MEMORANDUM
OF UNDERSTANDINGABCNDXYZ.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 writingNOW
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_________) 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. $ ____________/- (One ________________Only) 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
______________ Lakhs Only) approximately is to be paid in the following manner.a. Rs.__________ /-
(Rs______________ Only) by --/---/---.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 --/--/---.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..................................)