[INSERT NAME OF YOUR COMPANY] CONTRACT MANUFACTURING AGREEMENT
This Agreement (the “Agreement”), dated this [insert date] is between [insert name of the OEM
Manufacturer] (“Client”) whose address for the purposes of this agreement shall be [insert
address], and [insert name of your company] a [insert state in which your company is
incorporated in] corporation whose principal place of business is at [insert address]
(“Manufacturer”).
RECITALS
Client desires Manufacturer to manufacture certain products identified on Exhibit A hereto and
made a part hereof (the “Products”) to the specifications provided by Client and under the terms
and conditions described below, under the trademarks and trade names owned by Client and
identified on Exhibit B hereto and made a part hereof (the “Marks”).
AGREEMENT
In consideration of the foregoing and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Manufacture of Products.
a. Manufacturer shall manufacture, label, package, store, and ship to Client at the
location Client specifies the Products set forth in Exhibit A in accordance with good
manufacturing practices prevailing in the industry and in strict compliance with the
terms of this Agreement and the specifications, manufacturing process and quality
control standards set forth in Exhibit C (as amended from time to time, the
“Specifications”).
b. Client will provide Manufacturer with a forecast and access to Client’s inventory
information. Manufacturer will schedule production and order materials accordingly.
Upon receipt of Manufacturer’s production schedule, Client will issue a purchase
order to Manufacturer. Manufacturer will ship the Products in the sizes and with the
packaging specified, and shall label the Products with the Marks, using the labels
specified by Client, as provided in Section 4 below.
2. Compensation.
a. The price per each Product is set forth on Exhibit A hereto.
3. Labeling.
a. Client hereby grants Manufacturer a limited, non-exclusive, non-transferable license
as to the Marks for the purpose of allowing Manufacturer to perform its obligations
under this Agreement. Manufacturer agrees not to use, directly or indirectly, any
other trademarks that are colorable imitations of or confusingly similar to the Marks.
Manufacturer agrees that it shall not register the Marks or participate directly or
indirectly in such registration without Client’s prior written consent.
b. Manufacturer shall be responsible for ordering adequate supplies of labels and other
packaging materials on behalf of Client based on forecasts as provided by the Client.
Prior to placing any order for labels or packaging materials, Manufacturer shall
deliver to Client a recommendation as to the quantity of packaging to be ordered
based on forecasts as provided by the Client for Client’s approval or modification.
Manufacturer shall not place any order for labels or packaging materials without
Client’s prior written approval. Client shall be responsible for any unused labels or
packaging materials due to marketing formulation changes, not hitting sales forecast
or item discontinuation.
c. Nothing herein is deemed to grant to Manufacturer any right or license to use the
Marks for any purpose other than the labeling of Products for sale by Client as
provided in this Agreement.
4. Representations and Warranties.
a. Manufacturer hereby represents to Client that:
i. Manufacturer has the full legal right, power and authority to enter into this
Agreement.
ii. This Agreement is the legal, valid, and binding obligation of Manufacturer,
enforceable against Manufacturer in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other similar laws
of general application or by general principles of equity.
iii. All Products shall be manufactured and packaged in accordance with the
Specifications and good manufacturing practices prevailing in the industry
iv. All manufacturing and packaging of the Products shall be conducted in a
clean and sanitary environment.
v. All Products shall be merchantable and fit for human consumption.
vi. Consistent with the terms of Section 3, Manufacturer has in place appropriate
procedures to assure that the Product labels are compliant with applicable
federal and state requirements and that the correct label is applied to each
Product.
vii. Manufacturer is not subject to, nor is it aware of any pending or threatened
order, injunction, enforcement action or other proceeding by any local, state
or federal governmental agency regarding the manufacturing processes,
storage conditions, or purity of any products produced by Manufacturer.
viii. Manufacturer shall make available to Client, at Client’s request, the results of
all federal, state and local inspection reports and sanitation audits conducted
relating to or affecting (1) Manufacturer’s facilities, or (2) equipment, raw
materials, ingredients, packaging materials, labeling, work in process or
Products located therein. Manufacturer shall not disclose information in such
audits relating to other Client materials or ingredients. Manufacturer shall
immediately notify Client of any such inspections or audits or any other
information that indicates the presence of any bacteriological agent or any
substance considered by health authorities as being indicative of either
unsanitary practices or of public health concern.
