Agreement with Foreign Company Having Equal Participation
| Updated at | June 2010 |
This AGREEMENT is made the day of,
BETWEEN
(1) LMN, a company organised in ___________ under the laws of ____________and having its principal office, at ________________ (hereinafter referred to as "C" which expression shall unless repugnant to the context or meaning thereof include its successors and permitted assigns) of the One Part; and
(2) XYZ, a company organised and existing under the laws of _______ and having its registered office at ______________ (hereinafter referred to as "D" which expression shall unless repugnant to the context or meaning thereof include its successors and permitted assigns) of the Other Part;
(The expressions "LMN" and "XYZ" are collectively referred to as the "Parties" and any of them singly as "Party").
WHEREAS
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LMN is, inter alia, engaged in the business of ______________________.
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XYZ is, inter alia, engaged in the business of _________________.
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LMN and XYZ propose entering into a joint venture to carry on the business of ______________________ through the medium of a joint venture company ("COMPANY").
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The Company shall be legally formed in a manner consistent with the applicable provisions of the Indian Companies Act and shall be equally-owned by LMN and XYZ.
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Following the above, the Parties now wish to set out their definitive and binding agreement for their participation in and to determine their relationship with each other as Shareholders and certain aspects of the affairs of and their dealings with the Company.
NOW IT IS HEREBY AGREED as follows:-
ARTICLE - I: DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the following expression shall have the meaning hereinafter assigned to them:-
"Act" means the Indian Companies Act, 1956 as amended from time to time pursuant to which the Company will be incorporated and shall include any statutory modifications or re-enactment of laws governing companies in India.
"Agreement" means this Agreement and all Appendices hereto and amendments thereto made specifically in writing and signed by the authorised representatives of the Parties in accordance with the provisions contained in this behalf hereunder.
"Agreed Proportions" means the proportions in which the percentages bear in the Share Capital of the Company to be subscribed by the Parties in accordance with Clause 4.2.
"Affiliate" means in relation to LMN, a person approved in writing by XYZ, and in relation to XYZ, a person approved in writing by LMN.
"Annual Budget" means the annual budget for each fiscal year of the Company to be prepared pursuant to and in accordance with Article II.
"Associates" means in respect of any Party, its Controlled Nominees or holding company or subsidiaries.
"Auditors" means the independent statutory auditors of the Company for the time being.
"Board" means Board of Directors of the Company as constituted from time to time.
"Business" means the business of the Company referred to in Article III.
"Business Plan" means the rolling three year business plans of the Company to be prepared pursuant to Article XI.
"CEO" means the Chief Executive Officer of the Company by whatever name called whether or not a member of the Board.
"CFO" means the Chief Financial Officer of the Company by whatever name called whether or not a member of the Board.
"Controlled Nominee" means (1) in relation to LMN, any corporation in which it beneficially owns and controls directly or through any one or more of its wholly owned subsidiaries more than half of the voting power of such corporation or is in control of its management, and (2) in relation to XYZ, a corporation in which it, directly or indirectly through or together with its Associates, nominees or subsidiaries jointly or severally holds or controls not less than half of the voting power of such corporation or is directly or indirectly in control of the board of directors of such corporation or is in control of its management and shall include bodies corporate listed in Appendix 'A' hereto.
"Confidential Information" means any data or information, oral or written, in any medium that relates to any Party''s (or if any Party is bound to protect the confidentiality of any third party''s information, such third party''s) past, present, or future research, development, business activities, including any unannounced product(s) and service(s), and including any information relating to services, developments, inventions, processes, plans, documentation, financial information, customer and distributor lists, forecasts and projections Confidential and Information shall also include the terms of this Agreement.
"Debt' means all forms of long term borrowings (i.e. borrowings maturing after one year) from and credit extended by sources other than the Shareholders for a period exceeding one year.
"Directors" means the directors of the Company for the time being and shall include their duly appointed alternates.
