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(*)




                                   (*) AND (*)

                                    CONTRACT
                                     BETWEEN
                (*) AND *, HEREINAFTER COLLECTIVELY CALLED "SELLER"
                                       AND
                     CTI, INC., HEREINAFTER CALLED "BUYER".


BUYER, a Tennessee corporation, having its principal office at 810 Innovation
Drive, Knoxville, Tennessee 37932, agrees to purchase from SELLER, and SELLER
agrees to sell to BUYER, Virgin Product and Recycled Product, as defined herein,
and BUYER agrees to supply to SELLER, and SELLER agrees to accept, Scrap
Product, as defined herein, all upon the following terms and conditions:

TERM: From: January 1, 2000 through: December 31, 2004 (the "Initial Term"), and
thereafter this Contract will automatically renew for additional successive
Terms of two years each (the "Renewal Term(s)"), unless and until terminated as
of the end of the Initial Term or any Renewal Term by either party by written
notice given at least six (6) months prior to the end of the then current Term.
BUYER shall have the right to terminate this Contract at any time upon no less
than six (6) months' prior written notice if a price increase due to Superfund
or similar taxes is unacceptable to BUYER.

PRODUCT: Virgin and recycled Lutetium Oxide 99.99% having the specifications set
forth in Exhibit A attached hereto (the "Product"). Any modification to the
specifications for either Product must be in writing and signed by SELLER and
BUYER.

SCRAP/RECYCLED PRODUCT: BUYER will provide to SELLER, at no charge to SELLER,
CIP (Incoterms '90) SELLER's (*), France, plant, one hundred percent (100%) of
the scrap Product produced by BUYER during the Term, having the specifications
set forth in Exhibit B attached hereto ("Scrap Product") for recycling by SELLER
for sale to BUYER. Any modification to the specifications must be in writing and
signed by SELLER and BUYER.

QUANTITY: (a) Virgin Product: ninety-five percent (95%) of BUYER's requirements
for virgin Product ("Virgin Product") in each calendar year during the Term;
however, not in excess of SELLER's production capacity for Virgin Product at its
(*), France, plant, estimated at ten (10) metric tons of Product per calendar
year as of the date of this Contract; and (b) Recycled Product: one hundred
percent (100%) of SELLER's production of Recycled Product; however, not in
excess of SELLER's production capacity for Recycled Product at its (*), France,
plant, estimated at ten (10) metric tons per calendar year upon completion of
installation of its new recycling unit (see RIDER 1). If at any time BUYER
requires in excess of any such quantities, SELLER will have a right of first
refusal to supply such excess quantities; provided that SELLER shall not be in


(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
file separately with the Securities and Exchange Commission.
<PAGE>

breach of this Contract if it is unable to supply or make timely deliveries of
such excess. See RIDER 1.

PRICE: The prices for Virgin Product throughout the Initial Term, EXW (Incoterms
'90) SELLER's warehouse at Brook, New Jersey, U.S.A., are:



          Price Per Tier                      Quantities Purchased During the Initial Term
       -------------------                    --------------------------------------------
                                           
       $ (*) per kilogram                     (*)
       $ (*) per kilogram
       $ (*) per kilogram


The prices for Recycled Product throughout the Initial Term, EXW (Incoterms '90)
SELLER's warehouse at Brook, New Jersey, U.S.A., are:



          Price Per Tier                      Quantities Purchased During the Initial Term
       -------------------                    --------------------------------------------
                                           
       $ (*) per kilogram                     (*)
       $ (*) per kilogram
       $ (*) per kilogram


The above prices and quantities are on a cumulative basis for all purchases
throughout the Initial Term. The price for purchases in each tier commencing
with the first tier will remain the same irrespective of the total quantity
purchased. Purchases in each tier must be completed before the prices in the
next following tier will apply to further purchases. The above prices are firm
throughout the initial Term, subject to a hardship condition pursuant to
Paragraph 11. of the General Terms and Conditions of Sale attached hereto. After
expiration of the Initial Term, prices are subject to adjustment. Superfund and
similar taxes imposed in the future may be added to the prices to Buyer.

