Lesson 1: Review checklist

If the target company is a party to an unincorporated joint venture, use this as a checklist to reviewing the document.

1. Parties

   • Identify the parties to the joint venture agreement (Joint Venturers).

   • Determine if the target company (or any of its affiliates) is a party to the agreement.

   • Check if the parties are related, and if so, assess the nature of their relationship.

   • Verify if the agreement is on commercial, arm's length terms.

2. Joint Venture Particulars

   • Note the name, purpose, and assets of the joint venture.

   • Identify the operator (or manager) of the joint venture.

3. Joint Venturers' Interests and Governance

   • Review the participating interests of each Joint Venturer.

   • Check the number of representatives each Joint Venturer can appoint to the operating (or management) committee.

   • Verify if the committee voting rights are equivalent to the participating interests. If not, make a note of this.

4. Transfer Restrictions

   • Carefully review any restrictions on changes or transfers of ownership of a Joint Venturer.

   • Identify if there are restrictions on assigning or transferring a Joint Venturer's rights and obligations under the agreement.

   • Determine if the proposed acquisition triggers any of these restrictions.

   • Understand the exceptions to the restrictions, if any.

5. Security

   • Check if any member of the target company's group is required to provide security under the agreement.

   • Note the type and purpose of the security.

6. Operator

   • If the target company (or any of its affiliates) is the operator, review the provisions pertaining to the operator's liability.

7. Decision-making

   • Understand the decision-making process, including the composition and voting rights of the operating (or management) committee.

8. Governing Law

   • Note the governing law of the agreement.

9. Effective Date and Expiration

   • Verify the effective date of the agreement.

   • Check if the agreement has an expiration date or a term.

   • Confirm that the agreement is currently in force and legally binding.

10. Amendments or Modifications

    • Identify if the agreement has been amended or modified since its execution.

    • Review any amendments or modifications to understand their impact.

11. Consistency with Other Documents

    • Cross-check the information and provisions in the Joint Venture Agreement with other relevant documents, such as the target company's articles of association or bylaws.

    • Ensure consistency and identify any potential conflicts or discrepancies.

12. Impact on the Proposed Acquisition

    • Assess the overall impact of the Joint Venture Agreement on the proposed acquisition.

    • Identify any potential roadblocks, risks, or issues that may need to be addressed or negotiated.

    • Determine if any provisions need to be amended or renegotiated to facilitate the acquisition.