CONTRACT
THIS AGREEMENT, made and entered into this 1st day of March, 2001 by and
between TOPAZ GROUP, INC., a corporation organized and existing under the laws
of the State of Nevada and licensed to do business in Missouri, hereinafter
called "Licensee," and THE CURATORS OF THE UNIVERSITY OF MISSOURI, a public
corporation of the State of Missouri, hereinafter called "University".
This Agreement constitutes the complete understanding among the parties
hereto, and any alteration, amendment, or modification of any of the terms and
conditions shall not be valid unless made pursuant to a written agreement signed
by each of the parties. Any other agreement or understanding shall be null and
void. Both parties represent that there is no conflict with any other agreement.
This agreement shall be construed under and in accordance with the law of the
State of Missouri.
WITNESSETH: That for and in consideration of the acceptance of Licensee's
proposal and the award of this Contract to Licensee by University, and in
further consideration of the agreements and undertakings of the parties
hereinafter set forth, it is agreed by and between the parties hereto as
follows:
1. Licensee shall receive Topaz Gemstone Irradiation Capacity as set
forth in Licensee's proposal and as amended by letter dated April 4,
2000, in strict accordance with, and as described in the
specifications entitled, "Topaz Gemstone Irradiation License," dated
December 9, 1999, which were prepared by the Director,
Procurement/Materials Management, University of Missouri-Columbia,
Columbia, Missouri, and are on file in the Office of the Director,
Procurement/Materials Management, University of Missouri-Columbia,
Columbia, Missouri, said specifications being hereby made a part of
this Contract as fully as if attached hereto, or set forth herein,
said items to be furnished in strict accordance with the Contract
Documents.
2. The Contract Documents shall consist of the following parts:
a. This Instrument;
b. Licensee's Bond for Performance;
c. University's Request for Proposal dated December 9, 1999;
d. Specifications referred to in the paragraph numbered 1 above,
together with Addendum Numbers 1 and 2; e. Appendix A; f.
Licensee's Proposal dated February 14, 2000, addressed to The
Curators of the University of Missouri, Columbia, Missouri, and
as amended by letter dated April 4, 2000; and g. Notice of Award.
3. This Instrument, together with the documents hereinabove mentioned,
form the Contract, and they are as fully a part of this Contract as if
attached hereto or herein repeated. In the event that any provision in
any of the component parts of
this Contract conflict with any provision of any other component
parts, the provision in the component part first enumerated herein
shall govern, except as otherwise specifically stated.
4. No member or officer of the Board of Curators of the University of
Missouri incurs or assumes any individual or personal liability by the
execution of this Contract or by reason of the default of University
in the performance of any of the terms hereof. All such liability of
members or officers of the Board of Curators of the University of
Missouri as such is hereby released as a condition of and
consideration for the execution of this Contract.
5. University agrees that it will not assert any immunity from attachment
in aid of execution or from execution upon its property.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed, in triplicate, on the day and year first above written.
ATTEST TOPAZ GROUP, INC.
By /s/ Authorized Signatory /s/ Authorized Signatory
--------------------------------- -----------------------------------
SELLER
THE CURATORS OF THE UNIVERSITY
OF MISSOURI
By /s/ Authorized Signatory
-------------------------------
(Insert Signature Block)
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APPENDIX A
I. INTRODUCTION
This appendix shall provide detailed terms and conditions in support of an
exclusive license Agreement, made and entered into by and between THE CURATORS
OF THE UNIVERSITY OF MISSOURI, a public corporation of the State of Missouri,
contracting on behalf of the University of Missouri-Columbia Research Reactor
Center (hereinafter "University")and THE TOPAZ GROUP, INC. (hereinafter
Licensee). The exclusive license, awarded pursuant to Request for Bid
(RFB)#H-012500, shall apply to University's Topaz Gemstone Irradiation Capacity.
Service provided to Licensee shall include irradiation service only. University
shall irradiate topaz gemstones encapsulated within specialized irradiation
containers. Licensee shall fabricate, at Licensee's expense, all irradiation
containers not transferred to the Licensee at the inception of this Agreement
and shall maintain all irradiation containers. Licensee shall submit to
University irradiation containers loaded, sealed, and ready for irradiation. The
licensee shall make all determinations concerning duration of radiation exposure
and priority for each container. Following irradiation, irradiation containers
shall be returned to the Licensee unopened. All assays and analyses for the
purpose of release of radioactive byproduct material to the unlicensed public,
domestic and abroad, shall be the responsibility of the Licensee.
II. TERM OF AGREEMENT
This Agreement shall be effective for a period of four (4)years, beginning on
March 1, 2001, ending on February 28, 2005. Following completion of the initial
four (4)year license agreement, this agreement may be extended on an annual
basis upon mutual agreement of both parties. The start date of this Agreement
may be modified upon mutual agreement of both parties.
