SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") dated as of December 12, 1996 by
and between XXXXX & XXXXXXX LIMITED, a company incorporated under the laws of
England and Wales ("AB") and APPLIED MICROBIOLOGY, INC., a New York corporation
("AMBI"),
W I T N E S S E T H:
WHEREAS, pursuant to a Share Purchase Agreement dated as of December 12,
1996, among AB, AMBI and Xxxxx Xxxxx UK plc ("Xxxxx Xxxxx"), Xxxxx Xxxxx is
purchasing from AMBI, simultaneously with the execution hereof, all of the
issued ordinary shares of AB; and
WHEREAS, it is a condition precedent to the obligation of Xxxxx Xxxxx to
purchase such shares and the obligation of AMBI to sell such shares that AB and
AMBI enter into a supply agreement for the supply by AB to AMBI of the nisin and
nisin preparations described on Exhibit A (the "Products") for use in accordance
with a License Agreement of even date granting licenses from AB to AMBI (the
"Permitted Uses");
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby specifically acknowledged, the parties hereby agree
as follows:
1. Sale and Purchase. AB shall sell to AMBI, and AMBI shall purchase from
AB, in accordance with AMBI's orders, AMBI's requirements of Product on the
terms and conditions set forth in this Agreement. AB shall have no liability to
AMBI if AB is unable to supply all of the Products ordered by AMBI hereunder if
AB has used its commercially reasonable efforts to supply such requirements of
Products. AMBI shall provide to AB a rolling six month forecast of AMBI's
requirements for planning purposes. AMBI shall be obligated to purchase all
inventory of Product produced and inventory of Product on hand at the date of
termination of this Agreement.
2. Use of Products by AMBI. AMBI agrees that it shall use the Products
purchased hereunder solely for the Permitted Uses.
3. Prices. The price for Products shall be composed of Monthly
Manufacturing Overhead Fee and price per gram of Product sold, as set forth on
Exhibit B. Such prices shall be effective for the term of this Agreement,
without regard to renewal terms. Upon notice of renewal of this Agreement, the
parties shall mutually agree upon the price.
4. Payment. AB shall send AMBI a monthly invoice as
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of the first day of each calendar month setting forth the Monthly Manufacturing
Overhead Fee for such month. AB shall send AMBI a monthly invoice as of the end
of each calendar month setting forth the quantity of Products delivered during
such month, if any, and the amount due therefor. AMBI shall remit to AB the
entire net balance due within 30 days of the date of each invoice. In the event
that AMBI disputes any such invoice, AMBI shall promptly notify AB in writing of
such dispute. The parties shall resolve the dispute in accordance with Section
26 below. A late charge of one percent (1%) per month, or if lower, the maximum
rate allowed by law, shall be applicable to unpaid invoices from the due dates
thereof. AMBI agrees to pay AB's cost of collection, if any, on overdue
invoices, including reasonable attorneys' fees. If AMBI becomes delinquent in
the payment of any amount due AB, whether due hereunder or otherwise and such
delinquency is not cured within 30 days after receipt of written notice thereof,
AB may at its sole option suspend, defer or decline to make further shipments
hereunder except upon receipt of security satisfactory to AB or cash payment in
advance of delivery. No invoice shall be deemed to be unpaid or delinquent until
final resolution of the dispute pursuant to Section 26, provided however that if
such dispute is resolved in favor of AB, AMBI shall be liable for late charges
on the amount due from the original due date to the date paid.
