Manufacturing Agreement - India

Manufacturing Agreement for use in India.

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This kit includes tools and guidelines to assist you in drafting a Manufacturing Agreement.

A manufacturing agreement grants the manufacturer a non-exclusive right to manufacture and package a customer's products. Manufacturing agreements generally include provisions wherein the customer grants the non exclusive right to use customers trademarks, tradenames and such identification marks on the product packages. Generally, the customer has the right to purchase any improvements or developments made by the manufacturer.

Among others, this form includes the following key provisions:
  • Manufacturing of Product
  • Term of the Agreement and Termination
  • Know-How, Confidentiality and Trademarks
  • Engineering Changes
  • Quality Control and Maintenance of Records
  • Payments
  • Indemnity and Warranties
This attorney-prepared Manufacturing Agreement:
  1. Description and Instructions for Manufacturing Agreement
  2. Manufacturing Agreement for use in India
Law Compliance: This form is designed for use in India.
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.
 
 
Manufacturing Agreement
(India)

 

 

This MANUFACTURING AGREEMENT (the “Agreement”) is made on the ___________200 (the “Effective Date”) entered by and between ___________ hereinafter called “CLIENT”, and ___________________________, hereinafter called the “MANUFACTURER”.
 
WHEREAS THE CLIENT is engaged in the business of _____________________________
 
WHEREAS upon and subject to the terms and conditions of this Agreement, CLIENT has retained MANUFACTURERs services to provide manufacturing services for the ______________________________________(“Product”) [Mention the type of Product]
 
WHEREAS the  MANUFACTURER has represented and warranted to the CLIENT that  it possesses adequate manufacturing capacity at its factory situate  at __________,  (hereinafter  referred to as the said factory  premises) and has the necessary  labour, personnel, plant,  machinery, and facilities required for the manufacture of the said Products in  accordance with the statutory requirements pertaining to such manufacture.
 
WHEREAS the MANUFACTURER has also represented and warranted that it has obtained all licences, authorisations and permissions necessary or requisite in law for the manufacture by it of the said Products (under the brand/trade mark ______ of the CLIENT) and that  all  such licences, authorisations and permissions are presently in full  force and effect and shall be kept in full force and effect during the term of this agreement in  accordance with the laws applicable from  time to time.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
 
1.    MANUFACTURE. The MANUFACTURER hereby agrees and undertakes to manufacture the said Products strictly in accordance with the know-how, standards and specifications disclosed or intimated by the CLIENT from time to time.
 
2.    TERM. This Agreement shall commence on the effective date, ____, and shall continue for an initial term of one (1) year. This Agreement shall automatically be renewed for successive one (1) year increments unless either party requests in writing, at least ninety (90) days prior to the    anniversary date that this Agreement not be so renewed.
 
3.     PRODUCT FORECAST. CLIENT will provide an annual twelve (12) month forecast and a monthly six (6) month rolling Product forecast to MANUFACTURER.
 
4.    KNOW-HOW; CONFIDENTIALITY
 
a)   The CLIENT may disclose, communicate or  intimate to  the  MANUFACTURER  so much  of  the  know-how, standards and specifications as the CLIENT may in its  absolute  discretion  consider  necessary  or sufficient for the manufacture of the said  Products by the MANUFACTURER at the said factory  premises.  
 
b)   The MANUFACTURER hereby acknowledges that  the know-how,  standards and specifications disclosed or communicated or intimated to it by the  CLIENT for  and/or connected with, or in relation to the manufacture of the said Products pursuant to this Agreement  shall at all times remain and be the sole and  exclusive property of the CLIENT and the MANUFACTURER shall  neither have  nor  claim any  right, title or interest therein or thereto either during the continuance of this Agreement  or after the expiry or earlier determination thereof.
 
c)   The MANUFACTURER hereby agrees, undertakes and declares that it shall not directly or indirectly use the said know-how standards or specifications or any part thereof at any time for any purpose other than for the manufacture of the said Products for making supplies to the CLIENT in accordance with this Agreement.
 
d)   The  MANUFACTURER hereby undertakes that it shall keep secret and  confidential and shall not disclose, divulge or reveal either during the continuance of this  Agreement or at any time thereafter  the  information or know-how or standards or specifications disclosed, communicated or given or  gained or otherwise acquired by the MANUFACTURER under, pursuant to or by virtue of or as result of the implementation or performance of this Agreement, to any person, firm, body corporate or  authority whatsoever and shall ensure that the same is kept secret and confidential at all times.
 
   PROVIDED  HOWEVER that  nothing  herein contained shall  prevent  the  MANUFACTURER  from disclosing or imparting the  same to  their responsible senior employees or staff members but only  in  so far  as may be necessary  for  the satisfactory and proper performance and discharge of their duties and obligations to give effect  to this Agreement .
 
          PROVIDED FURTHER the MANUFACTURER shall if so required by the CLIENT obtain from such employees or staff members an undertaking in favour of  the CLIENT not to reveal, disclose or divulge  the know-how, standards or specifications or any other  documents or papers containing the know-how or any  information relating in any manner whatsoever  to the manufacture of the said Products in such forms and containing such terms and conditions as the CLIENT  may in its sole and  absolute discretion  prescribe and the CLIENT shall also be  entitled to inspect the undertaking which the  MANUFACTURER may have obtained from its employees/staff members and  modifications if any as may be suggested  by the  CLIENT in this connection shall be carried out by the MANUFACTURER and its employees.
 
   FURTHERMORE, MANUFACTURER and CLIENT agree to execute, as part of this Agreement, a Nondisclosure Agreement for the reciprocal protection of confidential information.
 
5.    ENGINEERING CHANGES
 
a)      CLIENT may, upon advance written notice to MANUFACTURER, submit engineering changes for incorporation into the Product. It is important that this notification include documentation of the change to effectively support an investigation of the impact of the engineering change. MANUFACTURER will make a reasonable effort to review the engineering change and report to CLIENT within __________ days of receiving such a notice for change. If any such change affects the price, delivery, or quality performance of said Product, an equitable adjustment will be negotiated between MANUFACTURER and CLIENT prior to implementation of the change.
 
 b)      MANUFACTURER agrees not to undertake significant process changes, design   changes, or process step discontinuance affecting electrical performance and/or mechanical form and fit without prior written notification and concurrence of the CLIENT.
 
