1. International Joint Ventures
What should I know before doing business with a foreign partner?
Cheryl Thompson
Brian Hansen

2. Important Information
This presentation is similar to any other seminar designed to provide general information on pertinent legal topics. The statements made and any materials distributed as part of this presentation are provided for educational purposes only. They do not constitute legal advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the speakers. This presentation is not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel. All Presentations and Other Materials © Holland & Hart LLP 2016

3. What is a Joint Venture?

4. Where are you going and how will you get there?
Objectives of the Joint Venture
Where are you going and how will you get there?

5. Transaction Cost Analysis
Expertise
Technology
Know-How of Separate Businesses
with Shared Costs and Risks
Time and Expense of Creating the JV
Conflicts of Management Style
Cultural Differences

6. Compatibility Alignment of Goals Business Cultures Financial Resources
Operational Savvy
Leadership Commitment
Business Plan
Reputation
Legal Compliance/Ongoing Disputes
Geographic Stability

7. Financing
Sweat Equity / Cash

8. Contribution of Assets

9. Cross-border / Local Law Issues

10. Competition

11. Alternative International Strategies
Outsourcing
Contracts
(ex: Exclusive Distributor Agreement)
Less Commitment/Less Control/Risk of Losing Partner
Easy/Fast/Cheap
Strategic Alliances
Equity/Non-Equity
Traditional M&A
Control/Full Acquisition
Higher Commitment/More Control/Less Risk of Losing Relationship
Create a Wholly-Owned
Subsidiary
Complex/Longer to Establish/More Expensive

12. Share Capital Share Capital Contributions Ongoing Financing Needs
Classes of Shares/Interests

13. Board of Directors/Management/Shareholders
Appointment and Removal of Directors
Approval Requirements
Quorum and Notice Requirements
Director and Officer Liability
Shareholder Decision Making Authority

14. Profit Distribution
Party expectations – reinvest in business or distribute cash?
Distributions out of capital or profits
Special allocations

15. Transfers of Interests
Restrictions on transfer
What transfer restrictions are enforceable?
Co-Sale, Drag-Along, Right of First Refusal

16. Restrictive Covenants
Restrictions from competing with Joint Venture
Requirement to refer opportunities to Joint Venture
Access to, or rights over, confidential information belonging to Joint Venture

17. Records
Information on business of Joint Venture provided to parties and how frequently
Rights of shareholders to inspect records

18. Intellectual Property
IP rights transferred or licensed and on what terms
Who owns IP rights developed by the Joint Venture
What happens to IP upon dissolution

19. Employee Issues How will employees be transferred to the Joint Venture
Will Joint Venture have its own employees
Employee benefits

20. Ancillary Arrangements
Supply of goods
Transitional arrangements for sharing information technology
Technical assistance
Secondment of staff
Provision of facilities

21. Dispute Resolution and Deadlock
Referral to CEOs
Reference to an independent director or third party
Arbitration

22. Termination Fixed term or indefinite Permitted termination
Any restrictions on parties after termination

23. Questions? Cheryl Thompson Brian Hansen cwthompson@hollandhart.com
Cheryl Thompson