5. Order and Delivery. AMBI shall submit written purchase orders, either
hard copy or through electronic data input, for the Products to AB from time to
time. All purchase orders for a quantity of Products equal to or less than the
amount forecasted shall be accepted by AB. AB shall use commercially reasonable
efforts to deliver such Products to AMBI within 14 days after receipt of the
applicable purchase order. AB shall deliver Products F.O.B. AMBI's facility in
Tarrytown, New York or any other delivery point requested by AMBI (the "Delivery
Point"), and AMBI shall take delivery and shall be deemed to have taken delivery
of all shipments of Products delivered to the Delivery Point. AMBI shall arrange
for acceptance of all shipments delivered to the Delivery Point at such time and
on such date as AB notifies AMBI that such shipments are scheduled to be
delivered. AMBI will be responsible for all shipping costs for each shipment of
Product to a Delivery Point other than AMBI's facility in Tarrytown, New York to
the extent that such costs exceed the cost that AB would have incurred if such
shipment had been delivered to such facility. AMBI shall be responsible for
payment of all customs duties and other expenses of customs incurred in
connection with shipping the Products from AB's plant in Beaminster, England to
the Delivery Point. AB will be responsible for all transportation arrangements.
AB will package the Products in accordance with the packaging specifications set
forth in Exhibit E and AB shall provide documents in the form specified on
Exhibit E.
6. Title. Title to all Products shipped to the Delivery Point shall pass
to AMBI upon delivery thereof by AB to the Delivery Point.
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7. Warranties. The Products delivered pursuant to this Agreement shall (i)
conform to the specifications set forth in Exhibit C (the "Specifications"),
(ii) be free from defects in material and workmanship, and (iii) not be
adulterated or misbranded with the meaning of applicable U.S. federal or state
laws and regulations, including the Federal Food, Drug and Cosmetic Act. AB
MAKES NO OTHER WARRANTY AND HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING THAT OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE. AMBI shall notify AB as soon as practicable,
but no later than 30 days after delivery, if any portion of the Products do not
conform to such warranty, shall retain possession of such Products until it
receives instructions from AB and shall minimize losses to AB. No portion of the
Products may be returned by AMBI until after receipt by AMBI of written shipping
instructions from AB. If AB instructs AMBI to dispose of the Products or a
portion thereof, AMBI shall retain evidence of such disposition and shall allow
AB to inspect and copy AMBI's sales records. AMBI's remedy and AB's liability
for failure of any Products to conform to the warranty contained in this Section
7 shall be limited solely to replacement of such Products at the original
Delivery Point (in which case AB shall use commercially reasonable efforts to
provide AMBI with such replacement Products) or refunding the price per gram of
such Products, at AMBI's option.
8. Delays. AB shall not be liable for any failure or delay in delivery due
in whole or in part to fires, floods, accidents, riots, demonstrations, acts of
God, declared or undeclared war, strikes or other labor difficulties, shortage
or unavailability of fuel, power, raw materials or supplies, production
breakdowns, delay or failure of usual sources of transportation, requirements or
requests of any government or subdivision thereof or acts, demands, orders or
interpositions of any government or any subdivision thereof or agent thereof or
any other cause beyond AB's reasonable control which makes performance
commercially impracticable. Under any such circumstances AB shall have such
additional time within which to perform its obligations under this Agreement as
may be reasonably necessary and may, without liability for any failure to
perform this Agreement, allocate its manufacturing capacity among any or all
buyers of Products and other products, including subsidiaries, affiliates and
departments of AB, in proportion to their respective purchases over the
preceding three months.
9. Absolute Obligation. AMBI acknowledges that AB's sole obligations
hereunder are as set forth in this Agreement, and that after delivery to AMBI of
the Products at the applicable Delivery Point, all risk of loss affecting the
Products shall be with AMBI. Such risks include, without limitation, loss or
theft of or damage to the Products and change in law or any form of governmental
regulation which shall limit, diminish or eliminate the use of the Products.
Effective upon delivery to AMBI of the Products, AMBI's obligation to pay the
purchase price attributable to such Products shall be absolute and
unconditional, subject to
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any exceptions set forth in Section 4 or 7, and AMBI waives to the fullest
extent permitted by law any defense, counterclaim or setoff, reduction,
abatement, deferment or recoupment of any kind whatsoever, including, without
limitation, supervening impracticability, illegality and frustration.