PURCHASE ORDER: BUYER will provide SELLER, no later than October 1 of the
preceding calendar year, with annual purchase orders for its requirements for
Products in the next succeeding calendar year ("Annual P.O."). For the first
calendar year of the Initial Term, BUYER will provide SELLER with an Annual P.O.
upon signature of the Contract. In addition, each calendar quarter, BUYER will
provide SELLER with an updated delivery schedule for Products during the
forthcoming three-month period (the "Rolling Delivery Schedule"). If the Annual
P.O and/or any Rolling Delivery Schedule is not consistent with the provisions
of this Contract, then SELLER's prior written agreement with the inconsistent
portions of such P.O and/or Schedule is required. If BUYER forecasts that the
Rolling Delivery Schedule will increase by more than ten percent (10%) of the
quantity scheduled far delivery, BUYER will give SELLER no less than thirty (30)
days written notice of such increase. SELLER will rely on the Annual P.O. and
the applicable Rolling Delivery Schedule to maintain in its Brook, New Jersey,
warehouse, the inventory of Products to be supplied to BUYER in accordance with
the Rolling Delivery Schedule. If BUYER requires Products on an expedited basis
or not in accordance with the applicable Rolling Delivery Schedule or BUYER has
not given SELLER at least thirty (30) days notice of an increase in the Rolling
Delivery Schedule,


(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>

SELLER may invoice BUYER for any increased costs incurred by SELLER in making
such deliveries.

DELIVERY: Deliveries will be made in accordance with BUYER's purchase orders or
releases.

TERMS: Net thirty (30) days from date of SELLER'S invoice.

OTHER CONDITIONS:

RIDER 1, EXHIBITS A AND B and the GENERAL TERMS AND CONDITIONS OF SALE attached
hereto are hereby agreed to and made a part of and incorporated in this
Contract. ANY ADDITIONAL OR DIFFERENT TERMS OR CONDITIONS IN BUYER'S PURCHASE
ORDERS, OTHER DOCUMENTS OR OTHERWISE WILL BE OF NO FORCE OR EFFECT EXCEPT TO THE
EXTENT EXPRESSLY SET FORTH IN WRITING AND SIGNED BY SELLER AND BUYER. THIS
CONTRACT SUPERSEDES ALL PRIOR CONTRACTS RELATING TO THE SUBJECT MATTER HEREOF.

CTI, INC.                              (*)



By:    /s/ Ronald Nutt                 By:  /s/
   ---------------------------              ------------------------------------
Title: Senior Vice President                President, (*), on
      ------------------------                  behalf of (*), a wholly-owned
Date:  March 17, 2000                  Title:   subsidiary of
      ------------------------                  --------------------------------

                                       Date:    3/12/2000
                                                --------------------------------
                                       (*)

                                       By:      /s/      (*)
                                            ------------------------------------

                                       Title:   President
                                                --------------------------------
                                       Date:    February 28, 2000
                                                --------------------------------


(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                                     RIDER 1


1.       SELLER'S RECYCLED PRODUCT PRODUCTION CAPACITY. Upon execution of this
         Contract by both parties, SELLER will proceed with the installation of
         a new Scrap Product recycling unit, having specifications determined by
         SELLER, at SELLER's plant in (*), France.

