AGREEMENT TO SUPPLY TECHNICAL KNOW-HOW

AFREEMENT is made at…………….this………..day of …….between M/s………….. 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…………….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:

1. 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……………………..

2. The Foreign Company has the exclusive expertise or know-how in relation to the manufacture of the said items of machinery/product.

3. 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.

4. 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 know-how as described in Para 29 of this Agreement.

3. All the know-how and other information supplied to the Indian Company shall be kept secret by the Indian Company and shall not be directly or indirectly passed on to any other person in or outside India.

4. 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..

5. 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.

6. 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.

7. The Indian Company may not grant a sub-license 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 may be given on such terms and condition as may be agreed upon.

8. The said machinery/product will be according to the specified 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 in found the same will be rectified by the Indian Company.

9. On the termination f 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 hereinafter provided the Indian Company shall not be entitled to make use of the know how and shall forthwith return all the technical material relating to the know how t the Foreign Company.

10. If and whenever required by the Indian Company, the Foreign Company shall depute one or more representatives who are specialized 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.

11. The Indian Company will bear and pay all the traveling 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.

12. 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 arrangement for the stay of such representatives or representative of the Indian Company. All the expenses on account of traveling 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.

13. The Indian Company in all advertisements wherever made and other literature mention the fact that the item of machinery/product are manufactured in collaboration with the Foreign Company.

14. The Foreign Company will have the right to send its one or more representatives o its own but at its own costs to India and to visit the factory of the Indian Company, to supervise and check that the d\said know-how or expertise is being utilized property and according to the requirements and the items of machinery/product are according to the standards maintained by the Foreign Company.

15. 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.

16. Indian Company may sell the said items of machinery/products, under its own trade mark or trade name in India but shall not us 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.

17. In consideration of the Foreign Company making available to the Indian Company the said know-how, the Indian Company shall pay to the Foreign Company as follows: (as per agreement)

18. The Indian Company will submit to the foreign company every…… ……months from the date the first item of machinery/products id produced and the statement of the total production during the previous months dully 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…………..months production within… month from the date of such acceptance.

19. 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.

20. The Indian Company will also be entitled to deduct from such payment the income tax, if any payable under the Income Tax Act, 1961.

21. 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.

22. 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.

23. 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
(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.

24. All the sanctions, approvals, permission, 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.

25. In the event of any dispute or difference arising between the parties hereto such dispute or difference shall be referred to Arbitration and such Arbitration shall be governed by the Indian Arbitration and Councilation Act, 1996 for the time being in force. The venue for such Arbitration shall be in India.

26. The validity of this agreement and the effect or meaning of the terms hereof will be decided according to the Indian Law.

27. In this agreement the expression ‘know-how’ shall include technical information such as inventories formulae process, engineering ad manufacture skill, scientific data, calculations, specifications, drawings, standards, sketches and all other relevant information and knowledge.

28. 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.

Common seal of the within named Indian Company…………….Co. Ltd. is hereto affixed pursuant to the resolution of the Board of Directors dated……..in the presence of Mr………… Managing Director duly authorised in that behalf and who in token thereof have put his signature in the presence of………………………….

Common seal of the within named Foreign Company………..................... Co. Ltd. is hereto affixed pursuant to. the resolution of the Board of Directors dated…………...........….in the presence of………....................duly authorised in that behalf and who in token thereof have put their/his signatures/signature in the presence of ……………………….