RAW MATERIAL CONTRACT
EDIBLE BOVINE CORIUM
MedChem Part No. 100-016
April 18, 1995
The Lackawanna Leather Company, a division of United States Leather, Inc., 2420
Z Street, Omaha, Nebraska, 68107, hereinafter called "Seller", agrees to sell,
and MedChem Products, Inc., 232 West Cummings Park, Woburn, Massachusetts,
01801, hereinafter called "Buyer", agrees to buy, the following described
product subject to the terms and conditions herein set forth:
I. PRODUCT
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Edible Bovine Corium obtained from cattle with an origin in the United
States of America and an XXX XXXXXXXXX XXXXX XX XXXXX XX XX XXXX XXXX XXXX
XXXXX. of extract made in accordance to Buyer's procedure DCN 94-022 for
Edible Bovine Corium, as set forth on Exhibit A attached hereto, which
shall be separately acknowledged and agreed to by each, the Seller and
Buyer (the "Specifications".)
II. WARRANTY
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Seller warrants that the product delivered hereunder shall meet all
Specifications, shall be produced in accordance with applicable GMP's and
all other procedures identified by Buyer (pursuant to Article VIII 10) and
shall be free of liens and encumbrances. This is the sole warranty
provided by Seller and Buyer acknowledges that Seller hereby disclaims any
implied warranties under the Uniform Commercial Code.
III. LIMITATION OF LIABILITY
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Notwithstanding anything to the contrary contained herein and solely as it
applies to pyrogen specification, Seller shall not be liable to Buyer for
failing to produce products which meet the pyrogen specification identified
on Exhibit A so long as the failure to meet such specification does not
result from Seller's failure to meet all Specifications or to produce the
product in accordance with applicable GMP's and all other procedures
identified by Buyer (pursuant to Article VIII 10). In the event that Buyer
does not accept product because such product does not meet the pyrogen
specification, Buyer shall be liable to Seller for the invoice cost of the
hides purchased and used to make such product.
(X) Confidential material omitted and filed separately with the Securities and
Exchange Commission.
IV. PRICE AND QUANTITY
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1. Subject to the terms of this Agreement, Buyer agrees to purchase and
Seller agrees to furnish an aggregate of XXXXXX pounds of product over
the course of this contract. Additional quantity is negotiable upon
Seller's ability to produce more product, and Buyer's desire to
purchase a greater quantity.
For the purposes of this agreement, all weights refer to wet Edible
Bovine Corium weight at the time of packaging at the Seller's Omaha,
Nebraska, facility.
2. Delivery schedule is defined in Article VI below.
3. Price per pound is:
XXXXXX per pound
XXXXX per pound payback of advance for start-up costs
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XXXXXX per pound net price.
4. Start-up costs of XXXXXXX will be advanced to the Seller by the later
of (i) 30 days after notice of the equipment renovation and (ii) 15
days after the date buyer receives an invoice for such advance.
During the start-up, the Seller will replace an existing Challenge
Mixer with a stainless steel mixer that is currently owned by the
Seller.
Title to the new stainless steel mixer will pass to the Buyer after
installation free and clear of encumbrances. Title to the existing
Challenge Mixer will pass to the Seller, free and clear of
encumbrances.
Seller shall pay back the advance of XXXXXXX by crediting the Buyer
with XXXXX per pound for each pound sold hereby as shown in Paragraph
3 above.
Up front start-up costs for which the advance may be used shall
include the following:
- Lease and install Reverse Osmosis Pure Water System XXXXXXX.XX
- Trade Challenge Mixer for stainless steel mixer XXXXX.XX
- Splitting machine servicing XXXXX.XX
- Cleaning and painting materials XXXXX.XX
- Cleaning and painting labor(80 hrs @ XXXXXXXX) XXX.XX
- Freezer and air conditioner start-up XXX.XX
- Calibration of temperature recorders XXX.XX
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XXXXXXX.XX
(X) Confidential material omitted and filed separately with the Securities and
Exchange Commission.
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5. The price per pound includes and Seller shall pay, all excise, sales,
use, transfer or other taxes, federal, state and local, in connection
with the sales or delivery of the product to Buyer.
V. TITLE OF EQUIPMENT
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All equipment purchased with the advance shall be retained by Buyer as its
property. Buyer recognizes that Seller may use this equipment during the
term of this Agreement for processing and products for other customers.
