Manufacture of Goods Contract

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This Manufacture of Goods Contract is between two companies for the manufacture and distribution of goods and products. This attorney-prepared agreement sets out the specifics regarding the arrangement and can be customized to fit your needs.

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This Contract for Manufacture of Goods is between two companies for the manufacture and distribution of certain goods and products. The first company will manufacture the products and the second company, or its affiliates, will distribute, market and sell the goods in a specified territory. This contract sets out the specifics of the arrangement including who will supply the necessary materials, how the goods will be manufactured and who retains title and ownership of the goods. It is essential that this type of business contract be clearly and concisely set forth in writing. A written Contract for Manufacture of Goods will be essential in the event of disagreements, misunderstandings or litigation between the parties.

This Contract for Manufacture of Goods includes the following provisions:
  • Parties: Sets forth the names of the companies who are parties to this contract;
  • Responsibilities of the Parties: Sets forth in detail the responsibilities of both parties as to manufacturing and any changes to the manufacturing of the products;
  • Inability of Company to Deliver Products: Sets out any remedies available if a company fails to deliver the goods in the set time period;
  • Payment Terms: Sets out the specific terms of payment;
  • Term and Termination: Sets out the term of the agreement and reasons why the agreement could be terminated;
  • Independent Contractor: The parties agree that they are both independent contractors and no employer/employee relationship is created;
  • Insurance: Sets out the insurance requirements of both parties for the term of this agreement;
  • Intellectual Property: Specifically sets out who will acquire or retain ownership to any intellectual property rights;
  • Signatures: This agreement must be signed by all parties to the contract agreement.

Protect your rights and your company by purchasing this attorney-prepared form.

This attorney-prepared package includes:
  1. General Information
  2. Instructions and Checklist
  3. Contract for Manufacture of Goods
State Law Compliance: This form complies with the laws of all states
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Contract for Manufacture of Goods

 

 

This Contract for Manufacturing of Goods (the "Agreement") is made and entered on (DD/MM/YYY) (the "Effective Date"), by and between (COMPANY NAME), a corporation (hereinafter, "CMPNY1"), and (COMPANY NAME), a corporation (hereinafter, "CMPNY2"), "CMPNY1", and "CMPNY2", shall be referred to herein individually as a "Party" and collectively as the "Parties."
 
RECITALS
A.   WHEREAS, "CMPNY2", or its Affiliates have the right to distribute, market and sell certain____________ [insert goods] and other __________ products in the Territory (as defined below);
 
B.   WHEREAS, "CMPNY1" is willing to manufacture ____________ [insert products] for CMPNY2 in the Territory (define) pursuant to the terms and conditions set forth in this Agreement.
C.   NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the mutuality, receipt and sufficiency of which are hereby acknowledged, "CMPNY1" and "CMPNY2"agree as follows:
 
1.   DefinitionsFor purposes of this Agreement, the following terms shall mean: [Insert Definitions as required]
 
2.   Responsibilities of the Parties
 
2.1   Appointment of CMPNY1 for Manufacture.  Commencing on the Effective Date and until such time, if any, that this Agreement is terminated pursuant to its terms and provisions, CMPNY2 hereby appoints CMPNY1 to be CMPNY2's exclusive manufacturer of all of CMPNY2's requirements for ________________ intended to be disturbed and sold in the Territory subject to the terms and conditions set forth in this Agreement.
 
2.2    Manufacture According to Specifications; Changes to Manufacture.  CMPNY1 shall manufacture the Products: (a) in accordance with the Specifications, and (b) in material compliance with the Quality Agreement, this Agreement, the CGMP Requirements and all other applicable legal requirements. Notwithstanding the provisions of this Agreement or any of its Schedules, including but not limited to the Specifications, CMPNY1 shall implement, as soon as possible, any change to the manufacture or the Specifications of Products that are required or recommended by the FDA or required by CGMP Requirements or applicable Law. Any and all direct costs (including, but not limited to, documented internal administrative costs, costs of external technical consultants engaged by CMPNY1 in effectuating such changes, and the costs of obsolescence, including disposal cost, of goods-in-process, raw materials and completed, packaged Products) (collectively, the "Amendment Costs") associated with any change in the manufacture or the Specifications of the Products required or recommended by the FDA or required by CGMP Requirements or applicable Law shall be borne by CMPNY2.  The Amendment Costs of any change in the Specifications proposed by either Party shall be borne by the Party proposing such change.
2.3   Supply and Ownership of Materials. CMPNY1 shall arrange to have all Active Ingredients necessary for the manufacture of the Products shipped to CMPNY1. CMPNY1 shall be responsible for release of the Active Ingredients in accordance with the Specifications. CMPNY1 shall arrange for the supply of all Components and Materials necessary for the manufacture of the Products. CMPNY1 shall retain title and ownership of all Products until shipment in accordance with Section 2.6.
 
2.4   Inability of CMPNY1 to Meet Requirements. Notwithstanding the foregoing, if, during the term of this Agreement:
 
   (a)   If during any calendar quarter (a "Supply Deficit Quarter") during the Term, CMPNY1 for any reason (other than a Force Majeure event) does not deliver units of Products in any Product Family with an aggregate price (determined in accordance with Section 4.1) of Products of such Product Family that but for such failure of supply would have been delivered in the ordinary course of business during such calendar quarter and been sold by CMPNY2, then CMPNY2 shall be entitled to receive from CMPNY1 an amount determined as follows:  [Insert terms].
 
