Joint Venture Agreement

THIS JOINT VENTURE AGREEMENT (the Agreement) is made at Mumbai,

India on May 1, 2012
between
M/s. ABC Ltd, a company incorporated under the provisions of Companies Act,
1956 and having its registered office at Kamala Mills B Wing, Mumbai 400 013,
India, through its chairman, hereinafter referred as the "Party of the First Part"
(which expression shall unless repugnant to the context include the Party of the
First Part's successors and assigns)
AND
M/s. XYZ Inc, a incorporated under the provision of Companies Act, 2006 of
United

Kingdom,

and

having

its

Registered

Office

at

____________________UK, through its authorized director, hereinafter referred

as "Party of the Second Part" (which expression shall, unless repugnant to the
context include the Party of the Second Part's successors and assigns).

Hereinafter individually referred as Party and collectively referred as Parties

WHEREAS the Party of the First Part is engaged in manufacturing, marketing,

selling and distributing rubber tyres for motor vehicles in India

AND WHEREAS the Party of the Second Part is engaged in providing

technologies and technical know-how in manufacturing rubber tyres for motor
vehicles

AND WHEREAS the Parties have entered into an Agreement for the purpose of
setting up a Joint Venture Company (hereinafter referred as JVC) at Mumbai,
Maharashtra, India for the purpose to manufacture rubber tyres for motor
vehicles using technical know-how and technologies provided by Party of the
Second Part and thereby marketing, selling and distributing the same throughout
India

NOW THIS AGREEMENT WITHNESSTH AND IT IS HEREBY AGREED BY

AND BETWEEN THE PARTIES that

1. The following words and terms will, when used in this Agreement, have
the meaning as set forth herein below:a. Act shall mean the Companies Act, 1956 and amendment
from time to time
b.

Article shall mean Article of Association of JVC

c. Auditors shall mean Auditor of the JVC appointed by Board

from year to year
d. Board shall mean the Board of Directors of JVC
e. Board Meeting shall mean meeting of the Board of Directors
f.

Chairman shall mean a Director appointed by the Board of

the JVC to act in the capacity and shall be appointed by Party of
the First Part

g. Confidential Information in relation to either Party means all

information of whatever nature relating to it or its business, plans,
technology know-how, intellectual property rights, processes,
formulas, trade secrets or other commercial information developed
or owned by any of the Parties and made available to the other
Party either in writing or orally or gathered by perception

h. Directors means an individual member of the Board of the

JVC, nominated and/or appointed by either of the Parties in writing
and shall include alternate director
i.

Meeting means a properly conveyed and duly held meeting of

the Board of the JVC and shall include ordinary and extraordinary
meeting

j.

Memorandum shall mean Memorandum of Association of the

JVC

2. It is hereby agreed that Parties shall undertake to incorporate and form

JVC

3. The registered office shall be located in Mumbai, Maharashtra, India. Any

change in the location of the registered office will be as decided by the
Board

4. The object of the JVC shall be to use the technologies and technical
assistance provided by the Party of the Second Part to enable JVC to
manufacture rubber tyres for motor vehicles and thereafter market, sell
and distribute the same throughout India

5. The initial authorized capital of the JVC will be Rs. 1,00,00,000/- (Rupees
one crore only) divided into 10,00,000 (Ten lakh) equity shares of Rs.
10/- (Rupees ten only) each. The Parties have agreed to subscribe the
share capital of the proposed JVC in the proportion of 3:2 i.e. the Party of
the First Part to take 60,000 (sixty thousand) equity shares of the
aggregate value of Rs.6,00,000/- (Rupees six lakhs only) and the Party of
the Second Part to take 40,000 (fourty thousand) equity shares of the
aggregate value of Rs. 4,00,000/- (Rupees four lakhs only)
6. That in addition to the initial authorized capital mentioned hereinabove,
the parties agree to subscribe to the further issue of share capital of the
JVC as may be required in the proportion mentioned in clause (5)
7. (Pre-emption clause)??

8. That the Memorandum and Article of the JVC will be as set forth on or
before the execution of this Agreement. Subject to the provisions of the
Act, these documents may be amended from time to time by written
agreement between the Parties
9. That on execution of this Agreement, the Parties agree to take necessary
action for the registration of the JVC within 60 (sixty) days hereafter.
10. That on incorporation of the JVC, the Party of the Second Part agrees to
bring in India, its technologies along with necessary machineries and
skilled and trained workmen required to run the machines for
manufacturing rubber tyres for motor vehicle at its own expense
11. The Profit Sharing Ratio ______

12. That the proposed Memorandum and Article of the JVC shall include the
following provisions:
a. The JVC shall have a Board composed of 5 (five) directors, of
which 3 (three) shall be appointed by the Party of the First Part
and 2 (two) shall be appointed by the Party of the Second Part
b. The Director(s) nominated and appointed shall hold office at the
pleasure of the appointing Party. The appointing Party shall have
the right to remove its own Director(s) so appointed by it and
appoint another or others in his or their place or in place of any
such Director(s) who resign(s) or otherwise vacate(s) his/their
office. Such appointment/removal shall be affected by a written
letter addressed to the Board of the JVC. The same shall take
effect upon the Board taking such requisite actions as may be
necessary.
c. In the event of a vacancy occurs in the Board for any reason
including any Director dying, resigning or being removed prior to
the fulfillment of his term, such vacancy shall be filled in by the
Party who had appointed the vacating Director.
d. Unless otherwise required under the provisions of law, none of the
Directors shall be liable to retire by rotation.

e. In case any Director is absent for a period of not less than 3

(three) months, the Board may appoint in his place, an alternate
Director who shall be nominated by the Party who appointed the
original Director.
f.

