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PHYSICAL INCUBATION SERVICES AGREEMENT
This Physical Incubation Services Agreement (​“Agreement”​) is executed at ​________ on this
_____ day of ​_______________ and is applicable with effect from ​______________ (​“Effective
Date”​)
BETWEEN:
INDIAN TELECOM INNOVATION HUB-TECHNOLOGY BUSINESS INCUBATOR​, a Society under
the Travancore – Cochin Literary Scientific and Charitable Societies Registration Act 12 of 1955,
and having its Registered Office at 4th floor, Bhageeratha Square, Banerji Road, Kacheripady,
Ernakulam North, Kochi - 682018 (hereinafter referred to as “​ITIH –TBI​”, which expression shall
unless repugnant to the context or meaning thereof mean and include its successors and
assigns) of the First Part;
MOBME WIRELESS SOLUTIONS LIMITED, ​an unlisted public company incorporated under the
aegis of the Companies Act, 1956, having its registered office at 41/3197, Fourth Floor,
Bhageeratha Square, Near Town Hall, Kacherippady, Cochin – 682018 (hereinafter referred to
as the “​MobME​” which expression shall, unless repugnant to the context or meaning thereof,
mean and include its successors and assigns) of the Second Part;
AND
M/s _______________________________, a partnership firm / limited liability partnership
registered under the Indian Partnership Act, 1932 at present carrying on the business of [​insert
main / current business of the partnership​] and having its registered office at
_________________________________ represented herein by its Partners:
_____________________, aged ___ yrs., son / wife / daughter of ______________________,
residing at _____________________ and Mr. / Ms. ____________ ____________________,
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aged _______ yrs., son / wife / daughter of _____________________, residing at
____________________________
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(hereinafter referred to as the “​Start Up​”, which expression shall, unless repugnant to the
context or meaning thereof, mean and include his/her/its/their successors and assigns) of the
Third Part.
ITIH – TBI and MobME are hereinafter collectively referred to as “​Service Provider​”. The Service
Provider and the Start Up are hereinafter individually referred to as “​Party​” and collectively as
“​Parties​”.
WHEREAS:
A. The Service Provider are, in collaboration with each other, operating a technology
business incubator at KINFRA Hi Tech Park, Opposite to Co-operative Medical College,
HMT Colony P.O, Kalamassery, Cochin – 683503 (“​Startup Village​”).
B. The Start Up is desirous of availing the Incubation Services for the duration of the
Incubation Period to help it develop a commercially viable business involving [​details of
the proposed business to be described here​] (“​Business​”) and has requested the Service
Provider to provide the same.
C. The Service Provider has agreed to provide the Incubation Services to the Start Up and
accordingly, the Parties have agreed to enter into this Agreement for recording the
terms on which the said Incubation Services will be provided and availed, the
consideration payable for the same and other terms and conditions incidental and
ancillary to the said purpose.
NOW THEREFORE, ​for and in consideration of the foregoing, and the representations,
warranties, and conditions set forth below, the Parties hereto, intending to be legally bound,
hereby agree as follows:
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1. DEFINITIONS AND INTERPRETATION
1.1 Definition
In this Agreement, including in the Recitals, and unless the context requires otherwise, the
following words and expressions shall have the following meanings:
(a) “Agreement” means this Agreement together with its Schedules, as the same may be
amended, modified and/or supplemented from time to time in writing in accordance
with the terms and conditions hereof​;
(b) “​Authorized Representative​” means any person duly authorized as such by each Party
for any purpose in connection with this Agreement;
(c) “Company” ​shall mean the company incorporated by the Start Up pursuant to Section
4.1 of this Agreement. For the avoidance of doubt, all references to the “Startup” in
this Agreement shall also mean and include a reference to the Company after the
Company signs a deed of adherence in accordance with Section 4.2 below;
(d) “Fully Diluted Basis” means the calculation of the value of the Start Up on the
assumption that all outstanding convertible securities, stock options and outstanding
commitments by the Start Up to issue equity shares at a future date, whether or not
due to the occurrence of an event or otherwise, have been so converted, exercised or
exchanged (or issued, as the case may be) and Fully Diluted shall be interpreted
accordingly​;
(e) “Gross Contract Revenue” means the total sale price and/or license fees and/or
consideration paid and/or to be payable to the Start Up by its Potential Customers;
(f) “Government” shall include the President of India, the Government of India, the
Governor and the Government of any State in India, any Ministry or Department of
the same and any local or other authority exercising powers conferred by Law;
(g) “​Incubation Period​” shall mean a period of ​6 months from the Effective Date of this
Agreement, which can be extended at the sole discretion of the Service Provider;
(h) “​Incubation Services​” means the physical incubation services as set forth in Section 2
hereunder and more fully set out in Schedule A and Schedule B of this Agreement;
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(i) “Key Employees” means the promoters and employees of the Start Up as mentioned
in Schedule C hereto;
(j) “Law” includes all statutes, enactments, Acts of Legislature or Parliament, laws,
ordinances, rules, bye-laws, regulations, notifications, guidelines, policies, directions,
directives and orders of any Government, Statutory Authority, Tribunal, Board, Court
or recognized Stock Exchange and if applicable, international treaties and regulations
as amended from time to time;
(k) “Losses” includes all losses, claims, costs, and damages (whether direct, indirect,
general, special, absolute, accrued, conditional or otherwise and whether or not
resulting from third party claims), including interests and penalties with respect
thereto and out-of-pocket expenses, including reasonable attorneys' and accountants'
fees and disbursements;
(l) “Monitoring Committee”​shall have the meaning ascribed to it in Section 5;
(m) “Potential Customers” are those customers introduced / referred by the Service
Provider to the Start Up as referred to in Section 3.1(a);
(n) “Potential Investors” are those investors and/or financiers introduced / referred by
the Service Providers to the Start Up as referred to in Section 3.1(c);
(o) “Premises” ​shall mean facilities in the Startup Village provided by the Service Provider
or its associates specifically to the Start Up for its use as set out in Schedule A of this
Agreement;
(p) “Pre-money Valuation” ​means the value of the Start Up arrived at immediately prior
to the infusion of any investment into the Start Up by Investors by calculating the
same on a Fully Diluted Basis;
(q) “Shareholders Agreement” shall refer to the shareholders agreement to be entered
into by all the shareholders of the Start Up with the Service Provider (or its nominees).
(r) “Startup Incubation Area” refers to the seats and work space, including seats, desk
attached and electric sockets, allotted to the Start Up in the Premises in pursuance of
this Agreement as set out in Schedule A;
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2 SCOPE OF SERVICES
2.1 For the due consideration payable by the Start Up as set forth in Section 3 of this
Agreement, the Service Provider shall provide physical incubation services and such other
services for the duration of the Incubation Period aimed to help the Start Up grow and
develop its Business, as more fully set out in Schedule A and Schedule B of this Agreement
(hereinafter referred to as the “​Incubation Services​”).
2.2 During the Incubation Period, the Start Up shall have the right to access the Premises as set
out in Schedule A of this Agreement. The aforesaid access shall be subject to compliance
with standard security measures and other reasonable precautionary measures prescribed
by the Service Provider.
2.3 For the avoidance of doubt, it is hereby stated that the Service Provider or its associates
enjoy legal ownership and/or possession of the Premises. Further, the Service Provider or
its associates shall have absolute rights to control access to the Premises.
2.4 For the avoidance of doubt, it is hereby stated that the access to Premises provided as part
of the Incubation Services does not constitute an agreement of lease. The right of the Start
Up is limited to the use of the Premises during the Incubation Period only while it is
receiving Incubation Services from the Service Provider.
2.5 Start Up shall allow persons and vehicles entering and leaving Service Provider’s campus to
be examined by the staff of Service Provider or any agency authorized by Service Provider
as part of the Service Provider’s security measures.
2.6 The Start Up shall be given access to the Start Up Incubation Area consisting of a specified
number of seats / work stations as specified in Schedule A. It is clarified and agreed that the
Service Provider may, at their absolute discretion, from time to time reduce the number of
seats and work stations allotted to the Start Up or re-allocate the seats and work stations
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already allotted to the Start Up to someone else and allocate other seats and work stations
to the Start Up.
2.7 If the Start Up has been availing any incubation services from the Service Provider prior to
the Effective Date of this Agreement and is executing this Agreement to avail the Incubation
Services under this Agreement, then the following conditions shall also apply:
(a) There shall not be any refund of any payments, if any, made by the Start Up prior
to the Effective Date; and
(b) All agreements, if any, entered into between the Start Up and the Service
Provider shall stand terminated and inoperative as of the Effective Date of this
Agreement.
