CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION. THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
LAWYERS AND MERCHANTS TRANSLATION BUREAU INC.
Legal, Financial, Scientific, Technical and Patent Translations
11 Broadway New York, NY 10004
Certificate of Accuracy
Translation from Portuguese into English
State of New York
SS:
County of New York
On this day personally appeared before me A. S. Drane who, after
being duly sworn, deposes and states:
That he is a translator of the Portuguese and English languages by profession
and as such connected with the LAWYERS & MERCHANTS' TRANSLATION BUREAU;
That he has carefully made the attached translation from the
original document written in the Portuguese language; and
That the attached translation is a true and correct English
version of such original, to the best of his knowledge and belief.
SUBSCRIBED AND SWORN TO BEFORE ME THIS SEP 14 1998
/S/ A.S. DRANE
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/S/ SUSAN TAPLEY
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Notary Public
CONTRACT OF DISTRIBUTION AND OTHER AGREEMENTS
By this private instrument made between PLANALQUIMICA INDUSTRIAL LTDA.,
with registered office in Braganca Paulista - SP, at Rua 23 No. 555 - Distrito
Industrial 4, registered in the CGC/MF [tax roll] under No. 00.641.670/0001-97,
represented herein by RAUL CUNHA FREIRE, hereinafter referred to as the
MANUFACTURER, of the one part, and ELANCO QUIMICA LTDA., with registered office
in this capital, at Av. Morumbi No. 8,264, registered in the CGC/MF under No.
43.940.618/0001-44, and subsidiary in Cosmopolis-SP, where it is established at
Rodovia Gal. Milton Tavares de Souza Km 135, represented herein by MARIO FRANCA
CAMARGO, hereinafter referred to as the DISTRIBUTOR, of the other part, having
regard to the fact that:
a) the MANUFACTURER manufactures the product for veterinary use "Nicarmix Premix
25%" - hereinafter referred to as the "PRODUCT" - used to combat coccidiosis,
and wishes to expand its business as regards the promotion and sale of the
PRODUCT in Brazil, Uruguay and Paraguay;
b) the DISTRIBUTOR sells various veterinary products in the anti-coccidian line
and, as a result of this, is knowledgeable about
potential markets for the promotion and sale of the PRODUCT, and has the
necessary client technical support services, as required by the MANUFACTURER;
the following is established and agreed:
CLAUSE I - OBJECT
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I.1. The MANUFACTURER grants to the distributor, who accepts, with
effect from 03.01.96, exclusivity in the promotion and sale of the PRODUCT,
throughout the territory of Brazil, Paraguay and Uruguay.
I.1.1. The technical characteristics defining the PRODUCT are detailed
in Annex I hereof.
I.2. Independently of the activities to be performed by the DISTRIBUTOR
hereunder, during the term of this agreement it may continue to devote itself to
any other activities of a commercial or industrial nature, whether present or
future.
I.3. For the purposes of the sale referred to in point I.1.,
2
the MANUFACTURER shall sell and deliver to the DISTRIBUTOR, at the address of
the subsidiary shown in the preamble hereof, the quantities of the PRODUCT
manufactured by it as requested by the DISTRIBUTOR, under the terms of the
agreement which both parties shall from time to time sign, as established in
clause III hereinafter.
I.3.1. The PRODUCT shall be delivered to the DISTRIBUTOR fully finished
and packaged, ready for sale.
I.4. Within the limits of this contract, the DISTRIBUTOR may organize
and plan freely its commercial policy in such a way as to develop harmoniously
the interests of the contracting parties.
CLAUSE II - EXCLUSIVITY AND PREFERENCE
II.1. The rights of promotion and sale of the PRODUCT are granted by
the MANUFACTURER to the DISTRIBUTOR exclusively, for all of the territories
indicated in clause I, while observing the clauses and conditions of this
contract.
II.2. By virtue of that exclusivity, the MANUFACTURER is under an
obligation to supply the PRODUCT, destined for sale in the
3
territories mentioned, exclusively to the DISTRIBUTOR.
