Common use of Third-Party Manufacturers’ Conduct Clause in Contracts

Third-Party Manufacturers’ Conduct. Each Licensee shall require that all third party manufacturers employed by such Licensee in the manufacture of the Licensed Products shall comply with all applicable laws and regulations relating to the manufacture of such Licensed Products and meet or exceed such specifications set forth for the Licensed Products while this Agreement is in effect. (a) Each Licensee shall remain fully responsible for ensuring that the Licensed Products are manufactured in accordance with the terms of the Agreement, and such Licensee shall take the steps necessary to ensure that the third party manufacturer: (i) Produces the Licensed Products only as and when directed by such Licensee; (ii) Does not distribute, sell or supply the Licensed Product to any person or entity other than a Licensee; and (iii) Does not delegate in any manner whatsoever its obligations with respect to the Licensed Products. (b) In the event that any such manufacturer utilizes the Licensed Trademarks for any unauthorized purpose, the applicable Licensee shall cooperate fully in bringing such utilization to an immediate halt at such Licensee’s sole expense. If, by reason of such Licensee’s not having supplied the above mentioned agreements to Licensor or not having given Licensor the name of any supplier, Licensor makes any representation or takes any action and is thereby subjected to any penalty or expense, such Licensee will compensate Licensor for any such cost or loss sustained. (c) Any and all reasonable costs incurred by Licensor that are associated with Licensor’s investigation, seizure and/or detention of Licensed Products manufactured, transported or shipped by a third party used by such Licensee (or any agent of such third party) but unknown to Licensor shall be borne by such Licensee, and such Licensee shall repay such amounts within ten (10) days of receipt of written details of such costs.