XYZ PROJECT

…. WORKS

COMPANY A
COMPANY B
COMPANY C

JOINT VENTURE AGREEMENT

ARTICLE 1 – PARTIES
Company A, a company established and existing under the laws of …., with its registered
address at… (hereinafter referred to as “…”);
AND
Company B, a company established and existing under the laws of …., with its registered
address at… (hereinafter referred to as “…”);
AND
Company c, a company established and existing under the laws of …., with its registered
address at… (hereinafter referred to as “…”);
In this Joint Venture Agreement (hereinafter referred to as “AGREEMENT”) each of the
PARTIES will hereinafter be referred to as a “PARTY”, and they will collectively be referred to as
the “PARTIES”.
The PARTIES have established a JOINT VENTURE in accordance with provisions of this
AGREEMENT. The name of the JOINT VENTURE is “…. Joint Venture” (hereinafter referred to
as “JOINT VENTURE”).
The registered office of each of the PARTIES specified in this AGREEMENT are deemed to be
their respective valid and binding notification address unless any change therein is notified by a
notice in writing.
The JOINT VENTURE has its principal place of business at …. which may be moved to another
address under a resolution adopted by the Board of Representatives. The powers of Board of
Representatives (“Board”) are given under Article 7.
For the avoidance of doubt, no provision in this AGREEMENT shall be construed to affect the
obligations of the JOINT VENTURE as CONTRACTOR versus the CLIENT.
ARTICLE 2 – SUBJECT OF THE AGREEMENT
This JOINT VENTURE has been founded with the objective of execution of a …. contract for
XYX Project … Works (hereinafter referred to as the “WORKS” or “PROJECT”) put out to tender
by COMPANY D (hereinafter referred to as the “CLIENT”), and to enter into an agreement with
the CLIENT (hereinafter referred to as the “CONTRACT”) and to execute and complete the
WORKS in accordance with the provisions of the CONTRACT.
The PARTIES shall be jointly and severally liable to the CLIENT for the fulfillment of all
obligations and liabilities of the JOINT VENTURE under or in relation to the execution of the
WORKS under the CONTRACT. Nothing in this AGREEMENT shall be construed to diminish or
limit the scope of this joint and several liabilities. Where in this AGREEMENT certain rights
and/or obligations are split between the PARTIES, such split is only relevant for the internal
relation between the PARTIES and is without prejudice whatsoever to the joint and several
liability towards the CLIENT.
ARTICLE 3 – FINANCING AND MEETING THE JOINT VENTURE’S FINANCING
REQUIREMENT
Finance required to carry out the WORKS will be met from advance payment and interim
payments to be received from the CLIENT in accordance with the terms of the CONTRACT and
from the loans to be borrowed on behalf of the JOINT VENTURE, where deemed necessary.
Provided further that, in order to finance initial costs associated with set up of the JOINT
VENTURE and the WORKS, each of the PARTIES might be asked to pay an amount to be
mutually determined by the Board as defined in Article 7 to an account to be opened in the
name of the JOINT VENTURE pro rata their respective shares in the JOINT VENTURE as
defined in Article 4. Notwithstanding the source of such financing paid by the PARTIES no
interest or expenses which may result from such source shall be payable by the JOINT
VENTURE to the PARTY which has incurred such cost.
If, during the term of the WORKS, the JOINT VENTURE incurs a loss or the JOINT VENTURE’s
resources prove to be inadequate or additional funds in cash cannot be secured from other
sources, then the PARTIES shall provide such additional financing pro rata their interests in the
JOINT VENTURE in accordance with a resolution adopted by the Board within specified therein.
Any and all financing which the PARTIES shall provide to the JOINT VENTURE from their own
resources shall be credited to the JOINT VENTURE account.
Any and all liabilities and receivables, or profit or loss which may result from the JOINT
VENTURE shall be distributed among the PARTIES pro rata their respective shares as detailed
in Article 4.
The JOINT VENTURE shall open a bank account which will be operated by the joint signature
of all PARTIES. All amounts to be received on behalf of the JOINT VENTURE shall be
deposited in such accounts and the expenditures shall be made therefrom. Names of persons
who will be authorized to carry out transactions through such bank accounts and their limits of
authority shall be defined in powers of attorney to be issued by the PARTIES in accordance with
resolutions of the Board.
