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JOINT VENTURE AND MANAGEMENT AGREEMENT

Joint Venture JV Agreement

JOINT VENTURE AND MANAGEMENT AGREEMENT | Document Parties: EMPIRE ENERGY CORP | Energy Corporation | GREAT SOUTH LAND MINERALS LIMITED | NBD PARTNERS You are currently viewing:
This Joint Venture JV Agreement involves

EMPIRE ENERGY CORP | Energy Corporation | GREAT SOUTH LAND MINERALS LIMITED | NBD PARTNERS

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Title: JOINT VENTURE AND MANAGEMENT AGREEMENT
Date: 3/7/2012
Industry: Oil and Gas Operations     Sector: Energy

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Exhibit 10.3

 

 

NBD PARTNERS ENERGY, KOREA

 ‘PARTY A’

 

AND

 

GREAT SOUTH LAND MINERALS LIMITED

‘PARTY B’

 

 

 

 

 

 

JOINT VENTURE

AND MANAGEMENT AGREEMENT

 

08 TH February 2012

 

 



 

 

JOINT VENTURE AND MANAGEMENT AGREEMENT

 

TABLE OF CONTENTS

 

 

Clause

Page

1.

DEFINITIONS AND INTERPRETATION

1

2.

CONDITIONS SUBSEQUENT

3

3.

PURPOSE

3

4.

BUSINESS PLAN

3

5.

NAME OF THE JOINT VENTURE

4

6.

DURATION

4

7.

THE MANAGER

4

8.

APPOINTMENT OF MANAGER

5

9.

POWERS AND DUTIES OF THE MANAGER

6

10.

THE MANAGER

7

11.

FINANCING OF THE JOINT VENTURE

7

12.

DEALING WITH THE RESOURCES OF THE JOINT VENTURE

8

13.

LIABILITY OF JOINT VENTURERS

8

14.

PROFITS AND LOSSES AND ACCOUNTS

9

15.

BANK AND BRANCH DETERMINED BY THE MANAGER

9

16.

INTEREST UNDER AGREEMENT NOT TO BE CHARGED

10

17.

RELATIONSHIP OF JOINT VENTURERS

10

18.

INDEMNITY FOR BREACH

11

19.

MUTUAL COVENANTS

11

20.

EVENTS OF DEFAULT

12

21.

SALE OF INTEREST IN JOINT VENTURE

14

22.

TERMINATION

17

23.

PROCEDURE FOLLOWING TERMINATION

17

24.

DISPUTE DETERMINATION

18

25.

CONFIDENTIALITY

18

26.

PUBLICITY

19

27.

TIME AND REMEDY OF DEFAULT

19

28.

REPRESENTATIONS AND WARRANTIES

19

29.

NOTICES

20

30.

GOVERNING LAW

21

31.

JURISDICTION

21

32.

BREACH OF AGREEMENT

21

33.

MISCELLANEOUS

21

SCHEDULE 1

24

Constitution

24

SCHEDULE 2

25

Company Management Fee

25

 

 

 

 

 



 

 

THIS JOINT VENTURE AND MANAGEMENT AGREEMENT is made this 08 th day of February 2012.

 

BETWEEN

NBD PARTNERS ENERGY of 13 th Floor, Prudential Tower, 838 Yeoksam_dong Kangnam_gu Seoul Korea 135-982

(‘PARTY A’)

 

AND

 

GREAT SOUTH LAND MINERALS LIMITED ABN 54 068 650 386 Registered in the Australian State of Tasmania, Registered office at Level 3, 65 Murray Street Hobart, TAS, AUSTRALIA 7000

 

( ‘PARTY B’)

 

ON THE BASIS THAT:

 

A.

Party A is an investor in commercial oil, gas & hydrocarbon ventures in the Australian State of Tasmania with access to funding sources and pursuant to the terms of the Convertible Loan Agreement dated 08 TH February 2012, is entitled to 10% equity in Energy Corporation International and may maintain a 49% interest in the Licence which belongs to Party B in Tasmania.

 

B.

Party B is an oil and gas explorer registered and operating in Australia and pursuant to the terms of the Convertible Loan Agreement with Party A dated 08 th February 2012, may maintain a 51% interest in the Licence in Tasmania.

