Please choose whether the Memorandum of Understanding is to be binding on the parties or non-binding. If it is binding, it operates just like an agreement between the parties. Sometimes parties enter into a binding MOU which provides broad details about a project and thereafter after carrying out investigations and due diligence enter into more detailed agreements. Alternately, parties may choose to have a non-binding arrangement at first to cover their broad understanding and then finalise a detailed binding agreement later. If the MOU is non-binding parties will not be able to enforce the terms contained herein.
Non binding (parties will not be able to enforce the terms contained herein)
MEMORANDUM OF UNDERSTANDING
This Binding Memorandum of Understanding (hereinafter “Memorandum” or “MOU”) is dated this .
BETWEEN
________ residing at ________ (hereinafter referred to as “First Party” which expression shall mean and include its legal heirs, administrators and permitted assigns),
AND
________ residing at ________ (hereinafter referred to as “Second Party” which expression shall mean and include its legal heirs, administrators and permitted assigns).
(referred to herein as “Parties” or individually as “Party”)
WHEREAS
A. The Parties are interested in working together in connection with the Purpose which is described in this Memorandum.
B. This Memorandum sets out the initial relationship between the Parties as well as the respective rights and responsibilities of each Party.
C. Each Party respectively is expected to act in good faith in accordance with this Memorandum.
NOW THEREFORE IN CONSIDERATION OF the premises and the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:
(1) PROJECT AND PURPOSE
(a) The Parties intend to investigate the prospect of working together and/or to actually work together, on a project which will be referred to as ________ (“the Project”).
(b) The Project has the following purpose (“the Purpose”):
________
(2) BINDING
(a) The Parties hereby acknowledge and agree that:
(I) The terms of this Memorandum are intended to be legally binding on the Parties hereto.
(3) CHANGES TO MEMORANDUM
(a) This Memorandum may be amended at any time by agreement between the Parties.
(b) Any changes to this Memorandum must be made in writing and signed by the Parties.
(4) GENERAL OBLIGATIONS
(a) Notwithstanding the non-binding nature of this Memorandum, the Parties will act in good faith and will use their best endeavours to achieve the Purpose and to give effect to the terms of this Memorandum.
(b) The Parties hereby acknowledge and agree that they will each respectively perform all acts and execute all documents as reasonably required in order to give effect to the terms of this Memorandum.
(c) Each Party agrees to cooperate in the spirit of mutual understanding and goodwill in order to develop the Parties’ relationships with one another and in order to pursue the Purpose.
(5) ROLES OF PARTIES
(a) ________ will have the following obligations in relation to the Project:
________
(b) ________ will have the following obligations in relation to the Project:
________
(6) CONFIDENTIALITY
(a) The Parties each hereby acknowledge and agree that in connection with this Memorandum, they may have access to information that is confidential and/or commercially valuable to one or more of the other Parties (“Confidential Information“).
(b) The Parties each hereby acknowledge and agree that they may be both the receiving party in relation to some Confidential Information (“Receiving Party”), and the disclosing party in relation to some other Confidential Information (“Disclosing Party”) and that the terms of this Memorandum may apply to a Party as both a Receiving Party and as a Disclosing Party, as the context so provides.
(c) For the purpose of this Memorandum, Confidential Information may include but is not limited to:
(I) information of whatever nature relating to the Project or to another Party (whether relating to the Project or otherwise);
(II) any information derived from any other information which falls within this definition of Confidential Information; and
(III) any copy of any Confidential Information.
but does not include information which:
(I) was known or in the possession of the Receiving Party before it was provided to the Receiving Party by the Disclosing Party, provided that it was known or in the possession of the Receiving Party through legal means, and not as a result of any breach of this Memorandum or any other agreement or obligation relating to confidentiality (whether or not the Receiving Party was a party to such other agreement or obligation);
(II) is, or becomes, publicly available, through no fault of the Receiving Party;
(III) is provided to the Receiving Party without restriction or disclosure by a third party, who did not breach any confidentiality obligations by making such a disclosure;
(IV) is provided to the Receiving Party by the Disclosing Party and is marked “Non-Confidential”; or
(V) is required by law or regulation to be disclosed, but in the event that this exception applies, it applies only to the absolute minimum necessary and provided that the Disclosing Party is first consulted to establish whether and if so how far it is possible to prevent or restrict such enforced disclosure.
(d) In relation to any Confidential Information:
(I) the Receiving Party shall keep the Confidential Information confidential and secret.
(II) the Receiving Party shall only use the Confidential Information for the purpose of working in good faith on the Project in accordance with this Memorandum.