ARTICLE 4 – PARTICIPATING INTERESTS AND SHARE TRANSFER
Interests of each of the PARTIES in the JOINT VENTURE (hereinafter referred to as
“Participating Interests”) shall be as follows:
Company A …% (Leader)
Company B …%
Company C …%
The above distribution of interests shall also apply to profit or losses. Letters of guarantee and
cash-credit which the JOINT VENTURE may require shall be provided by the PARTIES
according to such percentages.
Before the JOINT VENTURE is legally founded any and all individual of joint costs and
expenses which the PARTIES might have incurred in connection with guarantees and the
CONTRACT shall be disbursed with regard to the resolution of the Board.
Until this AGREEMENT has been terminated, each PARTY also hereby undertakes and
declares that it shall not transfer any of its shares, rights and/or obligations gained under the
AGREEMENT to any third party under any circumstances without the written consent of the
other PARTIES and the CLIENT.
Parties further declare and undertake that they shall not change their shareholding structure
under this AGREEMENT without the prior consent of the CLIENT.
ARTICLE 5 – GUARANTEES AND SURETIES
In principle, guarantees and counter-guarantees which may be required from the PARTIES by
the JOINT VENTURE at the term of the CONTRACT shall be provided by the PARTIES in favor
of the JOINT VENTURE pro rata their respective shares therein. All risks and expenses
incidental to or consequent on such guarantees and counter-guarantees shall be borne by the
JOINT VENTURE.
ARTICLE 6 – DEFAULT
Each PARTY shall fully indemnify the other PARTIES for any and all losses or expenses
incurred as a result of its failure to comply with this AGREEMENT and the CONTRACT, or as a
result of any other default, which may materially adversely affect its participation in the WORKS.
Should any PARTY (“Defaulting Party”) fail to provide guarantees and/or funds within ….
calendar days from the date of proposal of a Board resolution calling for funds, as provided in
Article 7, then the other PARTIES may provide the guarantees and/or funds on behalf of the
Defaulting Party, and in this case, as an indemnity and a penalty to the account of Defaulting
Party, they shall be entitled to:
(i) in case of guarantee: charge to the Defaulting Party the double of the cost debited by the
banks;
(ii) in case of funds: receive interest from the Defaulting Party … per cent per annum above
interest rate applied by the Non-Defaulting Party’s bank rate for the currency on which the bank
has raised.
Such payment shall not deprive the other PARTIES of the right to take to ensure that the
Defaulting Party complies with its obligations under this AGREEMENT.
Without prejudice to Article 2 of this AGREEMENT, should the Defaulting Party fail to provide
guarantees and/or funds within 60 days after the 14 calendar days period from the date of
request as stated above, then the Defaulting Party’s share of Participating Interest shall, unless
otherwise decided by the other non-defaulting PARTIES, be reduced, upon written notice to the
effect from the latter, so that the non-defaulting PARTIES shall accrue their Participating Interest
in the proportions which the actual financial contribution of each PARTY bears to the total
contribution of all the PARTIES, and consequently shall obtain profits accordingly. However, the
proportional liability of the Defaulting Party for losses, cost, expenses and obligations shall
remain as its original Participating Interests, as stated in Article 4, at the date of execution of this
AGREEMENT.
For sake of clarity, the Defaulting Party, in case of need and notwithstanding the reduction of its
Participating Interest, shall supply all documents and data needed for the other Parties to
proceed smoothly with the PROJECT.
Should there be losses at the final settlement of the accounts, such losses will be borne by the
PARTIES in proportion to their original Participating Interests as given in Article 4 hereinabove;
should there be profits, they will be shared, based on the actual Participating Interest, in
accordance to the aforesaid final redistribution.
