Exhibit 10.15
Confidential Treatment Requested indicates portions of
this document have been redacted and have been
separately filed with the Commission.
AMENDMENT TO CONTRACT MANUFACTURING AGREEMENT
This is an amendment to the Contract Manufacturing Agreement entered into and
effective October 27, 1999 between Tarchominskie Zaklady Farmaceutyczne "Polfa"
Spolka Akcyjna having its principal business at.: ▇▇. ▇. ▇▇▇▇▇▇▇ ▇, ▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ("Polfa") and Dyadic International, Inc. a Florida corporation
having a permanent place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ("Dyadic").
Whereas the Parties now recognize that in preparing the original agreement with
regard to Section 8 Equipment Responsibility that the original estimate by Polfa
for the modifications to the equipment **.
Whereas the Parties agree to amend the agreement in regard to Section 8 as
follows:
Section 8.1 will be replaced with the following:
8.1 The financial responsibility for any modifications to the equipment to
achieve the agreed upon baseline productivity is borne by Polfa,
The costs of investments and modifications of equipment and their
installation borne by Polfa to adjust its facilities in order to
produce Product(s) shall be amortised for seven years (7). Improvements
or modifications to equipment or facilities in order to
**
The parties confirm that above mentioned costs are estimated costs and
final settlements will be made after completion of each stage of
modernisation
** CONFIDENTIAL TREATMENT REQUESTED
Confidential Treatment Requested indicates portions of
this document have been redacted and have been
separately filed with the Commission.
The ** will commence after the equipment and facilities are fully
capable of producing product within the agreed Product Specifications.
A interest factor may be added to the monthly charge based on the
current month end **. The interest will be for one month calculated on
the balance of the allowable costs minus the cumulative monthly charge
paid by Dyadic excluding the interest or any credits for uses by other
parties,
If the equipment or facilities included in the allowable costs is used
for production of either Polfa's own Products or a third parties
Products then a suitable credit based on the number of fermentation
days will be given to Dyadic. Likewise if the Ultra Filtration
equipment supplied by Dyadic is used in the same manner then Polfa will
pay to Dyadic for the usage based on a suitable formula.
Each group of fermentors being modified must be approved in writing by
Dyadic before committing to the modifications as per section 8.3.
Both parties agree to immediately order equipment and begin
modifications in order to as expediently as possible complete the first
step of modifying two fermentors and the required recovery equipment.
The parties agree that the goal is to be able to manufacture commercial
product in the ** .
Tarchominskie Zaklady Farmaceutyczne Dyadic International, Inc.
"Polfa" Spulka Akcyjna
By: /s/ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------- ----------------------
** ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Member of Board President
By: /s/
-------------------------------- ---------------------
**
Member of Board
Date: 08 05 2000 Date: May 8, 2000
------------------------------
** CONFIDENTIAL TREATMENT REQUESTED
Confidential Treatment Requested indicates portions of
this document have been redacted and have been
separately filed with the Commission.
AMENDMENT
TO CONTRACT MANUFACTURING AGREEMENT
entered into and effective on October 27, 1999
between TARCHOMINSKIE ZAKLADY FANNACEUTYCZNE "POLFA" SPO1KA AKCYJNA
and DYADIC INTERNATIONAL, INC. concluded on February 10,2004
Hereby, the parties agreed the following changes to the Contract Manufacturing
Agreement:
1. Point 1.2. shall be replaced with the following:
"Industrial Enzymes" shall mean all non-pharmaceutical enzymes used as a
processing aid in production, or non-pharmaceutical enzymes used as an
active ingredients including but not limited to the following industries:
animal feed, alcohol, brewing, cheese making, ethanol, fruit juice, food,
fructose, household & industrial detergents, starch processing, personal
care products, pulp & paper and textile.
2. Point 10 Confidentiality shall has the following wording:
This Agreement shall maintain the terms .and conditions of the Secrecy
Agreement entered between Dyadic, Inc. and Polfa, concluded on April 15,
1999, attached hereto as Appendix 2. The terms and conditions of the
Secrecy Agreement will be extended to include the duration of this
Agreement including any extensions and ** thereafter.
Polfa specifically agrees that it will not at any time during the Term of
this Agreement or any extensions of thereof or for ** years following the
termination by Polfa, or ** following the termination by Dyadic, or by
Polfa due to Dyadic's fault, provided that the fault is not rectified as
specified in point 13.2, manufacture directly or indirectly for itself, or
others, any Industrial Enzymes.
