EXHIBIT 10.34
* Confidential Treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
MANUFACTURING AGREEMENT
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Executed in the city of Liberia, Costa Rica on the 21st day of January,
2005, between:
SABILA INDUSTRIAL, S.A. ("SISA") a corporation existing under the Laws of
Costa Rica, corporate I.D. number 0-000-000000, hereby represented by its
Coordinator for South American Businesses, Xx. Xxxx Xxxxxxx Xxxxxx Xxxxxx,
of legal age, engineer, identity card number * and,
MIRADENT PRODUCTS OF COSTA RICA, S.A. ("MPCR"), a corporation existing under
the Laws of Costa Rica, corporate I.D. number 0-000-000000, hereby
represented by its President Xx. Xxxxxxx Xxx, of legal age, lawyer, American
citizen, passport number * .
WHEREAS
- MPCR is a company established to produce and sell proprietary dental
products ("the Products"), such as dentures, dental arches, dental
implant stents, exclusively to MiraDent Group.
- SISA is a company operating under the free zone regimen that has the
facilities and personnel required to manufacture the Products for MPCR.
THEREFORE, being of mutual benefit for the parties, it is agreed to
celebrate this Manufacturing Agreement ("the Agreement") to be regulated
according to the Costa Rican Laws and the following clauses.
FIRST: Manufacturing agreement.
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MPCR contracts SISA to manufacture the Products within SISA's production
building in Liberia, Guanacaste.
SECOND: SISA's obligations.
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SISA agrees to the following conditions and obligations:
a) Provide all the management and manufacture personnel required to run
the overall production operation, which includes: handling of
importation and exportation proceedings of raw materials, machinery and
final product, manufacturing process, machinery installation and
maintenance, management, supervision and control. Provide industrial
technical assistance to expedite and facilitate output. For this
purpose SISA shall employ and supervise the personnel and comply with
the labor regulations that might correspond as the sole employer.
b) Obtain all the necessary permits from PROCOMER and any other
government agency required to handle the operation under the free zone
regimen.
c) Provide a manufacturing area of 198 square meters in its actual
production facilities. Additionally SISA in order to provide space to
MPCR will construct a separate storage facility with an estimated cost
of US$114,000.00 Funds to aid in the constructions of the facility
shall be provided by MPCR, as follows: (1) US$ 40,000 on or before 1
February 2005 and (2) US$ 10,000 on or before 1 March 2005; US$ 12,000
on or before 1 April 2005; and US$ 18,000 on or before 1 May 2005.
d) SISA will not be obliged to continue with the construction or comply
with any other obligation contained in the Agreement if the required
funds are not provided on time.
THIRD: MPCR's obligations.
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MPCR agrees to the following conditions and obligations:
a) Provide the training method for the core personnel and develop a team
of trained personnel that are skilled in the production and capable of
training others. MPCR will assume any labor or commercial obligations
related to the non-permanent trainers required to train SISA's
personnel. MPCR will assume any labor or commercial obligations
related to the personnel, managers, directors or any person directly
related to MPCR or MiraDent Group that might be retained by MPCR in
order to support and/or modify SISA's operations or to represent MPCR
under this agreement.
b) Beginning 1 February 2005, pay to SISA a monthly rent of US$ 1287 per
month (198 square meters x US$ 6.50 / sq meter) for the space being
used within SISA, facilities. This rental rate is fixed for twenty four
(24) months at which time the rental rate is subject to renegotiation.
MPCR has a credit of US$ 80,000 to be applied against its monthly
rental payments.
c) Provide all machinery, equipment and any materials, including the
initial raw materials, for the production of the Product including
packing materials. Provide supervision of the installation of the
machinery and equipment and pay any physical installation costs
required. The method of payment of these costs will be negotiated
after they have been incurred. All custom duties and shipment costs
shall be covered by SISA and be reimbursed by MPCR.
d) Maintain what is determined to be essential spare parts.
Additionally it is agreed that MPCR does not have the right to interfere or
intervene with the way SISA handles the hiring of personnel, the
administration of operation, etc, unless it is related to quality control
aspects of the Product. SISA is not obliged to hire any personnel
recommended by MPCR
FOURTH: Other agreements relating to production.