ARTICLE 7 – MANAGEMENT OF THE JOINT VENTURE
Company A shall be the Leader of the JOINT VENTURE, and it shall represent the JOINT
VENTURE. The Leader shall not be authorized to make decisions for and on behalf of the other
PARTIES as well as on behalf of the JOINT VENTURE, neither shall it be authorized to incur
liabilities for the other PARTIES of the JOINT VENTURE unless such authorization is granted to
him/her by the other PARTIES in each instance in writing. Decisions taken by the Leader under
the powers granted to him/her by any Power of Attorney under the CONTRACT or otherwise
shall be subject to prior written consent of the other PARTIES. Failing to get such prior written
consent, the Leader shall be deemed to be in breach of the AGREEMENT.
The JOINT VENTURE shall be managed by the Board of Representatives and a management
organ (hereinafter referred to as “Management Committee”) reporting to the Board of
Representatives.
7.1 The Board of Representatives (hereinafter referred to as “the Board”) shall consist of 3
(three) members. Each Party shall appoint a member to represent him/her at the Board
(hereinafter referred to as “Representative”) and its alternate to replace him/her when she/he is
absent from the Board meetings. The PARTIES shall be entitled to replace their representatives
at any time. If any of the Representatives resigns or is dismissed, then the successor shall be
appointed by the PARTY which has appointed such Representative.
Each of the PARTIES shall be entitled to one vote at the Board. The Chairman of the Board
shall be the representative of the Leader and shall be nominated at the first meeting of the
Board.
PARTIES shall nominate their Board Members within one week after the CONTRACT award.
The Board shall:
a) take decisions on overall organization of works, to appoint staff and purchase/lease
equipment required for the implementation of the WORKS, to approve contracts which may be
entered into for the foregoing purposes, to fix ceilings for amounts to be paid in consideration of
such works, to set forth the power limits of the Project Manager.
b) request additional financing from the PARTIES where deemed necessary and to fix deadlines
for payment thereof.
c) approve annual financial statements and profit and loss statements, to draw up budgets and
monitor implementation thereof.
d) examine and decide upon issues which the Management Committee may refer to the Board.
f) study and decide upon issues which the Directors may refer to the Board.
g) formulate staffing and wage policy and to approve implementation thereof.
h) take any legal decision and action in conformity with and required under the CONTRACT.
i) take decisions for cooperating with third parties in connection with the WORKS if deemed
necessary in accordance with the provisions of the CONTRACT.
j) take decisions in respect of any other issue which may be a matter of interest for the JOINT
VENTURE.
7.2 Without prejudice to Article 7.3, all decisions of the Board of Representatives shall be taken
unanimously.
7.3 Time, Place and Quorum of Meeting, Decision Taking:
a) The Board shall convene upon an invitation issues by the Chairman where and when
deemed necessary – at least once each 90 days – in connection with the JOINT VENTURE’s
business and transactions. Unless otherwise not decided in a contrary manner, the Board shall
convene at the principle place of business of the JOINT VENTURE.
b) any one of the PARTIES may request the Chairman to convene the Board within 3 (three)
days from the date of such request. Such request shall be deemed to have been duly delivered
when a confirmed facsimile transmission is received at the JOINT VENTURE’s registered office.
The meeting quorum for the Board shall be the present when 100% of the Participating Interests
are represented. Decisions shall be taken unanimously by 100% of the Participating Interests.
c) The Board shall convene within 3 (three) days after receipt by the JOINT VENTURE of such
request. If no such meeting can be held or required quorum cannot be attained, or unanimity for
the decision taking cannot be achieved then the meeting shall be postponed 7 (seven) days
after the date of receipt of the request for the first meeting. The quorum of the second meeting
of the Board shall be the presence of all of the Participating Interests. The decision making
quorum shall be the majority of the Participating Interests as defined in Article 4 hereinabove on
the condition that one of the votes constituting the majority belongs to the Leader. If such
majority cannot be achieved at the second meeting, the issue will be taken to the Presidents of
the Parties who will render the final decision in unanimity.
And if the decision to be taken is urgent such that any delay may harm the Project, and the
Board is not able to take decision, at the second meeting the decision will be taken by the
Chairman considering all relevant circumstances and in accordance with the authorities
attributed to him/her by the Board and the principles set forth in this AGREEMENT, for the
mutual benefit of the PARTIES and the Project. However, this option of the Chairman is limited
with the total monetary value of … million USD.