6.    DELIVERY; ORDERS
 
a)   MANUFACTURER shall  sell to the CLIENT  and the CLIENT  shall purchase from the MANUFACTURER  the said  Products  in the manner set  out  below,  at price set out/determined in  accordance with  the method in Schedule I hereto or such other price as may be  mutually agreed. For this purpose the MANUFACTURER shall disclose to the CLIENT all necessary information, data, working, cost and other expenses necessary for the determination of the prices to be mutually agreed upon.  
 
b)   The CLIENT will from time to time place orders with the MANUFACTURER for the purchase of the said Products and the MANUFACTURER shall supply such quantities as are ordered of the said Products at the agreed prices to the CLIENT within the time specified in each such order. The order shall allow the MANUFACTURER atleast 30 (thirty) days for the execution of the order. The MANUFACTURER shall ensure that it shall maintain adequate inventories/stocks of raw, packing and other materials at all times to supply the said Products in accordance with the orders placed. The MANUFACTURER shall ensure that it shall supply the said Products to the CLIENT so that the delivery is effected within one month from the date of manufacture indicated on the label of the product. The MANUFACTURER will be solely and exclusively responsible for the purchase, procurement and storage of raw, packing and other materials required for the  manufacture  of  the said Products and shall  purchase/procure the same from any source of its choice as per  the specifications laid down by the CLIENT.
 
c)        The CLIENT may revise or cancel a purchase order for Product and may also eliminate a component from a Product. If CLIENT revises or cancels a purchase order or eliminates a component, or through revised forecast (downside) causes excess inventory, MANUFACTURER shall identify all potential liability of CLIENT for material on order, material on hand, work in process, and finished goods. MANUFACTURER shall undertake commercially reasonable efforts to cancel all applicable component purchase orders and reduce component inventory through return for credit programs or allocate components for alternate programs to minimise charges to CLIENT. CLIENT agrees to compensate MANUFACTURER for costs incurred for finished goods (including profit); work in process (including labour performed); material on hand which could not be returned or used for other clients and at other sites of MANUFACTURER; material on order which could not be cancelled; applicable material supplier's restocking or cancellation fees; and agreed MANUFACTURER  handling charges.
 
d)   The  MANUFACTURER shall at its own cost and expense,  pack the said Products in  packages  or containers  in accordance with the directions and specifications given or prescribed by the CLIENT from time to time in that behalf.
 
e)   The CLIENT shall not be bound to  accept any  products which do not conform to  the  standards, specifications, instructions or directions prescribed and/or given by the CLIENT in that behalf from time to time or which do not conform with  statutory  requirement.  In such event the CLIENT shall be entitled to destroy at the MANUFACTURER's cost all of such non-conforming products.
 
f)   If after the CLIENT has accepted the said Products,  it is subsequently found that they do not  conform to the standards specifications prescribed by the CLIENT or with  the  statutory requirements pertaining thereto or if for any reason  pertaining to the Manufacture thereof the product is recalled from any of its establishments or dealers or retailers, the MANUFACTURER shall be liable to  reimburse the CLIENT for the prices of the said products paid/payable by the CLIENT to the MANUFACTURER and for the  expenses which the CLIENT may have incurred from the time of purchase till such recall.
 
 
7.    QUALITY CONTROL & MAINTENANCE OF RECORDS
 
a)   The CLIENT shall be entitled, without being obliged to do so, to give the MANUFACTURER instructions, advice and recommendations with regard to, inter alia, Good Manufacturing Practices, quality of the product and engineering aspects. The MANUFACTURER shall conform to the said instructions, advice and   recommendations given by the CLIENT at any time during the continuance of this Agreement.
 
b)   During the  continuance of  this  Agreement, the CLIENT,  its  authorised  agent(s)     and  representative(s) shall from time to time and  at all times  be entitled without being  obliged  to enter upon and inspect the  MANUFACTURER's  said factory  premises  and examine and  supervise  if necessary the process or method of  manufacturing and packing of the said Products and the  storage and use of the raw  materials, ingredients and other materials used or intended to be used by the MANUFACTURER for or in relation to the manufacture and  packing of  the said  Products. The MANUFACTURER shall extend full co-operation to the CLIENT in such inspection or   supervision and shall comply with all directions given by the CLIENT from time to time.
 
c)   The CLIENT shall be entitled to, without  being obliged to do so,  have the said   Products manufactured  hereunder  examined,  inspected  and tested in its Quality Control Department or [in its  laboratories] and other facilities in accordance with the  instructions and testing procedure prescribed by the CLIENT to ascertain whether the  said  Products conform to the standards and specifications prescribed by the CLIENT from time to time.
 
d)   The  MANUFACTURER shall at all  times  keep  and maintain proper records in their books relating to all matters and transactions under or arising out of  this Agreement  and the CLIENT at all times have  access to such records and books including vouchers, receipts, memos and other like documents and a right to inspect the same to make copies of or  take extracts therefrom by or through  any of the officers of the CLIENT authorised in that behalf.
 
 
8.      PAYMENTS
 
a)   The said Products shall be supplied by the MANUFACTURER to the CLIENT at prices determined in accordance with clause 4(a) above. The CLIENT shall make payments to the MANUFACTURER within ___days from the date of invoice/delivery of the said Products whichever is later. This may be varied from time to time by mutual Agreement.
 
b)   Further it is agreed that Parties that the total expenses envisaged in the manufacture of the said Product would be Rs. _________________(_____________). [Mention if this expense would be divided between the Parties or if borne by only the CLIENT] 
 
 
9.       INDEMNITY & WARRANTIES
 
a)   The MANUFACTURER shall advise the CLIENT of the maximum retail prices at which the said Products may be sold having regard to the provisions of the _______________ [Mention specific price contract board/order to which the prices should comply with]  or   any   other applicable provisions in force from time to  time.  The MANUFACTURER shall be responsible for ensuring that the said prices advised to the CLIENT are in conformity with the  provisions of  the   _____________ Order or  any  other  applicable statutory  provisions in force form time to  time, and  shall be responsible for compliance with  all the  statutory  requirements  pertaining  to   the selling prices of  the  said Products. The MANUFACTURER shall keep the CLIENT indemnified against any loss, damage or responsibility which may arise if there is any breach of the provisions of the __________________ Order or any other statutory provisions or requirements pertaining to the selling prices of the said Products.
 
