Know How Licencing Agreement between The Tropical Botanic Garden and Research Institute, Kerala, India (TBGRI) and The Arya Vaidya Pharmacy (Coimbatore) Ltd, Coimbatore, India (the PARTY), dated November 10th, 1995
Subject matter A Know How Licencing Agreement relating to know how (KNOWHOW) developed and owned by TBGRI to manufacture herbal formulations based on “Arogyapacha” and other herbal drugs (Jeevani).

Summary of use(s) The license hereby granted to the PARTY by TBGRI for utilization of KNOWHOW for a period of 7 years on an exclusive basis commencing from the date of transfer of KNOWHOW, provided that KNOWHOW is effectively utilized within 4 years from the date of transfer of KNOWHOW.

Purpose or background This agreement details the terms and conditions for the grant of licence by TBGRI to the PARTY for utilising the KNOWHOW, the rights and obligations of either party and the financial arrangements between the parties.

Contact details The Tropical Botanic Garden & Research Institute, Karimancode, P.O.Pacha-Palode, Thiruvananthapuram, 695 562, Kerala, India.
Telephone: 91-0472-869622, 869228; Fax: 91-0471-869646.


A.1.1 THIS AGREEMENT made and entered into this Tenth day of November One Thousand Nine Hundred and Ninety Five between Tropical Botanic Garden & Research Institute, a Society registered under the Travancore Cochin Literary, Scientific and Charitable Societies Registration Act 1955, having its registered office at Tropical Botanic Garden and Research Institute, Karimancode, P.O.Pacha-Palode, Thiruvananthapuram – 695 562 (hereinafter called TBGRI which expression shall where the context so admits, include its successors and permitted assigns) of the one part


A.1.2 The Arya Vaidya Pharmacy (Coimbatore) Ltd., a COMPANY incorporated in India under the Indian Companies Act 1913 (No.61 of 1947 – 48) and having its registered office at 1381 & 1382, Trichy Road, Coimbatore – 641 018 (hereinafter called the PARTY which expression shall where the context so admits include its successors and permitted assigns) of the other part.

A.2.1 WHEREAS TBGRI has developed and is in full possession of and has full intellectual property rights to manufacture herbal formulation based on “Arogyapacha” and a few other herbal drugs (Jeevani) as detailed in Annexure I (hereinafter called the KNOWHOW) for making Herbal Formulation based on “Arogyapacha” and a few other herbal drugs (Jeevani) as per specifications laid down in Annexure II (hereinafter called the PRODUCT).
A.2.2 And whereas TBGRI at the request of the PARTY has agreed to grant licence to the PARTY for utilising the KNOWHOW on terms and conditions hereinafter contained.

This agreement details the modalities and the terms and conditions for the grant of licence by TBGRI to the PARTY for utilising the said KNOWHOW, the rights and obligations of either party thereto and the financial arrangements between the parties.

A.4.1 In consideration of the payment as provided for in Clause 5.1 and performance by PARTY of the covenants herein contained, TBGRI hereby grants to the PARTY the licence to utilise the KNOWHOW to make and sell the PRODUCT directly or through any marketing agency authorised by The Arya Vaidya Pharmacy (Coimbatore) Ltd.
A.4.2 The license hereby granted to the PARTY by TBGRI is for utilisation of KNOWHOW for a period of seven years on exclusive basis commencing from the date of transfer of KNOWHOW provided that the KNOWHOW is effectively utilised within 4 years from the date of transfer of KNOWHOW.
A.4.3 The license shall come into force from Tenth day of November One Thousand Nine Hundred and Ninety Five (hereinafter called the EFFECTIVE DATE) and shall remain valid for a period of seven years thereafter.
A.4.4 The PARTY will produce and market the PRODUCT within 4 years from the date of transfer of KNOWHOW. If PARTY fails to do so TBGRI will have the right to cancel the licence granted to PARTY and the PARTY in turn should surrender the KNOWHOW. In such a circumstance the PARTY will not have any right to claim licence fee already paid to TBGRI.