Notwithstanding the provisions of the present paragraph 7.4, the following matters shall be
reserved to the Board and shall require the unanimous decision of the Board and casting vote of
the Chairman will not apply:
- amendments to the CONTRACT,
- inclusion of new parties to the JOINT VENTURE,
- exclusion of any Party from the JOINT VENTURE,
- the winding up of the Entity and closure of its activities and accounts,
- allocation of the execution of any portion of the WORKS to any Party,
- the allocation of powers for Management Committee, to be decided at first meeting of the
Board,
- supply of plant, machinery, personnel or equipment by any Party.
7.5 Organization:
There are two main operational structures of the JOINT VENTURE:
a) Management Committee
b) Project Manager’s Office
a) Management Committee
The Management Committee shall consist of 3 (three) members (the Project Manager chosen
by Company A and one deputy for each other Party), and each Party shall also nominate an
alternate in order the Management to function always properly. The PARTIES may at all times
replace the members they have appointed. Should there be a vacancy in the Management
Committee, its successor shall also be appointed by the PARTY who has appointed such
member.
Each PARTY shall be entitled to one vote in the Management Committee. The Management
Committee is responsible for ensuring that resolutions adopted by the Board are implemented.
The Management Committee is also responsible for decisions of daily works, within the limits
delegated by the Board and for operations regarding amounts above … USD. For operations
whose value is under such amount (but not exceeding …. USD/month), the Project Manager
shall be entitled to decide and proceed autonomously, within the limit of a correct behavior and
good faith. The Management Committee may distribute responsibilities among its members, but
decisions are to be executed by the Project Manager/Project Manager’s Office,
The quorum for the Management Committee Meeting shall be one member (or its alternate)
representing each PARTY.
The Project Manager shall be designated by the Leader. Should in the opinion of any of the
PARTIES, the Project Manager does not perform its duties properly, the Board, shall have the
right to revoke the appointment. The Leader shall designate another Project Manager who shall
replace the previous one. Neither Company B nor Company C shall have any liability out of or
connected with Project Manager’s negligence.
The Management Committee shall adopt its decisions unanimously. The decisions shall be
recorded and submitted to the forthcoming Board meeting for information. Any resolution which
cannot be adopted by the Management Committee shall be submitted to the next meeting. If
unanimity for a decision cannot be achieved at the forthcoming meeting, the matter shall be
referred to the Board which shall then make the final decision.
The Management Committee shall prepare, within 2 weeks from the signature of the
CONTRACT, the guidelines for the implementation of the PROJECT, which shall include the
strategies to develop the WORKS, which shall be approved by the Board and which shall be
organized in order to allow the PROJECT to proceed smoothly.
b) Project Manager’s Office
The Project Manager shall be the CONTRACTOR’s representative (as such term is defined in
the CONTRACT), and shall have the necessary authority to perform in accordance therewith.
The Project Manager’s Office shall consist of a site organization and other organizations which
will be created under supervision of the Project Manager who shall be appointed by the Board
upon a recommendation made by the Management Committee. Project Manager’s Office shall
carry out actual execution of the WORKS within limits of authority delegated thereto and report
results to the Management Committee.
ARTICLE 8 – REPRESENTATION
The JOINT VENTURE shall be represented by each of the Project Manager and the Leader.
In addition, the Board may delegate powers to any Representative and any employee of the
JOINT VENTURE.
ARTICLE 9 – OBLIGATION TO KEEP BOOKS
The JOINT VENTURE shall keep required books and draw up a financial statement at the end
of every financial year in accordance with provisions of applicable laws. Such books to be kept
shall be certified in the name of the JOINT VENTURE.
ARTICLE 10 – TERM OF AGREEMENT
1 In the event that the CONTRACT has not been entered into by the JOINT VENTURE and the
CLIENT or has been entered into but has not subsequently become effective, this
AGREEMENT shall expire upon occurrence of any of the following:
a) On the date of ….., if the offer of the JOINT VENTURE has expired or when the offer of the
JOINT VENTURE has expired whichever the later,
b) On the date of receipt of any formal confirmation from the CLIENT that the Tender has been
cancelled,
c) On the date CLIENT signs the CONTRACT with a third party.
