SUPPLY AGREEMENT
This Supply Agreement, entered into as of this 1st day of May, 2001, is by
and between Phibro-Tech, Inc., a Delaware corporation with offices at One Xxxxxx
Plaza, Fort Xxx, New Jersey ("Seller"), and Nufarm, Inc., a Delaware corporation
with offices at 0000 Xxxx Xxxxx Xxxxxxx, Xxxxx 000X, Xxxx Xxxxx, Xxxxxxxx
("Buyer").
WITNESSETH:
WHEREAS, Seller and Buyer wish to enter into a Supply Agreement under
which Seller will sell and deliver Product (as hereafter defined) to Buyer upon
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein, Seller
and Buyer hereby agree as follows:
1. Definitions.
(a) "Affiliate" means in respect of a party to this Agreement any entity
that, by means ownership of the majority of shares or otherwise, is
controlled by such party, is controlling such party or is under
common control with such party. A corporation or other entity shall
be regarded as in control of another corporation or entity if it
owns, or directly or indirectly controls, more than fifty percent
(50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly,
the power to direct or cause the direction of the management and
policies of the corporation or other entity.
(b) "Calendar Quarter" means each calendar quarter starting January,
April, July and October 1.
(c) "Calendar Year" means each calendar year while this Agreement is in
effect.
(d) "Contract Year" means in the first instance, the period commencing
as of May 1, 2001 and ending June 30, 2002 and thereafter each
twelve-month period commencing July 1 and ending June 30 while this
Agreement is in effect.
(e) "Control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management or policies of a
person or entity, whether through the ownership of voting
securities, by contract or otherwise.
(f) "Delivery Point" means FOB the Facility, unless otherwise specified
and agreed by both parties.
(g) "Facility" means the Sumter, SC facility of Seller at which Products
are manufactured.
(h) "Lead Time" means the period of time between receipt of a Purchase
Order and the time the Product is delivered to Buyer and/or its
Affiliates at the Delivery Point, which shall be sixty (60) calendar
days for all Products.
(i) "Product" means the products manufactured by Seller for Buyer and
set forth in Attachment 1, as may be amended from time to time by
the mutual agreement of the parties.
(j) "Product Specifications" means the published specifications for each
of the Products set forth in Attachment 2.
(k) "Purchase Order" has the meaning set forth in Section 2(d).
(l) "Substitute Products" means products that are used as substitutes
for Products, including without limitation, products manufactured by
others with substantially similar performance characteristics,
efficacy or functionality, but does not include existing Products
sold by Buyer's Affiliates.
(m) "Technical Data Sheets" means those product technical data sheets
customarily used in the chemical industry and containing such
information as is customarily found therein.
2. Purchase of Product.
(a) Appointment; Exclusivity. Buyer and its Affiliates hereby appoint
Seller to manufacture and be their exclusive supplier of Products
and Substitute Products, subject to the conditions and terms set
forth herein, and Seller accepts such appointment to manufacture and
supply the Products and to do such other acts as are herein
authorized. During the term of this Agreement, Seller shall, and
shall ensure that its Affiliates shall not, directly or indirectly,
supply, distribute or sell Products or Substitute Products to any
person or entity other than Buyer and/or its Affiliates on terms and
conditions, including price, that are, in the aggregate, materially
more favorable to such other person or entity than to Buyer and/or
its Affiliates hereunder.
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(b) 100% Requirements. Buyer agrees, and agrees to cause its Affiliates,
to buy 100% of its and their requirements for Products and
Substitute Products, up to the capacity of the Facility, during the
term of this Agreement from Seller hereunder, and Seller shall
supply to Buyer and its Affiliates 100% of its and their
requirements for Products and Substitute Products, in accordance
with the terms and conditions of this Agreement, provided such
requirements do not exceed the capacity of the Facility. During the
term of this Agreement, Buyer shall not divert the manufacture or
sale of Products or Substitute Products from the Facility to any
other plant.
(c) Forecasts. Buyer agrees to provide to Seller, within thirty (30)
days after the date hereof, written non-binding forecasts of its
anticipated requirements of Products by Calendar Quarter for the
balance of Calendar Year 2001 and for the first two Calendar
Quarters of Calendar Year 2002. At least sixty (60) days prior to
the beginning of each Calendar Quarter, Buyer shall provide Seller
with a written non-binding rolling estimate of its anticipated
requirements of Product during the next four succeeding Calendar
Quarters.
(d) Purchase Orders. To effect the purchase of Product, Buyer shall give
Seller a binding written purchase order; such order shall: (i) be
given to Seller at least the number of days prior to the scheduled
date for delivery of the Product ordered equal to the Lead Time;
(ii) specify the quantities, ship-to location and delivery date of
Product to be purchased; (iii) be subject to the terms and
conditions of this Agreement; and (iv) be Buyer's standard purchase
order form (hereinafter referred to individually as a "Purchase
Order" and collectively as the "Purchase Orders"), and shall be
appropriately completed and executed by Buyer. Within fifteen (15)
business days after receipt of such written notice and Purchase
Order, Seller shall either (A) notify Buyer in writing that such
Purchase Order does not comply with the terms and conditions of this
Agreement, specifying the respect in which the Purchase Order fails
to comply with this Agreement, in which event Seller and Buyer shall
promptly negotiate in good faith to resolve such disagreement and to
execute a suitable Purchase Order reflecting such resolution, or (B)
notify Buyer in writing of Seller's acceptance of such Purchase
Order, in which event such acceptance notice shall be accompanied by
a copy of such Purchase Order signed by Seller. If Seller fails to
notify Buyer within such period, Seller shall be deemed to have
accepted and signed the Purchase Order. Seller shall not be
obligated to fulfill any Purchase Orders in respect of any Calendar
Quarter to the extent the aggregate Purchase Orders for such
Calendar Quarter exceed the forecasts for such Calendar Quarter by
more than twenty-five percent (25%), although Seller shall use
commercially reasonable efforts to fulfill all such Purchase Orders.
