PRINCIPAL TO PRINCIPAL AGREEMENT

This AGREEMENT made at Chandigarh on this 22

nd
day of April, 2013 (Effective date)
BETWEEN
........................, a Company incorporated under the Companies Act, 1!", having its
#egistered $ffice at %%%%%%%%%%%%%%%&& (hereinafter referred to as the
........................, 'hich e(pression shall unless it )e repugnant to the conte(t or meaning
thereof )e deemed to mean and include its successors and permitted assigns of the ONE
PART
AND
., a company incorporated under the Companies Act, 1!" having its office at
%%%%%% , *ndia (hereinafter referred to as the Manufacturer, 'hich e(pression shall
unless it )e repugnant to the conte(t or meaning thereof )e deemed to mean and include its
successors and permitted assigns) of the OTER PART.
(........................ and Manufacturer shall hereinafter )e individually referred to as Part! and
collectively referred to herein as Part"e#)&
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WEREA&,
A& ........................ is engaged in the )usiness of manufacturing and mar.eting of Active
-harmaceutical *ngredients (A-*) and pharmaceutical products vi/& )ul. drugs and
formulations&
0& Manufacturer is engaged in the )usiness of manufacture, research 1 development and
sale of pharmaceutical products&
C& The Manufacturer has 'arranted and represented that it has the necessary infrastructure,
ade2uate e2uipments and competent technical staff re2uired to carryout the
manufacturing of the products as per ........................ specifications, in accordance 'ith
the statutory re2uirements&
3& The Manufacturer has approached ........................ to purchase in 'holesale 2uantities,
medicinal preparations, manufactured )y it as more particularly set out in the Anne(ure 4
A hereto (hereinafter referred to as t'e (r)*uct)
E& The Manufacturer has represented and 'arranted that it has o)tained all licenses,
authori/ations and permissions necessary or re2uisite in la' for the manufacturing of the
said Pr)*uct# and that all such licenses, authori/ations and permissions are presently in
full force and effect and shall )e .ept in full force and effect during the term of this
Agreement in accordance 'ith the la's applica)le from time to time& 5urther, the
,anufacturer has agreed to maintain and .eep all such records, statements, forms, )oo.s
etc& as the respective authorities may re2uire&
5& $n the faith and strength of the a)ove representations and 'arranties ........................
having considered the Manufacturer# offer has agreed to purchase the products
manufactured )y the Manufacturer on the terms and conditions contained herein&
N)+ t'"# a,ree-ent +"tne##et' an* "t "# 'ere.! a,ree* .! an* .et+een t'e (art"e# 'eret) a#
f)//)+#0
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1& This Agreement shall commence from 22
nd
April, 2013 and shall remain in force for the
period of 3 years (Three years only) till 21st April, 201" and either party shall have a
right to terminate this Agreement )y giving 0 days 'ritten notice to other party&
2& The Manufacturer shall supply the products as set out in Anne(ure 4 A to
........................ at the stipulated time mentioned in the purchase order or as agreed
)et'een the parties& ........................ shall )uy the products manufactured, from time to
time, )y the Manufacturer on the terms and conditions in this Agreement&
3& The 2uantity of the product to )e sold )y the Manufacturer to ........................ shall )e
determined as per the purchase order issued )y ........................ to the ,anufacturer, from
time to time&
6& The Manufacturer shall supply and ........................ shall )uy the products at a price
mutually agreed )et'een the parties, su)7ect to the o)servance and fulfillment of the
terms herein stated&
!& The Manufacturer shall )e responsi)le to pay e(cise duty and comply 'ith all the
re2uirements of Central E(cise, 8ales Ta(, freight, $ctroi, if any levied on delivery of the
products to ........................& Manufacturer shall ta.e appropriate insurance policy
covering dispatch of the finished products from the factory gate of the Manufacturer to
the location of delivery as stated in the purchase order or as agreed )et'een the parties&
"& ........................ and Manufacturer agrees that the )asis of all transactions )et'een the
parties, in presence of this Agreement, shall )e on a principal to principal )asis and that
nothing in the Agreement shall constitute or )e deemed to constitute either party as the
agent or employee for the other&
9& This Agreement is non:e(clusive and ........................ reserves the right to source the
products from else'here&
;& *t is e(pressly agreed and understood )et'een the parties that ........................ shall )e
free to sell the product purchased )y %%%%&& from the Manufacturer at any price not
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e(ceeding the ma(imum #etail -rice indicated hereon, 'hich ........................ shall deem
