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Andhra Pradesh Dairy Development Cooperative Federation Limited (APDDCFL)

AGREEMENT FOR SELECTION OF FRANCHISEE FOR MANUFACTURING AND MARKETING OF DAIRY PRODUCTS (FRESH) UNDER VIJAYA BRAND FOR TIRUPATHI REGION

PART II DRAFT FRANCHISEE AGREEMENT

DRAFT FRANCHISE AGREEMENT

This Franchise Agreement (this Agreement) is executed at [] this the [] day of ____, 2 1! (Effective Date)"

BY AND BETWEEN

Andhra Prade h Dair! Deve"#$ment C#%#$erative Federati#n &imited, a federation of coo#erati$e societies registered under the Andhra %radesh &o'o#erati$e (ocieties Act, 1)*+, ha$ing its registered office at [], and re#resented herein ,y its authorised signatory [] (hereinafter referred to as the Franchi #r, -hich ex#ression sha.., un.ess re#ugnant to the meaning and context, mean and inc.ude its successors'in'interest and assigns) of the 'NE PART

AND

[], a/an indi$idua./com#any/#artnershi# firm/so.e #ro#rietary concern (include as applicable), 0ndian citi1en /registered under the &om#anies Act, 1)2*/registered under the 0ndian %artnershi# Act, 1)!2 (include as applicable), residing at []/ha$ing its registered office at/carrying on ,usiness at (inc.ude as a##.ica,.e) [], re#resented through its director/ authori1ed signatory, ____________, son/-ife of ___________, aged a,out ___________ years, (hereinafter referred to as Franchi ee, -hich ex#ression sha.. un.ess re#ugnant to the meaning and context, mean and inc.ude his/her/its successors' in'interest and #ermitted assigns) of the 'THER PART

The Franchisor and the Franchisee are hereinafter together referred to as the Partie and indi$idua..y as a Part!3

WHEREAS( A3 The Franchisor, ,y an 4x#ression of 0nterest and 5id 6ocument dated 1!31132 1! (E'I), in$ited ,ids from interested #arties for se.ection of franchisees for manufacturing and mar7eting of 8i.7 #roducts under the 90:A;A ,rand for sa.e in Tiru#athi region of Andhra %radesh com#rising of &hittoor, <ada#a and =e..ore 6istricts3

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The Franchisee is engaged in the ,usiness of manufacture and/or mar7eting of dairy #roducts and has su,mitted a ,id in res#onse to the 4>0, -hich -as successfu. and -as acce#ted ,y the Franchisor3 The Franchisor has issued a ?etter of A-ard dated [] ,earing =um,er [] to the Franchisee in this regard3 The %arties see7 to enter into this Agreement to confirm and record the terms and conditions under -hich the Franchise (as defined hereunder) sha.. ,e granted to the Franchisee and im#.emented ,y the Franchisee3

&3

N'W THEREF'RE) IN C'NSIDERATI'N 'F THE M*T*A& PR'MISES) M*T*A& C'+ENANTS AND AGREEMENTS SET F'RTH HEREIN) THE PARTIES HERET' AGREE AND THIS AGREEMENT WITNESSES AS F'&&'WS(

,-

DEFINITI'NS AND INTERPRETATI'NS

131

0n this Agreement, un.ess the context other-ise re@uires, the fo..o-ing ex#ressions sha.. ha$e the meanings assigned to them ,e.o-"

(a)

A$$"ica."e &a/ means any a##.ica,.e 0ndian .a-, statute, ru.e, regu.ation, ordinance, re@uirement, directions, guide.ines, announcement or other ,inding action or re@uirement of any go$ernmentA de#artment, agency or instrumenta.ity of any go$ernment thereofA de#artments, ,odies, regu.atory authorities, go$ernment authorities, any court or ar,itra. tri,una.A

(,)

A$$r#va" mean #ermissions, consents, $a.idations, confirmations, .icenses, and other authori1ations re@uired to ,e o,tained ,y the Franchisee from go$ernment and/or regu.atory authorities in order to (i) manufacture and mar7et the %roducts, (ii) esta,.ish or ex#and or o#erate the 8anufacturing %.ants, (iii) maintain .a,our and staff at the 8anufacturing %.ants and for mar7eting of the %roducts and (i$) carry on a.. other acti$ities necessary or incidenta. to the im#.ementation of the FranchiseA C#nfidentia" Inf#rmati#n sha.. ha$e the meaning assigned to the term in &.ause 1)3!3 Ban0 G1arantee sha.. ha$e the meaning assigned to the term in &.ause 1 31 (,)3 B1 ine Da! means any day (other than a (aturday or (unday) on -hich the ,an7s at Bydera,ad are o#en for transaction of norma. ,usinessA

(c) (d) (e)

(f) Di c"# ing Part! sha.. ha$e the meaning assigned to the term in &.ause 1)313

(g) Di $1te sha.. ha$e the meaning assigned to the term in &.ause 1+323 (h) E'I sha.. ha$e the meaning assigned to the term in Cecita. A a,o$eA (i) Franchi e means the .icense and authorisation gi$en ,y the Franchisor to the Franchisee #ermitting the Franchisee to" (1) manufacture the %roductsA (2) mar7et, se.. and distri,ute the %roducts -ithin the TerritoryA (!) use the Trademar7s, so.e.y in re.ation to the manufacture and mar7eting of the %roducts3 during the Term, su,Dect to the terms and conditions contained in this Agreement3

(D)

Franchi e D#c1ment means this Agreement, the 4>0, the ,id tendered ,y the Franchisee in res#onse to the 4>0, the Doint ,idding agreement dated [] executed ,et-een the Franchisee and the .etter of a-ard issued ,y the Franchisor to the Franchisee3 Man1fact1ring P"ant means the dairy #roduct manufacturing #.ant or #.ants used ,y the Franchisee for the #erformance of its o,.igations under this AgreementA

(7)

(.)

Minim1m C#mmitment sha.. mean the minimum amount of re$enue re@uired to ,e generated in any gi$en ca.endar month ,y sa.es of %roducts ,y the Franchisee, as s#ecified in Anne21re%33 Minim1m R#!a"t! sha.. mean the Coya.ty #aya,.e ,y the Franchisee to the Franchisor in a ca.endar month if the 8inimum &ommitment is achie$ed in that month3 N#tice #f Di $1te sha.. ha$e the meaning assigned to the term in &.ause 1+32 (a)3 Perf#rmance Sec1rit! sha.. ha$e the meaning assigned to the term in &.ause 1 313 Per #n means any #erson, cor#oration, #artnershi# (genera. or .imited), .imited .ia,i.ity com#any, Doint $enture, association, co'o#erati$e federation, Doint stoc7 com#any, trust, go$ernmenta. or any other statutory authority, or other ,usiness entity or organisationA Pr#d1ct means the dairy #roducts .isted in Anne21re%4 heretoA R#!a"t! means the roya.ty #aya,.e ,y the Franchisee to the Franchisor under this Agreement in consideration of the grant of the Franchise, as more #articu.ar.y descri,ed under &.ause E and Anne21re%5A

(m)

