EXHIBIT 10.2
MEMORANDUM OF UNDERSTANDING
This memorandum of understanding entered into this the 22nd day of September,
2010 between M/s. HELIOS AND MATHESON INFORMATION TECHNOLOGY LIMITED,a Company
incorporated under the Companies Act, 1956 having its Registered Office at
cybervale #02-01, mahindra world city, Chennai 603 002
represented by its CEO and Managing Director Mr.G.K.Muralikrishna (hereinafter
called HMIT)
And
HELIOS AND MATHESON NORTH AMERICA a corporation formed under the laws of
Delaware, USA having its Registered Office at 200, Park Avenue South, New York
10003 represented by its President and CEO Divya Ramachandran (hereinafter
called HMNA).
WHEREAS HMIT is engaged in providing a comprehensive range of IT Services and
has been delivering such services through its global delivery model and has
invested several millions of dollars in setting up state of the art off-shore
developments centers;
AND WHEREAS HMNA is a subsidiary corporation of HMIT having its offices in USA
for carrying on business in and from U.S.A ;
AND WHEREAS HMNA does not have the off-shore infrastructure, nor the financial
resources to set up one and has requested HMIT’s help to execute such work for
their clients.
AND WHEREAS at the request of HMNA, HMIT agreed to make available to HMNA the
facilities of dedicated Off-shore Development Centers (ODCs), technology and
management support in running the said ODCs established by it for utilization of
the same by HMNA and its clients as may be required from time to time.
AND WHEREAS HMIT undertakes to provide adequate support for performance by HMNA
of all terms including financial obligations to the latter’s clients.
AND WHEREAS HMIT and HMNA have come to an understanding regarding the
remuneration and sharing of the revenue and costs in respect of the businesses
carried on for HMNA’s clients.;
AND WHEREAS the parties also desired that the terms and conditions regarding the
said services may be reduced to writing;
Now this memorandum of understanding witnesses as follows:
1. HMIT shall make available to HMNA the Off-shore Development Centers with
state of the art facilities of ODCs and also render services by way of human
resources, support in technology, client engagement, management and running the
ODCs for HMNA.
2a). While HMIT incurs capital and revenue expenditure in India, HMNA incurs
revenue expenditure in the USA, HMNA captures all the revenue (income) from the
clients. The fees and charges shall be worked out on the basis that the on-site
component of the revenue and costs are to HMNA’s account and Off-shore component
of revenue and costs are to HMIT’s account.
b) HMIT shall also capture whole revenue accrued for offshore resources
travelling onshore for knowledge transfer purposes.
c) HMIT shall invoice HMNA, at agreed frequency, the due amount as above with
required details.
d) Both HMIT and HMNA agree to follow transfer pricing guidelines as applicable
from time to time.
e) HMNA shall pay HMIT for the amount invoiced within 7 days of collecting the
corresponding dues from clients.
f) HMNA shall deduct all expenses incurred by it on behalf of HMIT from amount
payable to HMIT.
3a) In view of the commitment made by HMIT to capital expenditure, revenue
expenses and also to secure HMIT’s receivables from HMNA, it is also agreed
between HMIT and HMNA that HMNA would furnish security deposit of $1 million to
HMIT as of now and would increase the said security deposit as and when the
business operations are scaled up.

 

 

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EXHIBIT 10.2
b) It is also agreed between HMNA and HMIT that any damage, claim or expenses
that HMIT may suffer or incur while discharging its obligations under this
Memorandum of Understanding may be adjusted from and out of the security
deposit;
c) It was also agreed between HMNA and HMIT that the security deposit will be
refunded to HMNA without interest on termination of this agreement subject to
following:
i) Deduction of such amounts towards damages, claims or expenses arising out of
acts, deeds, commission, omission, etc of HMNA under this agreement;
ii) Deduction of any amount payable by HMNA to HMIT for services rendered by
HMIT to HMNA or its clients,
iii) Satisfactory discharge by HMNA of all obligation of HMIT taken on behalf of
HMNA,
iv) Further, refund of such security deposit is subject to satisfactory closure
of all fiduciary obligations of HMIT under this agreement or other agreements
that HMNA may have with its clients.
4. HMNA and HMIT agree to support each other fully in order to comply with all
requirements of laws of USA and India respectively.
5. Termination of this MOU has to be mutually agreed by CEO’s of the two
companies.
6. In view of the larger working relationship in the offing, both of the Boards
of Directors and management of HMNA and HMIT will convene in due course to reach
a comprehensive agreement on or before June 30, 2011.
In witness where of the parties have signed this memorandum of understanding
this the 22nd day of September 2010.

         
/s/ G.K.Muralikrishna
 
G.K.Muralikrishna
  /s/ Divya Ramachandran
 
Divya Ramachandran    
CEO & Managing Director
  President & CEO    
HMIT Ltd.
  HMNA Inc.