However, the Seller must obtain prior written approval from the Buyer for
each use. Seller hereby agrees to maintain this equipment in serviceable
condition during each use.
VI. DELIVERY SCHEDULE AND TERMS OF PAYMENT
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Each lot of product must meet acceptable Quality Control inspection
criteria of the Buyer before being transferred from the Seller's Omaha,
Nebraska location to the Massachusetts cold storage location.
Seller Will:
1. Deliver a XXX pound sample lot to Buyer on or before July 15, 1995.
The purpose of this shipment is to verify that the product is able to
be processed into flour at Buyer's manufacturing facility at Woburn,
Massachusetts.
2. Deliver XXXXX pounds to the Massachusetts cold storage facility by
August 31, 1995. Deliver the remaining XXXXXX pounds on or before
December 31, 1995.
3. a. Seller will also invoice Buyer on a monthly basis and Buyer
will pay such invoices within 15 days from the date that the
Buyer receives Seller's invoices; Invoices shall be as of the 1st
of the month as sent by Seller as follows:
i. For the eight (8) month period August 1995 through March
1996 invoiced at the rate of XXXX pounds per month.
ii. For the twenty (20) month period April 1996 through November
1997 at the rate of XXX pounds per month.
b. Unless the parties agree otherwise in writing, Seller must
deliver the exact quantities specified (plus or minus 1%). Buyer
reserves the right to reject incomplete deliveries and to return
at Seller's risk and expense excess quantities delivered.
(X) Confidential material omitted and filed separately with the Securities and
Exchange Commission.
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c. Buyer's production and marketing schedules are established in
part in reliance upon the delivery information specified in this
Agreement. If delivery cannot be made at the specified time and
place, Seller shall promptly notify Buyer of the earliest
possible date for a conforming delivery. Notwithstanding such
notice, and unless otherwise agreed by Buyer in writing, Seller's
failure to effect a conforming delivery shall entitle Buyer to
revoke any acceptance, to terminate the Agreement without
liability to Seller, to receive a full refund on any amount paid
with respect to such shipment, to purchase substitute products
elsewhere, to return at Seller's risk and expense all or any part
of a nonconforming delivery and to hold Seller accountable for
any loss or additional costs incurred.
Buyer's receipt of acceptance of all or a part of a nonconforming
delivery shall not constitute a waiver of any claim, right or
remedy under the Agreement or under applicable law.
VII. SERVICES TO BE PROVIDED BY SELLER AT SELLER'S EXPENSE
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1. Appropriate clean facility satisfying GMP to conduct production.
2. Obtaining hides.
3. Processing hides.
4. Quality Control services by a sub-contractor approved by Buyer.
5. Training of Seller's work force.
6. Hiring of all labor and support people to manage the activity.
7. Setup and maintenance support for equipment to include calibrations.
8. Temporary cold storage of product at:
- Omaha, Nebraska
Temperature will be monitored and recorded. Temperature to be
maintained in the range of -20 degrees F to +10 degrees F (monitoring
specifications are attached hereto in Appendix A).
9. Supplying pure water through a leased Reverse Osmosis System.
10. Disposal of all waste in accordance with governmental and industry
regulations.
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11. Freight charges to deliver product to Massachusetts cold storage
facility (monitoring specifications are attached hereto in
Appendix A).
12. Insure product for loss while in transit.
VIII. GENERAL TERMS
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1. Seller will identify each container of Edible Bovine Corium with the
gross weight of the contents of the container, MedChem Part number
100-016 and Lot #_____. All products shall be packaged, marked and
otherwise prepared for shipment by Seller in suitable containers in
conformity with reasonable commercial practices. Seller shall mark on
containers all necessary handling, loading and shipping instructions.
An itemized packing list shall be included with each shipment.
2. Seller will provide a certificate of origin with each Lot # delivered
to Buyer. This certificate will verify that the cattle, from which
the product was harvested, had an origin in the United States of
America.
3. For the term of the contract, arrangement and cost of refrigerated
transportation of the product to the storage facility at Crystal Cold
Storage and Warehouse, Inc., 25 Sycamore Avenue, Medford,
Massachusetts, 02155, will be the responsibility of the Seller.
Temperature will be monitored in transit and will be maintained
between -20 degrees F and +10 degrees F (monitoring specification as
attached hereto in Appendix A).
