Purchase Agreement
This Purchase Agreement (this "Agreement"), dated as of the 15th day of February
2000, among:
(1) ▇▇▇▇▇-▇▇▇▇▇▇ Company, an Illinois corporation operating under the laws of
the United States ("Purchaser"), and
(2) Hyaton Organics Inc., a subsidiary of Kafus Industries Ltd., a British
Columbia corporation, operating under the laws of the United States
("Supplier").
W I T N E S S E T H:
WHEREAS, Supplier is developing the Facility to produce Organic Products (such
terms and all other capitalized terms used herein having the respective meanings
set forth in Section 1).
WHEREAS, Supplier desires to obtain a contract for the purchase of the annual
production of the Facility.
WHEREAS, Purchaser desires to purchase and distribute the Organic Products.
NOW THEREFORE, in consideration of the premises and the mutual promises and
agreements herein expressed, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
SECTION 1. Definitions
Unless otherwise specified herein, the following terms shall have the
meanings specified below. The singular shall include the plural, and the
masculine shall include the feminine and neuter, as the context requires.
"Includes" or "is including" shall mean "including", but not limited to."
All definitions of agreements shall include all amendments thereto in
effect from time to time.
"Agreement" means this Purchase Agreement.
"Contract Price" means the price per Unit of product sold hereunder
determined in accordance with Section 4.2.
"Cure Provision Period" has the meaning set forth in Section 6.3.
"Dollars" and "$" means lawful currency of the United States.
"Facility" means the plant to be developed, financed, constructed and owned
by the Supplier at a site in Merry Hill, North Carolina.
"Final Completion Date" means the date when the following condition is
satisfied: Supplier's construction contractor certifies that the Facility
has completed performance testing and has performed to the degree necessary
to constitute substantial completion (or its equivalent) under the
construction contract and is capable of producing annually not less than
the volumes prescribed in Schedule A.
"Financial Closing" means the execution and delivery of definitive
documentation for the financing of all costs of construction, procurement
and equipping of the Facility which will not be financed by Supplier or its
affiliates.
"Force Majeure" has the meaning set forth in Section 9.
"Initial Delivery Date" has the meaning specified in Section 2.4.
"Initial, Basic and Operating Terms" mean the periods described in Section
2.1.
"Mechanical Completion Date" means the date which Supplier and Supplier's
construction contractor agree is the date that the Facility has been
completed to the extent necessary to begin start-up and performance
testing.
"Minimum Purchase Price" has the meaning specified in Section 4.1(b).
"Product" means Organic Products meeting the Specifications set forth in
Section 8.0 and produced using technology of Hyaton Organics Inc., which
technology is, as of the date of this Agreement, proprietary.
"Purchase Order" has the meaning specified in Section 3.3(a).
"Required Annual Amount" means the amount of product in tons as set out in
section 3.1 (b), or if less, the maximum that the Facility can product in
any given Contract Year.
"Selling Price" has the meaning set forth in Section 4.1.
"Shipment" means product identified on a single invoice and shipped to
Purchaser pursuant to this Agreement.
"Specifications" means, with respect to Product, the specifications set
forth in Section 8.0
"Term" means, collectively, the Initial Term, and the Operating Term.
SECTION 2. Term; Development of Facility
2.1 Basic Term
(a) This Agreement shall be effective from the date hereof and, unless earlier
terminated in accordance with this Agreement, continue until the fifth (5)
anniversary of the Final Completion Date. The period from the date hereof
until the Final Completion Date is herein called the "Initial Term". The
period from the date following the Final Completion Date to the fifth (5)
anniversary of the Final Completion Date is herein called the "Operating
Term".
(b) At least six (6) months prior the expiration of the Operating Term, the
parties may agree to renew this Agreement for an additional five (5) year
term, starting Final Completion Date on the terms of the initial Agreement
or under new terms agreed by both parties.
(c) Notwithstanding Paragraph (b) above, if the parties have not reached an
agreement, Supplier will be entitled to seek arrangements with other
parties for the marketing of Products. Supplier will not contract with a
third party on better terms without first offering in writing the same
terms and conditions to Purchaser. Purchaser shall have fifteen (15) days
from receipt of such notice to accept or reject the third party offer. If
Purchaser declines, Supplier upon six (6) months notice may contract with a
third party.
