SAMPLE DOCUMENT FOR FORMATTING ILLUSTRATION ONLY JOINT VENTURE AGREEMENT
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1 SAMPLE DOCUMENT FOR FORMATTING ILLUSTRATION ONLY JOINT VENTURE AGREEMENT This agreement made as of the day of,. BETWEEN: AND The above parties, sometimes hereinafter referred to collectively as the Parties or Joint Venturers, WITNESSETH THAT: WHEREAS, PARTY 1 is in the business of, inter alia, providing ; and WHEREAS, PARTY 2 is in the business of providing, inter alia, ; and WHEREAS, the Parties have agreed to form a joint venture, hereinafter referred to as the "Joint Venture" for the purpose of providing, hereinafter referred to as the System, which will allow. The System will also provide ; and WHEREAS, this Joint Venture Agreement is contingent upon awarding the contract to design such a System as outlined above (hereinafter referred to as the Contract ) to PARTY 1 and PARTY 2; and WHEREAS, the Parties have set forth in this Agreement the terms and conditions governing their relationship as Joint Venturers and the organization and operation of the Joint Venture. IN CONSIDERATION OF the promises and mutual covenants and agreements herein contained, the parties hereto agree as follows: 1. Superseding Effect: This Agreement supersedes all oral or written agreements, if any, between the Parties and constitutes the entire agreement between the Parties with respect to this Joint Venture. 2. Statements Of Work For Joint Venturers: A. The statements of work set forth below in paragraph 2.B.. below, define the work to be performed by each Joint Venturer in the performance of the Joint Venture and the Contract, if awarded to the Parties.
2 B. Statements of work. i. Exhibit "A" entitled "Statement of Work for Party 1, Inc. dated,. ii. Exhibit "B" entitled "Statement of Work for Party 2, dated,. C. The statements of work set forth in paragraph B. above are deemed to be preliminary and are subject to change upon the mutual agreement of the Joint Venturers after issuance of the Request for Change. If mutual agreement cannot be reached as to changes requested by either Party, this Agreement shall be terminated pursuant to Paragraph 5 below. 3. Creation Of Joint Venture: In consideration of the Proposal efforts to be expended by each Party for the mutual benefit of the Parties, the Parties hereby associate themselves as Joint Venturers and hereby create a Joint Venture for the purposes set forth in Paragraph 4 below. The name of the Joint Venture shall be: "PARTY 1-PARTY 2 JOINT VENTURE". 4. Scope Of Joint Venture: The scope of the Joint Venture shall be limited to the following: A. Design, integration, set-up, and sale or lease of the System to Hospital. B. Performance of the Contract, if awarded to the Joint Venture and any modifications or extensions thereto. C. Taking such actions required to effect performance of the Contract, including: i. Acquiring necessary hardware and software ii. iii. iv. D. Taking such other actions as set forth in this Agreement and such action as may be authorized by the Parties hereto. 5. Withdrawal After Review Of Request For Change: If either Joint Venturer or Hospital shall make a Request for Change which will alter the preliminary Statements of Work set forth under paragraph 2.C., within five (5) business days, Parties shall: A. Either agree as to any changes, if any, requested by either Party or Hospital to their respective statements of work referenced in Article 2, or B. Terminate this Agreement without any liability on either Party. Page 2 of 10
3 6. Execution Of Contract: If the Joint Venture is awarded the Contract, each Party shall have an authorized officer or representative execute the Contract within a reasonable time. 7. Joint And Several Liability Of Joint Venturers: If the Joint Venture executes the Contract, the Parties shall have joint and several liability to the and to third parties with whom the Joint Venture contracts. 8. Rights And Obligations Of Joint Venturers: The rights and obligations of the Parties are set forth in this Agreement. If either party is required under the Contract to perform any obligation, or to discharge any liability, which exceeds in scope or amount the proportion of such liability or obligation undertaken by such Party under this Agreement such Party shall require the other Party to contribute thereto in accordance with this Agreement. 9. Term And Termination: A. The term of the Joint Venture shall commence on,. B. The Joint Venture will terminate automatically upon receipt of notice by the Joint Venture from the Hospital that: i. The Contract has been canceled, or ii. iii. The Joint Venture's proposal has been rejected, or The Hospital has awarded the Contract to another bidder. C. If the Contract is awarded to the Joint Venture, the term shall continue until: i. All obligations and liabilities, including warranty, assumed by the Joint Venture under the Contract have been performed or discharged, and, ii. iii. iv. All disputes claims, causes of action, obligations and liabilities to third parties, and other similar matters arising out of or in connection with the Contract have been resolved or discharged, and The Joint Venture has received payment in full of sums due it under the Contract, and The final accounting and settlement provided for in Article have been agreed to and completed. 10. Interests And Compensation Of The Joint Venturers: A. Each Party shall have an interest in the assets, liabilities and any profits of the Joint Venture as shown on Exhibit C attached hereto. Page 3 of 10