3. Point 13.4 shall be changed as follows:
Upon termination of this Agreement all Confidential Information, strains,
documentation and technology are to be immediately returned to Dyadic and
the strains and related know-how will not be used by Polfa, or any Polfa's
affiliated companies, or for the benefit of any third party during and
after the termination of this Agreement.
4. Section 5 of Amendment to Contract Manufacturing Agreement signed by
the parties on May 8, 2000 now shall have the following wording:
An interest factor shall be added to the monthly charge based on the
current month end ** rate. The interest will be for one month calculated on
the balance of the allowable costs minus the cumulative monthly charges
paid by Dyadic excluding interest or any credits for uses by other parties.
Tarchominskie Zaklady Farmaceutyczne Dyadic International, Inc.
"Polfa" Spulka Akcyjna
/s/ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------- -------------------------------
** ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ - President
President - General Manager
/s/
-------------------------------------- -------------------------------
** - Member of the Board
Date: 10.02.04 Date: 2-10-2004
-------------------------------------- -------------------------------
** CONFIDENTIAL TREATMENT REQUESTED
Confidential Treatment Requested indicates
portions of this document have been redacted
and have been separately filed with the Commission.
CONTRACT MANUFACTURING AGREEMENT
This contract manufacturing agreement (the "Agreement") is made and entered into
as on the Effective Date, by and between:
TARCHOMINSKIE ZAKLADY FARMACEUTYCZNE"POLFA" SPOLKA AKCYJNA having its principal
of business at: ▇▇. ▇. ▇▇▇▇▇▇▇ ▇, ▇▇-▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ("Polfa")
represented by:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ -Member of Board
▇▇▇ ▇▇▇▇▇▇▇▇▇ - Member of Board
and
DYADIC INTERNATIONAL, INC. ("Dyadic") a Florida corporation having a permanent
place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇.
represented by:
▇▇▇▇ ▇▇▇▇▇▇▇▇ - President
WHEREAS, Dyadic is engaged in development, marketing and production of Enzymes,
and
WHEREAS, Dyadic desires to engage Polfa to produce Industrial Enzymes in large
scale quantities, and Polfa has represented to Dyadic that it has expertise in
large scale manufacturing of fermentation products; and
WHEREAS, Dyadic and Polfa desire to set forth in writing the terms and
conditions of their agreements and understandings;
Now therefore, in consideration of the statements set forth above, which shall
be deemed to be a substantive part of this Agreement, and the mutual promises,
covenants, agreements, representatives and warranties contained herein, in the
parties hereto agree to the following:
The terms and conditions of this Agreement are as set forth below:
1. DEFINED TERMS
1.1. "EFFECTIVE DATE" shall mean the date of the last signature to execute this
Agreement;
1.2. "INDUSTRIAL ENZYME(S)" shall mean all non pharmaceutical enzymes used as a
processing aids in production or active ingredients including but not limited to
the following industries: animal feed, alcohol, brewing, cheese making, ethanol,
fruit juice, food, fructose, household & industrial detergents, starch
processing, personal care products, pulp & paper and textile.
** CONFIDENTIAL TREATMENT REQUESTED
1.3. "FERMENTOR BROTH" shall mean the fermentor contents, including cell mass,
at the completion of a fermentation batch (including batch and fed batch
fermentations and all withdrawals).
1.4. "FERMENTATION BATCH" shall mean the fermentation process resulting in
fermentation broth from a fermentor.
1.5. "PARTY" shall mean either POLFA or DYADIC as the context requires, and
"Parties" shall mean, collectively, POLFA and DYADIC,
1.6. "PRODUCT(S)" shall mean final (liquid) concentrate(s) of Enzyme as per
DYADIC specifications. Final liquid concentrates include but are not limited to
formulated liquid Product(s) and formulated or unformulated liquid concentrates
intended for further processing inside and/or outside the POLFA facility.
1.7. "PRODUCT SPECIFICATIONS" shall mean the specifications for the production
and quality control of the "Products", each specific product will have its
specification sheet.
1.8. "FERMENTOR DAY", shall mean a twenty four-hour period after a fermentor has
been charged with media and inoculated from the seed tank until the fermentor
has ceased to be supplied with agitation, aeration and substrates.
1.9. "FERMENTATION DAYS" shall be the number of Fermentor Days required for a
Product after the fermentor has been charged with media and inoculated from the
seed tank until the fermentation protocol is complete. It will also include up
to 24 hours as the amount of time agreed between the parties for clean up,
change over, media loading, sterilisation and inoculation.
The Fermentation Days shall be expressed to the nearest tenth (1/10th) of a
Fermentor Day. Thus for a total fermentation the total Fermentation Days could
be **.
