1
EXHIBIT 10.30
JOINT VENTURE AGREEMENT
This Joint Venture Agreement (the "Agreement") is entered into on
November 28, 1995, between WALBRO AUTOMOTIVE CORPORATION, a Delaware
corporation whose registered office is located at Xxxxxx Xxxxx, Xxxxxxxx 00000
XXX ("Walbro"), and MUTUAL INDUSTRIES LTD., a company incorporated under the
laws of India, whose registered office is located at 00 Xxxxxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx (X) Xxxxxx-000000 ("Mutual"). Mutual is a
subsidiary of Gandhi Sons Group, a company incorporated under the laws of India
("GSG"). Walbro and Mutual are sometimes referred to as a Party and
collectively referred to as "the Parties".
R E C I T A L S:
A. Walbro designs and manufactures fuel storage and delivery
subsystems as original equipment for application on automotive electronic fuel
injection systems throughout the world.
B. Mutual and its affiliates design and manufacture various
products utilizing plastic injection molding throughout India.
C. Walbro has advanced technology with respect to plastic blow
molded manufacturing techniques, including fuel tanks, filler pipes and other
automotive, truck and agricultural products.
D. Walbro has worldwide automotive and truck customers which have
requested it operate a manufacturing facility in India for sales in India.
E. In light of the foregoing, the Parties desire to utilize their
respective strengths by establishing a Joint Venture (the "JV"), to be jointly
owned by Walbro and Mutual, to develop, manufacture and market fuel tanks,
filler pipes and other plastic blow molded products in the automotive, truck,
agriculture and any other markets ("JV Products").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and undertakings provided herein, the Parties agree as follows:
ARTICLE I
FORMATION OF THE JV
1.1 INCORPORATION. The Parties will cause the incorporation and
registration of the JV as a private limited company ("PLC") organized under the
laws of India. The JV shall be registered in the state of Maharashtra and its
registered office shall be at 47 Government Industrial Estate, Charkop
Kandivili (W) Xxxxxx - 000000 Xxxxx. The Articles of Association
2
and Memorandum of Association for the JV (collectively the "Articles") shall be
substantially in the form of EXHIBIT 1.1(A) AND (B) attached hereto.
1.2 OWNERSHIP. The equity interest in the JV ("Equity Interest")
will be owned by the Parties based on their percentage share of capital
contributions which is 50.1% for Walbro and 49.9% for Mutual, as set forth in
SECTION 2.1 ("Capital Percentages"). Such Capital Percentages may be adjusted
upon agreement of the parties subject to appropriate governmental approval.
1.3 PURPOSE. The purpose of the JV will be to develop,
manufacture and market fuel tanks, filler pipes and other plastic blow molded
products in the automotive, truck, agricultural and any other markets ("JV
Products") in the JV Territory. Except as expressly provided in SECTION 4.3,
the JV will be the exclusive vehicle through which each of the Parties and its
affiliates develops, manufactures and markets JV Products in the JV Territory.
It is intended that the JV shall be a self-sufficient and autonomous entity
with its own plant, assets and employees.
1.4 TERRITORY. The designated market for the JV (the "JV
Territory") will be India.
1.5 NAME. The Parties agree that the JV shall operate under the
name Mutual Walbro P. Ltd. or such other name as chosen by the Board. Walbro
shall license the JV the right to the use of the name Walbro pursuant to the
Name License Agreement in the form of EXHIBIT 1.5. The Articles shall include
name protection provisions for the benefit of Walbro.
1.6. ACCEPTANCE. The Parties agree to cause the JV to accept and
adopt this Agreement.
ARTICLE II
CAPITALIZATION AND FUNDING OF THE JV
2.1 CAPITAL CONTRIBUTIONS. The JV will be formed and capitalized
as follows:
(a) The initial capitalization of the JV shall be
$2,000,000 (70,000,000 rupees) of equity. The above amounts shall be
contributed in cash to the JV by the Parties in proportion to their
respective Capital Percentages.
(b) The equity contributions constituting the initial
capitalization shall be made at such times as requested by the Board.
2.2 OPERATING DEFICITS. Operating deficits of the JV beyond those
provided for in the initial capitalization or needs for additional working
capital will be funded by the Parties in proportion to their respective Capital
Percentages. Unless otherwise agreed at the time of funding, such deficits
will be funded by loans from the Parties.
-2-
3
2.3 SUBSEQUENT CAPITAL OR LOANS. Additional capital requirements
contemplated by the Business Plan will be made by the Parties in proportion to
their respective Capital Percentages. No additional capital contributions or
loans other than those contemplated by the Business Plan will be required
unless approved by both Parties.
