1
EXHIBIT 10.23
REDACTED VERSION
* = CONFIDENTIAL PORTIONS OMITTED
MARTEK BIOSCIENCES CORPORATION/
GIST-BROCADES B.V.
ARA PURCHASE AND PRODUCTION AGREEMENT
This ARA Purchase Agreement (the "Agreement") is made and entered into
this 31st day of December, 1996 (the "Effective Date") by and between
Gist-Brocades, B.V., a company organized and existing under the laws of the
Netherlands, having its principal place of business at Xxxxxxxxxxxxx 0, 0000 XX
Xxxxx, Xxx Xxxxxxxxxxx ("GB"), and Martek Biosciences Corporation, a Delaware
corporation having its principal place of business at 0000 Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000 ("Martek"), who, intending to be legally bound, hereby
agree as follows:
1. INTRODUCTION
1.1. Martek owns technology related to the manufacture and use of
arachidonic acid and has certain issued patents and patents pending throughout
the world, claiming (i) certain processes for the manufacture of arachidonic
acid, (ii) certain compounds and (iii) certain applications; Martek
manufactures and sells arachidonic acid to a number of customers for
application in food (including infant formula) products.
1.2. GB owns technology related to the manufacture and use of
arachidonic acid and has patents pending throughout the world, claiming (i)
certain processes for the manufacture of arachidonic acid, (ii) certain
formulations for that product and (iii) certain compounds.
1.3. GB is currently building new production facilities for the
manufacture of arachidonic acid for sale to its customers; the capacity of
these facilities will exceed GB's own requirements for arachidonic acid for
sale to its customers.
1.4. Martek wishes to have GB manufacture arachidonic acid in
accordance with certain specifications as further specified below in Section 2
and GB is willing to supply arachidonic acid conforming to such specifications
to Martek.
1.5. The parties wish to enter into this Agreement to provide for
certain terms under which GB will produce arachidonic acid ordered by Martek,
and Martek will pay for arachidonic acid it orders from GB.
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2. DEFINITIONS
2.1. "ARA" means arachidonic acid-rich trigliceride oil.
2.2. "Confidential Information" shall mean the information
described in SECTION 10 below.
2.3. "Customer Specifications" shall mean specifications for ARA,
other than the Martek Specifications, which are required by specific customers
of Martek and are agreed upon by the Committee (as defined below in Section
4.1); as agreed upon, each order for ARA placed by Martek which is required to
satisfy Customer Specifications shall identify the applicable specifications by
customer name or other unique designation. Customer Specifications shall
always include at least compliance with current good manufacturing practices
(cGMPs) promulgated by FDA and comparable requirements by other governmental
bodies for food ingredients, even if such requirements are not expressly set
forth in any statement of the Customer Specifications.
2.4. "Finished Oil" shall mean oil containing ARA that has been
degummed, refined, bleached and deodorized and meets either Martek
Specifications or Customer Specifications as specified by Martek in accordance
with Section 7.7.
2.5. "GB Costs" shall mean, for each period for which GB supplies a
budget to Martek in accordance with Section 9.1, those expenses of GB related
to production of ARA which are identified in such budget.
2.6. "Martek Specifications" shall mean specifications agreed upon
by the Committee (as defined below in Section 4.1) and to be attached to this
Agreement as an Exhibit, pursuant to which GB shall be required to produce ARA
for all orders by Martek other than those orders which Martek expressly advises
GB are to be produced to satisfy identified Customer Specifications. The
Martek Specifications shall initially be the specifications for crude oil
containing ARA; the Martek Specifications shall always include at least
compliance with current good manufacturing practices (cGMPs) promulgated by FDA
and comparable requirements by other governmental bodies for food ingredients,
even if such requirements are not expressly set forth in any statement of the
Martek Specifications.
2.7. "FDA" shall mean the U.S. Food and Drug Administration.
2.8. "cGMPs" shall specifically mean those FDA regulations
pertaining to food ingredients appearing in the Code of Federal Regulations,
Title 21, Parts 106 and 110 , including FDA guidelines related thereto and
other FDA interpretations thereof.
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2.9. "ARA Patent" shall mean any patent issued under the laws of
any country which claims any of the inventions described and fully supported in
International Patent Publications WO 92/13086 and/or WO 96/21037, attached
hereto as Exhibit B.
2.10. "Oil Blend Patent" shall mean any patent issued under the laws
of any country which claims any of the inventions described and fully supported
in International Patent Publication WO 92/12711, attached hereto as Exhibit C.
2.11. "Unit of ARA" shall mean either (a) that quantity of Finished
Oil containing ARA determined by an assay procedure to be developed by the
Committee, which contains one (1) kilogram of pure ARA or (b) that quantity of
crude oil containing ARA that, after processing, yields Finished Oil containing
ARA determined by an assay procedure to be developed by the Committee, which
contains one (1) kilogram of pure ARA
3. PATENT MATTERS
3.1. Acknowledgment. GB acknowledges that Martek has applications
for ARA Patents and Oil Blend Patents pending in many countries throughout the
world. A listing of the countries in which ARA Patents and Oil Blend Patents
have issued is set forth in Exhibit X. Xxxxxx shall notify GB promptly upon
the issuance of any additional ARA Patents or Oil Blend Patents.
3.2. Limited Patent License and Disclaimer. To the extent
necessitated by transfer of crude oil containing ARA to any facility of Martek
or a contractor of Martek for refining of any quantities of ARA for GB, Martek
hereby grants GB a limited license under any pending application for an ARA
Patent to sell the ARA. The license provided through this Section 3.2 is
limited to manufacture and/or sale of ARA under the manufacturing arrangement
described herein and is limited to activities occurring during the pendency of
an application for an ARA Patent before the European Patent Office. The
license does not extend to use of ARA which infringes a claim in an issued ARA
Patent.
3.3. Infringement Determination. If and when an ARA Patent issues
to Martek in a country where GB makes or sells ARA, the parties hereto shall
determine whether or not GB's manufacture and/or sale of ARA infringes such ARA
Patent. If the parties hereto are unable to reach consensus on the question of
whether or not GB's manufacture and/or sale of ARA infringes such ARA Patent,
the matter shall be referred to Patent Arbitration in accordance with Exhibit E
attached hereto. In any country where GB's manufacture or sale of ARA are
determined in accordance with this paragraph to infringe an ARA Patent, GB
agrees to cease such manufacture or sales except as provided in Section 3.4.
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3.4. Subcontractor Appointment. So long as this Agreement has not
been previously terminated, and GB is not in material default on the
performance of its obligations hereunder, on the earliest date on which it is
determined in accordance with Section 3.3 that GB's manufacture and/or sale of
ARA infringes or would infringe an ARA Patent issued by the European Patent
Office, Martek agrees to license and appoint GB as its subcontractor to
manufacture ARA solely for purchase by Martek. Upon appointment as
subcontractor, GB shall be granted a limited retroactive license to manufacture
and sell ARA under the ARA Patent issued by the European Patent Office for the
period prior to issuance of such ARA Patent, subject to the disclaimer set
forth in Section 3.8 below. Martek further agrees that so long as this
Agreement has not then been terminated and GB is not then in material default
on the performance of its obligations hereunder, it shall appoint GB as its
subcontractor to manufacture ARA, solely for purchase by Martek, in any other
country where an ARA Patent issues and it is determined in accordance with
Section 3.3 that GB's manufacture and/or sale of ARA infringes or would
infringe such ARA Patent. Upon such appointment, GB shall be entitled to
continue production of ARA for purchase by Martek on the terms set forth in
this Agreement.
3.5. Validity. While this Agreement is in effect, the parties
agree that any ARA Patent issued under the laws of any country shall be
presumed valid and enforceable unless and until such ARA Patent is held invalid
or unenforceable by a competent court or other competent tribunal from which no
appeal is permitted. While this Agreement is in effect, GB agrees not to
challenge the validity of any ARA Patent directly or indirectly in any country
where such agreement not to challenge is enforceable.
3.6. Infringement of ARA Patents by Third Parties.
a. GB agrees to promptly notify Martek of any infringement of an
ARA Patent by any third party of which GB is or becomes aware.
x. Xxxxxx undertakes to use reasonable efforts to xxxxx any
infringement of an ARA Patent by a third party of which Martek has notice, by
any suitable means, including without limitation legal action against the third
party, settlement agreement or otherwise causing cessation of the infringement
by the third party; provided, however, that so long as GB retains Exclusive
Supplier Rights as described in Section 7.1, Martek shall not, without the
prior consent of GB, xxxxx any infringement of an ARA Patent in the United
States or Europe by granting a license to, or entering into a prospective
non-assert agreement with, the infringing party. Martek shall not be required
by this Agreement to pursue abatement activity directed at more than one third
party at the same time. Abatement activity will be under Martek's sole control
and at Martek's expense. GB agrees to provide assistance when required by the
law of any jurisdiction in which an ARA Patent has issued, including without
limitation joining an infringement
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suit as a party. Any assistance required by law from GB, and any voluntary
assistance provided by GB through agreement of the parties, shall be at GB's
expense.