2. RELATIONSHIP
The Parties hereby establish a contract manufacturing relationship, whereby
Polfa will conduct contract production of the Product(s) for Dyadic, utilising
Dyadic's cultures and technology. Dyadic's cultures and technology. Dyadic's
cultures and technology are defined for the purposes of this Agreement as those
cultures and technologies that are owned by or licensed to Dyadic.
The production process will be conducted by POLFA at its facilities, properly
equipped and staffed, to produce the Product(s), meeting Product Specifications.
Dyadic shall provide Polfa with all technical and technology information,
instructions and procedures available to Dyadic and necessary for the production
packing and testing of the Product(s) including the strain(s) and procedures of
the strain(s) handling as well as technical and technology assistance and
training of Polfa's staff to enable Polfa to reach the highest level of capacity
of production process for each Product.
The parties desire to establish a new common Polish company with ownership and
other details to market the Product(s) produced under this Contract
Manufacturing Agreement according to the terms and conditions to be consistent
with the Letter of Intent signed by duly authorised representatives of the
parties.
** CONFIDENTIAL TREATMENT REQUESTED
3. MANUFACTURE PROCESS
3.1. Polfa will operate its facility using qualified staff in a manner to ensure
the efficient production of the Product(s) meeting the Product Specifications.
3.2. Polfa will provide fermentation production process for the efficient
production of the Product(s) with similar processing requirements as the ** and
** processes provided by Dyadic meeting Product Specifications. Additional
Product(s) with process requirements that require additional resources i.e. use
of additional labour, energy, equipment, maintenance services, step processing,
will be negotiated with the Charges for Product produced being adjusted by the
appropriate cost.
Fermentation production processes are to include all necessary equipment,
instrumentation and controls, and analytical services for the culture
maintenance and propagation, fermentation (including fed batch with partial
broth withdrawals), recovery (Including primary separation and flocculation of
fermentor broth), concentration, formulation, Packaging, warehousing and
shipment of the Product(s).
The disposal of the biomass wastes will be provided by Polfa. The currently
suggested method as done for Polfa's own production would be by land
application. All direct third party costs of the waste disposal for land
application shall be borne by Dyadic. The parties upon signing this agreement
will with all diligence and speed work toward the approval ` this methodology of
disposal of the waste. This approval of land application or an alternative
disposal method with its costs must be known before any modifications are made
to the fermentor equipment or ultrafiltration equipment is ordered. If the
documented estimates of an alternative method grossly exceed the land
application the land estimates and make the Manufacturing costs of this enzyme
uneconomical, then Dyadic can decide not to manufacture that enzyme at Polfa.
If the waste can be disposed of by land application but Polfa wishes to dispose
of it in another method which may include additional Polfa effort not included
in the Tooling Fee then the actual cost to Polfa will be borne by Dyadic but not
to exceed land application Costs.
If the waste cannot be disposed by land application then the total cost of the
other method including any additional effort by Polfa not included in the
tooling fee will be borne by Dyadic. It is anticipated that the production of
the Product(s) will require at minimum the Services identified in Appendix 1.
4. PROCEDURES
In performing the production process pursuant to this Agreement, Polfa shall use
its best efforts to comply with the operating protocols for the Production and
formulation of the Enzymes agreed to between the Parties. POLFA agrees not to
implement process changes to the procedures without the prior written approval
of Dyadic. Polfa will maintain and supply (in English) to Dyadic up to date
written procedures as being used for the processing of the Product(s) including
the process from culture handling through packaging. Polfa will maintain a
record of changes to the procedures with dates and explanation of changes
included in the record; such records will be available to Dyadic upon request.
5. CAPACITY AND PRODUCTION VOLUMES
5.1. Polfa agrees to provide full time to Dyadic for production of Enzymes up to
** fermentors as required by Dyadic. During the initial production, the parties
agree that ** fermentors can be utilised for production of the Product(s) in
place of ** fermentor. The Tolling Fee for the use of ** fermentor will be at
the agreed upon Tolling Fee in 7.1.
** CONFIDENTIAL TREATMENT REQUESTED
Currently one of the ** fermentor being presented has a ** than the other two
and if prorated from that used on the **. It is agreed that if yields of the
other ** fermentors cannot be achieved in the ** fermentor that Polfa **
fermentors. If during the agreed trial run ** fermentor, Polfa is unable to
achieve a ** then Dyadic can elect to not utilise the ** fermentors.
If agreed between the parties, **.
Dyadic will provide Polfa with a forecast of planned production volumes by
Product(s).