ARTICLE III
GOVERNANCE OF THE JV
The Parties agree that the JV will be governed substantially as set
forth below, and that these governance provisions are for the direct benefit of
the JV and its business. The Parties further agree: (a) that the JV Articles
will be structured to reflect this governance to the fullest extent permitted
under applicable law; and (b) that, in the event of a conflict between the
Articles and the following provisions, the following provisions will prevail to
the extent such a result is not directly contrary to applicable public policy.
3.1 MANAGEMENT TEAM. The day-to-day operations of the JV will be
conducted by a Chief Executive Officer ("CEO") and his staff. The CEO and key
management people will be appointed by the Board of Directors. The initial
Board of Directors will be Xxxxxxx X. Xxxxxxxxx, III and X.X. Xxxxxx.
3.2 BOARD OF DIRECTORS.
3.2.1 COMPOSITION. The JV will have a Board of Directors
(the "Board") comprised of two persons. Mutual will designate one member (the
"Mutual Member"), and Walbro will designate one member (the "Walbro Member").
Each of the Parties shall support the other's choices. The initial members
shall be listed in the Articles. The Board will elect the Chairman who will be
a designee of Walbro. Members of the Board shall be designated by Notice and
will serve until replaced by the Party so designating. The Parties may each
designate an alternative director to attend meetings and exercise the powers of
a regular Board Member which alternative directors shall be appointed by the
Board.
3.2.2 ROUTINE DECISIONS BY THE BOARD. For all matters
other than those set forth in SECTION 3.2.3:
(a) meetings shall be held at least four times annually
on a quarterly basis and each member shall be given seven days'
written notice (with acknowledgement of receipt) of any meeting of the
Board;
(b) attendance in person at such a meeting, without
written objection to lack of sufficient notice, waives this notice
requirement;
(c) two members shall constitute a quorum;
-3-
4
(d) the vote of a majority of all members present in
person shall be decisive;
(e) the vote of the Chairman will be decisive in a tie
vote; and
(f) whenever necessary under Indian law, decisions of the
Board shall be confirmed by a general shareholder meeting.
3.2.3 SPECIAL MATTERS. With respect to each of the following
situations, the Board will not have the power to act unless all Members vote in
favor of a resolution; and whenever necessary under Indian law, decisions of
the Board shall be confirmed by a general shareholder meeting.
(a) payment of a dividend other than from current year's
earnings;
(b) approval, ratification or substantial change of the
operating budget of the JV, including without limitation, the capital
expenditures, additions or improvements for the year;
(c) approval, ratification or substantial change of the
Business Plan;
(d) sale of substantially all of the assets of the JV;
(e) authorization or approval of a merger, consolidation
or a material change in the capital structure of the JV;
(f) creation or incurrence of indebtedness for borrowed
money if, after giving effect to the creation of such indebtedness,
the total amount of the JV's indebtedness for borrowed money will
exceed $2,000,000, except unsecured current liabilities incurred in
the ordinary course of business;
(g) creation or incurrence of any mortgage, pledge, lien,
charge or encumbrance upon any property or assets now owned or
hereinafter acquired by the JV except for (i) mortgages, pledges,
liens, charges or encumbrances on, and incurred at the time of and in
connection with the acquisition of property acquired in the ordinary
course of business, (ii) minor liens and encumbrances, and (iii) other
liens and encumbrances for amounts not exceeding $2,000,000 in the
aggregate at any one time outstanding;
(h) making, ratifying or causing the JV to become a Party
to a contract or commitment, or to renew, extend or modify any
contract or commitment between the JV and one of its equity holders
or an "affiliate" of an equity holder which requires payment of an
aggregate amount in excess of $250,000. For purposes of this
subsection, an "affiliate" will mean:
-4-
5
(i) a company, domestic or foreign, of which an
equity holder in the JV owns or controls,
directly or indirectly, at least 25% of the
assets, voting stock or capital;
(ii) a company or individual, domestic or foreign,
which owns or controls, directly or
indirectly, at least 25% of the assets,
voting stock or capital of an equity holder
of the JV; or
(iii) a company, domestic or foreign, under common
control with an equity holder through direct
or indirect ownership of at least 25% of the
assets, voting stock or capital of that
company.
(i) material agreement or commitment to any matter
required of the JV pursuant to a contract or agreement, including
Ancillary Documents, with Mutual, Walbro or an affiliate (as that term
is defined in subsection (h) above) of Mutual or Walbro, including the
modification or termination of any existing contract;
(j) agreement or commitment to purchase services, from
Walbro, Mutual or their affiliates (as that term is defined in
subsection (h) above); and
(k) approval of the licensing or sublicensing of any
technology, licensed by Walbro to the JV.