(n) (o) (#)

(@) (r)

(s) (t)

Term sha.. ha$e the meaning assigned to the term in &.ause 2323 Territ#r! refers to the territory of the cities or regions s#ecified in Anne21re%, heretoA Trademar0 sha.. ha$e the meaning assigned to the term in &.ause +31 (a)3

(u) 132

0n this Agreement, un.ess the context other-ise re@uires, the fo..o-ing ru.es a##.y"

(a) The singu.ar inc.udes the #.ura. and vice versa3

(,) A gender inc.udes a.. genders3

(c)

A reference to a c.ause, annexure or schedu.e is a reference to a c.ause of, or an annexure or schedu.e to, this Agreement3

(d)

The tit.es of the sections and su,sections of this Agreement are for con$enience of reference on.y and are not to ,e considered in construing this Agreement3

4-

APP'INTMENT AND TERM

231

The Franchisor here,y grants the Franchise to the Franchisee -ith effect from the 4ffecti$e 6ate, su,Dect to the terms and conditions of this Agreement and other Franchise 6ocuments3

232

Fn.ess terminated ear.ier ,y either %arty in accordance -ith the terms of this Agreement, the Franchise and this Agreement sha.. remain in force ti.. the ex#iry of a #eriod of ten (1 ) years from the date of commencement of manufacture of %roducts ,y the Franchisee (the Term)3 The %arties may agree to extend and rene- the Term ,y mutua. consent ex#ressed in -riting at .east ninety () ) days #rior to the ex#iry of the Term, on terms and conditions as may ,e mutua..y agreed to ,et-een the %arties3 =othing in this Agreement sha.. ,e construed as casting any o,.igation on the Franchisor to rene- the Term3 'B&IGATI'NS 'F THE FRANCHISEE 0n the e$ent the Franchisee re@uires to esta,.ish a ne- 8anufacturing %.ant for the #erformance of its o,.igations under this Agreement, it sha.."

23!

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(a)

#rocure .and ade@uate for the 8anufacturing %.ant, either ,y outright #urchase or on .ease for a #eriod of at .east ten (1 ) years from the 4ffecti$e 6ate, -ithin a #eriod of three (!) months from the 4ffecti$e 6ateA The .ease may ,e ta7en from time to time to com#.ete 1 years3

(,)

esta,.ish and commission the 8anufacturing %.ant -ithin a #eriod of one (1) year from the date that it #rocures the .and and carry out a tria. manufacturing run and commence commercia. #roduction of the %roducts -ithin a #eriod of three (!) months from the date of commissioning of the 8anufacturing %.ant3

(c)

!32

Genera. >,.igations of the Franchisee" (a) The Franchisee sha.. manufacture/#roduce and mar7et the %roducts strict.y in accordance -ith the (a) (tandard >#erating %rocedures and s#ecifications #ro$ided ,y the Franchisor from time to time, and (,) #roduction and mar7eting schedu.es, set out in %art A and %art 5 res#ecti$e.y of Anne21re%3 to this Agreement3

(,)

The Franchisee sha.. use its ,est efforts to mar7et the %roducts in the Territory at its cost and ex#ense3 The Franchisee sha.. se.. and mar7et the %roducts on.y -ithin the Territory and sha.. ensure that the %roducts so.d or distri,uted through its distri,ution net-or7 are #ro$ided on.y to consumers -ithin the Territory3 0n no e$ent sha.. the Franchisee mar7et/se../transfer or other-ise send %roducts (a) outside the Territory to any distri,utors, -ho.esa.ers, stoc7ists, agents or re#resentati$es, or (,) -ith the 7no-.edge that the %roducts -i.. ,e so.d/reso.d to end consumers outside the Territory3

(c) The Franchisee sha.. esta,.ish a ne- 8anufacturing %.ant or dedicate s#are or excess #roduction .ines in the 8anufacturing %.ants and/or ex#and its existing 8anufacturing %.ants, as the case may ,e, in accordance -ith instructions #ro$ided ,y the Franchisor to meet the #roduction and mar7eting re@uirements and schedu.es set out in Anne21re%33 The Franchisee sha.. ,e res#onsi,.e for a.. in$estments, costs and ex#enses, inc.uding o#erating ex#enses, incurred in this regard and sha.. o#erate the 8anufacturing %.ants in accordance -ith s#ecifications #ro$ided ,y the Franchisor from time to time3 Any ex#ansion of the FranchiseeHs existing 8anufacturing %.ant that is re@uired for the Franchisee to #erform its o,.igations under this Agreement sha.. ,e com#.eted such that the 8anufacturing %.ant is ready to commence o#erations -ithin a #eriod of six (*) months from the 4ffecti$e 6ate3 (d) The Franchisee sha.. com#.y -ith and ensure com#.iance -ith a.. A##.ica,.e ?a-s in re.ation to this Franchise3 The Franchisee sha.. ,e res#onsi,.e for o,taining and maintaining, at its cost, a.. necessary A##ro$a.s in this regard3

(e) The Franchisee sha.. em#.oy an ade@uate num,er of em#.oyees and staff to manufacture and mar7et the %roducts in an efficient manner3 The Franchisee -i.. a.one ,e res#onsi,.e for #ayment of sa.aries, ,enefits and incenti$es to its em#.oyees and staff3 (f) The Franchisee sha.. #ay Coya.ty to the Franchisor in accordance -ith this Agreement, and s#ecifica..y Anne21re%5 hereto3 (g) 0n the e$ent the Franchisee is a consortium of entities, each entity forming #art of such consortium sha.. ,e Doint.y and se$era..y res#onsi,.e and .ia,.e to fu.fi.. the o,.igations of the Franchisee under this Agreement3 !3! Jua.ity &ontro."

(a)

The Franchisee sha.. ensure that ra- materia.s #rocured ,y it meet @ua.ity s#ecifications #ro$ided ,y Franchisor from time to time3 The Franchisee sha.. a.one ,e res#onsi,.e for the @ua.ity of such ra- materia.s and ac7no-.edges that the Franchisee -i.. a.one ,e .ia,.e to consumers under A##.ica,.e ?a-s inc.uding #re$ention of food adu.teration .a-s or ru.es in a.. regions of the Territory3

(,)

The Franchisee sha.. maintain @ua.ity standards of the finished %roducts in accordance -ith A##.ica,.e ?a-s inc.uding the %re$ention of Food Adu.teration Act 1)2+, the 8i.7 and 8i.7 %roduct >rder 1))2 issued under the 4ssentia. &ommodities Act, 1)22, the ?ega. 8etro.ogy Act, 2 ) and a##.ica,.e ru.es #assed under the (tandards of Keights and 8easures Act, 1)I*3 The Franchisee sha.. on or ,efore a #eriod of [] from the 4ffecti$e 6ate, o,tain certifications in the form of 0(>') 1 and 0('12 certificates in res#ect of its ,usiness and the 8anufacturing %.ants3 The Franchisee sha.. -ithin such date a.so o,tain a Ba1ard Ana.ysis and &ritica. &ontro. %oints certificate from the 5ureau of 0ndian (tandards3 The Franchisee sha.. a.so o,tain F((A0 &ertificate The Franchisee sha.., in addition, com#.y -ith (tandard >#erating %rocedures as set out in %art A of Anne21re%3, and a.so -ith other o#erating and manufacturing standards as may ,e intimated to it ,y the Franchisor from time to time3
The Franchisee sha.. maintain insurance #o.icies as may ,e directed ,y the Franchisor, $a.id throughout the Term, such as -or7menHs com#ensation insurance and com#rehensi$e third #arty .ia,i.ity insurance, in such amounts as the Franchisor may direct3