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a) Quantity requirement. SISA agrees to use commercially reasonable
efforts to meet all the quantity requirements of MPCR for Products.
b) Modifications to existing processes or specifications. SISA may not
make any modifications to the quality and production process without
the prior written consent of MPCR. The cost of modifications to
existing processes or specifications required by MPCR shall be the sole
responsibility of MPCR.
c) Rights to inspect and monitor production. SISA grants to MPCR the
right to inspect and monitor production at the Plant at any time during
normal business hours.
d) Process records. SISA shall maintain, for a period of five (5)
years from the date that any production process was performed to
produce the Products, accurate records describing in detail such
production on a by lot basis. SISA shall give MPCR the right, at any
time during SISA's normal business hours and upon reasonable notice, to
inspect and make copies of any of SISA production records.
FIFTH: Compensation, prices and terms.
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a) Compensation. SISA will be compensated for the manufacture of the
Products on a per unit basis according to the pricing schedule shown on
Annex 1 of this Agreement All Products manufactured by SISA will be
sold by SISA to MPCR and purchased by MPCR from SISA at the specified
price (the "Contract Price") listed on Annex 1. Annex 1 will be
amended from time to time as additional Products are added. Prices are
firm for one year, then are subject to re-negotiation. All prices are
F.O.B. SISA's facility, Liberia, Guanacaste, Costa Rica. Ownership of
and title to Products and all risks of loss with respect thereto shall
pass to MPCR upon delivery of such Products by SISA to the land carrier
at the designated delivery (F.O.B.) point. Deliveries of Products
shall be made by SISA under normal trade conditions in the usual and
customary manner being utilized by SISA at the time and location of the
particular delivery.
b) Payment. MPCR will pay SISA for all Products not later than 30 days
after date of invoice.
c) Forecasts. Promptly after the execution of this Agreement, MPCR will
provide SISA with a forecast of its Product requirements for the next
twelve (12) months so as to give SISA sufficient advance notice of
MPCR's requirements to allow it to satisfy such requirements. MPCR must
give SISA purchase orders at least 90 days in advance of the desired
delivery date in order to allow SISA to obtain supplies and manufacture
the Products.
d) Purchase Orders. Subject to the foregoing provisions of this Section
5, MPCR will from time to time submit definitive purchase orders to
SISA setting forth the quantities of each Product to be supplied,
desired delivery dates and shipping instructions. SISA will promptly
accept such purchase orders or reject the purchase order by informing
MPCR that it cannot in whole or in part fill a purchase order. SISA's
rejection of a purchase order shall not be a breach of this Agreement.
Any accepted purchase order shall be a binding obligation of SISA to
supply and MPCR to purchase the Products ordered on the dates specified
in such purchase order.
SIXTH: Warranties.
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(a) SISA warrants that, at the time of shipment by SISA, all Products
manufactured by SISA sold and delivered pursuant to this Agreement
will conform to the mutually agreed upon visual and written
specifications for the Products.
(b) SISA further warrants that, at the time of shipment, all Products
manufactured by SISA and sold and shipped to MPCR pursuant to this
Agreement will have been manufactured in accordance with applicable
current good manufacturing practices ("cGMP") regulations as set forth
in 21 CFR 210, as then in effect, in a facility that is ISO 9000
certified.
(c) SISA accepts liability for Products that do not conform to visual and
written specifications and agrees to reimburse MPCR for the amount
invoiced to MPCR for such non-conforming Products should they occur.
Except as may be expressly stated by SISA on the Product or on SISA's
packaging, or in SISA's information accompanying the Product, at the
time of shipment to MPCR hereunder or as otherwise stated in this
section of this Agreement, SISA MAKES NO REPRESENTIONS OR WARRANTIES
OF ANY KIND WITH RESPECT TO THE PRODUCTS, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. SISA NEITHER ASSUMES NOR AUTHORIZES ANYONE TO
ASSUME FOR IT ANY OBLIGATION OR LIABILITY IN CONNECTION WITH THE
PRODUCTS. MPCR shall not make any representation or warranty with
respect to the Products that is more extensive than, or inconsistent
with, the limited warranty set forth in this Article or that is
inconsistent with the policies or publications of SISA relating to the
Products.
(d) MPCR'S EXCLUSIVE REMEDY FOR BREACH OF ANY WARRANTY HEREUNDER IS THE
REFUND OF THE CONTRACT PRICE FOR THE PRODUCTS THAT ARE COVERED BY THE
WARRANTY. SISA SHALL HAVE NO OTHER OBLIGATION OR LIABILITY FOR
DAMAGES TO MPCR ANY OTHER PERSON OF ANY TYPE, INCLUDING, BUT NOT
LIMITED TO, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF
PROFITS OR OTHER COMMERCIAL OR ECONOMIC LOSS, OR ANY OTHER LOSS,
DAMAGE OR EXPENSE, ARISING OUT OF OR IN CONNECTION WITH THE SALE, USE,
LOSS OF USE, NONPERFORMANCE OR REPLACEMENT OF THE PRODUCTS.