 

C.

Parties A & B have agreed to participate in a Joint Venture to operate & develop the oil and gas assets (including any coal Interests established over the Existing Projects through Party B or a Related Party entity of Party B) and the Project through a company to be called Empire NBD JV Pty Ltd (subject to registration);

 

D.

It is the purpose of this Agreement to record the terms and conditions of the involvement of the parties hereto in the Joint Venture.

 

THE PARTIES AGREE THAT:

 

1.

DEFINITIONS AND INTERPRETATION

 

1.1

Definitions

 

In this Agreement:

 

 

 

Agreement

means this Joint Venture and Management Agreement as the same may be amended or supplemented from time to time

 

 

Associate

has the meaning ascribed to that term by Division 2 of Part 1.2 of the Corporations Law, Australia.

 

 

Auditor

Means the nominated Auditor of the Joint Venture or such other auditor as the Joint Venturer party may determine from time to time.

 

 

Board

means the Board of Directors of the Company

 

 

Business

means the business of oil, gas and coal exploration & development.

 

 

Business Day

means a day on which banks are open for business in Tasmania excluding Saturday and Sunday and Public Holidays.

 

 

Chairman

means the Chairman of the Board and as provided for in this Agreement

 

 

Commencement Date

means the Agreement Date

 

 

Company

Means Empire NBD Energy JV Pty Ltd or other such nominated JV Management Company, to be registered with consent from the Parties.

 

 

Constitution

means the Constitution of a copy of which is and may be annexed to Schedule 1 of this Agreement (post signing).

 

 

Corporations Law

means the Corporations Act 2001 of Australia

 

 

 


2

 

 

 

 

dollar or $

means Australian dollars unless otherwise expressly provided.

 

 

EBIT

means at any time the operating profit or loss before deducting interest and any provision for income tax and excluding all abnormal and extraordinary items of the Business.

 

 

encumbrance

means any mortgage, charge (whether fixed or floating), pledge, lien, lease, title retention or conditional sale agreement, covenant, bill of sale, hire or hire purchase agreement, option, restriction as to transfer, use or possession, subordination to any right of any other Person, and any other encumbrance, security, restriction or interest whatsoever.

 

 

Existing Projects

Means the identified oil, gas and coal potential bearing structures and wellbore sites identified as “Bellevue” and “Thunderbolt” with respective coordinates being (approximately):

Bellevue: 465,660E, 533,8904N;

Thunderbolt: 466,844E, 5287200N.

 

 

Financial Year

means any period of 12 months commencing on 1 July and ending on 30 June in any year, OR the period 01 January to 31 December in any year, to be nominated by the Joint Venturers in accordance with its statutory reporting requirements.

 

 

Joint Venture (or JV)

means the joint understanding and contractual arrangements between Party A and Party B on the terms and conditions contained in this Agreement and any agreement entered into pursuant to this Agreement for the objects set out therein.

 

 

Joint Venture Expenses

means all amounts:

 

(a)

necessary to acquire assets of the Joint Venture;

 

(b)

otherwise authorised by the Manager or this Agreement.

 

 

Joint Venturers

means Party A and Party B as Joint Venturers pursuant to the terms of this Agreement or any of their successors or permitted assigns.

 

 

Licence

Means the current exploration licence in the Tasmanian State of Australia, described and registered as EL14/2009.

 

 

Manager

means Empire NBD Energy JV Pty Ltd ( (subject to registration) of Level 3, 65 Murray Street Hobart, Tas 7000 or other nominated management company as determined by the Parties.

 

 

Month

means a calendar month.

 

 

Permitted Bank Charge

means a mortgage, charge, lien or other encumbrance over the interest of a Joint Venturer in the Joint Venture permitted under Clause 16.1(a)(ii).

 

 

Person

means any individual, corporation, Energy JV, firm, joint venture, association, joint stock company, limited liability company, trust, unincorporated organisation, governmental body or other entity or legal person.

 

 

Prescribed Equity

means the following percentage interest in the Joint Venture, namely:

 

(a)

Party A - 49%; and

 

(b)

Party B - 51%,

 

or such other percentages as may be determined hereunder.

