SAMPLE MANUFACTURE AGREEMENTCompany Ltd (hereinafter referred to as “Consignor”).Address:Contacts:Tel:Fax:Supplier:Address:Contacts:Tel:Fax:This Sample Manufacture Agreement (hereinafter referred to as “this Agreement”) is entered into as of (hereinafter referred to as “Effective Date”), by and between XXX Company Ltd (hereinafter referred to as “Consignor”) and _______________________________ (hereinafter referred to as “Supplier”). Consignor and Supplier shall be hereina fter respectively referred to as the “Party” or collectively referred to as the “Parties”.1.TERM1.1 This Agreement shall be effective as of the Effective Date and shall be effectivefor a period of one (1) year. After the expiration of the initial term, this Agreement shall be automatically renewed for successive periods of one (1) year unless one Party notifies the other Party in writing not less than ninety (90) days prior to the end of the initial or any renewal term, that this Agreement shall terminate at the end of the then current term, or unless earlier terminated in accordance with the terms and conditions of this Agreement.2.SCOPE OF AGREEMENT2.1 This Agreement shall be applicable to any and all manufacture business ofsamples between Consignor and Supplier. The Parties acknowledge that thisAgreement will not constitute a commitment for Consignor to order any particular quantity of sample from Supplier.3.PURCHASE ORDER3.1 Samples to be purchased by Consignor from Supplier shall be subject to separatepurchase orders (hereinafter referred to as “Purchase Order”), which will specify particulars, including but not limited to price, quantity, delivery date and description of the samples. Consignor has the right to place Purchase Orders with Supplier. Supplier shall notify Consignor in writing whether or not Supplier accepts Purchase Orders within two (2) working days from the date of receipt of the Purchase Order. Provided, however that, as long as the Purchase Order complies with the terms and conditions of this Agreement, Supplier shall make its reasonable and best efforts in good faith to accept the Purchase Order. If Consignor does not receive Supplier’s reply regarding the acceptance or refusal ofa Purchase Order within the said period, the Purchase Order shall be deemed tohave been accepted by Supplier. The Purchase Order shall become effective upon acceptance (actual or deemed) by Supplier. Consignor shall reserve the right to vary a Purchase Order at any time before the Supplier’s con firmation of the Purchase Order without incurring any liability to Supplier. In case there are any conflicts between this Agreement and the Purchase Orders, the provisions of this Agreement shall prevail.3.2 Consignor has the right to modify the content of Purchase Orders at any time,including but not limited to quantity, delivery date and design requirements.Consignor shall notify Supplier in writing within a reasonable period. Supplier shall promptly manufacture samples in accordance with the modified Purchase Orders placed by Consignor. In the event that Consignor cancels any Purchase Order, the Supplier shall cease manufacturing such samples immediately upon receipt of Consignor’s cancellation notice.3.3 On the condition that Consignor modifies or cancels the Purchase Orders,Suppliers shall make best efforts to reduce losses with proper arrangement of tools, materials, packages, staff, transportation, etc. Any reasonable and necessary additional costs actually incurred by Supplier resulting from Co nsignor’smodification or cancelation of a Purchase Order shall be borne by Consignor under the premise that Supplier has submitted evidence to prove that such additional costs is attributable to Consignor and Consignor has confirmed in writing. Supplier shall bear the losses incurred and expanded due to their own cause.4.PRICE AND PAYMENT4.1 The price for the samples shall be mutually confirmed by the Parties and specifiedin the Purchase Order. All samples unit prices shall include [the total samples package, individual and master cartons, carton inserts, and samples literature].Future price agreements for ongoing samples and other adjustments to the samples shall be as mutually agreed by the Parties in writing.4.2 Supplier shall be entitled to issue qualified invoice to Consignor for the advancepayment, that is, thirty percent (30%) of the total price of the Purchase Order (hereinafter referred to as “Advance Payment”), at any time after acceptance of the Purchase Order. Consignor shall make payment within thirty (30) working days from its receipt of the qualified invoice.4.3 Supplier shall be entitled to issue qualified invoice to Consignor for the secondpayment, that is, seventy percent (70%) of the total price of the Purchase Order (hereinafter referred to as “Second Payment”) at any time after Consignor’s acceptance of the Simples. Consignor shall make payment within thirty (30) working days from its receipt of the qualified invoice.4.4 Each invoice shall quote the date and the number of the Purchase Order:5.MATERIALS5.1 All material shall be furnished by Supplier.5.2 The materials shall comply with the quality standards of Consignor and all otherapplicable quality standards.5.3 Supplier shall carry out strict