Seller shall not be obligated to fulfill any Product Order of less
than $500.
(e) Printed Purchase Order Terms Not Binding. Every Purchase Order
issued by Buyer hereunder shall reference this Agreement. No printed
term or condition contained in such Purchase Order shall bind, apply
to, or in any respect give rise to any obligation on the part of,
Seller or Buyer. No term or condition typed on such Purchase Order
shall bind, apply to, or in any respect give rise to any obligation
on the part of Seller unless specifically agreed to and
countersigned by Seller. Subject to Section 2(f), the terms and
conditions contained in this Agreement (including any Attachment or
Schedule hereto) supersede such printed terms and conditions and all
prior oral or written agreements, commitments and understandings
between Seller and Buyer and shall, together with the terms of such
accepted Purchase Order, constitute the entire agreement between
Seller and Buyer with respect to the matters provided for in such
Purchase Order.
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(f) Terms of Sale. Buyer shall, with respect to any sale of Products by
Buyer to any of its direct or indirect customers, replicate the
terms under which Seller sells Products hereunder to Buyer that
limit Seller's liability to Buyer (i.e., the Performance Warranties
and Sections 7(b) and 9 but not Section 5(g)) to limit Buyer's
liability to such customer for such sale (the "Terms of Sale").
Where Buyer sells Product to its customer pursuant to the Terms of
Sale and Buyer is liable to such customer, Buyer will be entitled to
pursue such rights as it may have against Seller; provided, however,
that to the extent Buyer modifies the Terms of Sale without the
prior written consent of Seller, Buyer shall not pursue any recovery
from Seller.
(g) Facility. Seller shall manufacture Product at the Facility. Buyer
agrees that Seller may utilize the Facility for the blending and/or
manufacture of product other than the Products, subject to Seller's
obligations under the Asset Purchase Agreement between Buyer and
Seller dated as of the date hereof and the requirements set forth
herein. Seller may change the location at which Product is
manufactured to another location in the United States upon one
hundred eighty (180) days' prior written notification to Buyer
unless such change would result in any material increase in price of
Product or other material adverse change to Buyer.
(h) Capital Expenditures. During the term of this Agreement, if Buyer
requires additional capacity or investment for the manufacture of
Products at the Facility, for the manufacture of new products at the
Facility, or for the manufacture of reformulated Products or
products at the Facility, (i) Buyer shall notify Seller in writing
of its need for such additional capacity or investment; (ii) Buyer
and Seller shall promptly after delivery of such notice negotiate in
good faith such request; and (iii) if Buyer and Seller agree to
proceed with increasing the capacity of, or making changes to, the
Facility, Buyer shall be liable for all reasonable costs incurred in
order so to increase the capacity or change the product
manufacturing capacities of the Facility to the extent Buyer has
approved such costs in writing prior to the incurrence thereof.
3. Payment; Delivery.
(a) Price. The purchase prices for Product for the first Contract Year
shall be Seller's full standard cost and margin as shown on the
Purchase Price appendix agreed by Buyer and Seller on the date
hereof. Thereafter, during the term of this Agreement, the purchase
price for Product shall be Seller's full standard cost, determined
by Seller with respect for Contract Year on a consistent basis,
subject to Section 3(d). On or prior to May 10 of each Contract Year
after the first Contract Year, Seller and margin shown on such
appendix shall have delivered to Buyer adjustments to the price for
Products determined in accordance with this Section and such
appendix for the following Contract Year (the "Adjustments"), along
with information in support of each such Adjustment. Seller shall
promptly provide and/or make available to Buyer any information that
Buyer reasonably requests in connection with the Adjustments,
including a report or certificate of Seller's auditors in respect of
any Adjustment that relates to copper prices. After
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such delivery, and or prior to May 31 of each Contract Year, Seller
and Buyer shall meet in such location as they may mutually agree to
discuss in good faith the Adjustments. Seller and Buyer shall give
due regard during such negotiations to actual and forecasted changes
in volume and the affect thereof on standard cost.
(b) Invoices. Seller's invoices shall be sent to:
Nufarm, Inc.
0000 Xxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: Financial Controller
or such other address as Buyer may notify Seller in writing from
time to time.
(c) Minimum Aggregate Payment. In respect of each Contract Year, Buyer
shall pay to Seller a minimum aggregate payment in respect of
Product equal to 70% of Base Volume multiplied by Product price,
regardless of the volume of Product ordered by Buyer during such
Contract Year. Payment of the price for Product in respect of such
Year shall be included for purposes of determining whether Buyer
made such minimum aggregate payment.
(d) Hardship. At any time during the term of this Agreement, if either
party believes that this Agreement is causing demonstrable economic
hardship to it, such party will notify the other party in writing
and within thirty (30) days thereafter, the parties shall meet and
negotiate that issue in good faith. The party claiming such hardship
shall provide and/or make available to the other party any
information such other party reasonably requests in connection with
such hardship.
(e) Payment. Buyer agrees to pay to Seller the purchase price and all
other amounts assumed by Buyer in accordance with the terms of this
Agreement for Products delivered in accordance with the terms of
this Agreement within fifty (50) days after the date of Seller's
invoice for those Products. Such invoices shall be stated and paid
in U.S. Dollars and shall be dated no earlier than the date of
delivery of the Product to the Delivery Point.
