Form of Technical Collaboration Agreement

THIS AGREEMENT made on this…………..day of……………BETWEEN ………………an Indian company having its registered office at………………. (hereinafter referred to as “A”) of the one part AND……………a foreign firm having its principal place of business at…………..(hereinafter called “B”) of the other part.

WHEREAS “A” is engaged in the manufacturing and marketing of………….and has considerable engineering know-how and technical information and equipment regarding said……………..and their method of manufacture.

AND WHEREAS “A” is desirous of manufacturing in India and marketing in India and other countries of various types of items which are set out in Schedule “A” hereto annexed (hereinafter referred to as PRODUCTS) on the terms and conditions herein contained.

NOW THEREFORE IT IS AGREED between the parties that :

1.           Know how” means and includes all inventions, processes, patents, engineering and manufacturing skill and other technical information whether patent or patentable or not which are presently owned by “B” or which may be so owned, during the term of this agreement including without limitation :

1.       Technical and engineering data, calculations and information.

2.       Design data, calculations and information.

3.       Details of layout of works, including details and specification of machinery

4.       All other forms of recovered information, technique and design in making of jigs, tools, dies, patterns and moulds.

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a.     “B” shall fully and promptly furnish “A” with such “know-how” as “A” may require from time to time during the term of this agreement in connection with the manufacture of the products.

b.    “B” will depute ……………technicians at the expense of “A” to held to establish and operate the plant at…………….and to train………..Indian technicians in its work in…………….at expense of “A”.

c.     “A” at their expense, shall procure and maintain patents in India on such inventions and improvements made by “A” : as “A” in their sole discretion shall choose. “B” shall also have the right to use the invention and improvements in all countries outside Indian and shall take full title to such procured by “B” outside India. However, “B” shall not, without the consent of “A”, licence any third party under said patents except its subsidiaries, its parent company or other subsidiaries of the parent company.

d.    “A” shall manufacture the PRODUCTS in strict accordance with the said know-how, the STANDARD of quality embodied therein or as may be set from time to time by “B”. To ensure the performance of this provision, “B” shall have the right to inspect at reasonable intervals and during business hours the facilities of “A” to the manufacture of the said PRODUCTS.

3.       Subject to other provisions of this agreement, “B” hereby grants to “A”.

a.     an exclusive licence to make in India the products by the use of any or all of “Bs” know-how.

b.    b.    a non-exclusive licenses to use and sell the said PRODUCTS throughout the world.c.     1.      2.      3.      

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a.     in consideration of “B” having agreed to disclose to “A” the latest method of manufacture of PRODUCTS and other processes and having further agreed to supply technical advice and date, “A” agrees to pay “B” a sum of …………..which due and payable in installments as follows.

                                      i.        Upon effective date.

                                     ii.        Upon delivery by “B” of the complete design and engineering documents.

                                    iii.        Within………….months after tender or certificate of Discharge of guarantees.

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Total ……………………..

a.     In consideration of “B” for having agreed to disclose to “A” the latest method of manufacture of products and other process, and having further agreed to supply technical advice and date, “A” will arrange to allot “B”…………shares at Rs……….each without any payment by “B”

b.    “A” further agrees to pay to “B” a royalty of………..per cent of the net selling price of the products covered by the agreement for a period of……….years from the date of execution of the agreement. The net selling price would means the ex-works price of the products covered (less the landed cost of all imported components) including ocean freight, insurance, customs duties payable thereon, etc., irrespective of the source of import. Such royalty payments are subject to Indian taxes.c.     1.      2.      3.      4.      

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a.     “A” shall render to “B” bi-annual/annual reports on or before the last day of………..following each calendar year with respect to which royalties are payable under this agreement, stating the amount of PRODUCT manufactured in the plant during the preceding year the amount of royalty due and payable with respect thereto. At the time of rendering such reports A shall pay to B the amount of royalty stated therein to be due and payable.

b.    A agrees to keep complete records of the account concerning the products which are the subject- matter of this agreement, which records shall be open to inspection of B ‘its appointed representative agreeable to both parties, during regular business hours for verifying the payments due to B under this agreement .

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6. All payments due by A to B under the agreement are to be made in …………………….. to B's account in any bank hit designates.

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a.     “A” shall maintain secrecy at all time during this agreement of all the know how, drawings and the like disclosed by “B” to “A” and/or pursuant to the terms herein or about which “A” learns during the performance of this agreement.

b.    “A” will, however, be free to sub-license the technical know-how, product design/engineering design under the agreement to another Indian party/parties, should it become necessary. The terms of such sub-licence will, however, be as mutually agreed to by all parties concerned including “B” and will be subject to the approval of the Government.