10. Order Forms and Invoices. Any purchase order, invoice or other such
document submitted by either party containing statements, clauses or conditions
modifying, adding to, repugnant to or inconsistent with the terms herein set
forth will be accepted by the other party only on the condition and with the
express understanding that the liabilities of such party shall be determined
solely by the terms and conditions of sale set forth in this Agreement.
11. Limitation on Liability.
(a) IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED HEREUNDER, WHETHER ARISING IN CONTRACT OR
TORT. AB'S LIABILITY WITH RESPECT TO PRODUCTS SOLD HEREUNDER (INCLUDING
LIABILITY ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM TORT) IN NO CASE
SHALL EXCEED THE TOTAL AMOUNT OF THE PRODUCTS PAID FOR HEREUNDER AND INVOLVED IN
THE CLAIM. CLAIMS OR LOSSES IN TORT INCLUDE, WITHOUT LIMITATION, NEGLIGENCE
(ACTIVE AND PASSIVE), STRICT LIABILITY AND MISREPRESENTATION.
(b) Notwithstanding anything contained in Section 11(a) above, nothing in
this Agreement shall exclude, restrict or limit AB's liability for death or
personal injury resulting from its negligence.
12. Indemnity. AMBI shall indemnify and hold harmless AB, its agents and
assignees, from and against any and all claims, actions, suits, proceedings,
costs, expenses (including court costs and reasonable attorney's fees), damages,
obligations, penalties, injuries and liabilities, including strict liability in
tort, arising out of, connected with or resulting from the AMBI's packaging,
shipment, delivery, sale, or ownership of the Products or any portion thereof
(the "AB Damages"), except to the extent that the AB Damages arise out of, are
connected with or result from the breach of AB's warranty set forth in Section 7
above. AB shall indemnify and hold harmless AMBI, its agents and assignees, from
and against any and all claims, actions, suits, proceedings, costs, expenses
(including court costs and reasonable attorney's fees), damages, obligations,
penalties, injuries and liabilities, including strict liability in tort, arising
out of, connected with or resulting from the breach of AB's warranty set forth
in Section 7 above.
13. Term. This Agreement is effective on and as of the date hereof, and
shall, unless earlier terminated pursuant to Section 14 hereof or renewed
pursuant to this Section 13, terminate on the date that is one year from the
date hereof.
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Subject to Section 3, AMBI shall have the right to extend the term of this
Agreement for additional six month terms upon 60 days prior written notice from
the date of termination.
14. Termination. In addition to all other rights and remedies available to
AB at law, in equity or otherwise, AB shall have the right to terminate this
Agreement by written notice to AMBI upon material default by AMBI of any of its
obligations hereunder, provided that AMBI shall not have cured such default
within 30 days after receipt of notice thereof. AMBI shall have the right to
terminate this Agreement at any time, with or without cause, upon 60 days prior
written notice to AB. Upon termination for any reason, including, without
limitation, expiration of the term of this Agreement pursuant to Section 13
hereof, AMBI shall pay all termination costs identified and set forth in Exhibit
D (the "Termination Costs"). The amount of severance costs shall be agreed upon
prior to the date of termination and shall be payable prior to or at the date of
termination. No later than 60 days after the date of termination, AB and AMBI
shall determine and agree upon the amount of the remainder of the termination
costs. The total amount due shall be payable within 30 days of such
determination.
15. Notices, etc. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given when delivered or if mailed
by first-class registered or certified mail, return receipt requested, postage
prepaid, five (5) days after deposit in the mail, addressed as follows:
If to AB, to:
Xxxxx & Xxxxxxx Limited
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxx
XX0 0XX
Xxxxxxx
Attention: Dr. Xxxxxx Xxxxx
If to AMBI, to:
Applied Microbiology, Inc.
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
U.S.A
Attention: Xxxxxxxx Xxxxx, Esq.
or, in each case, at such other address as may be specified in
writing to the other parties.
