SHAREHOLDERS
AGREEMENT
BETWEEN
____________________
AND
RE:
Shares of ----------------------Pvt. Ltd.
THIS
AGREEMENT made the ____ day of ______, 2003 BETWEEN MR_B residing at
_____________________ (hereinafter referred to as "A") (which
expression shall, unless repugnant to the context or meaning hereof, mean and
include his heirs, executors, administrators and assigns) of the First Part.
And
MR.
B residing at __________________________(hereinafter referred to as
"B") (which expression shall, unless repugnant to the context or
meaning hereof, mean and include his heirs executors, administrators and assigns)
of the Second Part.
And
________________________
(P) LTD., a Company incorporated under the Companies Act, 1956 and having its
registered office at _____________________ herein represented by its
___________ (hereinafter referred to as "XYZ") which expression
shall, unless repugnant to the context or meaning hereof, include its
successors and assigns) of the Third Part;
WHEREAS:
A. A and B hereto have
agreed to jointly manage a company in India named "XYZ Pvt Ltd ";
B. A and B have agreed
to become Equity Partners by investing in the shares of the Company subject to
the condition that they shall enter into a Shareholders Agreement in terms of
these presents;
C. The Company "XYZ
PVT. LTD. " has been requested to, and has agreed to, join in the
execution of these presents and to take this Agreement on record so that it is
aware of the rights and obligations of A AND B, the parties hereto and ensure
that they comply with the same;
D. The parties hereto
are desirous of recording the terms and conditions of their Agreement in
writing;
NOW
IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:-
1.
a. A and B shall jointly
invest in the Company which is an existing company limited by shares under the
Companies Act, 1956 and known as "XYZ PVT LTD".
b. The registered office
of the Company shall be situate at ________________, or at such other places as
may be mutually agreed upon between the parties in writing.
c. The Company shall
carry on the business of running and managing restaurants and (Description of
the business and complete address), either by itself or through other agencies
or company industries and may carry on any other business as may be decided by
B hereto and shall ensure that no other business activity is undertaken by the
Company at any time without the consent of A hereto.
2. The authorised share
capital of the Company is Rs.________/- (Rupees ___________________ only)
consisting of ______________ (________) equity shares of Rs.10/- (Rupees ten)
each.
3. The subscription by A
hereto to the aforesaid authorised share capital of the Company shall be
1,00,000 (One lakh) equity shares of Rs.10/- (Rupees ten only) and the
subscription by B to the aforesaid authorised share capital of the Company
shall be 1,00,000 (One lakh) equity shares of Rs.10/-(Rupees ten only).
4. There shall be no
further issue of capital without the consent of both the parties hereto, and
unless otherwise agreed upon in writing further investment shall be as mutually
decided by both parties.
5.
a. The Board of
Directors of the Company shall consist of A and B
b. A shall have the
right to nominate two (2) Additional Directors onto the Board and B shall have
the right to nominate three or more Additional Directors on the Board. Both
parties shall be entitled at any time to remove any of the representatives on
the Board by written notice to the other party and to appoint another or
other/s in their place.
c. The day to day
management of the Company shall be looked after by a Managing Director to be
appointed with the consent of B hereto. Any major acquisition of property,
substantial expansion of business activities or diversification or matters of
policy shall be with the prior consent of B.
d. It is agreed as
between the parties hereto that the position of Chairperson of the Company
shall be held by B or a nominee of B. The Chairman of the Board shall also be
the Chairman of all general meetings of the Company.
6. A and B hereto
jointly and severally shall vote and act as members of the Company and with
respect to the shares of the Company held by them, so as to ensure that
Directors of the Company are at all times appointed and maintained in office in
conformity with the provisions of this Agreement. If at any time the provisions
of this Agreement are not fully complied with, A and B jointly and severally
agree to promptly take all necessary steps to ensure that the provisions of
this Agreement hereof are fully implemented in letter and spirit.
7.
a. The Auditors of the
Company shall be M/s.______________________.
b. The Auditors of the
Company shall not be changed without the prior written consent of both A and B.
8. Any sale or transfer
of shares in the Company by either party shall be as provided in Clause 9. If
at any time during the continuance of this Agreement either A or B, desire to
sell or transfer all or any of their respective shares held by them in the
Company, they shall do so strictly in accordance with the provisions
hereinafter written.
9. If either A or B
desires at any time to sell the whole or part of their shares in the Company,
he shall first offer such shares in writing to the other. If the other does not
accept in writing the offer within 15 days of receipt of the offer, the first
party shall then be at liberty within 30 days thereafter to sell the shares so
offered to any other persons of its choice at the same price and on the same
terms and conditions as contained in its written offer to the other party
hereto in the first instance, failing which the procedure contained in this
sub-clause will have to be repeated by a party desiring to sell his shares.
