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(continuing) We've found the agreement really unequal and too much authority in his hands. But he's been insisting on it as the only way giving that same argum
by InSecurityDev 5y ago
(continuing)
We've found the agreement really unequal and too much authority in his hands. But he's been insisting on it as the only way giving that same argument of Buy American Act (BA) and Trade Agreement (TA).
As per my reading of these two acts, I understand that only the structure (51% ownership) isn't going to satisfy the requirements of these acts, as they require manufacturing (BA) or substantial transformation (TA) to have been done in USA. He says that we'll get 49% of the revenue and R&D/technical support will remain with us. but based on my reading of these provision, if we retain the development of the product, it won't pass BA/TA. We suspect that for such contracts, he can end up removing us from those activities consequently paying very little (if at all) percentage of the revenue from government contracts and we'll not be able to object it because of limited rights. "No Partner may do any act that would make it impossible to carry on the ordinary business of the Partnership." is one of such conditions in the agreement that can easily invoke expulsion of a partner in such a case IMO.
Please share your expert thoughts. Is our understanding of BA/TA correct?
Are there ways for us to remain independent, and we retain the rights of the product and he can still sell to government/Fortune1000 (though for latter I don't think it should be an issue)? (We’ve even proposed to have a separate contract for government agencies).