Manufacturer-Friendly Manufacturing Agreement Template

"Affiliate" means, with respect to a Party, any entity that directly or indirectly controls, is controlled by, or is under common control with that Party, where "control" means the ownership of more than 50 percent of the voting interests of an entity or the power to direct its management and policies.

"Applicable Law" means all laws, regulations, rules, orders, and binding governmental requirements applicable to a Party, the Products, or the performance of this Agreement from time to time.

"Background IP" means all Intellectual Property Rights owned or controlled by a Party before the Effective Date or developed independently of this Agreement, including, in the case of the Manufacturer, its manufacturing know-how, methods, and equipment configurations.

"Brand Materials" means the Brand Owner's trademarks, logos, trade names, packaging artwork, designs, and other brand identifiers furnished by the Brand Owner for use on or in connection with the Products.

"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in [city/jurisdiction] are authorized or required to be closed.

"Confidential Information" means all non-public information, in any form, disclosed by or on behalf of a Party to the other Party in connection with this Agreement that is designated as confidential or that a reasonable person would understand to be confidential given its nature and the circumstances of disclosure.

"Delivery Point" means the location designated in [Delivery Point/Incoterm] at which the Manufacturer shall make the Products available to the Brand Owner or its carrier.

"Facility" means the manufacturing premises of the Manufacturer located at [address], or any other premises approved in writing by the Brand Owner for the manufacture of the Products.

"Intellectual Property Rights" means all patents, utility models, design rights, copyrights, trademarks, trade secrets, know-how, rights in data and software, and all other intellectual or industrial property rights, whether registered or unregistered, anywhere in the world, including applications and rights to apply for any of the foregoing.

"Materials" means all raw materials, components, parts, sub-assemblies, and packaging required for the manufacture of the Products, whether procured by the Manufacturer or furnished by the Brand Owner.

"Minimum Annual Commitment" means the minimum quantity or aggregate value of Products that the Brand Owner is obligated to purchase in each Contract Year, as set forth in this Agreement.

"Contract Year" means each consecutive period of 12 months commencing on the Effective Date or on any anniversary of the Effective Date.

"Process Improvements" means any improvement, modification, or invention relating to the methods, processes, techniques, equipment, tooling usage, yields, or efficiencies employed by the Manufacturer in manufacturing the Products, to the extent not embodied in the design or functional characteristics of the Products.

"Product Improvements" means any improvement, modification, or invention that alters the design, features, functionality, appearance, composition, or performance of the Products or the Specifications.

"Products" means the goods described in [Product Description/List], to be manufactured by the Manufacturer for the Brand Owner in accordance with the Specifications.

"Purchase Order" means a written order issued by the Brand Owner and accepted or deemed accepted by the Manufacturer in accordance with this Agreement, specifying the Products and quantities ordered, delivery dates, and Delivery Point.

"Specifications" means the written technical, performance, material, dimensional, quality, labeling, and packaging requirements for the Products, as agreed in writing by the Parties and amended from time to time under this Agreement.

"Tooling" means all molds, dies, jigs, fixtures, patterns, gauges, templates, and special tools that are specifically designed or procured for the manufacture of the Products.

Headings are for convenience only and do not affect interpretation. The words "including" and "includes" mean "including without limitation." References to writing include email, unless otherwise stated. References to a Section are to a section of this Agreement. No provision shall be construed against a Party by reason of that Party having drafted it. All amounts stated in this Agreement are expressed in [Currency].

The Brand Owner hereby appoints the Manufacturer, and the Manufacturer accepts such appointment, as [an exclusive / a non-exclusive] manufacturer of the Products for the Brand Owner in the territory of [Territory] during the Term, on the terms and subject to the conditions of this Agreement.

The Manufacturer shall manufacture, test, package, and make available for delivery the Products in accordance with the Specifications, Applicable Law, and the terms of this Agreement, and shall perform the further services described in [Description of Additional Services, e.g., packaging, labeling, warehousing] (together with the manufacture of the Products, the "Manufacturing Services").

The Manufacturer shall perform the Manufacturing Services at the Facility with reasonable skill, care, and diligence, using suitably qualified personnel and in accordance with generally accepted industry standards applicable to the manufacture of goods of the same kind.

The Manufacturer may subcontract discrete, non-core elements of the Manufacturing Services, including finishing, testing, and logistics, to third parties of good standing, provided that the Manufacturer shall remain responsible for the performance of such subcontractors to the extent set forth in this Agreement. The Manufacturer shall obtain the Brand Owner's prior written consent, not to be unreasonably withheld, conditioned, or delayed, before subcontracting the principal assembly of the Products.

Nothing in this Agreement obligates the Manufacturer to manufacture any quantity of Products in excess of the capacity commitment of [Monthly/Annual Capacity] units, and any request by the Brand Owner for quantities above that level shall be subject to the Manufacturer's written confirmation of available capacity.

The Brand Owner shall provide, in a timely manner, all information, approvals, Brand Materials, and cooperation reasonably required by the Manufacturer to perform the Manufacturing Services. The Manufacturer shall not be liable for any delay or non-conformity to the extent caused by the Brand Owner's failure to do so, and any affected delivery dates shall be extended accordingly.