2.       DEDICATED SUPPLY OF THE PRODUCTS. It is understood between the parties
         that (a) SELLER has worked with BUYER over the past five years in the
         use of the Product to assist BUYER in the development of BUYER'S new
         propriety positron emission tomography medical scanning equipment (the
         "PET Scanner"), (b) BUYER is ready far commercial production of the PET
         Scanner and wishes to be assured of a guaranteed source of supply of
         the Product which constitutes a key raw material needed in the full
         scale production of the PET Scanner, and (c) SELLER has made a
         significant capital investment to increase its production capacity of
         Virgin Product to meet BUYER'S anticipated demand under this Contract,
         and further, in reliance on sales of Recycled Product under this
         Contract, intends to make additional capital investment to purchase and
         install a new production unit to recycle Scrap Product into Recycled
         Product for supply to BUYER. For the foregoing reasons, SELLER agrees
         that, during the Initial Term of this Contract, SELLER will not
         knowingly make commercial sales to any third party other then BUYER of
         Virgin Products and Recycled Products for use in BUYER'S Field of Use
         (the "Exclusivity Obligation"). BUYER'S "Field of Use" is defined as
         the production of scintillating crystals, ceramics and glasses for use
         in the manufacture of medical imaging equipment. SELLER will,
         notwithstanding, have the right to use the Products for research and
         development purposes in all fields of use and/or to make commercial
         sales of Virgin Products and Recycled Products far use in any field of
         use other than BUYER'S Field of Use. Notwithstanding the foregoing, in
         the event BUYER'S combined purchases of Virgin Products and Recycled
         Products from the effective date of this Contract through the third
         calendar year of the Initial Term, total no more than thirty (30)
         metric tons, then SELLER will have the right, in its sole discretion,
         to unilaterally terminate its Exclusivity Obligation effective as of
         the end of the third calendar year of the Initial Term or at any time
         thereafter. Combined purchases referred to in the foregoing sentence
         will include the quantities of Products covered by purchase order
         issued by BUYER and received by SELLER before the end of the third
         calendar year of the Initial Term for deliveries to BUYER within 180
         days after the date of the purchase order. In any event, SELLER'S
         Exclusivity Obligation will terminate automatically at the end of the
         Initial Term, unless SELLER determines, in its sole discretion, to
         extend its Exclusivity Obligation for an additional period of time.
         SELLER'S determination will be based on BUYER'S projected requirements
         for the Products. Notwithstanding, after the Initial Term SELLER shall
         have the right, in its sole discretion, to terminate its Exclusivity
         Obligation at any time.


(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>
3.       SCRAP/RECYCLED PRODUCT. SELLER will provide BUYER with a 78% yield on
         total Lutetium Oxide content from the Scrap Product (corresponding to a
         90% yield on recovery of Lutetium Oxide only). SELLER reserves the
         right to revise the foregoing recovery yield at the end of the third
         calendar year of the Initial Term based on the actual average recovery
         yield experienced by SELLER. The revised recovery yield will apply only
         during the fourth and fifth calendar years of the Initial Term. BUYER
         will ship to SELLER Scrap Product once every calendar quarter, BUYER
         will at the same time issue a purchase order to SELLER for Recycled
         Product totaling 78% of the quantity of Scrap Product shipped by BUYER.

4.       CONFIDENTIALITY. BUYER and SELLER agree that the terms and conditions
         of the supply arrangement between BUYER and SELLER and any technical
         and business information disclosed by either party to the other party
         in the course of the relationship between them created by this Contract
         shall be deemed "Confidential Information" subject to the terms and
         conditions of the Joint Confidentiality Agreement between the parties
         dated June 20, 1996 (the "Joint Confidentiality Agreement"). BUYER
         agrees that it shall not disclose this Contract nor the relationship
         between BUYER and SELLER to any third party, except with the prior
         written consent of SELLER which consent may be granted or withheld in
         SELLER's sole discretion. It is hereby further agreed by BUYER and
         SELLER that the Joint Confidentiality Agreement should remain in full
         force and effect and that Paragraph 13. of said Joint Confidentiality
         Agreement be, and it is hereby, deleted in its entirety and replaced
         with the following paragraph:

         "13.     This Agreement shall terminate upon termination or expiration
                  of that certain Contract dated January 1, 2000, between the
                  parties, providing for the supply of Lutetium Oxide to CTI;
                  provided, however, that Recipient's obligations set forth in
                  Paragraphs 4. and 5. hereof shall survive the termination or
                  expiration for any reason of this Agreement."