b)   The MANUFACTURER guarantees and warrants that  the said  Products manufactured and  packed  hereunder shall  in all respects be strictly  in  accordance with   the  statutory    requirements pertaining hereto  and in accordance with the standards  and specifications  disclosed and communicated by  the CLIENT  to the MANUFACTURER.  The MANUFACTURER further guarantees and warrants that:
 
i.   the  said  Products will be  manufactured  in conditions,  premises  and  facilities which comply in all respects with the statutory requirements applicable thereto.
 
ii.   all waste or rejects arising out of or during the process of manufacture shall be destroyed by the MANUFACTURER in accordance with Law at  its  cost so as to ensure that the  same
iii.   does not leave the said factory  premises under any circumstances whatsoever.
 
c)   The MANUFACTURER shall indemnify and keep indemnified the CLIENT at all times from and against all actions, suits, proceedings, claims, demands and expenses of whatsoever nature made or suffered or incurred by the CLIENT whether by reason of or by virtue of the efficacy or quality of the said Products or by reasons of or by virtue of any non-performance or non-observance by the MANUFACTURER of any terms and conditions of this Agreement.
 
d)   The MANUFACTURER shall be solely and exclusively liable for payment of all taxes, duties and levies payable by the MANUFACTURER including excise duty, octroi and sales tax, if any, on or in connection with the manufacture and/or sale of the said Products by the MANUFACTURER to the CLIENT under and in accordance with this Agreement and the CLIENT shall in no event be liable or responsible therefor. In the event any claim, penalty or liability is incurred by the CLIENT in this behalf at any time, the MANUFACTURER shall indemnify and keep indemnified the CLIENT from and against all such claims.
 
 
10.   INVENTORY MANAGEMENT
 
a)   MANUFACTURER agrees to purchase components according to the CLIENT approved vendor list (AVL) including any sourcing plans.
 
b)   All CLIENT tooling/equipment furnished to MANUFACTURER or paid for by CLIENT in connection with this Agreement shall:
 
i.   Be clearly marked and remain the personal property of CLIENT.
 
ii.   Be kept free of liens and encumbrances.
 
c)   Unless otherwise agreed, CLIENT is responsible for the general maintenance of CLIENT tooling/equipment.
 
d)   MANUFACTURER shall hold CLIENT property at its own risk and shall not modify the property without the written permission of CLIENT. Upon CLIENTs request, MANUFACTURER shall redeliver the property to CLIENT in the same condition as originally received by MANUFACTURER with the exception of reasonable wear and tear. In the event the property is lost, damaged or destroyed, MANUFACTURERs liability for the property is limited to the book value of the property.
 
 
 11.  TRADE MARKS; INTELLECTUAL PROPERTY
 
a)   The  MANUFACTURER shall for and on behalf of the CLIENT, affix or apply the said Mark  on the  said Products and/or the  labels and/or the packages thereof which are to be supplied to the CLIENT pursuant to  this Agreement. Such affixation shall be in such a manner as is directed by the CLIENT. Save as aforesaid,  the MANUFACTURER shall  not  use, nor shall be deemed to have the right to use the  said Mark in  connection  with  or  in relation to any product of whatsoever  nature made or dealt with by the MANUFACTURER. The MANUFACTURER hereby covenants that it  shall not use the said Mark in  any manner whatsoever which  may  jeopardise the significance, distinctiveness or validity of the  said Mark and shall apply and affix the said Mark only in pursuance of its obligations under this Agreement. The MANUFACTURER shall not be entitled to use or affix the said Mark on any products or goods except the said Products to be supplied to the CLIENT hereunder.
 
b)       Nothing herein contained shall at any time during the continuation of this Agreement   or after the expiry or earlier determination thereof give or be deemed to give or shall be intended to give or confer upon the MANUFACTURER any right, title, interest  or claim in or to the said Mark which shall continue to vest solely and  absolutely in favour of the CLIENT.
 
c)    The MANUFACTURER shall during the continuance of this Agreement  use its best endeavours to discover any infringement or passing off or suspected infringement  or  passing off or imitation of the said Mark coming to its knowledge and shall communicates the same to the CLIENT and assist the CLIENT in any action to be taken in such circumstances.
 
d)   The MANUFACTURER hereby declares that it has not and shall not any time:
 
i      take any action which shall or may impair the right title or interest of the CLIENT to the said Mark or create any right, title or interest therein or thereto which  may be adverse to the CLIENT.
 
ii.   use the said Mark  upon or in relation to any goods on its own account or otherwise for any other purpose.
 
iii.   use the said Mark upon or in relation to any goods other than the said Products meant  for supplies to the CLIENT.
 
iv.      permit the use of the said Mark  by any other  person, firm or body corporate.
 
v.   register or attempt to  register  any  mark similar to the said Mark.
 
   e)    Each Party (the “indemnifying party”) shall defend, indemnify, and hold   harmless the other party from any claims by a third party of infringement of intellectual properties resulting from the acts of the indemnifying party pursuant to this Agreement, provided that the other party: (i) gives the indemnifying party prompt notice of any such claims, (ii) renders  reasonable assistance to the indemnifying party thereon, and (iii)  permits the indemnifying party to direct the defence of the settlement of such claims.
 
 
12.       LICENCES & STATUTORY COMPLIANCES
 
a)    The  MANUFACTURER shall at all times comply with all applicable laws, rules and  regulations  from time to time in force including without  prejudice to  the  generality  of the foregoing, strictly comply with the provisions  of  the  _____________[Mention any specific Act, or legislation to comply with], safety laws and  regulations, laws and regulations relating to  procurement of materials including  imported materials, the Central Excise and Salt Act, 1944, and the rules, regulations  and  notifications made or issued  thereunder, relating to or appertaining to the due and  proper performance of  its duties and obligations under this Agreement . In the event of the MANUFACTURER committing a breach of  this  clause the MANUFACTURER shall indemnify and  keep indemnified  the CLIENT of, from and against  all claims, demands, actions,  proceedings, fines, penalties, expenses and other liabilities of whatsoever nature or brought against sustained or incurred by the CLIENT and whether paid for or not arising out of or as a result of such breach by the MANUFACTURER.
 