(l) any amendment to the Articles.
In case of a deadlock over one or more of these issues, the provisions set
forth in SECTION 3.2.4 below will control.
3.2.4 DEADLOCK. The following sets forth the Parties' agreement
with respect to a deadlock situation. In the event that:
(a) either of Mutual or Walbro (in this subsection called
"the First Party") gives written notice to the other Party (in this
subsection called "the Second Party") specifying as subject to this
subsection a resolution requiring the affirmative vote of a majority
of the Board, or the unanimous approval of the shareholders, which
resolution was previously put to and not passed by a meeting of the
Board or shareholders, as applicable, because the Second Party or its
designee Member present did not vote in favor of the resolution or
voted against the resolution, or the Second Party or its designee
Member were not present for the vote; and
(b) such resolution is again put at another such meeting
called within 30 days of the original meeting and the First Party or
its designee Member present, as the case may be, votes for the
resolution but the Second Party or its designee Member, as the case
may be, does not vote or votes against the resolution, or the Second
Party or its
-5-
6
designee Member, as the case may be, are not present for the vote,
then a deadlock situation will be deemed to have arisen. Within seven
days of such event arising, Walbro or Mutual, as the case may be, will
prepare and circulate to the other a memorandum or other form of
statement setting out its position on the matter in dispute and its
reasons for adopting such position. Each such memorandum or statement
will be considered by the Chief Executive Officers of Mutual and of
Walbro who will respectively use their reasonable efforts to resolve
such dispute.
If the Parties agree upon a resolution of the dispute, they will
jointly sign a statement setting forth the terms of such resolution and Walbro
and Mutual will exercise all voting rights and other powers of control
available to them in relation to the JV to procure that such resolution is
fully and promptly carried into effect.
If a resolution of the dispute is not agreed upon within 30 days after
delivery of the memorandum or statements mentioned above or such longer period
as Walbro and Mutual may agree in writing, the JV will automatically terminate
as prescribed in ARTICLE VII.
If a resolution is agreed upon by the Parties but is not implemented
by the JV within 60 days after such agreement, or such longer period as Walbro
and Mutual may agree in writing, the JV will automatically terminate as
prescribed in ARTICLE VII.
3.3 SHAREHOLDERS MEETING. The JV shall hold an annual
shareholders meeting in June, of each year at the offices of the JV or at such
other time and place as the Parties may agree, subject to the requirements of
the local law. Special shareholders meeting can be held on seven days' written
notice at the request of the Board. In all shareholder votes, a majority in
interest shall be decisive. A quorum shall only exist if representatives of
both Parties are present.
ARTICLE IV
CONDUCT OF THE JV
4.1 BUSINESS PLAN. A five-year business plan (the "Business
Plan") in the form attached as EXHIBIT 4.1 will be approved by the Board in
accordance with SECTION 3.2.3 and will be implemented by the management of the
JV. The Business Plan will include initial and subsequent funding
requirements. The Business Plan will be revised and updated on an annual basis
by the Board in accordance with SECTION 3.2.3.
4.2 FACILITIES - MANUFACTURING. The manufacturing facility for
the JV will be in Pune. Construction of the facilities shall begin immediately
after the necessary government approvals have been received. The JV will
provide customer application engineering and manufacturing technology with
substantial support from Walbro under the Engineering Support Agreement. The
Parties acknowledge that fuel pumps and modules will be manufactured by Walbro
and sold to the JV for addition to fuel tank assemblies to be sold to customers
in India.
-6-
7
4.3 EXCLUSIVITY. Notwithstanding SECTION 1.3, Walbro may continue
its current practice of selling to U.S. aftermarket customers who export to the
JV Territory. In addition, Walbro shall be permitted to enter into joint
ventures to develop, manufacture and market JV Products with other existing
joint venture partners or with affiliates of its customers in the JV Territory,
outside of a 300 mile radius of the JV facilities.
4.4 CUSTOMER APPLICATION AND GENERAL ENGINEERING SUPPORT FROM
WALBRO. The Business Plan provides for certain engineering services to be
provided to the JV by Walbro. Walbro will provide such services to the JV
pursuant to a Customer Application and General Engineering Support Agreement in
substantially the form attached as EXHIBIT 4.4.
4.5 INTERIM ENGINEERING SUPPORT FROM WALBRO. The Business Plan
provides for certain engineering services to be provided to the JV by Walbro.
Walbro will provide such services to the JV pursuant to a Interim Engineering
Support Agreement in substantially the form attached as EXHIBIT 4.5.