The Manufacturer shall be entitled to manufacture goods for itself and for third parties, provided that it shall not use the Brand Materials or Brand Owner's Confidential Information for such purposes and shall not manufacture products that embody the Brand Owner's Product Improvements for third parties.

The Parties are independent contractors. Nothing in this Agreement creates a partnership, joint venture, agency, or employment relationship between them, and neither Party has authority to bind the other.

The Products shall be manufactured in accordance with the Specifications, which the Parties have agreed in writing and initialed prior to the Effective Date, as identified by [Specification Reference/Version]. The Specifications shall be maintained by the Manufacturer in a controlled document system.

The Brand Owner warrants that the Specifications, designs, and Brand Materials furnished or approved by it are complete, accurate, and suitable for the intended purpose of the Products, and that the manufacture of the Products in accordance with them will not infringe the Intellectual Property Rights of any third party.

Where the Specifications are ambiguous, incomplete, or conflict with Applicable Law, the Manufacturer shall promptly notify the Brand Owner, and the Brand Owner shall provide written clarification within [number] Business Days. The Manufacturer shall have no liability for any delay or non-conformity arising from such ambiguity, incompleteness, or conflict pending such clarification.

Either Party may propose a change to the Specifications, the Products, or the Manufacturing Services by delivering a written change request describing the proposed change in reasonable detail (a "Change Request"). No change shall be effective unless and until it is set out in a written change order signed by authorized representatives of both Parties (a "Change Order").

Within [number] Business Days after receipt of a Change Request from the Brand Owner, the Manufacturer shall notify the Brand Owner of the anticipated effect of the change on price, lead time, Minimum Annual Commitment, Materials, Tooling, and any inventory affected. The Manufacturer shall not be obligated to implement the change until the Parties agree on such adjustments in a Change Order.

The Brand Owner shall bear all costs resulting from an approved change, including the cost of Materials and work-in-process made obsolete by the change, modifications to Tooling, requalification, and reasonable internal costs of the Manufacturer. The Manufacturer may refuse any Change Request that, in its reasonable opinion, would compromise safety, compliance with Applicable Law, or the Manufacturer's capacity.

The Manufacturer may implement changes required by Applicable Law or urgently required for safety without prior approval, provided that it notifies the Brand Owner as soon as practicable, and the Parties shall document the corresponding adjustments in a Change Order.

The Manufacturer may make Process Improvements and minor changes to its manufacturing processes without the Brand Owner's consent, provided that such changes do not alter the form, fit, function, or Specifications of the Products.

Within [number] days before the commencement of each calendar [quarter/month], the Brand Owner shall deliver to the Manufacturer a rolling non-binding forecast of its anticipated requirements for the Products for the following [number] months (the "Forecast"). The Forecast is provided for planning purposes only, except as expressly stated in this Section.

The Brand Owner shall purchase from the Manufacturer, in each Contract Year, Products in a quantity of not less than [Minimum Annual Quantity] units or an aggregate purchase price of not less than [Minimum Annual Value] (the "Minimum Annual Commitment"). The Minimum Annual Commitment is a firm and binding obligation of the Brand Owner and is not subject to reduction except by written agreement of the Parties.

If the Brand Owner fails to satisfy the Minimum Annual Commitment in any Contract Year, the Manufacturer may, by written notice and without prejudice to its other remedies, invoice the Brand Owner for an amount equal to [percentage] percent of the aggregate price of the shortfall quantity, and the Brand Owner shall pay such amount in accordance with Section 6. Alternatively, the Manufacturer may require the Brand Owner to issue Purchase Orders for the shortfall quantity within [number] days.

The Brand Owner shall order Products by issuing Purchase Orders to the Manufacturer not less than [number] days before the requested delivery date. Each Purchase Order shall specify the quantity, the requested delivery date, the Delivery Point, and any special instructions consistent with this Agreement.

The Manufacturer shall accept or reject each Purchase Order within [number] Business Days of receipt. The Manufacturer shall accept any Purchase Order that is consistent with the most recent Forecast, does not exceed 120 percent of the quantity forecast for the relevant period, and is submitted with the required lead time. A Purchase Order not rejected within such period is deemed accepted.

Accepted Purchase Orders are binding on the Brand Owner and may be cancelled or rescheduled only with the Manufacturer's written consent. In the event of any approved cancellation or rescheduling, the Brand Owner shall reimburse the Manufacturer for all Materials purchased, work-in-process, finished Products, and other costs incurred or committed in reliance on the Purchase Order.

Quantities of Products purchased pursuant to Purchase Orders, whether or not delivered in the relevant Contract Year, shall count toward the Minimum Annual Commitment for the Contract Year in which the delivery date requested falls. In the event of conflict between the terms of a Purchase Order and this Agreement, this Agreement shall prevail.

If the Manufacturer is unable to meet the quantities or delivery dates in an accepted Purchase Order due to the Brand Owner's failure to comply with its obligations, the corresponding Minimum Annual Commitment shall be deemed satisfied to the extent of the affected quantities.

Unless otherwise agreed in writing, the Manufacturer shall procure all Materials required for the manufacture of the Products from suppliers selected by it, in accordance with the Specifications and any approved supplier list agreed by the Parties.