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8. This agreement shall become effective after it has been duly approved and signed by “A” and “B” and the approval of the Government of India has been obtained thereto.

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a.     this agreement shall remain effective for a period of……….. years from the date of signing the agreement. Upon the expiration of this agreement, the KNOW HOW THEREFORE delivered to “A” shall remain its property for its full and free use thereof.

b.    Subject to the approval of the Indian Government, this agreement may be renewed in whole or in part for further period by mutual agreement.

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10. This agreement shall be binding upon and ensure to the benefit of the successors and assigns of the respective parties hereto, and the obligations hereunder shall not be assignable by either party without written consent being first obtained from the other.
11. This agreement embodies entire understanding of the parties as to its subject matter, and it shall not be amended except in writing executed by both parties to the agreement.
12. Either party may by notice in writing to the other terminate this agreement in the event of :

a.     Any default by such other party in the performance or observation of any of its obligations under this agreement which is not remedied to the satisfaction of the party giving such notice within ninety (90) days following delivery of such notice, such notice to contain reasonable particulars of such default and to state the intention to terminate the agreement under this clause unless such default is made good or remedied.

b.    Judicial proceedings for bankruptcy, composition with creditors, sequestration of assets for creditors, or receivership instituted by or against such other party, insolvency of such other party or its failure to meet its obligations as they mature for any material period of time.

c.     Liquidation , compulsory or voluntary of such other party except in connection with an amalgamation, reconstruction, merger, consolidation, re-organisation or disposition of assets as a going concern voluntarily undertaken and with a view to the continuance of the business by the transferee thereof, provided, however, that upon such event the business entity continuing the business formerly carried on by such other party shall, in an appropriate instrument delivered to the other party to this agreement, undertake to perform all of the obligations of such other party hereunder.

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13. Neither party shall be in default under this agreement by reason of its failure or delay in the performance of its obligations is such failure or delay is caused by acts of God, Government laws and regulations, strikes, lock-outs, war or any other cause beyond its control and without its fault or negligence.
14. All disputes, questions, or differences, etc., arising in connection with this agreement shall be referred to a single arbitrator in India in case parties agree upon one, otherwise two arbitrators in India are to be appointed by each party in accordance with and subject to the provision of the Arbitration & Conciliation Act, 1996, or any other enactment or statutory modification thereof for the time being in force.
15. Notices and other communications under the agreement shall be in writing, or by established cable, radio or facsimile service, addressed as indicated in the descripttion of parties above or as either party may request in writing, and the effective date of each is the date of its repaid deposit in the mail for dispatch by air or such service properly addressed.
16. The agreement should be construed in accordance with and be governed by the laws of India.

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the date first above written.

For “B”

……………………….

(Chairman of the Board)

For “A”

……………………….

(Director)

Agreement to Act as Technical or Management Adviser

THIS AGREEMENT is made at............... this... day of................ between M/s. ABC Co. Ltd., a Company registered under the Indian Companies Act, 1956, having its registered office at... hereinafter referred to as the Indian company of the One Part and M/s. XYZ Co. Ltd., a Company Incorporated under the laws in force in (Name of country) having its registered office at..................... hereinafter referred to as the Foreign Company of the Other Part.

WHEREAS the Indian Company is carrying on the business of manufacturing................. and owns a large factory/ factories at................

AND WHEREAS as the manufacturing process In the Indian Company's factories is highly technical and complicated and the production turnover of the Indian Company is very large and requires also administrative skill, the Indian Company approached the Foreign Company, who is carrying on business at... as technical and management advisers to different companies carrying on more or less similar business all over the world for collaboration to act as technical and management adviser.

AND WHEREAS after some negotiations the Foreign Company has agreed to act as the technical and management advisers of the Indian Company on the following terms and conditions and it is proposed to record the same in a formal agreement.

AND WHEREAS this agreement has been approved by the Government of India and the Reserve Bank of India on the terms and conditions a copy of which is hereto annexed.

NOW IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS. --

1.     The Indian Company hereby appoints the Foreign Company as the technical and management adviser of the Indian Company.

2.     The Foreign Company agrees to depute Its technical and management experts not exceeding... in number fully qualified as regards the business carried on by the Company to advise the India Company as to the technical matters relating to the machinery installed by the Indian Company in its factories at......... and relating to -the quality of production as well as regarding the management of the factories.

3.     The Office of the said experts will be at the registered office of the Indian Company at.......... and the experts will attend to the office work during the Company's working hours except when they are on a visit to the factories.

4.     The Indian Company will arrange for spacious residential accommodation of the experts befitting their position and in a good locality of the city where the registered office of the Indian Company Is situate at the cost of the Indian Company.