SEVENTH: Term.
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The term of this Agreement shall be five (5) years.
This Agreement shall be operative upon the Effective Date and shall continue
in effect for five (5) years, unless terminated pursuant to early
termination provisions herein, and may be extended pursuant to the
provisions below.
At the end of this initial five (5) year term this Agreement shall
automatically renew for an additional five (5) year period, unless a written
notice is provided by either party to the other that the moving party does
not wish to continue the Agreement. And, on each five (5) year anniversary
date thereafter, this Agreement shall automatically renew for an additional
five (5) year term, unless a written notice is provided by either party to
the other party that the moving party does not wish to continue the
Agreement. Written notice must be provided by the party wishing to cancel
the Agreement not later than one hundred eighty (180) days prior to the end
of the initial five (5) year term of this Agreement or one hundred eighty
(180) days prior to the anniversary date of any automatic renewal period.
Upon automatic extension of this Agreement under the provisions above all
terms and conditions of this Agreement shall continue in full force and
effect.
The Agreement shall be terminated before expiration of the initial or
extended term:
a) If SISA or MPCR fails to comply with any of their obligations under
this Agreement and if the noncompliance is not cured within thirty (30)
days of written notice of such noncompliance, then, the party gives
notice of termination to the other on those grounds, in which case that
party can claim compensation for the damages caused by such failure to
comply;
b) If SISA or MPCR becomes insolvent, submits to an agreement with
creditors, admits in writing its inability to pay its debts when
due, or becomes the subject of voluntary or involuntary bankruptcy,
insolvency, reorganization, relief for debts, receivership, or a
similar procedure that may affect all its assets or a substantial
portion thereof,
c) Upon the definitive cessation of operations in Costa Rica of SABILA
INDUSTRIAL and the industrial plant operated by it in Liberia by
decision of the parent company.
d) If SISA and MPCR agree in writing to terminate the Agreement.
The termination of this Agreement does not release any of the parties from
any pending obligation originated before or at the time of such termination.
Upon the termination of this Agreement, whether terminated pursuant to early
termination provisions herein or upon the expiration of the original term or
any renewal term of this Agreement, any and all improvements to the SISA
facilities and property made by or funded by MPCR as a part of this
Agreement shall thereinafter be the sole property of SISA.
EIGHTH: Indemnification.
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MPCR AGREES TO INDEMNIFY AND HOLD HARMLESS SISA AND ITS EMPLOYEES, OFFICERS,
DIRECTORS, STOCKHOLDERS, SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL
LOSSES, DAMAGES, COSTS AND EXPENSES, INCLUDING REASONABLE LEGAL FEES AND
EXPENSES INCIDENT THERETO, ARISING FROM ANY SUIT, CLAIM OR DEMAND OF ANY
THIRD PARTY RELATING TO (A) ANY DESIGN DEFECT IN ANY MPCR PRODUCT
MANUFACTURED BY SISA AS TO WHICH MPCR HAS PROVIDED SISA WITH WRITTEN
SPECIFICATIONS OR SAMPLES TO WHICH THE MPCR PRODUCT SUPPLIED BY SISA
COMPLIES, (B) ANY DESIGN DEFECT IN ANY MPCR PRODUCT NOT MANUFACTURED BY
SISA, (C) ANY MANUFACTURING DEFECT IN A MPCR PRODUCT NOT MANUFACTURED BY
SISA, (D) ANY STATEMENT ON ANY LABELING OF OR LITERATURE FOR ANY MPCR
PRODUCT THAT IS FALSE OR VIOLATES ANY LAW OR REGULATION OF THE UNITED STATES
OR ANY AGENCY, STATE OR LOCALITY THEREOF, AND (E) ANY INFRINGEMENT BY ANY
MPCR PRODUCT OR ANY LABELING, PACKAGING OR PRODUCT LITERATURE FOR ANY MPCR
PRODUCT NOT FURNISHED OR APPROVED BY SISA OF ANY PATENT, TRADEMARK,
COPYRIGHT, DESIGN OR OTHER INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY.
NINTH: Force Majeure.
