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Financial Collaboration Agreement

Document Cited in Related
Updated atMarch 2010

This agreement is made this...day of.................... 20.....

BETWEEN

_________ a Company incorporated (hereinafter called " ------", which expression shall unless repugnant to the context or meaning thereof, include its permitted assigns and successors), of the ONE PARTY.

AND

Mr..................... residents of.................... (hereinafter collectively called " ___", which expression shall, unless repugnant to the context and meaning thereof include their assigns permitted and successors), of the OTHER PART,

WHEREAS _____ and......................... Affiliate of ____), with place of registry in......................... (address), and having an office at......................... (address), (hereinafter referred to as......................... Affiliate of ____) which expression shall unless repugnant to the context thereof include its assigns and successors), have under a Memorandum of Understanding dated.................., 20.... agreed to set up a joint venture private limited company in India (hereinafter called "the company") for manufacture and marketing of garment and finishing equipment and provision of associated and incidental services;

AND, WHEREAS......................... (Affiliate of ______), is engaged in the manufacture of garment and finishing equipment and is in possession of extensive know-how and technical information concerning the manufacture of such products;

AND, WHEREAS, _____have requested......................... (name of ____ Affiliate), to furnish know-how and technical assistance to the Company.

AND, WHEREAS,......................... (name of _______ Affiliate), is willing to provide the Company such know-how and assistance for the manufacture of the aforesaid products;

NOW, it is hereby mutually agreed and declared as follows:

Article 1: Definitions

1.1 " Effective Date" shall mean the date on which this Government shall commence in accordance with Article 2, hereunder;

1.2 " Shares" shall mean equity shares of the Company to be subscribed for by the Parties hereto;

1.3 " Know-how" shall mean the technical information as defined in the technical collaboration agreement between......................... (name of ____''s Affiliate) and the Company;

1.4 " Affiliated Company" shall mean any body corporate which is a wholly owned subsidiary of any party hereto or the holding Company wholly owning such part or a wholly owned subsidiary of such holding Company;

1.5 " Date of Incorporation" shall mean the date on which the certificate of incorporation of the Company is granted to it by the Registrar of Companies at ................... (name of the place).

Article 2. Commencement and Term

2.1 This Agreement shall commence on the date on which approval is obtained from the Government of India and/or the Reserve bank of India to the investment in foreign currency by ______ in the shares of the Company to the extent and in the manner provided herein;

2.2 This agreement shall remain in force unless terminated earlier in accordance with the provisions herein.

Article 3: Promotion of the Company

As soon as, possible after the effective date, the parties hereto agree to cause the Company to be incorporated and registered under the Companies Act, 1956 with the principal object of manufacturing and marketing of certain garment and finishing equipment, more particularly described in Annexure. I.

Article 4: Structure of the Company

4.1 The Company shall initially be formed as a private limited company. The registered office of the Company shall be located in......................(name of the place). The initial subscribed and paid up capital of the Company shall be Rs. .... (Rupees .....) and its authorised capital shall be Rs..... (Rupees....);

4.2 Subject to the provisions hereinafter appearing _____ and _______ shall subscribe and participate in the capital of the Company at all times in the following proportions:

___: 50%

____ 50%

All further issues of capital by the company shall be subscribed and paid for by the parties hereto in the aforesaid proportions. The parties agree to maintain the above proportions at all times, except as hereinafter provided or unless otherwise agreed to in writing by the Parties.

4.3 The name of the company shall be......................... (name of the joint venture company) or such other name as is acceptable to the Registrar of Companies which shall be mutually agreed. However, in the event that the participation of _______ in the equity capital of the Company falls below the percentage set out in Article 4.2 above, the Parties hereto agree to take such steps as are necessary to discontinue the use of the word " ______" in the name of the Company and to accordingly change the name of the company. The memorandum and articles of association of the Company shall be in form and substance as, mutually agreed upon and approved by ____ and ____.

4.4 All measures and expenses required for incorporating the Company shall be undertaken by _____. These expenses shall be chargeable to the Company''s account after the company is formed.

Article 5: Board of Directors of the Company

To the extent legally permissible, the articles of association of the Company shall at all times contain provisions regulating the following matters and independently of the Articles of Association, the parties hereto solemnly declare and undertake that they shall at all times ensure that:

5.1 The number of Directors of the Company shall (initially)... be ____(and during the life of the company be ____), it being agreed that the number of Directors shall always be an even number and that the Directors will be appointed by ___ and ______ in equal number and the parties hereto shall vote and procure accordingly.

5.2 The Board shall appoint as alternate Director for any Director during his absence for a period of not less than three months from India such person as is nominated or approved in writing by the party hereto represented by the original Director in whose place he is appointed.

5.3 Unless otherwise agreed to by the Directors designated and appointed by the parties hereto or their alternates, written notice of every meeting of the Board shall be received by every Director atleast 28 days in advance...

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