(f) Tax. In addition to the prices referred to in this Agreement for any
Product, Buyer shall promptly pay to Seller or, with Seller's prior
written consent, directly to the applicable taxing authority, all
sales, transfer, excise, VAT, personal property and similar taxes,
tariffs or duties applicable to any sale of Product under this
Agreement. Buyer shall be responsible for all customs and other
export duties in connection with the examination of Products.
(g) Delivery.
(i) Seller shall deliver or cause to be delivered Product
specified in an accepted Purchase Order to Buyer and/or its
Affiliates at the Delivery Point within the Lead Time after
delivery of such Purchase Order.
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(ii) Buyer assumes all title to, and all risk of loss of, Products
upon delivery of the Products by Seller at the Delivery Point
to the carrier packed and ready for shipment to Buyer or
Buyer's designee. Buyer will be responsible for all subsequent
charges. Unless otherwise directed by Buyer, Seller will,
however, prepay the freight and xxxx Buyer for its cost for
transportation charges. In the absence of instructions from
Buyer to the contrary, Seller, on behalf of Buyer, will select
the mode of conveyance and carrier or carriers, but shall not
be deemed thereby to assume any liability in connection with
the shipment nor shall any such carrier be construed to be the
agent of Seller. If Buyer specifies the carrier in writing to
Seller, or if Buyer requests actual carrier invoices, then
shipment will be made collect. Buyer will be responsible for
all storage, rigging, drayage and other charges at Buyer's
site and for any special handling requested by Buyer. Seller
shall cooperate in good faith with Buyer in the documentation
and proof of loss claims promptly presented by Buyer to the
appropriate carrier and/or insurer.
(iii) Seller shall make reasonable efforts to make deliveries in a
timely fashion and to notify Buyer promptly of any delays in
delivery.
(h) Weights. Seller's weights at Delivery Point shall govern, unless
proven to be incorrect.
(i) Acceptance. Buyer will make an examination and test of each shipment
for compliance with the Product Specifications within a reasonable
time after its arrival at Buyer's destination. Buyer shall have the
right to reject on a reasonable basis any portion of any shipment
which does not meet the Product Specifications, without invalidating
the remainder of the order or shipment. Any claims against Seller
for failure to comply with the Product Specifications will be waived
unless made in writing promptly after the facts on which the claim
is based become known to Buyer and in any event within thirty (30)
days after the shipment's arrival at Buyer's destination. If Product
is so rejected, Seller at its option may either refund Buyer's
purchase price or promptly replace such non-conforming Product. Upon
Seller's request, Buyer shall return to Seller, transportation
charges collect, the Product upon which the refund or credit is
based, in substantially as good condition as when received by Buyer,
except such part, if any, as cannot be returned due to its necessary
use in processing to determine the existence of an inferior quality
or defective condition; and Buyer shall also likewise return, if
possible, the Products used in processing. In the event that any
shipment is rejected by Buyer due to failure to meet Product
Specifications, Buyer may withhold payment of such portion of any
invoice relating thereto, until such time as Seller replaces such
Product failing to meet the Product Specifications. Except as
provided in Section 9(c), Seller's sole liability for Product that
does not conform in all material respects to the Product
Specifications shall be limited to Seller's obligation, at its
option, to replace such Product or to refund the price of such
Product, and maximum liability, if any, of Seller in respect thereto
shall be the purchase price of that part of the material
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which is subject to the condition or cause on which the claim is
based. No claim shall be allowed for any cause as to material which
has been treated or processed in any way, except for such quantity
necessarily processed to determine the existence of an inferior
quality or defective condition.
(j) Quality Certificate. Seller shall accompany each shipment of Product
hereunder with Seller's standard form of (i) weight certificates and
(ii) assay certificate(s) applicable to each batch of production
contained therein.
4. Seller's Obligations.
(a) Documentation. Seller shall provide Buyer with Technical Data Sheets
in connection with the sale of the Product from time to time upon
request by Buyer.
(b) Support. Seller agrees upon Buyer's reasonable request from time to
time during the term of this Agreement to provide certain research
and development services and to provide Buyer reasonable and
customary technical and/or laboratory support at Seller's then
standard rates for such services and subject to such terms as the
parties may otherwise mutually agree, all in accordance with a
separate agreement to be entered into on terms mutually acceptable
to Buyer and Seller.
(c) Supply Interruption. If Seller is unable to supply Products in
accordance with accepted Purchase Orders at any time for any reason
other than a force majeure (as hereinafter defined) and other than
pursuant to a capital expenditure project jointly undertaken by
Buyer and Seller (a "Supply Interruption Period"), Seller shall
attempt in good faith to provide written notice to Buyer as far in
advance of the commencement of the Supply Interruption Period as
possible or as soon thereafter as possible and shall use
commercially reasonable efforts to resume supply in a timely manner.
