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Joint Venture Term Sheet

Joint Venture Term Sheet Template for South Africa

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Key Requirements PROMPT example:

Joint Venture Term Sheet

"I need a Joint Venture Term Sheet for a proposed partnership between a South African mining company and an Australian technology provider, focusing on implementing AI-driven mining operations, with completion targeted for March 2025 and including specific provisions for technology transfer and B-BBEE compliance."

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Document background
The Joint Venture Term Sheet serves as a crucial preliminary document in South African business combinations, establishing the foundation for detailed negotiations and eventual formation of a joint venture. It is typically used when parties have reached initial agreement on key commercial terms but before committing to detailed legal documentation and due diligence. The document reflects South Africa's unique regulatory environment, including B-BBEE requirements, competition law considerations, and exchange control regulations. While mostly non-binding, it typically includes certain binding provisions such as confidentiality, exclusivity, and costs. The term sheet helps parties align their expectations early, identify potential deal-breakers, and streamline the negotiation process for the final joint venture agreement.
Suggested Sections

1. Parties: Identification of all parties to the proposed joint venture, including their registration details and addresses

2. Background: Context of the proposed joint venture, including the parties' current businesses and rationale for collaboration

3. Definitions: Key terms used throughout the term sheet

4. Purpose and Scope: Detailed description of the joint venture's business objectives and scope of operations

5. Structure and Ownership: Proposed legal structure of the joint venture and ownership percentages, including B-BBEE considerations

6. Capital Contributions: Initial and subsequent capital contributions from each party, including form of contribution (cash, assets, intellectual property, etc.)

7. Governance: Management structure, board composition, voting rights, and decision-making processes

8. Key Commercial Terms: Core business terms including profit sharing, distribution policy, and operational responsibilities

9. Regulatory Compliance: Key regulatory requirements and approvals needed, including competition law and B-BBEE compliance

10. Timeline: Proposed timeline for due diligence, definitive agreements, and joint venture launch

11. Confidentiality: Obligations regarding confidential information shared during negotiations

12. Exclusivity: Terms of exclusive negotiation period, if applicable

13. Binding Effect: Clear statement of which provisions are binding and which are non-binding

14. Costs: Allocation of costs related to the transaction

15. Governing Law: Confirmation of South African law as governing law and jurisdiction

Optional Sections

1. Conditions Precedent: Include when there are specific conditions that must be met before proceeding with the joint venture, such as regulatory approvals or third-party consents

2. Exit Mechanisms: Include when parties want to outline preliminary terms for exit options, including tag-along/drag-along rights

3. Intellectual Property Rights: Include when the joint venture involves significant IP contributions or development

4. Non-Competition: Include when parties wish to address competition restrictions

5. Employment Matters: Include when there are significant employee transfer or employment considerations

6. Territory and Market Access: Include when the joint venture involves specific geographical or market restrictions

7. Technology Transfer: Include when the joint venture involves significant technology transfer between parties

8. Environmental Compliance: Include when the joint venture involves activities with environmental impact

9. Force Majeure: Include when parties want to address preliminary terms for handling unforeseen circumstances

Suggested Schedules

1. Structure Chart: Diagram showing proposed ownership and corporate structure

2. Initial Business Plan Overview: High-level summary of proposed business plan and financial projections

3. Capital Contribution Schedule: Detailed breakdown of each party's proposed contributions

4. Key Milestones: Timeline of key dates and deliverables

5. Reserved Matters: List of decisions requiring special approval

6. B-BBEE Structure: Detailed breakdown of B-BBEE ownership and compliance structure

7. Asset Schedule: List of key assets to be transferred to or used by the joint venture

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Affiliate
Agreement
B-BBEE
B-BBEE Act
Board
Business
Business Day
Business Plan
Capital Contribution
Companies Act
Competition Act
Conditions Precedent
Confidential Information
Contributing Party
Definitive Agreements
Directors
Effective Date
Encumbrance
Exchange Control Regulations
Exercise Period
Exit Event
Fair Market Value
Financial Year
Initial Capital
Intellectual Property Rights
Joint Venture
Joint Venture Company
Key Personnel
Long Stop Date
Material Adverse Change
Operating Committee
Parties
Prescribed Officers
Project
Related Party
Reserved Matters
SENS
Shareholders
Shares
Strategic Assets
Territory
Transaction
Transfer
Clauses
Parties
Background
Definitions
Purpose and Scope
Structure and Formation
B-BBEE Compliance
Capital Contributions
Ownership Structure
Governance
Board Composition
Management Structure
Reserved Matters
Business Plan
Funding Requirements
Distribution Policy
Transfer Restrictions
Exit Rights
Tag-Along Rights
Drag-Along Rights
Pre-emptive Rights
Deadlock Resolution
Non-Competition
Confidentiality
Intellectual Property
Employment Matters
Regulatory Compliance
Conditions Precedent
Due Diligence
Timeline
Exclusivity
Costs and Expenses
Binding Effect
Governing Law
Dispute Resolution
Notices
Good Faith
Relevant Industries

Mining and Natural Resources

Manufacturing

Technology and Telecommunications

Financial Services

Infrastructure Development

Energy and Renewables

Agriculture and Agribusiness

Healthcare

Retail and Consumer Goods

Transportation and Logistics

Real Estate and Property Development

Education and Training

Relevant Teams

Legal

Corporate Development

Mergers & Acquisitions

Strategy

Finance

Business Development

Commercial

Risk and Compliance

Corporate Secretariat

Operations

Tax

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Managing Director

Business Development Director

Corporate Development Manager

Investment Director

Legal Counsel

Commercial Director

Strategy Director

Mergers & Acquisitions Manager

Joint Venture Manager

Partnership Director

Chief Operating Officer

Chief Strategy Officer

Head of Business Development

General Counsel

Corporate Secretary

Risk Manager

Compliance Officer

Industries
Companies Act 71 of 2008: Primary legislation governing company formation, operation, and management in South Africa. Essential for understanding corporate structure options for the joint venture.
Competition Act 89 of 1998: Regulates competition issues and prevents anti-competitive behavior. Relevant for ensuring the joint venture doesn't create market dominance issues.
Broad-Based Black Economic Empowerment Act 53 of 2003: Crucial for structuring ownership and management participation in South African businesses, particularly important for joint ventures involving local partners.
Income Tax Act 58 of 1962: Governs taxation aspects of the joint venture, including profit sharing, dividends, and capital gains implications.
Exchange Control Regulations (Currency and Exchanges Act 9 of 1933): Relevant if the joint venture involves foreign partners or cross-border transactions, governing foreign currency movements and foreign investment.
Consumer Protection Act 68 of 2008: Important if the joint venture will be involved in providing goods or services to consumers in South Africa.
Protection of Personal Information Act 4 of 2013 (POPIA): Governs how personal information must be processed and stored, crucial for data sharing between joint venture partners.
National Credit Act 34 of 2005: Relevant if the joint venture will be involved in providing credit or financial services.
Electronic Communications and Transactions Act 25 of 2002: Important for electronic communications and digital aspects of the business relationship between joint venture partners.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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