examination on the materials at the time it receivesthe materials. Supplier shall keep original records of the aforesaid inspection and provide to Consignor upon Consignor’s request.6.QUALITY6.1 Consignor will send Design Document to Supplier via email or by other way asConsignor chooses, and Supplier shall acknowledge the receipt of the Design Document in writing with company seal affixed thereto to Consignor within two(2) working days after the date of receipt of the Design Document. Supplier shallmanufacture the sample in compliance with the aforesaid Design Document.6.2 Where Supplier fails to provide the sample on time, Consignor shall have the rightto charge Supplier a penalty amounting to [___________] and require Supplier to continue to provide the sample within the grace period granted by Consignor.Where the sample is not provided within the aforesaid grace period, Consignor shall have the right to terminate the cooperative relationship under this Agreement between the Parties.6.3 Where the sample is rejected by Consignor in writing to Supplier, Consignor shallhave the right to require Supplier to make amendments to the sample within the time limit specified by Consignor, and the amendments shall meet the requirements of Consignor. Where Supplier fails to make the aforementioned amendments on time, Consignor shall have the right to charge Supplier a penalty amounting to [___________] and/or terminate the cooperative relationship under this Agreement between the Parties.6.4 In the event of enquiries on the Design Documents and the requirements ofConsignor on the samples during the manufacturing process thereof, Supplier shall consult with Consignor in time.7.PACKING AND TRANSPORTATION7.1 Supplier warrants that at the time Consignor receives the samples packing andtransportation of the samples will comply with requirements of Consignors in terms of manner and standard.8.DELIVERY AND INSPECTION8.1 “Delivery” means the supply and delivery of the samples by Supplier toConsignor in accordance with the Purchase Order, and deliver the sample together with specification, photo and serial number identification to Consignor via mail or by other way as designated by Consignor within the time limit as set forth in the Purchase Order.8.2 Supplier acknowledges that time is of the essence and that any delay in Deliveryof the samples may cause material damage and losses to Consignor. Therefore, Supplier shall deliver the samples in strict compliance with its obligations under this Agreement and the Purchase Order.8.3 If a delay in Delivery of the samples is anticipated by Supplier, Supplier shallnotify Consignor promptly after Supplier becomes aware of such potential delay, advising the reason and the estimated duration of the delay. In such event, in addition to any remedy under any applicable laws and regulations, Consignor shall have the right to:8.3.1 require Supplier, at Supplier’s expense, to use any available means ofexpedited transportation for Delivery within the time limit specified by Consignor; or8.3.2 charge Supplier one percent (1%) or RMB 500 (whichever is higher) perday of the total price of the affected Purchase Order as penalty if a delay in Delivery of the samples occurred; or8.3.3 reject the samples and be refunded the Advance Payment of the PurchaseOrder, and charge Supplier thirty percent (30%) or RMB 50000 (whichever is higher ) of the total price of the affected Purchase Order as a penalty if Delivery of the samples is delayed for more than 10 days.8.3.4 Consignor shall have the right to claim against Supplier any and all losses,damages, costs and expenses (including legal expenses) incurred or paid by Consignor.8.4 If Supplier delivers the samples in excess of the amount set out in the PurchaseOrder, or in more than three (3) working days advance of the date of Delivery, Consignor shall have the right to:8.4.1 return such total amount of, or such part in excess of, the samples toSupplier on freight collect basis; or8.4.2 accept such samples in accordance with the terms and conditions of thisAgreement and the Purchase Order.8.5 Ownership and risk of the loss or damage to the Simples shall pass from Supplierto Consignor at the time of Consignor’s Acceptance of the samples.8.6 Supplier warrants that the samples shall be free from and clear of any lien or anyother type of security interest or claim from any person. Supplier shall indemnify, defend, and hold harmless Consignor from any lien and any claim upon the samples and/or the material arising from or in connection with this Agreement, including, but not limited to, workers’ wages, the material, or the services to be furnished by Supplier.8.7 Consignor shall have sixty (60) working days from the date of receipt of samplesto inspect and test for conformity with Design Document and other requirements of Consignor.8.8 If any samples supplied by Supplier to Consignor are not packed in accordancewith packing requirements of Consignor, Consignor, without prejudice to other rights provided herein, shall have the right to reject such samples and return to Supplier at Supplier’s expense the whole or any part of such samples.8.9 If a non-conformity is confirmed by Consignor during the inspection afterConsignor’s receipt of