Manufacturing Contract Template for Canada (Contract Manufacturing Agreement)

This Agreement is made on 2026-11-01 between Northern Devices Inc. of 100 King Street West, Toronto, Ontario (the Customer) and Prairie Precision Manufacturing Ltd. of 55 Industrial Road, Winnipeg, Manitoba (the Manufacturer).

The Manufacturer will manufacture the following products for the Customer:

Machined aluminum housings, part number NDI-4410 Rev C, per the drawings and specification in Schedule A.

The Manufacturer will build to the current drawings and specifications. Changes require written approval from both parties through a change order that states any effect on price and lead time.

This Agreement runs for an initial term of 3 years from the effective date and renews for successive one year terms unless either party gives 90 days written notice before the end of the term.

Unit price: 42.50 CAD per unit, ex-works, excluding GST/HST. Price review: Annually by agreement. Taxes, including GST/HST and any provincial sales tax, are added where applicable. Invoices are payable on Net 30 terms. Late amounts may bear interest at a rate stated in the order or by agreement.

The Customer will give a rolling non-binding forecast. Purchase orders are binding for the quantity and delivery date accepted. Delivery terms and the Incoterms rule are stated on each order. Risk of loss passes as stated in that rule.

The Manufacturer will operate a quality management system certified to ISO 9001:2015 or an equivalent agreed in writing. It will keep inspection records and lot traceability, notify the Customer promptly of any nonconformance that may affect shipped product, and allow reasonable audits on notice.

The Customer owns its designs, specifications and trademarks. The Manufacturer keeps its pre-existing know-how and general processes. Each party will keep the other's confidential information secret and use it only for this Agreement. Any improvement made specifically to the Customer's product belongs to the Customer unless the parties agree otherwise in writing.

Tooling arrangement: Customer owns all tooling. The Manufacturer will mark Customer tooling as Customer property, keep it insured and in good order, use it only for the Customer, and return it on request subject to payment of amounts due.

The Manufacturer warrants that products will conform to the specifications and be free from defects in workmanship and materials for an agreed warranty period. The Customer's remedy for non-conforming product is rework, replacement or credit.

Neither party is liable for indirect or consequential loss. Each party's total liability under this Agreement is limited to the fees paid in the 12 months before the claim, except for liability that cannot be limited by law, breach of confidentiality, or infringement of the other party's intellectual property. Each party will carry commercial general liability insurance at levels agreed in writing.

Either party may terminate for uncured material breach after 30 days written notice, or on the other's insolvency. On termination the Customer pays for finished goods and for work in progress and materials purchased to fill accepted orders, and the Manufacturer returns Customer property.

This Agreement is governed by the laws of Ontario and the federal laws of Canada that apply there. Where Quebec law applies, the parties confirm they require this Agreement and related documents to be drawn up in the language they agree on. Disputes will first go to senior management, then to the courts of Ontario or to arbitration if the parties agree.