(d) Notwithstanding Paragraph (c) above, Supplier shall fulfill forward sales
orders placed by Purchaser as under the original terms of the Agreement.
2.2 Construction Progress
Supplier agrees to keep Purchaser informed periodically of progress in
construction of the Facility and to notify Purchaser immediately of any
changes in the construction schedule that materially affect the anticipated
Initial Delivery Date.
2.3 Financial Closing
Should Financial Closing not have occurred within two (2) years from the
execution of this Agreement, Purchaser may terminate this Agreement by
written notice of intent to terminate given not less than six (6) months
prior to the effective date of termination; provided, however, that:
(a) Supplier shall have the right to extend the deadline for Financial Closing
on one or more successive occasions for up to three additional months in
the aggregate, by notice to Purchaser given on or prior to the initial
deadline for Financial Closing or any subsequent deadline then in effect,
which notice shall state that Supplier is diligently and in good faith
working to consummate Financial Closing and such extension is necessary to
enable Financial Closing to occur based upon a term sheet for all necessary
Facility financing having been executed by Supplier and the party or
parties providing financing, and;
(b) Termination shall not be effective if Financial Closing occurs on or before
the date Termination otherwise would become effective pursuant to the
notice given by Purchaser. Any extension of the deadline for Financial
Closing shall cause a corresponding extension of the deadline for the Final
Completion Date set forth in Section 2.5.
(c) In the event that Purchaser terminates the Agreement as outlined within
this Section 2.3, then Supplier shall reimburse Purchaser for all
reasonable marketing expenses agreed to by the parties incurred by
Purchaser in anticipation of supply of Product from the Supplier.
2.4 Initial Delivery Date
(a) After the Mechanical Completion Date but prior to the Final Completion
Date, when the Facility is capable of producing Product meeting the
Specifications, Supplier shall notify Purchaser and designate the date of
anticipated shipment of the first quantities of Product to Purchaser (the
"Initial Delivery Date").
(b) Should the Mechanical Completion Date not have occurred within the period
of 12 months after the date of Financial Closing (as such period may be
extended in accordance with Section 2.3), Purchaser may terminate this
Agreement by notice to Supplier of intent to terminate given not less than
30 days prior to the effective date of termination; provided, however,
that:
i. Supplier shall have the right to extend the deadline for Mechanical
Completion Date on one or more successive occasions for up to six
additional months in the aggregate, by notice to Purchaser given on or
prior to the initial deadline for Mechanical Completion Date or any
subsequent deadline then in effect, which notice shall state that
Supplier, and Supplier's contractor are diligently and in good faith
working to complete the construction of the Facility to the point when
the Mechanical Completion Date will be deemed to have occurred; and,
ii. Termination shall not be effective if the Mechanical Completion Date
occurs on or before the date termination otherwise would become
effective pursuant to the notice given by Purchaser.
2.5 Final Completion Date
Should the Final Completion Date not have occurred within the period of 18
months after the date of Financial Closing (as such period may be extended
in accordance with Section 2.3), Purchaser may terminate this Agreement by
notice to Supplier of intent to terminate given not less than 30 days prior
to the effective date of termination; provided, however, that:
(a) Supplier shall have the right to extend the deadline for Final
Completion Date on one or more successive occasions for up to six
additional months in the aggregate, by notice to Purchaser given on or
prior to the initial deadline for Final Completion Date or any
(b) subsequent deadline then in effect, which notice shall state that
Supplier, and Supplier's contractor are diligently and in good faith
working to complete the construction of the Facility to the point
Final Completion Date will be deemed to have occurred and that the
Facility is substantially complete; and,
(c) Termination shall not be effective if the Final Completion Date occurs
on or before the date Termination otherwise would become effective
pursuant to the notice given by Purchaser.
SECTION 3. Sale and Purchase
3.1 Sale and Purchase
(a) Subject to the terms and conditions herein set forth, commencing on
the Initial Delivery Date, Supplier agrees to sell to Purchaser, and
Purchaser agrees to market and purchase from Supplier, all Product
manufactured at the Facility during the Operating Term and all Product
manufactured at the Facility during any Contract Year up to the
Required Annual Amount for each Contract Year.
