Terms of Joint Venture Agreement (“JVA”)- Sotterchaya

Heads of Terms of Joint Venture Agreement (“JVA”) X & Company Limited -  Y & Company Limited

TERM SHEET

This Term Sheet outlines major terms and conditions regarding a possible joint venture to establish and operate a World class Inland Container Depot (ICD) and Container Freight Station (CFS) in Chattogram, Bangladesh

S/N	Terms	Proposed modality
1	Proposed JV Structure	* X & Company Limited -  Y & Company Limited as parent Companies will form the JV. * Regulations require Local parties to hold 51% shareholding. * A local 3rd party acceptable to X & Company Limited -  Y & Company Limited may be inducted to own up to 2% shareholding of proposed JVCO. * Shareholding may be – X & Company Limited 50 %, Y & Company Limited 50%
2	Proposed name of the JVCO	‘X & Company Limited -  Y & Company Limited.’, subject to the availability of such name in the Register of Joint Stock Companies of Bangladesh.
3	Operating Licenses & Permits	X & Company Limited -  will ensure grant of approval to JVCO by Ministry of Shipping (MOS) & National Board of Revenue (NBR) for constructing and operating the ICD and CFS. An appropriate fee for transfer of license to JVCO would be payable to X & Company Limited -  Y & Company Limited, as mutually agreed.
4	Capital structure	Authorised capital: [TBA] Paid up capital: [TBA] Pre-commencement expenditure borne by X & Company Limited shall be accounted for/valued for equity Both Parties will mutually agree on the terms on capital injection to the JVCO. License fee payable to X & Company Limited may be considered as part of Equity of X & Company Limited   upon transfer in the name of JVCO. Each Party will be responsible to fund its own equity stake through its own means.
5	JVA	Within 1 year from the date of signing of this Term sheet
6	Proceedings of Shareholders	Quorum =02 (two) Y & Company Limited representatives and two X & Company Limited representatives. Each representative will be entitled to cast one vote. All shareholder resolutions will be passed by a majority of the votes present and cast. Reserved Matters must be passed unanimously.
7	Board of Directors (“Board”)	X & Company Limited  &  Y & Company Limited will each be entitled to appoint three nominees to the Board. 3rd Co. may have one Board seat Quorum = Two Directors representing each of X & Company Limited and Y & Company Limited will appoint the Chairman of the Board. Each Director has one vote. All matters will be passed by the affirmative votes of the majority of the Board,
8	Governance and organisation structure	The Board will form an EXCOM comprising no more than 4 members, represented equally by X & COMPANY LIMITEED and Y & COMPANY LIMITED The Delegation of authority (DoA) will be agreed by the Parties and included in the JVA. Any change to the DoA shall be a Board Reserved Matter.
9	Financing	The total Project investment cost estimate = US$[TBA] m and will be financed in accordance with project milestones and needs. Any capital contribution made by the Parties towards the Project investment cost will be pro rata to shareholding.
10	Technical Assistance Agreement:	JVCO will enter into a license agreement with X & Company Limited  &  Y & Company Limited in return for Technical Assistance and know how fees, The scope of the expertise, support and assistance to be provided by X & Company Limited  &  Y & Company Limited under the TA Agreement will be agreed between X & Company Limited  &  Y & Company and JVCO in accordance with applicable legal and regulatory requirements.
11	Lease Agreement for leasing of land	JVCO will enter into a lease agreement with relevant land owning affiliates of X & COMPANY LIMITEED, which will (a) in each case be chargeable with effect from commencement of Project site handover to the JVCO For as long as X & Company Limited  &  Y & Company Limited holds no less than [49] % shareholding in JVCO, X & COMPANY LIMITEED will undertake in the JVA that it will ensure continuity of the Lease of land. each Lease Agreement will have a tenure of 9 years ( with auto renewal) to cover a period of [27] years,
12	Key non-financial obligations	X & COMPANY LIMITEED’s Obligations: Final MOS approval granted to JVCO for operation of ICD & CFS license currently held by X & COMPANY LIMITEED. Lease of land, regulatory permissions & pre-approvals for setting up the ICD etc. X & Company Limited  &  Y & Company Limited’s Obligations: Providing engineering & technological support in respect of end to end ICD & CFS formation & operation by introducing international standard. Entire IT/Digital Business Infrastructure, Systems and Innovations, Operating Processes & Best Practices etc. available to X & Company Limited  &  Y & Company Limited at any given point of time and Capability Building etc.
13	Transfer of shares	As per ICD Regulations, X & Company Limited  &  Y & Company Limited shall not transfer its share to any foreign entity. X & COMPANY LIMITEED shall have the right of first refusal to purchase shares of the X & Company Limited  &  Y & Company Limited  in JVCO based on a fair market value determined by an independent Merchant Bank valuation.

 

Have any Question?