the samples, in addition to any remedy under any applicable laws and regulations, Consignor shall have the right to:8.9.1 accept the whole or any part of the samples at a discounted price, whereConsignor, in its own discretion, deems that the reason for non-conformity is minor. The discounted price for such samples shall be agreed upon by the Parties;or8.9.2 reject the samples and be refunded the Advance Payment, and chargeSupplier thirty percent (30%) of the total price of the affected Purchase Order as a penalty. Furthermore, Consignor shall have the right to claim against Supplier any and all liability, losses, damages, costs and expenses (including legal expenses) awarded against or incurred or paid by Buyer therefrom; or8.9.3 reject the samples and require Supplier, within a time limit specified byConsignor, to remedy fully the non-conformity or replace the affected samples and resubmit the samples for re-inspection. In such event:(a) Consignor shall have the right to withhold the Second Payment of thePurchase Order, until the resubmitted samples are accepted byConsignor;(b) Consignor shall have the right to inspect the resubmitted samples;(c) Where Supplier fails to resubmit the samples on time, a delay in Deliveryshall be deemed and Consignor shall have the rights set forth in thisAgreement; and(d) Supplier shall bear all costs incidental to such repair and/or replacement,including the removal, replacement, re-installation, and/or re-assembly ofthe samples, including but not limited to, the costs and expenses arisingout of the re-inspection by Consignor of the remedied or replacedsamples.9.INTELLECTUAL PROPERTY RIGHTS9.1 Supplier acknowledges that the rights related to the images, trademarks, patentsand other intellectual properties provided by Consignor to Supplier during the period performing this Agreement belongs to Consignor. This Agreement shall notbe construed as giving the rights, ownership or interest of any intellectual property pertaining to the sample to Supplier. Supplier further acknowledges that the good will or reputation produced in the process of using the intellectual property of Consignor shall completely and exclusively belong to Consignor.9.2 Supplier shall not furnish Consignor’s intellectual property rights or confidentialinformation (including technique data, drawing, etc.) to any third party. Without Consignor’s consent, Supplier shall not sell, lend or provide the samples hereunder by itself or via others.9.3 Supplier shall not sell the copies or change, reverse engineering, decompose orimprove products or manufacture the derivatives of products during the valid term of this Agreement or after its termination. Any change, derivative or improvement without authorization shall belong to Consignor and the ownership belongs to Consignor ab initio.9.4 Supplier shall procure its shareholders and employees not to violate theobligations hereunder, failing which Supplier shall be deemed as in default.Supplier’s violation of this Article shall be deemed as material breach of the Agreement and Supplier shall pay Consignor RMB 200,000 as liquidated damages. If the liquidated damages is insufficient to compensate for Consignor’s losses, Supplier shall also compensate the margin between the liquidated damages and all the losses suffered by Consignor (including legal cost, attorney fee, etc.).9.5 Where Supplier commits a breach hereunder, Consignor shall have the right, inaddition to any other relief or remedies, and without prejudice to any rights rendered herein, to terminate this Agreement and/or all or any part of any Purchase Order upon written notice.10.CONFIDENTIALITY10.1 Supplier knows that it will receive or know the confidential informationdepending on this Agreement or otherwise during the period performing this Agreement. Such confidential information includes but not limited to anydocuments, materials, knowhow and other information in whatever form, whether technical or commercial, received or obtained by it or its Affiliates relating to the negotiation or execution of this Agreement or any documents executed in accordance herewith. Unless otherwise agreed herein, the confidential information and confidentiality obligations shall be subject to the Confidentiality Agreement signed by both parties separately.10.2 Supplier promises to keep the confidential of the confidential information at anytime and protect the confidential information from theft, damages, loss or unauthorized acquisition. Without the prior written consent of Consignor, if both parties have cooperated before signing the Agreement involving the provision of confidential information, Supplier shall not directly or indirectly or authorize or permit others to use, disclose, develop, copy or modify any confidential information, and not to authorize or permit a third party to use, disclose, develop, copy or modify any confidential information for the purposes beyond the rights and obligations hereunder in the effective period and thereafter.10.3 Supplier undertakes it will only disclose the confidential information to itsmanagers, employees, agents or contractors for the purpose of this Agreement, and procure such managers, employees, agents or contractors to know and observe this article