable
for the management of the Newco.
4.
FINANCIAL PLANS OF NEWCO
4.1 Business plan and annual
budget
Every year, not later than 30 days before the annual
notice of the Shareholders or Quotaholders’ meeting
for the approval of the balance sheet of the Newco,
the Board of Directors shall arrange a business plan and an annual budget for
the following year, to be exhibited to the meeting of the Shareholders or Quotaholders. Such business plan shall, among the other
things, set forth the management guidelines of the Newco.
¬¬¬¬¬¬¬¬¬¬
…………., ………………………
Company X _____________________________________
The legal representative
Company XYZ _____________________________________
The legal representative
EXHIBITS TO JOINT VENTURE AND SHAREHOLDERS OR
QUOTAHOLDERS AGREEMENT
EXHIBIT A –Supply Agreement of Components, List of
Components and General Sale Conditions
EXHIBIT B – Description of Patents, Trademarks, Drawings and Know-how
EXHIBIT C – Workmanship Agreement between Newco
and X company
EXHIBIT D - Machinery
EXHIBIT E- Trademark and Patent License
EXHIBIT F - Articles of Association and Bylaws
EXHIBIT G - Financial Investment Plan and First Year’s Sales Budget