4 B. Each Party shall assume and bear the obligations and liabilities of the Joint Venture, including any losses which the Joint Venture may incur, in the same percentages as set forth opposite its name in Exhibit C. 11. Executive Committee: A. The performance of the Contract, and the operations and activities of the Joint Venture in connection therewith, shall be carried out under the general management and direction of an Executive Committee consisting of members, of whom shall be designated in writing by and shall represent PARTY 1 and of whom shall be designated in writing by and shall represent PARTY 2. If a member of the Executive Committee fails to or is unable to serve, the Party designating said member shall designate another member within five (5) days after the Party is notified of such failure or inability. B. Each member of the Executive Committee shall have full power and authority to act for the Party by which he was designated, in all matters relating to the management and operations of the business and affairs of the Joint Venture. Any action taken by the Executive Committee, within the authority granted in this Agreement, shall be binding and conclusive upon both Parties. C. The Executive Committee shall meet not less than once a month in person or via telephone conference to review the progress of the Contract and to take any action required on matters within its authority. Special meetings of the Executive Committee may be called by either Party. As necessary, Scheduled and Special meetings shall be held at a location agreed upon by both parties. The reasonable and necessary travel and living expenses incurred by the members of the Executive Committee in connection with such meetings shall be charged to and paid for by the Joint Venture. The affirmative vote of at least one member representing each of the Parties shall be required for any action taken at a meeting of the Executive Committee. The Executive Committee shall prepare minutes recording all action taken at each meeting. The minutes shall be signed by a member, representing each Party, who was present at the meeting. Copies of the minutes of each meeting shall be distributed to each member of the Executive Committee. D. Each Party shall designate its representatives on the Executive Committee by notice in writing to the other Party on or before, Each Party may thereafter, at any time, and from time to time, change such designation by written notice to the other Party. Any change of representatives shall be effective upon receipt of said notice by the Party to which the notice of change is given. A member of the Executive Committee representing either party may at any time, by written notice to the other Party, designate an alternate to attend and act in his place at any or all meetings of the Executive Committee. Any vote given by such alternate at any meeting by such alternate shall have the same effect as if taken by the originally designated member. Page 4 of 10
5 12. Joint Venture Organization And Operations: Assignment of Personnel by the Parties A. The Parties shall assign qualified personnel from their corporations to perform key functions and execute the Statements of Work for the Joint Venture. B. PARTY 1 reserves the right to remove any employees of PARTY 2 from assignment to the Joint Venture at their sole discretion. 13. Contracts Between Joint Venture And The Parties: A. The Parties shall contract with the Joint Venture to provide such equipment, material and supplies and perform such services for the Joint Venture as set forth in their respective statements of work referenced in Article 2 above as they may be modified as provided for in this Agreement. B. Changes by either Party to their respective statement of work requires the prior written approval of the Executive Committee if such change result in an increase or decrease in said Party's cost of more than Five Thousand ($5,000) Dollars. C. The Parties shall be compensated for the work set forth in Exhibit C. 14. Accounting And Records: Books of account and supporting records shall be maintained by PARTY 1 on the accrual basis in accordance with generally accepted accounting standards. Upon request of PARTY 2, such books and records, and all other documents and files of the Joint Venture, shall be made available for examination, audit and copying by representatives of PARTY 2 at its own expense during regular business hours at the principal office of the Joint Venture. 15. Final Accounting, Settlement And Termination: A. Upon completion of, and receipt of final payment under the Contract, a final accounting, including a balance sheet and statement of profit and loss, of the operations of the Joint Venture shall be prepared by the Executive Committee and submitted to each Party. B. After paying or providing for payment of all liabilities, including liabilities to the Parties as shown on such balance sheet, after establishing reserves for contingent liabilities in such amounts as the Executive committee shall determine, after disposing or arranging for the disposition of all noncash assets and property of the Joint Venture, and after the final settlement statement has been prepared and signed, any funds remaining to the credit of the Joint Venture shall be distributed to the Parties in accordance with Exhibit C. C. Before making any distribution under the paragraph 15.B. above, or before the Parties are required to contribute funds to cover any loss, whichever is the case, a final settlement statement shall be prepared showing all revenues received by the Joint Venture, all Joint Venture Costs paid or accrued by the Joint Venture, any reserves established for contingent liabilities of the Joint Venture, and all Page 5 of 10