(c)

(d)

(e)

5+31

'B&IGATI'NS 'F THE FRANCHIS'R The Franchisor sha.. #erform the fo..o-ing o,.igations under this Agreement" (a) The Franchisor here,y grants the Franchisee the Franchise, i.e., a .icense to manufacture and mar7et the %roducts, on.y under the ,rand name 90:A;A and other ,rand names as may ,e intimated ,y the Franchisor to the Franchisee from time to time (together the Trademar0 ) in the Territory in accordance -ith this Agreement3

(,)

The Franchisor may from time to time #ro$ide the Franchisee -ith o#erationa. and other guide.ines for the im#.ementation of the Franchise3 The Franchisor may a.so #ro$ide technica. su##ort and co'o#eration to the Franchisee for customi1ation, or ex#ansion of the 8anufacturing %.ants and im#.ementation of the Franchise3

(c)

The Franchisor may #ro$ide training to the staff and em#.oyees of the Franchisee in res#ect of manufacturing #rocesses, @ua.ity contro. and mar7eting of the %roducts3 The Franchisor may a##oint @ua.ity contro. #ersonne. -ho sha.. #eriodica..y ins#ect and a##ro$e ra- materia.s used ,y the Franchisee, e@ui#ment and #rocesses at the 8anufacturing %.ants, @ua.ity of the finished %roducts and #ac7aging of the %roducts3

(d)

The Franchisor sha.., at its discretion, carry out regu.ar mar7eting and ,usiness #romotion acti$ities for the %roducts and the Trademar7s, in the Territory3

6231

WARRANTIES The Franchisee -arrants that" (a) it o-ns or has a right to use the 8anufacturing %.ants, sha.. continue to o-n or ha$e the right to use the 8anufacturing %.ans throughout the Term and sha.. not esta,.ish additiona. 8anufacturing %.ants or c.ose do-n any existing 8anufacturing %.ant -ithout the #rior -ritten consent of the Franchisor and the .and used for its 8anufacturing %.ants is not su,Dect to any contractua., statutory or regu.atory conditions that may affect the FranchiseeHs a,i.ity to use such .and for the 8anufacturing %.antsA

(,)

it has and -i.. continue to ha$e the financia. and infrastructura. ca#a,i.ity to manufacture %roducts in a num,er necessary to achie$e the 8inimum &ommitment for e$ery month during the Term and sha.. maintain the 8anufacturing %.ants in good condition throughout the TermA it sha.. #ro$ide the Franchisor -ith detai.s of its distri,ution net-or7, inc.uding names and addresses of its distri,utors, and sha.. ensure that its distri,ution net-or7 is acce#ta,.e to

(c)

the Franchisor, ,efore commencement of manufacture of the %roducts and sha.. inform the Franchisor #rior to a##ointing any ne- distri,utors or terminating the ser$ices of any distri,utorA (d) a.. of its re#resentations and -arranties in res#ect of its e.igi,i.ity criteria made at the time of its ,id #ursuant to the 4>0 remain true and in fu.. force and effectA it sha.. carry out its o,.igations under this Agreement in accordance -ith good industry #ractice and in the ,est interests of the Franchisor and sha.. -or7 di.igent.y to #romote the %roductsA the execution, de.i$ery and #erformance of this Agreement has ,een du.y authori1ed ,y a.. re@uisite [cor#orate] action on its #art and -i.. not $io.ate any #ro$ision of any A##.ica,.e ?a-s, or $io.ate any #ro$ision of its constituti$e documents or any indenture, agreement or instrument to -hich it is a #arty or ,y -hich it or its #ro#erty may ,e ,ound or affected and this Agreement constitutes the .ega., $a.id and ,inding o,.igations of the Franchisee, enforcea,.e in accordance -ith its termsA exce#t as other-ise disc.osed in -riting to the Franchisor, it is not a #arty to any agreement, or any .ega., administrati$e or ar,itra. #roceeding or in$estigation, #ending or threatened, -hich -ou.d ad$erse.y affect its a,i.ity to #erform its o,.igations under this AgreementA it is the ho.der of, or -i.. o,tain ,efore commencement of its o,.igations hereunder, a.. re@uired A##ro$a.s and -i.. continue to $a.id.y ho.d such A##ro$a.s ti.. the end of the Term3

(e)

(f)

(g)

(h)

232

The Franchisor -arrants that" (a) it o-ns or has a right to use a.. inte..ectua. #ro#erty rights in the Trade 8ar7sA (,) the execution, de.i$ery and #erformance of this Agreement has ,een du.y authori1ed ,y a.. re@uisite action on its #art and -i.. not $io.ate any #ro$ision of any A##.ica,.e ?a-s, or $io.ate any #ro$ision of its constituti$e documents or any indenture, agreement or instrument to -hich it is a #arty or ,y -hich it or its #ro#erty may ,e ,ound or affected and this Agreement constitutes the .ega., $a.id and ,inding o,.igations of the Franchisee, enforcea,.e in accordance -ith its terms3

7*31

PR'D*CTS The %roducts that are the su,Dect matter of the Franchise under this Agreement are .isted in Anne21re%43

*32

The Franchisor may from time to time add ne- %roducts to Anne21re%4 in consu.tation -ith the Franchisee3 PR'D*CTI'N AND MAR9ETING The Franchisee sha.. im#.ement the Franchise in accordance -ith the mar7eting and #roduction schedu.es set out in Anne21re%33

8I31

I32

The Franchisee sha.. ensure that it achie$es the 8inimum &ommitment in e$ery ca.endar month during the Term3 The Franchisee sha.. ,e .ia,.e to #ay extra Coya.ty in the e$ent the 8inimum &ommitment is not fu.fi..ed in any month and sha.. ,e entit.ed to incenti$es u#on attaining s#ecified target .e$e.s of sa.es, as more #articu.ar.y descri,ed in Anne21re%33 The 8inimum &ommitment may ,e amended ,y agreement of the %arties3 The Franchisor sha.. ,e entit.ed to direct the Franchisee to ma7e changes to its infrastructure or the .ayout, #rocesses or e@ui#ment of any 8anufacturing %.ant or to its distri,ution and mar7eting system and the Franchisee sha.. com#.y -ith such directions3

I3!