 

 

Prime Rate

means the reference rate for bank overdrafts in excess of $100,000.00 set from time to time by the Westpac Bank.

 

 

Principal RBC

means:

 

(a)

in the case of Party A: NBD ENERGY, South Korea (NBD) a company incorporated in Korea, whose registered office is at 13 th Floor, Prudential Tower, 838 Yeoksam_dong Kangnam_gu, Seoul 135-982.

 

(b)

in the case of Party B: Empire Energy Corporation International of 4500 College Blvd, Suite 230 Leawood, Kansas, 66211, USA.

 

 

Project

Means the development and exploitation in respect of natural oil, gas and coal reserves for commercial benefit over the Existing Projects within the Licence area.

 

 

 


3

 

 

 

 

Related Body Corporate

means a related body corporate within the meaning of  Division 6 of the Corporations Act 2001.

Resources

Means, naturally occurring oil, gas and other coal derived reserves or resources which may accrue to the JV or be extracted by the JV in the furtherance of this Agreement under any type of authorised Licence or Lease.

 

 

Services

means all financial, administrative, operational and any other similar services required to operate the Business.

 

 

Joint Venture Management Agreement

means the agreement between the Manager, Empire NBD Energy JV Pty Ltd or other such nominated company, subject to registration, created to manage the affairs of the Joint Venture.

 

1.2

Interpretation

 

In this Agreement unless the contrary intention appears:

 

(a)

the singular includes the plural and vice versa;

 

(b)

where a word or phrase is given a definite meaning, any part of speech or other grammatical form in respect of that word or phrase shall have a corresponding meaning;

 

(c)

a reference to any gender includes a reference to all other genders;

 

(d)

a reference to any legislation or to any provision of any legislation includes a reference to any modification or re-enactment of or any provisions substituted for such legislation or provisions;

 

(e)

an agreement, representation or warranty made by two or more Persons is made by them jointly and by each of them severally;

 

(f)

an agreement, representation or warranty made in favour of two or more Persons is made for the benefit of them jointly and for each of them severally; and

 

(g)

if an act required to be done under this Agreement on or by a given day is done after 5:30 pm on that day, it is taken to be done on the following day.

 

1.3

Headings

 

Headings are inserted for convenience only and do not affect the interpretation of this Agreement.

 

1.4

Weekends and Holidays

 

Where any act is required by this Agreement to be done on a given day and that day is not a Business Day then the act is required to be done on the next following Business Day.

 

2.

CONDITIONS SUBSEQUENT

 

2.1

It is a condition subsequent to this Agreement that immediately upon execution the Parties will do all things necessary to ensure:

 

(a)

The shares in the Company will be issued on a proportional basis to the Prescribed Equity; and

 

(b)

Simon Lee and Malcolm Roy Bendall will be appointed Directors of the Company.

 

3.

PURPOSE

 

3.1

The Parties hereby declare and acknowledge that they have entered this Agreement for the purpose of developing and exploiting the Project on the terms and conditions contained in this Agreement.

 

3.2

The Parties intend this Agreement to regulate the manner in which the JV will develop the Projects and the interests of each party in the manner in which the Projects are further developed to such time as (and past such time in absence of any new agreement) the Resources are extracted from the Projects and sold by the Parties on terms agreeable to the Parties.

 

 

 


4

 

 

4.

BUSINESS PLAN

 

4.1

The Parties agree that prior to the execution of this Agreement (or in the event this is not provided), as soon as possible subsequent to the execution of this Agreement, Party B will undertake to provide Party A with a Business Plan.  It is a condition of this Agreement that the Business Plan provides an accurate scope of the Projects including (but not limited to):

 

(a)

A budget, updated semi-annually, outlining actual costs of the previous 6 months and an estimate of the forward 6 months;

 

(b)

Explanations for any variation of more than 10% from the estimated costs of the previous six months (if any); and

 

(c)

A running total of costs incurred on behalf of the Joint Venture.

 

4.2

The initial Business Plan provided by Party B shall include forward estimates for the completion of the Projects to such stage where extracted Resources have been sold pursuant to a contract of sale in excess of $100,000 to a third party at arm’s length terms.

