Outsourcing Agreement - Manufacturing

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The key takeaways are that this is an outsourcing agreement between a manufacturer and buyer where the manufacturer will produce products for the buyer on a turnkey basis and provide various services like production, delivery, inventory management, etc.

The manufacturer will provide services like receipt and management of master materials, supply base management, production of components and finished goods, delivery, inventory management, and financial services.

The buyer will compensate the manufacturer according to the rates specified in the schedule. Payments will be due within a certain number of days after delivery. The manufacturer can charge storage fees if materials are in stock for over a certain period of time.

© Copyright Biztree Inc. 2010. All rights reserved.

Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGAL AND
STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

OUTSOURCING AGREEMENT

This Outsourcing Agreement (the “Agreement”) is effective [DATE],

BETWEEN: [MANUFACTURER NAME] (the " Manufacturer"), a company organized and


existing under the laws of the [State/Province] of [STATE/PROVINCE], with its
head office located at:

[YOUR COMPLETE ADDRESS]

AND: [BUYER NAME] (the "Buyer"), a company organized and existing under the laws
of the [State/Province] of [STATE/PROVINCE], with its head office located at:

[COMPLETE ADDRESS]

1. PURPOSE OF AGREEMENT

Formalize the agreements made regarding services and products between Buyer and MANUFACTURER

2. SERVICES

Manufacturer will produce products for Buyer on a Turnkey basis. Initially, services will cover [NUMBER]
products, as per the attached price sheets. However, this may be extended.

Specific services will be:

 Receipt and Management of master materials

 Supply base management

 Production (both components & finished goods)

 Delivery

 Inventory Management

 Financial Services

 Quality and Services Level Agreements will be based on mutual agreement.

3. DELIVERY

Manufacturer shall deliver the Services in line with the agreed service levels to Buyer.

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© Copyright Biztree Inc. 2010. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGAL AND
STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

4. ACCEPTANCE OF SERVICES

Buyer may reject the Services if they do not comply with the specification set out by Buyer. The Services
are deemed to be accepted if Manufacturer does not receive a notification within [NUMBER] days after
delivery to Buyer or its customers.

5. PAYMENT AND PRICING

Buyer will compensate Manufacturer for all Services rendered in accordance with the rates specified in the
Schedule [SPECIFY]. Unless otherwise agreed, prices shall exclude transport, insurance, sales taxes and
Import duties (outside [SPECIFY] countries) to Buyer' designated delivery address.

For all materials in stock, older than [NUMBER] days, Manufacturer will charge Buyer with an Inventory
Carriage Charge of [PERCENTAGE %] of its value per month.

Manufacturer will invoice Buyer based on actual shipments that have been performed.

Payments will be due in [COUNTRY] [CURRENCY] within [NUMBER] days after delivery, or when agreed
after delivery of installments or the receipt of invoice by Buyer, which ever is later. Manufacturer shall
invoice Buyer indicating the performed services in [COUNTRY] [CURRENCY] with reference to this
Agreement.

Buyer shall be entitled to deduct from or set off against any sums which Buyer may be liable to pay to
Manufacturer any amounts owed by Manufacturer, its affiliated entities, subsidiaries or successors in
interest.

6. WARRANTY

Manufacturer warrants providing the Services with due diligence and care in accordance with the
specifications set by Buyer. Should Manufacturer not supply the Services as agreed or should the
Services become defective within [NUMBER] months from their delivery to Buyer, Buyer may at its option
require Manufacturer to complete or re-perform the Services within a reasonable period of time, rescind
the contract or refuse payment of the compensation in part or in total, notwithstanding any damage claims.

7. INDEMNITY

Manufacturer shall reimburse Buyer and hold Buyer harmless from any liabilities or obligations imposed
upon Buyer resulting directly or indirectly from Manufacturer's or its employees or agents activities under
this Agreement.

8. LIABILITY

Either party shall be liable for failure or delay in performance of its duties under this Agreement except for
reasons beyond such party's reasonable control. Manufacturer shall not be liable for indirect or
consequential damages unless caused by intention or gross negligence.

9. CONFIDENTIALITY

Both parties shall take reasonable precautions to preserve in strict confidence any confidential or
proprietary information obtained by them, their agents or employees concerning the business, products,
equipment or services of the other party, including without limitation, trade secrets. Such reasonable

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© Copyright Biztree Inc. 2010. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGAL AND
STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

precautions shall include exercising precautionary measures designed to preserve the secrecy of such
information and to prevent its disclosure to third parties, except following prior consent of the other party,
with such precautions being at least equivalent to those taken by each party with respect to its own
confidential information.

10. PATENTS AND COPYRIGHT

Manufacturer warrants that the Services supplied to Buyer will not infringe any third parties' intellectual
property rights. Manufacturer will defend and indemnity Buyer against a claim that the Services supplied
hereunder infringe a patent or copyright and will pay resulting costs and damages provided that Buyer (i)
promptly informs Manufacturer in writing of the claim and (ii) gives Manufacturer sole control of the
defense and all related settlement negotiations. Manufacturer will either procure the right for Buyer to
continue using the Services or replace or modify them so that they become non-infringing or accept return
of the Services for a credit equal to the price paid by Buyer.

11. COPYRIGHT AND COPYRIGHT LICENSE

Buyer hereby grants Manufacturer the rights to copy in printed or electronic form the master materials
according to the forecasted numbers given to Manufacturer by Buyer.

12. TERM AND TERMINATION

This Agreement shall be valid for an indefinite period.

Both parties may terminate the Agreement with immediate effect

 of either party breaches a material term of the Agreement

 in case of a merger or change of key management or control

 in case of bankruptcy or similar.

Buyer may terminate this agreement without cause by giving [NUMBER] days written notice to
MANUFACTURER.

13. GOVERNING LAW

Any lawsuit relating to any matter arising under this Agreement may be initiated in a State/Provincial or
Federal Court located in [STATE/PROVINCE] or in any court in the [COUNTRY] having jurisdiction over
the matter.

14. INSURANCE

Manufacturer shall at its own expense obtain and maintain with an insurer adequate insurance coverage
in respect of any Buyer property under the care, custody or control of Manufacturer. Manufacturer shall
immediately notify Buyer in writing of any theft, loss or damage to any Buyer property and shall indemnify
Buyer in respect of the same.

Outsourcing Agreement Manufacturing Page 3 of 4


© Copyright Biztree Inc. 2010. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGAL AND
STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

MANUFACTURER BUYER

Authorized Signature Authorized Signature

Print Name and Title Print Name and Title

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