III. FEES, INVOICING, and CONTRACT SECURITY
A. Fee for Irradiation Capacity
The fee for irradiation capacity shall be calculated using a charge
rate of $15.38 per hour (based upon the annual projected on-line time
(150 hours/week)and the irradiation capacity fee bid of $120,000.00
per position (see RFB#H012500)). The fee shall include:
1. Payment for irradiation container exposure hours. This component of
the fee calculation shall be based upon the actual irradiation
exposure hours, rounded to the nearest whole hour.
a. If irradiation exposure time for an individual irradiation
container is between 95% and 105% or within one (1)hour of the
requested time, the actual irradiation hours for the container
shall he applied to the fee for irradiation capacity.
b. If irradiation exposure time for an individual container exceeds
105% of the requested time but is less than 200% of the
requested time, the
APPENDIX A
irradiation exposure hours for the container
equivalent to 105% of the requested time shall be applied to the
fee for irradiation capacity.
c. If irradiation exposure time for an individual irradiation
container exceeds 200% of the requested time, the irradiation
container exposure hours for the container shall not be applied
to the fee for irradiation capacity.
d. If irradiation exposure time for an individual irradiation
container is less than 95% of the requested time, the actual
irradiation hours for the container shall be applied to the fee
for irradiation capacity.
2. Payment for all hours for which no irradiation containers have been
submitted for irradiation by licensee. Irradiation containers shall
not be considered submitted unless received twenty-four (24) hours
prior to the requested start of irradiation.
3. Payment for all hours that irradiation exposure is ceased due to
University operational limitations (see section IV. A.).
4. Payment for all hours that irradiation exposure is ceased due to
non-compliance with University approved procedures and
specifications (see section V.).
5. Payment for all hours that irradiation exposure is ceased due to a
mechanical failure of a container that prohibits University's
ability to irradiate containers.
B. Fee for Irradiation Container Handling
1. Fee for irradiation container handling shall be $300 per container,
per irradiation. One (1)insertion is typically required to
successfully perform an irradiation. If additional insertions are
requested by the Licensee (scheduling change.. .)or are required
due to a University operational limitation as described in section
IV. A., the $300 handling fee shall be applied for each additional
insertion.
C. Invoicing and Payments
1. The fee for irradiation capacity shall be paid monthly. On or
before the start date of the contract period, the Licensee shall
pay a $40,000.00 deposit to University. At the conclusion of each
month of the contract period, an invoice will be generated
corresponding to the actual irradiation capacity fee. At the
conclusion of the contract period and upon final settlement of
charges, the deposit shall be returned to the Licensee.
2. The fee for irradiation container handling will be invoiced
monthly.
3. All invoices must be paid within 30 days of the invoice date. If
payment is not received within 30 days of the invoice date,
University shall provide in
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APPENDIX A
accordance with Section 14, Information For Respondents and General
Conditions, University of Missouri Request For Proposal
(RFP#HO12500).
D. Accountings
1. Upon delivery at University, Licensee shall provide to University a
listing of the requested irradiation exposure hours and irradiation
priority for each container.
2. University shall provide to Licensee a monthly written accounting
of all charges included in the monthly invoices that depicts the
official representation of the monthly charges. The accountings
shall list each irradiation container irradiated including a
verification of the requested run hours for each container.
University operational anomalies known to have affected service
shall be included in the report.
3. Licensee shall have the right to request an examination of
University's books and records relative to such monthly written
accounting. In that event, Licensee and University shall select a
mutually agreed upon independent auditor to perform the
examination. If there is a discrepancy between the results of such
examination and the monthly written accounting, appropriate
adjustments shall be made. If a dispute remains, Licensee shall so
advise University in writing (together with furnishing University
with written proof of the dispute), whereupon the parties shall
negotiate in good faith in an attempt to resolve the dispute. If
any such dispute is not resolved within thirty (30) days after
University's receipt of such written notice and written results,
either Licensee or University may submit the dispute to non-binding
arbitration, under the rules of the American Arbitration
Association. Subject to the foregoing, in the event the independent
auditor's examination of University's books and records reveals
more than a 25% difference between the results of such examination
and the monthly written accounting, University shall reimburse the
Licensee for the cost of any and all expenses incurred by Licensee
in conducting such examination. In the event the independent
auditor's examination of University's books and records reveals no
less than a 25% difference between the results of such examination
and the monthly written accounting, Licensee shall bear the cost
for any and all expenses incurred by Licensee in conducting such
examination and shall reimburse University for costs of any and all
expenses incurred by University in conjunction with said
examination.
