Agreement to Supply Technical Know-How[CD1]
THIS AGREEMENT is made at .............
this... day of................. between M/s. XYZ Co. Ltd., a Company
incorporated under the laws of............. and having its registered office at
................... hereinafter referred to as the 'Foreign Company, of the One
Part and M/s. ABC Co. Ltd., a Company registered under the Indian Companies
Act, 1956, and having its registered office at... hereinafter referred to as
the 'Indian Company' of the Other Part.
WHEREAS the Foreign Company is carrying on
business of manufacturing/fabricating the Items of machinery/the products, the
particulars of which are set out in the Schedule hereunder written, at...
AND WHEREAS the Foreign Company has the
exclusive expertise or know-how in respect of the said items of
machinery/product.
AND WHEREAS the Indian Company proposes to set
up a factory at... with intent to manufacture similar machinery/product and
requested the Foreign Company to make available the know-how to the Indian
Company.
AND WHEREAS after the negotiations the Foreign
Company has agreed to make available to the Indian Company know-how on the
following terms and conditions and which are set out and now proposed to reduce
to writing.
AND WHEREAS approval of the Government of
India will be obtained to enter into this agreement and this agreement will be
subject to such approval.
NOW IT IS AGREED BY AND BETWEEN THE PARTIES
HERETO AS FOLLOWS:
1.
The Foreign Company shall make available to the Indian
Company all the expertise or know-how in relation to the manufacture of the
said items of machinery/product mentioned in the Schedule hereunder written
within a period of....... days from the date hereof.
2.
The Foreign Company shall supply to the Indian Company
all the materials regarding such knowhow, such as the formulae, charts.
Drawings, process sheets, calculation sheets, standards and other Information
as Is necessary to understand and utilise the said know-how and to implement
the same In the manufacture of the said items of machinery/ products.
3.
All such material referred to above shall be in the
English language and shall be supplied to the Indian Company by the Foreign
Company within... days from the date hereof and as and when required
subsequently by the Indian Company.
4.
If the Foreign Company effects any improvement or makes
any additions or alterations in the technology for the manufacture of the said
items of machinery/product, the same will be intimated to the Indian Company
forthwith and all the literature, new formulate, drawings and other information
in respect of such new technology or improvement, additions or alterations
shall also be supplied to the Indian Company forthwith.
5.
All the know-how and other Information supplied to the
Indian Company shall be kept secret by the Indian Company and shall not he
directly or indirectly passed on to any other person In or outside India. The
Indian Company will secure from its employees who become acquainted with such
know-how, proper agreements for maintaining the secrecy of the know-how and
supply copy thereof to the Foreign Company.
6.
The Foreign Company will assist the Indian Company in
selecting and buying the modern and up to date machinery and equipment in India
or abroad, suitable for the manufacture the type of machinery /product
aforementioned and supply the necessary Information with the Foreign Company in
connection with such machinery product.
7.
The material relating to the know how mentioned above
shall be in English language or If the original is any other language it will
be accompanied by English translation thereof and measurement and weight
figures will be as for metric system.
8.
The know-how material will be handed over by the
Foreign Company in.... at the registered office of the Foreign Company to the
authorised representative of the Indian Company with utmost secrecy
9.
The Foreign Company shall not enter into any agreement
with any party for the use of the said know how by such party in India.
10. The
Indian Company may not grant a sub-licence or permission any party for
manufacturing their machinery /product with the help of the said know how
except with written consent of the Foreign Company and which consent maybe
given on such terms and conditions as may be agreed upon.
11. The
said machinery /product will be according to the specification quality and
standard envisaged by the know-how. The Indian Company shall have the first
production tested by the Foreign company and if any deficiency is found the
same will be rectified by the Indian Company.
12. On
the termination of this agreement by efflux of time (but not otherwise) Indian
Company will be entitled to use the know-how free of charge. But if the
agreement is terminated earlier as herein in after provided that the Indian
Company shall-hot be entitled to make use of the know how and shall forthwith
return all the technical material relating to the know how to the Foreign
Company.