A.5.1 In consideration of the licence hereby granted and the transfer of KNOWHOW by TBGRI to the PARTY, the PARTY shall pay to TBGRI as hereunder:

Licence Fee
i. Lump sum
a. Rs. 5 Lakhs on signing of the agreement, and
b. Rs. 5 Lakhs on the day of transfer of KNOWHOW by TBGRI

ii. Royalty

Royalty at the rate of 2% of the ex-factory sale price of the PRODUCT made by the PARTY for a period of 10 years, computed from the date of commercial production. The terms and conditions governing the payment of royalty shall be as in Annexure III.

A.6.1 Transfer of KHOWHOW

i. Transfer of KNOWHOW Documents
TBGRI shall within 180 days of the EFFECTIVE DATE hand over to the PARTY Technology Transfer Documents (TTD) consisting of specifications of product, process details, quality control procedures and user manuals.

ii. Demonstration
TBGRI shall demonstrate the KNOWHOW at TBGRI, Palode to the authorised representative of the PARTY within 6 months from the EFFECTIVE DATE for which the PARTY shall pay separately. On completion of the demonstration both parties shall sign a certificate to this effect.

iii. Training
TBGRI shall arrange for the training of Two or Three of PARTY’s personnel having the requisite qualifications for a maximum of 2 months for which the PARTY shall provide inputs/pay separately. The training shall be availed of by the PARTY within a period of 3 months from the date of transfer of KNOWHOW.
A.6.2 The transfer of KNOWHOW shall be deemed as completed on performance by TBGRI the tasks stipulated in clause A.6.1.

A.6.3 Assistance
TBGRI may at the request of the PARTY and on its paying charges as specified by TBGRI, depute qualified personnel to render assistance in KNOWHOW implementation. This assistance would be available up to a period of 4 years from the EFFECTIVE DATE.

A.7.1 The PARTY shall employ its best endeavour to work the KNOWHOW and sell the PRODUCT on a commercial scale. The PARTY shall commercialise the KNOWHOW within a period of 48 months from the date of transfer of KNOWHOW as defined in clause A.6.2.

A.7.2 Fulfilment of all procedural, legal, operational requirements for the commercial implementation of the KNOWHOW shall be the responsibility of the PARTY.

A.7.3 The PARTY acknowledges the absolute ownership of KNOWHOW by TBGRI and shall not dispute the legality, validity or enforceability of the licence granted.

A.7.4 It shall not be open to the PARTY to claim the KNOWHOW in their name on the plea of having effected any improvements/modifications upon the KNOWHOW or upon the PRODUCT. All PRODUCTS manufactured by the PARTY shall be deemed to have been manufactured under the licence hereby granted.

A.7.5 The PARTY shall permit the personnel of TBGRI or its attorneys or duly authorised agents, at all convenient time to enter into and upon any premises of PARTY where PRODUCTS under this licence are manufactured/stocked/sold/used for the purpose of inspecting the same and the manufacture thereof, generally to ascertain that the provisions of this licence are being complied with and quality of the PRODUCT maintained.

A.7.6 The PARTY shall not, at any time, assign, mortgage, charge, grant sub-licence or otherwise deal with possession or control of the licence hereby granted.

A.7.7 The PARTY shall not directly or indirectly and either by itself or by its agents use the KNOWHOW otherwise than in accordance with these presents.

A.7.8 The PARTY shall not file any application for seeking intellectual property rights in its own name or in the name of other person(s) on any matter relating to the information disclosed to it by TBGRI under this agreement, save with the written prior approval of TBGRI.

A.7.9 The PARTY shall not oppose or direct or cause any persons to oppose any application seeking intellectual property rights relating to the PRODUCT and/or KNOWHOW filed by TBGRI.

A.7.10 The PARTY shall treat as strictly confidential all information/knowledge obtained from TBGRI, in connection with or relating to the licence hereby granted.

A.8.1 During the currency of the agreement both parties shall promptly disclose to each other in writing, all or any improvements or modifications made on the KNOWHOW / PRODUCT. All such improvements/modifications shall then form an integral part of the KNOWHOW.