5.       RESOLUTION OF DISPUTES:

         A.       NEGOTIATION BY SENIOR EXECUTIVES.

         (a)      The parties shall attempt in good faith to resolve any dispute
         arising out of or relating to this Agreement promptly by negotiation
         between senior executives who have authority to settle the controversy
         and who are at a higher level of management than the persons with
         direct responsibility for administration of this Agreement. Any party
         may give the other party written notice of any dispute not resolved in
         the ordinary course of business. Within fifteen (15) days after
         delivery of the notice the party receiving the notice shall submit to
         the other a written response.

         (b)      The notice and the response shall include: (1) a statement of
         each party's position regarding the matter in dispute and a summary of
         arguments in support


<PAGE>

         thereof, and (ii) the name and title of an executive who will represent
         that party and any other person who will accompany that executive.
         Within thirty (30) days after delivery of the notice, the designated
         executives shall meet at a mutually acceptable time and place, and
         thereafter as often as they reasonably deem necessary, to attempt to
         resolve the dispute. All reasonable requests for information made by
         one party to the other shall be honored in a timely fashion.

         (c)      If the matter in dispute has not been resolved within sixty
         (60) days after delivery of the notice, or if the parties fall to meet
         within thirty (30) days, either party may initiate mediation
         proceedings as provided below.

         B.       MEDIATION. If the dispute has not been resolved within sixty
         (60) days after delivery of the notice referred to above, the dispute
         shall be submitted to non-binding mediation in accordance with the
         Rules of the Center for Public Resources Institute for Dispute
         Resolution. The parties shall mediate in good faith in an effort to
         resolve the dispute. The place of mediation will be New York, New York,
         or such other location agreed to by the parties. Mediation costs shall
         be shared equally by the parties. If the dispute is not resolved by the
         mediation process within sixty (60) days after commencement, either
         party may initiate litigation.

         C.       CONFIDENTIALITY. All negotiations and proceedings conducted
         pursuant to this Article (and any of the parties' submissions in
         contemplation hereof) shall be kept confidential by the parties and
         shall be treated by the parties and their respective representatives as
         compromise and settlement negotiations for purposes of the Federal
         Rules of Evidence and any similar state rules.
<PAGE>

                                    EXHIBIT A

                        SPECIFICATIONS FOR VIRGIN PRODUCT


The specifications for Virgin Product are set forth in the attached Page 2 of
Exhibit A executed by SELLER and BUYER.



                       SPECIFICATIONS FOR RECYCLED PRODUCT

The specifications for Recycled Product are set forth in the attached Page 3 of
Exhibit A executed by SELLER and BUYER.
<PAGE>

                              LUTETIUM OXIDE 99.99


             SPECIFICATION PROPOSAL REFERENCE: 7093 / CTI REVISION 2

                                CUSTOMER: C.T.I.






APPEARANCE: White odorless fine powder.



TECHNICAL CHARACTERISTICS:



(*):

(*)
(*)
(*)
(*)
(*)
(*)



(*)


(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                             LUTETIUM OXIDE 99.99R


SPECIFICATION PROPOSAL REFERENCE: 7093/ CTI REV. 2

CUSTOMER: C.T.I.


         2)       (*):


(*)
(*)
(*)




LOT SIZE: 250 kg.



PACKAGING: 50 kg metallic drum containing 5 x 10 kg plastic bags.
---------



-------------------------------------------------------------------------------
               Name        Quality              Signature            Date
                                                      
Prepared by    (*)        Quality                /s/ (*)       Dec. 7th, 1999
                           Manager


-------------------------------------------------------------------------------

Approved by    (*)     Market Director           /s/ (*)       Dec. 7th, 1999

-------------------------------------------------------------------------------

Customer                   Crystal Growth
acceptance     (*)     Technology Mgr.           /s/ (*)        Dec. 10, 1999


-------------------------------------------------------------------------------



(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                             LUTETIUM OXIDE 99.99R


             SPECIFICATION PROPOSAL REFERENCE: 7094 / CTI REVISION 0

                                CUSTOMER: C.T.I.



APPEARANCE: White odorless fine powder.
----------


TECHNICAL CHARACTERISTICS:
--------------------------

         1)      (*:)

(*)
(*)
(*)
(*)
(*)
(*)


(*)


(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                             LUTETIUM OXIDE 99.99R

SPECIFICATION PROPOSAL REFERENCE: 7094/ CTI REV. 0

CUSTOMER: C.T.I.