(b) The Required Annual Amount for the duration of this contract estimated
by Supplier are as follows: (Schedule A)
Year 1 15,000 (short tons-2000 lbs.)
Year 2 30,000 short tons
Year 3-5 50,000 short tons
3.2 Distributorship
Purchaser shall use all reasonable efforts and due diligence to promote,
market and distribute Product and at its own expense shall provide
aggressive, dedicated, continuous sales representation by means of actual
sales personnel contact with existing and prospective customers of Product.
Supplier and Purchaser shall establish a co-operative program pertaining to
the establishment of the Products' trademarks and subsequent media
promotion thereof. Costs pertaining directly to product and trademark
development as well as direct brand media spending will be borne by
Supplier. Supplier and Purchaser shall communicate as required and at least
semi-annually the parties shall have a joint marketing meeting to be held
at a convenient location for the parties. In connection therewith,
Purchaser shall, among other things at its own expense;
(i) respond to all inquiries concerning Product,
(ii) maintain sufficient equipment, and hire and maintain a sales staff
sufficient in number and qualifications to aggressively promote,
distribute and sell Product, and
(iii)develop in conjunction with Supplier from time to time and implement
such advertising strategies for Product as necessary and agreed to by
the parties. Within 15 business days following the end of each
calendar month, Purchaser shall deliver to Supplier a sales report in
a form satisfactory to both parties.
3.3 Purchase Orders
(a) In order to accommodate the continuous production process of the
Facility, Purchaser shall confer with Supplier to establish monthly
Product Purchase Order requirements at intervals of six months, two
months and one month. Purchaser shall deliver to Supplier individual
purchase orders covering each month's shipments at least twenty-one
(21) days in advance of the desired shipping date specifying the
Selling Price, packaging requirements of the Product required by
Purchaser (each, a "Purchase Order"). To the extent practicable,
Supplier will use its best efforts to accommodate Purchase Orders on
shorter notice as may be required from time to time, but in no event
shall Purchaser request changes to such Purchase Order less than 48
hours prior to expected delivery from the Facility.
(b) All Product purchased by Purchaser shall be shipped in such lots as
the parties may agree.
(c) All monthly Product requirements as previously agreed to by the
Purchaser will be transported from the Facility during the month. In
the event that contracted Product is not removed from the Facility, a
storage charge will be levied to the Purchaser.
(d) Supplier shall invoice each shipment at the time of delivery to the
carrier. Invoices shall include the Purchase Order Number, quantity,
types of product, selling price and any applicable taxes.
3.4 Additional Features
The parties agree to discuss on an ongoing basis different varieties and
packaging forms for the Product and other additions or deletions that would
provide additional revenue benefits to the Supplier and Purchaser.
3.5 Delivery
All Product Purchase Orders are F.O.B. Facility by the Purchaser's own
carrier or contracted carrier at the Purchaser's expense.
SECTION 4. Pricing
4.1 (a) Selling Price
With respect to any Product purchased by Purchaser and sold by Supplier to
Purchaser hereunder, the "Selling Price" for each Purchase Order shall be
the price at which the Purchaser, exercising its best efforts to maximize
price, has resold the Product to the end user, which is the subject of the
Purchase Order. In the event Product purchased by Purchaser has not been
pre-sold by Purchaser, the minimum purchase price (4.1(b)) will be applied
to the subject Product. If the actual selling price received by the
Purchaser from the end user is higher than the minimum purchase price, the
entire amount shall be recalculated and adjusted in favour of the Supplier
and will be credited in the next month's reconciliation statement.
4.1 (b) Minimum Purchase Price
A guaranteed minimum purchase price F.O.B. Facility is to be established
annually on each anniversary date of the Agreement to the Purchaser
(Schedule B).
4.2 Basis of Payment
Purchaser will provide a statement on a monthly basis showing total
volumes, revenues and costs (defined under Net Selling Price below) for all
Products sold or stored within ten (10) days of the previous monthly
period. The statement will be accompanied by payment from Purchaser to
Supplier for the amount due for all Product purchased and received from
Supplier during the preceding monthly period. Any Product shipped that is
not pre-sold as set out in (4.1), will be invoiced to Purchaser at the
Minimum Purchase Price (4.1 (b)) at month end and will be due for payment
within 15 days.
