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.

1. 
 

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24. 
 

25. 
 

26. 
 

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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