   (b)   If either (x) for any calendar quarter, CMPNY1 for any reason (other than Force Majeure) does not deliver units of such Product with an aggregate price (determined in accordance with Section 4.1) of CMPNY2's requirement for such Products for such quarter, or (y) for a period of two consecutive calendar quarters, CMPNY1 for any reason (other than Force Majeure) does not deliver units of such Product with an aggregate price (determined in accordance with Section 4.1) of CMPNY1's requirement for such Product, then CMPNY2 may terminate this Agreement with respect to such Product by delivery of a written notice of termination to CMPNY1 within [***] days after the completion of such [***] period.  If CMPNY2 terminates this Agreement with respect to one or more Products pursuant to this Section 2.4, CMPNY1 shall pay to CMPNY2 the Amount within ______  days of the effectiveness of such termination.
 
3.   Manufacturing Standards and Quality Assurance.
 
3.1   Each Product will be manufactured, controlled, tested, and released in accordance with the executed Quality Agreement.  If there is any inconsistency between this Agreement and the Quality Agreement, the terms of the Quality Agreement shall control with respect to quality issues, and this Agreement shall control with respect to all other issues.
 
3.2   CMPNY1 warrants that, as of the date of each delivery hereunder to CMPNY2, and until its date of expiration, each Product shall comply with the provisions of the FFDCA, and such Product shall not, when delivered to CMPNY2, be adulterated or misbranded within the meaning of the FFDCA. A material default by either Party of the Quality Agreement shall be deemed a default under this Agreement.
 
4.   Consideration
 
4.1   Price. The prices for the Products to be delivered by CMPNY1, during the term of this Agreement shall as set forth on Schedule A.
 
4.2   Terms of Payment. The terms of payment shall be net thirty (30) days from date of invoice. In case of default with respect to payment, any amount not paid timely shall bear interest from its due date through the date of effective receipt of payment at the rate equal to the LIBO Rate plus three percent (3%).
 
5.   Term and Termination 
 
5.1   Term and Renewal. The obligations of the Parties hereunder shall commence on the Effective Date and continue for a period of five (5) years (the "Initial Term") unless this Agreement is terminated as provided herein or unless extended by the mutual agreement of the Parties. At the end of the first three (3) years of the Initial Term, the Parties agree to commence good faith discussions to agree upon appropriate supply arrangements applicable after the expiration of the Initial Term.
 
5.2   Termination for Breach. This Agreement may be terminated by either Party if the other Party fails to remedy and make good any material default in the performance of any condition or obligation under this Agreement within ninety (90) days of the date a written notice of such default and intention to terminate is sent to the defaulting Party; provided that if a defaulting Party has promptly from receipt of notice commenced to cure such default and can demonstrate that it is diligently attempting to cure such default at the lapse of such ninety (90) days, then such party shall have such additional time to cure as may be reasonably required but not to exceed an additional seventy-five (75) days.
 
5.3   Termination for Bankruptcy. This Agreement may be terminated by either Party immediately, or at any time thereafter by notice to the other if the other becomes bankrupt or insolvent, or enters into liquidation whether compulsorily or voluntarily, or convenes a meeting of its creditors, or has a receiver appointed over all or part of its assets, or ceases for any reason to carry on business.
 
5.4   Termination for Force Majeure. This Agreement may be terminated by a Party, upon thirty (30) days written prior notice in the event of the other Party's inability to substantially perform its obligations hereunder for more than one hundred eighty (180) days due to an event of force majeure as defined in Section 10 herein, provided that the Party suffering the force majeure occurrence (the "Affected Party") reasonably expects that such condition of force majeure will be remedied within ninety (90) days from the date on which the Affected Party receives the other Party's notice of termination, then the Affected Party shall have ninety (90) days from the date of such notice to remedy such force majeure condition before termination becomes effective.
 
5.5   No Waiver. The failure of either Party to terminate this Agreement by reason of the breach of any of its provisions by the other Party shall not be construed as a waiver of the rights or remedies available for any subsequent breach of the terms and provisions of this Agreement.
 
5.6   Accrued Liabilities. Termination of this Agreement for any reason shall not discharge either Party's liability for obligations incurred hereunder and amounts unpaid at the time of such termination.
 
5.7   Property. In the event of termination of this Agreement for whatever cause, in addition to the other obligations of the Parties hereunder, each Party shall return to the other Party or to the other Party's designee, at the owner's sole cost and expense, no later than thirty (30) days after the effective date of termination all of such other Party's property, including, but not limited to, all proprietary information, in its possession, except to the extent required to be retained by Law or to comply with such party's continuing obligations hereunder.
 
6.   Independent Contractors 
 
The Parties acknowledge, agree and declare that the relationship hereby established between them is solely that of provider and recipient of manufacturing services and that each Party hereto is an independent contractor with respect to the other. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or, except as otherwise expressly provided in this Agreement as granting either Party the authority to bind or contract any obligation in the name of or on account of the other Party or to make any statements, representations, warranties or commitments on behalf of the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.
 