ARTICLE V
WALBRO LICENSE
Walbro will provide technology with respect to plastic molded products
to the JV via a non-exclusive license (the "Walbro License"), substantially in
the form of EXHIBIT 5. The Walbro License shall provide that the sale of JV
Products will be on a royalty-bearing basis. The Walbro License will provide
Walbro with all modifications and improvements to the technology licensed
thereby via a grant-back of such rights.
ARTICLE VI
RESTRICTIONS ON TRANSFER OF INTERESTS IN THE JV
6.1 NO TRANSFER WITHOUT APPROVAL. Neither Walbro nor Mutual may
transfer any of its Equity Interest in the JV to any third party (other than
direct or indirect Controlled Affiliates) without the prior written approval of
the other Party. It is the intention of the Parties that there be only two
owners of the JV; consequently, any attempted transfer of Equity Interest in
the JV must encompass the entire Equity Interest of the transferring Party.
Notwithstanding the above, transfers to Controlled Affiliates may be done
without approval provided that (i) such transfer constitutes all of the
transferor's Equity Interest, (ii) the transferee agrees to be bound by this
Agreement, and (iii) the transferor remains liable for all obligations imposed
by this Agreement.
For purposes of this Agreement, a "Controlled Affiliate" of a Party
means any person which controls, is controlled by or is under common control
with, such Party; "control" means the ownership of a majority of both the
voting power of, and the Equity Interest in, a person.
-7-
8
6.2 RIGHT OF FIRST REFUSAL. If for any reason a transfer of
Equity Interest in the JV cannot be restricted as provided in SECTION 6.1, then
a transfer by either Party of any of its Equity Interest in the JV to any third
Party (other than to a direct or indirect Controlled Affiliate), shall be
subject to a right of first refusal by the other Party to acquire such
interests as set forth below.
6.2.1 FIRST OFFER. If either of Walbro or Mutual receives
from a third Party (the "Outsider") a bona fide written offer (a "Bona Fide
Offer") to purchase all of its Equity Interest in the JV (the "Equity
Interest"), such Party (the "Selling Party") agrees that prior to effecting any
sale pursuant to such Bona Fide Offer, it will first make a written offer (the
"Offer") upon the terms and conditions provided herein to sell its Equity
Interest to the other Party (the "Offeree Party").
6.2.2 NOTICE OF OFFER. The Offer will set forth the
following:
(a) the Selling Party's intention to sell its Equity
Interest;
(b) a photostatic copy of the Bona Fide Offer of the
Outsider, and all written communications relating to the proposed sale
and purchase of the Equity Interest;
(c) a written offer to sell to the Offeree Party the
Equity Interest of the Selling Party upon the same terms and
conditions and for the same price as the Bona Fide Offer; and
(d) the U.S. dollar equivalent of the price.
6.2.3 OFFEREE PARTY ACCEPTANCE. The Offeree Party may accept such
Offer for all, but not less than all, of the offered Equity Interest by giving
written notice within 30 days after receipt of the Offer to the Selling Party.
If the sale to the Offeree Party is not consummated within 45 days after the
expiration of this 30-day notice period (which 45-day period will be tolled by
any waiting period or suspension of the transaction imposed or required by
applicable law or any unnecessary delay caused by the Selling Party) or as
provided in the Bona Fide Offer, the Selling Party will have the right to sell
its interest to the Outsider as provided in SECTION 6.2.5 below.
6.2.4 PURCHASE BY THE OFFEREE PARTY. Any purchase by the Offeree
Party pursuant to this ARTICLE VI will be consummated upon the same terms and
conditions and for the U.S. dollar equivalent price as the Bona Fide Offer for
the Equity Interest. Any terms and conditions not specified in the Bona Fide
Offer will be mutually agreed upon by the Offeree Party and the Selling Party.
6.2.5 PURCHASE BY OUTSIDER. If the Offeree Party fails to accept
the Offer pursuant to SECTION 6.2.3, the Selling Party will then have the right
to sell its Equity Interest to such Outsider on the same terms and conditions
as contained in the notice described in SECTION 6.2.2;
-8-
9
provided that (i) the sale to the Outsider is consummated within 45 days after
the expiration of the 30-day option period described in SECTION 6.2.3 (which
45-day period will be tolled by any waiting period or suspension of the
transaction imposed or required by applicable law) or as provided in the Bona
Fide Offer, and (ii) the Outsider becomes a Party to this Agreement
contemporaneous with his purchase of the Equity Interest. If the Selling Party
and the Outsider do not consummate the sale of the Equity Interest within the
time period described in (i) above or intend to consummate such sale on
materially different terms than the Bona Fide Offer, the Equity Interest may
only be sold to said Outsider after again complying with the terms of this
ARTICLE VI.