Dyadic shall provide Polfa with a rolling forecast of requirements for the next
twelve months every quarter end. Dyadic shall provide Polfa with firm orders for
volumes of Product(s) 45 days in advance of production. Dyadic should give Polfa
notification of a new Product(s) or the need to expand to another fermentor
three months in advance provided that no additional investments are required.
5.2. The parties agreed that at the initial time of co-operation to confirm the
possibilities of transfer of Industrial Enzyme production to Polfa's facilities,
five pilot plant scale trials shall be performed. If the results of these trials
are a success then one trial in ** fermentor shall be performed. For the first
trial ** the scope of modification made by Polfa will be the minimum
requirements necessary for such process.
The cost of raw materials and packaging needed for the trial shall be borne by
Dyadic and Dyadic shall not pay Polfa any Tolling Fee.
If the results of the industrial trial are successful Polfa shall start to
adjust its facilities to Industrial Enzyme production requirements and Dyadic
shall provide Polfa with UF equipment per Section 8. 1.
5.3. Under this agreement Polfa is required to make modification in their
fermentation area in order to be able to produce the Product(s) ("required
changes"). If Dyadic does not produce Product at Polfa per this Agreement within
six months after completion of the required changes then Dyadic will reimburse
Polfa for the documented cost of these changes. The total reimbursement is not
to exceed Polfa's estimate of **.
Both parties agree to use their maximum, efforts and recognise that time is of
the essence in completing the pilot plant studies, commercial level
demonstration trial fermentation, installing the modification and recovery
equipment and starting commercial production of Industrial Enzymes.
6. PRODUCT SPECIFICATIONS
The Parties shall agree upon Production and Quality Control Specifications
("Product Specifications").
7. CHARGES FOR PRODUCT PRODUCED
7.1. Dyadic shall pay to Polfa for Product(s) produced meeting Product
Specifications per each Fermentation Batch at a Product Price which shall be
calculated on the following formula:
**
** CONFIDENTIAL TREATMENT REQUESTED
Secondly **.
The result is **
7.2. Charges.
7.2.1 A tolling fee of ** for the total Fermentation Days used (the "Tolling
Fee"). 7.2.2 It is understood that Tolling Fee specified above is equal with **
7.2.3 **
7.2.4 **
7.2.5 The above mentioned Tolling Fee shall be valid for the period of twelve
months from the date of the first commercial production provided that such
commercial production shall be started within six months from the Effective
Date, excluding delay caused by Polfa's fault.
For the following twelve (12) month period the Tolling Fee shall be adjusted and
agreed using the following formula:
Adjustments:
**
The parties agree that the increase of the Tolling Fee in EURO cannot be greater
** .
If the Parties do not reach settlement on the annually adjusted Tolling Fee, the
new Tolling Fee shall be referred for binding arbitration to an independent
Chartered Accountant firm located in Poland. This firm would do their own
calculations based on the methodology and limitations stated in 7.2.5. The costs
for the work done by Chartered Accountant shall be borne by the party in error
or if both are in error equally between the parties. In case of dispute until a
new Tooling Fee is established by independent Chartered Accountant a previous
Tooling Fee is utilised. After the new Tooling Fee is agreed upon, the
fermentation charges in dispute will be recalculated with the new Tooling Fee
and the difference will be immediately remitted by Dyadic.
7.3. The calculation of total toll charges per fermentation batch of Product(s)
shall be ** .
7.4. Charges for Product produced set forth in this Article 7 is inclusive of
all normal production phases including all but not limited to those items
covered in App. 1, and shall include raw materials and packaging supplies,
necessary for performance under this agreement: such Raw Materials and Packaging
supplies shall be included at cost at the actual usage per Fermentation Batch in
the Product Price charge in Section 7.1. Polfa will supply documented evidence
of actual cost and usage of Raw Materials and Packaging to Dyadic. Dyadic will
agree to maintain a deposit of ** with Polfa in order to aid in the carrying of
Raw Materials and Packaging Inventory.
In keeping with the other costs the Raw Material and Packaging Costs will be
translated into EURO at a translation rate of PLN/EURO published by Polish
National Bank for the date of invoice issued by Polfa.
** CONFIDENTIAL TREATMENT REQUESTED
Dyadic will provide Polfa with a stand by Letter of Credit, of value of
approximately a ** . The conditions of Letter of Credit are defined in Appendix
3 to this Agreement. The costs of the Letter of Credit shall be divided into two
parties, i.e. the costs of it in Poland shall be borne by Polfa and the costs
outside of Poland shall be borne by Dyadic.