Where the Specifications designate a particular supplier, brand, or source for any Material (a "Designated Source"), the Manufacturer shall purchase from such Designated Source, and shall not be liable for any delay, price increase, shortage, or defect in the Materials attributable to the Designated Source, other than as a result of the Manufacturer's own negligence in handling such Materials.

The Brand Owner may supply certain Materials free of charge to the Manufacturer (the "Consigned Materials"), as identified in [Consigned Materials List]. The Brand Owner shall deliver Consigned Materials to the Facility at its own cost, in sufficient quantities and by the dates reasonably required, together with an allowance for normal scrap and waste of [percentage] percent.

Title to Consigned Materials shall remain with the Brand Owner. The Manufacturer shall store them separately or identifiably, use them solely for the Products, and bear the risk of loss or damage to them while in its possession only to the extent caused by its gross negligence or willful misconduct, with liability limited to the replacement cost thereof.

The Manufacturer shall inspect Consigned Materials upon receipt for visible damage and quantity discrepancies and shall notify the Brand Owner within [number] Business Days of any discrepancy. The Manufacturer shall have no responsibility for latent defects in Consigned Materials or for Product non-conformities caused by such defects or by the Consigned Materials' non-conformity with the Specifications.

If the cost of any Material procured by the Manufacturer increases by more than [percentage] percent over the cost assumed in the then-current prices, or if its supply becomes constrained, the Manufacturer may notify the Brand Owner, and the Parties shall negotiate in good faith an equitable price adjustment under Section 6.

Upon expiration or termination of this Agreement, or where Materials are rendered excess, obsolete, or non-cancellable as a result of changes in Forecasts, Purchase Orders, or Specifications, the Brand Owner shall purchase from the Manufacturer all such Materials at the Manufacturer's documented cost plus [percentage] percent handling charge.

The prices for the Products shall be as set forth in [Price List/Pricing Terms], expressed in [Currency] per unit and exclusive of all taxes, duties, levies, and charges (the "Prices"). The Prices are based on the Specifications, the Minimum Annual Commitment, and the assumptions on Material costs, labor, and exchange rates in effect at the Effective Date.

The Prices shall be reviewed by the Parties [annually/quarterly]. The Manufacturer may adjust the Prices upon [number] days' written notice to reflect documented increases in the cost of Materials, labor, energy, or transport, or changes in Applicable Law, and in any case in accordance with [Index/Adjustment Mechanism].

The Manufacturer shall invoice the Brand Owner upon [shipment/delivery] of each consignment of Products. In addition, the Manufacturer may invoice separately for Tooling charges, Change Order costs, shortfall payments, storage fees, and other amounts due under this Agreement.

The Brand Owner shall pay each undisputed invoice in full, without set-off, counterclaim, deduction, or withholding, within [number] days from the date of the invoice, by wire transfer to the account designated by the Manufacturer in writing. [Advance payment of [percentage] percent of the value of each Purchase Order shall be due upon its acceptance.]

All amounts payable under this Agreement are exclusive of value added, sales, use, goods and services, withholding, and similar taxes, and of customs duties, all of which shall be borne by the Brand Owner, except for taxes based on the Manufacturer's net income. If the Brand Owner is required by law to withhold any tax, it shall gross up the payment so that the Manufacturer receives the full amount it would have received absent such withholding.

If the Brand Owner disputes any invoice in good faith, it shall notify the Manufacturer in writing within [number] days of receipt, specifying the reasons in reasonable detail, and shall pay the undisputed portion on time. The Parties shall seek to resolve the dispute promptly, and any amount found to be due shall be paid within [number] days of resolution.

Any amount not paid when due shall bear interest at the rate of [percentage] percent per month, or the maximum rate permitted by Applicable Law if lower, from the due date until payment in full. The Manufacturer may, upon [number] days' written notice of non-payment, suspend deliveries and performance, withhold the release of Tooling and finished Products, or require payment in advance or other security, without liability to the Brand Owner.

The Brand Owner shall reimburse the Manufacturer for all reasonable costs of collection, including legal fees, incurred in recovering overdue amounts. The Manufacturer may, at its option, set off any amount owed by the Brand Owner against amounts owed by the Manufacturer to the Brand Owner.

The Manufacturer shall deliver the Products [Incoterm and named place, e.g., FCA Facility] at the Delivery Point, in accordance with the delivery dates stated in the accepted Purchase Orders, subject to the terms of this Agreement. Delivery dates are estimates, and the Manufacturer shall use commercially reasonable efforts to meet them.

The Manufacturer shall pack the Products in accordance with the Specifications or, if none, in accordance with standard commercial practice sufficient to ensure safe arrival under normal transportation conditions. The Brand Owner shall arrange and pay for all freight, insurance, export and import clearance, customs duties, and related charges, unless otherwise agreed in the relevant Purchase Order.

The Manufacturer may deliver Products in installments, and each installment shall be deemed a separate sale. Delivery of a quantity within [percentage] percent more or less than the quantity ordered shall constitute due performance, and the Brand Owner shall pay for the quantity actually delivered.

If the Brand Owner fails to take delivery of Products on the scheduled date or provide shipping instructions, the Manufacturer may store the Products at the Brand Owner's risk and expense at a storage charge of [amount] per [unit/pallet] per [period], and the Products shall be deemed delivered for purposes of risk of loss and invoicing as of the scheduled date. If the Brand Owner fails to take delivery within [number] days thereafter, the Manufacturer may, after notice, resell or dispose of the Products and recover from the Brand Owner any shortfall and costs.