ix. Manufacturer shall submit to Client such quality control records and reports
as are reasonably requested by Client. Manufacturer shall retain Products
from each production run for the full shelf life of the Product plus six
(6) months. Manufacturer shall send production samples to Client upon
request at any time and at Client’s cost. Manufacturer shall permit Client to
visit Manufacturer’s facility at reasonable internals and upon reasonable
notice during regular business hours to observe manufacturing and storage
activities with respect to the Products.
x. The signing and delivery of this Agreement by Manufacturer and the
performance by Manufacturer of all of Manufacturer’s obligations under this
Agreement will not breach any agreement to which Manufacturer is a party,
or give any person the right to accelerate any obligation of Manufacturer;
violate any law, judgment, or order to which Manufacturer is subject; or
require the consent, authorization, or approval of any person, including but
not limited to any governmental body.
b. Client hereby represents to Manufacturer that:
i. Client has the full legal right, power and authority to enter into this
Agreement.
ii. Client (or its affiliates) is the exclusive owner of the Marks, that it has the right
to grant the non-exclusive license described above, that it has not granted or
agreed to grant any assignment, license, right or privilege which conflicts with
the express provisions of this Agreement.
iii. This Agreement is the legal, valid, and binding obligation of Client,
enforceable against Client in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other similar laws
of general application or by general principles of equity.
iv. The signing and delivery of this Agreement by Client and the performance by
Client of all of Client’s obligations under this Agreement will not breach any
agreement to which Client is a party, or give any person the right to
accelerate any obligation of Client; violate any law, judgment, or order to
which Client is subject; or require the consent, authorization, or approval of
any person, including but not limited to any governmental body.
5. Covenant
Manufacturer covenants and agrees as follows:
a. Manufacturer shall provide Client with Products of consistent quality composed of safe
and wholesome ingredients, manufactured, labeled, packaged, stored, and shipped
under conditions compliant with all applicable federal, state, and local requirements
b. Manufacturer shall follow the Specifications provided in Exhibit C for Products identified
in Exhibit A and shall follow applicable laws, rules, and regulations, in its purchasing,
manufacturing, labeling, packaging, storing, and shipping of the Products. (i) All finished
Products and all raw materials, ingredients, processing aids, and packaging material
(collectively, “Product Supplies”) (a) shall be stored and shipped under sanitary
conditions, in strict compliance with all federal, state, and local laws, rules, regulations,
and guidelines including applicable current Good Manufacturing Practice and any other
applicable guidelines and regulations; (b) shall be manufactured, labeled, and packaged
in strict compliance with all federal, state, and local laws, rules, regulations, and
guidelines, including current Good Manufacturing Practice, current industry practices;
(c) shall be wholesome, merchantable, fit for their intended purpose, and fit for human
consumption consistent with the Specifications, current Good Manufacturing Practice,
industry practices, and applicable laws, regulations, and requirements. (ii) All finished
Products shall be packaged in accordance with Specifications and Manufacturer
warrants that it has procedures in place to assure the finished Products will be labeled in
a manner consistent with the Specifications and federal, state, and local requirements.
c. Manufacturer shall provide written notice of shortages of ingredients the absence of
which would decrease Product availability immediately upon learning of such shortages.
d. All books and records maintained or retained pursuant to this Agreement shall be
retained by Manufacturer for a period of at least 5 years, or longer if so required by
federal, state, or local laws, rules, or regulations.
6. Indemnification.
a. Manufacturer shall indemnify and hold harmless Client, its officers, directors, officers,
agents and employees from and against any and all damages, losses, liabilities,
claims, suits, costs and expenses (including attorney fees) (collectively, “Claims”)
resulting from or relating to any breach by Manufacturer of any provision, warranty or
covenant, or any non-fulfillment of any obligation by Manufacturer, under this
Agreement. Manufacturer further agrees to indemnify and hold harmless Client and
its officers, directors and agents, from and against any and all damages, loss, cost,
liability or expense (including attorney fees and costs) incurred by any such party in
connection with any complaints, demands, claims, or legal actions alleging illness,
injury, death, or damage as a result of the consumption or use of any Product;
provided that the Manufacturer shall not be required to indemnify Client against a
defect or defects in the Product that independent investigation shows originated after
the Product left the custody of the Manufacturer.
b. Client agrees to defend, indemnify and hold harmless Manufacturer, its directors,
officers, agents and employees from and against any and all damages, losses,
liabilities, claims, suits, costs and expenses (including attorney fees) (collectively,
“Claims”) resulting from or relating to any breach by Client of any provision, warranty
or covenant, or any nonfulfillment of any obligation by Client, under this Agreement.