7.5. Dyadic and Polfa agree that baseline productivity for each Enzyme
production shall be calculated as follows:
7.5.1 Dyadic shall give to Polfa the level of productivity based on Dyadic's
contract manufacturer's experience in the case of commercial products or pilot
plant data for non-commercial products. **
7.5.2 A productivity baseline (on-going baseline) will be determined for each
Product to be produced by Polfa for Dyadic. This productivity baseline is to
only and exclusively be used in the case where the production level is impacted
by a fermentor contamination, mechanical failure, operational error or where
product is produced not in specification (the aforementioned to be defined as
"Problem Fermentation(s)"). **
**
**
The in specification product will be agreed to be either measured in volume or
weight of a specific activity product or in total activity units.
Prior to completion of the required **. This baseline will be used to calculate
the prorated total fermentation charges for any fermentation where the
production level is impacted by a fermentor contamination, mechanical failure,
operational error or where product is produced not in specification.
After the agreed upon ** the ongoing baseline can be calculated and agreed upon,
all batches where the total fermentation charges have been prorated before the
on-going baseline could be calculated will be reviewed. This review will be to
determine the prorated total fermentation charges based on the on-going baseline
and determine if any credits are due to Dyadic or additional payments are due to
Polfa.
7.5.3 All batches where the production level is not impacted by a fermentor
contamination, mechanical failure, operational error or where product is
produced in specification irrespective of obtained production level shall be
paid per agreed total charges for all Product produced as it is defined in point
7.
7.6. All product manufactured by Polfa must meet the Product Specifications.
Dyadic is not obligated to take possession of Product(s) not meeting the Product
Specifications and Polfa will reimburse Dyadic the documented evidence of the
costs, if any, borne by Dyadic for manufacture of such batch of Product,
provided that it is no fault of Dyadic,
8. EQUIPMENT RESPONSIBILITY
8.1. The financial responsibility for any modifications to the equipment to
achieve the agreed upon the baseline productivity is borne by Polfa.
** CONFIDENTIAL TREATMENT REQUESTED
The costs of investments and modification of equipment and their installation
borne by Polfa to adjust its facilities in order to produce Product(s) shall be
amortised for ten years (10) and the annual amortisation is to be added to the
Tolling Fee, as per point 7. 1.
8.2. Dyadic has agreed for the initial fermentor used to provide the Ultra
filtration equipment that Polfa would install at their cost. The Ultra
filtration equipment would remain the property of Dyadic over the initial
ten-year term of the agreement. After the initial term Dyadic would have the
option to either sell the equipment to Polfa for an agreed upon value or remove
the equipment.
Dyadic shall be responsible for the ** .
8.3. The responsibility for any additional investments, if any, to adjust
Polfa's facilities for a new Product(s) shall be agreed upon by the parties.
9. PAYMENT TERMS
9.1. Polfa will send a regular invoice to Dyadic and such invoices shall be
issued by Polfa on Release Date.
9.2. Dyadic shall make payments to Polfa within 30 days from the date of invoice
issued by Polfa. Payment will be made directly to Polfa by Dyadic. If Dyadic
does not pay within the given time then Polfa may draw on the stand by Letter of
Credit. The Parties may agree that payments of Euro denominated invoices may be
made in Polish Zlotys at the translated rate of PLN/EURO per the Polish National
Bank for the day of settlement (according to Polish law).
9.3. All ▇▇▇▇▇▇▇▇ in this agreement will be subject where applicable to the
applicable Polish Government VAT.
10. CONFIDENTIALITY
This Agreement shall maintain the terms and conditions of the Secrecy Agreement
entered between Dyadic, Inc. and Polfa, concluded on April 15, 1999, attached
hereto as Appendix 2. The terms and conditions of the Secrecy Agreement will be
extended to include the duration of this agreement including any extensions and
5 (five) years thereafter. Polfa specifically agrees that it will not at any
time during the Term of this Agreement or for five (5) years following the
termination by Polfa or two (2) years following termination by Dyadic or
termination by Polfa due to Dyadic's fault or any extension thereof manufacture
directly or indirectly for itself, or others, any Industrial Enzymes as it is
defined in point 1.2.
11. OWNERSHIP AND DELIVERY
11.1. Ownership of the Product and the risk of loss shall transfer to Dyadic
upon Quality Control certification for the Product(s) meets Product
Specifications on the Release Date. Polfa agrees to warehouse the full quantity
of Product obtained from each ** liters fermentation batch in cold storage for a
period of up to ** free of charge. Dyadic agrees to take physical possession of
said Product within ** period from the date of Release Date or pay Polfa a
warehousing fee to be agreed upon by the Parties.
All out of pocket costs related to shipments shall be borne by Dyadic.