:-

R'YA&TY

E31

0n consideration of the Franchise granted to it, the Franchisee sha.. #ay the Franchisor, Coya.ty as fo..o-s"

(a)

The Franchisee sha.., during the Term, #ay the Franchisor the Coya.ty, ca.cu.ated on the ,asis of the formu.a set out in Anne21re%33 The Coya.ty sha.. ,e #aya,.e on a month.y ,asis for each ca.endar month during the Term, and sha.. ,e #aid on or ,efore the [] 5usiness 6ay of the next ca.endar month3 An amount of one #ercent (1L) of the re$enue generated from the 8inimum &ommitment M sha.. ,e deducted from the month.y Coya.ty #ayments made ,y the Franchisee and sha.. ,e de#osited ,y the Franchisee in a se#arate ,an7 account to ,e o#ened Doint.y ,y the #arties -ithin se$en (I) days of the 4ffecti$e 6ate3 The amounts de#osited in such account sha.. ,e uti.i1ed ,y the Franchisee so.e.y for mar7eting and ,usiness #romotion acti$ities as may ,e mutua..y agreed ,et-een the #arties3 5oth #arties may incur ex#enses to-ards mar7eting and ,usiness #romotion acti$ities -hich sha.. ,e #re'agreed annua..y under annua. mar7eting ,udget3 4ach #arty sha.. ,e entit.ed to -ithdra- amounts from the a,o$e mentioned ,an7 account as reim,ursement of such ex#enses, e$ery (#eriod) after su,mission of #roof of monies s#ent under a##ro$ed ,udget heads to the other %arty3

(,)

11

;)31

TRADEMAR9S) AD+ERTISING) PAC9AGING AND &ABE&&ING 'F PR'D*CTS Good-i.. and >-nershi# in Trademar7s (a) The Franchisee here,y agrees that it sha.. use the Trademar7s on.y for the #ur#ose of manufacture and mar7eting of the %roducts under this Agreement and strict.y in accordance -ith the s#ecifications and instructions of the Franchisor3

(,) Any unauthori1ed use of the Trademar7s ,y the Franchisee or any #erson acting on its ,eha.f sha.. constitute a ,reach of this Agreement and an infringement of the Trademar7s3 (c) The Franchisee here,y ac7no-.edges and agrees that a.. use of the Trademar7s and any good-i.. esta,.ished ,y its use of the Trademar7s -i.. inure to the exc.usi$e ,enefit of the Franchisor, and that this Agreement does not confer any good-i.. or other interests in the Trademar7s u#on either the Franchisee or any of its em#.oyees, re#resentati$es or any #erson acting on its ,eha.f3

)32

?imitations on Fse of Trademar7s (a) The Franchisee agrees and underta7es to use the Trademar7s as the so.e identification mar7 on the %roducts and sha.. ensure that a.. %roducts carry the Trademar7s assigned to them ,y the Franchisor3 The Franchisee sha.. at a.. times identify itse.f as an inde#endent manufacturer and mar7eter of the %roduct under .icense from the Franchisor3 The Franchisee agrees and underta7es not to use the Trademar7s as #art of any cor#orate or trade name or -ith any #refix, suffix or other modifying -ords, terms, designs or sym,o.s (other than .ogos and additiona. ser$ice mar7s that may ,e authori1ed ,y the Franchisor), or in any modified form3 The Franchisee sha.. use the Trademar7s on.y in re.ation to the %roducts and sha.. not use any Trademar7 in connection -ith the #erformance or sa.e of any ser$ices or #roducts that are outside the sco#e of this Agreement or in any manner -hich fa..ing outside the am,it of the rights granted under this Agreement3 The Franchisee sha.. not ,e #ermitted to use the Trademar7s in its contracts or a##.ications for any A##ro$a.s or any other documentation (other than on the #ac7aging or ad$ertisements of the %roducts), or in any manner that may im#.y that the Franchisor is res#onsi,.e for any of o,.igations under such contracts or a##.ications or other documents3 The Franchisee sha.. ensure that its use of the Trademar7s is accom#anied ,y such notices of trade and ser$ice mar7 registrations as the Franchisor may s#ecify3 The Franchisee sha.. adhere to a.. guide.ines or instructions of the Franchisor in re.ation to the use of the Trademar7s3

(,)

(c)

(d)

12

(e)

The Franchisee sha.. not #ermit any other %erson to use the Trademar7s or su,'.icense the use of the Trademar7s in any manner3

)3!

=otification of 0nfringement of Trademar7s (a) The Franchisee agrees that it sha.. not commit or #ermit the commission of any infringement of any Trademar73 The Franchisee sha.. notify the Franchisor immediate.y u#on coming to 7no- of any use of the Trademar7s ,y any other %erson or of any a##arent infringement of or cha..enge to the use of a Trademar7, or any c.aim ,y any %erson of any rights in any Trademar73 The Franchisor sha.. ta7e such action as it deems fit and at its discretion in connection -ith any infringement, cha..enge or c.aim, of or to a Trademar7 and sha.. a.one ha$e the right to #roceed -ith such action and sha.. exc.usi$e.y contro. any .itigation, com#romise or sett.ement arising out of any a..eged infringement, cha..enge or c.aim of or to a Trademar7 or other-ise re.ating to any Trademar73 The Franchisee sha.. co'o#erate -ith the Franchisor to arrest and mitigate any damage or .oss that may ,e caused to the Franchisor as a resu.t of any infringement, cha..enge or c.aim of or to a Trademar73

(,)

(c)

)3+

6iscontinuance of Fse of Trademar7s (a) 0n the e$ent the Franchisor is of the o#inion, at its so.e discretion, that it -ou.d ,e ad$isa,.e to re$ise, modify or discontinue use of any Trademar7 and/or for the %roduct to ,e ,randed -ith any a.ternate, additiona. or su,stitute trade or ser$ice mar7s, the Franchisee sha.. com#.y -ith the FranchisorHs directions to re$ise, modify or other-ise discontinue the use of such Trademar7 and/or use any a.ternate, additiona. or su,stitute trade or ser$ice mar7s3

)32

Ad$ertising

(a)

The Franchisee sha.. ad$ertise the sa.e of the %roducts at its cost, inde#endent of the Franchisor3 The Franchisee sha.. at its o-n cost, com#.y -ith reasona,.e directions gi$en ,y the Franchisor -ith regard to ad$ertisements of the %roducts ,y the Franchisee from time to time3 The Franchisee sha.. a.so co'o#erate -ith Franchisor and #artici#ate in ad$ertising cam#aigns instituted ,y the Franchisor3 For the sa7e of c.arity, it is here,y confirmed that the Franchisor sha.. ,e the o-ner of a.. good-i.. generated in res#ect of the Trademar7s #ursuant to such ad$ertisements3

(,)

The Franchisee sha.. ,e res#onsi,.e for com#.ying -ith A##.ica,.e ?a-s and o,taining a.. necessary A##ro$a.s -ith regard to ad$ertisement of %roducts3

1!