Client further agrees to indemnify and hold harmless Manufacturer and its officers,
directors and agents, from and against any and all damages, loss, cost, liability or
expense (including attorney fees and costs) incurred by any such party in connection
with any complaints, demands, claims, or legal actions alleging illness, injury, death,
or damage as a result of the consumption or use of any Product that independent
investigation shows was caused by a defect in the Product that originated after the
Product left the custody of Manufacturer.
7. Term.
a. This Agreement shall run for a period of one (1) year from the date hereof. This
Agreement shall renew automatically each year for a period of one (1) year unless
either party provides written notice of non-renewal to the other party at least thirty
(30) days prior to the expiration of the then-current term.
b. Manufacturer may terminate this Agreement immediately:
i. If Client fails to make any payment due under this Agreement and such
nonpayment continues 10 days after written notice from Manufacturer that
any payment due hereunder is more than 30 days late;
ii. If Client fails to perform any other obligation under this Agreement within 15
days of notice from Manufacturer specifying such failure, or if such failure
cannot be cured within such 15-day period, then Client shall not be in default
hereunder so long as Client commences cure within such 15-day period; or
iii. If Client becomes insolvent, a receiver is appointed to the possession of all or
substantially all of Client’s property, Client makes a general assignment for
the benefit of creditors or files a voluntary petition in bankruptcy, or Client is
the subject of an involuntary petition in bankruptcy and such involuntary
petition is not dismissed within one hundred twenty (120) days of filing.
c. Client may terminate this Agreement immediately:
i. If Manufacturer fails to perform or meet any material term or condition hereof
and has failed to correct same within 30 days after written notice of such
failure by Client;
ii. If Manufacturer or its agents or representatives, without Client’s consent, has
adulterated any Products or has substituted or added, with respect to any
instruction, specification, formula, manufacturing process or quality control
standard or any procedure set forth in this Agreement or any exhibit hereto,
an ingredient, component, process or procedure not called for thereby, or has
altered or omitted an ingredient, component, process or procedure called for
thereby (provided that, for avoidance of doubt, no cure period shall be
required prior to termination under this provision);
iii. If Manufacturer ceases to do business as a going concern or ceases to
conduct its operations in the normal course of business, becomes insolvent, a
receiver is appointed to the possession of all or substantially all of
Manufacturer’s property, Manufacturer makes a general assignment for the
benefit of creditors or files a voluntary petition in bankruptcy, or Manufacturer
is the subject of an involuntary petition in bankruptcy and such involuntary
petition is not dismissed within one hundred twenty (120) days of filing; or
iv. At any time after the initial one-year term of this Agreement upon 60 days’
written notice to Manufacturer of Client’s election to terminate this
Agreement.
d. Following any termination, (i) Client shall take delivery of all finished Products
previously identified to this Agreement by Manufacturer, and shall pay for same in
accordance with this Agreement, (ii) Client shall have the right to sell all remaining
stock of Products in Client’s possession, (iii) Client shall reimburse Manufacturer for
Manufacturer’s actual cost for any unused labels and other packaging materials
purchased in accordance with Section 3(c), and (iv) Client shall reimburse
Manufacturer for Manufacturer’s actual cost for any unused raw materials or
ingredients ordered specifically for Products manufactured solely for Client, to the
extent that such raw materials or ingredients are not otherwise used by Manufacturer
in its operations.