 

4.3

Irrespective of the shareholdings of the parties, in the event that Party B deviates by more than 15% from the estimate provided pursuant to clause 4.2, Party A shall have the option to remove any Manager currently conducting the business of the Project and replace the Manager with representatives of its choosing for no less than one year.

 

4.4

In the event that Party A does not exercise its rights under clause 4.3, Party A shall continue to have the ability to exercise its rights under 4.3 until the defect is cured.  

 

5.

NAME OF THE JOINT VENTURE

 

5.1

The name of the Joint Venture shall be " Empire NBD Energy JV Pty Ltd” (or such other name as may be agreed by the Joint Venturers) and the Manager will conduct the Business under this name.  The Manager may register the name (or any other agreed JV Energy JV name) as a business name as required by relevant legislation but will not apply for registration of the name as a trade mark.

 

5.2

Party A will procure that the Manager is granted a licence of the name "Empire NBD Energy JV Pty Ltd " for the purpose of being used as part of the name of the Joint Venture in accordance with Clause 5.1 and Party B will procure that the Manager is granted a licence of the name "Empire NBD Energy JV Pty Ltd " for the purpose of being used as part of the name of the Joint Venture in accordance with Clause 5.1 .

 

5.3

If for any reason Party A ceases to be a Joint Venturer, the Joint Venture shall immediately cease using the name " Empire NBD Energy JV Pty Ltd " , and if for any reason Party B ceases to be a Joint Venturer, the Joint Venture shall immediately cease using the name " Empire NBD Energy JV Pty Ltd " . The Manager acknowledges and agrees that the grant of the licences of the name " Empire NBD Energy JV Pty Ltd” will not confer any proprietary rights on the Manager and the name remain the sole property of the relevant licensors.

 

The parties will procure that the name of the Joint Venture and any company name or business name associated or used in connection with the Joint Venture is altered as soon as practicable to give effect to this clause.

 

6.

DURATION

 

The Joint Venture shall be established with effect from the Commencement Date and shall, subject as provided herein, continue in existence until the Joint Venture is terminated and the underlying property of the Joint Venture has been sold and proceeds of sale distributed between the shareholders of the Company proportionate to the parties’ shareholding in the Company at the time of any such distribution.

 

7.

THE MANAGER

 

7.1

The Joint Venturers agree that the Constitution must provide, amongst other things, the following:

 

(a)

Rights of Shares and Composition of Board

 

(b)

Quorum

 

A quorum at general meetings shall be no less than 2 (two) directors of the Company.

 

 

 


5

 

 

(c)

Appointment, Suspension and Renewal

 

By notice in writing to the other Joint Venturer, each Joint Venturer may remove or suspend a person appointed by it as a director and appoint another person in their place and may appoint another director temporarily in the place of the person so removed, suspended or in place of a sick or absent director, providing that the appointment of a person is an authorised  representative from one of the RBC’s.

 

(d)

Alternate Directors

 

(i)

By notice in writing to the Secretary, a director may appoint a person to be an alternate director in his place during such period as he thinks fit.

 

(ii)

An alternate director is entitled to notice of Board meetings and, if the appointor is not present at such meeting, is entitled to attend and vote in his place.

 

(iii)

An alternate director may exercise any powers that the appointor may exercise and the exercise of any such powers by the alternate director shall be deemed to be the exercise of the power by the appointing director.

 

(iv)

The appointment of an alternate director may be terminated at any time by the appointing director by notice in writing to the Secretary and will cease once the appointing director ceases to hold office as a director.

 

(e)

Frequency

 

(i)

There shall be Board meetings on a regular basis to be determined by the Board but not less than two times in each Financial Year.

 

(ii)

Not less than 5 Business Days written notice (including the provision of an agenda) (or such shorter period as all of the directors shall agree upon) shall be given to all directors for each such meeting, or in the case of a meeting proposed to be held by conference telephone or other electronic means at which the directors are not required to be physically present, not less than 4 Business Days written notice of such a meeting (or such shorter period as all of the directors shall agree upon) shall be given to all directors.

 

(f)

Additional Meetings

 

Notwithstanding the provisions of paragraph (e) , additional Board meetings may be convened by any director giving the other directors not less than 5 Business Days written notice (including the provision of an agenda) (or such shorter period as all of the directors shall agree upon) of such a meeting, or in the case of a meeting to be held by conference telephone or other electronic means at which the directors are not required to be physically present, by giving the other directors not less than 3 Business Days written notice of such a meeting (or such shorter period as all of the directors shall agree upon).