   [Also describe what the MANUFACTURER warrants and acknowledges in terms of the licences and approvals it has obtained for its manufacturing processes]
 
13.      INSURANCE
 
         The MANUFACTURER  shall at its cost take a comprehensive insurance policy [or specific a definite amount] to cover all the raw and packaging materials, stocks in process and finished products against inter alia, theft, fire, riots, civil commotion, natural calamities, including floods.
 
 
14.      NO AGENCY
 
a)      Nothing herein contained shall be deemed to construe or is intended to construe the MANUFACTURER as an agent of the CLIENT.  It is further hereby expressly agreed and declared that MANUFACTURER shall not at any time:
               
i.   enter  into a contract in the name of or purporting  to be made on behalf  of  the CLIENT;
 
ii.   by any act pledge the credit of the CLIENT or impose or  attempt to impose any contractual obligations on the CLIENT; and
 
iii.   either in its own offices, factories or depots or on invoices, bill heads or letter papers or any other place or by any other means, oral or written, make any statement to the effect or make a representation calculated or liable to include others  to believe that it is an agent of the CLIENT.
 
 
b)     The MANUFACTURER shall not sub-contract or delegate to any other person, firm or CLIENT  the whole or any part of the manufacture or  packaging of  the  said Products under this Agreement nor  shall the MANUFACTURER assign this Agreement or any of its rights, duties or obligations thereunder without the prior consent in writing of the CLIENT in that behalf.
 
 
15.      TERMINATION
 
a)     Notwithstanding anything to the  contrary herein contained  either  party shall  be  entitled to terminate this Agreement forthwith  upon the happening of any of the following events:
 
i.   Upon the other party committing a breach of any terms and conditions of this Agreement;
 
ii.        Upon the other party making any  arrangement or  composition with its creditors or if an execution or other process shall be levied upon or if  an  encumbrancer shall take possession of or a receiver shall be appointed  in respect of the assets or properties of  the other party or any part  thereof;
 
iii.      Upon the other party going into liquidation for the purpose of amalgamation or reconstruction.
 
b)      Notwithstanding anything contained hereinabove and without prejudice to the rights and remedies open to the parties, either party shall be entitled to terminate this Agreement without assigning any reason by giving three months notice to the other.
 
c)     The termination of this Agreement for any reason whatsoever shall not entitle the other party to any compensation therefor and shall be without prejudice to any claim or right of action previously accrued or acquired by the parties.
 
d)     Upon termination or expiry of this Agreement for any person whatsoever, the MANUFACTURER shall:
 
i.   forthwith discontinue manufacture and packing of the said Product;
 
ii.   forthwith discontinue any and every application and or affixation of the said Mark or any colourable imitation of the same in connection with any goods,  products, service, business or trade so as to cause confusion or deception or to detract from  or adversely affect the right, title or interest of the CLIENT in or to the said Mark  in any manner whatsoever;
 
iii.   not make any use whatsoever of the standards, specifications, information or  know-how disclosed or communicated to it by the CLIENT hereunder or acquired by the MANUFACTURER in connection with or as a result of  the  implementation of this Agreement or the MOU;
 
iv.   not  retain  any  copies or  extract  of  any documents or  drawings of the know-how  nor shall it make any use thereof or of any kind of benefits of research or new  methods of  manufacture acquired by it  concerning  the manufacture of the said Product;
 
v.   not  to sell to anyone else any quantity of  the  said  Products that may then be  in  the possession or custody of the MANUFACTURER;
 
vi.   destroy at its cost any stocks  of  packing material then  in  the  possession of   the MANUFACTURER and  the CLIENT shall not be required to purchase the whole or part thereof;
 
vii.   not directly or indirectly, represent, describe or cause to be represented   or described on any label, advertising material, circular or in any manner whatsoever that  it was formerly manufacturing the said  products under the said Mark owned by the CLIENT.
 
 
16.  GENERAL
 
 a)    This  Agreement shall be deemed to represent  the entire Agreement between  the  parties   hereto regarding  the  subject matter here of  and  shall supersede, cancel and replace any and all previous agreements, arrangements, writings or undertakings in  this  behalf between the parties  hereto.  
 
b)    Any  time relaxation indulgence or  concessions granted, made or shown by the CLIENT to or in favour of the MANUFACTURER under  this Agreement  shall  not  in  any way prejudice or affect  its  rights or remedies under this Agreement  or at law.
 
c)    This Agreement may be executed in one or more counterparts, each of which will be deemed the original, but all of which will constitute but one and the same document. The parties agree this Agreement and its addenda may not be modified except in writing signed by both parties.
 
d)     Neither party shall delegate, assign or transfer its rights or obligations under this Agreement, whether in whole or part, without the written consent of the other party provided, however, upon prior written notice to MANUFACTURER CLIENT   may assign or transfer its rights to third parties.
 
e)       Neither party shall be liable for any failure or delay in its performance under this Agreement  due to acts of God, acts of civil or military authority, fires, floods, earthquakes, riots, wars or any other cause beyond the reasonable control of the delayed party provided that the delayed party: (i) gives the other party written notice of such cause within fifteen (15) days of the discovery of the event; and (ii) uses its reasonable efforts to remedy such delay in its performance.
 
f)        This Agreement and the rights and obligations of the Parties hereunder shall, be construed in accordance with and be governed by the courts of _____________, in the State of ______________, India. In the event of disputes, differences, claims and questions between the parties hereto arising out of this Agreement or in any way relating hereto or any term, consultation or provision herein mentioned or the construction or interpretation thereof or otherwise in relation hereto, the parties shall first endeavour to settle such differences, disputes, claims or questions by friendly consultation. In the event of failure of parties to resolve by friendly consolation the dispute, the disputes, differences, claims and questions between the Parties hereto arising out of this Agreement or in any way relating hereto or any term, condition or provision herein mentioned or the construction or interpretation thereof or otherwise shall be referred to arbitration. The proceedings held by the arbitrator in making the award will be in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The award of the arbitrator shall be final and binding on the parties.
g)     This Agreement shall be executed in duplicate. The original it shall be retained by CLIENT and the duplicate by the DISTRIBUTOR.
 
