Form Of Technical Collaboration Agreement - Legal Draft

THIS AGREEMENT made

on this..day ofBETWEEN an Indian company having its registered

office at. (hereinafter referred to as A) of the one part ANDa 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 machinery4. All other forms of

recovered information, technique and design in making of jigs, tools, dies,

patterns and moulds.5.

1. 6.
2. 2.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.

1. 3.c.
2. d.
3. e.
4. 1.2.3.4.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...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 Bshares at Rs.each without

any payment by Bb. 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.

1. 3. 4.5.
2. 2.3.4.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 .1.

1. 2.
2. 3.
3. 4.
4. 5.
5. 7.
6. 8.
7. 9.
8. 10.
9. 11.
10. 12.
11. 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.1.

1. 2.
2. 3.
3. 4.

1. 5.
2. 6.
3. 7.

1. 1.2.3.4.5.6.7.8.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.c.

1. d.
2. e.
3. f.
4. g.
5. h.
6. i.
7. j.
8. k.
9. 1.2.3.4.5.6.7.8.9.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.1.

1. 2.
2. 3.
3. 4.
4. 5.
5. 6.
6. 7.
7. 8.
8. 9.
9. 10.
10. 11.
11. 12.
12. 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)