3 CONSIDERATION
3.1 As consideration for the Incubation Services provided by the Service Provider as per this
Agreement, the Start Up shall pay and provide the Service Provider with the following:
a) The Service Provider may introduce the Start Up to Potential Customers who may be
interested to buy and avail Start Up’s products and services. If the Start Up generates
revenues from these Potential Customers, the Start Up agrees to pay to the Service
Provider, a payment of Five percent (5%) of the Gross Contract Revenue generated from
each Potential Customer for the first Three (3) years from the date of first sale and/or
license of products and/or rendering of services to the Potential Customers. Such
amounts shall be payable by the Start Up to the Service Provider within Twenty (20) days
from the date of receipt of any amounts / consideration whatsoever by the Start Up (or its
nominees) from any Potential Customer.
b) ​In the event of any investment whatsoever by any person / entity (“​Investors​”) into the
Start Up at any time after the Effective Date hereof, the Service Provider shall have the
right, at their sole and absolute discretion, to co-invest along with such Investors up to a
maximum of Thirty percent (30%) of the total investment proposed to be raised by the
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Start Up from such Investors at the given point of time till the Start Up reaches a
Pre-money Valuation of INR Sixty Crores (INR 60,00,00,000/-) or US Dollars Ten million
(US$ 10,000,000).
Provided however that the price at which the Service Provider shall be allotted and issued
equity shares (or such other securities as areproposed to be allotted and issued to the
other Investors for their investment) for the investment by the Service Provider shall be
calculated based on a discount of Thirty percent (30%) of the Pre-money Valuation, i.e.
the price at which the Service Provider shall be issued and allotted equity shares (or such
other securities) shall be at a Thirty percent (30%) discount to the price per share / other
security at which such shares / other securities are to be allotted and issued to the
Investors. The Service Provider shall have the absolute right to transfer / assign / novate
in whole (or in part), and in one or multiple stages, their right to investment in the Start
Up and/or the shares / other securities that may be held by them in the Start Up from
time to time to any other persons or entities as they deem appropriate and the Start Up
shall do all the necessary corporate actions to facilitate and perfect the issue / transfer of
such shares / other securities to such nominee(s) of the Service Provider.
Where the Start Up incorporates a new entity outside India for similar product/ideas or
correlated activities of the Business or to raise funding for the development of products or
its Business as contemplated under this Agreement, the Service Provider shall at their
discretion have the right to co-invest, as mentioned above, as they deem fit in such
entities outside India by themselves / through their nominee(s). The terms and conditions
in relation to the Service Provider’s (and/or their nominees’) shareholding in the Start Up
shall be as set forth in a Shareholders Agreement as contemplated in Section 4.1
hereunder.
The Service Providers will have this right to co-invest at at a discount, for only one (1)
round of investment proposed to be raised by the Start Up. The Service Providers will
have the right to invest in future rounds of investment proposed to be raised by the Start
Up in proportion to its shareholding should it desire to do so, but without a discount.
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c) The Service Provider may introduce the Start Up to potential investors / financiers
(“​Potential Investors​”), who may be interested to invest in the Start Up and/or provide
financial assistance to the Start Up. If the Start Up receives any funding in any manner, by
way of equity, debt, convertible debt, grants, financial discounts, etc., from any such
Potential Investors introduced by the Service Providers, the Start Up agrees to pay the
Service Provider an arranger’s fee of Two-and-a-half percent (2.5%) of the total funding
received by the Start Up from such Potential Investors. Such amounts shall be payable by
the Start Up to the Service Provider within Twenty (20) days from the date of receipt of
any such funds / financial benefits whatsoever by the Start Up from the Potential Investor.
d) In the event that the Business, assets, Key Employees and/or the intellectual property
rights of the Start Up are wholly / partly sold, transferred or surrendered to any other
person / entity and/or the Key Employees of the Company take up employment /
engagement with any one other person / entity and the Start Up receives any
consideration whatsoever in cash / kind as mentioned above in connection with such sale,
transfer or surrender and/or the mass resignation and/or movement of the Key
Employees to employment / engagement with another person / entity, the Start Up
agrees to pay the Service Provider Twenty percent (20%) of the aggregate value of all
consideration whatsoever (including but not limited to cash, securities, options any other
properties and assets whatsoever) received (or to be received over a period of time) by
the Start Up. Such amounts shall be payable by the Start Up to the Service Provider within
Twenty (20) days from the date of receipt of any such funds / financial benefits /
consideration whatsoever in kind by the Start Up from the Potential Investor.
3.2 If and when the Start Up reaches/crosses a valuation of ​INR Sixty Crores (INR
60,00,00,000/-) or ​US Dollars Ten million (US$ 10,000,000), and it raises further
investment, the Service Provider shall also have the right to invest in the Start Up in
proportion to its shareholding should it desire to do so.
3.3 The Start Up undertakes to keep the Service Provider informed in writing every time it
proposes to bring in further investment or funds in the Start Up either from the existing
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shareholders or from third party investors at any time after the Effective Date at least
Fifteen (15) days before it enters into negotiations to raise such investments / funds. The
Start Up shall also notify the Service Provider within Ten (10) days of entering into any
sale / supply / license / services agreement with any Potential Customers.
3.4 The Service Provider (or their affiliates or nominees) shall also be entitled at their
discretion to charge the Start Up fees and expenses on a monthly basis (or such other
periodic basis as decided by the Service Provider) towards fees for the seats and
workstations used by the Start Up, for electricity, water, internet and other common
facilities and amenities used by the Start Up and/or for any specialized or hi-tech
equipment, laboratories or other facilities provided by the Service Provider to the Start Up
for its Business. The Service Provider shall also be entitled to charge the Start UP pro rata
fees for meeting the costs and expenses of arranging and organizing training, mentoring
and other activities conducted by external experts and agencies. All such amounts as
invoiced by the Service Provider (or their affiliates or nominees) shall be payable by the
Start Up within Ten (10) days of the date of the relevant invoice / bill, time being of the
essence.
3.5 For the avoidance of doubt, it is hereby agreed and confirmed by the Start Up that the
Incubation Services offered by the Service Provider under this Agreement and
introduction of Potential Customers and Potential Investors to the Start Up under this
Agreement, irrespective of the contingency of termination of this Agreement during its
term as set out in Section 6.1 (including during the Incubation Period), constitute
adequate consideration for the revenue sharing to be paid as per Section 3.1(a), the
discounted price at which shares / other securities are to be allotted and issued to the
Service Provider by the Start Up as per Section 3.1(b), the arranger’s fee to be paid as per
Section 3.1(c), the amounts to be paid as per Section 3.1(d) and the fees and expenses to
be paid / reimbursed in accordance with Section 3.4. The Start Up agrees to make prompt
payment of the amounts mentioned in Section 3.1 (a), 3.1(c), 3.1(d) and Section 3.4
above, time being of the essence.
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4 COVENANTS
4.1 The Start Up undertakes to incorporate itself as a Company under the Companies Act,
2013 and transfer the Business and all assets of the Start Up to the Company. In the event
of any proposed investment by the Service Provider pursuant to Section 3.1 above, the
Parties agree to enter into a Shareholders Agreement along with the Investors and all
other shareholders of the Start Up prior to such investment by the Service Provider in the
Start Up. The aforesaid Shareholders Agreement, which shall be congruous with this
Agreement and the interests of the Service Provider, shall mandatorily incorporate the
following:
a) Tag along rights: In the event of sale of shares in the Start Up by the shareholders to
third parties, the selling parties are obliged to ensure that the acquiring third parties
also acquire the shares held by the Service Provider/ its nominee(s) on the same
proportional conditions as the selling parties as a pre-condition to any such sale by the
shareholders. The Parties agree that the valuation of shares regarding the aforesaid
transaction shall not be prejudicial and detrimental to the reasonable commercial
interests of the Service Provider.
b) Drag along rights: In the event of collective exit to an independent third party, the
majority shareholder may require the other shareholders to mandatorily sell their
shares to the said independent third party. The sale of shares shall be on the same
proportional conditions for each shareholder as all other shareholders. The Parties
agree that the valuation of shares regarding the aforesaid transaction shall not be
prejudicial and detrimental to the reasonable commercial interests of the Service
Provider.
c) Anti-dilution clause: The shareholding percentage held by the Service Provider in the
Start Up shall not be diluted till the Start Up, as valued by an independent auditor
satisfactory to the Service Provider, reaches a pre-money valuation of US Dollars that
is higher than the valuation at which the Service Provider has invested in the Start Up,
up to a maximum pre-money valuation of USD 10 Million Dollars, except unless the
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Service Provider decides not to invest along with the Investors in terms of Section 3.1
above.
