COLLABORATION AGREEMENT BETWEEN AN
INDIAN COMPANY AND FOREIGN COMPANY
(.Principal
to Principal)
THIS AGREEMENT
is made at …………..... this ….. day of ………..... between M/s. ABC Co. Ltd., a
Company incorporated under the Laws of …………... and having its registered office
at ……………………..... hereinafter referred to as 'the Foreign Company' of the One
Part and M/s. XYZ & Co. Ltd………………. a Company registered under the Indian
Companies Act, 1956, and having its registered office at ………………………….....
hereinafter referred to as 'Indian Company' of the Other Part.
WHEREAS
the Foreign Company Is carrying on the business of manufacturing certain
machinery of a technical nature for producing or manufacturing the products
viz... The particulars of such machinery are mentioned in the First Schedule
hereto and which are hereinafter referred to as the said Machinery.
AND
WHEREAS the Foreign Company desires to have a market for the said machinery in
India and the Indian Company has offered to act as the agent of the Foreign
Company for the sale of the said machinery in India.
AND
WHEREAS after holding negotiations between the parties the Foreign Company has
agreed to appoint the Indian Company as its Agent in India and the Indian
Company has agreed to act as such agent on the terms and conditions hereinafter
recorded.
AND
WHEREAS approvals or permissions of the Government of India and other concerned
authorities will be obtained by the parties entering into this Agreement.
NOW IT
IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:-
1.
The Foreign Company hereby appoints the
Indian Company as its Sole Agent for the sale or supply of the said machinery
mentioned in the First Schedule hereunder written on the terms and conditions
herein recorded.
2.
The Foreign Company will export to the
Indian Company at the Indian Port or Ports Indicated by the Indian Company the
said machinery in such quantities as will be required by the Indian Company
from time to time, but subject to availability thereof with the Foreign
Company. The Machinery will be exported by the Foreign Company by opening Letters
of Credit on some Bank in India, through the former's foreign Bankers in the
name of the Indian Company for the price of the machinery agreed upon between
the parties as hereinafter mentioned. The Foreign Company will give credit
facility to the Indian Company for payment of the price of the said machinery
as and when exported to India, on such terms and conditions as may be agreed
upon from time to time and subject to approval by the Govt. of India and/or
Reserve Bank of India, if necessary.
3.
The price at which the said Machinery
will be sold and exported to the Indian Company will be as per particulars
mentioned in the Second Schedule hereunder written. The ratio of the price in
terms of the Foreign currency with that of Indian currency will change according
to the fluctuation In the International values thereof.
4.
The License for importing the said
machinery will be obtained by the Indian Company from time to time and the
import duty, custom duty and other charges required to be paid for clearing the
goods will be paid by the Indian Company. The machinery will be exported by the
Foreign Company on F.O.B. terms to the ports In India as may be agreed upon
from time to time.
5.
The machinery when received by the
Indian Company can be sold, by the Indian Company or given on hire or
hire-purchase basis at such price as may be agreed upon between the parties
hereto from time to time and on such other terms and conditions as the Indian
Company may think fit. In any case the price at which it will be sold or give non-hire
or hire purchase basis shall be competitive in the Indian market.
6.
The machinery will be sold as the
machinery manufactured by the Foreign Company and the name, address and trade
mark or patent marks will be properly exhibited on the packaging of the
machinery sold. The machinery will not be passed off as the machinery
manufactured by the Indian Company or any other person.
7.
The Foreign Company will furnish to the
Indian Company all the know-how. including any literature, drawings as to the
Installation and working of the said machinery.
8.
The Foreign Company will give full
training to the technicians (not more than
..... ) deputed by the Indian
Company to the factory of the Foreign Company as to the Installation mechanism
and working of the said machinery. The costs of such persons deputed by the
Indian Company by way of their salaries. boarding and lodging and travelling
will be borne and paid by the Indian Company separately or by adding it to the
cost of the machinery supplied to the Indian Company.
9.
If required by the Indian Company the
Foreign Company will depute their one or more technicians as will be required.
to India for equipping the technicians of the Indian Company with full
knowledge about the installation and working of the machinery as well as to
help the technicians of the Indian Company in Installing and putting In working
order the machinery supplied to any customers of the Indian Company. The
expenses incurred on account of such technicians of the Foreign Company will be
borne and paid by the Indian Company and the recovered from the buyer thereof.
If the machinery supplied to any customer fails to work and requires repairs
which the technicians of the Indian Company are unable to carry out, the
Foreign Company will depute their technicians as and when required to carry out
such repairs and their travelling and other expenses in India will be borne and
paid by the Foreign Company.
10.
The Indian Company will be entitled to
sell such machinery to any customer in India at such additional price (over and
above the price paid by the Indian Company to the Foreign Company) as it thinks
fit but consistent with the demand and market position.
11.