fit 'ithout any territorial restriction or other restrictions 'hatsoever )eing imposed on
........................ )y the Manufacturer&
& P3&ICIAN& &AMPLE&
The Manufacturer shall separately supply to ........................ such 2uantities of the
samples of the products as may )e re2uired )y the ........................ from time to time to )e
distri)uted free to physicians and hospitals& 8uch samples shall )e as per the
specifications stipulated )y ........................& The Manufacturer shall ensure that samples
meant for free distri)ution to physicians and hospitals shall )e overprinted, 'ith the
legend <-hysicians sample not to )e sold= in )old and conspicuous letters )et'een t'o
parallel red lines&
10& 45ALIT3 CONTROL 6 MAINTENANCE O7 RECORD&
a) The Manufacturer shall provide ........................ 'ith the Clear Analytical #eport
for each )atch of products to )e supplied to ........................&
)) ........................ shall )e entitled 'ithout )eing o)liged to do so, to give the
Manufacturer, instructions, advice and recommendations 'ith regard to, interalia >ood
,anufacturing -ractices, ?uality of the product and engineering aspects& The
Manufacturer shall conform to the said instructions, advice and recommendations given
)y ........................ at any time during the continuance of this Agreement&
c) 3uring the continuance of this Agreement, ........................, its authori/ed agent@s
and representative@s shall from time to time and at all times 'ith prior information )e
entitled 'ithout )eing o)liged to enter upon and inspect the Manufacturer# factory
premises and e(amine and supervise, if necessary, the process or method of
manufacturing and pac.ing of the products and the storage and use of the ra' materials,
ingredients and other materials used or intended to )e used )y the Manufacturer for or
in relation to the manufacture and pac.ing of the products& The Manufacturer shall
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e(tend full co:operation to ........................ in such inspection or supervision and shall
comply 'ith all directions given )y ........................ from time to time&
d) ........................ shall )e entitled to, 'ithout )eing o)liged to do so, have the
products manufactured hereunder e(amined, inspected and tested in its ?uality Control
3epartment or in its la)oratories and other facilities in accordance 'ith the instructions
and testing procedure prescri)ed )y the ........................ to ascertain 'hether the product
conform to the standards and specifications prescri)ed )y &&&&&&&&&&&&&&&&&&&&&&&& from time to
time&
e) The Manufacturer shall at all times maintain proper records in their )oo.s
relating to all matters and transactions under or arising out of this Agreement and
........................ at all times have access to such records and )oo.s including vouchers,
receipts, memos and other li.e documents and a right to inspect the same, to ma.e copies
of or ta.e e(tracts there from )y or through any of the officers of ........................
authori/ed in that )ehalf&
f) The ,anufacturer assures that all the products shall )e as per specifications
prescri)ed )y ........................& Ao'ever, it is agreed )y )oth the parties that 2uality and
time is the essence of the contract and failure to deliver standard goods in time shall )e
deemed to )e a )reach of this Agreement&
11& PA3MENT
........................ shall ma.e payments to the Manufacturer 'ith B*BETC (0) days
credit payment from the delivery of the products to ........................& These terms can )e
changed )ased on mutual agreement from time to time&
12& INDEMNIT3 6 WARRANTIE&
a& The Manufacturer guarantees and 'arrants that the products manufactured and
pac.ed hereunder shall in all respects )e strictly in accordance 'ith the statutory
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re2uirements, if any pertaining thereto and in accordance 'ith the standards and
specifications disclosed and communicated )y ........................ to the Manufacturer&
)& The Manufacturer further guarantees and 'arrants thatD
i& the said products 'ill )e manufactured in conditions, premises and facilities
'hich comply in all respects 'ith the statutory re2uirements applica)le
thereto&
ii& All 'aste or re7ects arising out of or during the process of manufacture shall
)e destroyed )y the Manufacturer at its cost as to ensure that the same does
not leave the said factory premises under any circumstances 'hatsoever&
c& The Manufacturer shall )e responsi)le and lia)le for all sorts of manufacturing
defects and@or any third party claim, demand and@or products complaint(s) received
from the customer, 53A officials, in terms of 3rugs 1 Cosmetics Act 160 and@or
under the provision of 3&-&C&$ and@or from any other source and ........................ shall
not )e lia)le in respect of the said manufacturing defects at all&
........................ shall intimate to the Manufacturer immediately on receipt of the said