 
IN   WITNESS  WHEREOF  the  parties  hereto   have executed  these  presents the day and year  first  above  written.
 
 
SIGNED AND DELIVERED by               ]
 
by Mr_____________________________   ]
 
Director, in the presence of             ]
 
 
SIGNED AND DELIVERED by                ]
 
___________________________            ]
___________________________            ]
___________________________            ]
 
 
 
in the presence of                           ]    
 
SCHEDULE 1
Price
 
Number of Pages15
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#33480
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.
 
 
Manufacturing Agreement
(India)

 

 

This MANUFACTURING AGREEMENT (the “Agreement”) is made on the ___________200 (the “Effective Date”) entered by and between ___________ hereinafter called “CLIENT”, and ___________________________, hereinafter called the “MANUFACTURER”.
 
WHEREAS THE CLIENT is engaged in the business of _____________________________
 
WHEREAS upon and subject to the terms and conditions of this Agreement, CLIENT has retained MANUFACTURERs services to provide manufacturing services for the ______________________________________(“Product”) [Mention the type of Product]
 
WHEREAS the  MANUFACTURER has represented and warranted to the CLIENT that  it possesses adequate manufacturing capacity at its factory situate  at __________,  (hereinafter  referred to as the said factory  premises) and has the necessary  labour, personnel, plant,  machinery, and facilities required for the manufacture of the said Products in  accordance with the statutory requirements pertaining to such manufacture.
 
WHEREAS the MANUFACTURER has also represented and warranted that it has obtained all licences, authorisations and permissions necessary or requisite in law for the manufacture by it of the said Products (under the brand/trade mark ______ of the CLIENT) and that  all  such licences, authorisations and permissions are presently in full  force and effect and shall be kept in full force and effect during the term of this agreement in  accordance with the laws applicable from  time to time.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
 
1.    MANUFACTURE. The MANUFACTURER hereby agrees and undertakes to manufacture the said Products strictly in accordance with the know-how, standards and specifications disclosed or intimated by the CLIENT from time to time.
 
2.    TERM. This Agreement shall commence on the effective date, ____, and shall continue for an initial term of one (1) year. This Agreement shall automatically be renewed for successive one (1) year increments unless either party requests in writing, at least ninety (90) days prior to the    anniversary date that this Agreement not be so renewed.
 
3.     PRODUCT FORECAST. CLIENT will provide an annual twelve (12) month forecast and a monthly six (6) month rolling Product forecast to MANUFACTURER.
 
4.    KNOW-HOW; CONFIDENTIALITY
 
a)   The CLIENT may disclose, communicate or  intimate to  the  MANUFACTURER  so much  of  the  know-how, standards and specifications as the CLIENT may in its  absolute  discretion  consider  necessary  or sufficient for the manufacture of the said  Products by the MANUFACTURER at the said factory  premises.  
 
b)   The MANUFACTURER hereby acknowledges that  the know-how,  standards and specifications disclosed or communicated or intimated to it by the  CLIENT for  and/or connected with, or in relation to the manufacture of the said Products pursuant to this Agreement  shall at all times remain and be the sole and  exclusive property of the CLIENT and the MANUFACTURER shall  neither have  nor  claim any  right, title or interest therein or thereto either during the continuance of this Agreement  or after the expiry or earlier determination thereof.
 
c)   The MANUFACTURER hereby agrees, undertakes and declares that it shall not directly or indirectly use the said know-how standards or specifications or any part thereof at any time for any purpose other than for the manufacture of the said Products for making supplies to the CLIENT in accordance with this Agreement.
 
d)   The  MANUFACTURER hereby undertakes that it shall keep secret and  confidential and shall not disclose, divulge or reveal either during the continuance of this  Agreement or at any time thereafter  the  information or know-how or standards or specifications disclosed, communicated or given or  gained or otherwise acquired by the MANUFACTURER under, pursuant to or by virtue of or as result of the implementation or performance of this Agreement, to any person, firm, body corporate or  authority whatsoever and shall ensure that the same is kept secret and confidential at all times.
 
   PROVIDED  HOWEVER that  nothing  herein contained shall  prevent  the  MANUFACTURER  from disclosing or imparting the  same to  their responsible senior employees or staff members but only  in  so far  as may be necessary  for  the satisfactory and proper performance and discharge of their duties and obligations to give effect  to this Agreement .
 
          PROVIDED FURTHER the MANUFACTURER shall if so required by the CLIENT obtain from such employees or staff members an undertaking in favour of  the CLIENT not to reveal, disclose or divulge  the know-how, standards or specifications or any other  documents or papers containing the know-how or any  information relating in any manner whatsoever  to the manufacture of the said Products in such forms and containing such terms and conditions as the CLIENT  may in its sole and  absolute discretion  prescribe and the CLIENT shall also be  entitled to inspect the undertaking which the  MANUFACTURER may have obtained from its employees/staff members and  modifications if any as may be suggested  by the  CLIENT in this connection shall be carried out by the MANUFACTURER and its employees.
 
   FURTHERMORE, MANUFACTURER and CLIENT agree to execute, as part of this Agreement, a Nondisclosure Agreement for the reciprocal protection of confidential information.
 
5.    ENGINEERING CHANGES
 
a)      CLIENT may, upon advance written notice to MANUFACTURER, submit engineering changes for incorporation into the Product. It is important that this notification include documentation of the change to effectively support an investigation of the impact of the engineering change. MANUFACTURER will make a reasonable effort to review the engineering change and report to CLIENT within __________ days of receiving such a notice for change. If any such change affects the price, delivery, or quality performance of said Product, an equitable adjustment will be negotiated between MANUFACTURER and CLIENT prior to implementation of the change.
 
 b)      MANUFACTURER agrees not to undertake significant process changes, design   changes, or process step discontinuance affecting electrical performance and/or mechanical form and fit without prior written notification and concurrence of the CLIENT.
 
