(dated)
Incorporated Joint Venture Agreement
between
and
and
TABLE OF CONTENTS
1.Definitions and Interpretation
2.Conditions Precedent
3.Term
4.Objectives
5.Structure of the Company
6.Board of Directors
7.Decision Making
8.Management
9.Financial Reporting
10.Accounts
11.Funding
12.Agreements Between Company and Shareholders
13.Transfer of Shares
14.Procedure on Transfer of Shares
15.Determination of Sale Price
16.Non-Competition
17.Publicity and Confidentiality
18.Dispute Resolution
19.Acknowledgements and Warranties
20.Termination
21.Default
22.Assignment
23.Counterparts
24.Entire Agreement
25.Further Action
26.Choice of Jurisdiction and Law
27.Non-merger
28.Notices
29.Waiver
30.Variation
31.Costs
32.Paramountcy
33.No Partnership or Agency
34.Severability
35.Consent
INCORPORATEDJOINT VENTURE AGREEMENT made the day of
Parties
of
of
of
Recitals
A.The parties to the joint venture have agreed that the Company conduct the Business of the joint venture.
B.The joint venture partners have created the company, issued shares and entered into this agreement as a means of regulating their relationship as joint venturers.
C.The joint venture partners (hereinafter referred to as‘Shareholders’) have entered into this Agreement to record their aims and objectives in relation to the Company and to provide for the operation and administration of the Company.
D.The Shareholders agree to associate with each other as shareholders in the Company as and with effect from the Effective Date on the terms set out in this Agreement.
1.Definitions and Interpretation
1.1.In this Agreement, including the recitals, unless the context otherwise requires, the following terms have the following meanings:
Act means the Corporations Act 2001 (Cth);
Agreement means this Incorporated Joint Venture Agreement, including its schedules;
Associate has the meaning given to that term by the Act;
Auditor means the registered Company auditor appointed by the Company for auditing its accounts;
Board means the Board of Directors, and includes any committee of that Board;
Board Meeting means a meeting of the Board (or any committee of the Board) duly convened and held in accordance with this Agreement and the Constitution;
Business means the Business of
Business Day means any day other than a Saturday, Sunday, bank holiday or public holiday in ;
Business Plan means the program current from time to time for the conduct of the Business during a financial year consisting of:
(a)a Business Plan specifying the proposed marketing plans, finance arrangements, capital expenditures and activities of the Business during that financial year; and
(b)a budget specifying an estimate of the income to be received and the expenses to be incurred in carrying out that Business Plan.
Chairman means the Chairman of the Board from time to time appointed under clause 6;
Change in Control of a Shareholder means the acquisition by any person or corporation, either alone or together with any associate of that person or corporation, of:
(a)a relevant interest in more than 50% of the issued voting capital of the Shareholder; or
(b)where the Shareholder is the trustee of a unit trust, a relevant interest in more than 50% of the issued units in that trust.
Chief Executive Officer means the Chief Executive Officer of the Company from time to time;
Company means
Conditions means the conditions set out in clause 2.1;
Confidential Information means all information, forms, specifications, processes, statements, formulae, trade secrets, drawings and data (and copies and extracts made of or from that information and data) concerning:
(i)the operations and dealings of the Company, the Business or a Shareholder;
(ii)the organisation, finance, customers, markets, suppliers, intellectual property and know-how of the Company, a Shareholder, a related body corporate of the Company or a related body corporate of a Shareholder; or
(iii)the operations and transactions of a Shareholder concerning the Business and that Shareholder’s shareholding in the Company.
which is not in the public domain (except by the failure of a Shareholder to perform and observe its covenants and obligations under this Agreement) and which has been obtained through or by being a member of the Company.
