Jewelry Manufacturing Agreement by bobzepfel

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									                           Jewelry Manufacturing Agreement

       This Jewelry Manufacturing Agreement (“Agreement”) is entered into as of the
day of        ,       (“Effective Date”) by and between
       (“Designer”) and ___________________ (“Manufacturer”).


       A.      Designer has created and own designs, copyrights, patents, trade secrets and
trademarks for use in fine and costume jewelry and wishes to have Manufacturer make various
jewelry items, including rings, necklaces, charms, brooches, earrings and pendants incorporating
these designs, copyrights, patents, trade secrets and trademarks (“Products”).

        B.      Manufacturer wishes to make Products incorporating these designs, copyrights,
patents, trade secrets and trademarks and deliver them to Designer.

        In consideration of the foregoing and of the mutual covenants contained herein, the
parties agree as follows:

1.     Definitions.

       1.1     “Products” means solely the products of Designer specified on Exhibit “A”
               attached hereto and incorporated herein by reference. Designer shall determine, in
               its sole discretion, whether a particular product or article falls within the definition
               of Product and Designer reserves the right, in its sole discretion, to eliminate any
               product or article as Product at any time so long as the product or article is
               eliminated generally from the Product line. Designer also reserves the right to add
               new products or articles as Products.

       1.2     “Design Rights” means the rights, without limitation, including copyrights, trade
               secrets, know-how, trademarks and/or patents, as well as, without limitation,
               rights with respect to product materials, colors, patterns, style, in and to any
               designs for Products, and to any package designs, labels, advertising or
               promotional material and any other designs using or used in conjunction with the

       1.3     “Marks” means the trademarks of Designer as set forth on Exhibit “B” attached
               hereto and incorporated herein by reference.

       1.4     “Property” means the intellectual property rights of Designer relating to the
               Products that Designer determines, in its sole discretion, to be desirable or
               necessary for Manufacturer to exercise the rights granted in this Agreement.

       1.5     “Rights” means collectively the Marks and Property.

2.   Production and Manufacturing.

     2.1   Standards and Goodwill. Manufacturer acknowledges that Designer has made a
           substantial investment in developing Products of high quality and design and
           developing and fostering an image and reputation of high quality, design, prestige
           and integrity under the Marks and Property and that the consuming public and
           industry now associate the Marks and Property with products of consistently high
           quality and design. Manufacturer further acknowledges that the terms and
           conditions of this Agreement are reasonable and necessary to assure that all
           Products sold under this Agreement consistently conform to the high quality and
           design standards.

     2.2   Manufacturing. Manufacturer shall manufacture all of the Products in accordance
           with the high quality and design standards prescribed by Designer, consistent with
           the best practices of the jewelry industry. In this regard, Manufacturer shall
           exercise its best efforts to cooperate with Designer at all times in the coordination
           of Products manufactured by Manufacturer so that they are consistent with the
           style, image, design and quality of other products sold under the Rights. If any
           Products manufactured by Manufacturer fail to conform to such standards, solely
           as reasonably determined by Designer, then Designer, in its sole discretion, may
           prohibit Manufacturer from using any Rights in connection with such non-
           conforming Products. Manufacturer shall supply Designer with a Certificate of
           Inspection verifying that all Products manufactured by Manufacturer were
           manufactured to Designer’s standards.

     2.3   Samples. As early as possible, and in any event prior to the commencement of
           any production run, Manufacturer shall furnish to Designer, at no expense to
           Designer, one sample of each Product that Manufacturer intends to manufacture
           under the Rights. Once the initial sample is approved by Designer, Manufacturer
           shall then furnish to Designer one complete final sample for each style to be made
           by Manufacturer. Designer shall have the right to exercise quality control and line
           content over the Products manufactured and sold by Manufacturer by making any
           changes or corrections in such samples as may be required, in Designer's sole and
           reasonable determination, to maintain the high quality and design standards
           prescribed by Designer, and Manufacturer shall make and incorporate such
           changes or corrections at Manufacturer's sole cost and expense. Manufacturer
           shall not make any changes to any sample after approval by Designer without
           resubmitting the sample for approval.

     2.4   Top of Production Samples. As soon as possible after completion of the first
           production run of a Product, Manufacturer shall furnish to Designer, at no expense
           to Designer, one top sample from the first production run of such Product.
           Designer shall have the absolute right, in its sole discretion, to approve or

            disapprove of such production samples. Manufacturer shall not make any changes
            to any sample after approval by Designer without resubmitting the sample for
            approval pursuant to Section 2.3. If Designer rejects any sample, Manufacturer
            shall discontinue the production of the Product and shall coordinate with
            Designer, at Manufacturer's expense, to make changes and corrections to conform
            the Product to the high quality and design standards and shall resubmit a sample
            for approval pursuant to Section 2.3. In addition, to ensure consistent quality of
            production runs, Manufacturer shall furnish to Designer, at no expense to
            Designer, two additional production samples of Products [in any given season] as
            Designer may, from time to time, request for the purpose of comparison with
            earlier samples. If Designer requires more than two such additional samples
            Manufacturer shall provide such excess additional samples to Designer at
            Manufacturer's regular wholesale price, reduced by any normal trade discounts
            given by Manufacturer for sample sales.