6.    DELIVERY; ORDERS
 
a)   MANUFACTURER shall  sell to the CLIENT  and the CLIENT  shall purchase from the MANUFACTURER  the said  Products  in the manner set  out  below,  at price set out/determined in  accordance with  the method in Schedule I hereto or such other price as may be  mutually agreed. For this purpose the MANUFACTURER shall disclose to the CLIENT all necessary information, data, working, cost and other expenses necessary for the determination of the prices to be mutually agreed upon.  
 
b)   The CLIENT will from time to time place orders with the MANUFACTURER for the purchase of the said Products and the MANUFACTURER shall supply such quantities as are ordered of the said Products at the agreed prices to the CLIENT within the time specified in each such order. The order shall allow the MANUFACTURER atleast 30 (thirty) days for the execution of the order. The MANUFACTURER shall ensure that it shall maintain adequate inventories/stocks of raw, packing and other materials at all times to supply the said Products in accordance with the orders placed. The MANUFACTURER shall ensure that it shall supply the said Products to the CLIENT so that the delivery is effected within one month from the date of manufacture indicated on the label of the product. The MANUFACTURER will be solely and exclusively responsible for the purchase, procurement and storage of raw, packing and other materials required for the  manufacture  of  the said Products and shall  purchase/procure the same from any source of its choice as per  the specifications laid down by the CLIENT.
 
c)        The CLIENT may revise or cancel a purchase order for Product and may also eliminate a component from a Product. If CLIENT revises or cancels a purchase order or eliminates a component, or through revised forecast (downside) causes excess inventory, MANUFACTURER shall identify all potential liability of CLIENT for material on order, material on hand, work in process, and finished goods. MANUFACTURER shall undertake commercially reasonable efforts to cancel all applicable component purchase orders and reduce component inventory through return for credit programs or allocate components for alternate programs to minimise charges to CLIENT. CLIENT agrees to compensate MANUFACTURER for costs incurred for finished goods (including profit); work in process (including labour performed); material on hand which could not be returned or used for other clients and at other sites of MANUFACTURER; material on order which could not be cancelled; applicable material supplier's restocking or cancellation fees; and agreed MANUFACTURER  handling charges.
 
d)   The  MANUFACTURER shall at its own cost and expense,  pack the said Products in  packages  or containers  in accordance with the directions and specifications given or prescribed by the CLIENT from time to time in that behalf.
 
e)   The CLIENT shall not be bound to  accept any  products which do not conform to  the  standards, specifications, instructions or directions prescribed and/or given by the CLIENT in that behalf from time to time or which do not conform with  statutory  requirement.  In such event the CLIENT shall be entitled to destroy at the MANUFACTURER's cost all of such non-conforming products.
 
f)   If after the CLIENT has accepted the said Products,  it is subsequently found that they do not  conform to the standards specifications prescribed by the CLIENT or with  the  statutory requirements pertaining thereto or if for any reason  pertaining to the Manufacture thereof the product is recalled from any of its establishments or dealers or retailers, the MANUFACTURER shall be liable to  reimburse the CLIENT for the prices of the said products paid/payable by the CLIENT to the MANUFACTURER and for the  expenses which the CLIENT may have incurred from the time of purchase till such recall.
 
 
7.    QUALITY CONTROL & MAINTENANCE OF RECORDS
 
a)   The CLIENT shall be entitled, without being obliged to do so, to give the MANUFACTURER instructions, advice and recommendations with regard to, inter alia, Good Manufacturing Practices, quality of the product and engineering aspects. The MANUFACTURER shall conform to the said instructions, advice and   recommendations given by the CLIENT at any time during the continuance of this Agreement.
 
b)   During the  continuance of  this  Agreement, the CLIENT,  its  authorised  agent(s)     and  representative(s) shall from time to time and  at all times  be entitled without being  obliged  to enter upon and inspect the  MANUFACTURER's  said factory  premises  and examine and  supervise  if necessary the process or method of  manufacturing and packing of the said Products and the  storage and use of the raw  materials, ingredients and other materials used or intended to be used by the MANUFACTURER for or in relation to the manufacture and  packing of  the said  Products. The MANUFACTURER shall extend full co-operation to the CLIENT in such inspection or   supervision and shall comply with all directions given by the CLIENT from time to time.
 
c)   The CLIENT shall be entitled to, without  being obliged to do so,  have the said   Products manufactured  hereunder  examined,  inspected  and tested in its Quality Control Department or [in its  laboratories] and other facilities in accordance with the  instructions and testing procedure prescribed by the CLIENT to ascertain whether the  said  Products conform to the standards and specifications prescribed by the CLIENT from time to time.
 
d)   The  MANUFACTURER shall at all  times  keep  and maintain proper records in their books relating to all matters and transactions under or arising out of  this Agreement  and the CLIENT at all times have  access to such records and books including vouchers, receipts, memos and other like documents and a right to inspect the same to make copies of or  take extracts therefrom by or through  any of the officers of the CLIENT authorised in that behalf.
 
 
8.      PAYMENTS
 
a)   The said Products shall be supplied by the MANUFACTURER to the CLIENT at prices determined in accordance with clause 4(a) above. The CLIENT shall make payments to the MANUFACTURER within ___days from the date of invoice/delivery of the said Products whichever is later. This may be varied from time to time by mutual Agreement.
 
b)   Further it is agreed that Parties that the total expenses envisaged in the manufacture of the said Product would be Rs. _________________(_____________). [Mention if this expense would be divided between the Parties or if borne by only the CLIENT] 
 
 
9.       INDEMNITY & WARRANTIES
 
a)   The MANUFACTURER shall advise the CLIENT of the maximum retail prices at which the said Products may be sold having regard to the provisions of the _______________ [Mention specific price contract board/order to which the prices should comply with]  or   any   other applicable provisions in force from time to  time.  The MANUFACTURER shall be responsible for ensuring that the said prices advised to the CLIENT are in conformity with the  provisions of  the   _____________ Order or  any  other  applicable statutory  provisions in force form time to  time, and  shall be responsible for compliance with  all the  statutory  requirements  pertaining  to   the selling prices of  the  said Products. The MANUFACTURER shall keep the CLIENT indemnified against any loss, damage or responsibility which may arise if there is any breach of the provisions of the __________________ Order or any other statutory provisions or requirements pertaining to the selling prices of the said Products.
 
b)   The MANUFACTURER guarantees and warrants that  the said  Products manufactured and  packed  hereunder shall  in all respects be strictly  in  accordance with   the  statutory    requirements pertaining hereto  and in accordance with the standards  and specifications  disclosed and communicated by  the CLIENT  to the MANUFACTURER.  The MANUFACTURER further guarantees and warrants that:
 
i.   the  said  Products will be  manufactured  in conditions,  premises  and  facilities which comply in all respects with the statutory requirements applicable thereto.
 