3.7. DISCLAIMER OF LIABILITY REGARDING OIL BLEND PATENTS. IF AND
TO THE EXTENT THAT AN OIL BLEND PATENT ISSUES IN ANY COUNTRY WHERE GB SELLS ARA
TO CUSTOMERS OTHER THAN MARTEK, MARTEK AGREES THAT SUCH SALE BY GB SHALL BE
FREE OF LIABILITY TO MARTEK, AND THAT MARTEK SHALL NOT XXX GB, FOR INDIRECT OR
CONTRIBUTORY INFRINGEMENT OF SUCH OIL BLEND PATENT, PROVIDED THAT GB SHALL
EXPRESSLY DISCLAIM ANY WARRANTIES TO CUSTOMERS THAT USE OF SUCH ARA IS LICENSED
UNDER OR WILL NOT INFRINGE ANY ARA PATENTS OR OIL BLEND PATENTS.
3.8 PATENT WARRANTY DISCLAIMER. THE PARTIES ACKNOWLEDGE THAT GB
IS NOT GRANTED ANY RIGHTS UNDER ANY PATENTS OR PATENT APPLICATIONS FILED IN THE
NAME OF OR ON BEHALF OF MARTEK EXCEPT THOSE SET FORTH IN SECTIONS 3.2, 3.4 and
3.7. MARTEK EXPRESSLY DISCLAIMS ANY WARRANTY TO GB OR ANY THIRD PARTY THAT ANY
SUBLICENSE BY GB OF ITS LIMITED RIGHT TO MAKE AND SELL ARA AS SET FORTH IN
SECTIONS 3.2 AND 3.4 OR ANY USE OF ARA MANUFACTURED BY GB WILL NOT INFRINGE ANY
PROPRIETARY RIGHTS OF MARTEK OR ANY THIRD PARTY, AND GB AGREES THAT IT SHALL
EXPRESSLY DISCLAIM TO ANY GB CUSTOMER WHICH PURCHASES ARA ANY REPRESENTATION
THAT USE OF SUCH ARA WILL NOT INFRINGE THE ARA PATENTS, OIL BLEND PATENTS OR
ANY OTHER PATENT.
4. STEERING COMMITTEE
4.1. Formation. Not later than fifteen (15) days after the
Effective Date, the parties shall form a steering committee (the "Committee")
which shall consist of four (4) members: two (2) appointed by Martek and two
(2) appointed by GB. Each party shall identify one of the team members it has
appointed as its "Leader." In addition to its two (2) members, each party may
send one (1) non-participating, nonvoting observer to each meeting of the
Committee. If either party decides at any time to replace its designated
Leader or its other Committee member, it may do so by written notice to the
other party's Leader.
4.2. Meetings. The Committee shall meet at such times and places
as it may select but, in any event, it shall meet at least once per calendar
quarter, provided that the first such meeting shall be held as soon as
practicable, but in no event later than thirty (30) days after the Effective
Date of this Agreement. Meetings of the Committee shall be in person or by
conference call as the Committee decides.
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4.3. Status Reports. The Leaders shall report to each other
monthly, or as otherwise mutually agreed upon, regarding the status of the
parties' respective obligations under this Agreement, any anticipated problems
(resolved or unresolved), and any indication of delay in fixed or tentative
schedules.
4.4. Agenda. The Committee shall be responsible for overseeing the
collaboration under this Agreement, for monitoring the parties' adherence to
the terms hereof and for agreeing on or determining any matters that are to be
agreed on or determined by the Committee pursuant to this Agreement. In
particular, the Committee shall, in good faith, mutually resolve, among other
things, the following: (a) determining a program to reach agreement on the
Martek Specifications; (b) determining the methods of analysis and the format
for certification of analysis referred to in Section 7.10 below, and following
the dispute settlement procedure referred to in Section 5.2 below; (c)
determining the procedure to agree on Customer Specifications and on the terms
under which GB shall supply Martek and/or Martek's customers with ARA meeting
Customer Specifications; (d) determining the schedule at which GB shall adjust
its manufacturing processes to manufacture ARA in accordance with the Martek
Specifications and Customer Specifications; (e) determining a schedule for
verification by Martek that GB is able to produce ARA which satisfies the
Martek Specifications and the Customer Specifications; (f) determining the
schedule at which GB shall adjust its manufacturing processes to accommodate
changes, which have been agreed upon by the Committee, in the Martek
Specifications or Customer Specifications and any applicable changes to GB
Costs which may result therefrom; (g) selecting the facilities of XX, XX
subcontractors, Martek and/or Martek subcontractors at which various steps in
the ARA manufacturing process will be completed with the goal of achieving the
lowest possible production costs for ARA taking into account all quality
requirements that have to be met; (h) determining the appropriate means for
packaging and shipping ARA ordered by Martek; and (i) periodically reviewing
GB's production processes for ARA with the goal of improving quality and
reducing production costs.
4.5. Improvements. Proposed improvements to the manufacturing
process for ARA shall be submitted to the Committee by the party proposing the
improvement. The Committee may agree that the parties jointly or individually
perform development work aimed at improvement of the manufacturing process for
ARA or may elect not to implement the improvement. If the Committee agrees
that the parties shall develop the work jointly, the parties shall share
equally the research and development costs related to the work at issue, and
the Committee shall agree on development protocols, describing the work to be
carried out by each of the parties in this respect. The proprietary rights in
any improvement to the manufacturing process for ARA which is developed by the
parties jointly and for which they have shared the related research and
development costs shall
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be jointly owned by them and shall be considered jointly owned Confidential
Information. GB Costs shall be reduced to the full extent that GB's actual
cost of production is reduced by any improvement owned solely by Martek, but
shall not be reduced if GB's actual cost of production is reduced by any
improvement owned solely by GB, except as expressly set forth below. Except as
expressly set forth below, in the event that GB's actual cost of production is
reduced by a jointly owned improvement, GB Costs shall be reduced by fifty
percent (50%) of the reduction in GB's actual cost of production. At six (6)
month intervals following the first use of any improvement to the manufacturing
process, regardless of the identity of the owner(s), the parties shall
calculate, for the preceding six (6) months (the "Review Period"), sales of ARA
by GB to Martek as a percentage of aggregate sales of ARA by GB. If during any
Review Period, sales of ARA by GB to Martek represent fifty percent (50%) or
less of aggregate sales of ARA by GB, Martek shall be entitled to a credit
against future purchases of ARA from GB in an amount equal to fifty percent
(50%) of the reduction, due to all the implemented improvements to the
manufacturing process for ARA during the Review Period, in GB's actual cost of
production for the quantities of ARA purchased by Martek during the Review
Period. If during any Review Period, sales of ARA by GB to Martek represent
more than fifty percent (50%) but less than one hundred percent (100%) of
aggregate sales of ARA by GB, Martek shall be entitled to a credit against
future purchases of ARA from GB in an amount equal to a percentage of the
reduction, due to all improvements to the manufacturing process for ARA during
the Review Period, in GB's actual cost of production for the quantities of ARA
purchased by Martek during the Review Period which is equal to the difference
between (a) one hundred percent (100%) and (b) the percentage of aggregate
sales of ARA by GB to Martek. The proprietary rights in any improvement to the
manufacturing process for ARA that is actually implemented in that process and
has been (i) incidentally discovered or developed, or (ii) developed by either
party, or by the parties jointly, without prior submission of a development
proposal to the Committee in accordance herewith shall be jointly owned by the
parties, and shall be considered jointly owned Confidential Information.
5. VERIFICATION OF ARA PRODUCTION QUALITY
5.1. Specifications for ARA. The parties acknowledge that Martek
wishes to have the ability to order ARA from GB that satisfies Martek
Specifications or, as necessary, Customer Specifications. Martek will use all
reasonable efforts to encourage its customers to accept the Martek
Specifications as the base specification for the ARA they purchase.
5.2. Verification of Production. Once the Martek Specifications
and/or the Customer Specifications for any customer have been agreed upon by
the Committee, GB shall deliver to Martek a quantity of ARA prepared to satisfy
the Martek Specifications and quantities of ARA prepared to satisfy the
Customer Specifications for each Martek customer. Such delivery shall
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be made in accordance with a schedule and in quantities and on terms determined
by the Committee, which quantities shall be sufficient in all cases to enable
Martek to verify that the quantities of ARA provided satisfy the applicable
specifications. Martek shall thereupon subject the delivered quantities of ARA
to the testing and analysis procedures agreed upon by the Committee to verify
that the individual quantities satisfy the applicable specifications. If any
quantity of ARA fails to satisfy the applicable specifications, Martek shall so
notify GB. Any dispute between the parties regarding the quality of any ARA
thus supplied shall be resolved in accordance with the procedure set forth in
Exhibit F. In case it is resolved that any quantity of ARA thus supplied by GB
fails to satisfy the applicable specifications, GB shall adjust its
manufacturing process or take other appropriate action and provide a
replacement quantity of ARA for testing and analysis by Martek. The process
shall continue until Martek determines that all quantities of ARA provided by
GB satisfy the applicable specifications.
5.3. Specification Changes. The parties acknowledge and agree that
the Martek Specifications and the Customer Specifications may be subject to
change at any time and from time to time. Martek shall bring any required
changes to the Martek Specifications or the Customer Specifications for any
Martek customer to the attention of the Committee as soon as reasonably
practicable. Upon agreement by the Committee to accept any such required
changes, the Committee shall then determine the terms, including GB Costs and
delivery dates applicable to ARA which will meet the proposed specification
changes. GB agrees to use its best efforts to accommodate any requested
changes at reasonable costs. Upon agreement by the Committee on such terms GB
shall implement the necessary adjustments in accordance therewith, and the
parties shall follow the procedure set forth in SECTION 5.2 for verifying that
quantities of ARA produced by GB satisfy the changed specifications.
