Buy Back Agreement of an Indian Company with a Foreign Company

Updated atAugust 2010

This AGREEMENT made at ___________ this _____ day of ___________ 201__

Between

_______________, a company registered under the Companies Act, 1956 with its registered office at ______________ (hereinafter referred to as X which expression shall, unless it be repugnant to the context include its successors, nominees and permitted assigns) of the ONE PART

And

___________, a company incorporated under the laws of __________ and having its office at, __________________ (hereinafter referred to as Y) which expression shall, unless it be repugnant to the context include its successors, nominees and permitted assigns) of the OTHER PART.

X and Y are herein collectively referred to as "Parties" and individually as "Party" to either of them.

Whereas X is engaged in the business of production and export of ____________ and B is in the business of manufacturing and procurement of ___________.

And Whereas the Parties are desirous of establishing a ________unit of _______in the State of _________, India with an annual capacity of _____ tonnes of _________ (hereinafter referred to as ____) and ______ is willing to import ______________ to ________ from such Unit.

Now Therefore, for and in consideration of the premises and the mutual covenants and agreements contained herein, the Parties hereto agree as follows:

Article I

Buy Back Undertaking

1.1 _____ agrees to buy from _____ at least ___ tonnes of ___________per annum for a minimum period of ___ years starting from the first year of commercial production. The first year of commercial production shall commence immediately after the completion of successful trial production. All deliveries shall be made at least on monthly basis.

1.2 _____ shall sell or supply the said quantity or/and additional quantities of production in ______ to _____ or to third party(s) through _____ only. For countries other than those in ______, including India, _____ shall have a right to market the production of the Unit on such terms and conditions, as _____ may deem fit. However, in such case, _____ shall make arrangement for payment of raw materials supplied by _____ and attributable to the part of production intended to be marketed in the Countries other than those in ______.

1.3 In case the ___________ produced by _____ at the Unit and supplied to _____ is found to be sub-standard, _____ shall have a right to reject such sub-standard ____________ and shall immediately communicate its decision to this effect to _____, in which event _____ agrees to pay cost of raw materials supplied by _____ to _____ and applied by _____ in such production of _____________.

1.4 _____ shall, however have a right to retain such _______ and to sell or dispose of the same in domestic market of India or to export such production to the countries other than in __________, as _____ may deem fit. However, _____ shall have option of importing such yarn to _________ as per the terms mutually agreed upon by the Parties hereto.

Article II

Procedure

2.1 _____, shall at least, three months before the beginning of each quarterly period comprised in any year, except in special cases, indicate the quantum and specifications of the products to be bought by it;

Based on such information, _____ shall plan and prepare its production programme for the ensuing quarter in consultation and under guidance of _____ and shall provide to _____ samples of ___ produced by it. _____ undertakes to make its best efforts to adapt its production facilities to such requirements. The parties hereto shall co-operate to review or modify the production schedule to take into account any revised market information provided by _____ or the requirements of _____ as the case may be;

2.2 _____ shall, at least three months before the beginning of each quarter comprised in any year except in special cases, place confirmed orders on the basis of approved samples. Such orders shall also indicate the consideration for the said products on the basis of the price determined in accordance with the terms of this Agreement.

2.3 The said products shall be shipped free on board at the port of__________ or any other port in India as may be mutually convenient and agreed to by the Parties hereto;

2.4 The said products shall be packed in a manner and specification as per the instructions of _____.

2.5 All goods manufactured by _____...

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