Joint venture agreement (Weagree model): extensive contract template addressing all aspects of an incorporated joint venture or collaboration. Includes extensive clauses organising the operations, the management and decision-making within the JV, and term and termination.
This Weagree model joint venture agreement is an extensive template addressing all aspects of an incorporated JVC. There are extensive sample provisions organising the JV-operations, on the management and decision-making within the JVC (joint venture company), and term and termination. The model joint venture agreement consists of 31 pages, and can be used for all kinds of incorporated alliances, cooperations and consortiums. It may inspire agreements for more informal collaborations as well. More guidance on drafting and structuring a joint venture agreement is in our online book (there is also a chapter on informal collaboration agreements).
It is very important to carefully formulate the scope of the JV-business: the scope of the joint venture is typically used to define what activities the JVC may undertake, but also in which fields of business the JVC-partners may operate. Essentially, the JVC-scope is the basis for non-compete clauses and a reference for internal decision-making and freedom to operate. In the schedule to this model Joint venture agreement are guidelines for scoping the field of collaboration, and the non-compete. There are several provisions regarding the JVC-financing (although financing and shareholder contributions must be addressed in a project agreement (not included).
The ‘laundry list’ of required board approvals is extensive and systematically structured. The JVC management structure presumes supervision by a non-executive board (although the related matters reserved for their approval may easily be moved to the list of actions requiring shareholder approval). There are extensive provisions regarding (contents of) the Business Plan, and (optionally) a Marketing and Sales Plan.
There is a basic deadlock-breaking mechanism (providing for escalation of any dispute or disagreement on decision-making). Basic (optional) Tag-along and Drag-along clauses are inserted: in a Drag-along clause, the (large) majority shareholder is entitled to sell its own shares and drag the (small) minority shareholders along in the divestment (the small shareholders would be required to sell their shares as well); in a Tag-along a small shareholder would be entitled to sell their shares along with an exiting majority shareholder as part of such broader transaction.
Definitions are addressed in a schedule. Related project agreements with the JV partners must be added.