Format of Foreign Collaboration Agreement



Format of Foreign Collaboration Agreement

Agreement executed this …………..….…………. day of …………..….…………. between M/s …..….…………., a Foreign Company incorporated in the United Kingdom and having its registered office at ….….…………. hereinafter called the U.K. Company of the ONE PART.
M/s…………..….…………. a company incorporated in India and having its registered office at …..…………….…. hereinafter called the Indian company of the OTHER PART:
WHEREAS the Indian company has been incorporated having for its object the manufacture and production of ................................. ; 
WHEREAS the Indian company has already constructed factory buildings, installed plant and machinery and commenced manufacture and production of ................................. ,; 
WHEREAS the Indian company with a view to improve, still further, the quality of the commodities manufactured, and to increase production, is desirous of procuring the latest technique and know-how relating to the manufacture of the above said commodities; 
WHEREAS the Indian company, therefore, approached the U.K. company that has considerable experience in the line of manufacture engaged in by the Indian company, and requested the U.K. company to extend to the Indian company necessary technical assistance in that behalf; AND 

WHEREAS the U.K. company has agreed to extend technical assistance and to furnish to the Indian company for improvement of their business the requisite know-how in the form of designs, plans, engineering drawings, technical advice and also to supply technicians to advice for improvement of the existing factories, machineries and plant and also to provide to the Indian personnel necessary technical training to enable them to successfully handle and exploit the technical know-how to be imparted to the Indian company subject to the terms and conditions set out hereunder:
(1)    In consideration of the remuneration paid by the Indian company to the U.K. company as described hereinafter, the U.K. company shall supply to the Indian company:
(a) technical advice and know-how for the purpose of improving or adding to the existing factories and installing additional plant and machineries, if necessary, for the manufacture of…………..….………….;
(b) further the necessary plans, factory-design and layouts, charts and drawings, documentation and other forms of technical know-how for the said purpose;
(c)  render advice in the matter of purchase of the further plant and machinery suitable and necessary for the factory;
(d)  lend the services of their technicians to assist the Indian company in carrying out the improvement to the factories and for installing additional plants and machinery;
(e)  provide technicians from their own staff to attend at the Indian company’s factory in India whenever necessary;
(f)   impart technical training to selected Indian personnel at their works in England or in their associated companies, to enable them to operate the machinery and plant to be installed and to exploit the imported technical know-how to the best advantage;
(g) advise the Indian company, promptly and to the best of their ability, in connection with any technical or manufacturing problems or difficulties which may be referred to it by the Indian company during the continuance of this agreement.
(2)  For technical know-how and data supplied by the U.K. company to the Indian company as above, the Indian company shall make a lump sum payment of Rs…………..….…………. to the U.K. company phased as follows:
(a)  one-third on approval of the agreement by the Central Government;
(b) one-third, on the U.K. company supplying the Indian company necessary charts, plans, engineering drawings, documentation and other technical data and know-how, which shall be done within 15 days from the date of approval, of this agreement by the Central Government;
(c) the balance one-third in three equal annual instalments thereafter after commencement of production.
(3)   This Agreement shall be in force for a period of 5 years at the first instance, subject to extension for a further period of 5 years by mutual agreement and subject to approval by the Central Government.
(4)   The Indian company may but not bound to use foreign brand names on their products for internal sale or on products to be exported.
(5)   There shall be no restriction on the Indian company exporting their products to foreign countries.

(6)   The Indian company shall not have the right to pledge, mortgage or assign or to sub-licence the technical know-how, data, engineering designs, layouts etc. to other parties, without the consent in writing of the U.K. company.
(7)   There shall be no restraint on the Indian company having their own arrangements for procurement of raw materials, purchase of spares and components and for pricing their products and the sale thereof.
(8)  Technicians who may be deputed by the U.K. company to the Indian company to advise and assist the Indian company under this agreement shall be paid their salary, travelling expenses and boarding and lodging by the Indian company.
(9)   The Indian company shall likewise bear all the expenses of the persons sent by them to the U.K. company for training in their works under clause 1(f) supra.
(10) The parties hereto mutually agree that they will each inform the other of any new development in design or methods of manufacture which they respectively may discover during the continuance of this Agreement in so far as such new developments are applicable to the products manufactured by the Indian company.
(11) The Indian company shall maintain the utmost secrecy in connection with any technical data supplied by the U.K. company under this Agreement, and in particular shall keep all data concerned with the manufacturing processes under lock and key.
(12) It is agreed that the payment made to the U.K. company shall include the compensation for use of the patent rights for the period of its duration, and that the Indian company shall have the right for the period of its duration the right to manufacture their products even after the expiry of this Agreement.
(13) The Indian company shall not, during the continuance of the Agreement refer any technical or manufacturing problems or difficulties to any one other than the U.K. company but shall regard and use the U.K. company as its sole technical consultant.
(14)  On the expiry of the period prescribed herein or of extended period provided in clause 3 (supra) or upon the termination of this agreement for any reason the Indian company shall return to the U.K. company all copies of information data or material sent to it by the U.K. company under this Agreement and then in its possession, and shall expressly refrain from communicating any such information, technical data or material received by it hereunder to any person, firm or company whatsoever.

IN WITNESS WHEREOF the parties hereto have signed this Agreement this…………..….……………………..….. day of…………..….…………. 2020 in the presence of the following:

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