(c)

A.. ad$ertising cam#aigns or #rocesses instituted ,y the Franchisee sha.. ,e su,Dect to the #rior -ritten a##ro$a. of the Franchisor3 The Franchisor may ,y -ritten notice to the Franchisee instruct the Franchisee to cease any s#ecific ad$ertisement or mode of ad$ertisement or ma7e changes to ad$ertisements issued ,y the Franchisee, a.. at the FranchiseeHs cost3

)3*

%ac7aging and ?a,e..ing

(a) The Franchisor sha.. #ro$ide directions and instructions to the Franchisee in res#ect of .a,e.ing, #ac7aging and #resentation of a.. %roducts3 The Franchisee sha.. ensure that .a,e.ing, #ac7aging and #resentation of a.. %roducts manufactured and distri,uted, inc.uding de#ictions of the Trademar7s, sha.. ,e strict.y in accordance -ith the FranchisorHs instructions in this regard3 0n the e$ent the Franchisee -ishes to use any different #ac7aging or .a,e.ing or #resentation, it sha.. #ro$ide detai.s of such .a,e.s and #ac7ages or containers and #resentations to the Franchisor and use such .a,e.s, #ac7ages and containers and #resentations on.y after o,taining the FranchisorHs consent in -riting3

(,) The Franchisee sha.. instruct a.. mem,ers of its distri,ution and su##.y chain that the #ac7aging and .a,e.ing of the %roducts sha.. not ,e a.tered in any manner -hatsoe$er, in res#ect of a##earance or #resentation, materia.s or manner of use3 The Franchisee sha.. ,e .ia,.e for any actions of its distri,utors, -ho.esa.ers, stoc7ists, agents or re#resentati$es that resu.t in any a.teration to the a##earance, materia.s or use of .a,e.s or #ac7ages a##ro$ed ,y the Franchisor for use -ith the %roducts and such actions ,y the Franchisee or its distri,utors, -ho.esa.ers, stoc7ists, agents or re#resentati$es sha.. amount to a ,reach of this Agreement3
,<PERF'RMANCE SEC*RITY

1 31

The Franchisee sha.. su,mit a #erformance security (Perf#rmance Sec1rit!) to the Franchisor to secure #erformance of its o,.igations under this Agreement3 The %erformance (ecurity sha.. ,e for an amount of Cu#ees [] (Cs31, , /') and sha.. ,e su,mitted as fo..o-s" (a) Ten #ercent (1 L) of the %erformance (ecurity sha.. ,e #aid as a non'refunda,.e de#osit ,y che@ue or demand draft in fa$our of the Franchisor and sha.. ,e used ,y the Franchisor for #roDect de$e.o#ment ex#enses, mo,i.i1ation of Jua.ity &ontro. #ersonne. and im#arting training to the FranchiseeHs #ersonne.3

(,)

The ,a.ance ninety #ercent () L) of the %erformance (ecurity sha.. ,e #aid in the form of an unconditiona. ,an7 guarantee (Ban0 G1arantee) dra-n on a nationa.ised ,an7 or schedu.ed commercia. ,an7 recognised ,y the Ceser$e 5an7 of 0ndia, in Bydera,ad, ha$ing a net -orth of not .ess than Cu#ees Fi$e Bundred &rores (Cs32 , , , /') as

1+

#er the .atest annua. re#ort of the ,an73 The 5an7 Guarantee sha.. remain $a.id from the date of su,mission ti.. the end of a #eriod of at .east t-o (2) months after the ex#iry of the Term3 (c) 0f the %erformance (ecurity is to ,e #aid in stages as descri,ed in &.ause 1 3+ (,) or &.ause 1 3+ (c), su,'c.auses (a) and (,) of this &.ause 1 31 sha.. a##.y to each stage of the %erformance (ecurity3

1 32

The Franchisor may encash the 5an7 Guarantee in -ho.e or in #art in the e$ent of a ,reach ,y the Franchisee of its -arranties or o,.igations under this Agreement or in the e$ent any amount #aya,.e ,y the Franchisee to the Franchisor remains o$er due for more than [] days3 0n the e$ent of #artia. encashment of the 5an7 Guarantee, the Franchisee sha.. re#.enish the 5an7 Guarantee to the origina. amount of Cu#ees [] (Cs3 _________/')3 The format of the 5an7 Guarantee is #ro$ided in Anne21re%6 hereto3 The %erformance (ecurity amount sha.. ,e ca.cu.ated in the fo..o-ing manner" (a) 0f the Franchisee has one or more 8anufacturing %.ants in o#eration as on the 4ffecti$e 6ate that do not re@uire ex#ansion or augmentation, the %erformance (ecurity amount sha.. ,e e@ua. to three (!) times the 8inimum Coya.ty3 The %erformance (ecurity sha.. ,e #aid on or -ithin one (1) 5usiness 6ay of the 4ffecti$e 6ate3 0f the Franchisee re@uires to augment or ex#and its 8anufacturing %.ant to commence o#erations under the Franchise, the %erformance (ecurity amount sha.. ,e e@ua. to nine ()) times the 8inimum Coya.ty3 T-o'thirds of the %erformance (ecurity sha.. ,e #aid on or -ithin one (1) 5usiness 6ay of the 4ffecti$e 6ate and the ,a.ance one'third amount sha.. ,e #aid on the date that the 8anufacturing %.ant commences commercia. o#eration3 0f the Franchisee re@uires to esta,.ish a ne- 8anufacturing %.ant to commence o#erations under the Franchise, the %erformance (ecurity amount sha.. ,e e@ua. to eighteen (1E) times the 8inimum Coya.ty3 >ne'ha.f of the %erformance (ecurity sha.. ,e #aid on or -ithin one (1) 5usiness 6ay of the 4ffecti$e 6ate3 >ne'third of the %erformance (ecurity sha.. ,e #aid on or ,efore the day that the Franchisee confirms in -riting to the Franchisor that it has #urchased or .eased .and for the esta,.ishment of a 8anufacturing %.ant3 The ,a.ance one'sixth of the %erformance (ecurity sha.. ,e #aid on or ,efore the date that the 8anufacturing %.ant commences commercia. o#eration3

1 3! 1 3+

(,)

(c)

,,1131

INDEMNITY The Franchisee sha.. indemnify, defend and ho.d harm.ess the Franchisor and the FranchisorHs officers, em#.oyees and re#resentati$es from and against a.. .ia,i.ities, .osses, damages, costs and ex#enses in re.ation to or arising out of"

12

(a)

any c.aims or actions ,rought in res#ect of the %roducts manufactured and/or mar7eted ,y the Franchisee, on any ground inc.uding on the ,asis of adu.teration of the %roductsA any c.aims or actions or #roceedings instituted ,y any go$ernmenta. or regu.atory or Dudicia. ,ody as a resu.t of the FranchiseeHs fai.ure to com#.y -ith A##.ica,.e ?a-s inc.uding the fai.ure to o,tain or com#.y -ith the terms of, any A##ro$a.sA any use of the Trademar7s that is not in accordance -ith this Agreement, inc.uding c.aims of inte..ectua. #ro#erty rights infringement instituted ,y a third #arty as a resu.t of such useA any use of #ac7ages, .a,e.s or containers that ha$e not ,een a##ro$ed or #ermitted ,y the Franchisor, inc.uding c.aims of inte..ectua. #ro#erty rights infringement instituted ,y a third #arty as a resu.t of such useA any ,reach of any #ro$ision of any Franchise 6ocument (inc.uding ,reach of any re#resentation or -arranty) ,y the Franchisee3

(,)

(c)

(d)

(e)

(f)

Any c.aim or action of any third #arty inc.uding on account of any ,reach committed ,y the Franchisee or any misre#resentation ,y the Franchisee to any third #artyA or

(g)

Anything done or omitted to ,e done through the neg.igence, defau.t or misconduct of the Franchisee or of its officers, directors, em#.oyees or agents3

1132 113!