The Indian Company can enter in to
contracts for sale of the machinery to be supplied by the Foreign Company on
such terms as a thinks fit but not as the agent of the Foreign Company and the
Foreign Company will not be responsible for the consequences of any breach of
any term thereof by the Indian Company provided that if the breach occurs due
to the failure of the Foreign Company to supply the machinery agreed to be sold
by the Indian Company to the buyer. the Foreign Company will be liable to
reimburse the Indian Company for the loss suffered by the latter due to such
failure. Indian Company will keep the Foreign Company informed of such
agreements entered into or orders for the supply of the machinery from time to
time.
12.
The said machinery will not be sold by
the Indian Company anywhere outside India.
13.
The Foreign Company warrants the
quality and utility of-the machinery for which it Is intended and if any item
of machinery is found to be defective In the manufacture thereof or in
manufacturing the products which it is intended to produce, the Foreign Company
will make good the defect at its own costs by deputing its technicians to India
at their own costs. The Foreign Company will not however be responsible for any
damage done to the machinery in transit from the Indian Port to any other place
in India.
14.
All technical information, drawings,
and other material to be supplied by the Foreign Company will be in English
language.
15.
If after the machinery is supplied to
the Indian Company any improvements, additions or alterations are made by the
Foreign Company, the same will be immediately conveyed to the Indian Company so
that necessary improvements alterations or additions can be made by the Indian
Company. If necessary the Foreign Company will depute its technicians to carry
out such improvements additions or alterations. The machinery to be supplied
from time to time by the Foreign Company will be up to date in all respects as
to new inventions and improvements made therein.
16.
The Foreign Company will also sell and
supply to the Indian Company such spare parts, Instruments and tools as may be
required by the Indian Company from time to time.
17.
The Indian Company will not make any
changes or alterations or additions to the machinery supplied without the
express consent of the Foreign Company and In the latter case the Indian
Company will furnish all information and technical know-how of the proposed
changes, alterations or additions. if required by the Foreign Company.
18.
The said machinery will be sold under
the trade mark or merchandise mark or patent mark of the Foreign Company and
for that purpose the Foreign Company shall grant users license to the Indian
Company as may be required by Law by a separate agreement.
19.
The Indian Company will be entitled to
appoint distributors and selling agents or sub agents at different places in
India on such terms and conditions as the Indian Company may think fit but such
appointments will be subject to the terms and conditions of this Agreement.
20.
The Indian Company will not attempt to
manufacture the said machinery in India and disclose the know how and any other
technical information regarding the said machinery to any other person in
India.
21.
The Indian Company will not accept the
agency of any other manufacturer manufacturing similar machinery.
22.
It Is expected that the Indian Company
will be able to sell at least ... Items of such machinery every year. In case
the Indian Company fails to do so. without any reasonable cause acceptable to
the Foreign Company, the latter will have the option to cancel this agreement
by giving three months' prior notice in that behalf.
23.
All payments to be made by the Indian
Company to the Foreign Company and vice versa will be subject to the approval
of the Reserve Bank of India and will be subject to such terms and conditions
as the said Bank will stipulate.
24.
This agreement "I remain in force
for a period of... years from the date hereof subject to the other terms
hereof. The parties may extend the said period by mutual consent.
25.
The approval to be granted to this
agreement shall be deemed to form part of this agreement. Any term of this
agreement which is inconsistent with or contrary to any term or condition
mentioned in the letter of approval shall be treated as void and of no effect.
26.
This agreement will be treated as
terminated on the happening of any of the events below mentioned :
(i) 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.
(ii)
If any event happens which will make the performance of this agreement
impossible including any force majeure event.
(iii)
If either the Indian Company or the Foreign Company goes in either voluntary or
compulsory liquidation according to or under the law by which it is governed.
(iv)
If the parties hereto mutually agree to terminate this agreement.
27.
All the sanctions, approvals,
permissions, licenses 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.
28.
In the event of any dispute or
difference arising between the parties hereto or 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 or otherwise to two
Arbitrators, one to be appointed by each of the parties to this agreement and
such Arbitration shall be governed by the Indian Arbitration & Conciliation
Act, 1996. The venue for such Arbitration shall be ………….... in India.
29.
The validity of this agreement and
effect or meaning of the terms hereof will be decided according to the Indian
Law.
30.
Any communication by one party to the
other shall be made by registered post through airmail, with acknowledgement
due or by telex or fax or cable. In case the communication is made by telex or
fax or cable the same will be subsequently but immediately thereafter confirmed
by 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.
31.
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.
32.
Each of the parties hereto shall be deemed to
include its successors or permitted assigns.
THE FIRST SCHEDULE ABOVE REFERRED TO
THE SECOND SCHEDULE ABOVE REFERRED TO
IN WITNESS WHEREOF the parties have put their respective
seals the day and year first hereinabove.
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
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.
Witnesses;
1.
2.
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