7.   Indemnification
 
7.1   Indemnification by CMPNY1. CMPNY1 agrees to indemnify, defend and hold harmless CMPNY2, its Affiliates and their respective employees against any and all third-party claims, including claims made against CMPNY2 by any of its distributors, losses, damages and liabilities, including reasonable attorney's fees, incurred by any of them arising out of (i) any failure of CMPNY1 or its Affiliates to manufacture, test, assemble, package, store, ship and deliver Products and Components in accordance with the Specifications or the terms of this Agreement, and (ii) any other breach of CMPNY1's agreements, representations, warranties or covenants contained in this Agreement.
 
7.2   Indemnification by CMPNY2. CMPNY2 agrees to indemnify, defend and hold harmless CMPNY1, its Affiliates and their employees against any and all third-party claims, losses, damages and liabilities, including reasonable attorney's fees, incurred by any of them arising out of (i) any breach of any of CMPNY2s agreements, representations, warranties or covenants contained in this Agreement; or (ii) any adulteration, misbranding or deterioration which occurs to the Products as a result of CMPNY2's or its Affiliates mishandling of the Products.
 
7.3   Procedure. If CMPNY2, its Affiliates or their respective employees, or CMPNY1, its affiliates or their respective employees (in each case an "Indemnified Party") receive any written claim which such Indemnified Party believes is the subject of indemnity hereunder by CMPNY1 or CMPNY2 as the case may be (in each case an "Indemnifying Party"), the Indemnified Party shall, as soon as reasonably practicable after forming such belief, give notice thereof to the Indemnifying Party; provided, that the failure to give timely notice to the Indemnifying Party as contemplated hereby shall not release the Indemnifying Party from any liability to the Indemnified Party unless the Indemnifying Party demonstrates that the defense of such claim is prejudiced by such failure. The Indemnifying Party shall have the right, by prompt notice to the Indemnified Party, to assume the defense of such claim, at its cost, with counsel reasonably satisfactory to the Indemnified Party. No such claim shall be settled other than by the party defending the same, and then only with the consent of the other party, which shall not be unreasonably withheld; provided, that the Indemnified Party shall have no obligation to consent to any settlement of any such claim which imposes on the Indemnified Party any liability or obligation which cannot be assumed and performed in full by the Indemnifying Party.
 
8.   Insurance 
 
8.1   Each Party shall obtain and keep in force during the term of this Agreement, (a) worker's compensation insurance in compliance with the worker's compensation laws of the state or states in which such Party has employees performing work related to this Agreement and employer's liability insurance with respect to such employees written on a per occurrence basis with a minimum limit of One Million Dollars ($1,000,000) per occurrence; and (b) commercial general liability insurance, written on a per occurrence basis, including, without limitation, premises, broad form property damages, contractual and products liability/completed operations coverage, which shall specifically cover such Party's indemnification obligations under Section 7.1 or 7.2 hereof, as applicable, with a combined single limit for bodily injury and property damage of not less than Ten Million Dollars ($10,000,000), provided however that either party may self-insure for this coverage.
 
8.2   Each Party shall furnish certificates of insurance for the policies of such Party to the other Party within ten (10) days after the Effective Date. Each Party shall immediately provide the other with written notice of any cancellation, non renewal, expiration or material modification of any policy. Should either Party at any time neglect or refuse to provide the insurance required herein, or should such insurance be canceled or materially modified, the other Party shall have the right to procure the same and the cost thereof shall be deducted from any compensation then due or thereafter to become due to the first Party.
 
9.   Limitation of Liability 
 
Neither Party shall be liable to the other for special, indirect, incidental or consequential damages.
 
10.   Force Majeure 
 
Neither Party shall be liable to the other for default or delay in the performance of its obligations under this Agreement, if such default or delay shall be caused directly or indirectly by events beyond the non-performing Party's reasonable control, including accident, fire, flood, riot, war, terrorism, act of God, embargo, strike, failure or delay of normal source of supply of materials due to circumstances beyond such Party's control (which shall not be deemed to include a failure to procure normal supply of materials due to financial reasons), or delay of carriers, or complete or partial shutdown of plant by any of the foregoing causes or other causes beyond its reasonable control, provided same are not due to the fault or neglect of such Party and provided further that any such delay or failure shall be remedied by such Party as soon as possible after the cause of such failure or delay.
 
11.   Confidentiality 
 
11.1   Any information or data (including but not limited to, any technical information, experience or data) regarding either Party's formulations, plans, programs, plants, processes, technical materials, Product, production requirements, standard specifications, costs, equipment, operations, procedures, instructions or customers (all of which is herein referred to as "Confidential Information") is the sole property of the respective Party. Each Party shall treat the other Party's Confidential Information in the same protective manner that it treats its own Confidential Information. Parties shall not use, except for the purpose of carrying out this Agreement, or disclose to others or permit their employees or agents to use, except for the purpose of carrying out this Agreement, or disclose to others, during the term of this Agreement and for a period of four (4) years from the date of termination or expiration of this Agreement, Confidential Information which has heretofore come or hereafter may come within the knowledge of, or which has been or may hereafter be acquired or developed by the respective party, its employees or agents, in the performance of any services hereunder. This paragraph shall not prevent either Party from using or disclosing to others information:
 
   (a)   which is known to the receiving Party at the time it is disclosed by obtained from the disclosing Party, which knowledge can be established by competent evidence; or
 
   (b)   which is, or through no fault of the receiving Party becomes, lawfully available to the public; or
   (c)   which lawfully becomes available to the receiving Party from a source other than the disclosing Party; or
 
   (d)   which the receiving Party is required by applicable Law, a court having jurisdiction, or Government or Regulatory Authority to disclose (provided that reasonable prior notice and an opportunity to limit such disclosure is provided to the other Party).
 