4.2 The Start Up shall, upon incorporation of the Company and within a period of Fifteen (15)
days from the date of incorporation of the Company, ensure that the Company completes
the following:- (a) signs a deed of adherence to this Agreement in a form and manner
satisfactory to the Service Provider agreeing to abide by all of the confirmations and
obligations of the Start Up and Company as mentioned in this Agreement; and (b)
furnishes to the Service Provider a certified true copy of resolutions passed by the Board
of Directors and the shareholders of the Start Up / Company ratifying the consideration
payable / to be provided as mentioned in Section 3.1 and 3.4 as being reasonable and
appropriate consideration for the Incubation Services provided by the Service Provider.
4.3 The Start Up shall avail the Incubation Services and use the Premises only during the
Incubation Period and only for the purposes set out in this Agreement. The Start Up
undertakes not to store any combustible materials or articles dangerous to life or
otherwise prohibited under Law within the area under its control​.
4.4 The Start Up shall not, without the previous written permission of the Service Provider
alter, improve or make structural alterations to the physical components of the Premises
provided by the Service Provider. Provided that the Start Up may at its own cost and
expense, with prior consent of the Service Provider, install such facilities as would be
required to carry out its activities without affecting or damaging the present building and
any structure of the building. It shall, on the expiry of the Incubation Period, hand over
physical components of Premises (including the Startup Incubation Area) in its original
condition subject to reasonable wear and tear or earlier determination thereof, dismantle
and remove all such office facilities etc. at their own costs and expenses and shall also
have the option to leave behind those items which they do not wish to remove for which
the Service Provider shall not have to pay any charges.
4.5 For the avoidance of doubt, it is clarified that the Start Up is required to completely vacate
the Premises and return possession of the Startup Incubation Area in its original condition
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subject to reasonable wear and tear at their own costs and expenses to the absolute
satisfaction of the Service Provider on the expiry of the Incubation Period, time being of
the essence. On failure to abide by this Section, the Service Provider will have the right to
claim damages from the Start up. The Start Up shall also not be entitled after expiry of the
Incubation Period, except with the prior written permission of the Service Provider, to use
the Service Provider’s address (or the address of the Premises) for communication
purposes in any form whatsoever.
4.6 The Start Up shall not transfer, assign, license, sub license or enter into any arrangement
whatsoever and shall not deal with their interests or rights in the Incubation Services or
Premises with any person/s or institutions in any manner whatsoever without the
previous written permission and consent of the Service Provider. If, in case any such
permission is once granted, the same shall be by a separate agreement as per the terms
decided by the Service Provider.
4.7 The Start Up shall be entitled to display the name and/or signboards only in the space
specified by Service Provider in the Startup Incubation Area.
4.8 The Start Up shall not cause any disturbance, annoyance, nuisance, damages to Service
Provider or the Startup Village or the peaceful functioning of other units in other premises
in Service Provider’s campus and will not create any obstructions in the common areas.
4.9 The Start Up shall indemnify the Service Provider in case the property or Premises of the
Service Provider including but not limited to the Startup Incubation Area or the property
in Startup Village, is destroyed/ disturbed/damaged, whether whole or in part, due to
actions/ inactions of the Start Up or anyone representing the Start Up, in any manner
whatsoever.
4.10 The Start Up shall not indulge in consumption, possession or storage of alcohol or any
other illegal or banned substances inside the Premises of the Service Provider, including,
but not limited to, the Startup Incubation Area.
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4.11 The Start Up shall inform Service Provider in writing of any proposed change in the
corporate structure of the Start Up and/or any proposed investment in the Start Up at
least Thirty (30) days prior to such proposed change / investment.
4.12 The Start Up shall promptly notify the Service Provider of any proposed change in the
nature or scope of the Business and of any event or condition, which might materially and
adversely affect or delay growth or development of the Business. Any proposed change in
the nature or scope of the Business shall not be implemented without the prior approval
of the Service Provider​.
4.13 The Start Up shall not, without the approval of the Service Provider, undertake or permit
the following the actions:
(a) undertake or permit any merger, consolidation, scheme of arrangement or
compromise with its creditors or shareholders or effect any scheme of
amalgamation or reconstitution.;
(b) revalue its assets any time during the term of this Agreement; and
(c) transfer, assign, dispose of, pledge, charge, hypothecate, mortgage or create any
lien or in any way encumber any of its undertakings, properties and assets or
Business in favour of any third party.
4.14 The Start Up shall promptly notify the Service Provider in the following circumstances: a)
on the happening of any event which will have or likely to have an adverse effect on the
Business; and b) force majeure circumstances and/or circumstances beyond the
reasonable control of the Start Up against which the Start Up may or may not have
insured its properties.
4.15 During the term of this Agreement, the Start Up shall not sell, assign, license, transfer or
engage in any activity that amounts to transfer or surrender of all / any part of its
intellectual property rights or its Business to any third party without the previous consent
of the Service Provider.
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4.16 The Start Up shall observe and perform all rules and regulations prescribed under various
Industrial and Labour Legislations including but not limited to the Shops and Commercial
Establishments Act, Industrial Disputes Act, Workmen’s Compensation Act, Payment of
Wages Act, Minimum Wages Act or any other statute governing the relationship between
employer and employees and the Start Up alone shall be responsible for all such statutory
compliances.
4.17 The Start Up shall comply with all the Laws for the time being in force that would be
applicable to the Start Up and shall comply with any regulations therein including but not
limited to filing of any forms, acquiring any licenses, submitting any returns with any
statutory authority or any Government.
4.18 The Start Up undertakes to provide a monthly general update on its business and financial
affairs on or before the Tenth (10​th​
) business day of every month.
4.19 The Start Up also undertakes to submit itself to the annual audit of the Service Provider,
which shall be carried out at the sole discretion of the Service Provider. The Start Up,
upon written request of the Service Provider, undertakes to provide all the pertinent
documents, records and information as required by the Service Provider during the tenure
of this Agreement.
4.20 All indirect taxes, if any, payable in connection with the services provided by the Service
Provider to the Start Up and/or the consideration payable or to be provided by the Start
Up for the same shall be borne solely by the Start Up and shall be paid in addition to the
amounts and other consideration referred to in Section 3.1 and 3.4 above.
4.21 The Start Up shall ensure compliance by all its staff and employees, including the Key
Employees, with all of the terms and conditions of this Agreement and all other rules and
regulations that may be prescribed from time to time by the Service Provider in / relating
to use of the Premises.
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5 MONITORING COMMITTEE
5.1 The Service Provider shall be entitled to appoint a Monitoring Committee comprising of
the representatives of the Service Provider and other experts for evaluating the
performance of the Start Up and its Business.
5.2 The Monitoring Committee shall continuously monitor the Business and activities of the
Start Up and, for this purpose, shall have free access to the Startup Incubation Area to
monitor the Start Up.
5.3 The Start Up shall permit the Monitoring Committee or any authorized representative of
the Service Provider to carry out technical and financial inspections during the term of this
Agreement and to inspect all records, documents, registers and accounts of the Start Up.
Any such representative of the Monitoring Committee or Service Provider shall have free
access at all reasonable times to any part of the Start Up's assets and to its records,
registers and accounts and to all schedules, costs, estimates, plans and specifications
relating to the Business and shall receive full co-operation and assistance from the
employees of the Start Up.
6 TERM AND TERMINATION
6.1 This Agreement shall be in force for a period of Five (5) years from the date of first
product sale by the Start Up.
6.2 This Agreement can be renewed or amended on such terms as may be mutually agreed to
by the Parties.
6.3 The Start Up shall not be entitled to terminate this Agreement after expiry of the
Incubation Period. The Service Provider shall have every right to terminate this Agreement
during its term as set out in Section 6.1 (including during the Incubation Period) and/or to
deny access to the Incubation Services and the Premises, after giving a Fifteen (15) days’
notice, in the following circumstances: -
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a. Where the Start Up violates any of the terms and conditions of this Agreement or
the Shareholders Agreement executed in pursuance of this Agreement; or
b. Where the Start Up violates any representation and warranties mentioned
hereinabove and such other rules and regulations as may be framed by Service
Provider, from time to time; or
c. Commits any fraud, theft or any other offence punishable under law; or
d. Unsatisfactory performance of the Start Up as per the determination of Monitoring
Committee; or
e. Such other circumstances as may deem fit in the interest of the Parties to this
Agreement.