6 distributions of Joint Venture profits, if any, to the Parties. When both Parties have agreed as to the correctness of such statement, each of them will sign it and release the other from any and all claims under this Agreement. D. When all known contingent liabilities of the Joint Venture have been discharged or otherwise satisfied and any contingency reserves remaining thereafter have been distributed to the Parties, the Joint Venture shall terminate and neither Party shall thereafter have any rights against or liability to the other Party under this Agreement, except as expressly provided elsewhere herein and except that their respective rights of contribution against each other and all claims of any nature arising out of or in connection with the operations of the Joint Venture which could or might be made against either Party. E. However, notwithstanding the foregoing, the Parties shall remain liable for their respective warranty obligations under the Contract for the period of such applicable warranty. 16. Documents Incorporated By Reference: The following documents are hereby incorporated by reference: A. Exhibit "A" entitled "Statement of Work for Party 1, dated,. B. Exhibit "B" entitled "Statement of Work for Party 2, dated,. C. Exhibit "C" entitled "Interests and Compensation of the Joint Venturers. 17. Notices And Correspondence: All notices and correspondence shall be sent by either Party and the Joint Venture in all matters dealing with the Contract or this Agreement to the following addresses: 18. Assignment: This Agreement or any interest hereunder shall not be assigned or transferred by either Party without the prior written consent of the other Party and subject to such terms and conditions that the other Party may impose. Page 6 of 10
7 19. Bankruptcy: A. Either Party may terminate this Agreement by written or telegraphic notice to the other Party if: i. Either Party shall become insolvent or make a general assignment for the benefit or creditors; or ii. A petition under any bankruptcy act or similar statute is filed by or against either Party and is not vacated within ten (10) days after it is filed. B. In such event the Party which is terminated may, at the Party 2ion of the other Party, be excluded, together with its successors, receivers and other legal representatives, from further participation in the management of the Joint Venture, and the other Party make take over the interest of the terminated Party in the Joint Venture. However, such action shall be without prejudice to the obligation of the terminated Party, or its successor, receiver or other legal representative to bear its proportionate share of any loss of the Joint Venture. In addition the other Party shall have the right to terminate the Joint Venture and wind up its affairs and carry on and complete the performance of the Contract without the participation of the terminated Party. C. On completion of the Contract and receipt of all payments due thereunder to the Joint Venture, the other Party shall account to the terminated Party or to its successor, receiver or other legal representative, and such terminated Party shall be entitled to receive an amount equal to any funds advanced by it to the Joint Venture and not previously repaid, plus its proportionate share of any profits earned to the date when it was excluded from the Joint Venture, or less its proportionate share of the loss resulting from the operations of the Joint Venture whether before or after the date when it was excluded from the Joint Venture. In the event that the share of such loss chargeable to the terminated Party exceeds any funds advanced by such Party and not previously repaid, the terminated Party, or its successor, receiver or other legal representative, shall promptly pay to the other Party an amount equal to such excess. The books of account of the Joint Venture shall be conclusive in establishing whether the operations of the Joint Venture resulted in a profit or a loss, and the amount of such profit or loss. D. A successor, receiver or other legal representative of the terminated Party shall not have any right against the other Party or against the funds or assets of the Joint Venture to claim repayment of working capital advances made to, or distribution of profits of, the Joint Venture until such repayment or distribution is due and payable in accordance with the provisions of paragraph 19.C. above, and any such repayment and/or distribution shall be subject to reduction or offset for any amount which is chargeable to the terminated Party under any term or provision of this Agreement and which was not fully taken into account in determining the amount of such repayment and/or distribution. Page 7 of 10