11.2   Upon termination of this Agreement, if requested, the receiving Party shall deliver to the disclosing party all notes, drawings, blueprints, manuals, letters, notebooks, reports of or pertaining to Confidential Information, including all copies thereof, and all other Confidential Information which is in the possession of or under the control of the receiving Party. Parties shall restrict access to Confidential Information to as few as practicable of their employees, and in all cases shall restrict such knowledge to only those employees who are directly connected with the performance of the services hereunder.
 
12.   Trademarks
 
12.1   CMPNY1's Rights. CMPNY2 hereby acknowledges that it does not have, and shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark, trade name, copyright, patent of CMPNY1, nor in any of CMPNY1's trademarks or trade names appearing on the label or packaging materials of the Products. CMPNY2 agrees to do nothing by act or omission which would impair CMPNY1's or its Affiliates' rights, ownership and title in the aforementioned.
 
12.2   CMPNY2s Rights. CMPNY1 hereby acknowledges that it does not have, and shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark, trade name, copyright, patent or other intellectual property of CMPNY2, nor in any of CMPNY2s trademarks or trade names appearing on the label or packaging materials of the Products. CMPNY1 agrees to do nothing by act or omission which would impair CMPNY2s or its Affiliates' rights, ownership and title in the aforementioned.
 
12.3   No Contest. Each Party further agrees not to contest, deny or dispute the validity of any trademarks or trade names owned by the other Party appearing on the labels or packaging materials of the Products or the title of such other Party thereto, and not to assist others in doing so, and not to take action of any kind inconsistent with the holding of all such trademark rights by such other Party.
 
12.4   Use. Neither Party shall use the trademarks or trade names owned by the other Party under which the Products are manufactured on any other goods or products, except as provided hereunder.
 
12.5   Infringement. Each Party shall immediately report in writing to the other Party upon being acquainted through any source whatsoever of any and all infringements or threatened infringements of the trade names or trademarks owned by such other Party appearing on the labels and packaging materials of the Products, and any attempt on the part of anyone to register, copy, infringe upon or imitate such trademarks or trade names, and if required by such party, the notifying Party will, at the other Party's sole expense, take such steps as the other Party may deem advisable against the infringement or otherwise for the protection of the other Party's rights.
 
12.6   Survival. The obligations set forth in this Section 12 shall survive the termination or expiration of this Agreement.
 
12.7   Intellectual Property Indemnification. CMPNY2 shall indemnify, defend and hold CMPNY1 and its employees, servants and agents harmless from and against any and all claims, demands, actions, suits, losses, damages, costs, expenses (including reasonable attorney's fees), and liabilities which CMPNY1 may incur, suffer or be required to pay by reason of any patent infringement suit or other intellectual property suit brought against CMPNY1 because of CMPNY1's manufacture of a Product.
 
13.   Notices 
 
13.1   Any notice or request expressly provided for or permitted under this Agreement shall be in writing, delivered manually or by mail, telegram, telefax or cable and shall be deemed sufficiently given if and when received by the Party to be notified at its address first set forth below, or if and when mailed by registered mail or certified mail, postage prepaid, addressed to such party at such address. Either Party, by notice to the other, may change its address for receiving such notices.
 
   To CMPNY1:
   With a copy to: General Counsel
 
   To CMPNY2:
   With a copy to:
 
14.   Governing Law 
 
The rights and obligations of the Parties to this Agreement and this Agreement shall be governed by, construed and enforced in accordance with the laws of the State of ____________________ [insert State] without regard to the provisions thereof concerning conflict of laws. The Parties hereby irrevocably and unconditionally consent to the exclusive jurisdiction of the courts of the State of ________________ for any action, suit or proceeding arising out of or relating to this Agreement, and agree not to commence any such action, suit or proceeding related then to except in such courts.
15.   Entire Agreement.
 
This Agreement, together with the Schedules thereto (including but not limited to the Quality Agreement) constitutes the complete and exclusive statement of the terms of the Agreement between the Parties hereto with reference to the subject matter hereof, and neither Party shall claim any modification or rescission from any provision hereof unless such modification or rescission is in writing, signed by the other Party.
 
16.   Assignment 
 
This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, and neither this Agreement nor any of the rights, interests or obligations hereunder of the Parties hereto may be assigned by any of the Parties hereto without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed.
 
17.   Counterparts
 
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Agreement delivered by facsimile transmission shall be as effective as an original executed signature page.
 