A.8.2 These presents shall not be construed as a warranty by TBGRI of the novelty, utility, saleability and workability of the KNOWHOW/PRODUCT.

A.8.3 This agreement shall be the sole repository of the terms and conditions agreed to herein by and between TBGRI and the PARTY and no amendment thereof shall take effect and be binding on either of them except provided for in clause A.16. hereunder.

A.9.1 The PARTY shall affix in a conspicuous manner upon every PRODUCT and a label or plate bearing the inscription “TBGRI KNOWHOW” in letters of size not less than half the nominal size of the largest size of letter —— —- name of the party or its brand name or trademark for the PRODUCT. The PARTY shall not sell [PRODUCT and/or any box or Package containing the PRODUCT] without such label or plate being affixed thereon. Similarly every advertisement, boarding, technical literature, publicity and the like material in respect of or relative to the PRODUCT issued by the PARTY shall include the same inscription as aforesaid in a prominent manner.

Neither party shall be held responsible for non-fulfilment of their respective obligations under this agreement due to the exigency of one or more of the force majeure events such as but not limited to acts of God, War, Flood, Earthquakes, Strikes, Lockouts, Epidemics, Riots, Civil Commotions etc., provided on the occurrence and cessation of any such event the party affected thereby shall give a notice in writing to the other party within one month of such occurrence or cessation. If the force majeure conditions continue beyond six months, the parties shall jointly decide about the future course of action.

TBGRI hereby agrees to authorise and to empower the PARTY to institute and prosecute such suits or proceedings as the PARTY may deem expedient, to protect the rights hereby conferred and for the recoveries of damages and penalties for the infringement of such rights and to secure to the PARTY full benefits of this licence and for any such purpose to use the name of TBGRI. The PARTY in its turn shall indemnify TBGRI against damages, costs and expenses occasioned by such proceedings, and TBGRI shall in any such proceedings, at the expense of the PARTY afford to the PARTY all proper and or reasonable assistance in proving and defending its title to the grant of the rights hereby conferred.

A.12.1 This agreement may be terminated by either of the parties forthwith if the other party commits breach of any of the terms hereof and shall have failed to rectify such breach within sixty days of the notice in this behalf having been served on it by the other party.

A.12.2 In addition to the reasons for termination as set forth above, this agreement may be terminated forthwith if either of the parties voluntarily or involuntarily enters into composition, bankruptcy or similar reorganisation proceedings or if applications invoking such proceedings have been filed.

Upon termination of the agreement:

A.13.1 All rights granted to and the obligations undertaken by the parties hereto shall cease to exist forthwith except the obligation of the PARTY to keep KNOWHOW in confidence vide clause A.7.10 herein and pay royalty as per clause A.5.1. (ii) above accrued on or prior to the date of such termination, make written reports and keep records, files and books vide para 6 of Annexure III hereto and the right of TBGRI to inspect the same.

A.13.2 The PARTY or its assigns will not utilise the KNOWHOW to manufacture the PRODUCT and the PARTY shall immediately deposit with TBGRI the original and all copies of TTD, and other documents data related to this licence received from TBGRI.

A.13.3 The PARTY shall immediately pay to TBGRI all amounts of money due from it upto the date of termination. Also all sums of money hereto paid by the PARTY under the terms of this licence shall be forfeited to TBGRI, and the PARTY shall not be entitled to any credit or allowance in respect thereof.

A.13.4 The PARTY will not be debarred from disposing off the PRODUCTS which are already manufactured or in the process thereof by sale or otherwise. Such disposal will however, not be effected unless and until the PARTY remits to TBGRI the entire amount of royalty due, in accordance with Clause 5 above including the PRODUCTS sought to be disposed off.

A.14 All notices and other communications required to be served on the PARTY under the terms of this agreement, shall be considered to be duly served if the same shall have been delivered to, left with or posted by registered mail to PARTY at its last known address of business. Similarly, any notice to be given to TBGRI shall be considered as duly served if the same shall have been delivered to, left or posted by registered mail to TBGIR at its registered address in Pacha-Palode, Thiruvananthapuram.