complaint(s) regarding manufacturing defects and thereafter it 'ill )e the responsi)ility
of the Manufacturer to deal 'ith the said complaints, claims in the manner agreed
)et'een the parties&
d& *ts is here)y understood and agreed that if any manufacturing defects are found in
the products at a later date, ........................ shall 'ithdra' from the mar.et the products
either voluntarily or upon the directions from the 53A, Authorities, and shall return the
same to the Manufacturer& *n such event, ........................ 'ill raise 3e)it Bote for the
value of the goods so returned and the transport charges& The Manufacturer shall pay
the 3e)it Bote or the amount of 3e)it Bote 'ould )e ad7usted after payment of the future
invoices&
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e& Manufacturer 'arrants that the -roduct 'ill have a shelf life of at least 0E of
standard shelf:life at the time of delivery to ........................& Manufacturer at its o'n
cost, 'hile the -roduct is in its possession, shall .eep the same duly insured&
Manufacturer shall ensure that the -roduct is stored under suita)le conditions to ensure
their fitness and merchanta)ility at all times, 'hilst in its possession or under its control&
Manufacturer shall dispatch the -roduct manufactured )y it to ........................ on Ffirst:
inG Ffirst:outG )asis and rotate such stoc.s to ensure that those 'ith the shortest
remaining shelf life are supplied first&
f& The Manufacturer shall indemnify and .eep indemnified ........................ at all
times from and against all actions, suits, proceedings, claims, demands and e(penses of
'hatsoever nature made or suffered or incurred )y ........................ 'hether )y reason of
or )y virtue of the 2uality of the said products or )y reason of or )y virtue of any non:
performance or non:o)servance )y the Manufacturer of any terms and conditions of this
Agreement&
g& The Manufacturer shall )e solely and e(clusively lia)le for payment of all ta(es,
duties and levies including e(cise duty, octroi and sales ta(, if any, on or in connection
'ith the manufacture and sale of the products )y the Manufacturer to ........................
under and in accordance 'ith this Agreement and ........................ shall in no event )e
lia)le or responsi)le thereof& *n the event, any claim, penalty or lia)ility is levied on or
incurred )y ........................ in this )ehalf at any time, the Manufacturer shall indemnify
and .eep indemnified ........................ from and against all such claims&
13& INTELLECT5AL PROPERT3 RIGT&0
i& The Manufacturer shall affi( on the products and @ or the la)els and @ or the pac.ages
thereof such of the said mar.s intimated to the Manufacturer )y ........................&
8ave as aforesaid, the Manufacturer shall not use, nor shall )e deemed to have the
right to use the said mar.s in connection 'ith or in relation to any other product of
'hatsoever nature made or dealt 'ith )y the Manufacturer& The Manufacturer
here)y covenants that it shall not use the said mar.s in any manner 'hatsoever 'hich
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may 7eopardi/e the significance, distinctiveness or validity of the said mar.s and shall
apply and affi( the said mar.s only in pursuance of its o)ligations under this
Agreement&
ii& Bothing herein contained shall at any time during the continuation of this Agreement
or after the e(piry or earlier determination thereof give or )e deemed to give or shall
)e intended to give or confer upon the Manufacturer any right, title, interest or claim
in or to the said mar.s 'hich shall continue to vest solely and a)solutely in favour of
........................&
iii& The Manufacturer shall during the continuance of this Agreement use its )est
endeavours to discover any infringement or passing off or suspected infringement or
passing off or imitation of the said mar.s coming to its .no'ledge and shall
communicate the same to ........................ and assist ........................ in any action to )e
ta.en in such circumstances&
iv& The Manufacturer declares and underta.es that it has not and shall not at any timeD
a) ta.e any action 'hich shall or may impair the right, title or interest of
........................ to the said mar.s or create any right, title or interest therein or
thereto 'hich may )e adverse to ........................&
)) use the said mar.s upon or in relation to any goods on its o'n account or
other'ise or for any other purpose&
c) permit the use of the said mar.s )y any other person, firm or )ody corporate&
d) #egister deceptively similar mar.s in any additional class&
v& ........................ shall give prior intimation to the Manufacturer of any improvements
or modifications relating to the said products or any of them 'hich are sought to )e
effected or in the event an application is made for patent or other protection under any