6. WARRANTY
6.1. Compliance. GB represents and warrants that it shall obtain
and maintain, and shall ensure that its subcontractors obtain and maintain all
licenses, permits, approvals, clearances and notifications which may be
required in connection with the manufacture and packaging of ARA for Martek and
that the performance of all GB obligations under this Agreement by GB and its
subcontractors shall comply with all applicable laws, rules and regulations of
any government having jurisdiction over such performance, including without
limitation regulations and other requirements regarding cGMPs. GB further
represents and warrants that all quantities of ARA that it supplies to Martek
hereunder shall be manufactured in conformity with, and shall fully satisfy,
the Martek Specifications or the applicable Customer Specifications as
identified to GB in Martek's order.
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6.2. Disclaimer. THE LIMITED WARRANTY SET FORTH HEREIN IS
EXCLUSIVE AND IN LIEU OF, AND GB HEREBY DISCLAIMS, ALL OTHER WARRANTIES
REGARDING THE ARA PRODUCED FOR MARTEK HEREUNDER, EXPRESS AND IMPLIED, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
6.3. Notification and Replacement. If any shipment of ARA supplied
by GB to Martek or, on behalf of Martek, to any Martek customer does not
conform to the applicable specifications, Martek shall promptly give GB written
notice of the nonconformity. Likewise, if GB discovers or has reason to
believe that any shipment of ARA fails to conform to the applicable
specifications, GB shall promptly notify Martek. Any dispute between the
parties regarding the conformity of any shipment of ARA to the applicable
specifications shall be resolved in accordance with the procedure set forth in
Exhibit F. In case it is resolved that any shipment of ARA fails to satisfy
the applicable specifications, GB shall promptly replace the nonconforming
shipment, without charge, with a substitute shipment that satisfies the
applicable specifications. Any nonconforming shipment of ARA shall be returned
to GB at GB's request and expense. In the event that GB is unable to produce a
replacement shipment of ARA that satisfies the applicable specifications within
a reasonable time after receipt of the notice of nonconformity, Martek shall
have no obligation to pay GB for the nonconforming shipment, and if payment has
already been made, Martek shall be entitled to an immediate refund of the price
of the nonconforming shipment.
7. PLANNING, PRODUCTION AND ORDERING TERMS
7.1. Exclusive Supplier Rights. Except as otherwise expressly
provided in Section 7.3, beginning on the later of (a) July 1, 1997 or (b) the
date on which the Committee agrees on the Martek Specifications, and for the
remaining term of this Agreement, GB shall have "Exclusive Supplier Rights."
For so long as GB's Exclusive Supplier Rights remain in effect, Martek agrees
that it shall not order ARA from any other third-party supplier and shall not
itself produce, in any calendar year a quantity of ARA greater than the "Martek
Allocation." For purposes of this Section 7.1, the term "Martek Allocation"
shall mean the lesser of (a) twenty-five percent (25%) of Martek's total sales
of ARA during such year or (b) eight thousand (8,000) Units of ARA; provided,
however, that the Martek Allocation shall in no event be less than two thousand
(2,000) Units of ARA per year The Martek Allocation shall be used as much as
possible to satisfy Customer requirements referred to below in Section 7.2.
7.2. Exceptions to Exclusivity. Until such time as GB shall have
obtained the kosher certification referred to in Section 7.6, Martek shall be
entitled to produce all quantities of ARA that require a kosher certification
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by the Orthodox Union at any Martek facility. In addition, in the event that
any Martek customer requires more than a single supplier of ARA as a condition
for placing one or more orders with Martek, the Martek Allocation referred to
in Section 7.1 above shall be increased if necessary to enable Martek to fill
orders for ARA for which any customer expressly requires an alternative
supplier. In the event such customer is not satisfied with a combination of
Martek and GB as suppliers, Martek shall be free to contract with third parties
to fill any such orders.
GB and Martek acknowledge that in the countries of China and
India, local companies might become interested in purchasing ARA for their
domestic markets (the "China and India Markets"). If such interest
materializes, GB and Martek shall negotiate in good faith a way for both
parties to participate in the China and India Markets in a way that both
parties will equally share in the benefit of selling into the China and India
Markets without Martek jeopardizing its ARA Patent rights and rights in
potential ARA Patents. If the parties fail to reach an agreement on this
matter within two years of the Effective Date, Martek shall be entitled to
produce ARA for the China and India Markets. If Martek produces ARA for the
China and India Markets itself, the sales price of ARA charged by GB for
sale(s) into the China and India Markets shall not be taken into account for
the purpose of setting the maximum ARA sales price pursuant to Section 8.2(b)
herein.
7.3. Termination of Rights. GB's Exclusive Supplier Rights shall
automatically terminate in the event that GB fails to fill any order for ARA
placed by Martek (a) in compliance with the provisions of applicable delivery
instructions submitted by Martek in accordance with this Section 7, (b) with a
shipment that satisfies the specifications identified in the applicable
delivery instructions, and (c) at a price that is not more than ten percent
(10%) higher than the price offered to Martek by any other prospective supplier
of good standing, as reasonably determined by Martek, for similar quantities
and quality. Notwithstanding the foregoing, failure by a shipment to satisfy
the specifications or instructions in the applicable delivery instructions
shall not be grounds for automatic termination of GB's Exclusive Supplier
Rights so long as GB fully complies with Section 6.3 in connection with such
shipment, and no such failure recurs in connection with (A) the next
consecutive order for the same Martek customer (whether ordered for delivery to
Martek or directly to the customer) or (B) more than three (3) orders placed by
Martek (whether ordered for delivery to Martek or directly to the customer)
during any twelve consecutive month period; provided, however, that the Martek
Allocation referenced in Section 7.1 shall be increased by the amount necessary
to enable Martek to fill any order for which a GB shipment has failed to
satisfy the specifications. In the event that GB's Exclusive Supplier Status
is automatically terminated for any reason, Martek shall have the option to
terminate this Agreement in accordance with Section 13.2.
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7.4. Purchase Estimates and Orders. To assist GB in organizing an
adequate supply of ARA to fill Martek's orders, Martek shall submit to GB, on
the first working day of each month, a written firm purchase order setting out
the quantities of XXX Xxxxxx will purchase during the month (the "Month")
following the first mentioned month as well the minimum quantities of XXX
Xxxxxx will purchase during the two months following the Month.
Simultaneously, Martek will submit to GB a tentative forecast of the quantities
of ARA that Martek expects to order during the three (3) calendar quarters
following the three (3) months referred to above. Except for the quantities of
ARA set out in the firm purchase order for the Month as referred to above,
Martek may order, and GB agrees to timely deliver, quantities of ARA up to one
hundred ten percent (110%) of the minimum quantities set out in the firm
purchase orders for each of the two months following the Month. In the event
the actual quantities of ARA ordered by Martek during the following two months
exceed said one hundred ten percent (110%), GB shall endeavor to manufacture
and supply such additional quantities to Martek and, in doing so, shall use all
inventory and manufacturing capacity which GB is not contractually obligated to
use for the purpose of filling orders for any third party, but shall not be
under any obligation to do so within such two (2) month period. In addition to
any other remedies provided herein, the Martek Allocation as defined in Section
7.1 shall be increased by any quantities of ARA not timely delivered by GB
pursuant to Sections 7.4 and 7.7 herein.
7.5. Maximum GB Capacity. Notwithstanding anything to the contrary
set forth in Section 7.4, if Martek's orders for ARA in any twelve (12) month
period exceed one hundred thousand (100,000) Units of ARA, Martek acknowledges
that GB will have to build additional processing capacity and that Martek's
first orders aggregating in excess of one hundred thousand (100,000) Units of
ARA in any twelve (12) month period (the "First Over Capacity Orders") may be
delayed for up to eighteen (18) months pending the building of additional
capacity by GB. During the period that GB is building such additional capacity
(the "Build-Out Period"), to the extent that GB cannot fill Martek's orders for
ARA, (a) the Martek Allocation referred to in Section 7.1 above shall be
increased as necessary to enable Martek to fill orders for ARA from customers
and/or (b) Martek shall be free to contract with third parties for the
production of ARA, in which case Martek shall transfer (and GB shall provide
Martek any required assistance) to such third party(ies) any technical
information necessary for the production of ARA. Martek agrees that contracts
with any third parties for production of ARA during the Build-Out Period shall
be structured so as not to preclude GB from re-establishing its exclusivity,
based upon the terms of this Agreement, at the end of the Build-Out Period.
7.6. Kosher Certification. GB shall obtain, as soon as
practicable, and shall thereafter maintain and at all times adhere to the
requirements for kosher certification by the Orthodox Union for all facilities
of GB and any GB
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subcontractors that are used to manufacture, produce and/or package any
component(s) of ARA.
7.7. Delivery Instructions. Martek shall submit delivery
instructions to GB for quantities of ARA subject to firm orders placed in
accordance with Section 7.4 above at GB's address written above. Such delivery
instructions, as so placed, shall identify (a) the quantity of ARA required,
(b) specifications which the ARA shall be required to satisfy, (c) the required
delivery date, (d) the address to which the shipment shall be delivered, and
(e) any other applicable shipping instructions. GB shall confirm orders within
five (5) business days after receipt.
