(Free Template) Manufacturing Agreement

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This is a Manufacturing Agreement written to favor the Client. You attach the product specifications to it as Exhibit A.

Here it is in MS Word format.

Key aspects covered:

1. Manufacturer warrants that the Product furnished will conform to agreed upon specifications, will be delivered on time and will be merchantable, new and free from defects, strictly conforming to all samples.

2. Manufacturer also warrants that it shall have good title to all Products, free and clear of all liens and encumbrances, and shall transfer such title to Client.

3. Manufacturer shall indemnify.

4. Manufacturer must have adequate insurance.

5. In case any units of Product are defective, Client can reject or require replacement, or to cancel any unshipped or unperformed portion of the order, at Manufacturer’s expense.

6. Manufacturer will bear any risk of loss, damage or deterioration to Product until receipt by Client of Product conforming to all requirements of the Client.

7. Client can offset any sums due Manufacture against any sums owed to Client by Manufacturer.

8. Client can audit the Manufacturer.

9. Manufacturer agrees not to attempt to steal Client’s contacts or employees.

This Manufacturing Agreement (the “Agreement”) is made and entered into as of the Effective Date set forth below, by and between the Parties.
The Parties:
The Client: ___________________________________________
Address: ______________________________________________
The Manufacturer: ____________________________________
Address: ______________________________________________
Effective Date:
____________________, 2016
Term and Termination:
This Agreement remains in effects for two (2) years from the Effective Date, unless extended or terminated early. This Agreement may be terminated earlier by either Party by written notice to the other Party if that other Party fails to perform strictly in accordance with the required delivery dates, Product specifications or any other material provision of this Agreement or any purchase order. The Agreement may also be terminated early if the other party: (a) ceases production; (b) files a voluntary petition in bankruptcy; (c) has an involuntary petition in bankruptcy filed against it; (d) has a receiver or trustee appointed for it; (e) makes an assignment for the benefit of creditors; (f) becomes insolvent; or (g) goes out of business.
The Client hereby engages the Manufacturer to provide services to manufacture the Client’s product(s), and the Manufacturer agrees to provide such services and goods, agreed to as per following terms:
1.      Product: ____________________ as per the specifications and other terms attached hereto as Exhibit A which is incorporated herein by reference and forms a part of this Agreement.
2.      Warranties. Manufacturer warrants that the Product furnished hereunder will conform to
agreed upon specifications, will be delivered on time and will be merchantable, new and free from defects in material and workmanship, including latent defects, and fit and sufficient for the particular purpose intended. Manufacturer also warrants that the Product shall strictly conform to all samples furnished or specified by Manufacturer to Client, and shall be packaged in accordance with Client’s instructions and normal industry standards, and in a manner to withstand transportation hazards without damage. Unless otherwise instructed by Client, Manufacturer shall promptly repair or replace any Product which does not comply with any of the foregoing warranties and return such repaired or replaced Product to Client at Manufacturer’s expense. The foregoing warranties shall run for a period of one year from the date of shipment. Manufacturer also warrants that it shall have good title to all Products, free and clear of all liens and encumbrances, and shall transfer such title to Client. All express and implied in law warranties will survive inspection, testing, acceptance and payment. Manufacturer warrants that its performance and the Product furnished hereunder will comply with all applicable U.S. and foreign laws, rules and regulations.
3.      Indemnity. Manufacturer shall defend, indemnify and hold harmless Client, its directors, officers, employees, agents and successors and assigns, from and against any and all costs, suits, claims, losses, damages, liens and expenses (including reasonable attorneys’ fees) arising out of any breach of any of Manufacturer’s warranties, breach of contract, tort (including negligence and strict liability) or any other act or omission of Manufacturer, or any of its employees, agents, subcontractors or other representatives.
4.      Insurance. Manufacturer has and will keep in force adequate comprehensive general liability (including products/completed operations and contractual liability), and property damage insurance coverage; and that it will furnish to Client certificates evidencing such coverages and naming Client as an additional insured if so requested by Client. Such insurance coverages shall provide primary coverage, and be in minimum amounts and with carriers satisfactory to Client, and shall not be cancelable without Client’s prior written consent.
5.      Delivery. Manufacturer shall deliver the Product according to the schedule outlined in Exhibit A. Delivery of Product on the required delivery date is an essential part of this Agreement. Manufacturer will immediately notify Client of any delay in shipment. If Manufacturer fails to deliver any Product as of the delivery date required hereunder, Client may, at its option, in addition to any other rights which Client may have hereunder, require delivery by the fastest method and all charges for any such method shall be prepaid in full by Manufacturer.
6.      Revocation and Rejection. In case any units of Product furnished hereunder are found at any time to be defective or otherwise failing to comply with any of Manufacturer’s warranties, Client will have the right, notwithstanding payment or acceptance, to reject or revoke, to require replacement or correction, or to cancel any unshipped or unperformed portion of the order, at Manufacturer’s expense. Client may hold any Product pending instructions from Manufacturer, or Client may return such Product to Manufacturer at Manufacturer’s expense for refund to Client.