ii.   all waste or rejects arising out of or during the process of manufacture shall be destroyed by the MANUFACTURER in accordance with Law at  its  cost so as to ensure that the  same
iii.   does not leave the said factory  premises under any circumstances whatsoever.
 
c)   The MANUFACTURER shall indemnify and keep indemnified the CLIENT at all times from and against all actions, suits, proceedings, claims, demands and expenses of whatsoever nature made or suffered or incurred by the CLIENT whether by reason of or by virtue of the efficacy or quality of the said Products or by reasons of or by virtue of any non-performance or non-observance by the MANUFACTURER of any terms and conditions of this Agreement.
 
d)   The MANUFACTURER shall be solely and exclusively liable for payment of all taxes, duties and levies payable by the MANUFACTURER including excise duty, octroi and sales tax, if any, on or in connection with the manufacture and/or sale of the said Products by the MANUFACTURER to the CLIENT under and in accordance with this Agreement and the CLIENT shall in no event be liable or responsible therefor. In the event any claim, penalty or liability is incurred by the CLIENT in this behalf at any time, the MANUFACTURER shall indemnify and keep indemnified the CLIENT from and against all such claims.
 
 
10.   INVENTORY MANAGEMENT
 
a)   MANUFACTURER agrees to purchase components according to the CLIENT approved vendor list (AVL) including any sourcing plans.
 
b)   All CLIENT tooling/equipment furnished to MANUFACTURER or paid for by CLIENT in connection with this Agreement shall:
 
i.   Be clearly marked and remain the personal property of CLIENT.
 
ii.   Be kept free of liens and encumbrances.
 
c)   Unless otherwise agreed, CLIENT is responsible for the general maintenance of CLIENT tooling/equipment.
 
d)   MANUFACTURER shall hold CLIENT property at its own risk and shall not modify the property without the written permission of CLIENT. Upon CLIENTs request, MANUFACTURER shall redeliver the property to CLIENT in the same condition as originally received by MANUFACTURER with the exception of reasonable wear and tear. In the event the property is lost, damaged or destroyed, MANUFACTURERs liability for the property is limited to the book value of the property.
 
 
 11.  TRADE MARKS; INTELLECTUAL PROPERTY
 
a)   The  MANUFACTURER shall for and on behalf of the CLIENT, affix or apply the said Mark  on the  said Products and/or the  labels and/or the packages thereof which are to be supplied to the CLIENT pursuant to  this Agreement. Such affixation shall be in such a manner as is directed by the CLIENT. Save as aforesaid,  the MANUFACTURER shall  not  use, nor shall be deemed to have the right to use the  said Mark in  connection  with  or  in relation to any product of whatsoever  nature made or dealt with by the MANUFACTURER. The MANUFACTURER hereby covenants that it  shall not use the said Mark in  any manner whatsoever which  may  jeopardise the significance, distinctiveness or validity of the  said Mark and shall apply and affix the said Mark only in pursuance of its obligations under this Agreement. The MANUFACTURER shall not be entitled to use or affix the said Mark on any products or goods except the said Products to be supplied to the CLIENT hereunder.
 
b)       Nothing herein contained shall at any time during the continuation of this Agreement   or after the expiry or earlier determination thereof give or be deemed to give or shall be intended to give or confer upon the MANUFACTURER any right, title, interest  or claim in or to the said Mark which shall continue to vest solely and  absolutely in favour of the CLIENT.
 
c)    The MANUFACTURER shall during the continuance of this Agreement  use its best endeavours to discover any infringement or passing off or suspected infringement  or  passing off or imitation of the said Mark coming to its knowledge and shall communicates the same to the CLIENT and assist the CLIENT in any action to be taken in such circumstances.
 
d)   The MANUFACTURER hereby declares that it has not and shall not any time:
 
i      take any action which shall or may impair the right title or interest of the CLIENT to the said Mark or create any right, title or interest therein or thereto which  may be adverse to the CLIENT.
 
ii.   use the said Mark  upon or in relation to any goods on its own account or otherwise for any other purpose.
 
iii.   use the said Mark upon or in relation to any goods other than the said Products meant  for supplies to the CLIENT.
 
iv.      permit the use of the said Mark  by any other  person, firm or body corporate.
 
v.   register or attempt to  register  any  mark similar to the said Mark.
 
   e)    Each Party (the “indemnifying party”) shall defend, indemnify, and hold   harmless the other party from any claims by a third party of infringement of intellectual properties resulting from the acts of the indemnifying party pursuant to this Agreement, provided that the other party: (i) gives the indemnifying party prompt notice of any such claims, (ii) renders  reasonable assistance to the indemnifying party thereon, and (iii)  permits the indemnifying party to direct the defence of the settlement of such claims.
 
 
12.       LICENCES & STATUTORY COMPLIANCES
 
a)    The  MANUFACTURER shall at all times comply with all applicable laws, rules and  regulations  from time to time in force including without  prejudice to  the  generality  of the foregoing, strictly comply with the provisions  of  the  _____________[Mention any specific Act, or legislation to comply with], safety laws and  regulations, laws and regulations relating to  procurement of materials including  imported materials, the Central Excise and Salt Act, 1944, and the rules, regulations  and  notifications made or issued  thereunder, relating to or appertaining to the due and  proper performance of  its duties and obligations under this Agreement . In the event of the MANUFACTURER committing a breach of  this  clause the MANUFACTURER shall indemnify and  keep indemnified  the CLIENT of, from and against  all claims, demands, actions,  proceedings, fines, penalties, expenses and other liabilities of whatsoever nature or brought against sustained or incurred by the CLIENT and whether paid for or not arising out of or as a result of such breach by the MANUFACTURER.
 
   [Also describe what the MANUFACTURER warrants and acknowledges in terms of the licences and approvals it has obtained for its manufacturing processes]
 
13.      INSURANCE
 
         The MANUFACTURER  shall at its cost take a comprehensive insurance policy [or specific a definite amount] to cover all the raw and packaging materials, stocks in process and finished products against inter alia, theft, fire, riots, civil commotion, natural calamities, including floods.
 