7.8. Shipment. During a Month, GB shall deliver quantities of ARA
covered by the firm order for the Month on the later of (a) the last business
day of the month or (b) ten (10) days after receipt of delivery instructions
from Martek. All orders shall be shipped F.O.B. GB's facility. For purposes
hereof, each order shall be deemed to have been "delivered, and risk of loss
with respect to each shipment shall pass from GB to Martek, upon delivery of
the shipment by GB to a carrier agreed upon by the Committee for transport to
the location specified in the Martek order. GB shall retain title to all
shipments of ARA until payment is received, whereupon title shall pass to
Martek or the Martek customer, as applicable.
7.9. Order Fulfillment. Issues relevant to order fulfillment,
including but not limited to the location(s) at which various stages in the
production process for ARA shall occur and methods for packaging and shipment
of ARA, shall be determined by the Committee. Notwithstanding the foregoing,
Martek shall be entitled to know the identity of each facility and
subcontractor which GB may use for production of ARA for Martek, and all
shipments of ARA in fulfillment of Martek's orders shall bear no brand name
other than Martek brand names unless otherwise directed by Martek.
7.10. Certification of Analysis. Promptly on the date of each GB
shipment of ARA ordered by Martek, whether for delivery to Martek or a Martek
customer, GB shall furnish Martek with a certificate of analysis in the form
determined by the Committee and signed by GB's relevant QA/QC officer, which
certifies the actual content of those components of the ARA which are
identified in the Martek Specifications or Customer Specifications, as
applicable.
7.11. Refinement and Extraction. The parties shall enter into a
separate agreement, the "Toll Manufacture Agreement," on terms substantially
similar to those set forth herein, pursuant to which Martek shall refine ARA
from crude oil containing ARA for GB or extract ARA from biomass and refine the
crude oil for GB. The members of the Committee shall comprise the steering
committee referenced in the Toll Manufacture Agreement. Martek hereby grants
an option to GB to purchase Martek's
CONFIDENTIAL - 12 -
13
blueprints for facilities for the refinement and/or extraction of ARA, in
return for fair and reasonable consideration to be agreed upon by the parties
and amortized monthly over a period of five years as of the sale and delivery
of the blueprints. The foregoing option may be exercised only if the Committee
determines that GB should refine ARA in one or more facilities in Europe, and
the consideration shall be payable only upon termination of this ARA Purchase
Agreement in the unamortized amount remaining at such time.
8. PAYMENTS
8.1. By GB. In consideration of Martek's undertaking to appoint GB
as Martek's subcontractor for the manufacture of ARA as set forth herein, GB
shall pay to Martek the following amounts on the dates provided:
(a) [ * ] shall be paid by GB to Martek upon
the date of execution of this Agreement;
(b) [ * ] shall be paid by GB to Martek
within thirty (30) days after the date of issuance by the European
Patent Office of the first ARA Patent that would be infringed by
continued manufacture, use or sale of ARA by GB; and
(c) [ * ] shall be paid within thirty (30)
days after the date of issuance in the United States of the first ARA
Patent that would be infringed by continued manufacture, use or sale
of ARA by GB.
A payment made by GB pursuant to this Section 8.1 shall be
reimbursable by Martek to GB to the extent of the Reimbursement Percentage set
forth on the next page, only if Martek terminates this Agreement other than (i)
for cause in accordance with Section 13.2 or in accordance with Section
13.3(b), or (ii) by reason of bankruptcy in accordance with its rights as a
bankrupt party under the bankruptcy laws of the United States.
CONFIDENTIAL - 13 -
14
REIMBURSEMENT
TIME OF TERMINATION BY MARTEK PERCENTAGE
----------------------------- ----------
During the first year after the due date for the 90%
applicable payment
During the second year after the due date for the 70%
applicable payment
During the third year after the due date for the 50%
applicable payment
During the fourth year after the due date for the 30%
applicable payment
During the fifth year after the due date for the 10%
applicable payment
After the fifth year after the due date for the 0%
applicable payment
8.2. By Martek. For each shipment of ARA ordered by Martek and
shipped to the address specified in Martek's delivery instructions which
satisfies the specifications identified in Martek's delivery instructions,
Martek shall pay to GB the GB Costs per Unit of ARA for filling such order plus
an additional [ * ] of such GB Costs per Unit of ARA; provided,
however, that in no event shall the total amount paid by Martek for any
shipment of ARA which satisfies the Martek Specifications exceed the lowest of:
(a) for the first [ * ] Units of ARA per [ * ]
month period beginning July 1, 1997, [*] per Unit of ARA; and for all
additional Units of ARA during such period, [ * ]
per Unit of ARA (exclusive in each case of transportation costs and
customs duties), or
(b) for the first [ * ] Units of ARA delivered by GB in
fulfillment of orders by Martek under this Agreement, [* ], and for
any additional Units of ARA delivered by GB in fulfillment of orders
by Martek under this Agreement, a price that is [
*
]; or
CONFIDENTIAL - 14 -
15
(c) a price per Unit of ARA based on GB Costs that are not more than ten
percent (10%) higher than Martek's cost of production per Unit of ARA,
calculated in a manner identical to the calculation of GB Costs, for
ARA of equivalent quantity and quality.
GB shall invoice Martek for each order no earlier than the date on which such
order is shipped, and Martek shall remit all payments due to GB within
forty-five (45) days following receipt of GB's invoice.
8.3. ARA Price Adjustments. For each shipment of crude oil
containing ARA which Martek is responsible for converting to Finished Oil,
Martek shall determine the quantity of ARA in the Finished Oil in accordance
with the method agreed upon by the Committee as a percentage of the quantity of
ARA in the crude oil (the "Recovery Rate"). GB shall be able to verify the
Recovery Rate as determined by Martek. If the Recovery Rate for any shipment
is less than ninety-five percent (95%), the price paid by Martek to GB per Unit
of ARA shall be increased by One U.S. Dollar (US $1.00) for every one percent
(1%) that the Recovery Rate is less than ninety-five percent (95%). If the
Recovery Rate is less than ninety percent (90%) for more than six thousand
(6,000) Units of ARA recovered by Martek from crude oil shipped by GB during
the twelve (12) month period immediately following Martek's receipt of the
first shipment from GB of crude oil containing ARA or during any subsequent
twelve (12) month period, the price paid by Martek to GB for such crude oil
shall be increased by an additional Two U.S. Dollars (US $2.00) per Unit of ARA
for every one percent (1%) that the Recovery Rate is less than ninety percent
(90%) during such period. If, during the twelve (12) month period immediately
following Martek's receipt from GB of the first shipment of crude oil
containing ARA the Recovery Rate is less than eighty-five percent (85%), GB's
obligation to deliver crude oil to Martek and GB's Exclusive Supplier Rights
shall be suspended, and the parties shall use commercially reasonable efforts
to increase the Recovery Rate, negotiate a change in the prices set forth in
Section 8.2(a) or reach another mutually agreeable procedure for recovery of
ARA from crude oil. GB's obligation to deliver crude oil to Martek and GB's
Exclusive Supplier Rights shall immediately resume upon achievement of a
mutually satisfactory increase in the Recovery Rate, change in the prices set
forth in Section 8.2(a) or other procedure for recovery of ARA from crude oil
within twelve (12) months after Martek first calculated a Recovery Rate of less
than eighty-five percent (85%). If by the end of such twelve (12) month period,
the parties have not achieved a mutually satisfactory increase in the Recovery
Rate, change in the ceiling prices set forth in Section 8.2(a) or other
procedure for recovery of ARA from crude oil, then either party may terminate
this Agreement.
8.4. Ceiling Price Adjustments. The maximum prices per kilogram of
crude oil containing ARA set forth in Section 8.2(a) are subject to increase on
each anniversary (the "Adjustment Date") of the effective date of this
Agreement in accordance with this Section 8.3. On each Adjustment Date, GB
Costs shall be adjusted to reflect (a) any increase in the actual cost of raw
CONFIDENTIAL - 15 -
16
materials required to produce ARA and (b) a percentage of that portion of the
then-applicable maximum prices attributable to items other than raw materials
which is equal to the percentage increase, if any, in the Consumer Price Index
for the month which is two (2) months prior to the Adjustment Date over the
Consumer Price Index for the corresponding month in the preceding year. For
purposes of this Section 8.3, the term Consumer Price Index shall mean the
"Index Number" for "All Items" for as published in the Revised Consumer Price
Index--Cities (36 mo. avg. 1982-84 = 100) by the Bureau of Labor Statistics of
the U.S. Department of Labor. If the Consumer Price Index for the month two
months prior to the Adjustment Date shall not have the same base period (that
is, the period for which the index is 100) as the index for 1982-84, then
either or both of such indexes shall be adjusted through the use of conversion
factors provided by the Bureau of Labor Statistics so as to be comparable to
each other for the purposes hereof, it being the intention of the parties that
the ceiling prices per kilogram of crude oil containing ARA shall be adjusted
upward to reflect the decreased purchasing power of the United States dollar,
if any, when compared to the purchasing power of the US dollar in 1982-84.
8.5. [
*
]
8.6. Currency. All payments hereunder shall be in made in United
States dollars.
9. REPORTING, RECORD KEEPING AND AUDIT
9.1. Within thirty (30) days after the effective date of this
Agreement and thereafter on January 1 of each year during the remaining term of
this Agreement, GB shall provide Martek with a budget for GB's costs of
production for ARA, determined in good faith in accordance with Exhibit A, for
the twelve (12) month period immediately following the date on which such
budget is to be provided. On September 30 and March 31 of each year during the
term of this Agreement, GB shall deliver to Martek a statement of GB's actual
costs of production of ARA for the periods ending the preceding June 30 and
December 31, respectively. Any difference between budgeted costs and actual
costs for any applicable six (6) month period will be reconciled (by a cash
refund to Martek if budgeted costs exceed actual costs, or by an invoice to
Martek for the additional amount payable if actual costs
CONFIDENTIAL - 16 -
17
exceed budgeted costs) upon submission of the applicable statement of actual
costs.