5.     The said experts will visit the factories of the Indian Company as and when they think necessary or required but at least once in a week and the Indian Company shall make arrangements for their overnight stays at such place or places.

6.     The said experts will also visit the factory or factories for giving advice and assistance whenever required by the Indian Company or by the local manager of the factory.

7.     The experts will use and make available all their expertise in carrying on the production in the said factories in an efficient manner and also make all suggestions for the efficient management of the factories.

8.     The Foreign Company will make available all the know-how including all literature, formulae, drawings, and other material to the said experts to enable them to advise the Indian Company and to use their expert knowledge in solving any problem as to the running of the machinery and plant and as to the manufacture of the products.

9.     Apart from the expenses required to be incurred for the residence and household purposes of the said experts and their family members namely wives and children and their travelling expenses, the Indian Company shall pay to the Foreign Company for the services to be rendered by the Company and Its experts as follows (Include the list of expenses).

The personal expenses of the experts and their families for food and other normal amenities shall not, however, exceed Rs.......... per month per expert. All payments to be made by the Indian Company to the Foreign Company and its experts will be subject to the approval of the Government of India and/or Reserved Bank of India and will he made as stipulated by the said authorities.

10.  If the Indian Company feel that the services rendered by the Foreign Company and Its experts are not satisfactory or necessary, the Indian Company will have the right to cancel this agreement by giving to the Foreign Company three months' prior notice to that effect.

11.  During the period of this agreement the experts deputed by the Foreign Company will not give any advice or other help or guidance to any other Company or person in India.

12.  The experts deputed by the Foreign Company will not be treated as the employees of the Indian Company and will not be entitled to any of the benefits given to the regular employees of the Indian Company. However the experts will be given off-time or casual leave for such days and at such times as may be agreed upon between the expert and the Managing Director of the Indian Company from time to time.

13.  The Letter of Approval issued by the Govt. of India herein recited and hereto annexed shall be deemed to form part of this Agreement and if any term of this agreement is found inconsistent with or contrary to any term and/or condition contained in the said letter, the same will be treated as null and void.

14.  The duration of this agreement will be........ Months/years subject to what is herein otherwise provided. The said period may be extended by mutual consent.

15.  This agreement will be treated as terminated on the happening of any of the events below mentioned.

a.     If any party hereto commits breach of any provisions of this agreement and the party who is alleged to have committed breach is served with a notice by the other party three months prior to the intended date of termination by the other party and the former party has failed to amend the breach within the said period.

b.    If any event happens which will make the performance of this agreement impossible including any force majeure event.

c.     If either the Indian Company or the Foreign Company goes into either voluntary or compulsory liquidation according to or under the law by which it is governed.

d.    If the parties hereto mutually agree to terminate this Agreement.

16.  All sanctions, approvals, permissions, licences and other requirements of the Government of India and of any statutory authorities required for giving effect to all the terms and conditions of this agreement shall be obtained by the Indian Company.

17.  In the event of any dispute or difference arising between the parties hereto as to the rights and obligations under this agreement or as to any claim, monetary or otherwise of one party against the other or as to the interpretation and effect of any terms and conditions of this agreement such dispute or difference shall be referred to Arbitration of a common Arbitrator if agreed upon, otherwise to two or more Arbitrators, one to be appointed by each of the parties to this agreement and such Arbitrator shall be governed by the Indian Arbitration & Conciliation Act, 1996. The venue for such Arbitration shall be................. in India.

18.  The validity of this agreement and the effect or meaning of the term hereof will be decided according to the Indian Law.

19.  Any communication by one party to the other shall he made by registered post through airmail, with acknowledgement due or by telex o fax or cable. In case the communication is made by telex or fax or cable the same will be subsequently but immediately thereafter confirmed b, written communication sent by registered post as aforesaid. Any evidence showing the communication was posted or telex, fax or cable communication was made will be sufficient to prove the posting or sending the communication.

20.  In this agreement the expression 'know-how' shall include technical information such as inventories formulae processes, engineering and manufacturing skill, scientific data, calculations,' specifications, drawings standards, sketches and all other relevant information and knowledge.

IN WITNESS WHEREOF the parties have put their respective seals the day and year first hereinabove written.

The common seal of M/s. ABC Co. Ltd., is hereunto affixed pursuant to the resolution of the Board of Directors dated................ in the presence of Mr........................,a Director duly authorised in that behalf

The common seal of M/s. XYZ & Co. Ltd., is hereunto affixed pursuant to the resolution of the Board of Directors dated................. in the presence of Mr................... a Director, duly authorised in that behalf.

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