6.4 Upon the termination of the Agreement / stoppage of access to the Incubation Services
and the Premises pursuant to Section 6.3, the Start Up shall:
i. Be prohibited from accessing the Premises of the Service Provider, stated in
Schedule A.
ii. Not be permitted to use the Service Provider’s address (or the address of the
Premises) for communication purposes in any form whatsoever.
6.5 For the avoidance of doubt, it is agreed that any termination of this Agreement shall not
affect any shares and securities subscribed to / held by the Service Provider (and their
nominees) and their rights as shareholders in the Start Up; and the Service Provider (and
their nominees) will be entitled to retain such shares and securities held by them in the
Start Up. It is further clarified and agreed that the termination of this Agreement by the
Service Provider after expiry of the Incubation Period, but prior to expiry of the term as
set out in Section 6.1, shall not, in any manner, adversely affect the rights of the Service
Provider under Section 3.1, Section 3.2 and Section 3.4. All other provisions of this
Agreement (including the indemnity obligations of the Start Up) as are necessary for the
Service Provider to receive the full economic consideration and benefits as referred to in
Section 3.1, Section 3.2 and Section 3.4 shall survive termination of the Agreement and
continue to be in force between the Parties.
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6.6 If the Start Up violates / fails to comply with any of the clauses mentioned in this
Agreement, the Service Provider will have absolute discretion to take necessary actions
including but not limited to initiating legal action for specific performance, claiming
damages or other remedies as available under Law.
7 INDEMNIFICATION
The Start Up shall keep the Service Provider indemnified in the event of Losses or damage
by fire or natural calamities of the structures / equipment / fittings or part thereof, or
from any third party liability arising from such event, or any other accident / event within
the Premises and / or Startup Village and/or any fraud, negligence or misrepresentation
or any default in compliance with any of the terms of this Agreement on the part of the
Start Up.
8 MISCELLANEOUS
8.1 Service of Notice
Service of a notice or any communication must be effected by one of the following
methods:
(a) by hand to the relevant address as set out in Section 8.2 and shall be deemed
served upon delivery, if delivered during a business day or at the start of the next
business day, if delivered at any other time; or
(b) by prepaid first-class post/registered post/speed post to the relevant address set
out in Section 8.2 and shall be deemed served at the start of the Fourth (4th)
business day after the date of posting; or
(c) by electronic mail transmission in “portable document format” (“.pdf”) to the
relevant e-mail addresses set out in Section 8.2 and shall be deemed served on
dispatch, if dispatched during a business day or at the start of the next business
17
day, if dispatched at any other time, provided that in each case a receipt indicating
complete transmission of the notice is obtained by the sender.
8.2 Address for Service
ITIH-TBI:
Name: ​__________________________________________
Designation: ​_____________________________________
Address: ​_________________________________________________________________
________________________________________________________________________​.
Email: ​__________________________________________________
MobME:
Name: ​__________________________________________
Designation: ​_____________________________________
Address: ​_________________________________________________________________
________________________________________________________________________​.
Email: ​__________________________________________________
Start up:
Name: ​__________________________________________
Designation: ​_____________________________________
Address: ​_________________________________________________________________
________________________________________________________________________​.
Email: ​__________________________________________________
8.3 Applicable Law & Settlement of Disputes
This Agreement shall be construed, governed by, interpreted and applied in accordance
with the Laws of India. Any dispute arising out of or in connection with this Agreement,
including any question regarding its existence, validity or termination, shall be referred to
18
and finally resolved by arbitration under Arbitration and Conciliation Act, 1996. The award
made by the arbitrator shall be final and binding on both Parties. The seat of arbitration
shall be Cochin, Kerala. All arbitration proceedings shall be conducted in English language.
The arbitration shall be conducted by a sole arbitrator in case Service Provider and Start up
agree upon the appointment of a sole arbitrator, failing which the arbitration shall be
conducted by a panel of Three (3) arbitrators consisting of One (1) arbitrator jointly
appointed by the Service Provider, One (1) arbitrator appointed by the Start up and the
third arbitrator jointly appointed by the two arbitrators appointed as aforesaid. Subject to
the above, the courts in Cochin, Kerala shall have jurisdiction over all matters relating to this
Agreement.
8.4 Entire agreement
This Agreement together with any agreement specifically executed pursuant to this
Agreement constitutes the whole and only agreement between the Parties relating to the
Incubation Services. This Agreement supersedes and extinguishes any prior drafts,
agreements, undertakings, representations, warranties and arrangements of any nature
whatsoever, whether or not in writing, relating thereto.
8.5 English Language
All notices or formal communications under or in connection with this Agreement shall be in
the English language.
8.6 Assignment
Unless specifically otherwise provided in this Agreement, neither Party shall have the right
to assign their respective rights hereunder or transfer their respective rights and
obligations, in whole or in part, to any third party. Provided however that the Service
Provider, may at its discretion, assign, transfer, novate and/or delegate any of its rights and
obligations to any third party.
19
8.7 Severability
If any provision of this Agreement is or becomes invalid, illegal or unenforceable under the
laws of any jurisdiction, then such provision shall (so far as it is invalid or unenforceable) be
given no effect and shall be deemed not to be included in this Agreement but without
invalidating any of the remaining provisions of this Agreement which shall not in any way be
affected or impaired. The Parties hereto shall then use all reasonable endeavors to replace
the invalid or unenforceable provisions with a valid and enforceable and mutually
satisfactory substitute provision, achieving as nearly as possible the intended commercial
effect of the invalid, illegal or unenforceable provision.
8.8 Waivers And Remedies
No failure or delay by the Parties in exercising any right or remedy provided by law under or
pursuant to this Agreement shall impair such right or remedy or operate or be construed as
a waiver or variation of it or preclude its exercise at any subsequent time and no single or
partial exercise of any such right or remedy shall preclude any other or further exercise of it
or the exercise of any other right or remedy.
8.9 Variation
The Service Provider shall vary the terms of this Agreement (or of any of the documents
referred to in this Agreement) at such circumstances as it may deem fit in the interest of the
Parties to this Agreement. Such variation shall not come into effect unless it is made by an
instrument in writing and signed by duly Authorized Representatives of each of the Parties
hereto. The expression “variation” shall include any variation, amendment, supplement,
deletion or replacement however effected.
8.10Counterparts
This Agreement may be executed in one or more counterparts, each of which when duly
executed and delivered shall be deemed an original but all of which together shall
constitute one and the same instrument and any Party may execute this Agreement by
20
signing any one or more of such originals or counterparts. The delivery of signed
counterparts by facsimile transmission or electronic mail in “portable document format”
(“.pdf”) shall be as effective as signing and delivering the counterpart in person.
8.11Costs and Expenses
Each of the Parties shall bear their own legal costs, disbursements charges and expenses
incurred in and about the negotiation, preparation and execution of this Agreement and
any other document executed in connection with this Agreement including but not limited
to the Shareholders Agreement. However, stamp duty payable in relation to this
Agreement, the Shareholders Agreement and any other document executed in connection
with this Agreement shall be borne by the Start Up.
21
SCHEDULE A
The facilities provided by the Service Provider in the Premises in the Startup Village during the
Incubation Period are as follows:-
• Usage of conference room*
• Limited usage of the address of the Service Provider solely for the purpose of
communicating as a participant in the Incubation Services provided by the
Service Provider.
*Access to conference rooms is subject to availability. Therefore, they will have to be booked
well in advance. Guidelines for booking and allotment will be formulated by the Service
Provider. The Start Up shall be informed regarding the same from time to time.
22
SCHEDULE B
Services Provided By Service Provider during the Incubation Period
A) Access to Premises set out in Schedule A
B) Access to a pool of mentors
C) Guidance in product development
D) Introduction to Potential Customers and Potential Investors and
E) Assistance in promotion of the Start Up’s Business
23
SCHEDULE C
Key Employees
1. ___________________________________________ (name), _______________________
(designation), s/d/o ________________________________________________, aged ____
years, holding PAN card / Passport / Aadhar card / driving license No _______________
and residing at
__________________________________________________________________ and
having permanent residence at _____________________________________________
_________________________________________. Tel No: _______________________.
Cell No ____________________​.
2. ___________________________________________ (name), _______________________
(designation), s/d/o ________________________________________________, aged ____
years, holding PAN card / Passport / Aadhar card / driving license No _______________
and residing at
__________________________________________________________________ and
having permanent residence at _____________________________________________
_________________________________________. Tel No: _______________________.
Cell No ____________________​.
3. ___________________________________________ (name), _______________________
(designation), s/d/o ________________________________________________, aged ____
years, holding PAN card / Passport / Aadhar card / driving license No _______________
and residing at
__________________________________________________________________ and
having permanent residence at _____________________________________________
_________________________________________. Tel No: _______________________.
Cell No ____________________​.