8. Confidentiality.
a. “Confidential Information” means this Agreement and all confidential or otherwise
proprietary business and technical information relating to the Parties and their
respective businesses, including, without limitation, ideas, know-how, trade secrets,
production, manufacturing and sales techniques, financial statements and data,
recipes and formulas, sources of supply, advertising, actual and prospective Clients,
pricing, costing, and accounting procedures. Confidential Information does not
include information that is in the public domain at the time of disclosure by the
disclosing Party; that enters the public domain after disclosure by the disclosing
Party through no fault of the receiving Party; that was or is separately disclosed to
the receiving Party by a third party not itself subject to an obligation of confidentiality
to the disclosing Party with respect to such information; or that was in the receiving
Party’s possession at the time of disclosure by the disclosing Party.
b. Each Party agrees to maintain the Confidential Information in strict confidence and,
except to the extent expressly permitted in this Agreement or otherwise consented to
in writing by the other Party, that the Confidential Information will not be disclosed by
it or its “Representatives” (defined to include affiliates, directors, shareholders,
officers, employees, agents, subcontractors, consultants, members, managers,
advisors, or other representatives including legal counsel, accountants and, in the
case of Client, its Distributors) to any “Person” (defined to include individuals,
partnerships, companies, limited liability companies, entities, corporations, or agents
thereof) except with the specific prior written consent of the other.
c. Both Parties agree that during the term of this Agreement and for a period of one
(1) year after the termination hereof, unless otherwise agreed by the Parties, that
each party and its employees and agents shall not contact, solicit, seek or in any way
enter into an employment relationship with any employee of the other party as of the
date of termination.
9. Miscellaneous.
a. Relationship of Parties. Manufacturer and Client are independent contractors for the
purpose of this Agreement. Neither the execution, delivery nor performance of this
Agreement will be construed to constitute either party as an agent or representative
of the other for any purpose. Neither the execution, delivery nor performance of this
Agreement will be deemed to establish a joint venture or partnership between the
Parties. Except as otherwise provided herein, neither Party has the authority to
(i) bind the other Party by or to any contract, representation, understanding, act or
deed, (ii) represent that either Party is an agent of the other Party, or (iii) represent
that either Party is responsible for the acts or omissions of the other Party.
b. Impossibility. The Parties shall not be responsible for any failure to perform due to
unforeseen circumstances or causes beyond their reasonable control, including but
not limited to acts of God, war, riot, embargoes, acts of civil or military authorities,
fires, floods, accidents, strikes, or shortages of transportation, facilities, fuel, energy,
labor, or materials. In the event of any such delay, the Parties may defer
performance hereunder for a period equal to the time of such delay.
c. Severability. If any provision of this Agreement shall be prohibited or unenforceable
by any applicable law, the provision shall be ineffective only to the extent and for the
duration of the prohibition or unenforceability, without invalidating any of the
remaining provisions.
d. Waiver. The temporary, limited, or specific waiver of any term, provision, or condition
of this Agreement or a breach thereof will not be considered a waiver of any other
term, provision, or condition, or of any subsequent breach of the same term,
provision, or condition.
e. Entire Agreement. This Agreement embodies the entire understanding of the Parties
and shall supersede all previous communications, representations or understandings
either oral or written between the Parties relating to the subject matter hereof.
f. Assignability. This Agreement shall be binding upon and be for the benefit of the
Parties and their legal representatives, successors, and assigns. Neither party may
assign this Agreement without the prior written consent of the other.
g. Choice of Laws. This Agreement shall be interpreted and construed in accordance
with the laws of the state of [insert state] without giving effect to choice of law rules.
The Parties consent to jurisdiction and venue in the state and federal courts located
[insert state].
h. Notice. All notices, bills and payments shall be made in writing and sent via email to
[insert email addresses of the parties]
i. Construction. Section headings are included for convenience, but shall not form a
part of the Agreement or affect the interpretation of any part hereof. The word
“including” is used in this Agreement in a non-exclusive sense and, unless otherwise
expressly set forth, shall be interpreted as being illustrative and not limiting.
j. Expenses. Each party shall bear its own expenses.
k. Signatures. This Agreement may be signed in counterparts.
l. Amendment. This Agreement may be amended only by a written document signed
by the party against whom enforcement is sought.
/s/___________________
[insert name of representative]
[insert Client Company]
[date]
/s/___________________
[insert name of representative]
[insert your Company name]
[date]
EXHIBIT A – DESCRIPTION OF THE PRODUCTS TO BE MANUFACTURED
[insert a description of the goods that are to be manufactured as well as the prices for each
products]
Exhibit B: TRADEMARKS AND TRADE NAMES
[include the trademarks and trade names to be placed on the products]
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