la' for the time )eing in force relating to patents and designs or other industrial
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property for such improvements and modifications in any category 'hatsoever& *t is
here)y e(pressly agreed and declared that the right, title and interest in any such
modifications, improvements or other shall vest and shall )e deemed to vest solely and
e(clusively to ........................ and the Manufacturer and its employees and other staff
mem)ers shall give or cause to )e given to ........................ assistance that may )e
re2uired in order to ena)le ........................ to protect its rights and in particular to
apply for and o)tain any patents, designs or other rights or other intellectual property
in respect of such improvements, modifications or other'ise&
16& LICEN&E& 6 &TAT5TOR3 COMPLIANCE&
The Manufacturer shall at all times comply 'ith all applica)le la's, rules and
regulations from time to time in force, 'ithout pre7udice to the generality of the
foregoing, strictly comply 'ith the provisions of the 3rugs 1 Cosmetics Act, 160, la's
and regulations relating to safety procurement of materials including imported materials,
Central E(cise Act and the #ules, #egulations and notifications relating to or
appertaining to the due and proper performance of its duties and o)ligations under this
Agreement& *n the event of the Manufacturer committing a )reach of this clause, the
Manufacturer shall indemnify and .eep indemnified ........................ of, from and
against all claims, demands, actions, proceedings, fines, penalties, e(penses and lia)ilities
of 'hatsoever nature or )rought against sustained or incurred )y the ........................ and
'hether paid for or not arising out or as a result of such )reach )y the Manufacturer&
1!& IN&5RANCE
The Manufacturer shall at its cost ta.e a comprehensive insurance policy to cover all the
ra' and pac.aging materials, stoc.s in process and finished products against inter alia,
theft, fire, riots, civil commotion, natural calamities including floods&
1"& PRI<IT3
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*t is agreed and declared that the employees of the Manufacturer in connection 'ith this
Agreement shall not have any privity 'ith ........................ that is to say that they shall not
)e deemed to )e the ........................# employees for any purpose under any la' for the
time )eing in force& *n other 'ords, no employer:employee relationship )et'een
........................ and such person is intended nor shall the same )e deemed to su)sist
)et'een ........................ and such persons& Any payment or lia)ility for payment incurred
)y the ........................ )y 'ay of any compensation or any other sum paya)le to the
Manufacturer=s employees for any reason 'hatsoever shall )e fully reim)ursed )y the
Manufacturer to ........................&
19& >5RI&DICTION
This Agreement shall )e governed in accordance 'ith the la's of *ndia& The -arties agree
that they shall in good faith 'or. to'ards implementation of this Agreement and any
dispute arising out of or in relation to this Agreement shall )e first attempted to )e
resolved amica)ly )y mutual negotiations, failing 'hich such dispute shall )e referred to
Ar)itration of a sole ar)itrator appointed )y &&&&&&&&&&&&&&&&&&&&&&&& 1 ,anufacturer )y mutual
consent to )e conducted in accordance 'ith the Ar)itration and Conciliation Act, 1"
and the rules thereunder, as amended from time to time&
The language of the ar)itration shall )e English and the venue of ar)itration 'ill )e
Chandigarh, 'here the cause of action arose& All other proceedings shall also )e in
English& The parties hereto agree that the Courts in Chandigarh, *ndia alone shall have
e(clusive 7urisdiction in respect of any matters pertaining to, arising out of or in
connection 'ith Agreement& The decision of such ar)itrator@ s shall )e final, )inding and
conclusive on the -arties&
1;& MA?IM5M RETAIL PRICE ( M.R.P.@
The ,&#&-& of the product to )e mar.ed 'ill )e decided mutually )et'een
Manufacturer 1 ......................... The final decision of ,&#&-& 'ill )e 'ith
........................&
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1& TERMINATION
i& Bot'ithstanding anything to the contrary herein contained, either of the parties shall
)e entitled to terminate this Agreement forth'ith upon the happening of any of the
follo'ing eventsD
a) 0y )oth parties for any reason or no reason 'ith a ninty (0) days 'ritten noticeH
or
)) )y either party in the event the other party shall su)stantially )reach any of
its o)ligations under this Agreement and shall fail to remedy such )reach 'ithin
thirty (30) days from receipt of 'ritten notice or such )reach )y the party not in
defaultH or
c) )y either party in the event of the other partyIs li2uidation, )an.ruptcy or
state of insolvencyH or
d) )y ........................, 'ith 30 days 'ritten notice if a controlling regulatory
authority either fails to approve or 'ithdra's approval for the manufacturing of