The

Chairman

shall

be

appointed

from

amongst

the

representatives of Party of the First Part who are appointed as

Directors of the Company, and he shall preside at the Meetings. If
the Chairman is unable to attend any Meeting, the Directors
present shall appoint another Director to act as Chairman in his
place for that Meeting. The Chairman shall have no casting vote.
g. Directors may receive such remuneration as may be determined,
from time to time, in accordance with the Memorandum & Articles
of the JVC
h. Meetings shall be held at regular intervals, at least once in every
four months.
i.

Notice of the Meeting shall be sent to each Director at least 10

(ten) days prior to the date of the Meeting accompanied by an
agenda. However, the Meeting can be called at a shorter notice by
written consent of all the Directors.

j.

The quorum necessary for transacting any business of or taking

any decision of the Board shall consist of at least 3 (three)
members, of whom at least 2 (two) shall have been those
appointed by the Party of the First Part and 1 (one) by the Party of
the Second Part.

k. If within half an hour from the time appointed for holding a meeting
of a Board, a quorum as specified in sub-clause (j), another date
shall be fixed for the meeting and notified in accordance with the
provisions this Agreement and if at such adjourned meeting the
quorum as required is not present, then the adjourned meeting
may proceed, provided that the Board shall not take any action
concerning matters specified in its Memorandum and any
attempted action by the Board shall be null and void.
l.

All major matters of the JVC shall be decided by the Board of the
JVC. In the Meeting, normally all matters should be decided

unanimously. However, in case of difference of opinion, matters

shall be decided by a majority of Directors present at the meeting.
m. However, the following matters shall not be decided by the Board
without the consent of at least one Director appointed by the Party
of the First Part and one Director appointed by the Party of the
Second

Amendment of Articles of Association of the JVC

Increase of share capital of the JVC

Terms relating to engagement of Managing Director of the

JVC

Declaration of dividends

Merger of the JVC

Dissolution or winding up of the JVC

Secrecy and Non-competition

n. That the Auditors of the JVC shall be QWERTY Private Limited

situated at 12/13 Road, Marine Drive, Mumbai 400 002
o. That the bankers of the JVC shall be State Bank of India, Lower
Parel Branch or such other bank or banks as may be agreed to by
the parties hereto.

13. Parties hereto agree that on incorporation of JVC, the Party of the
Second Part shall enter into a Technology Transfer Agreement with the
JVC for transfer of Technology know-how and technical data in
manufacturing rubber tyres for motor vehicles
14. Parties hereto agree that during the term of this Agreement not disclose
to any third party or their employees any Confidential Information except
as is necessary in the ordinary course of business for implementing this
Agreement.
15. Parties hereby agree that the obligation

to maintain secrecy of any

Confidential Information is maintained at all times, notwithstanding the

termination of this Agreement

16. Parties hereto agree and undertake during the term of this Agreement not
to compete with each other in India directly or indirectly of the business of
the JVC.
17. Parties hereby agree and undertake that their employees shall also be
bound by clause 14, 15 and 16
18. Parties hereby agree that they shall not pledge, hypothecate or encumber
their shares in the JVC except with the prior consent in writing of the other
Party.
19. The terms of this Agreement shall remain in force as so long as the
parties hold the shares in the JVC. In case any Party hereto transfers all
or any shares to any other Party, then this Agreement shall be deemed to
have been terminated.
20. <Exit Clause>?
21. Neither of the Parties shall transfer or assign its rights, obligations and
liabilities under this Agreement to any third party without the prior written
consent of the other Party and any such transfer or assignment of rights,
obligation and liabilities without the consent of the other Party shall be null
and void
22. In the event of any dispute or controversy arising under or by virtue of this
Agreement or any difference of opinion between the Parties, they shall
use their best efforts to resolve such dispute or difference of opinion
amicably by discussion and mutual accord. If the dispute cannot be
resolved in this manner within 60 (sixty) days, they shall arrange a
meeting between appropriate senior executives designated by each of
them, who shall have an additional 30 (thirty) days to resolve the dispute
or difference. If the dispute or difference cannot be settled within the 90
(ninety) day period, then either of them may refer the same to arbitration
under the Arbitration and Conciliation Act, 1996.
23. The number of arbitrators shall be 2(two), each Party shall be entitled to
appoint his own Arbitrator.
24. The arbitration shall be conducted in English language. The place of
Arbitration shall be Mumbai. The arbitration award shall be in English
language. The arbitration award shall be final and binding on the Parties
and not subject to any appeal

25. This Agreement will be governed by and construed in accordance with

laws in India.
26. Party shall bear their own expenses including legal fees, however all the
expenses relating to incorporation of JVC and registration fee and stamp
duty fee relating to this Agreement shall be borne by the Parties in
proportion of 50:50
IN WITNESS WHEREOF THE PARTIES hereto has put their respective hands
and seal the day and the year first hereinabove written.

THE COMMON SEAL of the withinnamed

Party of the First Part

M/s ABC Limited,

is hereunto affixed pursuant to the

Resolution of its Board of Directors

Passed in that behalf on March, 1 2012 in the

Presence of

1) Chairman

2) Company Secretary

in presence of :-

THE COMMON SEAL of the withinnamed

Party of the Second Part

M/s XYZ Inc,

is hereunto affixed pursuant to the

Resolution of its Board of Directors

Passed in that behalf on ________ in the

Presence of

1) _______

2) ________ ______

in presence of :-

Witnesses :-

1.
2.