Percentage revenues (commission) to Purchaser shall be calculated on the
Net Selling Price (as per the schedule below) and payment will be forwarded
to Purchaser from Supplier within f15 days of receipt of statement and full
payment from Purchaser.
Commission Revenue payment to Purchaser from the Supplier for the Products
purchased during the previous month will be based on the following table:
Net Selling Price % to Purchaser
(a) Fertilizers (1) (1)
(1) (1)
(1) (1)
(b) Growing Media (1) (1)
(1) (1)
(1) (1)
* short ton (2000 pounds)
(1) Confidential portion has been omitted and filed separately with the
Commission.
NET SELLING PRICE shall be defined as the sale price of the Product to
Purchaser's customers (end user) after deducting all direct costs relating
to the customers' orders for freight, storage, interest carrying cost,
handling and custom cost actually incurred by Purchaser but shall not
include Purchaser's overhead or fixed cost (Schedule C).
Purchaser shall be entitled to set selling prices but shall keep Supplier
informed of its pricing structure.
4.3 Product Only
All prices under this Agreement are for Product only and do not include
technical data, proprietary rights of any kind, or patent rights, and any
packaging other than normal domestic commercial packaging, unless expressly
agreed to in writing by the Supplier.
SECTION 5. Title and Risk of Loss
Title and risk of loss for all product sold hereunder shall pass to
Purchaser upon delivery onto Purchaser's or Purchaser's contractors
equipment at the Facility and the sale by Supplier to Purchaser will be
complete upon such delivery, Purchaser being deemed to have accepted
delivery thereof.
SECTION 6. Default.
6.1 Default
Notwithstanding anything herein contained, either party may terminate this
Agreement upon written notice to the other party in the event that;
(a) such other party commits a breach (other than a breach which in all
the circumstances is insignificant) of any provision of this Agreement
(which notice must specify in reasonable detail the breach or breaches
complained of);
(b) Supplier decides to close the Facility producing the Product;
(c) Such other party becomes the subject of any bankruptcy, insolvency or
similar proceedings;
(d) Any legislation, regulations, policy, ruling or decision of a Federal,
State or Municipal government or of any agency thereof are
implemented, repealed or altered in such a way as to significantly
prevent either party from lawfully exercising its rights or performing
its obligations hereunder.
6.2 Remedies
Upon the occurrence and during the continuation of any default hereunder,
the party not in default shall have the right:
(a) to give written notice of the party's intention to terminate this
Agreement and thus begin the Cure Provision Period effective
immediately upon the other party's receipt of such notice; and
(b) to pursue any other remedy given under this Agreement or now or
hereafter existing at law or in equity or otherwise.
6.3 Cure Provision Period
Upon written notice being received by either party of the other's intention
to terminate, a Cure Provision Period of 30 days from the date of receipt
of such notice shall commence. During this period, the party receiving the
notice will have the opportunity to correct the situation giving rise to
the termination notice and to make current any amounts past due that may
have arisen from such situation. Failure to correct (or in the event such
correction cannot by its nature be accomplished within 30 days, failure to
start and diligently proceed to correct) the situation during the Cure
Provision Period or the waiving of the Cure Provision Period by the party
in receipt of the termination notice will result in the notifying party
having the right to terminate the Agreement immediately. In the event of a
correction which cannot be accomplished within 30 days, and notwithstanding
the immediately preceding sentence, either party shall have the right to
invoke the remedies specified in Section 6.2 above if a default continues
for more than 90 days following the defaulting party's receipt of notice of
termination.
SECTION 7. Warranty; Indemnification; Insurance.
7.1 Warranty
Supplier warrants to Purchaser that all Product sold to Purchaser hereunder
shall be free and clear of liens, claims, encumbrances, and restrictions
against sale of any type or nature not authorized by this Agreement, and
shall at the time of delivery to the carrier conform to the Specifications
and the descriptions thereof in the Purchase Order covering the product in
question.
7.2 Indemnification
Each of the parties hereto covenants and agrees to indemnify and hold
harmless the other against and from any and all liability, damages, losses
and costs (including without limitation reasonable attorneys' fees)
suffered or incurred by such other party as a result of any breach of this
Agreement by the other party other than any negligent act or neglect of
itself, its servants, employees, agents, invitees, or licensees, including
liability for injury or damage to any person or property.