Seller will also provide advance written notice to Buyer of any
planned operational interruption relating to the Products if Seller
reasonably believes that the event will result in a material
interruption of supply of Products. So that all Product can be
shipped as required under this Agreement, promptly after delivery of
any such notice, Buyer and Seller will in good faith negotiate an
agreement pursuant to which Buyer's anticipated needs for Products
would be filled during the Supply Interruption Period. Such an
agreement may include, for example, that Seller would (i) produce a
sufficient amount of Products prior to the Service Interruption
Period to fulfill Buyer's anticipated needs during the Supply
Interruption Period; (ii) have an Affiliate of Seller supply
Products or Substitute Products under this Agreement during the
Supply Interruption Period to the extent Seller is unable to supply
the Products in accordance herewith; and/or (iii) obtain Products or
Substitute Products from a third-party manufacturer for shipment to
Buyer in accordance with Purchase Orders during the Supply
Interruption Period. If Seller cannot or does not provide Products
during a Supply Interruption Period for a consecutive period of
forty-five (45) days, Buyer shall have the right to procure, if
possible, Substitute Products on the open market ("cover products")
on a short-term basis and on commercially reasonable terms and
Seller shall reimburse Buyer for the cost of
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such cover products in quantities consistent with the Purchase
Orders to the extent such cost exceeds the cost of the Products
under this Agreement; provided, however, that once Seller has
provided written notice to Buyer that Seller is able to resume
supply of the Products under this Agreement, Buyer will use
commercially reasonable efforts to stop its procurement of cover
products and will resume acquiring Products from Seller under this
Agreement. If Buyer does procure cover products and Seller
reimburses Buyer for any excess costs thereof in accordance with the
foregoing, Seller's liability arising as a result of the Supply
Interruption Period shall be limited to such reimbursement
obligation.
(d) Facility. Seller shall use commercially reasonable efforts to cause
the Facility and the Products to comply in all material respects
with all applicable governmental laws, regulations, ordinances,
standards, orders and decrees including those relating to pollution,
ecology and environmental matters.
(e) Product Changes. If either party requires a change to any Product,
such party shall notify the other party in writing and within thirty
(30) days thereafter, the parties shall meet and negotiate in good
faith that Product change. Notwithstanding anything to the contrary
herein, Seller may make any Product change required for safety as
and when required. If the parties do not agree to a Product change
as a result of such negotiations, the following procedures shall
apply:
(i) Upon ninety (90) days' prior written notice to Buyer, Seller
may make changes to any Products whenever such changes are:
(A) required for safety, (B) required to facilitate
performance in accordance with the Product Specifications, or
(C) such that they represent non-substantial substitutions and
modifications not materially and adversely affecting
performance in accordance with the Product Specifications;
provided, however, that the Products so modified shall
continue to be covered by the applicable product registration.
In the event of such changes by Seller that materially affect
the cost of the Product and/or that Seller reasonably believes
materially and adversely to affect performance in accordance
with the Product Specifications ("Material Changes"), Seller
shall so state in its notice to Buyer. Buyer shall thereupon
have forty-five (45) days after receipt of such notice to
review such changes and to document and substantiate any
objection thereto. In the event of a Material Change to which
Buyer objects as aforesaid, Buyer shall have the right to
terminate this Agreement with respect to such Product upon
written notice to Seller within sixty (60) days after its
receipt of such notice of changes from Seller unless Seller
agrees, within thirty (30) days after the expiration of such
sixty-day period, not to make such change or to make such
change in a manner that does not materially affect the cost of
the Product and/or does not materially and adversely affect
performance in accordance with the Product Specifications.
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(ii) The cost of any change requested by Seller reasonably deemed
by Seller necessary to assure the compliance of delivered
Products with Product Specifications shall be borne by Seller.
Any change requested by Seller reasonably deemed by Seller
necessary or desirable to assure the compliance of the
Products with changed safety standards or governmental
regulations shall be implemented by Seller by an appropriate
field change notice. If in the reasonable judgment of Seller
such change is likely to result in a material increase in the
cost of, or the time required for performance by Seller of,
the supply of Products hereunder, or the composition of
Products, such notice shall propose new prices of Products,
Lead Times, Product Specifications and/or Product warranties
("Change Notice Terms"). Such new Change Notice Terms shall be
determined in accordance with the same methods as such terms
shall have been determined prior to such Change Notice Terms.
Buyer shall have the right to object to such new Change Notice
Terms by written notice to Seller within thirty (30) days
after receipt of such change notice. In such event, Seller and
Buyer shall negotiate in good faith with respect to such
Change Notice Terms that may be appropriate in light of such
change notice.
(iii) Upon ninety (90) days' prior written notice to Seller, Buyer
may require that Seller may make changes to any Products. In
the event of such changes by Buyer that Buyer reasonably deems
would materially affect the cost of the Product to Seller Lead
Times or Product warranties, Buyer shall so state in its
notice to Seller. Seller shall thereupon have forty-five (45)
days after receipt of such notice to review such changes and
to document and substantiate any objection thereto. In the
event of a Material Change to which Seller objects as
aforesaid, Seller shall have the right to terminate this
Agreement with respect to such Product upon written notice to
Buyer within sixty (60) days after its receipt of such notice
of changes from Buyer unless Buyer agrees, within thirty (30)
days after the expiration of such sixty-day period, not to
make such change or to make such change in a manner that does
not materially affect the cost of the Product to Seller.
(iv) The cost of any change requested by Buyer reasonably deemed by
Buyer necessary to assure the compliance of delivered Products
with Product Specifications shall be borne by Seller. Any
change requested by Buyer reasonably deemed by Buyer necessary
or desirable to assure the compliance of the Products with
changed safety standards or governmental regulations shall be
implemented by Seller by an appropriate field change notice.
If in the reasonable judgment of Seller such change is likely
to result in a material increase in the cost of, or the time
required for performance by Seller of, the supply of Products
hereunder, or the composition of Products, such notice shall
propose Change Notice Terms. Such new Change Notice Terms
shall be
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determined in accordance with the same methods as such terms
shall have been determined prior to such Change Notice Terms.
Buyer shall have the right to object to such new Change Notice
Terms by written notice to Seller within thirty (30) days
after receipt of such change notice. In such event, Seller and
Buyer shall negotiate in good faith with respect to such
Change Notice Terms that may be appropriate in light of such
change notice.