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Neither SISA nor MPCR shall be liable for any failure to perform hereunder
(other than payment of invoices when due) if either is prevented from
performing any of its obligations hereunder due, in whole or in part, to any
contingency or cause beyond its reasonable control, including, without
limitation, fire, explosion, earthquake, storm, flood, drought, lightning or
other adverse weather conditions, accident, breakdown of machinery,
transportation or handling difficulties, strike, lockout, or other labor
difficulties (from whatever cause arising, and whether or not the demands of
employees are reasonable or within its power to grant), war, insurrection,
riot, civil commotion, sabotage, vandalism, smoke, act of God or the public
enemy, any law, act, order, proclamation, decree, regulation, ordinance,
instruction, embargo or request of any government or any officer or agent
thereof, any order, judgment or decree of any court, delay or failure
of carriers or contractors, labor shortage, or inability to obtain
transportation equipment, raw materials, fuel, power, plant equipment or
materials required for maintenance or repairs ('Force Majeure") nor shall
MPCR's or SISA's obligations, except as may be necessary, be suspended
during the period of such Force Majeure, nor shall either Party's
obligations be cancelled with respect to such Products as would have been
sold hereunder but for such suspension. Such affected Party shall give to
the other Party prompt notice of any such Force Majeure, the date of
commencement thereof and its probable duration and shall give a further
notice in like manner upon the termination thereof. Each Party hereto shall
endeavour with due diligence to resume compliance with its obligations
hereunder at the earliest date and shall do all that it reasonably can to
overcome or mitigate the effects of any such Force Majeure upon both Party's
obligations under this Agreement. Should the Force Majeure continue for
more than six (6) months, than the other Party shall have the right to
cancel this Agreement and the Parties shall seek an equitable agreement on
the Parties' reward of interests.
The Parties agree that any obligation to pay money is never excused by Force
Majeure.
TENTH: Trademarks.
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With respect to trademarks, the Parties agree as follows:
a) To the extent, and only to the extent, of written authorization by
MPCR, may SISA use, symbolize, or otherwise xxxx Products with the
MPCR's trademarks or other proprietary logos.
b) Except as authorized in writing, SISA shall not, at any time, in any
place, or in any manner, utilize the trademarks of the MPCR, nor any
name or logo confusingly similar thereto, in connection with SISA's
business activities or in the manufacture, use, sale or other
disposition of Products, or in any other way whatsoever.
c) Except as authorized in writing, MPCR shall not, at any time, in any
place, or any manner, utilize the trademarks of SISA, nor any name or
logo confusingly similar thereto, in connection with the MPCR's
business activities or in the use, sale or other disposition of
Products, or in any other way whatsoever.
ELEVENTH: Proprietary Information and Confidentiality.
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a) Each Party agrees to maintain the other Parties' Proprietary
Information in strict confidence, not to make use thereof other than
for the performance of this Agreement, to release it only to employees
who have reasonable need to know the same, and except as required by
law, not to release or disclose it to any third parties, without the
prior written consent of the disclosing Party.
b) All Proprietary Information and any copies thereof shall remain the
property of the disclosing Party, and no license or other rights
therein is granted or implied hereby.
c) This Article is supplemental to and not in limitation of any
confidentiality agreements to which the Parties are signatories.
d) Any of SISA's or MPCR's officers, directors, employees, agents,
representatives or contractors who are assigned to or visit the MPCR
production facility shall execute and deliver a confidentiality
agreement in form of Annex 2 attached hereto.
e) Except as otherwise provided herein, each Party shall immediately
notify the other of any private or governmental request for Proprietary
Information or documents relating to the products or this Agreement.
In the event that a Party receives any subpoena or other legal process
requiring the production of information, documents, data, work papers,
reports, or other materials relating to Proprietary Information,
Products, or this Agreement, that Party shall give the affected Party,
if possible, the opportunity to participate in quashing, modifying or
otherwise responding to any compulsory process in an appropriate and
timely manner and cooperate fully with the affected Party's efforts to
narrow the scope of any such compulsory process, to obtain a protective
order limiting the use or disclosure of the information sought, or in
any other lawful way to obtain continued protection of such
information.
f) If any Party becomes aware of the loss, theft or misappropriation of
Proprietary Information which is in that Party's possession or control,
that Party shall notify the other Party whose Proprietary Information
has been lost, stolen or misappropriated within five (5) days after the
discovery of such loss, theft or misappropriation.
TWELFTH. Sublease.
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The lawful possession and occupancy by MPCR of the facilities shall be
regulated by the sublease hereby agreed upon by the parties in the following
terms and conditions:
a) Under the lease subscribed by and between SABILA INDUSTRIAL and "FINCA
SABILA", owner of the property where the industrial facilities to which
this Agreement refers are located, the lessee, SABILA INDUSTRIAL, has
the power to sublease on a full or a partial basis the leased property.
b) SABILA INDUSTRIAL, sublessor, subleases MPCR an area of approximately
198 square meters, within the plant of SABILA INDUSTRIAL, as a place of
location of the works required for operation by the sublessee of the
equipment and machinery necessary to provide the manufacturing process.
c) The sublessee cannot sublease its rights under the lease without the
prior written consent of the sublessor. And it cannot, under any
concept or circumstance, sublease the subleased property on a full or a
partial basis.
d) The sublease herein agreed upon terminates with the termination or
expiration of the main agreement, being this sublease a part thereof.