 

(g)

Venue

 

All Board meetings shall be held at venues convenient to the directors and in the absence of any agreement to the contrary shall be held by telephone conference.

 

(h)

Meetings by Telephone

 

(i)

The directors may dispatch business and adjourn and otherwise regulate Board meetings as they think fit.

 

(ii)

Without limiting the discretion of the directors to regulate their meetings, the directors may if they think fit, confer by radio, telephone, closed circuit television or other electronic means or audio or audio visual communication and a resolution passed by such conference shall, notwithstanding the directors are not present together in one place at the time of the conference, be deemed to have been passed at a Board meeting held on the day on which and at the time at which the conference was held.

 

(iii)

The provisions of this Agreement and the Constitution relating to Board meetings shall apply so far as they are capable of application mutatis mutandis to such conferences.

 

 

 


6

 

 

(i)

Statement of Directors Deemed a Resolution

 

(i)

If all directors (or their alternates) have signed a document containing a statement that they are in favour of a resolution in the terms set out in the document, a resolution in those terms shall be deemed to have been passed in a Board meeting held on the day in which the document was signed and at that time at which the document was last signed by a director or if the directors signed the document on different days, on the day on which and at the time at which the document was last signed by a director.

 

(ii)

For the purpose of this paragraph (i) , two or more separate documents containing statements in identical terms each of which is signed by one or more directors shall together be deemed to constitute one document containing a statement in those terms signed by those directors on the respective days on which they signed the separate documents.

 

(j)

Transfer of Shares

 

The transfer of shares in the Manager shall be restricted and may only occur in accordance with the provisions of this Agreement.

 

8.

APPOINTMENT OF MANAGER

 

The Joint Venturers hereby appoint the Manager as manager of the Joint Venture.

 

9.

POWERS AND DUTIES OF THE MANAGER

 

9.1

Powers of the Manager

 

(a)

Except as otherwise provided for herein or as otherwise agreed by the Joint Venturers, the Manager shall make all decisions for the Joint Venture and shall have all rights, power and authority generally conferred by law or necessarily consistent with accomplishing this consistent with the purposes and features of the Joint Venture as set forth in Clause 3 .

 

(b)

Without limiting the generality of the foregoing, the Manager has the right consistent with its fiduciary obligations to the Joint Venturers and with the Business and the purposes of the Joint Venture to:

 

(i)

subject to any applicable restrictions set forth in this Agreement, execute any and all customary agreements, contracts, documents, certifications and instruments in connection with the Business and purposes of the Joint Venture;

 

(ii)

protect and preserve the entitlements of the Joint Venture in respect of the assets at any time owned, acquired or created by the Joint Venture to the extent so empowered;

 

(iii)

perform all normal business functions and otherwise operate and carry out the day to day administration of the Business in accordance with and as limited by this Agreement;

 

(iv)

incur Joint Venture Expenses and customary and reasonable costs for start up, including outside legal services on behalf of the Joint Venture in connection with the Business and purposes of the Joint Venture;

 

(v)

engage in any kind of activity and perform and carry out contracts of any kind necessary to or in connection with or convenient or incidental to the day to day administration of the Joint Venture;

 

(vi)

enter into or dispose, extend or terminate any lease, enter into any contract for purchase or disposal of any asset or part of the undertaking of the Joint Venture; and

 

(vii)

enter into any other business.

 

9.2

Duties of the Manager

 

The Manager shall subject to the terms of this Agreement:

 

(a)

devote all of its time to carry out the day to day administration in the fulfilment of the Business and purposes of the Joint Venture and conduct the Business in an appropriate manner;

 

 

 


7

 

 

(b)

upon every reasonable request being made of it to inform the Joint Venturers and each of them of all matters, accounts, writings and other things which it may have become vested with concerning the Joint Venture;

 

(c)

carry out the day to day administration of the Joint Venture in a proper and professional manner in accordance with and subject to the terms of this Agreement and insofar as it is legally able to do so shall supervise and administer the Business on a day to day basis so as to ensure the optimum exploitation of the assets of the Business;

