MANUFACTURING AGREEMENT / 02-27-1997
PARTIES TO THE AGREEMENT
Remedent USA, Inc. with offices located at 7301 E. Evans Road,
Scottsdale, Arizona hereinafter referred to as ("REMEDENT")
AND
Shummi Enterprise Co. Ltd. along with Mr. Li Ming Kuei and associates
with offices located at 9/F-4 No. 188, Nanking E Road Sec. 5, Taipei, Taiwan
R.O.C. and with production facility located at Ping-Di, Central, Lung-Kang
District, Shen Zhen, China, hereinafter referred to as "SHUMMI."
PREAMBLE
REMEDENT is the rightful owner of the specialized multi-head Remedent
manual tooth and gumbrush, hereinafter referred to as "PRODUCT." Further,
REMEDENT wishes to contract the entire manufacturing process to SHUMMI.
And...
SHUMMI is in the business of manufacturing toothbrushes at its China
factory and wishes to provide its expertise and manufacturing capability, and as
such, accept the manufacturing contract from REMEDENT.
And...
REMEDENT shall contract with the Hong Kong based company Oral 2000 LTD,
to act as a business liason between REMEDENT and SHUMMI for the purpose of
quality control, technical issues, and coordination of shipping, Letters of
Credit, and other forms of payment as may be required.
THEREFORE, the parties to this contract agree as follows:
1. MANUFACTURING CONTRACT. REMEDENT does hereby grant and SHUMMI does hereby
accept the contract to manufacture the product by providing items as detailed in
article #3 of this agreement, according to the specifications as set forth in
exhibits 1-1, 1-2, and 1-3 attached to this agreement, according to the
specification modifications as provided from time to time by REMEDENT, and
according to other terms and conditions of this agreement.
2. OBLIGATIONS OF REMEDENT. REMEDENT shall provide the following in fulfillment
of this agreement:
1. All production specifications within 10 days of executing this
agreement.
2. Specification for wall clips that shall be provided with each
brush.
3. Technical assistance at SHUMMI China factory as requested by
SHUMMI, via ORAL 2000, LTD.
4. Design for Gumbrush oven fixtures.
5. Camera-ready artwork as required for all packaging, present
and future.
3. OBLIGATIONS OF SHUMMI. SHUMMI shall provide the following in fulfillment of
this agreement:
1. All production facilities.
2. All bristle planting machines.
3. Bristle planting tooling.
4. Trim machines for toothbrushes and gumbrushes.
5. End rounding machines and tooling.
6. Bristle material as specified by REMEDENT.
7. Bristle metal anchor material as specified by REMEDENT.
8. Plastic handle raw material as specified by REMEDENT.
9. Injection molding of plastic handles and wall clips.
10. Bristle planting, trimming and end-rounding as specified by
REMEDENT.
11. Package material as specified by REMEDENT.
12. All packaging of product as specified by REMEDENT.
4. PRICE AND TERMS. For the contract services and materials as set forth in
article #3, REMEDENT does hereby agree to pay SHUMMI the amount as set forth in
attachment #1 to this agreement and as amended from time to time. SHUMMI shall
provide a proforma invoice 5 days prior to all ship dates, and thereafter,
REMEDENT, or it's representative, ORAL 2000, LTD., is obliged to TT payment in
full prior to actual ship date, unless other arrangements are agreed to by
SHUMMI on an order by order basis.
5. REMEDENT IS EXCLUSIVE CUSTOMER. In consideration for REMEDENT granting this
manufacturing contract, SHUMMI does hereby agree that it will not produce the
product or any similar or competitive product for any person or company in
continuing the spirit of cooperation regarding all aspects of this project.
SHUMMI further agrees not to display or show the product to any person or
company unless permission is granted by REMEDENT in writing.
6. PRODUCTION CAPACITY. SHUMMI agrees to increase production capacity as
required by REMEDENT from time to time, within 30 days of such request by
REMEDENT.
7. TERM OF AGREEMENT. The term of this agreement shall be for three (3) years
and is automatically renewed thereafter on an annual basis unless canceled by
either party by giving at least 6 months written notice. If SHUMMI is unable to
meet the production needs of REMEDENT at any time, and is unable to correct the
issue within 45 days of notice by REMEDENT, then REMEDENT shall be allowed to
take whatever measures deemed necessary to produce the product elsewhere, and in
such case, SHUMMI agrees to make such transition smooth and turn over to
REMEDENT all materials belonging to REMEDENT.
8. PRODUCTION SCHEDULE. REMEDENT has set forth its estimated production schedule
on attachment #2 to this agreement. REMEDENT shall provide an update of the
estimated production schedule as needed from time to time. It is understood that
these are only estimates and shall not be considered as quotas by either party.
9. COOPERATION WITH REPRESENTATIVES. SHUMMI agrees that REMEDENT will contract
with the business liaison company ORAL 2000, LTD or other such company to
provide technical assistance, quality control, shipping arrangements, and
payment services if necessary. SHUMMI agrees to extend full cooperation to ORAL
2000, LTD or any other business liaison company that REMEDENT may delegate to
the project from time to time, with the understanding that such business liaison
company has full authority to demand quality of the products.
The parties agree to the above terms and conditions by execution below.
For REMEDENT USA, Inc.: Date
------------------------------------ ------------
Kenneth J Hegemann
For SHUMMI Enterprise Co. Ltd. Date
---------------------------- ------------
Li Ming Kuei
<PAGE>
ATTACHMENT #1
Schedule of product pricing, FOB SHUMMI China factory.
Note: Charges from SHUMMI factory to Hong Kong will be waived for full
container.
MATERIAL
CP PP
---------------------
Adult brush in single plastic blister,
6 brushes per inner pack, 12 inner packs
per shipping carton. Price per bush....................US$0.382 0.35
Jr. brush in single plastic blister,
6 brushes per inner pack, 12 inner packs
per shipping carton. Price per brush...................US$0.352 0.339
Adult brush bulk packaged 616 brushes
per shipping carton.....................................US$0.28
Adult brush, 5 brushes on card blister,
24 blisters packed in each shipping carton
Price per 5 blister pack................................US$1.505
Adult brush, 3 brushes on card blister,
24 blisters packed in each shipping carton.
Price per 3 blister pack................................US$0.924 0.828
Jr. brush, 5 brushes on a card blister,
24 blisters packed in each shipping carton.
Price per 5 blister pack................................US$0.834 0.801
Adult brush in poly bag with instruction
insert, 12 brushes per inner pack, 12 inner
packs per shipping carton. Price per brush.............US$0.28
Jr. brush in poly bag with instruction
insert, 12 brushes per inner pack, 12 inner
packs per shipping carton. Price per brush.............US$0.25
<PAGE>
ATTACHMENT #2
ESTIMATED PRODUCTION SCHEDULE--1997
P.O. will confirm each order, 45 day advance required.
SHIP DATE
from SHUMMI ADULT JUNIOR TOTAL
----------------- ------------ --------------- ---------------
Mar 30 100,000 -0- 100,000
Apr 15 100,000 20,000 120,000
May 1 30,000 50,000 80,000
Jun 1 40,000 10,000 50,000
July 1 60,000 20,000 80,000
Aug 1 80,000 40,000 120,000
Sept 1 100,000 50,000 150,000
Oct 1 150,000 80,000 230,000
Nov 1 150,000 80,000 230,000
Dec 1 200,000 100,000 300,000
<PAGE>
three sheets of drawings attached