 
14.      NO AGENCY
 
a)      Nothing herein contained shall be deemed to construe or is intended to construe the MANUFACTURER as an agent of the CLIENT.  It is further hereby expressly agreed and declared that MANUFACTURER shall not at any time:
               
i.   enter  into a contract in the name of or purporting  to be made on behalf  of  the CLIENT;
 
ii.   by any act pledge the credit of the CLIENT or impose or  attempt to impose any contractual obligations on the CLIENT; and
 
iii.   either in its own offices, factories or depots or on invoices, bill heads or letter papers or any other place or by any other means, oral or written, make any statement to the effect or make a representation calculated or liable to include others  to believe that it is an agent of the CLIENT.
 
 
b)     The MANUFACTURER shall not sub-contract or delegate to any other person, firm or CLIENT  the whole or any part of the manufacture or  packaging of  the  said Products under this Agreement nor  shall the MANUFACTURER assign this Agreement or any of its rights, duties or obligations thereunder without the prior consent in writing of the CLIENT in that behalf.
 
 
15.      TERMINATION
 
a)     Notwithstanding anything to the  contrary herein contained  either  party shall  be  entitled to terminate this Agreement forthwith  upon the happening of any of the following events:
 
i.   Upon the other party committing a breach of any terms and conditions of this Agreement;
 
ii.        Upon the other party making any  arrangement or  composition with its creditors or if an execution or other process shall be levied upon or if  an  encumbrancer shall take possession of or a receiver shall be appointed  in respect of the assets or properties of  the other party or any part  thereof;
 
iii.      Upon the other party going into liquidation for the purpose of amalgamation or reconstruction.
 
b)      Notwithstanding anything contained hereinabove and without prejudice to the rights and remedies open to the parties, either party shall be entitled to terminate this Agreement without assigning any reason by giving three months notice to the other.
 
c)     The termination of this Agreement for any reason whatsoever shall not entitle the other party to any compensation therefor and shall be without prejudice to any claim or right of action previously accrued or acquired by the parties.
 
d)     Upon termination or expiry of this Agreement for any person whatsoever, the MANUFACTURER shall:
 
i.   forthwith discontinue manufacture and packing of the said Product;
 
ii.   forthwith discontinue any and every application and or affixation of the said Mark or any colourable imitation of the same in connection with any goods,  products, service, business or trade so as to cause confusion or deception or to detract from  or adversely affect the right, title or interest of the CLIENT in or to the said Mark  in any manner whatsoever;
 
iii.   not make any use whatsoever of the standards, specifications, information or  know-how disclosed or communicated to it by the CLIENT hereunder or acquired by the MANUFACTURER in connection with or as a result of  the  implementation of this Agreement or the MOU;
 
iv.   not  retain  any  copies or  extract  of  any documents or  drawings of the know-how  nor shall it make any use thereof or of any kind of benefits of research or new  methods of  manufacture acquired by it  concerning  the manufacture of the said Product;
 
v.   not  to sell to anyone else any quantity of  the  said  Products that may then be  in  the possession or custody of the MANUFACTURER;
 
vi.   destroy at its cost any stocks  of  packing material then  in  the  possession of   the MANUFACTURER and  the CLIENT shall not be required to purchase the whole or part thereof;
 
vii.   not directly or indirectly, represent, describe or cause to be represented   or described on any label, advertising material, circular or in any manner whatsoever that  it was formerly manufacturing the said  products under the said Mark owned by the CLIENT.
 
 
16.  GENERAL
 
 a)    This  Agreement shall be deemed to represent  the entire Agreement between  the  parties   hereto regarding  the  subject matter here of  and  shall supersede, cancel and replace any and all previous agreements, arrangements, writings or undertakings in  this  behalf between the parties  hereto.  
 
b)    Any  time relaxation indulgence or  concessions granted, made or shown by the CLIENT to or in favour of the MANUFACTURER under  this Agreement  shall  not  in  any way prejudice or affect  its  rights or remedies under this Agreement  or at law.
 
c)    This Agreement may be executed in one or more counterparts, each of which will be deemed the original, but all of which will constitute but one and the same document. The parties agree this Agreement and its addenda may not be modified except in writing signed by both parties.
 
d)     Neither party shall delegate, assign or transfer its rights or obligations under this Agreement, whether in whole or part, without the written consent of the other party provided, however, upon prior written notice to MANUFACTURER CLIENT   may assign or transfer its rights to third parties.
 
e)       Neither party shall be liable for any failure or delay in its performance under this Agreement  due to acts of God, acts of civil or military authority, fires, floods, earthquakes, riots, wars or any other cause beyond the reasonable control of the delayed party provided that the delayed party: (i) gives the other party written notice of such cause within fifteen (15) days of the discovery of the event; and (ii) uses its reasonable efforts to remedy such delay in its performance.
 
f)        This Agreement and the rights and obligations of the Parties hereunder shall, be construed in accordance with and be governed by the courts of _____________, in the State of ______________, India. In the event of disputes, differences, claims and questions between the parties hereto arising out of this Agreement or in any way relating hereto or any term, consultation or provision herein mentioned or the construction or interpretation thereof or otherwise in relation hereto, the parties shall first endeavour to settle such differences, disputes, claims or questions by friendly consultation. In the event of failure of parties to resolve by friendly consolation the dispute, the disputes, differences, claims and questions between the Parties hereto arising out of this Agreement or in any way relating hereto or any term, condition or provision herein mentioned or the construction or interpretation thereof or otherwise shall be referred to arbitration. The proceedings held by the arbitrator in making the award will be in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The award of the arbitrator shall be final and binding on the parties.
g)     This Agreement shall be executed in duplicate. The original it shall be retained by CLIENT and the duplicate by the DISTRIBUTOR.
 
 
IN   WITNESS  WHEREOF  the  parties  hereto   have executed  these  presents the day and year  first  above  written.
 
 
SIGNED AND DELIVERED by               ]
 
by Mr_____________________________   ]
 
Director, in the presence of             ]
 
 
SIGNED AND DELIVERED by                ]
 
___________________________            ]
___________________________            ]
___________________________            ]
 
 
 
in the presence of                           ]    
 
SCHEDULE 1
Price
 

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