WHEREAS DELCO is carrying on business as manufacturer of, dealer in and exporter of electronic goods and has considerable technical knowledge regarding the manufacture of electronic products and information about the marketing possibilities of such products.
AND WHEREAS JAPCO is also carrying on business as manufacturer and exporter of electronic goods and has considerable know-how in this regard and intends to expand its business in collaboration with DELCO.
AND WHEREAS the parties have agreed to procure formation and incorporation in West Bengal of a company with the main object of manufacturing electronic goods for exports.
AND WHEREAS the parties have agreed to assist each other and the said company to be incorporated by making available to the new company latest plant, machinery and the technical know-how, technical services, technical assistance and arranging for buy-back and exporting the products of the new company.
AND WHEREAS the parties have agreed that this collaboration will be subject to obtaining all necessary approvals, licences, permissions, authorisations and consent of the concerned authorities and that the said consents, approval or authorisations will be applied for and obtained by both parties jointly and/or severally assisted by the other.
Now this agreement witnesseth and it is hereby agreed by and between the parties hereto as follows:
2. The JOINT CO. will have as its principal objects the manufacturing of all kinds of electronic products, machinery, consumer goods and all sorts of articles for sale in the domestic market as also export to other countries.
3. The JOINT CO. would have an authorised share capital of Rs. 1,000 crores divided into 100 crores Equity shares of Rs. 10 each. The initial issued, subscribed and paid-up capital would be Rs. 800 crores.
4. The Memorandum of Association and Articles of Association of the JOINT CO. proposed to be registered with the Registrar of Companies have to be approved by the Board of Directors of DELCO and JAPCO.
5. DELCO, Financial Institutions and members of the public shall be offered for subscription 51% of shares proposed to be issued for subscription by the JOINT CO.
6. JAPCO shall subscribe to and pay for the shares of JOINT CO. to the extent of 49% of the proposed issue of shares and pay for the same either in cash or kind.
7. The JOINT CO. shall have directors not less than five and not more than eleven.
8. DELCO and JAPCO shall exercise their voting rights at the General Meetings or Board Meetings in accordance with the terms and spirit of these presents.
13. DELCO agrees to procure suitable land for the purpose of settingup of a factory for the JOINT CO. DELCO agrees to take up the work of construction of the factory premises in accordance with the plan and design to be prepared by the parties herein jointly.
14. The cost of land and the cost of construction will be reimbursed by the JOINT CO. either by payment of cash or by the allotment of shares.
16. JAPCO guarantees that the plant proposed to be set up by import of plant machinery and other articles from JAPCO would be capable of producing electronic goods in the required quantities and of the world standard of quality.
(d) all technical information and assistance as shall be necessary to keep the JOINT CO. abreast with the latest advancement in technology and utilise the same in its manufacture, sale and export of electronic goods;
(f) qualified personnel for assembly and installation of plant and equipment supplied by JAPCO and JOINT CO. Such qualified personnel shall be responsible for start up production and continue to remain with the JOINT CO. till the commercial production starts;
18. JAPCO shall assign to the JOINT CO. all the JAPCO’s right, title and interest in all its present and future Patents, Trade Marks and Trade Names in relation to electronic goods.
19. JAPCO shall grant to JOINT CO. the right of an exclusive Licensee for the whole world for all Patents in relation to electronic goods for their production, manufacture, use, sale and export anywhere in the world.
20. JAPCO shall assign its right, title and interest in all licences held by it for production, manufacture, use and export of electronic goods.
21. The right, title and interest in or to the use of technical data which JAPCO at any point of time is entitled to use shall be assigned to JOINT CO. for production, sale, marketing the export of electronic goods.
22. JAPCO agrees to execute all such documents as JOINT CO. may require to give effect, perfect, confirm, record assignments and transfers to the JOINT CO. all the JAPCO’s Patents, Licences, Sub-licences and technical data.
23. JAPCO will be responsible for maintaining standards and quality of the products of JOINT CO. and for making available all technical know-how and other assistance to JOINT CO. for making the venture a success.
26. JAPCO will purchase from JOINT CO. at least 80% of its products on cost plus 30% profit basis and assist in exporting the balance quantity of products of the JOINT CO. to the World market.
28. It is agreed and understood that this agreement shall be subject to prior approvals being obtained by delco from the authorities concerned in India, japco from the appropriate authorities in India and Japan and compliance of the provisions of law by joint co. If the requisite approvals cannot be obtained within 36 months from the execution hereof then, unless the parties otherwise agree, this Agreement shall stand terminated.
30. The parties hereby agree that this agreement as also the rights and obligations of the parties herein and in the joint co. shall be governed by the laws of India.