Risk of loss of or damage to the Products shall pass to the Brand Owner upon delivery at the Delivery Point in accordance with the Incoterm specified in Section 7.1 above or, if earlier, in accordance with the preceding clause.

Title to the Products shall pass to the Brand Owner upon [full payment of the price of such Products / delivery at the Delivery Point]. Until title passes, the Manufacturer retains a security interest in the Products and may, in the event of non-payment, retake possession of them, and the Brand Owner shall permit access for that purpose.

If the Manufacturer anticipates a delay of more than [number] days in delivery, it shall notify the Brand Owner, and the Parties shall agree on a revised delivery schedule. The Brand Owner's sole and exclusive remedy for late delivery by the Manufacturer, other than as a result of the causes set forth in Section 16 or the Brand Owner's acts or omissions, shall be a credit of [percentage] percent of the price of the delayed Products per week of delay, up to a maximum of [percentage] percent of such price.

The Manufacturer shall maintain a quality management system consistent with [Quality Standard, e.g., ISO 9001 or equivalent] throughout the Term, and shall conduct in-process and final inspections and tests of the Products in accordance with the Specifications and the quality plan agreed by the Parties in writing.

The Manufacturer shall maintain records of manufacturing, inspection, and test results, and lot or batch traceability for the Products, for a period of [number] years after delivery, and shall make summary quality records available to the Brand Owner upon reasonable written request.

The Brand Owner may, upon not less than [number] Business Days' prior written notice, during normal business hours, and not more than [number] times per Contract Year (unless a material quality issue has occurred), audit and inspect the Facility and the manufacturing of the Products, at its own expense. Any such audit shall be conducted so as not to disrupt the Manufacturer's operations, and the Brand Owner's representatives shall comply with the Manufacturer's site, safety, security, and confidentiality rules.

The Brand Owner shall inspect the Products within [number] Business Days after delivery at the Delivery Point (the "Inspection Period"). Unless the Brand Owner gives the Manufacturer written notice of rejection specifying in reasonable detail the manner in which the Products fail to conform to the Specifications (a "Rejection Notice") within the Inspection Period, the Products shall be deemed irrevocably accepted.

Products conform to this Agreement if they meet the Specifications and the agreed acceptance criteria, including any acceptable quality level specified in [Acceptance Quality Level/Sampling Plan]. Cosmetic or other deviations within the agreed tolerances shall not constitute non-conformity. Where the Parties have agreed a sampling plan, Products shall be deemed conforming if the sample meets the plan, irrespective of the presence of individual non-conforming units within the permitted defect rate.

Upon receipt of a timely Rejection Notice, the Manufacturer shall, within [number] Business Days, either confirm or contest the non-conformity. The Manufacturer may require the return of samples of the rejected Products or inspect them in place. Any dispute as to conformity not resolved within [number] days shall be referred to an independent testing laboratory mutually agreed by the Parties, whose determination shall be final and binding as to conformity, and whose costs shall be borne by the Party against whom the determination is made.

Rejected Products that are confirmed or determined to be non-conforming shall be dealt with exclusively in accordance with Section 9. Products shall be returned only after the Manufacturer has issued a written return authorization, and any Products returned without such authorization may be refused.

The Manufacturer warrants to the Brand Owner that, for a period of [number] months from the date of delivery (the "Warranty Period"), the Products shall conform in all material respects to the Specifications and shall be free from defects in workmanship and in Materials procured by the Manufacturer (other than Materials from a Designated Source or Consigned Materials).

The warranty in Section 9.1 shall not apply to any defect or non-conformity arising from: the Specifications, designs, or Brand Materials; Consigned Materials or Designated Source Materials; Tooling supplied or specified by the Brand Owner; normal wear and tear; misuse, abuse, neglect, improper storage or handling after delivery; modification or repair by anyone other than the Manufacturer; or use of the Products contrary to the Specifications or any instructions of the Manufacturer.

The Brand Owner shall notify the Manufacturer in writing of any claimed breach of warranty within [number] days after discovering the defect and in any event before the end of the Warranty Period, and shall provide reasonable supporting evidence. Failure to so notify shall constitute a waiver of the claim.

The Manufacturer's sole obligation and the Brand Owner's sole and exclusive remedy for Products that breach the warranty in Section 9.1 or that are rejected under Section 8 shall be, at the Manufacturer's option and expense, to repair or replace the non-conforming Products within a commercially reasonable period or, where repair or replacement is not commercially practicable, to credit or refund the price paid for such non-conforming Products.

The Manufacturer's liability under this Section shall not include any costs of removal, reinstallation, recall, field service, sorting, or rework undertaken by the Brand Owner or any third party, except to the extent otherwise agreed in writing by the Manufacturer in advance, and shall be subject to the limits in Section 14.

THE WARRANTIES SET FORTH IN THIS SECTION ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, ALL OF WHICH THE MANUFACTURER HEREBY DISCLAIMS TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW.

The Brand Owner represents and warrants that it has the right to market and sell the Products, that it is responsible for the regulatory approvals, certifications, labeling, and compliance of the Products for their intended markets, and that it shall not make any representation or warranty on behalf of the Manufacturer to any third party.