2 In the event that CONTRACT has been entered into by the JOINT VENTURE and the CLIENT
and has subsequently become effective, then this AGREEMENT shall remain in full force and
effect until all the securities are released and all rights and obligations between the PARTIES
hereunder are discharged and accounts between the JOINT VENTURE and any third party are
settled after the final acceptance and final settlement of accounts following performance of all
additional obligations, where existing or which may arise in the future, against the CLIENT.
A final balance sheet shall be drawn up after completion of the WORKS. This AGREEMENT
shall be terminated after such balance sheet has been approved by the Board.
ARTICLE 11 – CONTINUED OBLIGATIONS
Any technical, financial and legal obligation, or any indemnities required to be paid to workmen
or third parties under a judgment, or all tax and insurance premium liabilities together with delay
interest and penalties or any amount which may be deducted by the CLIENT as a penalty which
may arise from the WORKS under the CONTRACT within the period of limitation after
liquidation of the JOINT VENTURE shall be promptly paid by the PARTIES pro rata their shares
in the JOINT VENTURE.
ARTICLE 12 – DISTRIBUTION OF SURPLUS MATERIALS AND EQUIPMENT AFTER
COMPLETION OF THE WORKS
Prior to calculation of the final profit and upon completion of the WORKS, all surplus equipment
and materials and any movables and immovable which have been acquired in the name of the
JOINT VENTURE shall be owned by the PARTIES in proportion with their respective shares.
The Board shall take a decision for distribution or selling of such surplus equipment and
materials.
ARTICLE 13 – CALCULATION OF PROFITS
Profits obtained in connection with the WORKS shall constitute of the positive difference
between the aggregate of the cost of including but not limited to; direct costs, indirect cost, final
charges without profit, damages, indemnities, all overhead expenses relating to the WORKS
and the aggregate amount of interim payments accrued.
ARTICLE 14 – WITHDRAWAL, BANKRUPTCY, COMMISSION OF BANKRUPTCY,
ATTACHMENT
a) The JOINT VENTURE shall be effective on and from the date of this AGREEMENT and
continue to exist until the date determined in Article 10.
b) Without prejudice to Article 2 of this AGREEMENT, if any PARTY (“Debtor”) is unable to
discharge its obligations or to provide guarantees or additional financing required for
continuation of the JOINT VENTURE because it declares bankrupt or enters into an agreement
in favor of its creditors or its interest and/or rights in the JOINT VENTURE is subject to an
attachment and it is unable to lift such attachment within … days, then the other PARTIES shall,
be entitled to exclude Debtor from the JOINT VENTURE and to take over interest of Debtor.
Debtor shall reimburse and hold harmless the other PARTIES for any costs, damages and
expenses, arising out of or in relation with any claim, obligation or lien asserted on Debtor’s
share of entire assets in the JOINT VENTURE by any third party based on valid grounds or not
due to any reason whatsoever, including but not limited to attorney’s fees, compensation for any
measures taken by the other PARTIES in order to prevent or minimize the effects of such claim,
obligation or lien on the JOINT VENTURE.
c) When a PARTY withdraws from the JOINT VENTURE pursuant to paragraph (b) of this
Article, a balance sheet, showing amounts due from and to such PARTY as of the date of
withdrawal, shall be drawn up. The withdrawing PARTY shall participate in the JOINT
VENTURE’s profit or loss obtained or incurred until the date of its withdrawal in proportion with
its interest therein. In addition to this, the withdrawing PARTY shall also indemnify any costs,
which other PARTIES might have incurred as a result of such withdrawal. Any guarantee or
security which has been provided by and all obligations of the withdrawing PARTY shall
continue to remain in effect during the term of this AGREEMENT.
d) Without prejudice to Article 2 of this AGREEMENT, if a PARTY fails to discharge its
obligations under this AGREEMENT, then the other PARTIES shall discharge such obligations
to ensure continuation of the JOINT VENTURE. In that case the PARTY which has assumed an
additional obligation shall be entitled to claim from the defaulting PARTY a legal interest in
consideration of such additional asset provided or to request that its percentage interest in the
JOINT VENTURE be modified or to complete the WORKS in the name and for the account of
the JOINT VENTURE. For this reason, their rights are reserved to claim from the defaulting
PARTY indemnification of any direct losses and damages. Furthermore, if there will be a
disruption because of the withdrawal pursuant to paragraph (b) of this Article, the withdrawing
PARTY shall indemnify all losses that the JOINT VENTURE incurred before the CLIENT and
the third parties.