The Franchisee sha.. not com#romise or sett.e any c.aim or ma7e any admission fixing .ia,i.ity on the Franchisor -ithout the consent of the Franchisor3 The Franchisee here,y agrees that in res#ect of a.. matters for -hich it has agreed to #ro$ide indemnity to the Franchisor under this Agreement, in case any actions, #roceedings, #rosecutions or c.aims arise or are made against the Franchisor, the Franchisee sha.., forth-ith u#on notification thereof, im#.ead itse.f in such action, #roceeding, #rosecution or c.aim as the case may ,e, and if such action, #roceeding, #rosecution or c.aim resu.ts in any .ia,i.ity, damage, demand, ex#ense or attachment, the Franchisee sha.. direct.y and so.e.y ,e .ia,.e for the same in the same manner as the Franchisor -ou.d ha$e ,een .ia,.e in the a,sence of the indemnities set out hereunder3 A*DIT The Franchisee sha.. #ro$ide month.y re#orts to the Franchisor e$ery ca.endar month in res#ect of the manufacturing and mar7eting of the %roducts carried on ,y it3 (uch re#ort sha.. ,e in a form #rescri,ed ,y the Franchisor and sha.. contain at the .east, the fo..o-ing information"

41231

1*

(a)

6etai.s of the num,er of %roducts (in a##ro#riate units) in each category manufactured during the monthA 6etai.s of the num,er of %roducts (in a##ro#riate units) in each category so.d or distri,uted during the monthA 6etai.s of the num,er of %roducts (in a##ro#riate units) so.d or distri,uted in each region of the Territory during the month inc.uding in such su,'di$isions of each region as the Franchisor may re@uest information onA =ames and addresses of a.. distri,utors, -ho.esa.ers, stoc7ists, agents, re#resentati$es and entities used ,y the Franchisee to se.., distri,ute, mar7et or ad$ertise the %roducts, in each region com#rising the Territory3

(,)

(c)

(d)

1232

The Franchisor sha.. ,e entit.ed to audit a.. records and ,oo7s of account of the Franchisee for the #ur#ose of ensuring its com#.iance -ith the terms of this Agreement and to reconci.e the records -ith the month.y re#orts referred to a,o$e3 The Franchisor may a.so audit or ins#ect the o#erations of the 8anufacturing %.ants3 0n addition, the Franchisor sha.. ,e entit.ed to conducting #eriodic re$ie-s of the im#.ementation of the Franchise and recommend ,usiness #romotion #.ans and mar7eting strategies to the Franchisee3 The Franchisor may carry out such audit ,y itse.f or through an inde#endent auditor once e$ery six (*) months from the 4ffecti$e 6ate3 (uch audits sha.. occur -ith reasona,.e notice and during norma. ,usiness hours3 (uch audits sha.. ,e at the ex#ense of the Franchisee, un.ess such audit determines a discre#ancy of [] #ercent (''L) or more in the re#orted manufacture and sa.es figures of the Franchisee, resu.ting in an under#ayment to the Franchisor, in -hich case the Franchisee sha.. ,ear a.. costs of the audit, inc.uding the fees of third #arty auditors, and immediate.y #ay to the Franchisor the sum of the discre#ancy identified ,y the audit3 The Franchisor sha.. ,e entit.ed to set off any sums o-ed ,y it to the Franchisee against any sums #aya,.e ,y it to the Franchisee3

123!

123+

,3-

TERMINATI'N 'F THE FRANCHISE

1!31

4ither %arty may terminate this Agreement ,y -ritten notice immediate.y u#on the occurrence of the fo..o-ing e$ents"

(a)

0n the e$ent of an e$ent of force maDeure (as descri,ed under &.ause 1E) -hich #re$ents a %arty from #erforming is o,.igations under this Agreement for a continuous #eriod of ninety () ) 5usiness 6ays or more, or

1I

(,)

0f the other %arty undergoes any manner of recei$ershi# or .i@uidation other than as a resu.t of a bona fide restructuring of its ,usiness that does not cast any significant .ia,i.ities on that %arty, ,ecomes inso.$ent or enters into any com#romise or sett.ement -ith its creditors or ceases or threatens to cease to carry on its ,usiness3

1!32

The Franchisor may terminate this Agreement ,y -ritten notice immediate.y u#on the occurrence of any of the fo..o-ing e$ents"

(a)

0f the Franchisee is in ,reach of its o,.igations, re#resentations or -arranties under any Franchise 6ocument and fai.s to remedy such ,reach -ithin thirty (! ) days of its recei#t of notice in this ,eha.f from the FranchisorA

(,) (c)

0n the e$ent of change in contro. or o-nershi# of the Franchisee -ithout the #rior -ritten consent of the FranchisorA 0f the Franchisee is in$o.$ed in any conduct or #erforms any act -hich may, in the so.e o#inion of the Franchisor, ad$erse.y affect the re#utation or good-i.. of the Franchisor, its distri,ution net-or7, or of any of its affi.iates or ,usiness associates or may ex#ose the Franchisor to any form of #ena. action or .itigation or simi.ar #roceedingsA 0f the Franchisee assigns or su,'.icenses or transfers or attem#ts to assign, su,'.icense or transfer any of its rights and/or o,.igations under this Agreement -ithout the #rior -ritten consent of the Franchisor or commits any other ,reach of this Agreement that is not ca#a,.e of cure -ithin a #eriod of thirty (! ) daysA 0f the Franchisee fai.s to achie$e the 8inimum &ommitment for a #eriod of more than [] months during the TermA 0f the Franchisee fai.s to commence manufacture of the %roducts -ithin the #eriods set out in &.auses !31 (c) or !32 (c) as a##.ica,.e, and in the e$ent the 8anufacturing %.ant is a.ready in existence as on the 4ffecti$e 6ate and does not need augmentation or ex#ansion, -ithin a #eriod of not more than ninety () ) days from the 4ffecti$e 6ate3

(d)

(e)

(f)

1!3!