The Brand Owner shall bear the cost of design, procurement, manufacture, modification, and replacement of all Tooling required for the Products, as set forth in [Tooling Cost Schedule/Quotation]. The Manufacturer may arrange for the construction or procurement of the Tooling on behalf of the Brand Owner and shall invoice the Brand Owner therefor, payable [percentage] percent upon order, and the balance upon [completion/approval of first article samples].

Title to the Tooling shall vest in the Brand Owner upon payment in full of the corresponding Tooling charges. The Manufacturer shall have no ownership interest in the Tooling, other than a possessory lien described in this Section, and shall mark the Tooling as the property of the Brand Owner where practicable.

The Manufacturer shall use the Tooling exclusively for the manufacture of the Products for the Brand Owner, shall keep it in the Facility, and shall exercise reasonable care in its use, storage, and routine maintenance. The Brand Owner shall bear the cost of major repairs, refurbishment, and replacement of the Tooling, including when it wears out or is damaged in the ordinary course of production. The Manufacturer shall be liable for loss or damage to the Tooling only to the extent caused by its gross negligence or willful misconduct, up to the amount of the Tooling's unamortized cost.

The Brand Owner shall insure the Tooling against loss or damage at its own expense for its full replacement value, and the Manufacturer shall have no obligation to insure it, unless it agrees to do so in writing at the Brand Owner's cost.

The Manufacturer shall have a lien on the Tooling and any Products in its possession for all amounts due and unpaid by the Brand Owner under this Agreement, and may retain the Tooling until all such amounts are paid in full. The Brand Owner shall execute any documents reasonably required to perfect such lien.

Upon the Brand Owner's written request following expiration or termination of this Agreement, and subject to payment in full of all sums due to the Manufacturer, the Manufacturer shall release the Tooling to the Brand Owner at the Brand Owner's cost and risk, in its then-current condition, within [number] days. Tooling not used for [number] months and not collected within [number] days after written notice from the Manufacturer may be disposed of by the Manufacturer, and the Brand Owner shall pay all storage and disposal costs.

The Manufacturer shall provide the Brand Owner, on reasonable request, with a record of the Tooling in its possession and its approximate condition and tooling life. The Parties acknowledge that Tooling has a limited life of approximately [number] cycles, and the Manufacturer makes no warranty as to the longevity of Tooling.

As between the Parties, the Brand Owner shall own and retain all right, title, and interest in and to the Brand Materials, the Specifications, the designs and drawings furnished by it, and its Background IP, and nothing in this Agreement transfers any of the foregoing to the Manufacturer.

The Manufacturer shall own and retain all right, title, and interest in and to its Background IP, including its manufacturing processes, know-how, methods, software, and equipment, and nothing in this Agreement transfers any of the foregoing to the Brand Owner.

The Brand Owner hereby grants to the Manufacturer a non-exclusive, non-transferable, royalty-free, revocable license during the Term to use the Brand Materials, the Specifications, and the Brand Owner's relevant Intellectual Property Rights solely to the extent necessary to manufacture, package, and deliver the Products to the Brand Owner in accordance with this Agreement. The Manufacturer may sublicense such rights to approved subcontractors solely for the same purpose.

All Product Improvements, whether made by the Brand Owner, the Manufacturer, or jointly, shall be owned exclusively by the Brand Owner. The Manufacturer hereby assigns, and shall cause its personnel to assign, to the Brand Owner all of its right, title, and interest in and to the Product Improvements upon their creation, and shall, at the Brand Owner's expense, execute such documents as are reasonably necessary to perfect such assignment.

All Process Improvements, whether made by the Manufacturer, the Brand Owner, or jointly, shall be owned exclusively by the Manufacturer. The Brand Owner hereby assigns to the Manufacturer all of its right, title, and interest in and to any Process Improvements, and shall, at the Manufacturer's expense, execute such documents as are reasonably necessary to perfect such assignment. To the extent that any Process Improvement is incorporated in a Product Improvement and cannot be used without it, the Brand Owner shall have a non-exclusive, perpetual, royalty-free license to use such Process Improvement solely for the manufacture of the Products by or for the Brand Owner, provided that this license shall not entitle the Brand Owner to disclose the Manufacturer's trade secrets, or to obtain Manufacturer's Background IP.

Each Party shall promptly disclose to the other in writing any Product Improvement or Process Improvement of which it becomes aware that is made in the course of the performance of this Agreement. The Manufacturer shall not use the Product Improvements for any third party without the Brand Owner's prior written consent.

The Manufacturer shall not acquire any right in the Brand Materials by reason of the use thereof, and all goodwill arising from such use shall inure to the Brand Owner. The Manufacturer shall not register or use any mark confusingly similar to the Brand Materials. The Manufacturer shall use the Brand Materials only in accordance with the Brand Owner's written brand guidelines furnished to it.

Each Party shall promptly notify the other if it becomes aware of any suspected infringement of the other Party's Intellectual Property Rights in connection with the Products. The owner of the affected Intellectual Property Rights shall have the sole right, but not the obligation, to take action in respect thereof, at its own expense.

Each Party (the "Receiving Party") shall hold in strict confidence all Confidential Information of the other Party (the "Disclosing Party"), shall use it solely for the purpose of performing or exercising its rights under this Agreement, and shall not disclose it to any third party except as permitted by this Section.