Directors means the Directors of the Company for the time being and Director means one of them;
Effective Date means the date days after the Conditions have all been satisfied;
Encumber means to mortgage, pledge, charge, assign as security or otherwise encumber;
Event of Default means an event specified in clause21.1;
Financial Year means a period of 12 consecutive calendar months ending on 30 June or on another day decided by the Board;
Interest Rate means a rate of interest per annum which is three (3) percentage points higher than the rate (expressed as a percentage per annum, on a yield to maturity basis) stated by the Australian Merchant Bankers’ Association from time to time to be the mean average of the yields being quoted by members of that association as the yields that they would require upon the purchase by them of a bill of exchange maturing in 180 days and drawn by a person not associated with the relevant member and accepted by another member.
Month means calendar month.
Office means the registered office of the Company from time to time.
Related Body Corporate has the meaning given to that term in s 50 of the Act.
Respective Proportion means, in respect of a Shareholder, the proportion of the issued capital of the Company held by that Shareholder from time to time.
Shares means fully paid ordinary shares of $1.00 each in the capital of the Company.
Shareholders mean the entities which hold shares from time to time.
Simple Majority means a majority that together holds not less than 51% of the total voting rights of all Directors or Shareholders, as the case may be, present and entitled to vote at a meeting of Directors or Shareholders, as the case may be.
Transfer means to sell, assign, transfer, convey or otherwise dispose of:
(a)in this Agreement except to the extent that the context otherwise specifies:
(i)any term defined in the statement of the names and descriptions of the Shareholders has the meaning there defined;
(ii)reference to any legislation or any provision of any legislation includes any modification or re-enactment of the legislation or any legislative provision substituted for, and all legislation and statutory instruments and regulations issued under, the legislation;
(iii)words denoting the singular include the plural and vice versa
(iv)words denoting individuals or persons include bodies corporate and trusts and vice versa;
(v)words denoting either gender include both genders;
(vi)headings are for convenience only and do not affect interpretation;
(vii)reference to a clause, paragraph or schedule is a reference to a clause, paragraph or schedule of this Agreement;
(viii)reference to any document or Agreement includes reference to that document or Agreement as amended, novated, supplemented, varied or replaced from time to time;
(ix)where any word or phrase is given a definite meaning in this Agreement any part of speech or other grammatical form of that word or phrase has a corresponding meaning;
(x)reference to an amount of money is a reference to the amount in the lawful currency of the Commonwealth of Australia;
(xi)reference to a time and date in connection with the performance of an obligation by a Shareholder is a reference to the time and date in Sydney, Australia, even if the obligation is to be performed elsewhere; and
(xii)reference to the rights, duties, obligations and liabilities of more than one Shareholder will in every case be a reference to rights, duties, obligations and liabilities that are several and not joint or joint and several.
2.Conditions Precedent
2.1This Agreement, with the exception of clause 1, 2, 16, 19 and 21–33, is subject to and will have no force or effect until:
2.1.1the Company issues shares to the Shareholders;
2.1.2the issued shares be allocated evenly between the Parties on Effective Date so that their individual Shareholding is:
Shareholder / Number of Shares / Type of SharesOrdinary
Ordinary
Ordinary
Ordinary
(a)resigns as a Director of the Company;
(b)be appointed as Director of the Company;
(c)the Company issue shares each to and on the [date]
Shareholder / Number of Shares / Type of SharesOrdinary
Ordinary
(i)and be appointed Director of the Company on .
(d)subject to clause 2.1.2(d), each of the Shareholders must make all appropriate applications, diligently pursue those applications and generally use all reasonable endeavours to ensure that the conditions are fulfilled as soon as is reasonably practicable after the date of this Agreement.
(e)if the conditions are not satisfied on or before or a later date agreed by the Shareholders in writing then, subject to that Shareholder having complied with clause 2.1.2(f), a Shareholder may at any time after that date terminate this Agreement by giving notice in writing to the other Shareholders.
(f)on service of a notice under clause 2.1.2(e) this Agreement has no further effect and each Shareholder is released from:
(i)its obligations to further perform this Agreement except those imposing on its obligations of confidentiality; and
(ii)any liability under this Agreement except in respect of a breach of clause2.1.2(d).
(g)no party makes any warranty nor any representation as to whether the Conditions Precedent will take place or is capable of taking place before the date prescribed in clause 2.1.2(e).