"Effective Date" means ____________
"Encumbrance" means and includes any interest or equity of any person including without prejudice to the generality of the foregoing, any right to acquire, option or right of pre-emption or any mortgage, charge, pledge, lien or assignment, or any other encumbrances, priority or security interest or arrangement of whatsoever nature over or in the relevant property.
"Equity Capital" means the equity share capital of the Company to be issued and paid up.
"Executive Committee" means the committee of the Board appointed pursuant to Clause 6.11.
"Group" means in relation to a Party and to the Company, their respective Associates.
"Lease Agreement" means the agreement between LMN or XYZ and the Company to provide the land, building, equipment and/or utilities to the Company under a lease arrangement on payment of rentals.
"Memorandum and Articles of Association" means the Memorandum and Articles of Association of the Company, and references to "Memorandum of Association" and "Articles of Association" shall mean the Memorandum of Association and Articles of Association respectively of the Company.
"Plant" means the manufacturing facility of the Company whether owned by itself or on lease.
"Product" means --------------------------------.
"Project" means the Business to be established pursuant hereto and to be carried on by and through the Company.
"Proprietary Information" means all (a) copyrights, copyright registrations and applications, trademark rights including registrations and applications, patent rights, trade names, mask work rights, trade secrets, know-how, trade dress, moral rights, algorithms, rights, goodwill and other intellectual property rights, and improvements, renewals, and extensions thereof, regardless of wherever such rights arise and (b) all derivatives of the foregoing".
"Rupees" and the sign "Rs." means the lawful currency of the Republic of India.
"Secretary" means the person appointed by the Board holding the office of the secretary of the Company for the time being.
"Shareholder" means persons who are registered holders of any Shares for the time being of the Company and shall include the Parties for so long as they hold Shares.
"Shareholders' Loans" means the loans for the time being extended by a Shareholder to the Company on terms set out in a written loan agreement between the Shareholder as lender and the Company as borrower, and such other borrowings as may be agreed between the Parties from time to time including by means of the issuance of debentures, bonds, notes, or otherwise of the Company.
"Shares" means equity shares of par value of Rs.1O/- each in the issued, subscribed and paid-up Equity Capital of the Company.
"Total Equity" means the total Equity Capital, agreed by the Parties to be issued by the Company including convertible bonds, and convertible debentures (whether fully or partially) for the time being of the Company.
"Transferee" means any person to whom or which Shares are transferred in a manner as setout in this Agreement and who or which, as a condition to the permitted transfer thereof, agrees in writing to be bound as a Shareholder.
1.2 References to Articles, Clauses, Recitals, Appendices and Schedules are to articles, clauses, recitals, appendices and schedules of and to this Agreement.
1.3 Any reference to a statutory provision shall include such provision and any regulations made in pursuance thereof as from time to time modified or re-enacted whether before or after the date of this Agreement so far as such modification or re-enactment applied or is capable of applying to any transactions entered into prior to this Agreement and (so far as liability thereunder may exist or can arise) shall include also any past statutory provisions or regulations (as from time to time modified or re-enacted) which such provisions or regulations have directly or indirectly replaced.
1.4 Words importing the singular include the plural, words importing any gender include every gender, and words importing persons include bodies corporate and unincorporate and (in each case) vice versa.
1.5 Words and phrases the definitions of which are contained or referred to in the Companies Act shall be construed as having the meaning thereby attributed to them but excluding any statutory modification thereof not in force on the date of this Agreement.
1.6 Words and phrases the definitions of which are contained or referred to in the Articles of Association shall be construed as having the meaning thereby attributed to them.
1.7 Unless otherwise prohibited by law, if the definition of any words or phrases provided herein conflicts with the definition of said words or phrases contained in the Companies Act or the Articles of Association, the definition provided herein shall control.
1.8 Headings contained in this Agreement are for convenience of reference only and shall not govern the construction or interpretation of this Agreement including any Article, Clause, Recital, Appendix or Schedule...
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