Exhibit 10.II.I
MANUFACTURING AGREEMENT
Agreement made betweenMOSAIC FERTILIZANTES DO BRASIL S/A, a corporation with facilities at Rodovia Domenico Rangoni, without number, km. 62.5 - Paiçaguera, Cubatão/SP, enrolled with the Corporate Taxpayer Register under number CNPJ/MF 61.156.501/0021-08, hereinafter referred to asMOSAICand hereby represented by its legal representatives, andCARGILL NUTRICAO ANIMAL LTDA - PURINA, a corporation duly organized with branch offices at Rodovia Campinas/Paulínia, km. 122, Bairro Betel, Paulínia/SP, enrolled with the Corporate Taxpayer Register under number CNPJ/MF nº 02.391.178/0002-17, hereinafter referred to asPURINA and hereby represented by its legal representatives, the said parties hereto agree as follows:
1. OBJECT
1.1.MOSAIC shall manufacture for and in the name ofPURINA, at its facility located in the above mentioned address, the products listed on Attachment 1 hereof, and such list may have items added to or deleted from it, at the Parties discretion;
1.1.1. In addition to industrializing the products,MOSAICcovenants to:
| a) | sell the necessary raw-materials to manufacture the products according to their respective formulas, with the exception of the premix, pursuant to item 1.3 hereof; |
| b) | send, atPURINAexpense and to its order, the finished packaged products to the locations informed byAGRIBANDS. |
1.2.MOSAIC attests being duly authorized and with capacity to, pursuant to the laws in force, industrialize the products hereunder;
1.3.PURINA shall supplyMOSAIC with the formulation and the premix necessary to manufacture and deliver the products ordered.MOSAIC shall supply the packages and the remaining necessary raw-materials to produce the formulas of the products, strictly complying with the contents of the formula provided byPURINA, and using the ingredients contained in it.
1.4.MOSAIC shall guarantee the monthly production of the products listed in Attachment 1, based on the volume agreed between the Parties;
1.5. The products shall only be produced byMOSAIC upon receiving an order fromPURINA, which shall be placed on a weekly basis, showing the product description, quantity to be produced and the location where such finished packaged products shall be shipped to. A weekly schedule shall be sent toMOSAIC with at least five (5) days in advance by e-mail, facsimile, wire or letter;
1.6.PURINA shall bear the freight cost for the shipment of the finished products to it, andMOSAICshall hire the freight;
2. PRICE, PAYMENT, ADJUSMENTS
2.1. The manufacturing price to be paid byPURINA toMOSAIC shall be set at thirty seven reais (R$ 37.00) per ton plus the price of the raw materials necessary to manufacture the products, that will be agreed at the time the order is placed and including all taxes and packaging.
2.2. In the eventPURINA delays a payment,PURINA shall incur a two (2%) per cent penalty on the invoiced value and interests permitted by law;
3. OBLIGATIONS
3.1.MOSAIC undertakes full responsibility for the quality assurance of the formulated, manufactured and packaged products, as long as any problems in the products result from production, raw-materials or package supplied byMOSAIC;
3.2. It is the obligation ofMOSAIC, extended to its assigns, employees and outsourced personnel involved in the performance of this agreement, to keep absolute confidentiality during the term of this agreement and after the termination thereof, in regard to formulas, know-how and information obtained fromPURINA, subject to being liable for damages, loss of profits and other suitable claims.MOSAIC covenants to use the formulas, know-how and information received fromPURINA only for the businesses hereunder;
3.3. Technical information and other data on the products shall only be made available to the assigns, employees and outsourced personnel designated byMOSAIC, whom are directly engaged in the manufacturing process;
3.4. AsMOSAIC has direct access toPURINAinformation,MOSAICitself, and its outsourced personnel, assigns and employees covenant to the following:
a) to safeguard and protect the information, using it only to present data toPURINAitself, in strict compliance with legal rules andPURINAguidelines;
b) not using, disclosing or communicating confidential information or any trade secrecy belonging toPURINA,either during the term of this agreement made between the parties hereto or after termination thereof;
c) to use the information received fromPURINA only for the business purposes hereunder;
d) upon termination of this agreement for any reason whatsoever,MOSAIC undertakes to immediately return toPURINAany and all the formulas, manuals, instructions and guidelines received during the term of this agreement and it is, as of now, restrained from using such formulas, manuals, instructions and guidelines for its own benefit, or to release them to third parties at any time, by no means, as well as to return/deliver the stock of products and raw materials, regardless of any notice in writing;
e) to be liable for losses and damages caused by default in any of the provisions herein specified;
f) to make its outsourced personnel, assigns and employees aware of the requirement to fulfill the obligations undertaken herein.