3.   Services. Designer will furnish to Manufacturer samples and Design Rights necessary for
     the services under this Agreement. Designer will designate approved materials of which
     Manufacturer will order and take delivery only from approved vendors. Manufacturer
     agrees to perform services for Designer including finishing Products. Manufacturer will
     provide counter-samples and production samples for approval by Designer. All Products
     will be made strictly in accordance with the applicable Production Ticket, Quality
     Audit/Release form and approved samples. Designer may also provide specifications,
     which must be used. All construction materials, colors, accessories, and finishes must be
     delivered as ordered. Products will be packed strictly in accordance with the instructions
     from Designer. If the Products are packed in any other manner, the invoice price will be
     reduced by the cost of repacking.

4.   Shipping and Delivery. Unless otherwise stated by Designer in writing, all shipments
     shall have 60 day net term. Manufacturer shall adhere to all Designer delivery dates and
     cancellation dates. If Manufacturer meets Designer’s cancellation date, Designer shall be
     entitled to 60 day net terms. All shipments shall be invoiced by Manufacturer prior to
     shipping, and the invoices shall be sent to Designer’s corporate department for approval.
     All shipments by Manufacturer shall include an accurate packing list, and all production
     orders shall have a receipt confirmation. All finished Products will be returned to
     Designer no later than the cancellation date stated on the Production Ticket. If they are
     not, Designer may cancel the order on the Production Ticket. No extensions of time will
     be honored unless in writing and signed by Designer. Manufacturer understands that
     Designer has made or will make commitments to its customers for delivery of the
     completed Products on the basis of timely completion by Manufacturer. Financial
     adjustments will be assessed for late deliveries as follows:

     4.1    Shipments received by Designer 10 days or more late: 20% deduction from the

       4.2    Shipments received by Designer 30 days or more late: 100% deduction from the
              price (i.e., the shipment is of no value to Designer and Manufacturer
              acknowledges and agrees it has harmed Designer and will provide it with credit of
              ____% of the purchase price for subsequent shipments.

        These reductions are reasonable estimates of the costs which Designer would incur; these
costs are difficult to fix precisely.

5.     Payment. The price is stated on the Production Ticket and is landed duty paid, Designer’s
       warehouse in                   . All unit prices include delivery to Designer’s warehouse
       in                     , and all shipments, unless they are direct shipments, will be sent
       there. If Designer’s customers return Products because they are defective, Manufacturer
       will be allowed to inspect them. Designer may deduct the full cost of such Products from
       any outstanding invoice, if they are in part a result of Manufacturer’s poor quality.

6.     Approval of Work. "Defective" means Products which do not conform strictly to the
       approved samples, are not strictly in the size scale specified, have not been manufactured
       in accordance with the instructions provided by Designer, or has been assembled and
       sewn by Manufacturer with production-work from different materials. Designer will not
       pay for Products which are Defective. Manufacturer must deliver all Products, including
       Defective Products.

       A production run may be rejected if more than 10% of the ordered quantity is Defective
       with a variety of minor defects. A production run may be rejected if more than 4% of the
       ordered quantity is Defective with a variety of major defects. A production run will be
       rejected if the Products have defects which make them unsafe. If an entire production run
       is rejected by Designer, Manufacturer will refund the amount of the letter of credit for its
       services on that production run. Designer will have no obligation to pay Manufacturer for
       its services on that production run. If the inspection discloses defects in excess of the
       established AQL (Acceptable Quality Level), Manufacturer will pay Designer’s entire
       cost of a 100% inspection. If there are Defective Products and Designer elects not to
       reject the production run, Designer may repair the Defective Products. Manufacturer will
       pay for all cost incurred by Designer to repair defective Products.

7.     Care of Samples and Products.

       7.1    Manufacturer will keep the Designer samples at its principal business address and
              will not move them elsewhere without notifying Designer.

       7.2    Manufacturer will insure the Designer Products as provided in Section 18 below.

       7.3    Upon request, Manufacturer will return all samples. If there is a dispute between
              Designer and Manufacturer, and Designer pays the cost, Manufacturer will send
              the samples to Designer.

     7.4   Manufacturer will provide Designer a monthly report of inventory of: items
           bearing the Designer trademark within fifteen (15) days of the end of each
           calendar month. Manufacturer will promptly provide to Designer a weekly
           activity report and, if so requested by Designer, a biweekly work-in-process

8.   Term and Termination.

     8.1   Term. This Agreement is in effect for as long as Designer issues Production
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