18.   Severability 
 
If any provision of this Agreement is held to be invalid, illegal or unenforceable, such provision will be given no effect by the Parties and shall not form part of this Agreement, all other provisions of this Agreement shall remain in full force and effect; and the Parties will use their best efforts to negotiate a provision in replacement of the provision held invalid, illegal or unenforceable that is consistent with applicable Law and achieves, as nearly as possible, the original intention of the Parties. To the fullest extent permitted by applicable Law, the Parties waive any provision of law that would render any provision of this Agreement invalid, illegal or unenforceable in any respect.
 
19.   Survival
 
The respective rights and obligations of the Parties set forth in this Agreement shall survive the expiration or termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.
 
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized representatives as of the day and year first above written.
 
 
 
 
 
 
 
CMPNY1
 
CMPNY2
 
 
 
 
By:
 
_____________________________
 
By:
 
________________________________
Name:
 
_____________________________
 
Name:
 
________________________________
Title:
 
_____________________________
 
Title:
 
________________________________
 
SCHEDULE A
PRICES
 
[Insert payments]
 
 
Number of Pages14
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#43463
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Contract for Manufacture of Goods

 

 

This Contract for Manufacturing of Goods (the "Agreement") is made and entered on (DD/MM/YYY) (the "Effective Date"), by and between (COMPANY NAME), a corporation (hereinafter, "CMPNY1"), and (COMPANY NAME), a corporation (hereinafter, "CMPNY2"), "CMPNY1", and "CMPNY2", shall be referred to herein individually as a "Party" and collectively as the "Parties."
 
RECITALS
A.   WHEREAS, "CMPNY2", or its Affiliates have the right to distribute, market and sell certain____________ [insert goods] and other __________ products in the Territory (as defined below);
 
B.   WHEREAS, "CMPNY1" is willing to manufacture ____________ [insert products] for CMPNY2 in the Territory (define) pursuant to the terms and conditions set forth in this Agreement.
C.   NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the mutuality, receipt and sufficiency of which are hereby acknowledged, "CMPNY1" and "CMPNY2"agree as follows:
 
1.   DefinitionsFor purposes of this Agreement, the following terms shall mean: [Insert Definitions as required]
 
2.   Responsibilities of the Parties
 
2.1   Appointment of CMPNY1 for Manufacture.  Commencing on the Effective Date and until such time, if any, that this Agreement is terminated pursuant to its terms and provisions, CMPNY2 hereby appoints CMPNY1 to be CMPNY2's exclusive manufacturer of all of CMPNY2's requirements for ________________ intended to be disturbed and sold in the Territory subject to the terms and conditions set forth in this Agreement.
 
2.2    Manufacture According to Specifications; Changes to Manufacture.  CMPNY1 shall manufacture the Products: (a) in accordance with the Specifications, and (b) in material compliance with the Quality Agreement, this Agreement, the CGMP Requirements and all other applicable legal requirements. Notwithstanding the provisions of this Agreement or any of its Schedules, including but not limited to the Specifications, CMPNY1 shall implement, as soon as possible, any change to the manufacture or the Specifications of Products that are required or recommended by the FDA or required by CGMP Requirements or applicable Law. Any and all direct costs (including, but not limited to, documented internal administrative costs, costs of external technical consultants engaged by CMPNY1 in effectuating such changes, and the costs of obsolescence, including disposal cost, of goods-in-process, raw materials and completed, packaged Products) (collectively, the "Amendment Costs") associated with any change in the manufacture or the Specifications of the Products required or recommended by the FDA or required by CGMP Requirements or applicable Law shall be borne by CMPNY2.  The Amendment Costs of any change in the Specifications proposed by either Party shall be borne by the Party proposing such change.
2.3   Supply and Ownership of Materials. CMPNY1 shall arrange to have all Active Ingredients necessary for the manufacture of the Products shipped to CMPNY1. CMPNY1 shall be responsible for release of the Active Ingredients in accordance with the Specifications. CMPNY1 shall arrange for the supply of all Components and Materials necessary for the manufacture of the Products. CMPNY1 shall retain title and ownership of all Products until shipment in accordance with Section 2.6.
 
2.4   Inability of CMPNY1 to Meet Requirements. Notwithstanding the foregoing, if, during the term of this Agreement:
 
   (a)   If during any calendar quarter (a "Supply Deficit Quarter") during the Term, CMPNY1 for any reason (other than a Force Majeure event) does not deliver units of Products in any Product Family with an aggregate price (determined in accordance with Section 4.1) of Products of such Product Family that but for such failure of supply would have been delivered in the ordinary course of business during such calendar quarter and been sold by CMPNY2, then CMPNY2 shall be entitled to receive from CMPNY1 an amount determined as follows:  [Insert terms].
 
   (b)   If either (x) for any calendar quarter, CMPNY1 for any reason (other than Force Majeure) does not deliver units of such Product with an aggregate price (determined in accordance with Section 4.1) of CMPNY2's requirement for such Products for such quarter, or (y) for a period of two consecutive calendar quarters, CMPNY1 for any reason (other than Force Majeure) does not deliver units of such Product with an aggregate price (determined in accordance with Section 4.1) of CMPNY1's requirement for such Product, then CMPNY2 may terminate this Agreement with respect to such Product by delivery of a written notice of termination to CMPNY1 within [***] days after the completion of such [***] period.  If CMPNY2 terminates this Agreement with respect to one or more Products pursuant to this Section 2.4, CMPNY1 shall pay to CMPNY2 the Amount within ______  days of the effectiveness of such termination.
 