4. Title to product sold hereunder shall pass to Buyer upon delivery by
Seller of conforming product and acceptance by Buyer at Crystal Cold
Storage and Warehouse.
5. Seller agrees that Buyer, its agents and representatives, including
but not limited to, Buyer's insurance representatives and
underwriters, may inspect Seller's Omaha, Nebraska premises in a
reasonable manner, with reasonable frequency, and for reasonable
periods of time, for the purpose of monitoring the manufacture of the
product and compliance with the terms of the Agreement and, for the
purpose of rendering insurance advice to the Buyer in connection with
this Agreement.
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6. All products shall be received subject to Buyer's inspection, testing,
and approval at Seller's premises, and subject to Buyers's acceptance
of such products at Crystal Cold Storage and Warehouse after
inspection and testing of the conditions of such products after
shipping, notwithstanding any prior payment for such products. The
test, lab and any other inspection data;recorder data during initial
testing, warehousing and transit will be provided to Seller by Buyer
to perfect Buyer's claim for product rejected by Buyer upon inspection
and testing at the Crystal Cold Storage and Warehouse.
Upon a rejection of such a shipment and notice of said rejection by
Buyer to Seller it shall be Seller's responsibility to adjust its
production schedule to replace such rejected product within the
delivery parameters specified under Article VI 3. Products rejected
by Buyer as not conforming to the Specifications may be returned to
Seller at Seller's risk and expense.
7. Seller's warranties under Article II of this Agreement shall survive
any delivery, inspection, acceptance, payment or resale of the
products and shall extend to Buyer and its customers. Following such
delivery, inspection, acceptance, payment or resale of such products
and notwithstanding anything to the contrary set forth herein, Seller
shall only be liable with respect to such products in connection with
any breach of its warranties in Article II of this Agreement. Seller
shall indemnify and hold Buyer harmless against any and all claims,
losses, liabilities, damages, costs or expenses, including attorneys'
fees and court costs, resulting from the breach of Seller's Article II
Warranty(s) under this Agreement. Seller and Buyer shall each
maintain with an insurance company or companies comprehensive general
liability insurance (including product liability hereunder) in the
minimum amount of $2,000,000. Any amount owed to Seller by Buyer
shall be subject to deduction for any set-off, counterclaim or
indemnification right arising out of this Agreement.
8. Sellers' liability to Buyer for breach of warranty or otherwise shall
not include any incidental or consequential damages.
9. Notwithstanding anything to the contrary contained in this agreement,
neither party will be liable for any default, damages or expenses
under this agreement as a result of such party's failure to perform
its duties under this Agreement, due to interruptions of the supply of
raw materials, complete or partial destruction of the
manufacturing/processing facilities, labor disputes and other matters
reasonably beyond the control of either party; provided, however, that
the party claiming the foregoing shall make a good faith effort to
remedy any of the above contingencies. In such event, the time for
performance shall be extended for the period of delay or inability to
perform due to such event. During any period of shortage, Seller's
first obligation will be to supply Buyer with its requirement as
outlined in the PRICE AND QUANTITY section of this agreement.
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10. The product will be manufactured in conformance with the
Specifications. However, the Buyer shall have the right to change the
Specifications as reasonably desired by Buyer or as required by
Federal regulations upon prior written notice to Seller provided that
Buyer shall reimburse Seller for any reasonable additional costs
incurred by Seller in meeting such revised Specifications. Seller may
not make any changes in the Specifications without the prior written
approval of the Buyer.
11. This agreement gives no license to Seller, either expressed or
implied, under any patents, patent applications or other intellectual
property of Buyer or under which Buyer has a right to grant licenses.
12. Seller acknowledges and agrees that all specifications, drawings,
diagrams, schematics, sketches, models, samples, designs, technical
information or data, written, oral or otherwise, furnished by Buyer to
Seller is and shall remain Buyer's sole and exclusive property, and
shall be returned promptly to Buyer upon the earlier of its request or
the termination or completion of the agreement. Seller acknowledges
and agrees that all such intellectual and industrial property shall be
treated as confidential and shall not be used or disclosed by Seller
except under this Agreement. Buyer further represents and warrants
that the products delivered hereunder do not infringe any United
States or foreign patent trademark, trade secret or copyright or any
proprietary, intellectual property, industrial property, contract or
other right held by any third party.