3.5.MOSAIC shall allowPURINAto, since previously agreed, carry out visits and audits conducted by one or more technicians, in order to inspect the formulation and quality of the products and materials, andMOSAICshall not thereby be discharged from its liability;
3.6.MOSAIC undertakes to comply with the Quality Control guidelines set forth by the Parties hereto, in addition and pursuant to all existing legal rules for quality and safety covering industrialized products;
3.7. The Quality Control guidelines are set out in Attachment 2 hereof;
3.8.MOSAICshall, after agreeing upon the Quality Control to be signed by the Parties, issue a specific analysis certificate for each batch of raw-materials and finished products, and it shall keep a retention sample as demonstration;
3.9.MOSAIC shall be solely held responsible towards third parties and outsourced personnel hired byPURINA, for any problems, damages, risks or accidents that the products manufactured byMOSAIC may cause, provided that such problems, damages, risks or accidents result from the manufacturing process or from the raw materials supplied byMOSAIC;
3.10. In the eventPURINA is sued for damages caused by the products manufactured byMOSAIC, the latter undertakes to immediately engage in the discussion and/or the legal procedure or process. In the eventPURINA is bound to defend itself or to satisfy any claims for any purposes,MOSAICshall be liable for providing the immediate payment that may be required, as well as to bear all charges incurred byPURINA (court costs, charges, expert fees, lawyer fees, etc.), as long as such loss stem from the manufacturing process or from the raw materials supplied byMOSAIC;
3.11.MOSAICshall be liable for the receipt of the goods sent byPURINA (premix), and shall proceed a material check thereof, comparing the quantity shown in the bill of sale and the quantity actually received;
3.12. If there is a difference between the documents and the quantity of goods thatPURINAmay have shipped toMOSAIC, the latter shall, before receiving the materials, contactPURINA, report the event, and follow the instructions that should be sent byPURINA;
3.13. The technical responsibility for the manufactured products shall be exclusively ofMOSAIC,therebyMOSAICshall have and keep a technician at its facilities, and such technician shall be registered at the Department of Agriculture, Livestock and Supply;
3.14.MOSAIC undertakes to produce and send the manufactured products in strict compliance with the respective governing laws (tax, agriculture, etc.);
3.15.PURINA shall pay the fair price hereby agreed upon;
3.16. It is the obligation ofPURINA to supply the related materials listed in the section “OBJECT” hereof,
4. EMPLOYMENT RELATIONSHIP
4.1. The employees, assigns and outsourced personnel shall have no employment relationship withPURINA, and all obligations resulting from a formal employment agreement as well as tax, civil and criminal liability shall be the sole and exclusive responsibility ofMOSAIC;
5. LEGAL PROCEDURE AND TECHNICAL BREACH
5.1.PURINA andMOSAIC, each for itself, shall comply with all legal and tax procedures that govern the operation, including the procedures related to the Department of Agriculture, Livestock and Supply, each taking the responsibility within its own scope, including the compliance with all fiscal, and tax requirements, keeping records of entries, disbursements and inventories.;
5.2. The parties hereto covenant that, with regard to the goods (premix and packages), sent byPURINA toMOSAIC (whether directly or through suppliers), the maximum percentage that will be accepted as “technical breach” shall be one (1%) per cent;
5.3.MOSAIC shall bear any excess of technical breaches and weight resulting from storing, grinding and mixing the materials used to manufacture and package the products;
5.4. In the event of discrepancyMOSAIC shall sent a written communication toPURINA reporting all the events related to the receipt of the goods (premix and packages), showing the number of the bill of sale, the issuance date, the name of the supplier, the product description and the related discrepancies;
6. PRODUCT RECEIPT AND REJECTION
6.1. Regardless of the responsibility undertaken byMOSAIC,PURINA reserves the right to, upon receipt of the products, collect a sample thereof for analysis;
6.2. After the delivery of the products byMOSAIC toPURINA, the latter may approve or reject such products, stating in writing the reason for any such reject;
6.3. The batches of products rejected byPURINA shall be replaced byMOSAIC within fifteen (15) days from the date of their return, and the expenses and costs of the premix necessary to manufacture the new products as well as the transport (pick-up and return) shall be at the expense ofMOSAIC;
7. TERM, PENALTY AND ASSIGNMENT
7.1. This term of this agreement is twelve (12) months as of the date of the execution thereof and it may be renewed by written agreement between the parties.