(h)no party shall have any liability to the other in the event that the Conditions Precedent is not met. This clause is subject to clause 2.1.2(f).
3.Term
3.1This Agreement commences on the Effective Date and continues until terminated in accordance with this Agreement.
4.Objectives
4.1The objectives of the Shareholders in establishing the Company are
4.1.1as per employment contracts (Schedule 1).
(a)in order to fulfil the objectives listed in clause 4.1, each Shareholder must:
(i)cooperate and use the Shareholder’s best endeavours to ensure that the Company successfully carries on the Business;
(ii)not use Confidential Information in a way which damages or is reasonably likely to damage the Company or any of the other Shareholders;
(iii)not unreasonably delay an action, approval, direction, determination or decision required of the Shareholder;
(iv)make approvals or decisions that are required of the Shareholder in good faith and in the best interests of the Company and the carrying on of the Business as a commercial venture; and
(v)be just and faithful in the Shareholder’s activities and dealings with the other Shareholders;
(vi)act honestly and fairly in relation to each other in relation to the affairs of the Company;
(vii)where any Shareholder provides goods or services to the Company for any reason, such goods or services shall be provided to the Company on terms no less favourable than those provided to, or which would reasonably be expected to be provided to, any other person on an arm’s length basis having regard to the circumstances.
5.Structure of the Company
5.1The Shareholders must procure that on the Effective Date the issued capital of the Company is held legally and beneficially as follows:
Shareholder / Number of Shares / Share Percentage1,000 / 25%
1,000 / 25%
1,000 / 25%
1,000 / 25%
and for this purpose each Shareholder must subscribe at par for the number of shares specified above.
5.2On the effective date the Shareholders must pass a special resolution to ensure that the constitution is adopted in substitution for, and to the exclusion of, the Company’s existing constitution.
5.3The Company is and shall remain a Corporation limited by shares under the laws of Australia.
5.4The Company’s constituent document shall comprise the Constitution with such changes as may be necessary or desirable for the conduct of the Business and as may be agreed between the Shareholders.
5.5The rights, powers and privileges attached to each of the shares shall be the same in all respects and they shall rank pari passu and no share shall be classified or reclassified or the rights attaching to any such share varied except by mutual agreement between the Shareholders.
5.6Subject to clause 5.5, no additional shares or other equity securities or securities with rights of conversion or options over equity securities in the Company shall be issued, nor shall the Company grant any right or option to subscribe for the same, except by unanimous agreement between the Shareholders or following the issue of shares to the Shareholders in the same proportions as set out in clause 5.
5.7If the Board determines that the Company requires additional capital, the Company may offer the right to subscribe for additional shares as follows:
5.7.1first, each Shareholder at the time the offer is made (Existing Shareholder) shall have a right to acquire, within 13 days of the date of the offer (Initial Offer) the percentage of the total number of shares as equals its percentage holding of shares as at that date;
5.7.2second, the Existing Shareholders who accept the offer in paragraph 5.7.1 may subscribe, within 30 days of the date of the Initial Offer, lapses or earlier if an offer is declined before that date, for any of the shares not subscribed by the Existing Shareholders in accordance with paragraph 5.7.1 pro rata to the percentage of shares they hold following the offer in paragraph 5.7.1;
5.7.3third, any other person determined by the Board may subscribe for any of the shares not subscribed for by an Existing Shareholder in accordance with paragraphs 5.7.1 or 5.7.2, and the Board shall determine the number and pricing of the shares to be offered in accordance with clause 14.
6.Board of Directors
6.1The number of Directors (excluding alternate Directors) must be 2 from the Effective Date. From and will be appointed Director bring total Directors to 4, unless the Shareholders otherwise unanimously determine. Each Shareholder is entitled to appoint one Director.
6.2The Shareholders must procure that, on the effective date, the Board comprises:
6.2.1;
6.3Every appointment and removal of a Director takes effect when the written notice of appointment or removal is received at the office or, in the case of an appointment, when the written consent to act as a Director is received at the office if that is later than the receipt of the notice of appointment.