 

(d)

cause to be kept such accounts and other records as will sufficiently explain the transactions and financial position of the Business to enable a true and fair profit and loss account and balance sheet to be prepared from time to time in accordance with generally accepted Australian Accounting Standards consistently applied by the accounting staff and shall cause such accounts to be kept in such a manner as to enable them to be conveniently and properly audited;

 

(e)

provide and/or oversee accounting staff who shall prepare monthly accounts as at the end of each month, year to date and yearly accounts during the currency of the Joint Venture or at such other times as the Joint Venturers may direct and shall provide the Joint Venturers with a copy of any balance sheet and profit and loss statement prepared in accordance with this clause.

 

(f)

Do all such things necessary to protect the interests of the Joint Venturers and the Licence held by the Parties.

 

9.3

No Liability

 

Because it is only a representative of the Joint Venturers, the Manager shall have no liability to the Joint Venturers for losses sustained, liability incurred or damages suffered by any or both of the Joint Venturers as a result of the Manager's management of the Joint Venture as any liability of the Manager shall be a liability of the Joint Venture to be borne by the Joint Venturers as set forth in Clause 13.2 .

 

9.4

Remuneration

 

The Manager shall not receive any salary, fees, commission, profits, distributions, reimbursements or other compensation for its services as manager of the Joint Venture save and except in reimbursement of any costs and expenses incurred by the Manager on behalf of the Joint Venturers in managing the Business, pursuant to Clause 9.2 and pursuant to the indemnity set out in Clause 13.2 .

 

10.

THE MANAGER

 

10.1

Manager of Joint Venture

 

The Manager shall act as manager of the Joint Venture in accordance with the powers and duties conferred upon the Manager in Clause 9 .

 

10.2

Assets Held for Joint Venturers

 

All agreements entered into or assets acquired or created or held by the Manager shall be so entered into or acquired or created or held for and on behalf of the Joint Venturers in their respective Prescribed Equity and the Manager shall have no beneficial interest therein or thereto.

 

10.3

Monies Required by the Manager

 

All monies required for the Manager to serve as manager of the Joint Venture (including the payment of Joint Venture Expenses) shall be funded by the Joint Venturers in proportion to their respective Prescribed Equity.

 

10.4

Relationship Between Manager and Joint Venturers

 

Notwithstanding anything to the contrary contained herein:

 

(a)

neither this Agreement nor any agreement referred to herein nor any acts or omissions of the Manager or of the Joint Venturers or any of them shall create or constitute or be deemed to have created or constitute the relationship of trustee and beneficiary between the Manager and any of the Joint Venturers;

 

(b)

the relationship between the Manager and the Joint Venturers shall be that of principal and agent and the Manager shall hold any assets of the Joint Venture merely as agent and not as trustee for the Joint Venturers; and

 

 

 


8

 

 

(c)

to the extent to which legal title to any asset belonging to the Joint Venturers vests in the name of the Manager, the Manager shall in all respects deal with such asset in accordance with the terms of this Agreement and the directions of the Joint Venturers.

 

11.

FINANCING OF THE JOINT VENTURE

 

11.1

Funding by Joint Venturers

 

The Joint Venturers agree that 100% of the funding required at any time for the Joint Venture will be contributed by Party A in accordance with Clause 11.2 .

 

11.2

Contributions by Each Joint Venturer

 

(a)

In respect of the funding to be provided by the Joint Venturers under Clause 11.1 , the parties intend that the Initial Capital will be provided to the Company upon exercise of rights pursuant to the Convertible Loan Agreement executed between both parties’ Principal RBC subject to agreement of the Principal RBC’s of the transfer of rights to the Parties.

 

(b)

Subject to the terms of this Agreement, further capital that may be required for the advancement of the JV will be paid by the Parties proportionate to each party’s Proscribed Equity at the date on which the debt is incurred.

 

(c)

The Parties intend that the Initial Capital is intended for the use by the JV in the development of the Projects and that the transfer of the Initial Capital to the control of the Company (or the application for the benefit of) will not grant any further rights to either Party. For the avoidance of doubt, the application of the Initial Capital to the Company for the development of the Project and the furtherance of the objectives of the JV (directly or indirectly) will not entitle either Party (or any Principal RBC) to any further rights, shares or benefits.