II.3. Only those sales which the MANUFACTURER shall make, directly, to
[ ] and destined solely for the manufacture of the products [ ], shall be
expressly excluded from that exclusivity, and [ ] shall not purchase the product
in the same formulation as Nicarmix.
II.4. The MANUFACTURER shall give preference to supplying the PRODUCT
to the DISTRIBUTOR and, this being the case, is prohibited from supplying it to
other potential buyers until it has met the quantities ordered by the
DISTRIBUTOR.
CLAUSE III - ORDERS AND PERIODIC AGREEMENTS
III.1. Every 30 (thirty) days, the DISTRIBUTOR shall forward in writing
to the MANUFACTURER the orders of the PRODUCT and respective delivery schedule,
and such orders and schedule shall only be altered by written request up to 05
(five) days prior to the date set for delivery, provided that this be
technically possible.
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III.2. Periodically, every 03 (three) months, the parties shall meet to
fix, jointly and by mutual agreement, forecasts of quantities and other periodic
conditions which shall govern this contract.
III.2.1. When the parties are agreed as to the aspects mentioned they
shall enter into a written agreement which shall be incorporated into this
contract as Annex II - Periodic Conditions.
III.3. Unforeseeable market changes shall give rise to the joint
revision of the terms and conditions hereof.
CLAUSE IV - TERM AND RENEWAL
IV.1. This contract shall run for a period of 12 (twelve) months,
commencing on 03.01.96.
IV.2. The contract shall be automatically renewed, for an indefinite
period, unless the party interested in not renewing the agreement communicates
that intention in writing, at least 90 (ninety) days prior to the end of the
contractual period.
5
CLAUSE V - STOCKS AND GUARANTEE OF UNINTERRUPTED SUPPLY
V. For the purposes of achieving the object of this contract, the
MANUFACTURER undertakes to keep in stock, ready for supply to the DISTRIBUTOR, a
minimum quantity of the product, so that the supply is continuous, even in the
event of a strike, breakdown of equipment and/or any other foreseeable
situation.
CLAUSE VI - INFORMATION AND CONFIDENTIALITY
VI.1. During the performance of this contract the DISTRIBUTOR shall
inform the MANUFACTURER of the list of clients acquiring the PRODUCT and the
respective quantities. Every three months the DISTRIBUTOR shall also advise the
average price of the product charged during that period.
VI.2. The MANUFACTURER further undertakes to supply the DISTRIBUTOR
with the technical information, respective manuals and other necessary
information in relation to the PRODUCT and the performance of the agreement.
VI.3. It is established as of now that any information passed
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on by one party to the other as a result of this agreement shall be treated as
commercial and industrial secrets and shall, as such, be confidential
information, which shall not be disclosed to third parties without the prior
written consent of the party which provided the information. Such prohibition
shall remain even after this contract has expired, in which case the only
exception shall be the list of clients who acquired the PRODUCT.
CLAUSE VII - RESPONSIBILITY FOR THE PRODUCT
VII.1. In its capacity as a producer of veterinary products, the
MANUFACTURER is technically responsible for the PRODUCT, and is obliged to
comply with all applicable laws including, but not limited to, matters
concerning licenses required for the manufacture and sale of the PRODUCT, and
shall supply to the DISTRIBUTOR any supporting documents necessary for the
performance of this contract.
VII.2. The MANUFACTURER is responsible for repairing any damage caused
to consumers as a result of the quality of the PRODUCT, and shall also be liable
for such defects as it may contain, and undertakes to exempt the DISTRIBUTOR
from any
7
liability as regards such aspects, with the sole exception of facts caused by
the DISTRIBUTOR itself.
VII.3. The MANUFACTURER shall display on the sales packaging sufficient
clear information on the PRODUCT, specifying the quantity, characteristics,
composition and quality, and on the risks which it presents, and any other
necessary information, bearing in mind the need to comply with the applicable
rules and regulations on the manufacture and sale of the PRODUCT.