13. If
and whenever required by the Indian Company, the Foreign Company shall depute
one or more representatives who are specialised in the application of the said
know-how with a view to teach any one or more employees of the Indian Company
for the application of the said know-how and/or supervise the application of
the know-how in the factory of the Indian Company.
14. The
Indian Company will bear and pay all the travelling charges to and from India
of such representatives of the Foreign Company 'as aforesaid and shall also
bear and pay the expenses incurred for their stay in India and other incidental
charges.
15. If
so desired by the Indian Company it may send one or more representatives to the
factory of the Foreign Company to get themselves acquainted with the
Implementation of the know how and with the process of manufacture of the said
items of machinery/product and in that case the Foreign Company shall render
them all facilities and assistance to achieve the said object. The Foreign
Company will make all arrangements for the stay of such representatives or representative
of the Indian Company. All the expenses on account of travelling from and to
India and of the stay of the said representative or representatives of the
Indian Company at the place where the factory of the Foreign Company is situate
will be borne and paid by the Indian Company.
16. If
any special tools, Instruments and material are required in the application of
the said know-how and which are not available in the Indian market the same
will be supplied by the Foreign Company. The Indian Company will obtain the
necessary Import License for the same and the price thereof will be paid by the
Foreign Company opening a Letter of Credit on any Indian Bank through Foreign
Bank in favour of the Foreign Company. Such goods will be sent F.O.B. to some
port In India.
17. The
Indian Company shall not make any innovations or additions or alterations in
the said knowhow and the process of manufacture without the written consent of
the Foreign Company and the Indian Company "I take care to see that the
said items of machinery/products will be In strict compliance with the
specifications of quality and standards laid down by the Foreign Company.
18. The
Indian Company in all advertisements wherever made and other literature mention
the fact that the item of machinery/products are manufactured in collaboration
with the Foreign Company.
19. The
Foreign Company will have the right to send its one or more representatives on
its own but at its own costs to India and to visit the factory of the Indian
Company, to supervise and cheek that the said know- how or expertise Is being
utilised properly and according to the requirements and the items of
machinery/product are according to the standards maintained by the Foreign
Company.
20. The
items of machinery/products manufactured by the Indian Company will be sold
only in the Indian market and not outside India except with the written consent
of the Foreign Company.
21. The
Indian Company will furnish to the Foreign Company a statement every six months
of the total production of the said Items of machinery/products, and the total
sale effected to enable the Foreign Company to ascertain the response to the
said items of machinery/ products from the Indian market.
22. Indian
Company may sell the said items of machinery/products, under its own trade mark
or trade name in India but shall not use the trade mark or trade name of the
Foreign Company without a separate written agreement to that effect between the
Foreign Company and the Indian Company.
23. In
consideration of the Foreign Company making available to the Indian Company the
said knowhow the Indian Company shall pay to the Foreign Company as follows:-
a.
A lump sum payment of ...... American Dollars in the manner
hereinafter mentioned and (b) a royalty at the rate of Rs.... on the ex-factory
price of the each of the said items of manufacture/product at the end of every
three months as hereinafter stated. The lump sum legally payable as aforesaid
shall be paid to the foreign company in three installments unless otherwise
stipulated in the letter of the Reserve Bank of India namely-
I.
One third of the said amount will be paid on the
approval of this agreement by the Reserve Bank of India and on this agreement
being pledged with the authorised dealer in foreign exchange.
II.
The second installment of one-third amount will
be paid on the supply of the know-how.
III.
The third installment of the balance will be
paid after four years or on the approval of the Reserve Bank and the agreement
is filed with the authorised dealer in foreign exchange whichever is earlier.
IV.
All remittances of money to be made to the
Foreign Company under this agreement will be forwarded as per the exchange
rates prevailing on the date of remittance.
24. The
Indian Company will submit to the foreign company every three months from the
date the first item of machinery/product is produced and the statement of the
total production during the previous months duly certified by a Chartered
Accountant and after the same is verified and accepted by the Foreign Company.
The India Company will pay the amount of royalty at the rate aforesaid on such
three months production within one month from the date of such acceptance.
25. The
payment to be made by the foreign company will be subject to payment of cess,
if any payable under the Research and Development Cess Act of 1986.