3.   Manufacturing Standards and Quality Assurance.
 
3.1   Each Product will be manufactured, controlled, tested, and released in accordance with the executed Quality Agreement.  If there is any inconsistency between this Agreement and the Quality Agreement, the terms of the Quality Agreement shall control with respect to quality issues, and this Agreement shall control with respect to all other issues.
 
3.2   CMPNY1 warrants that, as of the date of each delivery hereunder to CMPNY2, and until its date of expiration, each Product shall comply with the provisions of the FFDCA, and such Product shall not, when delivered to CMPNY2, be adulterated or misbranded within the meaning of the FFDCA. A material default by either Party of the Quality Agreement shall be deemed a default under this Agreement.
 
4.   Consideration
 
4.1   Price. The prices for the Products to be delivered by CMPNY1, during the term of this Agreement shall as set forth on Schedule A.
 
4.2   Terms of Payment. The terms of payment shall be net thirty (30) days from date of invoice. In case of default with respect to payment, any amount not paid timely shall bear interest from its due date through the date of effective receipt of payment at the rate equal to the LIBO Rate plus three percent (3%).
 
5.   Term and Termination 
 
5.1   Term and Renewal. The obligations of the Parties hereunder shall commence on the Effective Date and continue for a period of five (5) years (the "Initial Term") unless this Agreement is terminated as provided herein or unless extended by the mutual agreement of the Parties. At the end of the first three (3) years of the Initial Term, the Parties agree to commence good faith discussions to agree upon appropriate supply arrangements applicable after the expiration of the Initial Term.
 
5.2   Termination for Breach. This Agreement may be terminated by either Party if the other Party fails to remedy and make good any material default in the performance of any condition or obligation under this Agreement within ninety (90) days of the date a written notice of such default and intention to terminate is sent to the defaulting Party; provided that if a defaulting Party has promptly from receipt of notice commenced to cure such default and can demonstrate that it is diligently attempting to cure such default at the lapse of such ninety (90) days, then such party shall have such additional time to cure as may be reasonably required but not to exceed an additional seventy-five (75) days.
 
5.3   Termination for Bankruptcy. This Agreement may be terminated by either Party immediately, or at any time thereafter by notice to the other if the other becomes bankrupt or insolvent, or enters into liquidation whether compulsorily or voluntarily, or convenes a meeting of its creditors, or has a receiver appointed over all or part of its assets, or ceases for any reason to carry on business.
 
5.4   Termination for Force Majeure. This Agreement may be terminated by a Party, upon thirty (30) days written prior notice in the event of the other Party's inability to substantially perform its obligations hereunder for more than one hundred eighty (180) days due to an event of force majeure as defined in Section 10 herein, provided that the Party suffering the force majeure occurrence (the "Affected Party") reasonably expects that such condition of force majeure will be remedied within ninety (90) days from the date on which the Affected Party receives the other Party's notice of termination, then the Affected Party shall have ninety (90) days from the date of such notice to remedy such force majeure condition before termination becomes effective.
 
5.5   No Waiver. The failure of either Party to terminate this Agreement by reason of the breach of any of its provisions by the other Party shall not be construed as a waiver of the rights or remedies available for any subsequent breach of the terms and provisions of this Agreement.
 
5.6   Accrued Liabilities. Termination of this Agreement for any reason shall not discharge either Party's liability for obligations incurred hereunder and amounts unpaid at the time of such termination.
 
5.7   Property. In the event of termination of this Agreement for whatever cause, in addition to the other obligations of the Parties hereunder, each Party shall return to the other Party or to the other Party's designee, at the owner's sole cost and expense, no later than thirty (30) days after the effective date of termination all of such other Party's property, including, but not limited to, all proprietary information, in its possession, except to the extent required to be retained by Law or to comply with such party's continuing obligations hereunder.
 
6.   Independent Contractors 
 
The Parties acknowledge, agree and declare that the relationship hereby established between them is solely that of provider and recipient of manufacturing services and that each Party hereto is an independent contractor with respect to the other. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or, except as otherwise expressly provided in this Agreement as granting either Party the authority to bind or contract any obligation in the name of or on account of the other Party or to make any statements, representations, warranties or commitments on behalf of the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.
 
7.   Indemnification
 
7.1   Indemnification by CMPNY1. CMPNY1 agrees to indemnify, defend and hold harmless CMPNY2, its Affiliates and their respective employees against any and all third-party claims, including claims made against CMPNY2 by any of its distributors, losses, damages and liabilities, including reasonable attorney's fees, incurred by any of them arising out of (i) any failure of CMPNY1 or its Affiliates to manufacture, test, assemble, package, store, ship and deliver Products and Components in accordance with the Specifications or the terms of this Agreement, and (ii) any other breach of CMPNY1's agreements, representations, warranties or covenants contained in this Agreement.
 