ARTICLE VII
TERM AND TERMINATION OF THE JV
7.1 TERM AND TERMINATION OF THE JV. Unless otherwise terminated
as provided below, the JV will be of perpetual duration. The JV will be
terminated:
7.1.1 BY MUTUAL CONSENT. At any time by the mutual consent
of the Parties;
7.1.2 FOR BREACH. Upon the material breach, which is not
cured within 90 days after notice thereof, by a Party of its obligations to the
JV or otherwise under this Agreement, at the option of the non-breaching Party
exercised within ten days after the expiration of the 90-day cure period;
7.1.3 BANKRUPTCY. Automatically upon the filing of a
voluntary petition or answer admitting jurisdiction of the court and the
material allegations, or the consent to, an involuntary petition pursuant to or
purporting to be pursuant to any reorganization or insolvency law of any
jurisdiction, or an assignment for the benefit of creditors, or an application
for or consent to the appointment of a receiver or trustee of a substantial
part of the property of a Party hereto;
7.1.4 DEADLOCK. Upon an unresolved deadlock as described
in SECTION 3.2.4;
7.1.5 INVOLUNTARY REDUCTION OF WALBRO OWNERSHIP. At the
option of Walbro upon the involuntary reduction of its Equity Interest in the
JV to be less than 51%.
7.1.6 CHANGE OF CONTROL OF MUTUAL. At the option of
Walbro, upon a change of control of Mutual. For purpose of this provision, a
change of control will occur if Mutual is no longer controlled, directly or
indirectly by the current owners of the Gandhi Sons Group. The current owners
are listed in EXHIBIT 7.1.6 hereto.
7.1.7 FORCE MAJEURE. At the option of the non-offending
Party, upon the failure of a Party to begin fully performing its obligations
under this Agreement within six months after such Party declares an inability
to perform due to force majeure as provided in SECTION 9.5; or
-9-
10
7.1.8 EXPROPRIATION. Upon the expropriation,
nationalization or seizure of a substantial portion of the JV's property.
7.2 CONSEQUENCES OF TERMINATION.
7.2.1 PURCHASE OPTION. Upon the occurrence of an event
which would cause the termination of the JV pursuant to SECTION 7.1 above,
Walbro will have the option, in lieu of proceeding with the dissolution of the
JV, to purchase Mutual's Equity Interest by giving written notice within 30
days after the termination of the JV to Mutual that it desires to purchase for
cash all of its Equity Interest. The Parties will then negotiate in good faith
with respect to price. If the Parties cannot agree upon price within 30 days,
then the price will be equal to the fair market value of the Equity Interest as
determined by an investment banker with recognized standing in the
international finance community and mutually acceptable to the Parties. In the
event the Parties cannot agree on an investment banker, each Party will select
one banker and the two bankers will select a third banker, which third banker
will conclusively determine fair market value. For purposes of this section,
"fair market value" of an Equity Interest will be the value of the JV as if it
were being sold as a whole business and a going concern to one purchaser,
multiplied by the selling Party's Capital Percentage at the time of the
valuation.
Notwithstanding anything herein to the contrary, this purchase option
will not be available to Walbro if the termination is due to Walbro's breach or
bankruptcy, pursuant to SECTION 7.1.2 or SECTION 7.1.3.
7.2.2 SALE OPTION. Upon the occurrence of an event which would
cause the termination of the JV pursuant to SECTION 7.1 above, Mutual will have
the option, in lieu of proceeding with the dissolution of the JV, to require
Walbro to purchase its Equity Interest by giving written notice within 30 days
after termination of the JV to Walbro. The terms of such purchase shall be the
same as those described in SECTION 7.2.1. above. Notwithstanding anything
herein to the contrary, this sale option will not be available to Mutual if the
termination is due to Mutual's breach or bankruptcy pursuant to SECTION 7.1.2.
or SECTION 7.1.3.
7.2.3 DISSOLUTION. If the above purchase or sale options are not
exercised by either Party as provided, the Parties will use their best efforts
to dissolve the JV and wind up its affairs in a manner designed to preserve the
interests of both Parties in the JV Products in JV Territory. Until the JV is
completely dissolved, the Parties shall be bound by all the provisions of this
Agreement.
7.2.4 DAMAGES. Nothing herein shall prejudice the rights of a
Party, in addition to the exercise of any other remedy hereunder, to recover
money damages for any breach by a Party of this Agreement or any Ancillary
Document (as defined).