         2)       (*):

(*)
(*)
(*)




LOT SIZE: 250 kg.
---------


PACKAGING: 50 kg metallic drum containing 5 x 10 kg plastic bags.
----------




-------------------------------------------------------------------------------
               Name    Quality                Signature       Date
                                                   
Prepared by    (*)     Quality                /s/ (*)       Dec. 7th, 1999
                       Manager


-------------------------------------------------------------------------------

Approved by    (*)     Market Director        /s/ (*)       Dec. 7th, 1999

-------------------------------------------------------------------------------

Customer               Crystal Growth
acceptance     (*)     Technology Mgr.        /s/ (*)        Dec. 10, 1999


-------------------------------------------------------------------------------



(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                                    EXHIBIT B
                        SPECIFICATIONS FOR SCRAP PRODUCT


Scrap Product to be provided by BUYER to SELLER will have the following
specifications:

         Lutetium having no less than 87% Lutetium Oxide content and no more
         than five (5) parts per million ("PPM") of a combination of the
         elements Uranium ("U") and Thorium ("Th").


(*)      Omitted information is the subject of a request for confidential
treatment pursuant to Rule 406 under the Securities Act of 1933 and has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                      GENERAL TERMS AND CONDITIONS OF SALE

1.       The price and terms herein specified may be adjusted by Seller at any
         time after expiration of the Initial Term by written notice from Seller
         dispatched at least thirty (30) days prior to the effective date of
         such adjustment. Buyer shall be deemed to have consented to such
         adjustment unless written rejection of the adjustment is given to
         Seller before the effective date thereof. Upon receipt of such
         rejection, Buyer and Seller will have thirty (30) days to reach
         agreement on the adjustment. If agreement is not reached within thirty
         (30) days, Buyer will have the right to terminate this Contract at any
         time thereafter upon thirty (30) days prior notice. Any such adjustment
         shall apply to all Products shipped by Seller hereunder on and after
         the effective date thereof unless subsequently again adjusted by
         Seller. In the event Seller is prevented by any governmental
         restriction from increasing any price herein or adjusting any term, or
         from continuing any price or term already in effect, Seller may
         terminate this Contract by written notice dispatched thirty (30) days
         prior to date of termination.

2.       Unless otherwise specified herein, deliveries shall be made in
         approximately equal monthly quantities.

3.       Each shipment shall constitute a separate and independent transaction
         and Seller may recover for each such shipment without reference to any
         other. If Buyer is in default with respect to any of the terms or
         conditions of this Contract, Seller may, at its option, defer further
         shipments hereunder until such default be remedied (in which event
         Seller may elect to extend the Contract period for a time equal to that
         for which shipments were so deferred), or, in addition to any other
         legal remedy, Seller may decline further performance of this Contract.
         If, in the sole judgment of Seller, the financial responsibility of
         Buyer shall at any time become impaired, Seller may decline to make
         further deliveries under this contact except upon receipt, before
         shipment, of payment in cash or satisfactory security for such payment.

4.       In case of bulk carload or tank car shipments, shipper's weight,
         certified to by sworn Weighmaster, shall govern.

5.       Determination of the suitability of the Products supplied hereunder for
         the uses and applications contemplated by Buyer and others shall be the
         sole responsibility of Buyer. All warranties by Seller pertaining to
         the Products are expressed in this paragraph. Seller warrants that upon
         delivery to Buyer the Products supplied hereunder meet the respective
         specifications expressly agreed upon in writing by the parties and
         attached hereto as Exhibit A. SELLER MAKES NO OTHER WARRANTIES OR
         REPRESENTATIONS OF ANY KIND WHATSOEVER WITH RESPECT TO THE PRODUCTS,
         EXPRESS OR IMPLIED, STATUTORY, BY OPERATION OF LAW OR OTHERWISE, AND
         SELLER EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF MERCHANTABILITY,
         FITNESS FOR A PARTICULAR PURPOSE AND SUITABILITY.