9.2. GB shall maintain complete and accurate records of all GB
Costs and of ARA transactions with other customers. Martek shall have the
right, upon reasonable prior written notice, through an independent public
accounting firm reasonably acceptable to GB, to examine GB's books, records and
accounts relating to GB's performance under this Agreement and for the purposes
of verifying the accuracy of GB's statements of actual costs for the production
of ARA. All information regarding GB's business received in any such
examination shall be held in confidence. The expenses of such audits shall be
borne by Martek, and any overpayment by Martek of the amounts GB was entitled
to receive for fulfillment of orders for ARA which is established as a result
of such audit shall be promptly refunded to Martek with interest at the prime
rate per annum, as published bi-weekly in the Wall Street Journal, calculated
from the date(s) of the overpayment until the date of refund in accordance
herewith. If any such audit establishes an aggregate overpayment by Martek
during the period covered by the audit by five percent (5%) or more of the
amounts to which GB was entitled, then Martek shall be reimbursed by GB for the
expenses of the audit.
10. CONFIDENTIAL INFORMATION
The parties acknowledge and agree that each party will be disclosing
confidential information to the other party, including but not limited to, the
Martek Specifications, Customer Specifications, know-how, business strategy,
ideas, concepts and financial information (the "Confidential Information").
Each party agrees that it shall hold the Confidential Information of the other
party in strict confidence, shall not disclose it to others or use it in any
way, commercially or otherwise, except for purposes of performing its
obligations under this Agreement. Each party further agrees to take all action
necessary to protect the confidentiality of the other party's Confidential
Information including, without limitation, (a) implementing and enforcing
operating procedures to minimize the possibility of unauthorized use or copying
of the other party's Confidential Information, and (b) obligating each of its
subcontractors, by written agreement, to protect the other party's Confidential
Information. Notwithstanding this SECTION 10, the term "Confidential
Information" shall not include any information which (i) is or becomes part of
the public domain through no fault of the receiving party, (ii) is obtained by
the receiving party from any third party which is under no obligation to the
disclosing party to protect the confidentiality thereof, or (c) can be
established by the receiving party with reasonable documentary evidence to have
been independently developed by the receiving party without reliance on the
other party's Confidential Information. The parties hereby acknowledge that
Martek and GB, as corporations whose stock
CONFIDENTIAL - 17 -
18
is publicly traded, may be required by applicable laws to disclose the terms of
this Agreement.
11. LIMITATION OF LIABILITY
EXCEPT FOR THE LIABILITY OF GB UNDER SECTION 12, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOSS OF PROFITS OR INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCURRED BY THE OTHER PARTY AND
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT FOR ANY CAUSE OF ACTION OF
ANY KIND EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
12. INDEMNIFICATION
GB shall indemnify and hold Martek harmless from and against any and
all liability, damages, loss or expense (including reasonable fees of attorneys
and other professionals) arising from any claim, demand, action or proceeding
initiated by any third party based upon failure by any shipment of ARA to
satisfy the warranty provisions of SECTION 6.1, including without limitation
any claim that any shipment of ARA contained any contaminant or other substance
not included in the applicable specifications.
13. TERM AND TERMINATION
13.1 Term. The term of this Agreement shall commence upon the
effective date hereof and shall remain in effect for ten (10) years from the
Effective Date unless otherwise terminated in accordance with this Section.
This Agreement may be renewed upon mutual consent of the parties; provided
however, that renewal on the same terms, if the parties so consent, shall not
be conditioned upon payment by GB of additional consideration for appointment
as a subcontractor.
13.2 Termination for Cause. This Agreement may be terminated by
either party in the event that the other party has not performed any material
obligation or has otherwise breached any material term of this Agreement or any
other contract or agreement between the parties (a) immediately upon receipt of
written notice thereof if the breach or nonperformance is incapable of cure, or
(b) upon the expiration of thirty (30) days (or any longer cure period
authorized by the nonbreaching party with respect to any individual breach)
after receipt of written notice thereof if the breach or nonperformance is
capable of cure and has not then been cured.
13.3. Termination by Martek. Martek may terminate this Agreement
without prejudice to any other rights or claims it may have in the event of (a)
final determination that both Martek's pending ARA Patent and pending or issued
(as applicable) Oil Blend Patent will not issue or are abandoned,
CONFIDENTIAL - 18 -
19
withdrawn or otherwise lapse in either the United States or in the countries of
the European Union and the number of Units of ARA sold by Martek is less than
fifty percent (50%) of the total number of combined Units of ARA sold by both
Martek and GB in the United States and the countries of the European Union, in
the aggregate, or (b) GB challenges the validity of, or otherwise opposes any
ARA Patent, pending ARA Patent, Oil Blend Patent or pending Oil Blend Patent
anywhere in the world.
13.4. Termination by GB. GB shall have the right to terminate this
agreement, without liability or obligation to GB in connection with such
termination, (i) in the event that Martek initiates any claim, action or
proceeding against GB based upon an allegation that GB has infringed any ARA
Patent or Oil Blend Patent, or (ii) if and when Martek fails to comply with its
obligations under Section 3.6 above. Nothing herein shall be construed to
release GB from any liability that it may have to Martek in connection with any
alleged infringement.
13.5. Effect of Termination. Upon any termination of this
Agreement, there shall be no further obligation by Martek to purchase ARA from
GB and no further limitation on the suppliers from which Martek may purchase
ARA. In the event that either party terminates this Agreement in accordance
with Section 13.2 by reason of a material default by the other party or in the
event that Martek terminates this Agreement in accordance with Section 13.3(b),
the terminating party shall have an unrestricted royalty-free right and license
to use and sublicense the use of any information and technology related to the
manufacture and production of ARA owned or used by such other party that the
terminating party has become aware of during the term hereof. Notwithstanding
the foregoing, Martek shall have no right or license to use GB-owned
information or technology related to the production of ARA as a result of
termination of this Agreement in accordance with Section 13.2 by reason of a
failure by GB to fill an order placed by Martek for ARA at a price that is not
more than ten percent (10%) higher than the price offered to Martek by another
supplier.
14. TRADEMARKS
14.1. Use. During the term of this Agreement, GB shall use Martek's
brand names and the Martek trade name, solely on Martek's behalf and for
Martek's benefit, on all shipments of ARA by GB, in response to orders and
delivery instructions by Martek, to Martek or any Martek customer, and GB shall
not attach any additional brand names, trademarks, trade names, logos or
designations to any such shipment. GB's use of Martek's brand names and the
Martek trade name shall be in accordance with Martek's policies in effect from
time to time, as communicated by Martek to GB. GB shall not be authorized to
use, and is expressly prohibited from using, any Martek brand name or the
Martek trade name on any shipment of ARA other than a
CONFIDENTIAL - 19 -
20
shipment subject to an order and delivery instructions submitted to GB by
Martek.
14.2. Ownership. GB has paid no consideration for the use of any
Martek brand name or the Martek trade name, and nothing contained in this
Agreement will give GB any right, title or interest in any of them. GB
acknowledges that Martek owns and retains all rights in the Martek brand names
and the Martek trade name. GB will not at any time during or after this
Agreement assert or claim any interest in any Martek brand name or the Martek
trade name. Upon expiration or termination of this Agreement, GB will
immediately cease all use of the Martek brand names and the Martek trade name.
15. DISPUTES; ARBITRATION
15.1. Disputes Generally. The parties hereby undertake to use good
faith efforts to settle any dispute arising under this Agreement. Failing
settlement, all disputes, including without limitation claims of breach of
contract, fraud in the inducement and negligence shall be finally settled in
accordance with the Rules of Conciliation and Arbitration of the International
Chamber of Commerce. The arbitration shall take place in Baltimore, Maryland
USA, and the parties hereby agree to exclude any right of application or appeal
to the courts in connection with any question of law arising in the course of
the reference or out of the award. Notwithstanding the foregoing, any disputes
with respect to disclosure of any Confidential Information shall not be subject
to this arbitration provision.
15.2. Selection of Arbitrator(s). If the parties hereto fail to
settle any dispute arising under this Agreement within a period of sixty (60)
days after the date on which such dispute arose, each party shall, within sixty
(60) days thereafter, appoint one arbitrator and the two so nominated shall, in
turn, choose a third arbitrator. If the arbitrators chosen by the parties
cannot agree on the choice of the third arbitrator within a period of thirty
(30) days after their nomination, then the third arbitrator shall be appointed
by the American Arbitration Association. If either party fails to appoint its
own arbitrator within the specified period, the arbitrator appointed by the
other party shall be the sole arbitrator. The parties shall use their best
efforts to appoint arbitrators who are knowledgeable in biochemical technology.
15.3. Language; Transcript. The arbitration shall be conducted in
the English language. Relevant documents in other languages shall be
translated into English if the arbitrators so direct. A written transcript in
English of the hearing will be made and furnished to the parties.
15.4. Decision of Arbitrators. The arbitrators will decide in
accordance with the terms of this Agreement and will take into account any
appropriate international trade usages applicable to the transaction. The
CONFIDENTIAL - 20 -
21
award of the arbitrators will be final and binding upon the parties. Judgment
upon the award may be entered in any court having jurisdiction. An application
may be made to any such court for judicial acceptance of the award and an order
of enforcement.