CLAUSE VIII - DEFAULT AND RESCISSION
VIII.1. If either of the parties fails to fulfill any one of the terms
or conditions of this agreement, such that it prejudices the interests of the
other, the other party must notify the defaulting party in writing of the
default, with a view to settling the claim amicably.
VIII.2. If the default persists for more than 30 (thirty) days after
the notification is sent, the notifying party may consider this contract
automatically rescinded, independently of any other formality and without
prejudice to any applicable damages as a
8
result of such default.
VIII.3. This contract shall be rescinded by operation of law in cases
of bankruptcy, composition with creditors or insolvency of either of the
parties, independently of notice or prior notification.
CLAUSE IX - LIABILITY EXCLUSION
Neither of the parties shall be liable towards the other for any
indirect or consequential loss or damage, even if such losses and damage result
from loss of profits, loss of production or loss of products.
CLAUSE X - TAXES
All taxes, duties and contributions of any kind existing now or in the
future in respect of this contract shall be paid by the party legally liable,
and on no account shall any inversion of obligations take place.
CLAUSE XI - GENERAL CONDITIONS
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XI.1. The promotions, events and marketing activities designed to
promote sales of the PRODUCT such as, inter alia, advertisements, leaflets,
congresses, etc., shall be carried out for the account and at the discretion of
the MANUFACTURER, and shall be assessed by the parties so as to establish in
advance the conditions for their execution.
XI.2. This contract does not generate any kind of company with its own
legal personality, and each party shall retain its own. This instrument does
not, therefore, imply any merger, integration, incorporation or succession of
one party by the other.
XI.3. This contract corresponds to the full agreement of the parties on
the contractual object, expressly revoking any previous documents and
understandings on the matter.
XI.4. Neither of the parties shall assign or in any way transfer the
rights and obligations arising out of this contract without the prior written
authorization of the other.
XI.5. Failure to exercise any right or power of the parties shall not
imply waiver or novation, and shall be regarded as mere
10
liberality, which shall not prevent the party from exercising it at any moment.
XI.6. The parties are obligated for themselves and their successors and
elect the central jurisdiction of the District of Sao Paulo-SP, for questions
arising out of this contract, excluding any other, however privileged.
CLAUSE XII - ANNEXES
The documents listed below, initialed by the parties or by their
authorized representatives, form an integral part of this instrument as
"ANNEXES" and shall be fully valid, except insofar as they contradict the
provisions of this contract, in which case the contract shall prevail:
ANNEX I - TECHNICAL CHARACTERISTICS OF THE PRODUCT
ANNEX II - PERIODIC AGREEMENT
And being in full agreement, they sign this contract, with two
witnesses, in four copies of identical form and content.
Sao Paulo, March 1, 1996.
11
/s/
PLANALQUIMICA INDUSTRIAL LTDA.
/s/
ELANCO QUIMICA LTDA.
WITNESSES:
/s/
ACS/JOR
/s/
12
ANNEX I
TECHNICAL CHARACTERISTICS OF THE PRODUCT
CONFIDENTIAL TREATMENT REQUESTED FOR ALL BRACKETED ([ ]) INFORMATION. THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
[ ]
ANNEX II
1. PRICE AND DEADLINE
1.1 Up to [ ] of Nicarmix per annum, Elanco will pay [ ] per kg.
1.2 Over [ ] of Nicarmix per annum, Elanco will pay [ ] per kg.
1.3 Prices at sight
N.B.: Payments up to [ ] working days shall be considered at sight.
1.4 CIF Elanco in [ ].
2. ELANCO SELLING PRICE
2.1 The Elanco selling price ogjective shall be [ ].
2.2 Elanco will start to sell at [ ] and, depending on on market trends and the
activities of competitors, may increase to [ ].
2.3 When the Elanco selling price reaches the price mix of [ ], Planquimica
will add to its price local taxes, known as PIS / COFINS, calculated today at
the rate of[ ] of the selling price.
2.4 The price mix must be calculated by Elanco every [ ] selling period.
2.5 If Elanco sells over the price mix of [ ] the incremental value must be
divided between Planalquimica and Elanco on the basis of [ ] for Planalquimica
and [ ] for Elanco.