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M/s.
.............................................................................................
.....................................................................................................
.....................................................................................................
Represented by :
Mr.
..........................................................................................
and
Mr.
.........................................................................................
On the one hand
and
M/s.
.....................................................................................
.............................................................................................
................................................................... ........
..................
Represented by :
Mr.
..........................................................................................
and
Mr.
..........................................................................................
On the other
have had discussions about
a proposed joint venture in
(the receiver's country)
for production
of..........................................................................................................................
and have agreed on the following points at the end
of their discussions held in the office of
.........................................................................................................................on
...............................................
1. Company A
shall supply the
technical know-how for
production of
...................................
. The technical
know-how shall comprise
the complete
documentation required
for the
production, deputation
of professionals
to (the
receiver's country)
as required to ensure
the fulfilment of the
undertaking and training
of the Company
B's
professionals for the
same purpose. The travel
costs by ......
class air passage
as well as the living
costs of the technicians
covered by such
deputation either way
will be borne by the new
joint venture company.
Company A
will help the new company in the selection of the hardware
and software required in the production. Complete know-how and documents shall
be handed over to
Company B and/ or the newly formed company.
2. Company A
shall be paid by the
newly formed company for
its know-how a lumpsum
fee of
......................................................
. This amount will
be paid in three
instalments as follows :
1/3 after the
agreement has been
filled with the
local authorities
1/3 on delivery of
technical documentation,
and
1/3 on the
commencement of
commercial production.
3. In addition to the
above lump-sum fee, the
Company A
shall be paid a royalty
of
........................
percent for a period of
.....................
years on the ex-factory
value of the licensed
products.
4. In
order to carry out terms
of this undertaking and
on signing of the
documents by the
parties, a joint venture
company shall be formed
with agreed paid- up
capital basis to carry
out the terms of
undertaking. Company A
shall participate in the
equity capital of the
new joint venture
company to the extent of
................ % of
the paid capital.
5. As envisaged above,
Company A
will participate in the equity capital as agreed. So long as the aid agreement
of technical know-how is in subsistence
Company A shall
continue to hold the said shares and shall continue to provide any improvement
in the technology for manufacturing the said products. If, however,
Company A
decides to withdraw its equity participation after 5 years the equity
shares held by Company A
shall be offered to Company B
at a rate to be fixed by the auditors of the joint venture company. If
Company B
does not indicate its intention to purchase the said shares within 6 months of
the offer given by Company A,
then Company A
can dispose of its equity
shares in the open market in accordance with the directions that might be given
by local
authorities in this regard.
6. Company B
agrees to move the necessary applications before
its Government
authorities for registration of the joint venture company, for import of capital
goods, and for sanction of the proposed foreign collaboration.
7. Company B
shall keep, Company A
informed, with the help of a quarterly report or more often if necessary,
of the progress made by them in completion of the formalities associated with
the establishment of the joint venture and in implementation of the project.
8. Company B
shall be assisted by Company A
in competing the official formalities for the establishment of the joint venture
by being given the necessary information relevant to implementation of the
project. The application forms requiring such assistance from
Company A
shall be given to Company A in
photocopy.
9. Company B
shall bear all the initial expenses involved in the formation of the joint
venture company. These expenses shall debited to the account of the new joint
venture company, and subsequently shared by the two partners in proportion to
their share capital in the joint venture company.
10. Both
Company B
and
Company A
affirm that they shall implement the project in good faith and shall take all
necessary steps to see the project through expeditiously. They shall not
negotiate with any other parties for a similar project, and the negotiations in
progress, if any, shall be terminated forthwith.
11. This Memorandum of Understanding
shall be valid upto the end of .......................................,
and both the parties hereto shall be free thereafter from their obligations
herein written, if the progress achieved until then is not found satisfactory by
either of them.
For
Company A For
Company B
...............................
..............................
...............................
..............................
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