7.2   Indemnification by CMPNY2. CMPNY2 agrees to indemnify, defend and hold harmless CMPNY1, its Affiliates and their employees against any and all third-party claims, losses, damages and liabilities, including reasonable attorney's fees, incurred by any of them arising out of (i) any breach of any of CMPNY2s agreements, representations, warranties or covenants contained in this Agreement; or (ii) any adulteration, misbranding or deterioration which occurs to the Products as a result of CMPNY2's or its Affiliates mishandling of the Products.
 
7.3   Procedure. If CMPNY2, its Affiliates or their respective employees, or CMPNY1, its affiliates or their respective employees (in each case an "Indemnified Party") receive any written claim which such Indemnified Party believes is the subject of indemnity hereunder by CMPNY1 or CMPNY2 as the case may be (in each case an "Indemnifying Party"), the Indemnified Party shall, as soon as reasonably practicable after forming such belief, give notice thereof to the Indemnifying Party; provided, that the failure to give timely notice to the Indemnifying Party as contemplated hereby shall not release the Indemnifying Party from any liability to the Indemnified Party unless the Indemnifying Party demonstrates that the defense of such claim is prejudiced by such failure. The Indemnifying Party shall have the right, by prompt notice to the Indemnified Party, to assume the defense of such claim, at its cost, with counsel reasonably satisfactory to the Indemnified Party. No such claim shall be settled other than by the party defending the same, and then only with the consent of the other party, which shall not be unreasonably withheld; provided, that the Indemnified Party shall have no obligation to consent to any settlement of any such claim which imposes on the Indemnified Party any liability or obligation which cannot be assumed and performed in full by the Indemnifying Party.
 
8.   Insurance 
 
8.1   Each Party shall obtain and keep in force during the term of this Agreement, (a) worker's compensation insurance in compliance with the worker's compensation laws of the state or states in which such Party has employees performing work related to this Agreement and employer's liability insurance with respect to such employees written on a per occurrence basis with a minimum limit of One Million Dollars ($1,000,000) per occurrence; and (b) commercial general liability insurance, written on a per occurrence basis, including, without limitation, premises, broad form property damages, contractual and products liability/completed operations coverage, which shall specifically cover such Party's indemnification obligations under Section 7.1 or 7.2 hereof, as applicable, with a combined single limit for bodily injury and property damage of not less than Ten Million Dollars ($10,000,000), provided however that either party may self-insure for this coverage.
 
8.2   Each Party shall furnish certificates of insurance for the policies of such Party to the other Party within ten (10) days after the Effective Date. Each Party shall immediately provide the other with written notice of any cancellation, non renewal, expiration or material modification of any policy. Should either Party at any time neglect or refuse to provide the insurance required herein, or should such insurance be canceled or materially modified, the other Party shall have the right to procure the same and the cost thereof shall be deducted from any compensation then due or thereafter to become due to the first Party.
 
9.   Limitation of Liability 
 
Neither Party shall be liable to the other for special, indirect, incidental or consequential damages.
 
10.   Force Majeure 
 
Neither Party shall be liable to the other for default or delay in the performance of its obligations under this Agreement, if such default or delay shall be caused directly or indirectly by events beyond the non-performing Party's reasonable control, including accident, fire, flood, riot, war, terrorism, act of God, embargo, strike, failure or delay of normal source of supply of materials due to circumstances beyond such Party's control (which shall not be deemed to include a failure to procure normal supply of materials due to financial reasons), or delay of carriers, or complete or partial shutdown of plant by any of the foregoing causes or other causes beyond its reasonable control, provided same are not due to the fault or neglect of such Party and provided further that any such delay or failure shall be remedied by such Party as soon as possible after the cause of such failure or delay.
 
11.   Confidentiality 
 
11.1   Any information or data (including but not limited to, any technical information, experience or data) regarding either Party's formulations, plans, programs, plants, processes, technical materials, Product, production requirements, standard specifications, costs, equipment, operations, procedures, instructions or customers (all of which is herein referred to as "Confidential Information") is the sole property of the respective Party. Each Party shall treat the other Party's Confidential Information in the same protective manner that it treats its own Confidential Information. Parties shall not use, except for the purpose of carrying out this Agreement, or disclose to others or permit their employees or agents to use, except for the purpose of carrying out this Agreement, or disclose to others, during the term of this Agreement and for a period of four (4) years from the date of termination or expiration of this Agreement, Confidential Information which has heretofore come or hereafter may come within the knowledge of, or which has been or may hereafter be acquired or developed by the respective party, its employees or agents, in the performance of any services hereunder. This paragraph shall not prevent either Party from using or disclosing to others information:
 
   (a)   which is known to the receiving Party at the time it is disclosed by obtained from the disclosing Party, which knowledge can be established by competent evidence; or
 
   (b)   which is, or through no fault of the receiving Party becomes, lawfully available to the public; or
   (c)   which lawfully becomes available to the receiving Party from a source other than the disclosing Party; or
 
   (d)   which the receiving Party is required by applicable Law, a court having jurisdiction, or Government or Regulatory Authority to disclose (provided that reasonable prior notice and an opportunity to limit such disclosure is provided to the other Party).
 
11.2   Upon termination of this Agreement, if requested, the receiving Party shall deliver to the disclosing party all notes, drawings, blueprints, manuals, letters, notebooks, reports of or pertaining to Confidential Information, including all copies thereof, and all other Confidential Information which is in the possession of or under the control of the receiving Party. Parties shall restrict access to Confidential Information to as few as practicable of their employees, and in all cases shall restrict such knowledge to only those employees who are directly connected with the performance of the services hereunder.
 