10. B will bring in
further working capital to run an F & B Unit(s) at (Address of registered
office). __________ Bank had advanced loans of about Rs. 1,10,00,000/-(Rupees
One Crore Ten Lakhs Only) to XYZ which loans have to be repaid by them. B will
be bringing further moneys upto Rs. (Rupees Only) to repay the loan. The
Balance Rs. ____/- has been secured with the collateral security provided B.
XYZ have entered into a Management and Royalty Agreement with ------------- (P)
Ltd., for the operation and management of the F & B unit(s) of XYZ and are
entitled to receive their share of profit. A and B are equally entitled to this
share of profit being equal share holders of XYZ. It is hereby agreed that A
shall not be entitled to a percentage of the profit which shall not exceed Rs.
------/-(Rupees ________________ Only) per month from XYZ out of his share of
profit subject to the terms contained herein and/or in any other document
executed by him on behalf of XYZ. The balance money attributable to A shall be
utilized to repay the loans and interest outstanding to ________ Bank, and the
amount of Rs. ________ /- brought in by B and interest thereon, and towards the
working capital brought in by B and interest thereon and any other loans of the
XYZ. This arrangement will continue till the entire sums (liabilities) together
with the interest thereon have been repaid. However B will be entitled to
withdraw the profit attributable to his share.
11. B will be entitled to
interest at the rate of 12% per annum on the sums brought in by him or his
Associates / concerns / businesses.
12. A and B agree and
undertake not to disclose or divulge directly or indirectly to any third party
any trade or business secret or other secret or confidential information
pertaining to the business, affairs or transactions of each other or of the
Company or of their clients or customers, that may have been disclosed,
imparted to or acquired by either of them from the other or from the Company.
13. A and B jointly and
severally undertake:-
a. that they shall
ensure that they, their representatives, proxies and agents representing them
at general meetings of the shareholders of the Company shall at all times
exercise their votes in such manner so as to comply with, and to fully and
effectually implement, the provisions of this Agreement.
b. That if any
resolution is proposed contrary to the terms of this Agreement, the parties,
their representatives, proxies and agents representing them shall vote against
it. If for any reason such a resolution is passed, the parties will, if
necessary, join together and convene an extraordinary, general meeting of the
Company in pursuance of section 169 of the Companies Act, 1956 for implementing
the terms of this Agreement.
14. A and B shall jointly
and severally procure and/or ensure that the Director or Directors of its
choice on the board of the Company shall at all times fully and effectually
implement and comply with (including by exercise of voting rights at meetings
of the Board or resolutions by circulation and on resolutions passed at a
meeting of any Companies of the Directors) the provisions of this Agreement.
15. If either A or B
shall commit a breach of any of the terms or provisions of this Agreement and
shall fail to rectify such breach within Sixty (60) days from the receipt of
written notice from the party complaining of the breach, then the latter shall
be entitled, without prejudice to its other rights and remedies under this
Agreement or at law, to terminate the Agreement recorded herein by written
notice.
16. No modification of
alteration of this Agreement or any of its terms or provisions shall be valid
or binding on A and/or B unless made in writing duly signed by both.
17. This Agreement is
personal to A and B and shall not be transferred or assigned in whole or in
part by either party without the prior written consent of the other.
18. If any dispute or
difference shall at any time arise between A and B as to any terms, provisions
or matters contained herein on as to their respective rights, claims, duties or
liabilities hereunder or otherwise, howsoever in relation to or arising out of
or concerning this Agreement, such dispute or difference shall be referred to
the arbitration. The venue of such arbitration shall be in Bangalore unless
otherwise agreed in writing. Such arbitration shall be held under and in
accordance with the provisions of the Arbitration and Conciliation Act, 1996.
19. This Agreement
represents the entire agreement between the parties hereto on the subject
matter hereof and cancels and supersedes all prior agreements, arrangements or
understandings, if any, whether oral or in writing, between the parties hereto
on the subject matter hereof.
IN
WITNESS WHEREOF the parties hereto have executed these presents the day and
year first hereinabove written.
SIGNED
AND DELIVERD by )
MR.
A)
in
the presence of )
SIGNED
AND DELIVERD by )
MR.B)
in
the presence of )
SIGNED
AND DELIVERD )
for
and on behalf of
XYZ
)
by
its SHAREHOLDERS AND )
AUTHORISED
DIRECTORS )
MR.
A )
MR.
B)
in
the presence of )