Dyadic agrees to schedule shipments of not less than a minimum of **. In the
event, Dyadic requires shipment of Product in quantities less than the amount
stated above, the Parties agree that such shipment will incur an additional
service charge agreed upon by both Parties.
** CONFIDENTIAL TREATMENT REQUESTED
11.2. All improvements in Dyadic's technology (processes or strains) either by
Dyadic or Polfa are the sole property of Dyadic.
12. FERMENTATION USAGE AND CANCELLATION
12.1.1 All fermentors allocated to Dyadic may be used by Polfa at any time they
are not used by Dyadic for manufacturing products allowed in this agreement.
This is provided the manufacturing of these products is not detrimental to the
production or scheduling of Dyadic production.
12.1.2 Cancellation of any rights to any fermentor Dyadic has produced in during
the previously three months requires six months notification by Polfa.
12.1.3 In cancellation utilisation percentage the capacity fermentor days per
period is ** of workdays. Workdays exclude any plant shutdowns such as vacation,
equipment breakdowns or scheduled maintenance.
12.1.4 Cancellation can only be for each fermentor independent of the other.
Cancellation of a fermentor must begin with the last added fermentor to actual
production. If the total fermentor days of all fermentations produced in the
previous three months is 75% of the total of all fermentors days activated for
Dyadic then there can be no cancellation of any fermentors.
12.1.5 In the case of cancellation of any fermentor Polfa may purchase the
installed equipment owned by Dyadic (see point 8. 1.) if Dyadic does not wish to
keep it for use at another location. The purchase price would be **. The formula
to be used would be **.
FIRST FERMENTOR
12.2.1 The First Fermentor can be ** .
12.2.2 In the first twelve months of use after the initial commercial production
in this fermentor no cancellation can be made for any production level.
12.2.3 In the second and third year of use Polfa may cancel the right to this
fermentor if Dyadic is utilising less than **.
12.2.4 After the third year of use Polfa. may cancel the right to this fermentor
if Dyadic is utilising less than **.
SECOND FERMENTOR
12.3. 12.3.1 Dyadic will have a guaranteed option to increase production to the
second ** years providing the first fermentor has not been cancelled.
12.3.2 After Dyadic has begun utilising the second Fermentor there is no
utilisation requirement for the **.
12.3.3 After the ** of production Polfa can cancel Dyadic's rights to this
fermentor if Dyadic is utilising ** days in the previous **.
** CONFIDENTIAL TREATMENT REQUESTED
THIRD AND FOURTH FERMENTOR
12.4.1 Dyadic has the right of first refusal on the third and fourth
fermentor for ** years. If Polfa have a bonafide offer or requirement for
production in the third or fourth fermentor, then Dyadic has ** to provide
production requirements to Polfa to fill ** of this fermentor's capacity days.
If Dyadic is not utilising the previous fermentor at this point, (i.e., Polfa
wishes to permanently contract for using the fourth fermentor while Dyadic is
only using the first and second fermentors) then the right of first refusal is
only valid for **.
12.4.2 If Dyadic begins production in the third or fourth fermentor, other than
for exercising the preceding option in 12.4.1, there will be no performance
level requirement for the first year of use.
12.4.3 After the second year of production cancellation can occur if Dyadic is
utilising ** the previous ** for the third or fourth fermentor.
13. TERM AND TERMINATION
13.1. This Agreement shall continue in effect from the Effective Date for ten
(10) years from effective date, with options for ** extensions each lasting for
a minimum of an additional ten (10) years, unless extended by mutual written
agreement of the Parties, or terminated pursuant to the provisions of Article
13.2.
13.2. In the event of default of a material term of this Agreement, the
aggrieved Party shall provide written notice of such a breach, and may terminate
this Agreement if such default is not cured within ninety (90) days of such
written notice.
13.3. In the event of the sale and/or transfer by the Parties or by its
successors of such of both Parties' assets which are necessary to implement this
Agreement, both Parties (or its successors) will require any such sale and/or
transfer to include an agreement by the Acquiring party to assume this Agreement
on the same terms and conditions set forth herein.
13.4. Upon termination of this agreement all Confidential Information, strains,
documentation, and technology are to be Immediately returned to DYADIC.
14. WARRANTY
14.1. Polfa warrants that the Product(s) shall meet the Product Specifications"
upon Quality Control clearance, but Polfa is not responsible for any quality
changes of Product(s) which appear during the storage of Product(s) in cooling
store at temperature 10(0)C.
14.2. Polfa will maintain insurance for Dyadic's final Product(s) to the same
extent that Polfa maintains its own products for a period of five days from the
date of Release Date.