24
IN WITNESS WHEREOF​, the said Service Provider and the said Start Up have put their respective
signatures hereunder on the day, month and year first above written.
Signed and delivered for and on behalf
of ​INDIAN TELECOM INNOVATION
HUB-TECHNOLOGY BUSINESS
INCUBATOR (ITIH -TBI)
By:
Title:
Signed and delivered for and on behalf of
__________________________________
(​Start Up​)
By:
Title:
Signed and delivered for and on behalf
of ​MOBME WIRELESS SOLUTIONS
LIMITED
By:
Title:
25
26

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Legal Agreement with Partnership

  • 1. PHYSICAL INCUBATION SERVICES AGREEMENT This Physical Incubation Services Agreement (​“Agreement”​) is executed at ​________ on this _____ day of ​_______________ and is applicable with effect from ​______________ (​“Effective Date”​) BETWEEN: INDIAN TELECOM INNOVATION HUB-TECHNOLOGY BUSINESS INCUBATOR​, a Society under the Travancore – Cochin Literary Scientific and Charitable Societies Registration Act 12 of 1955, and having its Registered Office at 4th floor, Bhageeratha Square, Banerji Road, Kacheripady, Ernakulam North, Kochi - 682018 (hereinafter referred to as “​ITIH –TBI​”, which expression shall unless repugnant to the context or meaning thereof mean and include its successors and assigns) of the First Part; MOBME WIRELESS SOLUTIONS LIMITED, ​an unlisted public company incorporated under the aegis of the Companies Act, 1956, having its registered office at 41/3197, Fourth Floor, Bhageeratha Square, Near Town Hall, Kacherippady, Cochin – 682018 (hereinafter referred to as the “​MobME​” which expression shall, unless repugnant to the context or meaning thereof, mean and include its successors and assigns) of the Second Part; AND M/s _______________________________, a partnership firm / limited liability partnership registered under the Indian Partnership Act, 1932 at present carrying on the business of [​insert main / current business of the partnership​] and having its registered office at _________________________________ represented herein by its Partners: _____________________, aged ___ yrs., son / wife / daughter of ______________________, residing at _____________________ and Mr. / Ms. ____________ ____________________, 1
  • 2. aged _______ yrs., son / wife / daughter of _____________________, residing at ____________________________ 1 (hereinafter referred to as the “​Start Up​”, which expression shall, unless repugnant to the context or meaning thereof, mean and include his/her/its/their successors and assigns) of the Third Part. ITIH – TBI and MobME are hereinafter collectively referred to as “​Service Provider​”. The Service Provider and the Start Up are hereinafter individually referred to as “​Party​” and collectively as “​Parties​”. WHEREAS: A. The Service Provider are, in collaboration with each other, operating a technology business incubator at KINFRA Hi Tech Park, Opposite to Co-operative Medical College, HMT Colony P.O, Kalamassery, Cochin – 683503 (“​Startup Village​”). B. The Start Up is desirous of availing the Incubation Services for the duration of the Incubation Period to help it develop a commercially viable business involving [​details of the proposed business to be described here​] (“​Business​”) and has requested the Service Provider to provide the same. C. The Service Provider has agreed to provide the Incubation Services to the Start Up and accordingly, the Parties have agreed to enter into this Agreement for recording the terms on which the said Incubation Services will be provided and availed, the consideration payable for the same and other terms and conditions incidental and ancillary to the said purpose. NOW THEREFORE, ​for and in consideration of the foregoing, and the representations, warranties, and conditions set forth below, the Parties hereto, intending to be legally bound, hereby agree as follows: 1 2
  • 3. 1. DEFINITIONS AND INTERPRETATION 1.1 Definition In this Agreement, including in the Recitals, and unless the context requires otherwise, the following words and expressions shall have the following meanings: (a) “Agreement” means this Agreement together with its Schedules, as the same may be amended, modified and/or supplemented from time to time in writing in accordance with the terms and conditions hereof​; (b) “​Authorized Representative​” means any person duly authorized as such by each Party for any purpose in connection with this Agreement; (c) “Company” ​shall mean the company incorporated by the Start Up pursuant to Section 4.1 of this Agreement. For the avoidance of doubt, all references to the “Startup” in this Agreement shall also mean and include a reference to the Company after the Company signs a deed of adherence in accordance with Section 4.2 below; (d) “Fully Diluted Basis” means the calculation of the value of the Start Up on the assumption that all outstanding convertible securities, stock options and outstanding commitments by the Start Up to issue equity shares at a future date, whether or not due to the occurrence of an event or otherwise, have been so converted, exercised or exchanged (or issued, as the case may be) and Fully Diluted shall be interpreted accordingly​; (e) “Gross Contract Revenue” means the total sale price and/or license fees and/or consideration paid and/or to be payable to the Start Up by its Potential Customers; (f) “Government” shall include the President of India, the Government of India, the Governor and the Government of any State in India, any Ministry or Department of the same and any local or other authority exercising powers conferred by Law; (g) “​Incubation Period​” shall mean a period of ​6 months from the Effective Date of this Agreement, which can be extended at the sole discretion of the Service Provider; (h) “​Incubation Services​” means the physical incubation services as set forth in Section 2 hereunder and more fully set out in Schedule A and Schedule B of this Agreement; 3
  • 4. (i) “Key Employees” means the promoters and employees of the Start Up as mentioned in Schedule C hereto; (j) “Law” includes all statutes, enactments, Acts of Legislature or Parliament, laws, ordinances, rules, bye-laws, regulations, notifications, guidelines, policies, directions, directives and orders of any Government, Statutory Authority, Tribunal, Board, Court or recognized Stock Exchange and if applicable, international treaties and regulations as amended from time to time; (k) “Losses” includes all losses, claims, costs, and damages (whether direct, indirect, general, special, absolute, accrued, conditional or otherwise and whether or not resulting from third party claims), including interests and penalties with respect thereto and out-of-pocket expenses, including reasonable attorneys' and accountants' fees and disbursements; (l) “Monitoring Committee”​shall have the meaning ascribed to it in Section 5; (m) “Potential Customers” are those customers introduced / referred by the Service Provider to the Start Up as referred to in Section 3.1(a); (n) “Potential Investors” are those investors and/or financiers introduced / referred by the Service Providers to the Start Up as referred to in Section 3.1(c); (o) “Premises” ​shall mean facilities in the Startup Village provided by the Service Provider or its associates specifically to the Start Up for its use as set out in Schedule A of this Agreement; (p) “Pre-money Valuation” ​means the value of the Start Up arrived at immediately prior to the infusion of any investment into the Start Up by Investors by calculating the same on a Fully Diluted Basis; (q) “Shareholders Agreement” shall refer to the shareholders agreement to be entered into by all the shareholders of the Start Up with the Service Provider (or its nominees). (r) “Startup Incubation Area” refers to the seats and work space, including seats, desk attached and electric sockets, allotted to the Start Up in the Premises in pursuance of this Agreement as set out in Schedule A; 4
  • 5. 2 SCOPE OF SERVICES 2.1 For the due consideration payable by the Start Up as set forth in Section 3 of this Agreement, the Service Provider shall provide physical incubation services and such other services for the duration of the Incubation Period aimed to help the Start Up grow and develop its Business, as more fully set out in Schedule A and Schedule B of this Agreement (hereinafter referred to as the “​Incubation Services​”). 2.2 During the Incubation Period, the Start Up shall have the right to access the Premises as set out in Schedule A of this Agreement. The aforesaid access shall be subject to compliance with standard security measures and other reasonable precautionary measures prescribed by the Service Provider. 2.3 For the avoidance of doubt, it is hereby stated that the Service Provider or its associates enjoy legal ownership and/or possession of the Premises. Further, the Service Provider or its associates shall have absolute rights to control access to the Premises. 2.4 For the avoidance of doubt, it is hereby stated that the access to Premises provided as part of the Incubation Services does not constitute an agreement of lease. The right of the Start Up is limited to the use of the Premises during the Incubation Period only while it is receiving Incubation Services from the Service Provider. 2.5 Start Up shall allow persons and vehicles entering and leaving Service Provider’s campus to be examined by the staff of Service Provider or any agency authorized by Service Provider as part of the Service Provider’s security measures. 2.6 The Start Up shall be given access to the Start Up Incubation Area consisting of a specified number of seats / work stations as specified in Schedule A. It is clarified and agreed that the Service Provider may, at their absolute discretion, from time to time reduce the number of seats and work stations allotted to the Start Up or re-allocate the seats and work stations 5