4x#.anation" 0n the e$ent the Franchisee is a consortium of entities, any e$ent as descri,ed a,o$e under &.auses 1!31 and 1!32 affecting any entity forming #art of such consortium sha.. gi$e a right of termination to the Franchisor under &.ause 1!31 or &.ause 1!32 as the case may ,e3 The Franchisee may terminate this Agreement ,y gi$ing at .east ninety () ) days notice to the Franchisor in the e$ent the Franchisor commits a materia. ,reach of this Agreement and fai.s to cure such ,reach -ithin a #eriod of sixty (* ) days from the date of recei#t of a notice from the Franchisee re@uesting such cure3

1!3+

1E

1!32

&onse@uences of Termination" (a) F#on ex#iry of the Term or termination of this Agreement for any reason, the Franchisee sha.." (a) immediate.y cease manufacture and sa.e of the %roducts and cease re#resenting or ho.ding itse.f out as a franchisee in res#ect of the %roducts in any mannerA immediate.y discontinue use of a.. Trademar7s and of any materia.s, #ac7ages or .a,e.s ,earing a Trademar7 or other-ise indicati$e of any association -ith the FranchisorA return immediate.y to the Franchisor, at the FranchiseeHs ex#ense, a.. signs, dis#.ay or ad$ertising or #romotiona. items and any training materia.s or other materia.s used in connection -ith the o#eration of the Franchise #ro$ided to it ,y the FranchisorA (d) #ay to the Franchisor forth-ith (-ithout any deduction or right of set'off) a.. Coya.ty or other sums of money -hich may ,e o-ed to the Franchisor (-hether or not then due)3

(,)

(c)

(,) (c)

A.. o,.igations and .ia,i.ities of a %arty that accrue or arise #rior to the ex#iry of the Term or the date of termination of this Agreement sha.. continue unaffected3 The Franchisor sha.. ha$e the o#tion, ,ut not the o,.igation, u#on ex#iry of the Term or termination of the Agreement, to #urchase a.. %roducts in stoc7 -ith the Franchisee inc.uding .a,e.s, #ac7ages and containers, at a #rice that is to ,e mutua..y agreed u#on ,et-een the %arties3 0n the e$ent the Franchisor does not exercise this o#tion, the Franchisee may continue sa.e of %roducts ti.. its stoc7 of %roducts existing as on the effecti$e date of termination is dis#osed off and the terms of this Agreement sha.. a##.y to such sa.es3

,5-

G'+ERNING &AW AND ARBITRATI'N

1+31

This Agreement sha.. ,e go$erned ,y the .a-s of 0ndia3

1+32

0n the e$ent of any dis#ute, contro$ersy or c.aim arising out of or re.ating to this Agreement, or the ,reach, termination or $a.idity thereof (Di $1te), the fo..o-ing actions sha.. ,e ta7en" (a) A 6is#ute -i.. ,e deemed to ha$e arisen -hen one %arty ser$es on the other %arty a notice stating the nature of the 6is#ute (a N#tice #f Di $1te)A

1)

(,)

F#on ser$ice of a =otice of 6is#ute u#on a %arty, the %arties -i.. use reasona,.e efforts to reso.$e the 6is#ute through negotiationsA

(c)

0n the e$ent the %arties are una,.e to reso.$e a 6is#ute through negotiations -ithin thirty (! ) 5usiness 6ays of ser$ice of a =otice of 6is#ute, the %arties sha.. refer the 6is#ute to ar,itrationA The ar,itration #roceedings sha.. ,e conducted in the 4ng.ish .anguage and in accordance -ith the #ro$isions of the Ar,itration and &onci.iation Act, 1))*, as may ,e amended from time to time3 The $enue of ar,itration sha.. ,e Bydera,ad, 0ndia3 The ar,itra. tri,una. sha.. consist of a sing.e ar,itrator -ho sha.. ,e mutua..y agreed u#on ,y the %arties3 0n the e$ent the %arties fai. to agree u#on a sing.e ar,itrator, the ar,itra. tri,una. sha.. consist of three ar,itrators3 4ach %arty sha.. nominate an ar,itrator and the t-o ar,itrators so nominated sha.. a##oint a third ar,itrator, -ho sha.. ,e the chair#erson of the tri,una.A and The decision of the ar,itra. tri,una. sha.. ,e ,inding u#on the %arties and may ,e enforced in any court of com#etent Durisdiction3

(d)

(e)

1+3!

(u,Dect to &.ause 1+32 a,o$e, the courts at Bydera,ad sha.. ha$e exc.usi$e Durisdiction in res#ect of a.. 6is#utes3

,61231

N'N%C'MPETE AND N'N%S'&ICITATI'N 6uring the Term, the Franchisee sha.. not manufacture, se.., mar7et or distri,ute #roducts that are the same as any of the %roducts that are or ,ecome the su,Dect of the Franchise on its o-n ,eha.f or on ,eha.f of anyone other than the Franchisor or as a franchisee for any entity other than the Franchisor3 =othing in this Agreement sha.. ,e construed as restricting or .imiting the FranchisorHs right to a##oint other franchisees, distri,utors, su,contractors or agents in res#ect of the manufacture, sa.e and distri,ution of the %roducts or #roducts simi.ar to the %roducts, in the Territory or outside the Territory3 The Franchisee ac7no-.edges that the FranchisorHs em#.oyees and agents are $a.ua,.e resources of the Franchisor and that the Franchisor has in$ested su,stantia. time and ex#ense in training its em#.oyees and agents3 6uring the Term, inc.uding any extensions thereof and for a #eriod of t-o years thereafter, the Franchisee sha.. not contact or so.icit any em#.oyee or agent of the Franchisor in any manner -ith a $ie- to encouraging that em#.oyee or agent to terminate his em#.oyment or agency -ith the Franchisor or to ,reach that em#.oyeeHs or agentHs agreement -ith or o,.igations to the Franchisor and sha.. not offer em#.oyment to any em#.oyees or agents of the Franchisor3

1232

123!

,71*31

&IMITATI'N 'F &IABI&ITY 0n no e$ent (inc.uding as a resu.t of ex#iry of the Term, termination of the Agreement or refusa. ,y the Franchisor to rene- the Term) sha.. the Franchisor ,e .ia,.e to the Franchisee for any indirect, conse@uentia. or s#ecia. damages under this Agreement or for any .oss of ,usiness or #rofits, .oss of re$enue, .oss of o##ortunity or .oss of good-i..3 The FranchisorHs aggregate .ia,i.ity to the Franchisee under this Agreement sha.. not exceed an amount e@ua. to three times the 8inimum Coya.ty3 The Franchisor sha.. ,e entit.ed to encash, in #art or fu.., any of the 5an7 Guarantees gi$en as #art of the %erformance (ecurity, in the e$ent of any materia. ,reach of this Agreement ,y the Franchisee or in order to reco$er any sums due from the Franchisee3

1*32

,81I31

N'TICES Any notice re@uired to ,e gi$en under this Agreement sha.. ,e in -riting and addressed in the case of each %arty, to the addresses set out ,e.o-" Franchisor" [] Franchisee" []

1I32

=otices and communications sha.. ,e considered gi$en or made" (a) (,) (c) (d) -here sent ,y hand or courier, u#on recei#tA -here sent ,y registered #ost, on the fifth 5usiness 6ay fo..o-ing the date of #ostingA -here gi$en ,y fax, t-enty'four (2+) hours after the time of successfu. transmissionA -here sent ,y e'mai., -ithin t-enty'four (2+) hours after the message has ,een sent to the intended reci#ient #ro$ided that the sender doesnHt recei$e an automatic out of office re#.y and/or a message notifying the sender of de.ays -ith the de.i$ery of the emai. in @uestion3