15. BATCH SAMPLES, REPORTS AND QUALITY CONTROL
15.1. Polfa agrees to provide Dyadic with periodic reports (including, but not
limited to fermentation records showing all details of each fermentation and
recovery records) and samples as agreed to by the Parties as it is specified in
Appendix 4 to this Agreement.
** CONFIDENTIAL TREATMENT REQUESTED
15.2. The Parties agree that the quality control approval of the final
Product(s) - QC Release (Release Date) - shall be made by Polfa according to the
specification and procedures supplied by Dyadic for each Product(s). Dyadic may
amend this process at any time upon Polfa's prior written consent, which consent
shall not be unreasonably withheld.
16. ENTIRE AGREEMENT
This Agreement set forth the entire agreement of the Parties relating to the
subject matter hereof. All prior agreements, understandings and representations
are superseded by such Secrecy Agreement and this Agreement, and are without
further effect. This Agreement may be amended only by written agreements signed
by both Parties. Polfa acknowledges that only the President of Dyadic or his
written designee may on behalf of Dyadic modify or enter into any agreements
with Polfa.
17. NOTICE
All notices and other communications required or permitted by this Agreement
shall be in writing and shall be deemed to have been given when delivered by
hand or mailed, certified or registered mail return receipt requested and
postage prepaid.
(a) If to Dyadic:
▇▇▇▇ ▇▇▇▇▇▇▇▇
President
Dyadic International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; USA
and to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Ltd.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - 2794
(b) If to Polfa:
**
Polfa Tarchomin S.A.
2, ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇ -▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
Either Party may change the address or designee to which notice shall sent by
giving written notice of such change to the other Party.
18. GOVERNING LAW
It is understood and agreed that the laws of Austria shall at all times and in
all respects govern the construction and interpretation of this Agreement. All
papers, agreement documents and instruments shall however be executed in
English, which shall be the controlling language of this Agreement.
The both Parties will do their best efforts to resolve all matters and disputes
in the amicably way.
** CONFIDENTIAL TREATMENT REQUESTED
All disputes arising from the interpretation of this Agreement - if not settled
amicably - shall be referred to the settlements to the Arbitration Court at the
International Chamber of Commerce in Vienna, Austria. The arbitration including
appointment of arbitrators shall be carried out in accordance with the valid
rules of the International Chamber of Commerce Rules of Arbitration.
The arbitration shall be conducted in the English language.
The award of Arbitration shall be final and binding for both parties. The
parties bind themselves to carry out the awards of the arbitrators.
19. INDEMNIFICATION
19.1. Dyadic shall indemnify and hold Polfa harmless against all claims and
expenses, including legal expenses arising out of the death of or injury and
disease to any person or persons or out of any damages to property, whether
during or after termination of this Agreement, resulting from the use of the
"Products" produced and delivered in accordance herewith and accepted by Dyadic
which is not attributable to the negligence of Polfa or its employee to follow
the process and the "Product Specification".
19.2. Polfa, will recognise that the strains and know-how are the sole property
of Dyadic and will use this technology and any other information to fulfil the
purpose of this Agreement and no other. Polfa recognises that the technology
revealed to Polfa by Dyadic contains certain Trade Secret information and Polfa
agrees to maintain the same degree of confidentiality and protection with regard
to the Trade Secrets of Dyadic as Polfa would maintain with regard to its own
Trade Secrets. Polfa agrees that it will not use this Trade Secret information
for its benefit or to the detriment of Dyadic except as needed for the
satisfactory performance of this Agreement.
19.3. For all purposes hereunder, the Parties hereto agree to act as, and
acknowledge, that each is an independent contractor to the other, with no
capacity to legally bind the other Party nor to act at its agent, employee,
joint venture or partner expect as specifically set forth herein, if at all, or
in a separate writing executed by the Party to be bound.
19.4. Dyadic represent to the best of its knowledge and belief that production
process(es) of Product(s) shall not infringe any third parties property rights.
Nevertheless, in case Polfa would be sued by reason of an infringement of third
parties property rights, Polfa shall promptly inform Dyadic thereof. Dyadic
shall then conduct itself any defence of such suit at its own expense and hold
Polfa harmless from and against any loss, claim, damage, expense or liability
resulting from such infringement. Polfa agrees to assist Dyadic, without,
however, assuming any monetary obligation.
20. FORCE MAJEURE
The Parties hereto shall not be liable for any failure to perform. as required
by this Agreement, to the extent such failure to perform is due to circumstances
reasonably beyond their control, such as labour disturbances or labour disputes
of any kind, accidents, failure of any governmental approval required for full
performance, civil disorders of commotion, acts of aggression, acts of God,
energy or other conservation measures, explosion, failure of utilities,
mechanical breakdowns, material shortages disease, or other such occurrences.