6.       BUYER ASSUMES ALL RISK AND LIABILITY (INCLUDING SAFETY, HEALTH AND
         ENVIRONMENTAL) FOR, AND WILL INDEMNIFY AND HOLD HARMLESS SELLER FROM,
         ALL LOSS, DAMAGE OR INJURY TO PERSONS AND PROPERTY RESULTING FROM THE
         UNLOADING, HANDLING, USE, STORAGE AND DISPOSAL OF THE PRODUCTS UPON AND
         AFTER DELIVERY TO BUYER, INCLUDING, WITHOUT LIMITING THE FOREGOING, THE
         USE OF SAID PRODUCTS ALONE OR IN MANUFACTURING PROCESSES, OR IN
         COMBINATION WITH OTHER SUBSTANCES,
<PAGE>

         INCLUDING ALL RISK AND LIABILITY WHATSOEVER FOR POLLUTION, HEALTH AND
         ENVIRONMENTAL DAMAGE, INJURY AND RESTORATION.

7.       Buyers exclusive remedy, and Seller's sole liability, on any claim with
         respect to the Products supplied hereunder, whether statutory, tort,
         negligence, strict liability, contract or warranty, shall be limited to
         rejection of any Product not in compliance with the specifications in
         Exhibit A and, at Seller's option, replacement of or reimbursement for
         such nonconforming Product as determined by the net price paid to
         Seller. No claim of any kind, whether as to Product delivered or for
         nondelivery or untimely delivery of Product, and whether arising in
         tort or Contract, shall be greater in amount than the purchase price of
         the Product in respect of which such damages are claimed; and the
         failure to give notice of claims within sixty (60) days from date of
         delivery, or the date fixed for delivery, as the case may be, shall
         constitute an unconditional waiver by Buyer of all claims in respect of
         such Product. In no event shall Seller be liable for incidental,
         special, indirect, consequential or punitive damages.

8.       All returnable containers used in making deliveries hereunder are
         Seller's property and shall be used by Buyer only for proper storage of
         Seller's Product originally delivered therein. Buyer shall make a
         deposit as security for the return of such containers, equal to
         Seller's current deposit charge therefor at the time of shipment. Such
         deposit shall be paid, without discount, when the invoice for the
         contents is paid. Buyer shall return such containers to Seller's
         shipping point within two months from the date of original shipment,
         whereupon Buyer shall be credited with the amount of the deposit. If
         Buyer fails to return the containers in good condition and within the
         time specified, Seller may refuse to accept the same and may retain
         said deposit.

9.       Buyer shall reimburse Seller for all taxes, excise or other charges
         which Seller may be required to pay to any government (national, state,
         provincial or local) upon, or measured by, the sale, production,
         transportation or use of any Product sold hereunder. Seller may at its
         option add to the price of Product sold hereunder the amount of any
         increase in transportation charges for shipments to Buyer, provided
         that such transportation charges are payable by Seller hereunder.

10.      Neither party shall be liable for its failure to perform or delay in
         performance hereunder if said performance is made impracticable or
         delayed due to any circumstances beyond the reasonable control of the
         party affected, including but not limited to, acts of God, fires,
         floods, wars, sabotage, accidents, labor disputes or shortages, plant
         shutdown, equipment failure, voluntary or involuntary compliance with
         any law, order, rule or regulation of government agency or authority,
         or inability to obtain material (including power and fuel), raw
         material, equipment or transportation. The affected party may omit
         purchases or deliveries during the period of continuance of such
         circumstances and the Contract quantity shall be reduced by the
         quantities so omitted. During any period when Seller shall be unable to
         supply the total demands for any Product provided for in this Contract,
         caused by the circumstances specified above, Seller may allocate any
         available Product among all buyers, including its own divisions and
         departments, on such basis as it may deem fair and practical.
         Notwithstanding the foregoing, the provisions of this paragraph shall
         not apply to obligations to make payments due under this Contract.