-10-
11
ARTICLE VIII
REGULATORY MATTERS AND INVALIDITY
8.1 COOPERATION IN MAKING REGISTRATIONS AND OTHER GOVERNMENT
FILINGS. Mutual shall cooperate fully in assisting Walbro in making, whenever
required or necessary, registrations and other governmental filings including,
but not limited to, filings for investment approval, technical assistance
arrangements and license agreements.
8.2 CONSEQUENCES OF INVALIDITY. If for any reason whatever at any
time, any provision of this Agreement or any of the Ancillary Documents is or
becomes invalid, illegal or unenforceable, or is declared by any court of
competent jurisdiction or any other competent authority to be invalid, illegal
or unenforceable or if such competent authority:
(i) refuses, or formally indicates an intention
to refuse authorization of, or exemption to,
any of the provisions of or arrangements
contained in this Agreement or in any of the
Ancillary Documents (in the case of a refusal
either by way of outright refusal or by way
of requiring an amendment or deletion of any
provision of this Agreement or of any of the
Ancillary Documents and/or the inclusion of
any new provision in this Agreement or in the
Ancillary Documents and/or the giving of
undertakings as to future conduct before such
authorization or exemption can be granted);
or
(ii) formally indicates that to continue to
operate any provision of this Agreement or of
any of the Ancillary Documents may expose the
Parties to sanctions under any order,
enactment or regulation, or requests any
Party to give undertakings as to future
conduct in order that such party may not be
subject to such sanctions; and in all cases,
whether initially or at the end of any
earlier period or periods of exemption (each
of which circumstances being referred to in
this ARTICLE VIII as "a Relevant
Invalidity"), then in any such case, at the
request of either Party by notice or a series
of notices to that effect to the other
("Negotiation Notice"), the Parties will meet
to negotiate in good faith to agree upon
valid, binding and enforceable substitute
provisions while at the same time
reconsidering the other terms of this
Agreement and of any of the Ancillary
Documents not so affected so as to
reestablish an appropriate balance of the
commercial interests of the Parties
("Substitute Provisions").
8.3 FAILURE TO AGREE ON SUBSTITUTE PROVISIONS. If and to the
extent that Substitute Provisions are formally agreed in writing within one
month of the service of a Negotiation Notice, or such other period as may be
formally agreed in writing between the Parties, then in
-11-
12
that respect the matter shall be deemed to be settled and such substitute
provisions shall be deemed part of this Agreement or of any of the Ancillary
Documents. If, however, in respect of any Relevant Invalidity no Substitute
Provisions can be agreed within such period, then if any Party considers on
reasonable grounds that its commercial interests with regard to this Agreement
and/or any of the Ancillary Documents is materially and adversely affected as a
consequence of the Relevant Invalidity it may submit such matter to arbitration
pursuant to SECTION 9.8.
8.4 DEFERRAL OF DETERMINATION OF ADVERSE EFFECT. If any Party
considers that it is unable to assess the consequence of any Relevant
Invalidity in the light of facts subsisting at the time, that Party may defer
commencement of an arbitration in respect of the provision or provisions
affected by such Relevant Invalidity until such time as it considers on
reasonable grounds that its commercial interests with regard to this Agreement
and/or any of the Ancillary Documents are materially and adversely affected in
the light of events occurring subsequent to communication of the finding of
invalidity to the Parties. Notwithstanding the foregoing, a Party must
commence arbitration pursuant to SECTION 8.3 within 60 days of receipt of the
Negotiation Notice.
8.5 REPATRIATION LIMITATIONS. If any monies owed by the JV to
Walbro for any reason (including, but not limited to dividends, royalties or
fees) cannot be paid due to government regulations, laws or otherwise, the JV
shall segregate such funds into a separate account for the sole benefit of
Walbro until such time as the funds can be repatriated.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 ANCILLARY DOCUMENTS; INTERPRETATION. The Parties agree that,
in the event of an inconsistency or disagreement between this Agreement and any
other agreement or document referred to herein to be entered into in connection
with the JV (each an "Ancillary Document" and, collectively, the "Ancillary
Documents"), this Agreement shall prevail.