A.15.1 No amendment or modification of this agreement shall be allowed. The request for the same is made in writing by both the parties or their authorised representatives and specifically stating the same to be an amendment of this agreement. The modifications/changes shall be effective from the date on which they are made/executed unless otherwise agreed to.

A.16.1 The rights and/or liabilities arising to any PARTY to this agreement shall not be assigned except with the written consent of the PARTY and subject to such terms and conditions as may be mutually agreed upon.

Applicable to agreements with private parties in India
A.17.1 Except as hereinbefore provided, any dispute arising out of this Agreement, the same shall be referred to the arbitration of two arbitrators, one to be appointed by each party to the dispute, and in case of difference of opinion between them to an umpire appointed by the said two arbitrators before entering on the reference, and the decision of such arbitrators or umpire, as the case may be, shall be final and binding on both parties. The venue of arbitration shall be at such place as may be fixed by such arbitrators or umpire and the arbitration proceedings shall take place under the Indian Arbitration Act, 1940.
A.17.2 Any legal appeal over the arbitrators’ award arising out of or in any way connected with this agreement shall be deemed to have arisen in Thiruvananthapuram and only the courts in Kerala shall have the first jurisdiction to determine such matters.

This agreement has been executed in two originals one of these has been retained by TBGRI and the other by the PARTY.
In witness whereof the parities hereto have signed this agreement the Tenth day of November One Thousand Nine Hundred and Ninety Five mentioned hereinbefore.
For and on behalf of TBGRI

For and on behalf of PARTY

The KNOWHOW shall mean [please specify the type of knowhow/ scale of development/ parameters, specifications of its operation / use etc.]
The PRODUCT shall meet/conform to the following [specifications / parameters etc.]
1. The royalty shall be payable on net ex-factory sale price of all the PRODUCT manufactures sold and used for as such or to make any other product therefrom, exclusive of all duties and taxes payable to the Government. The ex-factory sale price for the basis of payment of royalty on the PRODUCT used for shall be (i) the highest ex-factory sale price of the PRODUCT sold; (ii) or if no merchant sales have taken place, the price such a PRODUCT would fetch if sold in the market as determined by the DIRECTOR TBGRI.
2. The period 10 years for the payment of royalty shall be computed from the date of the start of the commercial manufacture of the PRODUCT authorised by the PARTY to any agency of the Central or State Government or in the PARTY’s Annual Reports and shall survive the period of licence hereinbefore mentioned.
3. The royalty shall become due for payment on the 31st March and on 30th September in every year and shall be paid by the PARTY on / or before the expiry of 60 days from the above two stipulated dates. In the event of default in the payment of royalty amount as above the PARTY shall pay interest on amount in default at the rate of 18% per annum.
4. The PARTY shall within 60 days of the stipulated dates deliver to TBGRI in a prescribed form, a true and complete statement in writing of PRODUCT manufactured, sold and / or used by PARTY during the preceding half year and all the royalty payable to TBGRI under this agreement.
5. PARTY shall be liable for the payment of royalty on all PRODUCT irrespective of any plea whether the same have been manufactured as per the KNOWHOW licensed by TBGRI or otherwise. All PRODUCT manufactured by the PARTY shall be deemed to have been manufactured under KNOWHOW licensed TBGRI. It will not be open to PARTY to claim any exemption or reduction in the payment or amount of royalty accruing under this agreement on the plea of having used KNOWHOW other than that of TBGRI or having effected any improvements/modifications in the intellectual property licensed by TBGRI.
6. PARTY shall at its place of business, keep accurate records in sufficient details to enable the calculation and determination of royalty payable hereunder and upon TBGRI’s request shall permit an authorized representative of TBGRI to have access during its business hours to examine relevant records as may be necessary to (a) determine in respect of any half year as specified above, ending not more than one year prior to the date of such request, the correctness of any report and / or payment under this agreement and (b) obtain information as to the royalty payable for any such period in case of failure to comply with the terms of the agreement.


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