11.      Notwithstanding any other provision in this Contract; if during the
         Initial Term Seller experiences an economic hardship, which is hereby
         defined as an increase of more than twenty percent (20%) in Seller's
         costs to procure the raw materials necessary to produce
<PAGE>

         the Products, over Seller's costs as of the effective date of this
         Contract to procure such raw materials (the "Hardship"), then Seller
         shall have the right to pass through to Buyer by increasing the prices
         of the affected Products by that amount which represents the excess
         over 20% of such increase in Seller's costs to procure the raw
         materials required to produce the affected Products. Buyer shall have
         the right to terminate this Contrast upon at least sixty (60) days
         prior written notice to Seller if said price increase results in a
         price than is twenty percent (20%) or more higher than the price
         offered by another manufacturer for the product having the same
         specifications as Seller's Product, of the same or equal quality, in
         volumes no less than one full current year under this Contract and on
         the same or comparable terms and conditions as provided to Buyer under
         this Contract. At any time within six (6) months of Seller's notice to
         Buyer of a price increase for a condition of Hardship, Buyer may have
         an audit performed to verify the accuracy of the Hardship price
         increase; provided, however, such audit shall be conducted only upon
         the following terms and conditions. Such audit shall be performed by a
         certified public accountant who is a member of a recognized national
         public accounting firm acceptable to both Buyer and Seller (the
         "Accountant"). The Accountant shall execute on behalf of Seller a
         confidentiality agreement in which the Accountant and the Accountant's
         firm agree that the Accountant will not disclose to Buyer or any other
         third party any information whatsoever which he or she obtained in the
         course of the audit, except for the Accountant's summary conclusion
         that Seller's calculation of the Hardship price increase complies or
         does not comply with the terms of this Paragraph 11., and, if the
         Accountant determines that the price increase is not in compliance with
         this Paragraph, the net amount by which the Accountant deems Seller's
         calculation to be in noncompliance. It is understood and agreed that
         the Accountant's access to Seller's books and records will be limited
         only to those books and records which relate directly to Seller's
         calculation of the Hardship price increase. Such audit shall be
         performed upon not less than ten (10) days prior notice to Seller, and
         will be conducted at such reasonable times agreeable to Seller during
         Seller's normal business hours. Such audit shall be at Buyer's cost and
         expense unless the Accountant determines that Seller's calculation was
         in noncompliance by more than ten percent (10%) of the total Hardship
         price increase, in which event the audit will be at Seller's cost and
         expense.

12.      This Contact constitutes the entire agreement between the parties with
         respect to the subject matter hereof, whether written or oral, and
         there are no understandings, agreements, representations or warranties
         of any kind, express or implied, not expressly set forth herein. No
         modification of or addition to this Contract shall be effective or
         binding on the parties unless made in writing and signed by both
         parties; and no modification or addition shall be affected by the
         acknowledgment or acceptance of purchase order forms containing terms
         or conditions at variance with or in addition to those set forth
         herein.

13.      This Contract shall be binding upon and inure to the benefit of the
         respective successors and assigns of each of the parties hereto, but
         shall not be assigned by Buyer without the prior written consent of
         Seller. Seller's waiver of any breach or failure to enforce any of the
         terms and conditions of this Contract, at any time, shall not in any
         way affect, limit or waive Seller's right thereafter to enforce and
         compel strict compliance with every term and hereof.

14.      In no event shall either party be liable to the other party for any
         incidental, indirect, special, consequential or punitive damages
         whatsoever, on any claim, whether statutory,
<PAGE>

         tort, negligence, strict liability, contract or warranty, implied or
         otherwise, arising out of this Contract, any transaction hereunder or
         the Products supplied hereunder.

15.      Buyer and Seller agree that this Contract shall be governed,
         interpreted and construed in accordance with the laws of the State of
         New York, without regard to conflicts-of-laws rules or principles.
         Unless otherwise stated on the reverse side, the United Nations
         Convention on Contracts for the International Sale of Goods will not,
         for any purpose, govern or apply to this Contract or the performance
         and transactions entered into hereunder.

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