  • 6. already allotted to the Start Up to someone else and allocate other seats and work stations to the Start Up. 2.7 If the Start Up has been availing any incubation services from the Service Provider prior to the Effective Date of this Agreement and is executing this Agreement to avail the Incubation Services under this Agreement, then the following conditions shall also apply: (a) There shall not be any refund of any payments, if any, made by the Start Up prior to the Effective Date; and (b) All agreements, if any, entered into between the Start Up and the Service Provider shall stand terminated and inoperative as of the Effective Date of this Agreement. 3 CONSIDERATION 3.1 As consideration for the Incubation Services provided by the Service Provider as per this Agreement, the Start Up shall pay and provide the Service Provider with the following: a) The Service Provider may introduce the Start Up to Potential Customers who may be interested to buy and avail Start Up’s products and services. If the Start Up generates revenues from these Potential Customers, the Start Up agrees to pay to the Service Provider, a payment of Five percent (5%) of the Gross Contract Revenue generated from each Potential Customer for the first Three (3) years from the date of first sale and/or license of products and/or rendering of services to the Potential Customers. Such amounts shall be payable by the Start Up to the Service Provider within Twenty (20) days from the date of receipt of any amounts / consideration whatsoever by the Start Up (or its nominees) from any Potential Customer. b) ​In the event of any investment whatsoever by any person / entity (“​Investors​”) into the Start Up at any time after the Effective Date hereof, the Service Provider shall have the right, at their sole and absolute discretion, to co-invest along with such Investors up to a maximum of Thirty percent (30%) of the total investment proposed to be raised by the 6
  • 7. Start Up from such Investors at the given point of time till the Start Up reaches a Pre-money Valuation of INR Sixty Crores (INR 60,00,00,000/-) or US Dollars Ten million (US$ 10,000,000). Provided however that the price at which the Service Provider shall be allotted and issued equity shares (or such other securities as areproposed to be allotted and issued to the other Investors for their investment) for the investment by the Service Provider shall be calculated based on a discount of Thirty percent (30%) of the Pre-money Valuation, i.e. the price at which the Service Provider shall be issued and allotted equity shares (or such other securities) shall be at a Thirty percent (30%) discount to the price per share / other security at which such shares / other securities are to be allotted and issued to the Investors. The Service Provider shall have the absolute right to transfer / assign / novate in whole (or in part), and in one or multiple stages, their right to investment in the Start Up and/or the shares / other securities that may be held by them in the Start Up from time to time to any other persons or entities as they deem appropriate and the Start Up shall do all the necessary corporate actions to facilitate and perfect the issue / transfer of such shares / other securities to such nominee(s) of the Service Provider. Where the Start Up incorporates a new entity outside India for similar product/ideas or correlated activities of the Business or to raise funding for the development of products or its Business as contemplated under this Agreement, the Service Provider shall at their discretion have the right to co-invest, as mentioned above, as they deem fit in such entities outside India by themselves / through their nominee(s). The terms and conditions in relation to the Service Provider’s (and/or their nominees’) shareholding in the Start Up shall be as set forth in a Shareholders Agreement as contemplated in Section 4.1 hereunder. The Service Providers will have this right to co-invest at at a discount, for only one (1) round of investment proposed to be raised by the Start Up. The Service Providers will have the right to invest in future rounds of investment proposed to be raised by the Start Up in proportion to its shareholding should it desire to do so, but without a discount. 7
  • 8. c) The Service Provider may introduce the Start Up to potential investors / financiers (“​Potential Investors​”), who may be interested to invest in the Start Up and/or provide financial assistance to the Start Up. If the Start Up receives any funding in any manner, by way of equity, debt, convertible debt, grants, financial discounts, etc., from any such Potential Investors introduced by the Service Providers, the Start Up agrees to pay the Service Provider an arranger’s fee of Two-and-a-half percent (2.5%) of the total funding received by the Start Up from such Potential Investors. Such amounts shall be payable by the Start Up to the Service Provider within Twenty (20) days from the date of receipt of any such funds / financial benefits whatsoever by the Start Up from the Potential Investor. d) In the event that the Business, assets, Key Employees and/or the intellectual property rights of the Start Up are wholly / partly sold, transferred or surrendered to any other person / entity and/or the Key Employees of the Company take up employment / engagement with any one other person / entity and the Start Up receives any consideration whatsoever in cash / kind as mentioned above in connection with such sale, transfer or surrender and/or the mass resignation and/or movement of the Key Employees to employment / engagement with another person / entity, the Start Up agrees to pay the Service Provider Twenty percent (20%) of the aggregate value of all consideration whatsoever (including but not limited to cash, securities, options any other properties and assets whatsoever) received (or to be received over a period of time) by the Start Up. Such amounts shall be payable by the Start Up to the Service Provider within Twenty (20) days from the date of receipt of any such funds / financial benefits / consideration whatsoever in kind by the Start Up from the Potential Investor. 3.2 If and when the Start Up reaches/crosses a valuation of ​INR Sixty Crores (INR 60,00,00,000/-) or ​US Dollars Ten million (US$ 10,000,000), and it raises further investment, the Service Provider shall also have the right to invest in the Start Up in proportion to its shareholding should it desire to do so. 3.3 The Start Up undertakes to keep the Service Provider informed in writing every time it proposes to bring in further investment or funds in the Start Up either from the existing 8
  • 9. shareholders or from third party investors at any time after the Effective Date at least Fifteen (15) days before it enters into negotiations to raise such investments / funds. The Start Up shall also notify the Service Provider within Ten (10) days of entering into any sale / supply / license / services agreement with any Potential Customers. 3.4 The Service Provider (or their affiliates or nominees) shall also be entitled at their discretion to charge the Start Up fees and expenses on a monthly basis (or such other periodic basis as decided by the Service Provider) towards fees for the seats and workstations used by the Start Up, for electricity, water, internet and other common facilities and amenities used by the Start Up and/or for any specialized or hi-tech equipment, laboratories or other facilities provided by the Service Provider to the Start Up for its Business. The Service Provider shall also be entitled to charge the Start UP pro rata fees for meeting the costs and expenses of arranging and organizing training, mentoring and other activities conducted by external experts and agencies. All such amounts as invoiced by the Service Provider (or their affiliates or nominees) shall be payable by the Start Up within Ten (10) days of the date of the relevant invoice / bill, time being of the essence. 3.5 For the avoidance of doubt, it is hereby agreed and confirmed by the Start Up that the Incubation Services offered by the Service Provider under this Agreement and introduction of Potential Customers and Potential Investors to the Start Up under this Agreement, irrespective of the contingency of termination of this Agreement during its term as set out in Section 6.1 (including during the Incubation Period), constitute adequate consideration for the revenue sharing to be paid as per Section 3.1(a), the discounted price at which shares / other securities are to be allotted and issued to the Service Provider by the Start Up as per Section 3.1(b), the arranger’s fee to be paid as per Section 3.1(c), the amounts to be paid as per Section 3.1(d) and the fees and expenses to be paid / reimbursed in accordance with Section 3.4. The Start Up agrees to make prompt payment of the amounts mentioned in Section 3.1 (a), 3.1(c), 3.1(d) and Section 3.4 above, time being of the essence. 9
  • 10. 4 COVENANTS 4.1 The Start Up undertakes to incorporate itself as a Company under the Companies Act, 2013 and transfer the Business and all assets of the Start Up to the Company. In the event of any proposed investment by the Service Provider pursuant to Section 3.1 above, the Parties agree to enter into a Shareholders Agreement along with the Investors and all other shareholders of the Start Up prior to such investment by the Service Provider in the Start Up. The aforesaid Shareholders Agreement, which shall be congruous with this Agreement and the interests of the Service Provider, shall mandatorily incorporate the following: a) Tag along rights: In the event of sale of shares in the Start Up by the shareholders to third parties, the selling parties are obliged to ensure that the acquiring third parties also acquire the shares held by the Service Provider/ its nominee(s) on the same proportional conditions as the selling parties as a pre-condition to any such sale by the shareholders. The Parties agree that the valuation of shares regarding the aforesaid transaction shall not be prejudicial and detrimental to the reasonable commercial interests of the Service Provider. b) Drag along rights: In the event of collective exit to an independent third party, the majority shareholder may require the other shareholders to mandatorily sell their shares to the said independent third party. The sale of shares shall be on the same proportional conditions for each shareholder as all other shareholders. The Parties agree that the valuation of shares regarding the aforesaid transaction shall not be prejudicial and detrimental to the reasonable commercial interests of the Service Provider. c) Anti-dilution clause: The shareholding percentage held by the Service Provider in the Start Up shall not be diluted till the Start Up, as valued by an independent auditor satisfactory to the Service Provider, reaches a pre-money valuation of US Dollars that is higher than the valuation at which the Service Provider has invested in the Start Up, up to a maximum pre-money valuation of USD 10 Million Dollars, except unless the 10