5. Quality Assurance and Control
(a) Seller shall use commercially reasonable efforts to maintain the
productivity, yields and quality of its production of Products and
practice the "continuous improvement" approach in accordance with
good manufacturing practice.
(b) Upon request of Buyer, Seller shall provide to Buyer and its
customers certificates of analysis for all raw materials and
Products.
(c) Seller shall maintain all documentation relating to the manufacture
and/or quality control of the Products for a period of at least
seven (7) years and shall make such documentation available to Buyer
upon its reasonable request in writing.
(d) Seller shall take one (1) sample of each production batch of the
Products, shall keep it in a sealed container for a period of at
least thirty-six (36) months after delivery and shall make the
sample available to Buyer upon its reasonable written request.
Seller's numbering system for identifying the production batches and
samples shall be in correlation to the Purchase Order.
(e) Buyer shall have the right, upon reasonable prior notice to Seller,
to enter the Facility during regular business hours, for the purpose
of: (i) observing and testing the raw materials, packaging and
labeling materials and Products, (ii)observing the process of
manufacturing, packaging and labeling the Products; and (iii)
inspecting the quality of the finished Products, including
inspecting the process and results of any quality control test
conducted by Seller; provided, however, that Buyer shall not
materially disrupt the operations of the Facility as a result of
such entry.
(f) Seller shall use commercially reasonable efforts to maintain its
current certifications under quality, environmental, health and
safety standards (e.g., ISO 9000 ff) and shall, upon reasonable
request of Buyer and at Buyer's cost and expense, obtain
certification under quality, environmental, health and safety
standards that Seller currently does not have.
(g) Without limiting the foregoing, Seller makes no warranty that any
Product will have any effect on any or all fungus or other plant,
crop, fruit or tree diseases or conditions.
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6. Resale.
Buyer shall have the right to re-label all Products and to sell such
Products under Buyer's name alone; provided, however, that in the event
Buyer re-labels any Product, Buyer shall be responsible for all regulatory
and/or other requirements for labels and other matters.
7. Warranties; Disclaimer.
(a) Warranties. The Product will, at the time of delivery, (i) be free
from material defects and from contamination resulting from faulty
manufacture; (ii) conform in all material respects to the Product
Specifications, and (iii) be labeled and packaged in accordance with
the Product Specifications (collectively, the "Performance
Warranties").
Seller represents and warrants that it has and will use commercially
reasonable efforts to maintain sufficient production capacity and
know-how to manufacture and supply Products in accordance with this
Agreement. Seller will not materially change the manufacturing
process for and components of the Product from the process and
components in place prior to the date hereof, except as may be
changed in accordance herewith. To Seller's knowledge, the Products
do not infringe any third party intellectual property rights. Seller
will convey to Buyer good title to the purchased Products free from
any security interest, lien, claim or encumbrance that arises out of
activities of Seller.
(b) Disclaimer.
The stated warranties are conditioned upon proper treatment,
storage, handling and use of the Products. SELLER MAKES NO
REPRESENTATION OR WARRANTY EXCEPT AS MAY BE EXPRESSLY SET FORTH IN
THIS AGREEMENT, AND SELLER EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR USE OR FITNESS FOR A PARTICULAR PURPOSE. Claims for
breach of warranty resulting from latent defects shall be made
promptly after discovery thereof by Buyer.
8. Term.
This Agreement shall have an initial term extending five (5) years from
the date hereof with consecutive two-year renewals at two-year intervals
thereafter, unless and until either party gives the other notice of
non-renewal no less than one (1) year prior to the end of the initial or
any renewal term.
9. Indemnification; Insurance.
(a) Indemnification by Buyer. Buyer shall defend, indemnify and hold
harmless Seller, its shareholders, officers, directors and employees
from and against any all damages, losses, liability, claims, causes
of action, expenses and costs (including
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reasonable attorneys' fees and other litigation costs) for personal
injury (including death), property damage and other relief
(including environmental claims) arising out of (i) claims relating
to Buyer's furnishing of manufacturing specifications and
procedures, packaging materials, labeling or any information
pertaining thereto, (ii) the handling, storage, transportation, sale
or use of the Product by Buyer or any direct or indirect customer or
bailee thereof, (iii) claims and liability arising out of the use,
disposition, subsequent processing, admixture or reaction of any
Product with other products, chemicals or materials, including any
change made in the composition or form of Products or use of same in
combination with other substances, including, but not limited to,
damages for infringement of any patents or processes practiced by
Buyer or patents on products made by Buyer (other than patents
licensed by Buyer from Seller under the License Agreement between
Buyer and Seller dated as of the date hereof) and claims and
liability arising out of the fungicidal nature or other properties
of the Products, or the use or application of Products or items on
which Products are applied or with which such Products are used,
(iv) claims of product liability for Products sold by Buyer, except
to the extent the liability is caused by a breach of the Performance
Warranties by Seller, and (vi) Buyer's failure to comply with all
applicable laws, rules and regulations relating to the use,
distribution, sale and processing of the Product; but in any event
excluding any claim or damage to the extent Seller is responsible to
indemnify Buyer therefor in accordance with Section 9(c).
(b) Insurance of Buyer. Buyer shall procure reasonably adequate
insurance for product liability damages arising out of the sale or
use of the Products. Buyer shall maintain comprehensive general
liability insurance (including pollution liability coverage) and
other insurance, on an occurrence basis, for injury to or death of
any person(s) or damage to property of not less than $50,000,000 per
occurrence.