8 20. Clause Headings: The heading or subheadings of clauses contained herein are used for convenience and ease of reference and shall not limit the scope or intent of the clause. 21. Excusable Delays: A. Neither Party shall be liable for excess costs, damages, or liquidated damages, if any, for delays in delivery or failure to perform due to causes beyond its control and without its fault or negligence. Such causes include but are not limited to, acts of God, acts of the public enemy, acts of any government, fires floods, epidemics, quarantine restrictions, strikes, freight embargoes, unusually severe weather, or delays of subcontractors arising from unforeseeable causes beyond the control and without the fault or negligence of both a Party and its subcontractors. B. The rights and obligations of the Party or Parties subject to an excusable delay shall be deemed to be those of the Joint Venture under the "Excusable Delay" provisions of the Contract. 22. Fair Labor Standards Act: Each Party certifies that its work performed and products furnished under the Contract have been or shall be performed and furnished in compliance with the Fair Labor Standards Act, as amended, and regulations and orders of the U.S. Department of Labor issued thereunder. This certification shall be considered as the written assurance contemplated by the October 26, 1949, amendment to said Act. 23. Inspection, Acceptance And Rejection: A. Each Parties' items, including without limitation raw materials, components, services, intermediate assemblies, and products and data, shall be subject to inspection and test by the Joint Venture and the Hospital to the extent practicable at all times and places. B. The rights and obligations of the Parties for inspection, acceptance and rejection of their respective work shall be deemed to be that of the Joint Venture under the "Inspection, Acceptance and Rejection" provision of the Contract. 24. Insurance: Each Party shall bear the risk of loss or damage, from all hazards, to real and personal property belonging to the Hospital in a Party's custody or possession. Each Party shall be required to enter premises owned, leased, occupied by or under the control of Hospital during the performance of the Contract and this Agreement. Therefore each Party shall indemnify and hold harmless the Hospital and each other, their officers and employees, from any loss, cost, damage, expense or liability by reason of property damage or personal injury, including death, or whatsoever nature or kind arising out of or as a result of such performance, whether arising out of actions of the Party or of its employees, subcontractors, and lower tier subcontractors. Each Party and its subcontractors and lower tier subcontractors shall maintain public liability and property damage insurance covering the obligations set forth above and shall maintain Page 8 of 10
9 required workmen's compensation insurance covering its employees and such other insurance coverage required by the "Insurance" provisions of the Contract. 25. Laws And Ordinances: A. Each Party shall comply with all of the applicable laws, ordinances, rules and regulations including Federal, State and Municipal authorities and departments relating to or affecting its work under the Contract, and shall secure and obtain any and all permits, licenses and consents as necessary in connection therewith. B. The Joint Venture shall secure and obtain any and all permits, licenses and consents required by the Joint Venture. C. This Joint Venture Agreement shall be governed by the laws of the State of Ohio. 26. Modification Of Agreement: This Agreement contains all the agreements and conditions under which the Joint Venture is to be performed and no course of dealing or usage of the trade shall be applicable unless expressly incorporated in this Agreement. The terms and conditions contained in this Agreement shall not be added to, modified, superseded or otherwise altered except by a written modification signed by authorized representatives of the Parties. 27. No Waiver Of Conditions: Failure of one Party to insist on strict performance shall not constitute a waiver of any of the provisions of this Agreement or the Contract or waiver of any default of the other Party. 28. Notice Of Labor Disputes: A. Whenever a Party has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of the Contract or this Agreement, the Party shall immediately give notice thereof, including all relevant information with respect thereto, to the other Party and the Program Manager. B. Each Party shall insert the substance of this clause, including this paragraph B, in any subcontracts hereunder as to which a labor dispute may delay the timely performance of this Contract; except that each such subcontract shall provide that in the event its timely performance is delayed or threatened by delay by any actual or potential labor dispute, the subcontractor shall immediately notify its next higher tier subcontractor of all relevant information with respect to such dispute. 29. Public Release Of Information: Neither Party shall, except as may be required by laws or regulations, in any manner advertise or publish or release for publication any statement or information mentioning the Contract or this Agreement or the fact that the Party has furnished or contracted to furnish items or services required by the Contract, or quote the opinion of any employee of the Parties or the Hospital. 30. Subcontracts: Each subcontract placed by any of the Parties, in excess of $5,000 shall be reported promptly to the other party in writing. Such report shall state the names Page 9 of 10
10 and address of the subcontractor, the item or services purchased, and the amount of the subcontract. If requested, the hiring Party shall furnish the other party with a copy of the subcontract. 31. Title, Risk Of Loss And Damage: Each Party shall retain title to and risk of loss and damage to all items to be delivered under the Contract until final acceptance by the Hospital. IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand, this day of,. SIGNATURES: PARTY 1 PARTY 2 By: Printed Name: Its: Date: By: Printed Name: Its: Date: WITNESSES: Page 10 of 10
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