The Receiving Party may disclose Confidential Information to those of its and its Affiliates' directors, employees, subcontractors, professional advisers, insurers, and financing sources who have a need to know it for the purposes of this Agreement and who are bound by written or professional obligations of confidentiality no less protective than those contained herein. The Receiving Party shall be liable for any breach of this Section by such persons.

The obligations in this Section shall not apply to information that the Receiving Party can demonstrate by written records: is or becomes publicly available other than through breach of this Agreement; was lawfully known to it before disclosure without restriction; is lawfully received from a third party without restriction; or is independently developed without use of or reference to the Disclosing Party's Confidential Information.

The Receiving Party may disclose Confidential Information to the extent required by Applicable Law, court order, or the rules of a stock exchange or regulatory authority, provided that, where lawful, it gives the Disclosing Party prompt prior written notice and reasonably cooperates, at the Disclosing Party's expense, in seeking protective treatment, and discloses only that portion that is legally required.

The Manufacturer's manufacturing processes, cost structures, supplier identities, yield data, and Process Improvements shall be deemed Confidential Information of the Manufacturer. The Specifications, Brand Materials, forecasts, and unreleased product plans shall be deemed Confidential Information of the Brand Owner.

Upon expiration or termination of this Agreement or upon written request, the Receiving Party shall promptly return or destroy the Disclosing Party's Confidential Information, except for copies required to be retained by Applicable Law or stored in routine backups, which shall remain subject to this Section. The Manufacturer may retain Confidential Information of the Brand Owner as reasonably necessary to exercise its rights and defend claims under this Agreement.

The obligations in this Section shall survive for a period of [number] years following the expiration or termination of this Agreement, and, in respect of trade secrets, for as long as such information remains a trade secret. The Parties acknowledge that a breach of this Section may cause irreparable harm for which damages would be an inadequate remedy, and that the Disclosing Party shall be entitled to seek injunctive relief without the necessity of posting a bond.

The Brand Owner shall defend, indemnify, and hold harmless the Manufacturer, its Affiliates, and their respective directors, officers, employees, and agents from and against any and all third-party claims, and resulting losses, liabilities, damages, judgments, settlements, costs, and expenses (including reasonable legal fees) arising out of or relating to: the Specifications, designs, Brand Materials, or Tooling furnished or specified by the Brand Owner, including any claim that the manufacture or sale of Products in accordance therewith infringes any Intellectual Property Right of a third party.

The Brand Owner shall further defend, indemnify, and hold harmless the Manufacturer Indemnitees (as defined above) from and against all third-party claims arising out of or relating to: the marketing, distribution, sale, or use of the Products by or through the Brand Owner; any product liability, personal injury, death, or property damage claim relating to the Products, except to the extent caused by a manufacturing defect for which the Manufacturer is responsible under Section 9; any recall or regulatory action concerning the Products, except to the extent caused by the Manufacturer's breach; and the Brand Owner's breach of this Agreement or of Applicable Law.

The Manufacturer shall defend, indemnify, and hold harmless the Brand Owner, its Affiliates, and their respective directors, officers, employees, and agents from and against third-party claims for bodily injury, death, or damage to tangible property, to the extent directly caused by the negligence or willful misconduct of the Manufacturer in the performance of the Manufacturing Services at the Facility, subject always to Section 14.

The Manufacturer's indemnification obligations shall not apply to the extent that the claim arises from the Specifications, designs, Brand Materials, Consigned Materials, Designated Source Materials, or Tooling, from Products modified by anyone other than the Manufacturer, or from the Brand Owner's negligence or breach of this Agreement.

A Party seeking indemnification (the "Indemnitee") shall give the indemnifying Party prompt written notice of the claim (provided that delay shall relieve the indemnifying Party only to the extent it is prejudiced), shall permit the indemnifying Party to control the defense and settlement thereof, and shall provide reasonable cooperation at the indemnifying Party's expense. The indemnifying Party shall not settle any claim in a manner that imposes liability or admission of fault on the Indemnitee without its prior written consent, not to be unreasonably withheld.

If the Products or any portion thereof become, or in the Manufacturer's reasonable opinion are likely to become, the subject of an infringement claim arising from the Specifications or Brand Materials, the Manufacturer may suspend manufacture and delivery of the affected Products without liability, and the Brand Owner shall remain liable for the Minimum Annual Commitment and for all Materials, work-in-process, and costs incurred by the Manufacturer in respect of such Products.

The indemnities in this Section state the entire liability of each Party, and the exclusive remedy of the other Party, with respect to the third-party claims they cover.

NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE MANUFACTURER'S TOTAL AGGREGATE LIABILITY ARISING OUT OF OR RELATING TO ANY PURCHASE ORDER, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF STATUTORY DUTY, INDEMNITY, OR OTHERWISE, SHALL NOT EXCEED THE TOTAL PRICE PAID OR PAYABLE BY THE BRAND OWNER FOR THE PRODUCTS UNDER THE SPECIFIC PURCHASE ORDER GIVING RISE TO THE CLAIM (THE "AFFECTED ORDER").