12.   Trademarks
 
12.1   CMPNY1's Rights. CMPNY2 hereby acknowledges that it does not have, and shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark, trade name, copyright, patent of CMPNY1, nor in any of CMPNY1's trademarks or trade names appearing on the label or packaging materials of the Products. CMPNY2 agrees to do nothing by act or omission which would impair CMPNY1's or its Affiliates' rights, ownership and title in the aforementioned.
 
12.2   CMPNY2s Rights. CMPNY1 hereby acknowledges that it does not have, and shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark, trade name, copyright, patent or other intellectual property of CMPNY2, nor in any of CMPNY2s trademarks or trade names appearing on the label or packaging materials of the Products. CMPNY1 agrees to do nothing by act or omission which would impair CMPNY2s or its Affiliates' rights, ownership and title in the aforementioned.
 
12.3   No Contest. Each Party further agrees not to contest, deny or dispute the validity of any trademarks or trade names owned by the other Party appearing on the labels or packaging materials of the Products or the title of such other Party thereto, and not to assist others in doing so, and not to take action of any kind inconsistent with the holding of all such trademark rights by such other Party.
 
12.4   Use. Neither Party shall use the trademarks or trade names owned by the other Party under which the Products are manufactured on any other goods or products, except as provided hereunder.
 
12.5   Infringement. Each Party shall immediately report in writing to the other Party upon being acquainted through any source whatsoever of any and all infringements or threatened infringements of the trade names or trademarks owned by such other Party appearing on the labels and packaging materials of the Products, and any attempt on the part of anyone to register, copy, infringe upon or imitate such trademarks or trade names, and if required by such party, the notifying Party will, at the other Party's sole expense, take such steps as the other Party may deem advisable against the infringement or otherwise for the protection of the other Party's rights.
 
12.6   Survival. The obligations set forth in this Section 12 shall survive the termination or expiration of this Agreement.
 
12.7   Intellectual Property Indemnification. CMPNY2 shall indemnify, defend and hold CMPNY1 and its employees, servants and agents harmless from and against any and all claims, demands, actions, suits, losses, damages, costs, expenses (including reasonable attorney's fees), and liabilities which CMPNY1 may incur, suffer or be required to pay by reason of any patent infringement suit or other intellectual property suit brought against CMPNY1 because of CMPNY1's manufacture of a Product.
 
13.   Notices 
 
13.1   Any notice or request expressly provided for or permitted under this Agreement shall be in writing, delivered manually or by mail, telegram, telefax or cable and shall be deemed sufficiently given if and when received by the Party to be notified at its address first set forth below, or if and when mailed by registered mail or certified mail, postage prepaid, addressed to such party at such address. Either Party, by notice to the other, may change its address for receiving such notices.
 
   To CMPNY1:
   With a copy to: General Counsel
 
   To CMPNY2:
   With a copy to:
 
14.   Governing Law 
 
The rights and obligations of the Parties to this Agreement and this Agreement shall be governed by, construed and enforced in accordance with the laws of the State of ____________________ [insert State] without regard to the provisions thereof concerning conflict of laws. The Parties hereby irrevocably and unconditionally consent to the exclusive jurisdiction of the courts of the State of ________________ for any action, suit or proceeding arising out of or relating to this Agreement, and agree not to commence any such action, suit or proceeding related then to except in such courts.
15.   Entire Agreement.
 
This Agreement, together with the Schedules thereto (including but not limited to the Quality Agreement) constitutes the complete and exclusive statement of the terms of the Agreement between the Parties hereto with reference to the subject matter hereof, and neither Party shall claim any modification or rescission from any provision hereof unless such modification or rescission is in writing, signed by the other Party.
 
16.   Assignment 
 
This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, and neither this Agreement nor any of the rights, interests or obligations hereunder of the Parties hereto may be assigned by any of the Parties hereto without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed.
 
17.   Counterparts
 
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Agreement delivered by facsimile transmission shall be as effective as an original executed signature page.
 
18.   Severability 
 
If any provision of this Agreement is held to be invalid, illegal or unenforceable, such provision will be given no effect by the Parties and shall not form part of this Agreement, all other provisions of this Agreement shall remain in full force and effect; and the Parties will use their best efforts to negotiate a provision in replacement of the provision held invalid, illegal or unenforceable that is consistent with applicable Law and achieves, as nearly as possible, the original intention of the Parties. To the fullest extent permitted by applicable Law, the Parties waive any provision of law that would render any provision of this Agreement invalid, illegal or unenforceable in any respect.
 
19.   Survival
 
The respective rights and obligations of the Parties set forth in this Agreement shall survive the expiration or termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.
 
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized representatives as of the day and year first above written.
 
 
 
 
 
 
 
CMPNY1
 
CMPNY2
 
 
 
 
By:
 
_____________________________
 
By:
 
________________________________
Name:
 
_____________________________
 
Name:
 
________________________________
Title:
 
_____________________________
 
Title:
 
________________________________
 
SCHEDULE A
PRICES
 
[Insert payments]
 
 

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