 

(d)

The parties agree that the Initial Capital will be used solely for the good-standing, benefit and advancement of the projects.

 

(e)

Contributions are to be made in accordance with Clause 11.3 .

 

11.3

Payment of Contributions

 

(a)

The Company must submit for the approval of the Manager & Joint Venturers on or before the [20 th ] day of each Month a cash estimate for the next Month showing:

 

(i)

the estimated cash payments which will be required to be made during the relevant Month;

 

(ii)

the extent, if any, to which those estimated cash payments will be satisfied by cash on hand; and

 

(iii)

the amount which each Joint Venturer would be required to pay and the date or dates on which such payments will be required (" Cash Call ") provided that all such Cash Calls are approved by the Board of the Manager.

 

(b)

The Company may, by not less than [5] Business Days' notice to the Joint Venturers, amend cash estimates or the date or dates on which payment is required.  

 

(c)

No Cash Calls are required to be paid by a Joint Venturer unless they have first been unanimously approved by the Board of the Manager.

 

(d)

The Joint Venturers agree to pay to the Company for the purposes of this Agreement a Cash Call which has been approved by the Board of the Manager pursuant to Clause 11.3(c) on or before the date specified by the Board.  

 

12.

DEALING WITH THE RESOURCES OF THE JOINT VENTURE

 

12.1

The Parties hereby warrant to each other that:

 

(a)

They will deal with the Resources of the JV in a proper manner, in good faith and for the joint benefit of the Parties to the JV;

 

 

 


9

 

 

(b)

That any Resources of the JV when dealt with for the benefit of one Party will accrue benefit of similar value to the other Party proportionate to each Party’s shareholding as amended from time to time and as at the date of any such divesture of the benefit of the relevant Resources; and

 

(c)

The Parties (or the JV) will under no circumstances, enter into forward contracts of sale in respect of the Resources without the express written acceptance of both Parties.

 

13.

LIABILITY OF JOINT VENTURERS

 

13.1

Several Liability

 

All contracts and agreements entered into on behalf of the Joint Venture shall where practicable be entered into by the Manager on behalf of the Joint Venturers and shall provide for the liabilities of the Joint Venturers to be several in proportion to the Prescribed Equity of each Joint Venturer.

 

13.2

Liability to Equal Prescribed Equity

 

Where for any reason any contract or agreement entered into for the purposes of the Joint Venture (whether in the name of the Manager), the Joint Venturers or any of them) or any act or omission of the Manager, the Joint Venturers or any of them involves the Joint Venturers in joint or joint and several liability, each Joint Venturer shall indemnify and keep indemnified the other Joint Venturer such that no Joint Venturer shall be responsible for more than its Prescribed Equity in relation to such joint or joint and several liability ( “the Indemnity” ). The Indemnity will not operate where any cost, loss or damage has been incurred as a result of a negligent act or omission or default by the Manager or the other Joint Venturer.

 

14.

PROFITS AND LOSSES AND ACCOUNTS

 

14.1

Determination of Shares of Joint Venturers

 

The net profit or net loss arising from the Joint Venture in respect of each Financial Year shall be determined, shared and/or borne in proportions equal to the Prescribed Equity of each Joint Venturer.

 

14.2

Quarterly Profit Distribution

 

Unless the Joint Venturers otherwise agree, within 10 Business Days after the end of each quarter during a Financial Year, there shall be distributed out of the cash funds available to the Joint Venture an amount equal to the whole of net profits, if any, for such quarter.

 

14.3

Accounts

 

Within 20 Business Days of the end of each Month in each Financial Year, the Manager shall cause to be prepared and distributed to the Joint Venturers a profit and loss account for the Joint Venture for that Month prepared in accordance with generally accepted Australian Accounting Standards consistently applied.

 

14.4

Audit of Accounts

 

The accounts of the Joint Venture as at the end of each Financial Year shall be audited by the Auditor within 60 days of the end of each Financial Year in accordance with Australian Accounting Standards and Corporations Act requirements.

 

14.5

Surplus Funds

 

In addition to any distribution in accordance with Clause 14.2 , at th


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