Where a claim arises out of or relates to more than one Purchase Order, the Manufacturer's aggregate liability for such claim shall not exceed the total price paid or payable under the Affected Orders, and in no event shall the Manufacturer's aggregate liability for all claims arising in any Contract Year exceed [the total price paid or payable for the Products delivered in such Contract Year / an amount of [amount]].

IN NO EVENT SHALL THE MANUFACTURER BE LIABLE TO THE BRAND OWNER OR ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES, OR FOR ANY LOSS OF PROFIT, REVENUE, BUSINESS, GOODWILL, OR ANTICIPATED SAVINGS, COST OF PROCUREMENT OF SUBSTITUTE GOODS, OR COSTS OF RECALL, EVEN IF ADVISED OF THE POSSIBILITY THEREOF.

The Brand Owner's liability to the Manufacturer for any amounts payable under this Agreement, including Prices, Tooling charges, shortfall payments under the Minimum Annual Commitment, and amounts payable for Materials, and its liability under Section 13 and for infringement or misappropriation of the Manufacturer's Intellectual Property Rights or Confidential Information, shall not be subject to the limitations in this Section.

Any claim against the Manufacturer must be brought within [number] months after the cause of action accrued, failing which it shall be barred to the maximum extent permitted by Applicable Law.

The Brand Owner acknowledges that the Prices reflect the allocation of risk in this Section and that the Manufacturer would not have entered into this Agreement without these limitations. The limitations of this Section shall apply even if any limited remedy fails of its essential purpose, but nothing in this Agreement excludes or limits liability to the extent that such exclusion or limitation is prohibited by Applicable Law, including for fraud or willful misconduct.

Any credit, refund, repair, or replacement provided by the Manufacturer shall count towards the limit of liability for the Affected Order.

The Manufacturer shall maintain, at its own expense, throughout the Term and for [number] years thereafter, with reputable insurers: commercial general liability insurance, including products and completed operations liability, with limits of not less than [amount] per occurrence; property insurance covering the Facility and the Manufacturer's own equipment and inventory; and workers' compensation or equivalent insurance as required by Applicable Law.

The Brand Owner shall maintain, at its own expense, throughout the Term and for [number] years thereafter, with reputable insurers: commercial general liability insurance, including product liability and recall insurance, with limits of not less than [amount] per occurrence and in the aggregate; and insurance covering the Tooling and the Consigned Materials for their full replacement value while located at the Facility or in transit.

The Brand Owner shall cause the Manufacturer to be named as an additional insured under its product liability insurance policy in respect of liabilities arising out of the design, marketing, and sale of the Products, and shall cause its insurer to name the Manufacturer as loss payee, as its interest may appear, under the policy covering the Tooling.

Each Party shall, upon request, provide the other with certificates of insurance evidencing the coverage required by this Section. Each Party shall give the other not less than [number] days' prior written notice of cancellation, non-renewal, or material reduction of any such coverage.

The insurance required herein shall be primary and non-contributory with respect to any other insurance maintained by the other Party, to the extent of the liabilities assumed by the insuring Party under this Agreement. Each Party shall cause its insurers to waive rights of subrogation against the other Party to the extent of the loss covered by such insurance and caused by the other Party's ordinary negligence.

The insurance obligations in this Section do not limit or modify a Party's liability under this Agreement, and the existence of insurance coverage shall not increase the limits of liability stated in Section 14.

Neither Party shall be liable for any failure or delay in performing its obligations under this Agreement (other than an obligation to pay money) to the extent that such failure or delay results from an event or circumstance beyond its reasonable control, including acts of God, flood, fire, earthquake, epidemic or pandemic, war, terrorism, civil unrest, embargo, sanctions, governmental action or regulation, labor disputes or strikes, failure of utilities or transportation networks, and shortages or delays in supply of Materials (a "Force Majeure Event").

A Party affected by a Force Majeure Event shall give the other Party written notice within [number] Business Days after becoming aware thereof, describing the event, its expected duration, and its anticipated effect on performance, and shall use commercially reasonable efforts to mitigate its effects and resume performance as soon as reasonably practicable.

During any Force Majeure Event affecting the Manufacturer, the Manufacturer may allocate its available capacity, Materials, and finished Products among its customers in a manner it considers fair and reasonable in the circumstances, and shall have no liability to the Brand Owner for any resulting shortfall in supply.

The Manufacturer's obligations, and the delivery dates under affected Purchase Orders, shall be suspended and extended for the duration of the Force Majeure Event plus a reasonable period for resumption of production. The Minimum Annual Commitment for the Contract Year shall be reduced proportionately to the quantity of Products that the Manufacturer is unable to supply by reason of the Force Majeure Event.

The Brand Owner's obligation to pay for Products delivered, Materials procured, work-in-process, and Tooling, and the Brand Owner's obligations in respect of the Minimum Annual Commitment relating to periods and quantities not affected by the Force Majeure Event, shall not be excused by any Force Majeure Event.

If a Force Majeure Event continues for more than [number] consecutive days, either Party may terminate the affected Purchase Orders, or, if the event continues for more than [number] days, this Agreement, by giving [number] days' written notice to the other, without liability, subject to the Brand Owner's obligation to pay for all Products, Materials, work-in-process, and other amounts due as at the date of termination.