  • 11. Service Provider decides not to invest along with the Investors in terms of Section 3.1 above. 4.2 The Start Up shall, upon incorporation of the Company and within a period of Fifteen (15) days from the date of incorporation of the Company, ensure that the Company completes the following:- (a) signs a deed of adherence to this Agreement in a form and manner satisfactory to the Service Provider agreeing to abide by all of the confirmations and obligations of the Start Up and Company as mentioned in this Agreement; and (b) furnishes to the Service Provider a certified true copy of resolutions passed by the Board of Directors and the shareholders of the Start Up / Company ratifying the consideration payable / to be provided as mentioned in Section 3.1 and 3.4 as being reasonable and appropriate consideration for the Incubation Services provided by the Service Provider. 4.3 The Start Up shall avail the Incubation Services and use the Premises only during the Incubation Period and only for the purposes set out in this Agreement. The Start Up undertakes not to store any combustible materials or articles dangerous to life or otherwise prohibited under Law within the area under its control​. 4.4 The Start Up shall not, without the previous written permission of the Service Provider alter, improve or make structural alterations to the physical components of the Premises provided by the Service Provider. Provided that the Start Up may at its own cost and expense, with prior consent of the Service Provider, install such facilities as would be required to carry out its activities without affecting or damaging the present building and any structure of the building. It shall, on the expiry of the Incubation Period, hand over physical components of Premises (including the Startup Incubation Area) in its original condition subject to reasonable wear and tear or earlier determination thereof, dismantle and remove all such office facilities etc. at their own costs and expenses and shall also have the option to leave behind those items which they do not wish to remove for which the Service Provider shall not have to pay any charges. 4.5 For the avoidance of doubt, it is clarified that the Start Up is required to completely vacate the Premises and return possession of the Startup Incubation Area in its original condition 11
  • 12. subject to reasonable wear and tear at their own costs and expenses to the absolute satisfaction of the Service Provider on the expiry of the Incubation Period, time being of the essence. On failure to abide by this Section, the Service Provider will have the right to claim damages from the Start up. The Start Up shall also not be entitled after expiry of the Incubation Period, except with the prior written permission of the Service Provider, to use the Service Provider’s address (or the address of the Premises) for communication purposes in any form whatsoever. 4.6 The Start Up shall not transfer, assign, license, sub license or enter into any arrangement whatsoever and shall not deal with their interests or rights in the Incubation Services or Premises with any person/s or institutions in any manner whatsoever without the previous written permission and consent of the Service Provider. If, in case any such permission is once granted, the same shall be by a separate agreement as per the terms decided by the Service Provider. 4.7 The Start Up shall be entitled to display the name and/or signboards only in the space specified by Service Provider in the Startup Incubation Area. 4.8 The Start Up shall not cause any disturbance, annoyance, nuisance, damages to Service Provider or the Startup Village or the peaceful functioning of other units in other premises in Service Provider’s campus and will not create any obstructions in the common areas. 4.9 The Start Up shall indemnify the Service Provider in case the property or Premises of the Service Provider including but not limited to the Startup Incubation Area or the property in Startup Village, is destroyed/ disturbed/damaged, whether whole or in part, due to actions/ inactions of the Start Up or anyone representing the Start Up, in any manner whatsoever. 4.10 The Start Up shall not indulge in consumption, possession or storage of alcohol or any other illegal or banned substances inside the Premises of the Service Provider, including, but not limited to, the Startup Incubation Area. 12
  • 13. 4.11 The Start Up shall inform Service Provider in writing of any proposed change in the corporate structure of the Start Up and/or any proposed investment in the Start Up at least Thirty (30) days prior to such proposed change / investment. 4.12 The Start Up shall promptly notify the Service Provider of any proposed change in the nature or scope of the Business and of any event or condition, which might materially and adversely affect or delay growth or development of the Business. Any proposed change in the nature or scope of the Business shall not be implemented without the prior approval of the Service Provider​. 4.13 The Start Up shall not, without the approval of the Service Provider, undertake or permit the following the actions: (a) undertake or permit any merger, consolidation, scheme of arrangement or compromise with its creditors or shareholders or effect any scheme of amalgamation or reconstitution.; (b) revalue its assets any time during the term of this Agreement; and (c) transfer, assign, dispose of, pledge, charge, hypothecate, mortgage or create any lien or in any way encumber any of its undertakings, properties and assets or Business in favour of any third party. 4.14 The Start Up shall promptly notify the Service Provider in the following circumstances: a) on the happening of any event which will have or likely to have an adverse effect on the Business; and b) force majeure circumstances and/or circumstances beyond the reasonable control of the Start Up against which the Start Up may or may not have insured its properties. 4.15 During the term of this Agreement, the Start Up shall not sell, assign, license, transfer or engage in any activity that amounts to transfer or surrender of all / any part of its intellectual property rights or its Business to any third party without the previous consent of the Service Provider. 13
  • 14. 4.16 The Start Up shall observe and perform all rules and regulations prescribed under various Industrial and Labour Legislations including but not limited to the Shops and Commercial Establishments Act, Industrial Disputes Act, Workmen’s Compensation Act, Payment of Wages Act, Minimum Wages Act or any other statute governing the relationship between employer and employees and the Start Up alone shall be responsible for all such statutory compliances. 4.17 The Start Up shall comply with all the Laws for the time being in force that would be applicable to the Start Up and shall comply with any regulations therein including but not limited to filing of any forms, acquiring any licenses, submitting any returns with any statutory authority or any Government. 4.18 The Start Up undertakes to provide a monthly general update on its business and financial affairs on or before the Tenth (10​th​ ) business day of every month. 4.19 The Start Up also undertakes to submit itself to the annual audit of the Service Provider, which shall be carried out at the sole discretion of the Service Provider. The Start Up, upon written request of the Service Provider, undertakes to provide all the pertinent documents, records and information as required by the Service Provider during the tenure of this Agreement. 4.20 All indirect taxes, if any, payable in connection with the services provided by the Service Provider to the Start Up and/or the consideration payable or to be provided by the Start Up for the same shall be borne solely by the Start Up and shall be paid in addition to the amounts and other consideration referred to in Section 3.1 and 3.4 above. 4.21 The Start Up shall ensure compliance by all its staff and employees, including the Key Employees, with all of the terms and conditions of this Agreement and all other rules and regulations that may be prescribed from time to time by the Service Provider in / relating to use of the Premises. 14
  • 15. 5 MONITORING COMMITTEE 5.1 The Service Provider shall be entitled to appoint a Monitoring Committee comprising of the representatives of the Service Provider and other experts for evaluating the performance of the Start Up and its Business. 5.2 The Monitoring Committee shall continuously monitor the Business and activities of the Start Up and, for this purpose, shall have free access to the Startup Incubation Area to monitor the Start Up. 5.3 The Start Up shall permit the Monitoring Committee or any authorized representative of the Service Provider to carry out technical and financial inspections during the term of this Agreement and to inspect all records, documents, registers and accounts of the Start Up. Any such representative of the Monitoring Committee or Service Provider shall have free access at all reasonable times to any part of the Start Up's assets and to its records, registers and accounts and to all schedules, costs, estimates, plans and specifications relating to the Business and shall receive full co-operation and assistance from the employees of the Start Up. 6 TERM AND TERMINATION 6.1 This Agreement shall be in force for a period of Five (5) years from the date of first product sale by the Start Up. 6.2 This Agreement can be renewed or amended on such terms as may be mutually agreed to by the Parties. 6.3 The Start Up shall not be entitled to terminate this Agreement after expiry of the Incubation Period. The Service Provider shall have every right to terminate this Agreement during its term as set out in Section 6.1 (including during the Incubation Period) and/or to deny access to the Incubation Services and the Premises, after giving a Fifteen (15) days’ notice, in the following circumstances: - 15
  • 16. a. Where the Start Up violates any of the terms and conditions of this Agreement or the Shareholders Agreement executed in pursuance of this Agreement; or b. Where the Start Up violates any representation and warranties mentioned hereinabove and such other rules and regulations as may be framed by Service Provider, from time to time; or c. Commits any fraud, theft or any other offence punishable under law; or d. Unsatisfactory performance of the Start Up as per the determination of Monitoring Committee; or e. Such other circumstances as may deem fit in the interest of the Parties to this Agreement. 6.4 Upon the termination of the Agreement / stoppage of access to the Incubation Services and the Premises pursuant to Section 6.3, the Start Up shall: i. Be prohibited from accessing the Premises of the Service Provider, stated in Schedule A. ii. Not be permitted to use the Service Provider’s address (or the address of the Premises) for communication purposes in any form whatsoever. 6.5 For the avoidance of doubt, it is agreed that any termination of this Agreement shall not affect any shares and securities subscribed to / held by the Service Provider (and their nominees) and their rights as shareholders in the Start Up; and the Service Provider (and their nominees) will be entitled to retain such shares and securities held by them in the Start Up. It is further clarified and agreed that the termination of this Agreement by the Service Provider after expiry of the Incubation Period, but prior to expiry of the term as set out in Section 6.1, shall not, in any manner, adversely affect the rights of the Service Provider under Section 3.1, Section 3.2 and Section 3.4. All other provisions of this Agreement (including the indemnity obligations of the Start Up) as are necessary for the Service Provider to receive the full economic consideration and benefits as referred to in Section 3.1, Section 3.2 and Section 3.4 shall survive termination of the Agreement and continue to be in force between the Parties. 16