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APPENDIX A
E. Contract Security
1. Licensee shall, at own expense, on or before the start date of this
Agreement, furnish a performance bond equivalent to one (1)year
irradiation capacity fee ($480,000) as security for the faithful
performance of this Agreement. The bond provided shall be effective
for a one year term beginning on the start date of this agreement
and shall be renewable, via continuation certificate, for
additional one year periods at the sole option of the surety.
Failure of the surety to provide renewal(s) of this bond shall not
constitute default under this agreement. However, if Licensee fails
to secure a substitute surety, acceptable to University for any
one-year period, that failure shall constitute default under this
agreement. In no event shall the surety's total liability under
this bond exceed $480,000.
2. The surety of such bond shall be a duly authorized surety company
satisfactory to the University. Licensee shall furnish, at own
cost, to University, on or before the start date of this Agreement,
a properly certified copy of the current Certificate of Authority
to transact business in the State of Missouri of the surety
company, which proposes to execute the performance bond. Such
certificate will remain on file with University. The University
will approve no performance bond until such certificate is
furnished, unless there already is on file with the University such
a current certificate of such Surety Company, in which no
additional certificate will be required during the period of time
for which such current certificate remains in effect.
3. In the event of default, surety payment shall be remitted within
thirty (30)days of the default date.
4. In the event of default, Licensee's property shall be disposed in
accordance with Section III, subsection D (see addendum #2)of RFB
#12500. If Licensee's property is abandoned at University, property
shall be considered forfeited to University.
F. Addresses for Notifications
1. All notices, reports, invoices, accountings, and other
correspondence specified in this agreement shall be sent to the
following addresses unless either party notifies the other of a
change of address.
University: University of Missouri - Columbia
Research Reactor Center
Columbia, MO 75211
TGI: The Topaz Group, Inc.
C/o Quali-Tech, Inc.
6200 Arrowhead Lake Dr.
Columbia, MO 65203
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APPENDIX A
IV. OPERATIONAL CONDITIONS
A. University Operational Limitations
1. University Operational Capacity Limitations are as follows:
o Dry Storage Capacity: Forty-eight (48)irradiation containers
o Reactor Pool Storage Capacity: Twenty-four (24)irradiation
containers
o Reactor Pool Irradiation Container Dose Limit for Removal:
Measured rate of 300mr/hr
o Reactor Irradiation Positions: Four (4)irradiation containers
2. The total number of irradiation containers that may reside at
University at any one time is seventy-six (76). Incoming shipments
of irradiation containers shall not contribute to the total,
provided that an equal or greater number of irradiation containers
are shipped from MURR on the day of the incoming shipment.
3. Dose rate measurements for irradiation containers in the reactor
pool may be executed no earlier than 7 days from the end of
irradiation and a maximum of once daily Monday through Friday
thereafter or as mutually agreed.
4. If "800 series" irradiation containers are utilized, two (2)or four
(4)"800 series" containers must be irradiated simultaneously to
fully utilize irradiation capacity. If one (1)"800 series"
container is irradiated in a position, then one (1)adjacent
irradiation container must remain empty.
5. University shall routinely store up to three (3)Licensee-owned and
supplied fifty five (55)gallon drum-type transport containers for
the purpose of shipping irradiation containers. The number, type,
size, and storage location of transport containers may be modified
upon mutual agreement by both parties.
B. Irradiation Container Contents and Damage
1. Topaz is the only material approved for irradiation under this
agreement. Other materials may be irradiated, but require prior
written approval from University. Said approval shall not be
unreasonably withheld. Costs associated with University's
evaluation of other materials shall be charged to the licensee.
2. University will be responsible for the actual replacement cost of
any containers irreparably damaged during handling by University
personnel. Cost to University for replacement of irradiation
containers shall not exceed $15,000.00 per container. Licensee
shall bear all costs for replacement of containers that require
replacement as a result of normal operations and wear.
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APPENDIX A
C. Receipt and Shipment of Irradiation Containers
1. Containers to be irradiated shall be received at University not
less than twenty-four (24)hours prior to the requested start of
irradiation or as mutually agreed.
2. Containers to be shipped from University must meet the University
operational limit for removal from the reactor pool forty-eight
(48)hours prior to scheduled shipment or as mutually agreed.
3. Shipments into or out of University may be executed on Wednesday's
and/or Thursday's between the hours of 9:00 am and 4:00 pm Missouri
local time unless another day or time is mutually agreed. Shipments
may not be executed on days University is closed for holidays.
4. Shipment dates shall be scheduled and specific shipment contents
shall be reported to each party in writing no later than 4:00 pm on
the Monday prior to shipment or as mutually agreed.
5. All shipments to University shall be made in accordance with
University instructions and shall comply with all state, federal,
and/or international laws governing the shipment of radioactive
byproduct material. Shipments from University shall comply with all
state, federal, and/or international laws governing the shipment of
radioactive byproduct material.