This Agreement shall commence on the Effective Date and, unless terminated earlier in accordance with its terms, shall continue for an initial term of [number] years (the "Initial Term"). Thereafter it shall renew automatically for successive renewal terms of [number] years each (each a "Renewal Term" and, together with the Initial Term, the "Term"), unless either Party gives the other written notice of non-renewal at least [number] days before the end of the then-current term.

Either Party may terminate this Agreement by written notice with immediate effect if the other Party: commits a material breach of this Agreement that is not capable of remedy or, if capable of remedy, is not remedied within [number] days after written notice requiring it to do so; becomes insolvent, is unable to pay its debts as they fall due, makes an assignment for the benefit of creditors, or has a receiver, administrator, or liquidator appointed over all or a substantial part of its assets; or ceases to carry on business.

The Manufacturer may, in addition, terminate this Agreement or suspend performance by written notice to the Brand Owner if: the Brand Owner fails to pay any amount when due and does not cure such failure within [number] days after written notice; the Brand Owner fails to meet the Minimum Annual Commitment in any Contract Year; the Brand Owner undergoes a change of control in favor of a competitor of the Manufacturer; or the continued manufacture of the Products would, in the Manufacturer's reasonable opinion, violate Applicable Law or expose it to material risk.

The Brand Owner may terminate this Agreement for convenience only upon not less than [number] months' written notice, provided that it has paid the Minimum Annual Commitment (or the shortfall payment under Section 4.3) for the Contract Year in which termination takes effect, and all other amounts due under this Agreement. The Manufacturer may terminate this Agreement for convenience upon not less than [number] months' written notice.

Upon expiration or termination for any reason: the Brand Owner shall pay all outstanding invoices, which shall become immediately due and payable; the Brand Owner shall purchase all finished Products and work-in-process at the Prices (or, as to work-in-process, at the Manufacturer's cost plus a reasonable percentage of the Price) and all Materials in accordance with Section 5.7; the Manufacturer shall, subject to Section 10, release the Tooling; and each Party shall return or destroy Confidential Information in accordance with Section 12.

Where the Manufacturer terminates this Agreement for the Brand Owner's breach, or the Brand Owner terminates for convenience, the Brand Owner shall pay the Manufacturer, as a genuine pre-estimate of loss and not as a penalty, an amount equal to [percentage] percent of the unfulfilled portion of the Minimum Annual Commitment for the then-current Contract Year [and for the remainder of the Initial Term].

The Manufacturer shall, for a period of [number] days following the effective date of termination or expiration, other than for termination for the Manufacturer's uncured material breach, continue to fulfill accepted Purchase Orders on the terms of this Agreement, provided that the Brand Owner pays in advance or provides satisfactory security for such Purchase Orders.

Termination or expiration shall not affect any rights, remedies, or obligations accrued before the effective date thereof. Sections 1, 5.4, 5.7, 6, 7.5, 7.6, 9, 10, 11, 12, 13, 14, 17, and 18, and any other provisions that by their nature are intended to survive, shall survive termination or expiration.

This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of [Governing Law Jurisdiction], without regard to its conflict of laws principles. The application of the United Nations Convention on Contracts for the International Sale of Goods is hereby excluded.

The Parties shall first attempt in good faith to resolve any dispute, controversy, or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity, breach, or termination (a "Dispute"), through negotiation between their senior executives. Either Party may initiate such negotiation by written notice describing the Dispute (a "Dispute Notice").

If the Dispute is not resolved within [number] days after the Dispute Notice, either Party may refer it to mediation administered by [Mediation Institution] in accordance with its rules then in effect, with the costs of the mediator shared equally by the Parties.

If the Dispute is not resolved by mediation within [number] days after the commencement of the mediation, it shall be finally resolved by binding arbitration administered by [Arbitration Institution] in accordance with its arbitration rules in force at the time of the request for arbitration. The tribunal shall consist of [one/three] arbitrator(s), the seat of arbitration shall be [City, Jurisdiction], and the language of the arbitration shall be English.

The arbitral award shall be final and binding on the Parties, and judgment on the award may be entered in any court having jurisdiction. The tribunal shall have no authority to award damages in excess of, or in a manner inconsistent with, the limitations in Section 14. The prevailing Party shall be entitled to recover its reasonable legal fees and costs from the other Party, as determined by the tribunal.

Nothing in this Section shall prevent either Party from seeking urgent interim, injunctive, or conservatory relief from any court of competent jurisdiction, including to protect its Intellectual Property Rights or Confidential Information, or from commencing proceedings in the courts of [Jurisdiction] to collect undisputed amounts owed to it under this Agreement.

The Parties shall keep confidential the existence and content of any proceedings under this Section, and any award, except as necessary to enforce or challenge it or as required by Applicable Law. Pending resolution of any Dispute, the Parties shall continue to perform their respective obligations under this Agreement, provided that the Manufacturer may exercise its rights of suspension for non-payment under Section 6.

All notices under this Agreement shall be in writing and delivered by hand, internationally recognized courier, or email (with confirmation of transmission) to the addresses set forth below the Parties' signatures, or as updated by notice. This Agreement constitutes the entire agreement between the Parties on its subject matter, supersedes all prior understandings, may be amended only in writing signed by both Parties, may not be assigned by the Brand Owner without the Manufacturer's prior written consent, and may be executed in counterparts, including by electronic signature.