(III) the Receiving Party shall not release the Confidential Information to any other party, unless that other party is an advisor who is under a duty of confidentiality, is assisting with the Project, and needs to have the Confidential Information in order to assist with the Project.
(e) If there is any doubt as to whether any particular information constitutes Confidential Information, the Receiving Party should presume it is Confidential Information, until the Receiving Party obtains explicit confirmation from the Disclosing Party that it is not Confidential Information.
(f) Each Party’s respective obligations of confidentiality under this clause will survive the termination or expiration of this Memorandum and will continue after that Party ceases to participate in the Project.
(7) COMPETITION
(a) Each Party respectively agrees that for the period of time as set out in this clause (“the Time Period”) after the Party ceases to participate in the Project, and within the geographical area as set out in this clause (“the Geographical Area”), the Party will not, either directly or indirectly, whether as an employee, partner, sole trader, manager, director, advisor, agent, representative, affiliate, consultant, shareholder, unitholder, trustee, contractor or otherwise, undertake any of the following:
(I) engaging in a business or project which is the same as, similar to or in competition with the Project; or
(II) soliciting, hiring, or attempting to hire any other Parties or any employees or staff that are working in connection with the Project;
(III) soliciting any customers or clients of the Project;
(b) For the purposes of this clause, “the Time Period” means, from the date that the Party ceases to participate in the Project:
________
(c) For the purposes of this clause, “the Geographical Area” means:
________
(d) Each Party’s respective obligations under this clause will survive the termination or expiration of this Memorandum and will continue after that Party ceases to participate in the Project.
(8) INTELLECTUAL PROPERTY
(a) In connection with each Party’s participation in the Project, each Party respectively may generate, create, contribute to, write or produce intellectual property (“Project Intellectual Property”).
(b) For the purposes of this Memorandum, “Project Intellectual Property” includes but is not limited to:
(I) information, ideas, innovations, developments, improvements, inventions, discoveries, plans, reports, drawings, specifications, advice, analyses, designs, methodologies, code, artwork, or any other intellectual property; and
(II) intellectual-property that results in any way from work performed for or on behalf of the Project (whether performed by the Party or by somebody else); and
(III) intellectual property, whether the Party generates, creates, contributes to, writes or produces that intellectual property:
(A) directly, indirectly, independently or in cooperation or conjunction with another person or persons; and
(B) during the Party’s ordinary working hours, or outside of the Party’s ordinary working hours; and
(C) at the location where the Party ordinarily participates in the Project, or at some other location.
(IV) intellectual-property that results in any way from the use of resources or assets in connection with the Project, including reference or other materials, personnel, facilities, or other resources; and
(V) intellectual-property that relates in any other way to the Project or any business which is developed in connection with the Project.
(c) Unless otherwise expressly agreed between the Parties, nothing in this Memorandum is intended to create any transfer or assignment of any intellectual property rights in relation to any Project Intellectual Property.
(d) Unless otherwise expressly agreed between the Parties, in the event that a particular Party generates, creates, contributes to, writes or produces an item of Project Intellectual Property, that Party shall retain any and all intellectual property rights in relation to that item of Project Intellectual Property.
(e) Each Party’s respective obligations under this clause will survive the termination or expiration of this Memorandum and will continue after that Party ceases to participate in the Project.
(9) TIMING AND DURATION OF PROJECT
(a) This Memorandum will commence on .
(b) The Parties will negotiate in good faith in order to sign a final and legally binding agreement in relation to the Project (the “Agreement”) on or before .
(c) This Memorandum will remain in effect until the Agreement commences, or unless and until otherwise terminated by the Parties.
(d) The Parties may terminate this Memorandum by mutual agreement.
(e) Either Party may terminate this Memorandum forthwith by providing immediate notice in writing to the other Party.
(10) CONSEQUENCES OF TERMINATION
(a) In the event that this Memorandum is terminated:
(I) Neither Party will, under this Memorandum, incur any financial liability to the other Party; and
(II) Notwithstanding the preceding sub-clause hereof, either Party may incur liability towards the other Party in connection with matters outside of this Memorandum, which may include but are not limited to liability in relation to breach of contract, tort, or equity.
(III) In the event that a Party (“First Party”) is in possession of any equipment, materials, documents, intellectual property, data or other information (“Items”) that are the property of the other Party (“Second Party”), then the First Party must promptly return all Items to the Second Party, or destroy any Items if directed to do so by the Second Party; and
(11) EXCLUSIVITY
(a) Each Party (which, for the purpose of this clause is referred to as the “Representing Party”) hereby represents to the other Party that:
(I) Upon the signing of this Memorandum, the Representing Party will terminate any discussions or negotiations with any party other than a Party to this Memorandum (“Third Party”), which relate to the Purpose or to the Project (“Third Party Discussions”), in which the Representing Party, or any employee, agent, advisor, contractor or other representatives of the Representing Party, may be engaged.