6. All shipping costs shall be the responsibility of the Licensee.
Commercial carriers shall be paid directly by the Licensee.
7. The Licensee shall be responsible for providing all transport
containers. All costs associated with the purchase, maintenance,
and regulatory compliance of transport containers and shipping
supplies shall be the responsibility of the Licensee.
8. Transport containers and commercial carriers of all shipments are
subject to University approval. Said approval shall not be
unreasonably withheld.
V. PROCEDURES, DOCUMENTATION, and QUALITY ASSURANCE
As stated later in this section, some procedures used by the Licensee shall
be subject to University approval. Such procedures shall be reviewed and
approved by University on or before the start date of this Agreement.
Procedures shall be issued to University via controlled copy and all
subsequent revisions must be reviewed and approved by University prior to
utilization.
A. Irradiation Containers
1. All procedures used for the construction, pre-irradiation handling,
packing, sealing, and marking of irradiation containers must be
approved by University. All irradiation containers submitted to
University must
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APPENDIX A
comply with University-approved design specifications and
construction procedures detailed in RFB#HO12500 Technical
Information Packet or another design/procedure approved by
University.
2. University reserves the right to disqualify any irradiation
container that has an apparent abnormality or if irradiation, tests
or analyses performed by University suggest that the
characteristics or contents of an irradiation container are not in
accordance with the terms of this Agreement or represent a
substantial risk of damage to the reactor, its subsystems, or a
safety hazard to University personnel. Tests and analyses performed
by University may include any method up to and including opening
and inspection of irradiation containers and contents. Irradiation
containers opened by University prior to irradiation will be
re-sealed by University. Irradiation containers opened by
University after irradiation will not be re-sealed, but will be
adequately secured for transport. Tests and analyses may be
performed before or after irradiation but shall not substantially
affect the flow of production.
B. Topaz
1. All procedures used for the handling and preparation of topaz
immediately prior to encapsulation into irradiation containers must
be approved by University.
C. Shipping
1. All procedures used for the packaging and shipment of irradiation
containers must be approved by University.
D. Documentation
1. All documentation (forms and records)submitted to University or
used by University for the purpose of documenting activities
related to this Agreement must be approved by University.
E. Quality Assurance
1. University may perform quality assurance audits of Licensee's
compliance with University approved procedures. Quality assurance
audits may be performed prior to the start date of this Agreement
and at any time during the term of the Agreement. Quality assurance
audits may be performed at any site where University approved
procedures are performed. If subcontractors or subsidiaries of the
Licensee perform University approved procedures, the Licensee shall
make all necessary arrangements for quality assurance audits at
those sites owned and operated by subcontractors or subsidiaries.
University shall provide Licensee with advance notice of quality
assurance audits and quality assurance audits will be performed
during normal business hours. University shall bear all costs to
University associated with quality assurance audits.
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APPENDIX A
VI. LICENSES AND REGULATORY COMPLIANCE
A. Licenses
1. Both parties shall maintain licenses, and permits where applicable,
required to legally perform the activities described in this
Agreement.
B. Regulatory Compliance
1. Both parties shall comply with all local, State, federal, and
international laws and regulations while engaging in activities
pursuant to this Agreement.
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APPENDIX A
RIDER
1. Licensee shall have the right to request an examination of
University's books and records relative to such monthly written accounting. In
that event, Licensee and University shall select a mutually agreed upon
independent auditor to perform the examination. If there is a discrepancy
between the results of such examination and the monthly written accounting,
appropriate adjustments shall be made. If a dispute remains, Licensee shall so
advise University in writing (together with furnishing University with written
proof of the dispute), whereupon the parties shall negotiate in good faith in an
attempt to resolve the dispute. If any such dispute is not resolved within
thirty (30) days after University's receipt of such written notice and written
results, either Licensee or University may submit the dispute to non-binding
arbitration, under the rules of the American Arbitration Association. Subject to
the foregoing, in the event the independent auditor's examination of
University's books and records reveals more than a 25% difference between the
results of such examination and the monthly written accounting, University shall
reimburse Licensee for the cost of any and all expenses incurred by Licensee in
conducting such examination. In the event the independent auditor's examination
of University's books and records reveals no less than a 25% difference between
the results of such examination and the monthly written accounting, Licensee
shall bear the cost for any and all expenses incurred by Licensee in conducting
such examination and shall reimburse University for cost of any and all expenses
incurred by University in conjunction with said examination.
2. Any legal notifications shall be sent to:
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10 174
Attn: Mitchell S. Nussbaum, Esq.
3. University agrees that it will not assert any immunity from
attachment in aid of execution or from execution upon its property.
4. Licensee's corporate name should be Topaz Group Incorporated
throughout.