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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