9.2 PUBLIC ANNOUNCEMENTS AND CONFIDENTIALITY. The Parties agree
that all data and information relating to the JV, including but not limited to
any information relating to or provided under any Ancillary Document, the JV's
trade secrets, know-how, inventions, discoveries, improvements, technologies,
business practices and methods, whether or not patented, lists of suppliers,
and information relating to the JV's financial statements, customer identities
and utilization patterns, needs and participation levels, potential customers,
suppliers, products, servicing methods, equipment, programs, analyses, profit
margins and cost data, shall be kept confidential by both Parties and shall
not, whether prior to or after the date hereof, be disclosed to any person,
firm, or corporation, except to the extent that such data or information is
generally known to the trade or in the public domain. The Parties, however,
may provide the information to third parties (i) for the purpose of assisting
in the evaluation of the JV, its performance, or its operations, (ii) for the
purpose of determining the value of said Party's
-12-
13
Equity Interest in the JV, and (iii) for any other purpose consistent with the
activities contemplated by this Agreement and the Ancillary Documents; provided
that in each case the disclosing Party takes reasonable precautions to maintain
the confidential nature of the information. The Parties may also make any
disclosures necessary to comply with applicable securities and other disclosure
laws. The Parties recognize and acknowledge that any breach by them of the
foregoing provisions of this section may cause irreparable harm to the other
Party and the JV and, in the event of any such breach, such other Party or the
JV shall, in addition to all other remedies available to it, at law or in
equity, be entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction to enjoin such breaching Party from doing
any act in violation of such provisions, and that such other Party or the JV
shall not be required to show actual monetary damages as a prerequisite to such
relief. The above provisions shall survive any termination of this Agreement
and any dissolution of the JV for a period of two years after such termination
or dissolution.
Each Party agrees not to make any public disclosure regarding the
existence or the substance of the transactions contemplated hereby without the
prior approval of the other Party, except to the extent that either Party
reasonably determines that such disclosure is required by applicable law or
regulation.
9.3 ACCOUNTING AND FISCAL YEAR. The JV's accounting methods will
be in accordance with Indian law and Indian generally accepted accounting
principles and all accounts shall be maintained in Indian currency units. The
JV shall adopt the calendar year as its fiscal year.
9.4 INSURANCE. Insurance protection provided for the JV under
this Agreement must apply both to each individual facility of the JV and to all
facilities as a whole. The JV's insurance must also provide insurance coverage
for all types of risk related to the construction and operation of the
aforementioned facilities, including material and other property losses caused
to fixed assets belonging to the JV, rented by it, or acquired on credit by it,
as well as its civil liability for property or physical damage which may be
caused to third Parties in connection with the JV's activity, either by defects
in the goods its produces or by JV workers and employees in connection with
their performance of their job responsibilities.
9.5 FORCE MAJEURE. Where either Party is unable, wholly or in
part, by reason of force majeure to carry out its obligations under this
Agreement, such obligations are suspended so far as they are affected by the
force majeure during the continuance thereof; provided that an obligation to
pay money is never excused by force majeure.
The Party affected by the force majeure will give notice to the other
Party of the particulars of the situation and the probable extent to which it
will be unable to, or delayed in, performing its obligations under this
Agreement, within 10 days after the occurrence of the force majeure.
For purposes of this section, "force majeure" means an act of God,
strike, lockout or other interference with work, war declared or undeclared,
blockade, disturbance, lightning, fire,
-13-
14
earthquake, storm, flood or explosion; governmental or quasi-governmental
restraint action, expropriation, prohibition, intervention, direction or
embargo; unavailability or delay in availability of equipment or transport;
inability or delay in obtaining governmental or quasi-governmental approvals,
consents, permits, licenses, authorities or allocations; and any other cause
whether of the kind specifically enumerated above, or otherwise which is not
reasonably within the control of the Party affected.
9.6 EXPENSES. The JV will pay the reasonable costs and expenses
of the Parties and their lawyers, accountants and other advisors incurred in
negotiating and drafting this Agreement and the Ancillary Documents and in
otherwise forming the JV.
9.7 FURTHER ASSURANCES. Walbro and Mutual agree to execute and
deliver such other instruments, agreements or documents and take such other
action as may reasonably be necessary or desirable to consummate the
transactions contemplated by this Agreement.
9.8 RESOLUTION OF DISPUTES. All disputes, controversies or claims
arising in connection with this Agreement shall be finally settled under the
Rules of Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with said Rules. The place of the
arbitration of shall be London, England. All arbitration proceedings shall be
conducted in the English language. Documents prepared for use in the
arbitration shall be prepared in the English language. Where a document other
than in the English language is to be relied on by a party to the arbitration,
a translation of that document into the English language, certified a true and
fair translation by a recognized translator, shall be provided together with a
certified copy of the original document.
9.9 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns, but will not be assignable or delegable by any Party without
the prior written consent of the other Party, except that either Party may
assign, in whole or in part, its rights hereunder, subject to all obligations
hereunder, to a Controlled Affiliate in connection with any transfer of Equity
Interest in the JV permitted pursuant to ARTICLE VI; provided, however, that
such assignment will not relieve that Party of any of its obligations or
liabilities hereunder.
