Building your own business can be both exciting and daunting. However, there are different ways to start a business and one of these is through a Build Own Operate Transfer Agreement (BOOT). A BOOT agreement is a contractual agreement that allows a company to build, own, and operate a facility for a certain period before transferring ownership to another party. In this article, we will discuss a Build Own Operate Transfer Agreement sample.
A BOOT agreement is a common form of Public-Private Partnership (PPP) used to finance and construct large infrastructure projects. This type of agreement can help local governments and private investors save money and leverage resources to achieve long-term economic development goals. Here are some of the key terms that you need to know before you write a BOOT agreement:
– Build: Refers to the construction phase of the project. The building phase includes the design, procurement, and construction of the facility or infrastructure project.
– Own: Refers to the period when the company operates and manages the facility. The company is responsible for the maintenance, security, and operations of the facility.
– Operate: Refers to the period during which the company is responsible for the day-to-day operations of the facility.
– Transfer: Refers to the transfer of ownership from the company to the government or other party that takes over the facility’s ownership after the operating period. The transfer can involve either a full or partial transfer of ownership.
Now, let`s move on to the sample of a typical BOOT agreement.
BUILD OWN OPERATE TRANSFER AGREEMENT
This Build Own Operate Transfer Agreement (the “Agreement”) is made on the [DATE] between [COMPANY NAME] (the “Company”), a [STATE] corporation having its principal place of business at [ADDRESS], and [GOVERNMENT AGENCY NAME] (the “Government Agency”), a [STATE] agency having its principal place of business at [ADDRESS].
RECITALS
WHEREAS, the Government Agency desires to construct and operate a [TYPE OF FACILITY] facility (the “Project”) to be located in [LOCATION];
WHEREAS, the Company has the expertise and resources to design, build, own, and operate the Project;
WHEREAS, the parties have agreed to enter into a BOOT agreement for the Project on the terms and conditions set forth in this Agreement:
AGREEMENT
1. Design and Construction of the Project: The Government Agency shall provide the necessary funds to the Company to design, construct, and commission the Project. The Company shall complete the construction of the Project within [DURATION] months from the date of this Agreement.
2. Ownership and Operation of the Project: Upon completion of the construction of the Project, the Company shall own and operate the Project for a period of [DURATION] years. During this period, the Company shall be responsible for the maintenance, security, and operation of the Project.
3. Transfer of the Project: At the end of the operating period, the ownership of the Project shall be transferred to the Government Agency, subject to the rights and obligations of the parties under this Agreement.
4. Payment: The Government Agency shall pay the Company [AMOUNT] in consideration of the design, construction, and operation of the Project. The payment shall be made in [PAYMENT SCHEDULE].
5. Termination: If either party breaches any provision of this Agreement, the other party may terminate this Agreement upon [TERMINATION NOTICE PERIOD].
6. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state of [STATE].
7. Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between the parties with respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Build Own Operate Transfer Agreement as of the date first written above.
[COMPANY NAME]
By: [SIGNATURE]
[GOVERNMENT AGENCY NAME]
By: [SIGNATURE]
CONCLUSION
A Build Own Operate Transfer Agreement can be a viable option for financing and constructing large infrastructure projects. This type of agreement can benefit both public and private entities, and can help achieve long-term economic development goals. If you’re considering a BOOT agreement, it is important to have a clear understanding of the key terms and conditions. The sample BOOT agreement provided above is a good starting point for drafting your own agreement.