16. Waiver; Modification. No waiver by AB of any breach of any provisions
hereof shall constitute a waiver of any other breach of such provision. AB's
failure to object to provisions contained in any communication from AMBI shall
not be deemed an acceptance of such provisions or as a waiver of the
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provisions of this Agreement. Any waiver or modification of this Agreement or
any of the provisions hereof to be effective must be in writing and signed by
the party against whom such waiver or modification is to be enforced.
17. Complete Agreement. This Agreement contains the entire agreement
between the parties pertaining to the subject matter hereof, and there are no
other oral, written or implied agreements between the parties pertaining to the
subject matter hereof; neither party has relied upon any representation or
warranty concerning the subject matter hereof not contained in this Agreement.
18. Confidentiality. The parties hereto shall keep confidential the terms
and conditions of, and the transactions contemplated in, this Agreement, and
such parties shall instruct their respective officers, employees and other
representatives having access to such information of such obligation of
confidentiality; provided, however, that any disclosure of such information may
be made after consultation with the other party to the extent required by
applicable law and that such information may be used as evidence in or in
connection with any pending or threatened litigation related to this Agreement
or any transaction contemplated hereby.
19. Assignment. Neither party shall assign this Agreement or any interest
therein without the prior written consent of the other party, except that either
party may assign this Agreement without consent to such party's affiliates under
common control or subsidiaries in which such party maintains a controlling
interest, or to successors to such party's interest by the sale or merger of
substantially all of such party's assets. Any attempt to assign or transfer in
violation of this Agreement shall be invalid. This Agreement shall be binding
upon and inure to the benefit of the parties, their successors and assigns.
20. Time of Essence. Time is of the essence in each and every provision in
this Agreement.
21. Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction, as to such jurisdiction, shall be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
22. Governing Law. This contract shall be governed by and construed
according to the laws of the State of New York.
23. Headings. Section headings are for convenience of reference only and
shall not be considered in the interpretation of this Agreement.
24. Nature of Relationship. Each party shall act
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solely as an independent contractor, and nothing in this Agreement shall be
construed to give either party the power or authority to act for, bind or commit
the other party.
25. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
26. Resolution of Disputes.
(a) Negotiation Between Executives. The parties shall attempt in good
faith to resolve any dispute arising out of or relating to this Agreement, or
the breach, termination or validity hereof, by negotiations between executives
who have authority to settle the controversy. Any party may give the other party
written notice of any dispute not resolved in the normal course of business.
Within 20 days after delivery of such notice, executives of both parties shall
meet at a mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, to exchange relevant information and to attempt to
resolve the dispute. If the matter has not been resolved within 60 days of the
disputing party's notice, or if the parties fail to meet within 20 days, either
party may initiate arbitration of the controversy or claim as provided
hereinafter.
If a negotiator intends to be accompanied at a meeting by an attorney, the
other negotiator shall be given at least three working days' notice of such
intention and may also be accompanied by an attorney. All negotiations pursuant
to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence and state
rules of evidence.
(b) Arbitration. If a dispute arising out of or relating to this
Agreement, or the breach, termination or validity hereof, has not been resolved
by negotiation as provided herein, it shall be settled by arbitration in
accordance with the Center for Public Resources Institute for Dispute Resolution
Rules for Non-Administered Arbitration of Business Disputes. The arbitration
shall take place in New York City, New York, shall be governed by the United
States Arbitration Act, 9 U.S.C. xx.xx. 1-16, and judgment upon the award
rendered by the arbitrator may be entered by any court having jurisdiction
thereof.
27. Additional Products. The parties acknowledge that
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this Agreement may be amended in the future to add additional Products as agreed
by the parties at such prices as may agreed by the parties.
IN WITNESS WHEREOF, the parties hereto have entered into and signed this
Agreement as of the date and year first above written.
APPLIED MICROBIOLOGY, INC.
By______________________________________
Xxxxxxxx Xxxxx
Its Vice President
XXXXX & XXXXXXX LIMITED
By______________________________________
Xxxxxxxx Xxxxx
Its Lawful Attorney
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