13. This agreement (other than the first two sentences of Section 12)
shall terminate within 30 days after Seller has invoiced Buyer for
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all of the product required to be delivered by this Agreement unless
sooner terminated by Buyer and may be extended upon mutual agreement
of the parties. This agreement is not transferable nor assignable by
Buyer or Seller without the prior written consent of the other party,
but shall be binding upon and inure to the benefit of the parties
hereto and their respective successors.
14. All notices to be provided hereunder shall be in writing, and shall be
deemed given when addressed to a party hereto at the address set forth
above, when deposited with the U.S. Mail, registered or certified, or
when deposited with a nationally recognized overnight courier service.
15. This Agreement is to be governed by the laws of the State of Nebraska.
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16. Termination:
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(a) Buyer may, by written notice to Seller, terminate the whole or
any portion of this Agreement in the event of (i) proceedings,
voluntary or involuntary, in bankruptcy or insolvency, by or
against Seller, (ii) the appointment, with or without Seller's
consent, of any trustee or receiver for any substantial portion
of Seller's assets, (iii) any assignment for the benefit of
Seller's creditors, or (iv) Sellers' breach of any provision
contained herein; Provided that in the event of a breach by
Seller of any provision contained herein, Seller shall have 30
days from notice by Buyer to cure such breach and this Agreement
shall only be terminable to the extent that such breach is not
cured by such 30 day period. In the event of any such
termination, Buyer may procure, upon such terms and in such
manner as it may deem appropriate, products comparable to the
products covered by the Agreement so terminated, and Seller shall
be liable to Buyer for any excess cost of such comparable
products. In the event of any such termination, Buyer may
require Seller to deliver to it, in the manner and to the extent
directed by it, any completed or partially completed products,
against Buyer's payment of the portion of the price properly
allocable to such products. Seller shall continue performance of
this Agreement to the extent not terminated. Except to the
extent specifically set forth herein, Buyer shall have no
obligation or liability to Seller in respect of the terminated
portion of this Agreement. Notwithstanding the foregoing, Seller
shall not be liable to Buyer for excess costs or other damages if
Seller's default is due to a cause beyond its reasonable control
and without its negligence. Such notice shall be in writing and
mailed by U.S. Mail addressed to the Seller, and the date of
notice shall be the date of mailing. In the event of any such
termination, all deposits or prepayments shall be deemed to have
been held in trust for Buyer's benefit and shall be returned to
Buyer promptly upon request.
(b) Subject to Section 7 hereof, all of Seller's representation,
warranties and indemnification obligations set forth in this
Agreement shall survive the cancellation, termination or
completion of this Agreement with respect to any product sold to
Buyer prior to cancellation, termination or completion.
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17. Compliance with Laws:
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Seller shall comply with all applicable governmental laws, ordinances,
codes, rules, regulations and orders in the performance of this
Agreement, including, without limitation, the Occupational Safety and
Health Act, the Fair Labor Standards Act of 1938, Title VII of the
Civil Rights Act, the Age Discrimination in Employment Act, and
Executive Order 11246, along with the implementing rules and
regulations of the office of Federal Contracts Compliance. At Buyer'
request, Seller shall obtain all permits or licenses required in
connection with the manufacture, sale, shipment and installation of
the products ordered hereby.
18. Authorization:
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Seller represents and warrants that it has been duly authorized to
execute, deliver and perform this Agreement, and the person signing on
Seller's behalf has the power and authority to do so.
19. Severability; Remedies; Waiver:
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In the event that any one or more provisions contained in this
Agreement shall be held by a court of competent jurisdiction to be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The
remedies contained herein are cumulative and in addition to any other
remedies at law or equity. Buyer's failure to enforce, or waiver of
a breach of, any provision of this Agreement shall not constitute a
waiver of any other breach of such provision.
20. Entire Agreement:
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This Agreement is the complete and exclusive statement of the contract
between Buyer and Seller with respect to Buyer's purchase of the
products. No waiver, consent, modification, amendment or change of
the terms of this Agreement shall be binding unless in writing and
signed by Buyer and Seller.
All of the foregoing is accepted as of the date set forth above.
MEDCHEM PRODUCTS, INC. LACKAWANNA LEATHER
By: /s/ Edward J. Quilty By: /s/ Jeff Whitver
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Date: Date: 4/18/95
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