and the confidentiality obligations agreed by both parties.10.4 If Supplier is aware of any non-authorized disclosure, improper use,embezzlement or other damages (whether on purpose or not), Supplier shall notify Consignor immediately.10.5 Supplier shall, at Consignor’s request, return all originals, copies, reproductionsand summaries of Confidential Information and all other tangible materials and devices provided to Supplier as Confidential Information, or at Consignor’s option, certify destruction of the same.10.6 Supplier may disclose the information according to the laws, regulations or thecommand of relevant departments. When the condition allows, Supplier shall notify Consignor of the intended disclosure in advance to give reasonablechances to Consignor for defense.10.7 Supplier shall ensure its shareholders and employees will not breach theobligations hereunder, otherwise Supplier shall be deemed as in default.Supplier’s breach of this Article or the confidentiality agreement between the Parties, no matter directly or indirectly, shall be deemed as material breach of Agreement and Supplier shall pay Consignor RMB 200,000 as liquidated damages. If the liquidated damages are insufficient to compensate for Consignor’s losses, Supplier shall assume the margin between the liquidated damages and all the losses suffered by Consignor (including legal cost, attorney fee, etc.)10.8 The terms and obligations hereunder shall survive after the termination orexpiration of this Agreement.10.9 Where Supplier commits a breach hereunder, Consignor shall have the right, inaddition to any other relief or remedies, and without prejudice to any rights rendered herein, to terminate this Agreement and/or all or any part of any Purchase Order upon written notice.11.WARRANTIES AND LIABILITYTERMINATION11.1 Supplier warrants that Supplier will, solely for Consignor, manufacture, supplyand deliver samples in accordance with the design documents provided by Consignor (hereinafter referred to as “Design Document”), and other requirements of Consignor, and will not quote prices, manufacture, supply or deliver the aforesaid samples or samples of the same or similar appearance to any third party.11.2 Supplier warrants that the price and other conditions in regard to the sale of thesamples offered hereunder or under other agreements between the Parties in the future shall be no less favorable than the prices and other conditions of sale that Supplier offers to any other customers for the same or similar samples.Consignor may benchmark prices by spot buys, quotes, or other independent data. If Supplier offers more favorable prices or other conditions of sale to anyother person, Supplier shall offer to the same to Consignor on both a retroactive and prospective basis.11.3 Supplier further warrants at all times that:11.3.1 it will comply with all government requirements that may be applicablefrom time to time; and11.3.2 it has obtained all necessary governmental or other necessary permits andapprovals for the purpose of this Agreement; and11.3.3 it has sufficient experience and ability to fulfill its obligation; and11.3.4 it is financially solvent.11.4 Supplier shall indemnify Consignor in full against all liability, loss, damages,costs and expenses (including legal expenses) awarded against or incurred or paid by Consignor as a result of or in connection with:11.4.1 any breach by Supplier of any warranty, covenant or other provisions setout in this Agreement; and11.4.2 any claim that the samples or their packaging infringes upon, or theirimportation, use or resale, infringes upon, the patent, copyright, design right, trade mark or other intellectual property rights of any other person, except the samples manufactured strictly in accordance with the Design Documents; and11.4.3 any liability or sample liability under the applicable law under whichliability in respect of the samples is awarded against or incurred or paid by Consignor or its agents, employees, employers, associates, affiliates or any business partners to whom Consignor finally has to pay or has paid; and11.4.4 any act or omission of Supplier or its employees or agents in supplying,delivering and installing the samples.11.5 Where Supplier commits a breach hereunder, Consignor shall have the right, inaddition to any other relief or remedies, and without prejudice to any rights rendered herein, to terminate this Agreement and/or all or any part of any Purchase Order upon written notice.12.FORCE MAJEURE12.1 Neither Consignor nor Supplier shall be liable to the other or be deemed to be inbreach of this Agreement by reason of any delay in the performing, or any failure of its obligations in relation to the samples, if the delivery or failure is beyond that Party’s reasonable control so that the effect could not have been reasonably expected at the time of the conclusion of this Agreement or have been avoided or overcome by such party. However, the affected Party shall give written notification of such delay, including the anticipated duration of the delay or failure, to the other Party within five (5) working days after the event or occurrence.13.TERMINATION13.1 The Consignor shall be entitled to terminate this agreement without liability toSupplier