7.      Risk of Loss. Regardless of the F.O.B. point, Manufacturer will hold title to Product and bear any risk of loss, damage or deterioration to Product until receipt by Client of Product conforming to all requirements of the Client at the delivery point specified in the order.
8.      Right of Setoff. Client’s obligation to make payment to Manufacturer hereunder is subject to any unsettled claims Client may have against Manufacturer. Client may offset any sums due Manufacture against any sums owed to Client by Manufacturer.
9.      Audit.  If requested by Client, the Manufacturer will permit Client or authorized representatives of Client to examine all pertinent documents, data and other information relating to the Product, tooling, and the Manufacturer’s obligations under this Agreement. Client shall bear the cost of audit unless it is determined that Manufacturer is in a breach of this Agreement, in which case the Manufacturer shall bear the cost of the audit. Manufacturer will:
a.       Provide the most current financial reports for the Manufacturer and for any related company involved in producing, supplying, or financing the Product or any of its components.
b.      Provide physical access to any facility or process relating to the Product
c.       Cooperate with audit of any records, facility or process to determine compliance with the requirements of this Agreement.
10.  Non-Circumvention.
a.       Manufacturer will learn the names, telephone numbers, and email addresses of customers, business partners, affiliates, investors, borrowers, lenders, agents, or banks of Client, hereinafter called “Contacts.” Manufacturer acknowledges, accepts and agrees that the identities of the Contacts will be recognized as exclusive and valuable assets and trade secrets of Client. Manufacturer agrees to keep confidential the names of any Contacts introduced or revealed by Client to Manufacturer, and that Manufacturer, its associates, subcontractors, joint ventures, partnerships, divisions, subsidiaries, employees, agents, heirs, assigns, designees, or consultants will not directly or indirectly contact, negotiate or deal with any of the Contacts without a written permission from Client to do so for the Term of this Agreement, and two (2) years thereafter.
b.      Manufacturer will not hire any employees of Client and will not, either directly or indirectly, solicit, induce, recruit or encourage any of Client’s employees to leave its employment, or take away such employees, or attempt to solicit, induce, recruit, encourage or take away employees of Client, either on behalf of Manufacturer or for any other person or entity.
11.  Governing Law. This Agreement is made under and shall be construed according to the laws of the State of California without regard to its conflict of law principles that would result in application of any other law. Venue over all disputes shall be in the courts of competent jurisdiction located in Los Angeles County, CA, and each of the Parties hereto consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any action or proceeding, waives any objection to venue laid therein and agrees not to plead or claim in any such courts that such proceeding brought therein has been brought in any inconvenient forum.
12.  Prevailing Language. English shall be the language of communication. In case of any discrepancy between the English version of this Agreement, specifications or other documents and any translations, the English version shall prevail.
13.  Equitable Remedies. The Manufacturer acknowledges that its breach of this Agreement may cause irreparable damage and agrees that the Client shall be entitled to seek injunctive relief under this Agreement, as well as any other relief that may be granted by a court of competent jurisdiction.
14.  General Provisions. Manufacturer is an independent contractor and nothing in this Agreement will be construed as establishing an employment or agency relationship between Client and Manufacturer.  Manufacturer has no authority to bind Client by contract or otherwise.  The Manufacturer may not assign this Agreement without the prior written consent of the Client. This Agreement may be executed in multiple counterparts, each of which shall constitute a signed original. Any facsimile or electronic image of this Agreement or writing referenced herein shall be valid and acceptable for all purposes as if it were an original. Each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. However, in the event that any provision of this Agreement becomes or is declared unenforceable by any court of competent jurisdiction, such provision shall be deemed deleted and the remainder of this Agreement shall remain in full force and effect.
15.  Entire Agreement. This Agreement along with exhibit(s) attached is the entire agreement and understanding between the Parties, and supersedes and merges all prior oral and written agreements, discussions and understandings between them regarding the subject matter of this Agreement. No waiver or modification of any provision of this Agreement shall be binding unless made in writing and signed by an authorized representative of both the Parties. Any changes in exhibit(s) attached hereto, when mutually agreed to in writing will be deemed to be attached to this Agreement with immediate effect going forward, unless agreed to otherwise in writing.
The Parties hereto by their duly authorized representatives have executed this Agreement.
[Signature page follows]
By: _____________________________
Name/Title: ______________________
By: _______________________________
Name/Title: ________________________
Date: ______________________________


Delivery Schedule:
X sample units before _____________, 2016
X units before ______________, 2016
X units before ______________, 2016
Payment Terms:
Deposit of $_____
$______ within x days of receipt of 1000 conforming units.
By: _____________________________
Name/Title: ______________________
By: _______________________________
Name/Title: ________________________
Date: ______________________________

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