15.5. Expense of Arbitration. The arbitrators shall determine the
allocation between the parties of expenses incurred in connection with the
arbitration.
16. REGULATORY MATTERS; ACCESS TO ARA PRODUCTION FACILITIES
16.1. Approvals. Each party shall obtain all regulatory approvals,
permits, licenses, clearances and notifications which it is required to have
for manufacture, shipment, sale or use of ARA prior to any such manufacture,
sale or use or shall ensure that such required approvals, permits, licenses,
clearances and notifications are otherwise obtained. Each party shall provide
the other party with all information the other party may reasonably request in
order to obtain or comply with any necessary regulatory approvals, permits,
licenses, clearances and notifications for manufacture, shipment, sale or use
of ARA such as, but not limited to, all information concerning studies
performed by or on behalf of such party in the field of product identification,
characterization and analysis; pathogenicity, toxicity, mutagenicity and
clinical trials.
16.2. Inspection. Upon reasonable notice during regular working
hours, Martek and any Martek customer may inspect the manufacturing facilities
of GB and any subcontractor(s) in order to inspect the manufacture of ARA,
examine samples of ARA, review quality control and manufacturing procedures for
ARA or any other purpose related to this Agreement.
16.3 Manufacturing Changes. GB shall notify the Committee of any
proposed change to any manufacturing procedure for ARA and shall not change the
manufacture of ARA without the prior approval of the Committee.
16.4. Government Communications. GB will promptly provide to Martek
copies of all documents in its possession concerning communications to or from
FDA or prepared by FDA, or to or from or prepared by any other governmental
agency, which bear in any respect on compliance by GB with FDA and other
relevant governmental agency requirements pertaining to the manufacture of ARA
under this Agreement.
17. GENERAL PROVISIONS
17.1. Assignment. Neither this Agreement nor any rights granted
hereby may be assigned by either party without the prior written consent of the
other party, which consent shall not be unreasonably withheld. Any
CONFIDENTIAL - 21 -
22
attempt by either party to assign any rights, duties or obligations without the
requisite consent of the other party shall be void and without force or effect.
17.2. Modification. This Agreement can only be modified by a
written agreement duly signed by persons authorized to sign agreements on
behalf of Martek and of GB, and variance from the terms and conditions of this
Agreement in any written notification given by either party shall have no force
or effect.
17.3. Severability. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
17.4. Relationship of the Parties. For purposes of this Agreement,
GB and Martek will be and shall act as independent contractors, and neither
party is authorized to act as an agent or partner of, or joint venturer with,
the other party for any purpose. Neither party by virtue of this Agreement
shall have any right, power, or authority to act or create any obligation,
express or implied, on behalf of the other party.
17.5. Notices. All notices shall be in writing and shall be deemed
to be delivered when deposited with a recognized international express courier
service, or when sent by facsimile transmission promptly confirmed by return
transmission. All notices shall be directed to Martek or GB at the respective
addresses first set forth above or to such other address as either party may,
from time to time, designate by notice to the other party.
17.6. Governing Law. This Agreement, and any and all tort claims
that may arise in connection with ARA and any related services, will be
governed by the substantive laws of the State of Maryland. The parties hereby
expressly exclude the applicability of the Convention on Contracts for the
International Sale of Goods and that body of law known as conflicts of laws.
Notwithstanding anything to the contrary herein, issues regarding the scope of
any ARA Patent shall be determined in accordance with the laws of the
jurisdiction in which such ARA Patent has issued.
17.7. Force Majeure. Neither party shall be liable for any damages
or penalty for any delay in performance of, or failure to perform, any
obligation hereunder or for failure to give the other party prior notice
thereof when such delay or failure is due to the elements, acts of God, delays
in transportation, delays in delivery by vendors or other causes beyond that
party's reasonable control.
17.8. No Waivers. No express or implied waiver by either party of
any event of default hereunder shall in any way be, or be construed as, a
waiver of any future or subsequent event of default.
CONFIDENTIAL - 22 -
23
17.9. Survival. The respective rights and obligations of the
parties under Sections 6, 9, 10, 11, 12, 13.5, 14, 15 and 17 shall survive the
termination of this Agreement.
17.10. Entire Agreement. The parties acknowledge that this
Agreement, together with Exhibits A - F hereto, sets forth the complete,
exclusive and integrated understanding of the parties which supersedes all
proposals or prior agreements, oral or written, and all other prior
communications between the parties relating to the subject matter of this
Agreement.
17.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
MARTEK BIOSCIENCES GIST-BROCADES B.V. (GB)
CORPORATION (MARTEK)
By: By:
------------------------ ---------------------------------
Title: Title:
--------------------- ------------------------------
Date: Date:
---------------------- -------------------------------
CONFIDENTIAL - 23 -
24
EXHIBIT A
GB COSTS
GB Costs per Unit of ARA = Variable Costs per Unit of ARA + Production Costs
per Unit of ARA, as follows and adjusted as necessary in accordance with
Sections 4.5 and 8.5 of the attached Agreement:
VARIABLE COSTS
Variable Costs shall be determined on the basis of actual consumption taking
actual purchase prices into account.
Variable Costs shall comprise those costs are directly identifiable within a
product, namely:
- Raw and intermediate materials
- Packaging
- Operations performed elsewhere
- Transport
PRODUCTION COSTS
Production Costs shall be determined on the basis of actual yields and actual
department costs, which are directly or indirectly related to production. Cost
categories include, without limitation, labor, depreciation based on historical
costs, project costs, energy, waste and effluent disposal or treatment,
insurance, local taxes, site service allocations like production staff,
maintenance, purchasing, quality assurance, security services, etc.
The determination of Variable Costs and the allocation of Production Costs to
Units of ARA shall be made according to Generally Accepted Accounting
Principles.
ACCEPTED AND AGREED TO:
MARTEK BIOSCIENCES GIST-BROCADES B.V. (GB)
CORPORATION (MARTEK)
By: By:
----------------------------- ---------------------------------
Title: Title:
-------------------------- ------------------------------
Date: Date:
--------------------------- -------------------------------
CONFIDENTIAL - 1 -
25
EXHIBIT B
ARA PATENTS
INTERNATIONAL PUBLICATION NO: WO 92/13086
INTERNATIONAL PUBLICATION NO: WO 96/21037
[attached]
ACCEPTED AND AGREED TO:
MARTEK BIOSCIENCES GIST-BROCADES B.V. (GB)
CORPORATION (MARTEK)
By: By:
----------------------------- ---------------------------------
Title: Title:
-------------------------- ------------------------------
Date: Date:
--------------------------- -------------------------------
CONFIDENTIAL - 2 -
26
EXHIBIT C
OIL BLEND PATENTS
INTERNATIONAL PUBLICATION NO: WO 92/12711
[attached]
ACCEPTED AND AGREED TO:
MARTEK BIOSCIENCES GIST-BROCADES B.V. (GB)
CORPORATION (MARTEK)
By: By:
------------------------------ ---------------------------------
Title: Title:
--------------------------- ------------------------------
Date: Date:
---------------------------- -------------------------------
CONFIDENTIAL - 3 -
27
EXHIBIT D
COUNTRIES IN WHICH ARA PATENTS AND
OIL BLEND PATENTS HAVE ISSUED
ARA Patents issued in
Australia
Indonesia
Israel
New Zealand
OAPI
South Africa
Sri Lanka
Oil Blend Patents issued in
Australia
Indonesia
Israel
New Zealand
South Africa
Sri Lanka
U.S.A.
ACCEPTED AND AGREED TO:
MARTEK BIOSCIENCES GIST-BROCADES B.V. (GB)
CORPORATION (MARTEK)
By: By:
----------------------------- ---------------------------------
Title: Title:
-------------------------- ------------------------------
Date: Date:
--------------------------- -------------------------------
- 4 -
Confidential
28
EXHIBIT E
PATENT ARBITRATION PROCEDURE
FOR INFRINGEMENT DETERMINATION
IT IS AGREED by and among Gist-Brocades B.V. (hereinafter referred to
as "GB") and Martek Biosciences Corporation (hereinafter referred to as
"Martek") that the following procedure will be used to resolve certain issues
arising under the Section 3.3 of the AGREEMENT to which this PROCEDURE is
attached.
Article E - I. PURPOSE
The purpose of this PROCEDURE is to provide an arbitration mechanism
by which, at the election of either party, any or all of the following issues
may be submitted to and finally decided by an independent panel of arbitrators:
1. Whether a claim of an issued Martek Patent is infringed by a
GB product, either directly or indirectly.
2. Whether a claim of a Martek Patent issued in a particular
country is drawn to an invention which is described and fully
supported in accordance with laws of that country in the International
Patent Publication attached as Exhibit B hereto.
It is understood and agreed that arbitration pursuant to this Agreement relates
to and is intended to resolve certain issues arising out of this Agreement,
without the burden and expense of litigation. As further provided herein, the
decision of a majority of the arbitrators shall be final and binding on both
parties so long as this Agreement is in effect. Such decision will have no
effect in a dispute outside the scope of this Agreement, e.g. patent
litigation, nor will such decision survive termination of this Agreement except
as the decision affects arbitration under this Agreement.
Subject to the express provisions of this Procedure and those rulings
or determinations made by the arbitrators, the parties shall have the power to
agree upon the form of the patent arbitration proceeding(s) and the rules under
which it shall be conducted.