ARTICLE 15 – ASSIGNMENT OF RIGHTS
None of the PARTIES may assign all or any part of its rights and obligations hereunder to any
other company, firm or person without prior consent of other PARTIES.
ARTICLE 16 – PROVISION OF MACHINERY, EQUIPMENT, MATERIAL AND PLANT TO
THE JOINT VENTURE BY THE PARTIES
Required machinery, equipment and materials and plant may be procured or leased from a
PARTY at a current price approved by the Board and under a resolution adopted by the Board.
ARTICLE 17 – GOVERNING LAW AND DISPUTE SETTLEMENT
17.1 The JOINT VENTURE’s management shall act like the management of a corporation by
taking into consideration the JOINT VENTURE’s common interests instead of private interests
of the PARTIES in respect of any matter whatsoever and any dispute which may arise between
the PARTIES shall be settled amicably.
This AGREEMENT and the relationship between the PARTIES hereunder shall be governed by
and construed in accordance with the laws of ….. without referring to its conflict of laws.
17.2 Unless capable of being resolved by amicable discussions, all disputes arising between the
PARTIES in connection with the interpretation and the execution of this AGREEMENT shall be
finally settled by arbitration under the Rules of Arbitration of the …., by one or more arbitrators
appointed in accordance with the said Rules.
The venue shall be …….The language of the proceedings shall be English.
The arbitral award shall be final and binding upon the PARTIES.
This Article shall be deemed to constitute an arbitration agreement binding on the PARTIES.
Commencement of an arbitration proceedings shall not lead to any suspension, interruption or
delay in the WORKS by the PARTIES.
ARTICLE 18 – CONFIDENTIALITY
Any information given to the receiving PARTY shall be treated as “Confidential Information”
unless otherwise indicated by disclosing PARTY in writing.
Concerning the confidential information received from each other (hereinafter known as the
“Confidential Information”) the PARTIES shall be required to:
a) Keep and handle it with the appropriate level of protection,
b) Not disclose it to its affiliates or any third party whatsoever,
c) Not permit or facilitate the publication or circulation of such Confidential Information without
other PARTY’s prior written consent
d) Return to each other, at request, any Confidential Information received in tangible format, and
not keep any copies or reproductions thereof, with the exception of a copy strictly required to
fulfill accounting or tax obligations
PARTIES further agree not to use any such Confidential Information as they may have received
in connection with the co-operation instituted hereunder for any purpose other than the strict
performance of its obligations hereunder.
This confidentiality obligation shall remain in full force and effect for a period of five (5) years
following AGREMENT expiry or termination.
ARTICLE 19 – EXCLUSIVITY
No PARTY shall, directly or indirectly, participate in submitting a proposal independently,
separately or in combination with a third party or parties, or shall enter into any arrangement
with any third party in connection with the WORKS. This principle of exclusivity as stated herein
shall involve the affiliates of the PARTIES.
This exclusivity obligation shall remain full force and effect until the expiry or termination of this
AGREEMENT and CONTRACT.
ARTICLE 20 – AUDIT
Audit of the JOINT VENTURE accounts shall be made upon the request of any PARTY and
approval by the Board. Auditing shall be performed by an independent audit company to be
appointed by the Board.
ARTICLE 21 – EFFECTIVE DATE AND LANGUAGE
This AGREEMENT shall come into effect when signed by the PARTIES which is prepared in the
English language. In the event that this AGREEMENT is translated into another language, the
English language version of this AGREEMENT shall prevail.
ARTICLE 22 - SIGNATURE
This AGREEMENT, consisting of 22 Articles, is made and signed in …. on ……. in one original
copy.

Company A Company B Company C

ATTACHMENTS
- Circular of Signatures
- Power of Attorneys