9.10 AMENDMENTS, SUPPLEMENTS, ETC. This Agreement may be amended
or supplemented at any time by additional written agreements signed by both
Parties, as may mutually be determined by the Parties to be necessary,
desirable or expedient to further the purposes of this Agreement or to clarify
the intention of the Parties.
9.11 NOTICES. All notices and other communications required or
permitted hereunder will be in writing and, unless otherwise provided in this
Agreement, will be deemed to have been duly given when delivered in person or
one business day after having been dispatched by telegram or electronic
facsimile transfer (confirmed in writing by mail simultaneously dispatched with
a copy of the sender's machine printed facsimile confirmation) or three
business days after
-14-
15
having been dispatched by an internationally recognized overnight courier
service to the appropriate Party at the address specified below.
(a) If to Walbro, to:
Walbro Automotive Corporation
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: President
With copies to:
Xxxxxx Xxxxxx & Xxxxx Walbro Automotive Europe
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000 0000 Xxx xx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000 74120, Megeve
Facsimile Number: (000) 000-0000 Facsimile Number: (33) 50.58.90.72
Attention: Xxxxxx X. Xxxxxxxx Attention: X. X. Xxxxxxxxx, III
(b) If to Mutual, to:
Mutual Industries Ltd.
00 Xxxxxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx (X)
Xxxxxx - 000000
Facsimile Number: (022) 8058778
Attention: X. X. Xxxxxx
9.12 WAIVER. Waiver by either Party of a breach by the other Party
of any obligation or requirement contained in, or arising from, this Agreement
does not operate as a waiver of another or continuing breach by the other Party
of the same, or any other, obligation or requirement hereunder. Any waiver by
either Party must be in writing, signed by the waiving Party.
9.13 ENTIRE AGREEMENT. This Agreement and the Ancillary Documents
represent the understanding of the Parties with respect to the subject matter
hereof and thereof and supersede any other agreement, whether written or oral,
that may have been made or entered into by Walbro or Mutual or their affiliates
relating to the matters contemplated hereby.
9.14 NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the Parties hereto to express their
mutual intent, and no rule of strict construction will be applied against
either Party.
-15-
16
9.15 SEVERABILITY. Subject to the provisions of ARTICLE VIII, if
any provision of this Agreement or the application of any such provision to any
person or circumstance is held invalid, illegal or unenforceable in any respect
by a court of competent jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision hereof.
9.16 GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the substantive laws of India.
9.17 THIRD PARTIES. Nothing in this Agreement express or implied
is intended to confer any right or remedy under or by reason of this Agreement
on any person other than the Parties, their respective heirs, representatives,
successors and permitted assigns, affect or discharge the obligation or
liability of any third persons to any Party to this Agreement, or give any
third Party any right or subrogation or action over against any Party to this
Agreement.
9.18 TITLES AND HEADINGS. Titles and headings to sections herein
are inserted for convenience of reference only, and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
9.19 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same agreement.
9.20 POWER AND AUTHORITY. Each of the Parties hereby acknowledges,
represents and warrants that it has full power and authority to enter into this
Agreement and the Ancillary Documents.
9.21 INDEPENDENT PARTIES. In making and performing this Agreement,
the parties shall at all times act as independent entities and nothing
contained in this Agreement shall be construed or implied to create an agency,
partnership or employer/employee relationship between the parties. At no time
shall either party make commitments or incur any charges or expenses for or in
the name of the other party.
9.22 SURVIVAL. The covenants and agreements made in SECTIONS 7.2,
9.2, 9.4, 9.6 and 9.14 will survive any termination of this Agreement.
-16-
17
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
the day and year first above written.
WALBRO AUTOMOTIVE CORPORATION
By:
-----------------------------------------------
Its:
-----------------------------------------------
MUTUAL INDUSTRIES LTD.
By:
-----------------------------------------------
Its:
-----------------------------------------------
-17-
18
EXHIBITS
TO JOINT VENTURE AGREEMENT BETWEEN
WALBRO AUTOMOTIVE CORPORATION AND MUTUAL INDUSTRIES LIMITED
Exhibit 1.1(a) Articles of Association
Exhibit 1.1(b) Memorandum of Association
Exhibit 1.5 Name License Agreement
Exhibit 4.1 Business Plan
Exhibit 4.4 Customer Application and General Engineering Support Agreement
Exhibit 4.5 Interim Engineering Support Agreement
Exhibit 5 Walbro Technology License