Article E - II. ARBITRATORS AND GENERAL PROCEDURES
The arbitrators shall be licensed patent practitioners and/or retired
judges knowledgeable as to patent law and practice in the jurisdiction where
the patent has issued. Three (3) neutral arbitrators will hear and decide the
issue(s) as a
5
29
panel, with a majority of the panel having the power to make final rulings and
issue the decision(s).
The panel will be selected by agreement of the parties from a group of
twelve (12) candidates, six (6) of whom shall be proposed by each party by not
later than thirty (30) days following the date a party shall have demanded in
writing the arbitration of the enumerated issue(s). Each party shall then
select two (2) arbitrators from the six (6) proposed by the other party, for a
total of four (4) nominees. The three (3) members of the panel shall than be
chosen by blind draw from the four (4) nominees, with the fourth nominee to be
available, to serve as an arbitrator in the event an arbitrator earlier chosen
is or becomes unable or unwilling to serve. In the event a party shall fail to
(i) submit its list of six (6) nominees, (ii) designate two (2) persons from
the other party's list or (iii) participate in the blind draw, the nonfailing
party shall have the right, by blind draw conducted before not less than three
(3) disinterested witnesses, to draw names from that party's list of six
nominees, the first three (3) of whom shall compose the panel for the
arbitration and the fourth, fifth and sixth of whom shall be available, in
order, to serve as an arbitrator in the event an arbitrator earlier chosen is
or becomes unable or unwilling to serve. Neither party shall knowingly propose
any arbitrator candidate whose impartiality might reasonably be questioned for
any reason.
The arbitrators' compensation shall be agreed upon by the parties and
the arbitrators. The terms of compensation for each of the arbitrators shall
be identical. The fees and expenses of the arbitrators shall be shared equally
between the parties, but each party shall bear its own costs respecting the
preparation and presentation of its case.
All communications between the parties and the arbitrators shall be in
the English language, and furthermore shall be in writing except during an
inter partes hearing and in unusual circumstances requiring oral communication
regarding procedural or scheduling matters. Any oral communication to the
arbitrator(s) shall be promptly confirmed in writing. Copies of all
communications with the arbitrator(s) shall be served by overnight delivery to
the other party. Neither party shall, directly or indirectly, engage in any ex
parte contact with any arbitrator or potential arbitrator prior to the
termination of this proceeding or the rendering of a written decision in this
proceeding.
Each arbitrator shall agree in writing to maintain in confidence the
existence of this proceeding and any non-public information revealed or
furnished to the arbitrator during the proceeding. Each arbitrator shall
further agree that, upon termination of this proceeding or the rendering of a
written decision in this proceeding, he or she shall return to each party the
originals of all materials
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provided to the arbitrator by that party, and shall certify to that party that
no copies thereof have been retained.
The arbitrators shall select a Chairman by majority vote. Upon
consultation with the other arbitrators and the parties, the Chairman shall, at
the earliest practicable date, set the dates for written submissions and the
hearing date and establish any prehearing conferences or procedural schedules
as the panel determines to be necessary and appropriate. The Chairman shall be
the presiding officer of the proceeding(s), with all decisions and
determinations of the parties and the panel to be by a majority of the
arbitrators, unless the parties agree otherwise in writing. It is understood
and agreed that any dispute between the parties which concerns any and all
procedural matters or which is ancillary to the arbitrator's determination of
the enumerated issue in dispute shall be finally determined by the arbitrators
in a timely fashion after providing both parties an opportunity to be heard.
Article E - III. DISCOVERY
The parties agree that adequate information on which to base a
decision will generally be available from public sources, including public
records of patent prosecution, supplemented by information shared between the
parties under this Agreement, and neither of them shall demand further
discovery except upon a showing to the satisfaction of the panel of special
circumstances which exist justifying the requested additional discovery.
Incomplete or insufficient provision by a party of information to be shared
under this Agreement may constitute such special circumstances.
Each party will provide the identity of any expert witnesses, along
with the report, curriculum vita, publication list and the substance of
testimony for each expert not later than 20 days before the hearing in Article
E - VI. Each identified expert witness will be made available for deposition
by the other party upon request. Deposition of other witnesses may be
requested, and will be taken at the discretion of the panel.
In the event a party hereto believes additional discovery with respect
to an issue, including deposition of other witnesses, is necessary in order to
ensure full and fair consideration of such issue by the arbitrators, the
parties shall discuss and consider, in good faith, mutually acceptable methods
of obtaining such discovery. In the event the parties have not agreed to such
discovery by not later than fifteen (15) days following written notice
requesting same, then the party or parties so requesting may submit the matter
to the panel for final determination, with the panel's ruling to issue within
ten (10) days following submission.
It is the mutual intention of the parties that discovery, if any,
shall be limited in nature and scope; shall be conducted expeditiously; shall
have as its sole
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purpose the obtaining of information that is directly relevant and necessary to
the presentation of the requesting party's case; shall be conducted in a fair,
cooperative and courteous manner; and shall be accomplished primarily if not
exclusively by the voluntary exchange of documents and information. The other
paragraphs of this article shall be interpreted in keeping with the spirit and
intent reflected in this paragraph. Notwithstanding the foregoing, neither
party shall be entitled to use, refer to or submit any document in briefing, at
the hearing, or otherwise, unless that party shall have furnished the document
to the other party not later than ten (10) days prior to said use, reference or
submission.
Any dispute regarding discovery shall be submitted promptly to the
arbitrators for their determination. The parties shall promptly comply with
any decision by the arbitrators. If necessary, any decision by the arbitrators
concerning any procedural matters may be enforced by any court of competent
jurisdiction in the same manner as a final decision of an enumerated issue,
including an order of specific performance.
Article E - IV. BRIEFING
As of the date specified in the procedural schedule, Martek shall
deliver to GB's counsel and to the arbitrators an opening brief, not to exceed
fifty (50) pages, concerning the enumerated issue(s). On that same date, GB
shall deliver to Martek's counsel and to the arbitrators an opening brief, not
to exceed fifty (50) pages, concerning the enumerated issue(s). Each brief
shall be accompanied by an appendix containing any evidentiary materials which
have previously been furnished to the other party pursuant to Article E-III and
which the party wishes to submit to the panel. The pages in Martek's appendix
shall be consecutively numbered 1, 2, 3, etc. The pages in GB's appendix shall
be consecutively numbered X-x, X-0, X-0, etc.
As of the date specified in the procedural schedule, each party shall
deliver to the other party's counsel and to the arbitrators an opposing brief,
not to exceed fifty (50) pages responding to the opening brief of the other
party. Each brief shall be accompanied by an appendix containing evidentiary
materials which have previously been furnished to the other party pursuant to
Article E - III and which have not previously been included in the appendix to
the opening briefs, with each page consecutively numbered as indicated above,
starting with the next number following the last number used in the party's
opening appendix.
As of the date specified in the procedural schedule, each party shall
deliver to the other party's counsel and to the arbitrators a reply brief, not
to exceed twenty-five (25) pages, replying to the opposition brief of the other
party. Each brief shall be accompanied by an appendix containing evidentiary
materials which have previously been furnished to the other party pursuant to
Article E - III and which
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have not previously been included in the opening or opposing briefs, with each
page consecutively numbered as indicated above, starting with the next number
following the last number used in that party's response appendix.
Each party shall have discretion not to file one or more of the
foregoing briefs, and a party which fails to file by the date specified shall
be conclusively deemed to have fully and finally waived the right to file said
brief(s).
Article E - V. EVIDENTIARY STANDARD
At the hearing, the parties may offer such evidence as is relevant and
material to the dispute and shall produce such additional evidence as the panel
may deem necessary to the determination of the dispute. The failure or refusal
to adduce additional evidence which is within the control of a party may be
taken into account by the panel, in its sole discretion, in rendering its final
decision. It is specifically agreed by the parties that they and the
arbitrators may use and rely upon evidence that would typically be relied upon
by a lawyer rendering an infringement opinion for a client.
Article E - VI. ARBITRATION HEARING
The hearing shall be held at a time and at a place to be selected by
the parties or, failing agreement, by the panel. All proceedings at the
hearing shall be in the English language.
By not later than twenty (20) days prior to the hearing, the parties
shall exchange lists of the names and addresses of all witnesses, together with
the substance of the testimony of each, including any expert witnesses as
provided for in Article E - III above.
At the hearing, each party shall be allotted a total of two and
one-half (2 1/2) hours within which to present all argument and to answer any
questions posed by the arbitrators. Time may be allocated to the required
sequence in any manner as each party elects. Time limits shall be strictly
enforced.
No party shall rely upon any evidentiary material not submitted with
the briefs, although demonstrative exhibits that were not submitted with the
briefs may be used if copies thereof are provided to the other party five (5)
business days before the start of the hearing.
The hearing proceedings shall not be recorded either electronically or
stenographically. Attendance at the hearing shall be limited to persons
entitled to have access to Confidential Information under Article E - VIII
below.
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Neither party shall be required to authenticate documents or to
present or otherwise rely upon sworn affidavits or statements of any kind, or
upon declarations made under penalty of perjury or otherwise. Unless the
parties otherwise agree, each party shall have the right to present one expert
witness, in person, and the opposing party shall have the right to cross
examine any witness called. The time for cross examination shall be charged to
the cross examining party.