(c) Indemnification by Seller. Seller shall defend, indemnify and hold
harmless Buyer, its shareholders, officers, directors and employees
from and against any all damages, losses, liability, claims, causes
of action, expenses and costs (including reasonable attorneys' fees
and other litigation costs) for personal injury (including death),
property damage and other relief (including environmental claims)
arising out of (i) liability to persons or entities other than Buyer
and its direct and indirect customers in such capacity for Products
to the extent the liability is attributable to the failure of the
Products to conform with Seller's Performance Warranties hereunder;
(ii) the handling, storage or transportation of the Product by
Seller or any bailee thereof, (iii) any costs of cleanup and
recovery of damages arising out of or incidental to the removal or
disposal of waste material generated or created by Seller or any
customer of Seller (other than Buyer), (iv) claims in connection
with, or arising from, infringement of any patents on processes
practiced by Seller, whether such claims and liability are for
negligence or otherwise, except to the extent of procedures
furnished by Buyer, and (v) Seller's failure to comply with all
applicable laws, rules and regulations relating to the manufacture
and supply of the Product; but (A) in any event excluding any claim
or damage to the extent
12
Buyer is responsible to indemnify Seller therefor in accordance with
Section 9(a) and (B) in the case of any claims arising under Section
9(c), other than through Buyer or its direct or indirect customers
in such capacity, Seller's liability shall be limited to 50% of the
amount paid by Buyer during the previous Contract Year for Products
and if such claim occurs during the first Contract Year, to
$5,000,000.
(d) Insurance of Seller. Seller shall procure reasonably adequate
insurance for product liability damages arising out of the sale or
use of the Products. Seller shall maintain comprehensive general
liability insurance (including pollution liability coverage) and
other insurance, on an occurrence basis, for injury to or death of
any person(s) or damage to property of not less than $50,000,000 per
occurrence.
(e) Limitations. Except as set forth in Section 9(a) or Section 9(c):
(i) Seller shall in no event by liable, directly or indirectly, to
Buyer or anyone claiming through or on behalf of Buyer for (A)
any special, incidental, consequential or punitive damages,
including any damages for lost profits, loss of business or
loss of use, arising out of, or in connection with this
Agreement or the use or performance of Product, whether in an
action of contract or tort, including negligence, even if
Seller has been advised of the possibility of such damages or
(B) any claim or demand against Buyer by any other party on
account of, or arising from, the use or performance of
Product. Seller's liability and Buyer's exclusive remedy, for
any cause of action arising out of this Agreement or in
connection with the sale of any Product is expressly limited
to replacement of non-conforming Product(s) or payment in an
amount not to exceed the purchase price of the specific
Product(s) for which damages are claimed, at Seller's option.
(ii) Buyer shall in no event be liable, directly or indirectly, to
Seller or to anyone claiming on behalf of Seller for any
special, incidental, consequential or punitive damages,
including any damages for lost profits, loss of business or
loss of use, arising out of, or in connection with, this
Agreement or the use or performance of Product, whether in an
action of contract or tort, including negligence, even if
Buyer has been advised of the possibility of such damages.
(iii) No action, whether in contract or tort, including negligence,
arising out of, or in connection with, this Agreement may be
brought by any party more than two (2) years after the cause
of action has accrued.
13
10. Confidentiality.
(a) Confidential Information. Buyer and Seller acknowledge that each may
have access to certain confidential data, including formulas,
know-how, specifications, market information, customer lists and
other confidential information of the other party in connection
herewith, including quantities and prices of Product supplied
hereunder (the "Confidential Information").
(b) Covenant. Each party agrees that Confidential Information of the
other party is valuable property. Except as may be required by law,
each party will not use or disclose the Confidential Information of
the other party for any purpose other than the performance of its
obligations hereunder or in connection herewith and will take all
reasonably necessary action to protect the Confidential Information
of the other party. In the event that either party is required by
law to disclose any Confidential Information, it will notify the
other party promptly so that it may seek a protective order or other
remedy. In such event, such party will finish only that portion of
the confidential Information that it is advised by counsel is
legally required and will use commercially reasonable efforts to
obtain assurance that confidential treatment will be accorded to the
Confidential Information. Each party will use the same degree of
diligence and effort to protect the other party's Confidential
Information from disclosure to third parties as such party uses to
protect its own Confidential Information, but in no event shall a
party use less than reasonable diligence and effort in protecting
the Confidential Information of the other party.
(c) Exceptions. Confidential Information does not include information
that:
(i) is publicly known or available at the time of disclosure, or
subsequently comes into the public domain through no fault or
action of the party in receipt of such information;
(ii) is or becomes available to the receiving party on a
non-confidential basis from a source, other than the
disclosing party or its representatives, provided that to the
knowledge of such receiving party, such source is not
prohibited from disclosing such portions to the receiving
party by a contractual, legal or fiduciary obligation to the
disclosing party; or
(iii) was in the possession of the receiving party prior to its
disclosure by the disclosing party, as evidenced by
appropriate documentation; provided, however, that information
disclosed by either party to the other in connection with this
Agreement prior to the execution of this Agreement that would
have been deemed Confidential Information if disclosed after
the execution of this Agreement shall be deemed to have been
disclosed under this Agreement even if it was not identified
as confidential in the manner contemplated by this Agreement
at the time of its disclosure.
14
(d) Return or Destruction. Upon the termination or expiration of this
Agreement, each party shall upon request, return to the other party
or destroy such other party's Confidential Information.
(e) Specific Performance. The parties hereto mutually agree that their
obligations under this Section 10 are of a special and unique
character which gives them a peculiar value and each party cannot be
reasonably or adequately compensated in damages in an action at law
in the event the other party breaches such obligations. Therefore,
each party expressly agrees that the other party shall be entitled
to injunctive and other equitable relief in the event of such breach
or threatened breach in addition to any other rights or remedies
which such other party may possess.