Likewise, it shall be extended if it is agreed to extend the term of
the main agreement.
e) The sublessee can incorporate at its expense improvements and changes
in the structures and foundations of the subleased facilities with the
previous permit from the sublessor. The improvements so incorporated
shall become the property of the sublessor, being clear and understood
that the equipment, accessories, spare parts, structures, piping, tanks
and machinery in general that are removable and the property of the
sublessee shall remain its property. Upon termination of the Agreement,
the sublessee shall remove its assets from the subleased property, at
its expense and within two months after such termination. Any assets
that are not removed within said term shall become the property of the
sublessor without payment of any amount.
f) The price of the lease shall be the amount of US$ 1287 per month
payable in advance on a monthly basis.
THIRTEENTH: Miscellaneous.
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(a) Assignment prohibited. The partial or full assignment of the
rights of MPCR under this Agreement is prohibited.
(b) Arbitration. All controversies or differences that may be
derived from this Agreement or its performance, liquidation or
interpretation shall be solved by means of arbitration, in
accordance with the Regulations of the Center of Conciliation and
Arbitration of the Chamber of Commerce of Costa Rica, by which
rules and procedures the parties agree to abide unconditionally.
(c) Relationship of the parties. The Parties intend that the
relationship between them hereunder shall be solely that of buyer
and producer. Nothing herein shall be construed (a) to create a
partnership or joint venture, (b) to constitute either Party an
agent or legal representative of the other Party; or (c) to create
any fiduciary relationship between the Parties. This Agreement
does not grant any Party any right or authority to assume or
create any obligation or responsibility on behalf of any other
Party, and no Parties shall be in any way responsible for the
debts of any other Party incurred under or pursuant to the terms
of this Agreement.
(d) Cooperation. Each Party shall cooperate with the other Parties
hereto and shall take such further action and shall execute and
deliver such further documents as may be reasonably necessary or
desirable in order to carry out the provisions and purposes of
this Agreement.
(e) Severability. If a competent court declares that any provision
of this Agreement is unenforceable or null, such unenforceability
or nullity shall not affect the validity of the remaining
provisions of this Agreement, which shall survive and continue in
full force and effect.
(f) Amendment. This Agreement can only be amendment by agreement of
SISA and MPCR, duly expressed in writing in a document signed by
all of them.
(g) Certified Date. Any party is hereby authorized to appear before
a Notary Public to have the date of this Agreement duly
authenticated.
(h) Subscription of the Agreement. The authority of the individuals
signing this Agreement on behalf of each party has been duly
confirmed by means of genuine documents admitted by all of them,
which are made an integral part of this Agreement.
(i) Domicile. For purposes of this Agreement, the domicile of all
the parties is the city of Liberia, Province of Guanacaste,
Republic of Costa Rica, waiving the enforcement of their laws of
origin and organization.
(j) Address of the parties. The parties specify their respective
administrative offices at their industrial facilities in Liberia,
Guanacaste to keep records and make and receive payments. All
notices hereunder shall be in writing and shall be sent by (a)
telecopier with confirmation of receipt, or (b) prepaid overnight
delivery through a nationally recognized courier service:
If to SISA, to:
Sabila Industrial, S.A.
4 km South of Liberia, Guanacaste, COSTA RICA
Attention: Xxxx Xxxxxx,General Manager
If to MPCR, to:
XXXX
Xxxxxxx 0, Xxxxx 00
Xxxxxxxx Xxxxx Ideal, contiguo al Pulmitan de Liberia
Liberia, Guanacaste, COSTA RICA
Attention: Xxxxx Xxxxxx
(k) Language. The parties agree that the English language shall
be the official language for the execution, performance and
interpretation of this Agreement.
IN WITNESS WHEREOF, we have set our hand on two counterparts of this
Agreement, one for each party hereto, on the date and at the place
previously specified.
By: /s/ Xxxx X. Xxxxxx Xxxxxx By: /s/ Xxxxxxx Xxx
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Xxxx X. Xxxxxx Xxxxxx Xxxxxxx Xxx
Coordinator for South American Business President
Sabila Industrial S.A. Miradent Products of Costa Rica
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