7.2. It is hereby established by the Parties a penalty corresponding to one (1) month of paid compensation, considering the average amount paid in the last three (3) months prior to the termination thereof, such payment to be made by the party who breaches any provisions hereof ;
7.3. Only upon prior express consent of the parties shall this agreement be assigned or transferred;
8. TERMINATION
8.1. This agreement shall be terminated in the event of any breach or default in any clause hereof, as well as in the event of insolvency, bankruptcy, composition with creditors of any of the Parties, regardless of notice, judicial summons or notification;
8.2. Either Party, regardless of the reason, may terminate this agreement, without charges to the other party, upon prior written notice given three (3) months in advance thereto.
9. BRAND NAMES, FORMULAS, LICENSES ANS REGISTERS
9.1.MOSAIC attests that, subject to legal penalties, it acknowledges as property/license ofPURINA, the products, formulas, registers and brand names that the former shall manufacture, handle and store, andPURINA shall neither use them for any purposes or effects, nor assign them to third parties, on no account, subject to civil and criminal liability for faulty acts, even if such acts are practiced by its assigns, employees or outsourced personnel;
9.2. The formulas provided byPURINA to manufacture the products ordered shall not, subject to just cause and termination of the employment agreement, be used byMOSAIC,its assigns, employees or outsourced personnel, for any purpose other than manufacturing the products forPURINA, in thatMOSAICshall be subject to civil and criminal liability for the loss it may come to cause;
9.3. The brand names, advertising materials and logos thatMOSAIC uses in the products manufactured to order are of exclusive license/property ofPURINA, andMOSAIC shall not use tem during the term of this agreement or after the termination thereof for any purposes, other than the object of this instrument;
10. MOSAIC INVESTMENT
10.1. Any financial investment made inMOSAICfacilities, shall be considered of its exclusive interest and shall not be paid back byPURINA and such investment shall not be considered as part of the cost for price adjustment purposes hereunder;
11. STORAGE
11.1.MOSAIC undertakes the responsibility, without charges toPURINA, for keeping and protecting in its facilities all ingredients, several materials and packages belonging toPURINA to manufacture the products, as well as for the finished products, andMOSAICshall become the depositary thereof, according to the terms of the Brazilian Civil Code;
11.2. As for storage,MOSAIC shall not receive any payment either as storage fees or as storage expenses;
12. NOVATION
12.1. It is hereby expressly forbidden for either Party to novate or argue the novation for any purposes or effects. .
12.2. Any tolerance or ease to any breach shall constitute a mere gratuity and shall not be construed as a waiver of any rights conferred by this agreement or warranted by law.
13. LEGAL REPRESENTATION
13.1. The parties hereto attest that, subject to legal penalties, their lawful representatives who execute this agreement are their true representatives for such purpose, as provided for in the Articles of Incorporation or Corporate Charter;
14. SUCESSION
14.2. This agreement shall be binding upon the Parties hereto and their respective successors, under any form.
15. COURT
15.1. The Parties hereto elect the Court of the city of Paulínia to settle any disputes arising from the performance of this agreement and it is expressly understood that the Parties waive all other courts, even the most privileged ones.
IN WITNESS WHEREOF, the Parties sign three (3) identical copies of this instrument, in the presence of the witnesses here undersigned.
Paulínia, 12 September 2007
MOSAIC FERTILIZANTES DO BRASIL S/A
PURINA PURINA DO BRASIL LTDA.
WITNESSES:
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| Name: | | | | Name: |
| ID: | | | | ID: |
| TIN: | | | | TIN: |
| Address.: | | | | Address.: |
Attachment 1
LIST OF PRODUCTS
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| PRODUCT DESCRIPTION | | REGISTER NUMBER AT THE DEPARTMENT OF AGRICULTURE, LIVESTOCK AND SUPPLY |
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| PURINAFÓS 130 CONCENTRATED | | SP-03117 30220 |
| PURINAFÓS 160 CONCENTRATED | | SP-03117 30219 |