11. Termination.
(a) Breach. Notwithstanding anything herein to the contrary, if either
party breaches in any material respect any of the terms and
conditions of this Agreement, the non-breaching party will have the
right, upon sixty (60) days' prior written notice to the breaching
party, to terminate this Agreement, in addition to other remedies,
unless prior to the end of said sixty (60) day grace period the
defaulting party has cured or is proceeding diligently (to the other
party's reasonable satisfaction) to cure the breach in question;
provided, however, that no party shall seek to invoke such remedy
without having first exhausted the procedures set forth in Section
12(o).
(b) Change of Control of Buyer. In the event of the sale of a
controlling interest of Buyer or the business of Buyer, other than
through a public offering of stock for which a registration is filed
with the applicable regulatory authority, or the assignment or
delegation by Buyer of its rights or obligations hereunder, other
than to a subsidiary or Affiliate of Buyer, Buyer shall provide
immediate notice to Seller and Seller shall have the right to
terminate this Agreement within forty-five (45) days after receipt
of such notice if Seller reasonably determines that its performance
under this Agreement would be materially and adversely affected as a
result of such event. Any notice of termination must be in writing
and shall give rise to immediate termination of this Agreement
unless otherwise stated therein.
(c) Change of Control of Seller. In the event of the sale, directly or
indirectly, of a controlling interest of Seller, other than through
a public offering of stock for which a registration is filed with
the applicable regulatory authority, the sale of all or
substantially all of the assets of Seller or the Facility, or the
assignment or delegation by Seller of its rights or obligations
hereunder, other than to a subsidiary or Affiliate of Seller, Seller
shall provide immediate notice in writing to Buyer. If Buyer
reasonably determines that the acquiror is a competitor of Buyer
and/or its Affiliates or that the acquiror would not fulfill the
terms and conditions hereof in accordance with the price of Products
hereunder, Buyer shall have the right within forty-five (45) days
after receipt of such notice to deliver to
15
Seller a notice of termination, which notice shall state a date, no
later than twelve months after the date of the notice, on which date
this Agreement shall terminate.
(d) Effect of Termination. Notwithstanding anything herein to the
contrary, no expiration or other termination of this Agreement,
regardless of the reason or reasons therefor, shall affect the
obligation of Buyer to pay fully and timely for Product delivered to
Buyer prior to such expiration or termination. All payment
obligations, and all obligations and liabilities accruing prior to
termination or arising out of the event or occurrence giving rise to
termination, shall survive any such expiration or termination.
(e) Rights on Default. Without limiting any other right or remedy which
Seller may have, if Buyer shall default in any material payment
obligation to Buyer, which default remains uncured for more than
thirty (30) days, Seller shall have the right to cancel, suspend or
reject any or all outstanding and/or future orders and shipments in
its discretion.
12. Miscellaneous.
(a) Assignment. Subject to Section 11(c), Seller may assign this
Agreement; provided, however, that if Seller assigns this agreement
to an Affiliate of Seller, Seller shall remain bound by the terms
and conditions of this Agreement. Subject to Section 11(b), Buyer
may assign this Agreement; provided, however, that if Buyer assigns
this Agreement to an Affiliate of Buyer, Buyer shall remain bound by
the terms and conditions of this Agreement. No party shall arrange
for the performance of its obligations hereunder to be performed by
any other entity without the prior written consent of the other
party.
(b) Survival. The provisions of Sections 3(f), 9, 10 and 11(d) hereof
shall survive the termination or expiration of this Agreement and
any and all rights and obligations of any of the parties hereto
which accrue prior to such termination or expiration shall also
survive such termination or expiration.
(c) Notices. Any notice required or permitted to be given hereunder
shall be deemed sufficient if sent by telefacsimile, delivery
confirmed, or if mailed by registered or certified mail or delivered
by messenger or air courier, to the party to whom such notice is
required or permitted to be given. If telefaxed, any such notice
shall be considered given two (2) days after the date telefaxed. If
mailed, any such notice shall considered given seven (7) days after
the date when mailed. If delivered by messenger or air courier, any
such notice shall be considered given when received.
16
All notices to Buyer shall be addressed as follows:
Nufarm, Inc.
0000 Xxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: General Manager
Facsimile: 000-000-0000
Copy to: Nufarm Limited
000-000 Xxxx Xxxx
Xxxxxxxx Xxxxx
Xxxxxxxx 0000
Xxxxxxxxx
Attention: Group General Manager Operations
Facsimile: 011 613-9282-1007
All notices to Seller shall be addressed as follows:
Phibro-Tech, Inc.
Xxx Xxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: President
Facsimile: 000 000-0000
Copy to: Phibro-Tech, Inc.
Xxx Xxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Xxxxxx Xxxxxx of America
Attn: General Counsel
Facsimile: 000 000-0000
A party may change the address to which notice is to be given by
notice as provided herein.
(d) Governing Law. This Agreement shall be interpreted in accordance
with the laws of the State of New York, United States of America,
without reference to conflict of laws principles.