6.4The Chairman of the Board will:
6.4.1be a Director appointed by ; and
6.4.2have a casting vote as Chairman in addition to any vote he or she may otherwise have as a Director.
6.5In any Board meetings each Shareholder’s nominee on the Board, and if there is more than one nominee those nominees together, will be entitled to exercise that number of votes equivalent to:
6.5.11 Vote.
6.6At least six Board meetings must take place each financial year:
6.6.1the time, date and location of all Board meetings must be determined by the Chairman after consultation with the Board or, if there is no Chairman, by a simple majority vote of the Board;
6.6.2any Board meetings in addition to those referred to in sub-paragraph6.6 may be convened at the written request of any Shareholder or Shareholders that have an aggregate respective proportion of more than 15%. The agenda for a Board meeting convened under this sub-paragraph6.6.1 must be determined by the Shareholder or Shareholders convening the meeting;
6.6.3a Board meeting will require at least 10 Business days’ prior written notice to be given to all Directors unless otherwise agreed by all Directors. That notice must include an agenda and, unless all Directors otherwise agree, a Board meeting may only resolve matters specifically referred to in that agenda. Subject to clause 6.6, the agenda must be determined by the Chairman or/and the Company secretary, or/and the Chief Executive Officer after consultation with the Board.
6.7A quorum for Board meetings is constituted by the attendance (in person or by alternate) of a Director appointed by each Shareholder that is entitled to appoint a Director under clause 6.1).
7.Decision Making
7.1Subject to the Act and this Agreement, all decisions of the Board or the Shareholders in general meeting will be made by Simple Majority Vote.
7.2A decision of the Board or the Shareholders in general meeting will not be valid unless (in addition to being made by simple majority vote) it is supported, in the case of the Shareholders in general meeting, by at least two Shareholders or, in the case of the Board, the Directors nominated by at least two Shareholders.
7.3All decisions in respect of the following matters when they are not included in the Business Plan must be made by unanimous consent of the Board:
7.3.1appointment of the Chief Executive Officer;
7.3.2the submission of any tender, bid or proposal relating to any contract or commitment with a value of $10,000.00 or more for each financial year;
7.3.3execution of any contract or entering into any commitment with a value of $5,000.00 or more for each financial year;
7.3.4incurring any capital expenditure or liability of $5,000.00 or more, for an individual transaction or for a series of transactions in aggregate in any financial year;
7.3.5the acquisition of any freehold land;
7.3.6entering into leases of real property with rental payments of more than $5,000.00 for each financial year;
7.3.7provision of guarantees by the Company to any third party that exceeds the limits determined by the Shareholders by simple majority vote;
7.3.8obtaining new or increasing existing external borrowings where the total of all external borrowings exceeds the limits determined by the Shareholders by Simple Majority Vote;
7.3.9sale of the whole or part of any material undertaking of the Company including, without limitation, the sale of any assets with a value of $5,000.00 or more;
7.3.10entering into any transaction which is not proposed on a commercial ‘arms length’ basis or of any unusual or onerous nature or which is outside the ordinary course of the Business;
7.3.11the issue of any shares, or options to take up unissued shares, in the capital of the Company;
7.3.12execution of any service, employment or consultancy contract with a term of more than 3 months, or a financial commitment of $5,000.00 or more;
7.3.13provision of any encumbrance by the Company over any of its assets, property, undertaking or uncalled capital securing an amount in excess of $5,000.00;
7.3.14subscription for, or acquisition or sale of, any securities in any Company including, without limitation, the formation, sale or acquisition of any Company as a subsidiary of the Company;
7.3.15execution of contracts between the Company and any Shareholder or its related body corporate pursuant to clause 12;
7.3.16commencement of any new Business (other than the Business);
7.3.17any modification, variation or amendment to any Agreement or arrangement (other than this Agreement) referred to in this clause 7.3; or
7.3.18determination of the matters referred to in clause 11 (relating to further funding of the Company).