At hearing, counsel may present witnesses and exhibits, read excerpts
from exhibits and reports, and otherwise present the case by means of an
opening statement, evidentiary presentation and final argument. Counsel shall
make only such submission and/or summary of evidence as is consistent with a
good faith belief based upon reasonable investigation that such evidence is
factually true. No statement of counsel may be challenged before the panel on
the basis that no documentary or other evidence is presented in support, but
the weight to be given any statement of counsel may be questioned if and to the
extent no such confirming evidence is presented.
Article E - VII. DECISION
The arbitrators shall render a brief written decision in the English
language respecting their determination of the enumerated issue(s) and deliver
duplicate copies of said decision to the parties by certified mail within
fifteen (15) days of the conclusion of the hearing and shall base its decision
solely upon the evidence before it and consistent with this Agreement. The
decision shall be by a majority of the panel, with each arbitrator who concurs
in the decision so indicating by signing the duplicate originals.
Article E - VIII. CONFIDENTIALITY
If a page or part of a brief, document, or evidentiary material
contains information (i) that is not in the public domain, and (ii) that has
been held in confidence by the producing party, those pages or parts of such
brief, document, or evidentiary material which contain such information may be
designated as containing confidential information by the party contending it is
entitled to protection hereunder (hereinafter "Confidential Information").
Briefs, documents, or evidentiary materials may be designated as containing
Confidential Information by stamping, tagging, or writing the words
"CONFIDENTIAL UNDER ARBITRATION PROCEDURE" on each page or part containing
Confidential Information, prior to the production or service thereof by the
producing party upon the other party. Such designation, or lack thereof, will
not change the status of any Information disclosed in accordance with other
provisions of this Agreement.
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The arbitrators and the parties shall each maintain in confidence the
existence of those proceedings and the opinion(s) of the panel.
Any and all Confidential Information which has been obtained from the
other party during the course of this proceeding shall be maintained
confidential and subject to the following restrictions:
a. It shall be used only for purposes of this proceeding and not
for any business or other purpose whatsoever;
b. It shall not be given, shown, made available to, or
communicated in any way to anyone other than:
(i) the outside attorneys for either party and those
employed in the course of assisting such attorneys, including
paralegals and office personnel;
(ii) attorneys who are employees of one of the parties,
and the paralegals and office personnel employed in the
ordinary course of assisting such attorneys;
(iii) two technical consultants (who may be employees of
the receiving party), each of whom shall be identified to the
producing party at least forty-eight hours in advance of the
first disclosure to him of any Confidential Information of the
producing party;
(iv) the arbitrators and persons employed by any
arbitrator and assisting in this proceeding; and
(v) a reasonable number, not to exceed three (3), of
management level personnel of each party having a need to
know.
The provisions of this Article E - VIII shall not, however, be deemed
to apply to information which was lawfully in the possession of the receiving
party (or its counsel) prior to the disclosure by the producing party;
information which a party (or its counsel) lawfully obtains from a third party
having the right to disclose such information; information which was developed
independently by a party as reflected in written documents; or information that
was in the public domain before the effective date of this Agreement or which
subsequently becomes part of the public domain through no fault of the
receiving party.
Article E - IX. ABSENT PARTY
The arbitration may proceed in the absence of a party that, after due
notice, fails to be present. A written decision on an enumerated issue shall
not be made
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solely on the basis of a default of a party, but the panel shall require that
the party present submit such available evidence as may be reasonably required
for the making of a final decision.
Article E - X. SERVICE
Any papers, notices or process necessary or proper for the initiation
or completion of arbitration hereunder, or for the entry of enforcement of
judgment on a written decision, may be served upon a party in accordance with
Section 17.5 of this Agreement.
Article E - XI. CHOICE OF LAW
This Procedure shall be governed by the Choice of Law set forth in
Section 17.6 of the attached Agreement.
ACCEPTED AND AGREED TO:
MARTEK BIOSCIENCES GIST-BROCADES B.V. (GB)
CORPORATION (MARTEK)
By: By:
------------------------------ ---------------------------------
Title: Title:
--------------------------- ------------------------------
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EXHIBIT F
PROCEDURE FOR RESOLUTION
OF ARA QUALITY ISSUES
IT IS AGREED by and among Gist-Brocades B.V. (hereinafter referred to
as "GB") and Martek Biosciences Corporation (hereinafter referred to as
"Martek") that the following procedure will be used to resolve certain issues
arising under the Sections 5.2 and 6.1 of the AGREEMENT to which this PROCEDURE
is attached.
Article F - I. PURPOSE
The purpose of this PROCEDURE is to provide a mechanism by which, at
the election of either party, any dispute regarding whether or not any quantity
of ARA delivered by GB to Martek meets the applicable specifications which have
been agreed upon by the Committee and specified by Martek to GB.
It is understood and agreed that resolution of disputes about ARA quality
pursuant to this PROCEDURE relates to and is intended to resolve certain issues
arising out of the AGREEMENT to which this PROCEDURE is attached, without the
burden and expense of litigation. As further provided herein, the decision of
the third-party analyst (or of a majority of the third-party analysts if the
Committee agrees upon multiple analysts) shall be final and binding on both
parties so long as this Agreement is in effect.
Article F - II. SPECIFICATIONS FOR ARA
The parties acknowledge that the AGREEMENT provides for the
possibility of more than one set of specifications for ARA: "Customer
Specifications" as defined by Section 2.3 of the AGREEMENT and "Martek
Specifications" as defined by Section 2.6 of the AGREEMENT. The Martek
Specifications and any Customer Specifications require approval by the
Committee. Section 7.7 of the Agreement permits Martek to specify which of the
foregoing specifications any particular order for ARA must satisfy.
Article F - III. ROLE OF THE COMMITTEE
Section 4.4 of the Agreement authorizes the Committee to determine
methods of analysis of ARA, including identification of one or more independent
third parties that are to be engaged to analyze quantities of ARA produced by
GB. Pursuant to this PROCEDURE, the Committee shall select and agree upon
alternative third-party analysts, other than those selected by the Committee to
analyze all quantities of ARA produced by GB, who shall be and remain available
to
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analyze any quantity of ARA with respect to which a dispute arises about
whether the applicable specifications have been met.
Article F - IV. COMMITTEE SELECTIONS
As soon as practicable after the AGREEMENT has been executed, the
Committee shall agree upon (1) the Martek Specifications (and, at Martek's
request, any Customer Specifications), (2) the method of analysis to be used to
determine whether ARA meets applicable specifications and (3) a minimum of
three (3) third-party analysts different from the analysts already selected by
the Committee to analyze all ARA produced GB. The foregoing selections shall
be memorialized, at the Committee's discretion, either by attachment to this
Exhibit F or retention in the Committee's files.
Article F - V. DISPUTE RESOLUTION PROCEDURE
In the event that Martek notifies GB pursuant to Section 5.2 or 6.3 of
failure by any quantity of ARA to conform to the applicable specifications, GB
shall have three (3) business days following receipt of such notice within
which to notify Martek that GB disputes Martek's conclusion. Either party
shall thereupon be entitled to notify each of the two Committee Leaders, by
facsimile transmission and by email of the existence of a dispute as to the
quality of ARA. Not later than the close of business on the day immediately
following the date on which such notice was transmitted to the Committee
Leaders, the Committee shall agree upon the number of alternative analysts to
be used to resolve the dispute, shall request expedited services from the
selected analyst(s) and, upon confirmation by the selected analyst(s) of
acceptance of the offered engagement and the time within which the analysis
will be completed, the Committee shall immediately direct Martek and GB each to
ship to such analyst(s) quantities of ARA from the shipment of disputed
quality. Each selected analyst shall analyze the samples of ARA furnished by
Martek and GB, and shall advise the Committee in writing in the English
language, within the time committed to in connection with acceptance of the
engagement, whether or not the ARA samples provided by Martek meet the
applicable specifications. If the selected analyst(s) determine that the
sample of ARA furnished by GB meets the applicable specifications while the
sample furnished by Martek does not, the selected analyst(s) shall have the
authority to investigate the matter and allocate responsibility for the
deviation from specifications either to Martek or to GB. The decision(s) of
the selected analyst(s) shall be final and binding on the parties. The fees
charged by the selected analyst(s) and the costs for shipping samples of ARA to
such analyst(s) shall be shared equally by Martek and GB.
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Article F - VI. PROCEDURE DEFAULT
In the event that, for any reason, (a) the Committee has not agreed
upon a method of analysis to be used to determine whether ARA meets applicable
specifications or a minimum of three (3) third-party analysts different from
the analysts engaged to analyze all ARA produced GB, or (b) a sufficient number
of analysts, as determined by the Committee, do not accept the offered
engagement to analyze the ARA of disputed quality, the Committee shall have the
opportunity to complete such selections pr make alternative selections in
sufficient time to engage analyst(s) within the time otherwise required. If,
for any reason, the Committee fails to act within the times periods specified
in Article F - V above or a written opinion is not received within the time
specified by the Committee from each selected analyst who has accepted the
engagement, either party shall be entitled to seek resolution of the dispute in
accordance with the provisions of Section 15 of the AGREEMENT. Such
arbitration proceeding shall be governed by the Choice of Law set forth in
Section 17.6 of the attached AGREEMENT.
ACCEPTED AND AGREED TO:
MARTEK BIOSCIENCES GIST-BROCADES B.V. (GB)
CORPORATION (MARTEK)
By: By:
------------------------------- ---------------------------------
Title: Title:
---------------------------- ------------------------------
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