by giving notice to Supplier at any time if:13.1.1 supplier files a certificate of dissolution or otherwise dissolves, terminates,or liquidates, or is merged with or is consolidated into any other corporation, limited liability company, partnership, or other entity, without the Consignor’s written consent; or13.1.2 under the PRC Law Supplier: (a) is adjudicated as bankrupt or insolvent;(b) fails to pay its debts as they mature; or13.1.3 Supplier ceases, or threatens to cease, to carry on business; or13.1.4 Supplier explicitly expresses or indicates by act its intention not to performits obligations under this Agreement; or13.1.5 Consignor reasonably apprehends that any of the events mentioned aboveis about to occur in relation to Supplier and notifies in writing Supplier accordingly.13.2 This Agreement can be terminated if the parties agree to do so upon negotiation.Furthermore, Consignor is entitled to terminate this Agreement by giving a written notice to Supplier not less than one month in advance. Such termination does not constitute breach of contract.13.3 In the event of any termination of this Agreement, the Supplier shall, upon theConsignor’s request, immediately return to the Consignor or the agent thereof, including without limitation, confidential information, specification, samples, all correspondence, reports, drawings and any other items of whatever nature supplied to the Supplier by the Consignor or the agent or owned by the Consignor or the agent pursuant to this Agreement.13.4 Such articles herein as those in regard to obligations of intellectual propertyprotection, non-disclosure of confidential information, the Supplier’s warranties and liability, and those in regard to the governing law and dispute resolution shall survive termination of this Agreement.14.MISCELLANEOUS14.1 ASSIGNMENTSupplier shall not assign any rights or assign any obligation hereunder, voluntarily or by operation of law, to any other person, firm, or corporation including any subsidiary or affiliate of Supplier, without the prior written consent of Consignor, and any assignment or transfer without such consent shall be null and void and Supplier shall remain jointly and severally liable to perform its obligations under this Agreement, notwithstanding its attempted assignment or transfer.14.2 GOVERNING LAWThis Agreement and all acts and transactions pursuant hereto and the rights and obligations of the Parties hereto shall be governed, construed and interpreted in accordance with the law of the People’s Republic of China(“PRC”), for thepurpose of this Agreement excluding Hong Kong, the Macau Special Administrative Region and Taiwan.14.3 DISPUTE RESOLUTIONAny dispute arising from performance of this Agreement shall be settled through negotiation between the Parties. If no agreement is reached, such dispute shall be submitted to Southern China International Economic and Trade Arbitration Commission for arbitration in Shenzhen to be conducted according to the arbitration rules in effect at the time of application for arbitration. The language to be used in the arbitral proceedings shall be Chinese. The Arbitration Tribunal shall be composed by three arbitrators. The arbitration award is final and binding upon the Parties.14.4 SEVERABILITYThe invalidity or unenforceability of any provision of this Agreement pursuant to any applicable law shall not affect the validity or enforceability of the remaining provisions hereof, but this Agreement shall be construed as if not containing the provision held invalid or unenforceable in the jurisdiction in which so held, unless, in the good faith opinion of Consignor, such invalid or unenforceable provisions comprise an integral part of, or are otherwise inseparable from the remainder of, this Agreement, in which case this Agreement, in such jurisdiction, shall immediately terminate and be of no further force and effect.14.5 ENTIRE AGREEMENTThis Agreement, together with its exhibits attached hereto, and any Purchase Order constitute the entire and only agreement between the Parties with respect to the subject matter contained hereunder, and supersede and cancel all previous agreements, negotiations, commitments, and understandings, oral or in writing, with respect to the same. For the purpose of this Agreement, reference to this Agreement herein shall be reference to this Agreement and its exhibits, as the case may be. Any release, discharge, abandonment, change, alteration, or modification to this Agreement, in any manner, orally or otherwise, shall only be made by an instrument in writing signed by duly authorized representatives of the respective Parties.14.6 LANGUAGEThis Agreement is executed in the English and Chinese languages. In the event of any discrepancy or conflict between English version and Chinese version, the Chinese version shall prevail.IN WITNESS WHEREOF, the Parties have caused this Agreement in duplicate to be executed by their respective duly authorized representatives effective as of the day and year first above written.Consignor: Supplier:[Full name of Consignor] [Full name of Supplier]________________________ ________________________ Authorized Representative Authorized Representative(signature and seal) (signature and seal)。