(II) While this Memorandum is in effect, the Representing Party will not, directly or indirectly:
(A) Engage in any Third Party Discussions; or
(B) Invite, encourage, seek or otherwise solicit any Third Party to engage in Third-Party Discussions; or
(C) Respond to any invitation or solicitation from any Third Party in relation to any Third Party Discussions (except to explicitly reject such invitation or solicitation); or
(D) Enter into any agreement, memorandum of understanding, heads of agreement, letter of intent, or other arrangements with any Third Party in relation to any Third Party Discussions (whether legally binding or non-binding).
(III) The Representing Party will ensure that any employee, agent, advisor, contractor or other representatives of the Representing Party also complies with the obligations under this clause.
(b) For the sake of clarity, “Third Party Discussions” do not include discussions or negotiations in which the Representing Party may engage with any Third Party in order to pursue the Purpose in good faith and in the spirit of this Memorandum.
(12) COSTS
Unless otherwise expressly provided in writing, each Party is responsible for its own costs of complying with this Memorandum and in connection with the performance of its obligations under this Memorandum.
(13) FORCE MAJEURE
If and to the extent that a Party’s performance of any of its obligations under this MOU, hindered or delayed by fire, flood, earthquake, elements of nature or acts of God, Pandemic, acts of war, terrorism, riots, civil disorders, rebellions or revolutions, or any other similar cause beyond the reasonable control of such Party (each, a “Force Majeure Event”), and such non-performance, hindrance or delay could not have been prevented by reasonable precautions, then the non-performing, hindered or delayed Party will be excused for such non-performance, hindrance or delay, as applicable, of those obligations effected by the Force Majeure Event for as long as such Force Majeure Event continues and such Party continues to use its best efforts to recommence performance whenever and to whatever extent possible without delay, including through the use of alternate sources, workaround plans or other means. The Party whose performance is prevented, hindered or delayed by a Force Majeure Event will immediately notify the other Parties of the occurrence of the Force Majeure Event and describe in reasonable detail the nature of the Force Majeure Event.
If the Force Majeure Event continues for a continuous period exceeding 30 (thirty) days, the Parties shall mutually agree on the future course of action. However, despite all efforts made by the Parties in good faith, if the Force Majeure Event continues for a period of 90 (ninety) days, either of the Parties shall have the right to terminate this MOU by giving the other Parties notice of termination in writing.
(14) INDEMNITY
Each Party (“Indemnifying Party”) hereby agrees to indemnify and hold the other Party harmless from all damages, costs, attorney’s fees or other losses arising out of or relating to:
(a) breach of this MOU by the Indemnifying Party;
(b) breach of any representation or warranty by the Indemnifying Party.
(15) SEVERABILITY
If any provision of this MOU shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision thereof, and this MOU shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. Any invalid or unenforceable provision of this MOU shall be replaced with a provision that is valid and enforceable and most nearly gives effect to the original intent of the invalid/unenforceable provision.
(16) ENTIRE AGREEMENT
This MOU constitutes the entire agreement and understanding of the Parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings duties or obligations between the Parties with respect to the subject matter hereof.
(17) NO OTHER RIGHTS GRANTED
Nothing in this MOU is intended to grant any rights under any patent, copyright or other intellectual property rights of any Party in favour of the other, nor shall this MOU be construed to grant any Party any rights in or to the other Party’s Confidential Information, except the limited right to use such Confidential Information in connection with the Project under this MOU.
(18) AMENDMENTS
Any change, alteration, amendment, or modification to this MOU must be in writing and signed by authorized representatives of both Parties.
(19) DISPUTE RESOLUTION
(a) Any dispute(s) arising out of this MOU shall, as far as possible, be settled amicably between the Parties hereto failing which the following shall apply:
(b) The courts in ________ shall have exclusive jurisdiction over any dispute, differences or claims arising out of this MOU.
(c) If either Party employs attorneys to enforce any rights arising out of or relating to this MOU, the prevailing Party shall be entitled to recover reasonable costs and attorneys’ fees.
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(22) GOVERNING LAW
This MOU and all issues arising out of the same shall be construed in accordance with the laws of India.
SIGNED BY THE PARTIES THIS
___________________________
________
___________________________
________