,:1E31

F'RCE MA=E*RE =either %arty sha.. ,e .ia,.e to the other in res#ect of anything -hich may constitute ,reach of this Agreement arising ,y reason of force majeure, name.y circumstances ,eyond the reasona,.e contro. of such %arty such as acts of God, terrorism, #eri.s of the sea or air, fire, f.ood, drought, ex#.osion, em,argo, riots, ci$i. commotion, #ro$ided that if any force maDeure e$ent continues for more than six months, either %arty may terminate this Agreement immediate.y3

21

,;1)31

C'NFIDENTIA&ITY The %arties sha.. ensure that a.. &onfidentia. 0nformation disc.osed ,y one %arty (the Di c"# ing Part!) to the other in accordance -ith this Agreement or -hich may at any time unti. ex#iry or termination of this Agreement come into the other %artyNs 7no-.edge, #ossession or contro. sha.. not ,e used for any #ur#oses other than those re@uired or #ermitted ,y this Agreement, and sha.. remain confidentia. and sha.. not ,e disc.osed to any third #arty3

1)32

The #ro$isions of &.ause 1)31 sha.. not a##.y to any &onfidentia. 0nformation" (a) #re$ious.y authorised in -riting ,y the 6isc.osing %arty as ca#a,.e of ,eing disc.osed to a third #arty under a##ro#riate confidentia.ity #ro$isions a##ro$ed ,y the 6isc.osing %artyA -hich has ,ecome #art of the #u,.ic domain other than ,y reason of ,reach of this c.auseA -hich is re@uired ,y any go$ernmenta. entity, or any a##.ica,.e .a- or regu.ation, or the order of any court or com#etent authority, to ,e disc.osed3

(,)

(c)

1)3!

For the #ur#ose of this Agreement C#nfidentia" Inf#rmati#n sha.. mean a.. information ,e.onging to a %arty disc.osed ,y that %arty to the other, -hether con$eyed ora..y, in -riting, in machine reada,.e form or other-ise, inc.uding any and a.. #ro#rietary, technica. or ,usiness information (inc.uding -ithout .imitation, ,usiness, #roduct, ser$ice or mar7eting #.ans, #rocedures or strategies, information re.ating to finances and information re.ating to customers or #ersonne.) or information of a %arty to -hich the other %arty may gain access during the #erformance of this Agreement3 GENERA& The Franchisee sha.. not ,e entit.ed to assign, se.., .icence, transfer or other-ise dea. -ith its rights and o,.igations under this Agreement to any third #arty -ithout the #rior -ritten consent of the Franchisor3 0f any #ro$ision of this Agreement is or ,ecomes (-hether or not #ursuant to any Dudgment or other-ise) in$a.id, i..ega. or unenforcea,.e in any res#ect under the .a- of any Durisdiction, the $a.idity, .ega.ity and enforcea,i.ity of any other #ro$ision sha.. not ,e affected or im#aired in any -ay3 =o -ai$er of any right under this Agreement ,y the Franchisor or the fai.ure ,y Franchisor to exercise any remedy it may ha$e in re.ation to a ,reach ,y the Franchisor of this Agreement, sha.. o#erate to #re$ent the Franchisor from exercising such right .ater, or from exercising such remedy .ater either for the same or another ,reach3

4<2 31

2 32

2 3!

22

2 3+

4ach %arty ac7no-.edges that it is acting on its o-n ,eha.f, as an inde#endent contractor and not as an agent, re#resentati$e, or em#.oyee of the other3 =othing in this Agreement and no action ta7en ,y the %arties under this Agreement sha.. constitute, or ,e deemed to constitute, an agency, association or Doint $enture. This Agreement (inc.uding the schedu.es to this Agreement) may on.y ,e $aried ,y a document in -riting signed ,y each of the %arties3 The Franchise 6ocuments and any instructions #ro$ided ,y the Franchisor to the Franchisee under this Agreement a.one constitute the entire agreement ,et-een the %arties -ith res#ect to the su,Dect matter of this Agreement3 0n the case of any conf.ict ,et-een any of the Franchise 6ocuments, the fo..o-ing order of #riority sha.. a##.y" (a) (,) (c) (d) (e) 0nstructions gi$en ,y the Franchisor to the Franchisee #ursuant to this Agreement This Agreement The ?etter of A-ard The ,id tendered ,y the Franchisee in res#onse to the 4>0, exce#t for such #ortions of the ,id as ha$e ,een s#ecifica..y reDected ,y the Franchisor in -riting3 The 4>0

2 32

2 3*

IN WITNESS WHERE'F, as of the 4ffecti$e 6ate, an authori1ed re#resentati$e of each %arty has du.y executed this Agreement3

SIGNED for and on behalf of

SIGNED for and on behalf of

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(igned" OOOOOOOOOOOOOO3

=ame"

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ANNE>*RE%I TERRRIT'RY TIR*PATHI REGI'N( C'MPRISING 'F CHITT''R) 9ADAPA ? NE&&'RE DISTRICTS 'F ANDHRA PRADESH

2+

ANNE>*RE %II

S- N# 13 23 !3 +3 23

Pr#d1ct (F8 (in ,ott.es / Tetra %ac7) 5utter 8i.7, (G.asses / sachets) ?assi, ( g.asses) &urd, (&u#s / (achets / 5u.7 #ac7s) 0ce &ream, (?itres)

MRP a $er m1t1a" C#n ent

22

ANNE>*RE @ III
%roduction and 8ar7eting (chedu.e for committed Juantity

The ,idder sha.. meet the minimum commitment as fo..o-s" SN#Mi"0 Pr#d1ct t# .e man1fact1red *nit A1antit! $r#$# ed t# .e man1fact1red Bin *nit C M#nthD A1antit! $r#$# ed t# .e man1fact1red Bin *nit C M#nthD Bin /#rd D

13 23 !3 +3 23

(F8 (in ,ott.es / Tetra %ac7) 5utter 8i.7, 2 m. ?assi, 2 m. &urd 0ce &ream

5ott.es / sachets G.asses / sachets g.asses &u#s / (achets / ,u.7 #ac7s ?itres

The Franchisor agrees that the a,o$e @uantities #ut together of minimum 2 L of the targeted @uantity to ,e manufactured e$ery month sha.. ,e re$ie-ed ,y the #arties after ex#iry of t-o years i3e, from the ,eginning of third year of effecti$e date3

2*

ANNE>*RE @ I+

ROYALTY FEES The Franchisee shall pay the Franchisor Royalty Fee on revenue derived from sale of the Products agreed upon in Annexure-II and also on any other product that are agreed to be manufactured and sold by the Franchisee under this Franchise Agreement with Franchisor. The Royalty Fee percentage payable by the Franchisee shall be as below. Products SFM, Butter Milk, Lassi, Curd, Ice Cream Royalty Fee Percentage As quoted in the commercial offer

The Franchisee agrees that the above Royalty Fee percentage shall be reviewed by the Parties after the expiry of two years i.e, from the beginning of third year of effective date3 The MRP of the Products shall vary from time to time depending upon market conditions and other factors. The MRP of Products shall be mutually agreed and fixed by Franchisor, from time to time.