product& *n the event that the product is 'ithdra'n )y regulatory decree in a
portion, )ut not all of the mar.et, then ........................ shall have the right to
reduce the minimum 2uantities 'ith 30 days 'ritten notice&
ii& ........................ reserves the right to terminate this Agreement forth'ith if, in the
opinion of ........................ there is a change in the management of the Manufacturer
'hether due to change in the shareholding or due to change in the control of the 0oard
or other'ise&
iii& The termination of this agreement for any reason 'hatsoever shall )e 'ithout
pre7udice to any claim or right of action previously accrued or ac2uired )y the
........................& Jpon termination of this agreementD :
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a) the Manufacturer 'ill complete delivery of any undelivered portion of
........................# pending orders for the said products&
)) the Manufacturer shall remove the products containing Trademar. from its
manufacturing licence&
c) All outstanding )ill raise @ issued )y the Manufacturer in respect of the products
shall )e paid )y ........................ as per the terms of this agreement&
20& 7ORCE MA>E5RE
Beither ........................ nor the Manufacturer shall )e lia)le for any ina)ility to fulfill
their commitments hereunder occasioned in 'hole or in part )y force ma7eure, stri.e,
loc.out, fire, 'ar, destruction of plant, ina)ility to secure >overnment authori/ation and @
or approvals or any other cause )eyond their reasona)le control or any )rea.do'n 'hich
is )eyond the a)ility of the Manufacturer to fi( 'ithin a reasona)le time& 8uch force
ma7eure occurrence shall )e immediately notified to the other party&
21& MI&CELLANEO5&
i& This agreement shall )e deemed to represent the entire Agreement )et'een the
parties hereto regarding the su)7ect matter hereof and shall supersede, cancel and
replace any and all previous agreements, arrangements, 'riting or underta.ings in
this )ehalf )et'een the parties hereto&
ii& *f any provision of this Agreement or part thereof is declared or found to )e
illegal, unenforcea)le or void in any respect, the -arties shall negotiate in good
faith to agree upon a su)stitute provision that is legal and enforcea)le and is as
nearly as possi)le consistent 'ith the intentions underlying the original provision&
*f the remainder of this Agreement is not materially affected )y such declaration
or finding and is capa)le of su)stantial performance, than that term or provision
or part thereof shall to the e(tent deemed not to form part of this Agreement and
the remainder of the Agreement 'ill )e enforced to the e(tent permitted )y la'&
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iii& Each party ac.no'ledges and agrees that )reach of this Agreement may result in
immediate irrepara)le in7ury to the other party and that in the event of a )reach or
threatened )reach of this Agreement, the other party shall )e entitled to see.
preliminary and permanent in7unctive relief from any court of competent
7urisdiction, 'hich remedy shall )e cumulative and in addition to any other rights
and remedies to 'hich such other party may )e entitled&
iv& Any time, rela(ation, indulgence or concessions granted, made or sho'n )y the
........................ to or in favour of the Manufacturer under this Agreement shall
not in any 'ay pre7udice or effect its rights or remedies under this agreement or at
la'&
v& This Agreement constitutes the entire understanding )et'een the -arties and may
not )e amended or modified, in 'hole or in part, e(cept )y an agreement in
'riting signed )y )oth -arties&
vi& This agreement may )e e(ecuted in one or more counterparts, each of 'hich shall
)e deemed an original, )ut all of 'hich together shall constitute one and the same
instrument&
vii& All consents and notices re2uired to )e given or served )y either party hereto on
the other shall )e delivered to or left at or sent )y registered post
ac.no'ledgement due )y either party to the other at the registered address of the
party or at such address as may )e communicated in 'riting and the same shall )e
deemed to have )een given or served upon its receipt )y such other&
KSignature page followsL
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IN WITNE&& WEREO7, the duly authori/ed representatives of the -arties have caused this
Agreement to )e e(ecuted on the date first 'ritten a)oveD
&IGNED, &EALED AND DELI<ERED
)y ........................ LIMITED
&IGNED, &EALED AND DELI<ERED
)y
8ignatureD 8ignatureD
BameD BameD ,r&
3esignationD 3esignationD
3ateD 3ateD
8ignatureD 8ignatureD
BameD BameD
3esignationD 3esignationD
3ateD 3ateD
MitnessD 1& BameD MitnessD 1& BameD
8ignatureD 8ignatureD
MitnessD 2& BameD MitnessD 2& BameD
8ignatureD 8ignatureD
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ANNE?5RE B A
LI&T O7 PROD5CT&
Bame of the product -ac. #ate (*B #8)
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