** CONFIDENTIAL TREATMENT REQUESTED
21. SEVERABILITY
If any part or provision of this Agreement is found to be invalid or
unenforceable, such part or provision will be deemed and amended so as to
achieve, as nearly as possible, the same economic affect as the original part or
provision and the remainder of this Agreement shall remain in full force and
effect.
22. HEADINGS/GENDER
Paragraph headings or the use of a particular gender in this Agreement are for
convenience and do not affect its construction or interpretation.
**
** CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 1
**
1. **
2. **
3. **
4. **
5. **
6. **
7. **
8. **
9. **
10. **
11. **
12. **
13. **
** CONFIDENTIAL TREATMENT REQUESTED
14. **
15. **
** CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 3
TERMS AND CONDITIONS OF STANDBY LETTER OF CREDIT
**
** CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 4
SAMPLES OF PRODUCTION REPORTS
**
** CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 4. 1.
**
** CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 4.2.
**
** CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 4.3.
RUN PARAMETERS REPORT
**
** CONFIDENTIAL TREATMENT REQUESTED
Confidential Treatment Requested indicates
portions of this document have been redacted
and have been separately filed with the Commission
POLFA TARCHOMIN(R) S.A.
--------------------------------------------------------------------------------
Centrala tel. ▇▇▇ ▇▇ ▇▇, 811 80 1 TARCHOMINSKIE ZAKLADY
Sekretariat tel. ▇▇▇ ▇▇ ▇▇, fax ▇▇▇ ▇▇ ▇▇ FARMACEUTYCZNE "POLFA"
Dzial Sprezedazy tel. ▇▇▇ ▇▇ ▇▇, ▇▇▇ ▇▇ ▇▇ SPOLKA AKCYJNA
Fax ▇▇▇ ▇▇ ▇▇, tel/fax ▇▇▇ ▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇, ▇▇-▇▇▇ ▇▇▇▇▇▇▇▇
Dzial Eksportu tel/fax ▇▇▇ ▇▇ ▇▇
Warsaw, February 11, 2004
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
PRESIDENT & CHIEF EXECUTIVE OFFICER
DYADIC INTERNATIONAL, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
Hereby, Polfa Tarchomin S.A. having its business seat at: ▇, ▇.▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
▇▇-▇▇▇ ▇▇▇▇▇▇; Poland presents and confirms that it recognizes the existing
terms and conditions of the Contract Manufacturing Agreement concluded by and
between Polfa Tarchomin S.A. and Dyadic International, Inc. on October 27, 1999
and it will provide Dyadic International, Inc. with required fermentation
capacity according to the following time schedule:
- **;
- **;
- **.
Preliminary schedule will contain the following information:
- the scope of modernization, i.e. required investments and works;
- duties and responsibilities of each party;
- preliminary time table required to realize the whole project;
- period of time to be necessary to start this modernization
from the date of Dyadic's order to beginning of the works,
Polfa Tarchomin S.A. will secure the funds to carry out these modernizations.
/s/ [Illegible]
------------------------
President, General Manager
Date: 11/02/04
-----------------------
** CONFIDENTIAL TREATMENT REQUESTED
LETTER OF UNDERTAKING
Hereby, Dyadic International, Inc. having its business seat at: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
represented by:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ - President, Chief Executive Officer
confirms and presents that this letter provides the Board of Directors of Polfa
Tarchomin S.A. with Dyadic International, Inc.' guarantee which Polfa Tarchomin
S.A. can utilize to support Polfa Tarchomin S.A. application for credit.
According to the terms and conditions of this guarantee agreement, upon
completion of each step of modernization, Dyadic International, Inc. shall be
obliged to provide Polfa Tarchomin S.A. with orders as is customary for
toll-manufacturing of Industrial Enzymes and to take back manufactured
Industrial Enzymes in amount equal to production, made utilizing not less **
capacity fermenters days during the whole period of the return of agreed
modernization costs by Dyadic International, Inc. to Polfa Tarchomin S.A.
provided that Polfa Tarchomin S.A. will make available to Dyadic International,
Inc. required fermentation capacity according to the time schedule outline in
Polfa Tarchomin's letter dated February 11, 2004,
**
Dyadic International, Inc. agrees and accepts the time schedule of realization
of modernization by Polfa Tarchomin S.A.
This letter is enclosure to the Contract Manufacturing Agreement and it
constitutes the integral part of this Agreement.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ - President of
Dyadic International, Inc.
2-1-2004
--------------------------------
date:
** CONFIDENTIAL TREATMENT REQUESTED