26. The
Indian Company will also, be entitled to deduct from such payment the income
tax, if any payable under the Income Tax Act. 1961.
27. Copy
of this agreement signed by both the parties will be filed with the several
authorities as required by law.
28. The
Indian company will submit to the Foreign Company every three months from the
date the first item of machinery /product is produced, a statement of the total
production during the previous months duly certified by a Chartered Accountant
and after the same is verified and accepted by the Foreign Company, the Indian
Company will pay the amount of royalty at the rate aforesaid on such three
months production within one months from the date of such acceptance.
29. The
payment to be made to the Foreign Company will be subject to payment of cess,
if any payable under the Research and Development Cess Act of 1986.
30. The
Indian Company will also be entitled to deduct from such payment the income
tax, if any payable under the Income Tax Act, 1961.
31. A
copy of this agreement signed by both the Parties will be filed with the
several other authorities as required by law.
32. All
payments to be made by one party hereto to the other in Indian or foreign
currency under this agreement will be made subject to the approval of the
Reserve Bank of India and In the manner stipulated by the said Bank.
33. The
Letter of approval of the Government of India hereinbefore recited shall be
deemed to be a part of this agreement and any term herein contained which is
contrary to or inconsistent with any term or condition contained In the said
letter, shall be treated as void and of no effect.
34. This
agreement will remain in force for a period of... years from the date hereof
subject to the other terms hereof. The parties may extend the said period by
mutual consent.
35. This
agreement will be treated as terminated on the happening-of any of the events
below mentioned.
i.
If any party hereto commits breach of any
provisions of this agreement and the party who is alleged to have committed
breach is served with a notice by the other party, three months prior to the
intended date of termination by the other party and the former party has failed
to amend the breach within the said period.
ii.
If any event happens which will make the
performance of this agreement impossible including any force majeure event.
iii.
If either the Indian Company or the Foreign
Company goes into either voluntary or compulsory liquidation according to or
under the law by which it is governed.
iv.
If the parties hereto mutually agree to terminate
this agreement.
36. All
the sanctions, approvals, permissions, licenses and other requirements of the
Government of India and of any statutory authorities required for giving effect
to all the terms and conditions, of this agreement shall be obtained by the
Indian Company.
37. In
the event of any dispute or difference arising between the parties hereto or as
to the rights and obligations under this agreement or as to any claim, monetary
or otherwise of one party against the other or as to the interpretation and
effect of any terms and conditions of this agreement, such dispute or
difference shall be referred to Arbitration of a common Arbitrator if agreed
upon otherwise to two or more Arbitrators, one to be appointed by each of the
parties to this agreement and such Arbitration shall be governed by the Indian
Arbitration & Conciliation Act, 1996. The venue for such Arbitration shall
he in India.
38. The
validity of this agreement and the effect or meaning of the terms hereof will
be decided according to the Indian Law.
39. Any
communication by one party to the other shall be made by registered post
through airmail. With acknowledgement due or by telex or fax or cable. In case
the communication is made by telex or fax or cable, the same will be subsequently
but immediately thereafter confirmed by written communication sent by
registered post as aforesaid. Any evidence showing the communication was posted
or telex, fax or cable communication was made will be sufficient to prove the
posting of sending the communication.
40. In
this agreement the expression 'know-how' shall include technical information
such as Inventories formulae process, engineering and manufacturing skill,
scientific data. Calculations, specifications, drawings, standards, sketches
and all other relevant information and knowledge.
41. Each
of the parties hereto shall be deemed to include its successors or permitted
assigns..
THE SCHEDULE ABOVE
REFERRED TO
IN WITNESS WHEREOF the parties have put their
respective seals the day and year first hereinabove written.
The common seal of M/s. ABC Co. Ltd., is
hereunto affixed pursuant to the resolution of the Board of Directors dated
................ in the presence of Mr........................,a Director duly
authorised in that behalf
The common seal of M/s. XYZ
& Co. Ltd., is hereunto affixed pursuant to the resolution of the Board of
Directors dated................. in the presence of Mr. .................. a
Director, duly authorised In that behalf. Witnesses;
1.
2.
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