Memorandum of Understanding[CD1]
ABC and
XYZ.
Re: ____________________________
Pvt. Ltd.
THIS MEMORANDUM OF UNDERSTANDING
made this ____________day of _____________between ABC having his office
at__________________, India hereinafter referred to as "ABC" (which
expression and the expression "ABC Group" shall unless it be
repugnant to the context or meaning thereof mean and include himself and the
present other shareholders of __________________Pvt. Ltd. and their respective
heirs, executors, administrators and assigns) of the One Part and MR. XYZ
having his office at_____________________. (Hereinafter referred to as
"XYZ" which expression and the expression "XYZ Group" shall
unless it be repugnant to the context or meaning thereof be deemed to mean and
include himself and his nominees to the extent specified herein and their
respective heirs, executors, administrators and assigns) of the SECOND PART;
WHEREAS ABC is one of the
founding shareholders and is Chairman and Director of a company incorporated in
India known as ______________ Pvt. Ltd. hereinafter referred to as "the
Company" which is in the process of setting up an internet portal,
relating to ___________________, known as "__________________";
AND WHEREAS ABC and certain other
persons have advanced sums of money to the Company in respect of which shares
have been/are to be issued to them and this group is for the sake of brevity
referred to as the "XYZ Group";
AND WHEREAS XYZ has agreed that
he and his nominees (for the sake of brevity referred to as the "ABC
Group") will invest an amount of Rs.__________________ /- (Rupees
_______________Only) to acquire 20 % (twenty per cent) of the Capital of the
Company on certain terms and conditions and equity shares of the Company will
be issued to the members of XYZ Group accordingly;
AND WHEREAS the parties hereto
are desirous of recording the terms and conditions of their agreement in
writing
NOW THIS MEMORANDUM OF
UNDERSTANDING WITNESSETH AS UNDER:-
1. ABC
Group has caused to be incorporated a Company known as ________ Pvt. Ltd.
hereinafter referred to as "the Company" and has, since several
months been working on establishing an internet portal relating
to___________________.
2. The
paid up capital of the Company shall be Rs._________________ /-
(Rupees________only) comprising __________(____________) equity shares of
Rs._____ /- (Rupees_________) each.
3. It
has been agreed that XYZ group shall hold 60% (sixty per cent) of the paid-up
capital of the Company and that XYZ Group shall hold 20% (twenty per cent) of
the paid-up capital of the Company.
4. It
is further agreed that 20% (twenty per cent) shall be allotted by ABC Group as
and by way of stock options at their discretion to employees, associates,
content writers and Technology partners and other supporters on such terms as
decided by the Group. It has however been agreed that. 1% (one per cent) out of
this 20% (twenty per cent) shall be allotted to Mr. XYZ and 1% (one per cent)
to Mr. PQR leaving thereby 18% to be allotted by ABC Group as described above.
5.
XYZ has agreed that for the 20% (twenty per cent) to be
allotted to the XYZ Group, the XYZ Group shall pay to the Company a total
amount of Rs. __________________/- (Rupees
_________________Only) to comprise share capital and premium
of the total amount of Rs.__________/- (Rupees ______________Only) an amount of
approximately Rs._________/- (Rupees _____________Only) being the equivalent of
U.S. $ ____________/- has already been received by the Company by way of
Foreign Inward Remittance received from XYZ. These amounts already received
have been treated by the Company as advances against share capital and premium.
The balance amount of Rs____________/- (Rupees ______________ Lakh Only)
approximately is to be paid in the following manner.
a. Rs.__________
/- (Rs______________ Only) by (date)
b. Rs.__________
/- (Rupees ___________Only) by --/--/---
c. Rs.
__________/- (Rupees_________ __Only) by --/--/---.
d. Rs.
_________/- (Rupees ___________Only) by --/--/---
e. Rs.
_________/- (Rupees ___________Only) by --/--/---
f. Rs.
_________/- (Rupees ___________ Only) by --/--/---
g. The
balance to make up Rs_____________/- (Rupees ______ only) by (date)
6. It
has been mutually agreed that the Company shall not further dilute its equity
or avail of finance from any other person nor shall it agree to allot any
shares to any other person without the consent of XYZ. It has been further
agreed that ABC Group shall not sell all or any of the shares allotted to them
without the consent of XYZ Group until such time as there is an IPO or a second
round of financing by mutual agreement. In the event of a second round of
financing becoming necessary, it shall be done by mutual Agreement between the
parties hereto and it is expected that an Initial Public Offering (IPO) will
also be made and that shares will be issued to the public. The parties have
agreed that for any future rounds of financing as mutually decided there will
be a proportionate dilution of shares.
7. XYZ
shall have the right to be a Director of the Company and ABC shall cause XYZ to
be appointed to the Board of Directors whenever XYZ desires.
8. ABC
shall cause this Memorandum of Understanding to be taken on the records of the
Company and the Company will also agree to abide by all the terms and
conditions hereof.
9. The
parties hereto record that this Memorandum of Understanding reflects the broad
terms of their Agreement and they agree to execute and sign a detailed
Shareholders Agreement and such further Agreements in writing as may be
required from time to time to give effect to the development promotion and
financing of the portal in the best possible way.
IN WITNESS WHEREOF the parties
hereto have hereunto set and subscribed their respective hands the day and year
first hereinabove written.
SIGNED AND DELIVERED by the
within-named
MR. ABC
In the presence of
__________________
SIGNED AND DELIVERED by the
within-named MR.
XYZ
In the presence
of________________________
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