Example: Contract for Cosmetic Formula Development and Reverse Engineering

Formula Development and Reverse Engineering Agreement

Date 8 October 2568

Executed at Legend of Products Co., Ltd.

This Agreement is made on the day of....8...Month...October...B.E....2568.. Between Mr. XXXXX Surname XXXXX acting as the authorized representative of XXXXX Co., Ltd. Company Registration No. 0100000000000, located at 99/88 Nuan Chan Subdistrict, Bueng Kum District, Bangkok 10230

hereinafter referred to in this Agreement as the “Client,” of the one part, and Legend of Products Company, represented by Mr. XXXXX Surname XXXXX acting as its authorized representative, with its office located at 42/11 Moo 7, Chatuchot Road, Soi 20, O Ngoen Subdistrict, Sai Mai District, Bangkok 10220, hereinafter referred to as the “Contractor.” Both parties agree to enter into this Agreement under the following material terms:

Clause 1. The “Client” agrees to engage the “Contractor,” and the “Contractor” agrees to reverse-engineer and develop cosmetic product formulations for the Client, hereinafter referred to in this Agreement as the “Product Formulations.” The newly developed Product Formulations shall be the exclusive property of the “Client,” and the Contractor shall manufacture products using these developed formulations solely for the Client. Full ownership shall vest in the “Client” only upon payment of the formulation development and reverse-engineering fees in accordance with this Agreement. Product details set out in the documents attached to this Agreement and/or the prototype quotation provided to the Client for product manufacturing shall be deemed an integral part of this Agreement.

Clause 2. The “Client” agrees to pay an initial product formulation development and reverse-engineering fee of 5000 baht/1 formula, or as otherwise agreed, to the Contractor for formula development and reverse engineering. The scope of development is based on the sample provided by the Client, and the developed or reverse-engineered formula must be at least 80% similar to the sample received from the Client.

Clause 3. The Contractor will calculate the costs and inform the Client of the pricing before payment of the formulation development or reverse-engineering fee. This will specify the price range for the formula and product requested by the Client, as well as the approximate % to which the product can match the Client’s requirements. The standard requirement is at least 80% similarity.

Clause 4. The Client may request appropriate adjustments, changes, or additions of ingredients to the formula. The Client will control the costs and ingredient quantities as appropriate. Additions beyond those agreed upon for the initial formula are possible but will increase the formula’s cost. R&D will provide information and advice on formulation development and reverse engineering through the assigned sales representative at every stage.

Clause 5.The Contractor will send the first sample within 7-15 days, or as otherwise discussed and agreed. Samples will be sent a total of 1-6 times (including the first shipment).

• The first sample will be sent within approximately 7-15 days. Once the customer tries the product sample, we will await their feedback to proceed with production or further formula adjustments.

• Subsequent samples, if adjustments are made, will be sent every 3-5 days. Customers can request up to 5 formula adjustments, not including the first sample.

• If the formula is approved, we will proceed with production.

• If the formula is not approved, If the Client is still dissatisfied after receiving samples 6 times (including the first shipment), the factory will refund 50% of the actual formulation development fee, namely 2500 baht, and formulation development and reverse engineering under this agreement will end.

Clause 6.The Client may specify the active ingredients, fragrance, and color in the formula as %. RD will provide advice at every stage to ensure that the formula’s cost does not exceed the price range initially specified.

Clause 7. Confidentiality The Contractor agrees to keep all concepts and information about the extracts in the entire formula confidential and will not disclose them to third parties or use them for other brands under any circumstances. Researchers and employees within the company will likewise not disclose the Client’s confidential information to third parties.

Clause 8. Formula Ownership and Usage Rights The newly developed or reverse-engineered formula will belong to the factory, but the Client will hold 100% exclusive usage rights. The formula will not be copied or reproduced for anyone else without the rights holder’s permission. The Client will be informed of the % of active ingredients, % of fragrance concentrate, and % of color in the formula, but will not be informed of the % of other ingredients or the full composition accounting for 100% of the formula. This is to prevent the factory’s formula from being used for the Client’s own production or production at another factory.

Clause 9. Warranty & Liability The Contractor warrants that the developed formula does not infringe any third-party copyrights or patents and contains no hazardous substances prohibited under Ministry of Public Health regulations.

Clause 10. The Client has the right to request the "Master Formula" for production at another factory at any time. The Master Formula may be purchased for 150,000 baht per formula and includes the proportions of all ingredients, totaling 100%, along with the correct manufacturing procedures.

The Client therefore agrees to commission the reverse engineering and development of 1 formula Payment has been made in the amount of 5,000.00 baht

(...five thousand baht only...)

out of the total amount of 5,000.00 baht as specified in the quotation No. QN20251000001

This agreement is executed in 2 copies with identical content. Both parties have read and fully understood the agreement and confirm that it accurately reflects their intentions. In witness thereof, they have signed below in the presence of witnesses.