(e) Force Majeure. Any party may reduce, suspend or terminate
performance hereunder without liability including, without
limitation, any damages or penalty for delay in delivery, in the
event performance is prevented by a cause beyond the control of such
party including without limitation, an act of God, act, regulation
or law of any government, war, civil war, commotion, destruction of
production faculties or materials by fire, explosion, earthquake or
storm, sabotage, labor disturbance, strike, lock-out, epidemic, or
unforeseen shortage or unavailability
17
(on terms economically and commercially practicable to such party)
of fuel, power, transportation, raw materials, supplies,
governmental approvals, permits or licenses (each a "force
majeure"); provided, the affected party sends written notice thereof
to the other party within a reasonable time after the onset of such
event. Notwithstanding the foregoing, if as a result of any such
prevention, a party is unable to perform under this Agreement for a
period of one hundred eighty (180) consecutive days, the other party
shall have the right to terminate this Agreement effective thirty
(30) days after its provision of written notice to the
non-performing party of its intention so to terminate unless such
performance shall be resumed during such thirty-day period. In the
event a party elects so to terminate this Agreement, the other party
shall have no further liability as a result of the reduction,
suspension or termination of performance due to a force majeure.
(f) Entire Agreement. This Agreement, together with any Attachments
hereto and any appendices delivered contemporaneously herewith,
constitutes the entire understanding between the parties with
respect to the subject matter hereof, and supersedes and replaces
any other prior agreements, representations, warranties and
discussions relating thereto. The parties agree that all supply of
Product hereunder shall be subject to and governed by the terms and
conditions contained herein, and none of the terms and conditions
contained in any purchase or order form, invoice, etc., shall amend
the provisions of this Agreement unless signed by both parties and
clearly indicating that the parties intend to vary the terms hereof.
(g) Severability. In the event that any of the provisions contained in
this Agreement would be held to be invalid, prohibited or
unenforceable for any reason, such provision, shall be ineffective
to the extent of such invalidity, prohibition or unenforceability,
without invalidating the remaining provisions of this Agreement.
Subject to the foregoing, in case any one or more of the provisions
contained herein should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected in any way
thereby.
(h) Third Party Beneficiaries. The parties hereto do not intend to
create hereby, and this Agreement shall not be read or construed to
create or grant, any rights or benefits in or for any person or
entity other than the parties hereto or as expressly provided in
Section 9 hereof, and any and all other third party rights or
benefits are hereby expressly disclaimed and denied.
(i) Modification; waiver. This Agreement can only be modified or changed
by an agreement in writing and signed by the parties hereto. The
failure of any party at any time or times to require performance of
any provision hereof shall not affect the right of such party at a
later time to enforce the same. No waiver by any party hereto of any
condition, or of the breach of any provision, term or covenant,
contained in this Agreement in any one or more instances shall be
deemed to be or construed as a further or continuing waiver of any
such condition, or of the breach of any other provision, term or
covenant, of this Agreement.
18
(j) Relationship of the Parties. The relationship of the parties created
hereby is that of independent contractors, and neither party shall
be any right or authority to create or assume any obligation of any
kind on behalf of the other.
(k) Validity. Each signatory hereto represents and warrants to the other
party that he is duly authorized and empowered to execute this
Agreement in the capacity herein set forth.
(l) Binding Effect. This Agreement and the various rights and
obligations arising hereunder shall inure to the benefit of and be
binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns.
(m) Captions; construction. The captions herein have been inserted
solely for convenience of reference and in no way define, limit or
describe the scope or substance of any provision of this Agreement.
No party shall be deemed to have drafted this Agreement, but rather
this Agreement is a collaborative effort of the undersigned parties
and their attorneys.
(n) Counterparts. This Agreement may be executed in identical
counterparts, all of which when taken together shall constitute but
one complete, executed agreement.
(o) Dispute Resolution.
(i) The parties shall attempt to resolve any dispute or
controversy arising out of or in connection with this
Agreement in accordance with the following. The parties shall
first refer the dispute to management-level employees who have
oversight of operational matters to negotiate in good faith
over a period of fifteen (15) days a resolution of the
dispute. If such employees are unable to resolve the dispute,
the parties shall refer the dispute to chief executive
officers of the parties to negotiate in good faith over a
period of fifteen (15) days a resolution of the dispute. No
party may bring a claim under or in connection with this
Agreement unless and until it such procedure has been
concluded with respect to such claim. Notwithstanding the
foregoing, any party may at any time seek equitable relief or
remedy, including an injunction, in a court of law.
(ii) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the
jurisdiction of any New York state court or federal court of
the United States of America sitting in the Borough of
Manhattan, New York, in any action or proceeding arising out
of or relating to this Agreement or the transactions
contemplated hereby or for recognition or enforcement of any
judgment relating thereto, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and
determined in any such court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding
shall be conclusive and may be
19
enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law.
(iii) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may not or
hereafter have to the laying of venue of any suit, action, or
proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby in any New York state or
federal court located in the Borough of Manhattan, New York.
Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or
proceeding in any such court.
(iv) Each of the parties hereto hereby irrevocably and
unconditionally consents to service of process in the manner
provided for notices in Section 12(c). Nothing in this
Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
20
IN WITNESS WHEREOF, the parties have caused this Supply Agreement to be
executed in by their duly authorized representatives as of the date first
written above.
PHIBRO-TECH, INC. NUFARM, INC.
By: /s/ W. Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxx
---------------------- ----------------------
Name: W. Xxxxxx Xxxxxx Name: Xxxxx Xxxxxx
Title: President Title: Authorized Signatory
Attachment 1
Products
Products
Champion Technical (standard) EPA No.: 55146-003
Champion Technical (Orient grade) EPA No.: 55146-003
Champion Technical (Korea grade) EPA No.: 55146-003
Champion Wettable Powder EPA No.: 55146-001
Champion Wettable Powder Turkey
Champion Wettable Powder Sri Lanka
Champion Wettable Powder Jordan
Champ Flowable EPA No.: 55146-041
Champ Formula 2 Flowable EPA No.: 55146-64
Champ DP EPA No.: 55146-57
Attachment 2
Product Specifications
See attached.
Appendix
Price of Products