  • 17. 6.6 If the Start Up violates / fails to comply with any of the clauses mentioned in this Agreement, the Service Provider will have absolute discretion to take necessary actions including but not limited to initiating legal action for specific performance, claiming damages or other remedies as available under Law. 7 INDEMNIFICATION The Start Up shall keep the Service Provider indemnified in the event of Losses or damage by fire or natural calamities of the structures / equipment / fittings or part thereof, or from any third party liability arising from such event, or any other accident / event within the Premises and / or Startup Village and/or any fraud, negligence or misrepresentation or any default in compliance with any of the terms of this Agreement on the part of the Start Up. 8 MISCELLANEOUS 8.1 Service of Notice Service of a notice or any communication must be effected by one of the following methods: (a) by hand to the relevant address as set out in Section 8.2 and shall be deemed served upon delivery, if delivered during a business day or at the start of the next business day, if delivered at any other time; or (b) by prepaid first-class post/registered post/speed post to the relevant address set out in Section 8.2 and shall be deemed served at the start of the Fourth (4th) business day after the date of posting; or (c) by electronic mail transmission in “portable document format” (“.pdf”) to the relevant e-mail addresses set out in Section 8.2 and shall be deemed served on dispatch, if dispatched during a business day or at the start of the next business 17
  • 18. day, if dispatched at any other time, provided that in each case a receipt indicating complete transmission of the notice is obtained by the sender. 8.2 Address for Service ITIH-TBI: Name: ​__________________________________________ Designation: ​_____________________________________ Address: ​_________________________________________________________________ ________________________________________________________________________​. Email: ​__________________________________________________ MobME: Name: ​__________________________________________ Designation: ​_____________________________________ Address: ​_________________________________________________________________ ________________________________________________________________________​. Email: ​__________________________________________________ Start up: Name: ​__________________________________________ Designation: ​_____________________________________ Address: ​_________________________________________________________________ ________________________________________________________________________​. Email: ​__________________________________________________ 8.3 Applicable Law & Settlement of Disputes This Agreement shall be construed, governed by, interpreted and applied in accordance with the Laws of India. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to 18
  • 19. and finally resolved by arbitration under Arbitration and Conciliation Act, 1996. The award made by the arbitrator shall be final and binding on both Parties. The seat of arbitration shall be Cochin, Kerala. All arbitration proceedings shall be conducted in English language. The arbitration shall be conducted by a sole arbitrator in case Service Provider and Start up agree upon the appointment of a sole arbitrator, failing which the arbitration shall be conducted by a panel of Three (3) arbitrators consisting of One (1) arbitrator jointly appointed by the Service Provider, One (1) arbitrator appointed by the Start up and the third arbitrator jointly appointed by the two arbitrators appointed as aforesaid. Subject to the above, the courts in Cochin, Kerala shall have jurisdiction over all matters relating to this Agreement. 8.4 Entire agreement This Agreement together with any agreement specifically executed pursuant to this Agreement constitutes the whole and only agreement between the Parties relating to the Incubation Services. This Agreement supersedes and extinguishes any prior drafts, agreements, undertakings, representations, warranties and arrangements of any nature whatsoever, whether or not in writing, relating thereto. 8.5 English Language All notices or formal communications under or in connection with this Agreement shall be in the English language. 8.6 Assignment Unless specifically otherwise provided in this Agreement, neither Party shall have the right to assign their respective rights hereunder or transfer their respective rights and obligations, in whole or in part, to any third party. Provided however that the Service Provider, may at its discretion, assign, transfer, novate and/or delegate any of its rights and obligations to any third party. 19
  • 20. 8.7 Severability If any provision of this Agreement is or becomes invalid, illegal or unenforceable under the laws of any jurisdiction, then such provision shall (so far as it is invalid or unenforceable) be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement which shall not in any way be affected or impaired. The Parties hereto shall then use all reasonable endeavors to replace the invalid or unenforceable provisions with a valid and enforceable and mutually satisfactory substitute provision, achieving as nearly as possible the intended commercial effect of the invalid, illegal or unenforceable provision. 8.8 Waivers And Remedies No failure or delay by the Parties in exercising any right or remedy provided by law under or pursuant to this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy. 8.9 Variation The Service Provider shall vary the terms of this Agreement (or of any of the documents referred to in this Agreement) at such circumstances as it may deem fit in the interest of the Parties to this Agreement. Such variation shall not come into effect unless it is made by an instrument in writing and signed by duly Authorized Representatives of each of the Parties hereto. The expression “variation” shall include any variation, amendment, supplement, deletion or replacement however effected. 8.10Counterparts This Agreement may be executed in one or more counterparts, each of which when duly executed and delivered shall be deemed an original but all of which together shall constitute one and the same instrument and any Party may execute this Agreement by 20
  • 21. signing any one or more of such originals or counterparts. The delivery of signed counterparts by facsimile transmission or electronic mail in “portable document format” (“.pdf”) shall be as effective as signing and delivering the counterpart in person. 8.11Costs and Expenses Each of the Parties shall bear their own legal costs, disbursements charges and expenses incurred in and about the negotiation, preparation and execution of this Agreement and any other document executed in connection with this Agreement including but not limited to the Shareholders Agreement. However, stamp duty payable in relation to this Agreement, the Shareholders Agreement and any other document executed in connection with this Agreement shall be borne by the Start Up. 21
  • 22. SCHEDULE A The facilities provided by the Service Provider in the Premises in the Startup Village during the Incubation Period are as follows:- • Usage of conference room* • Limited usage of the address of the Service Provider solely for the purpose of communicating as a participant in the Incubation Services provided by the Service Provider. *Access to conference rooms is subject to availability. Therefore, they will have to be booked well in advance. Guidelines for booking and allotment will be formulated by the Service Provider. The Start Up shall be informed regarding the same from time to time. 22
  • 23. SCHEDULE B Services Provided By Service Provider during the Incubation Period A) Access to Premises set out in Schedule A B) Access to a pool of mentors C) Guidance in product development D) Introduction to Potential Customers and Potential Investors and E) Assistance in promotion of the Start Up’s Business 23
  • 24. SCHEDULE C Key Employees 1. ___________________________________________ (name), _______________________ (designation), s/d/o ________________________________________________, aged ____ years, holding PAN card / Passport / Aadhar card / driving license No _______________ and residing at __________________________________________________________________ and having permanent residence at _____________________________________________ _________________________________________. Tel No: _______________________. Cell No ____________________​. 2. ___________________________________________ (name), _______________________ (designation), s/d/o ________________________________________________, aged ____ years, holding PAN card / Passport / Aadhar card / driving license No _______________ and residing at __________________________________________________________________ and having permanent residence at _____________________________________________ _________________________________________. Tel No: _______________________. Cell No ____________________​. 3. ___________________________________________ (name), _______________________ (designation), s/d/o ________________________________________________, aged ____ years, holding PAN card / Passport / Aadhar card / driving license No _______________ and residing at __________________________________________________________________ and having permanent residence at _____________________________________________ _________________________________________. Tel No: _______________________. Cell No ____________________​. 24
  • 25. IN WITNESS WHEREOF​, the said Service Provider and the said Start Up have put their respective signatures hereunder on the day, month and year first above written. Signed and delivered for and on behalf of ​INDIAN TELECOM INNOVATION HUB-TECHNOLOGY BUSINESS INCUBATOR (ITIH -TBI) By: Title: Signed and delivered for and on behalf of __________________________________ (​Start Up​) By: Title: Signed and delivered for and on behalf of ​MOBME WIRELESS SOLUTIONS LIMITED By: Title: 25
  • 26. 26