7.3 Liability Insurance
Supplier and Purchaser shall each provide and keep in force, comprehensive
general liability insurance in respect of personal injury, death or
property damage with generally accepted insurance carriers as are customary
for risks of this nature and with minimum amounts of $5,000,000.00 per
occurrence and each party will provide to the other, proof of such
insurance and renewal thereof, upon request.
SECTION 8. Product Features
8.1 Product Specifications
The Products sold under the "Truly Organic" brand name are pure organic
fertilizers and pure organic growing media (substrates) that contain no
chemical additives and are formulated on a bio-modulated release basis. The
Products are produced from selected organic waste materials that have been
aerobically processed under specific, optimally controlled conditions.
The Products will be formally certified by a recognized national and/or
state organic certification body, such as OMRI (The Organic Materials
Review Institute) and/or any other regulatory body required by law where
the Product is sold.
(i) Growing Media:
Professional-All Purpose Mix -consumer retail market
-ready-to-use
-complete multi-purpose blend
-packaged in multi-color, laminated,
re-sealable bags
(ii) Fertilizer
MTO (Magic Touch Organic) -consumer retail market
-pelletized pure organic fertilizer
-general purpose use
-packaged in multi-color, laminated,
re-sealable bags
(iii)Compost - detailed specifications and packaging shall be determined
and agreed to by the parties acting reasonably and attached hereto as
a schedule prior to production of same.
(iv) Enhanced Growing Media - detailed specifications and packaging shall
be determined and agreed to by the parties acting reasonably and
attached hereto as a schedule prior to production of same
Dependant on market demands and conditions, the Supplier in conjunction
with the Purchaser will develop other products and packaging to meet other
markets' and customers' needs.
8.2 Product Claims
Purchaser agrees to service all claims made or submitted by its customers
arising out of the sale of Product under this Agreement in the best
interests of Supplier; provided, however, that claims in excess of $500.00
shall not be settled by Purchaser without the prior written approval of
Supplier, which approval shall not be unreasonably withheld or delayed. For
claims under $500.00, Purchaser shall settle the claim in accordance with
this Section 8.2, and an adjustment shall be made by Supplier in the next
regularly prepared billing statement to reflect such settlement and payment
by Purchaser. For claims over $500.00, Purchaser shall promptly notify
Supplier of such claim and upon settlement agreement, Supplier shall pay
for such claim directly.
SECTION 9. Force Majeure
If any cause reasonably beyond the control of either party, including but
not limited to fire, tempest, earthquake, inclement weather, Act of God,
power interruption, fuel shortage, strike, lockout or other labor dispute,
riot or civil commotion, act of public enemy or enactment, rule, order or
act of government or governmental agency, prevents such party (the
"defaulting party") from complying with any provision of the Agreement,
then the defaulting party shall be excused from complying while such cause
continues to prevent the defaulting party from so complying for a period of
forty-five (45) days.
Where non-compliance by the defaulting party continues beyond forty-five
(45) days and relates to a material term or terms of this Agreement, then
the other party shall have the option to terminate this Agreement effective
upon giving written notice of termination to the defaulting party.
SECTION 10. General Provisions.
10.1 Entire Agreement
The provisions of this Agreement and the Schedules attached hereto contain
the entire agreement between the parties concerning the transactions
contemplated herein and supersede all prior agreements or understandings
between the parties relating to the subject matter hereof, written or oral
and all prior agreements or understandings, written or oral, between
Purchaser and Supplier or any of their affiliates relating to the subject
matter hereof. The provisions of this Agreement shall supersede any
provisions, terms and conditions contained on any Purchase Order (other
than as to the volumes and sizes on a Purchase Order delivered hereunder),
sale order or other writing Purchaser or Supplier may give or receive, and
the rights of the parties shall be governed exclusively by the provisions,
terms and conditions hereof.
10.2 Successors and Assigns
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that neither party may assign any of its duties and obligations
hereunder without the prior written consent of the other party, which
consent shall not be unreasonably withheld. In no event shall any
assignment relieve the assigning party of its obligations and duties
hereunder or impair the rights of the non-assigning party hereunder.
Notwithstanding the foregoing, Purchaser hereby agrees and consents to the
assignment of this Agreement by Supplier for the purpose of financing or
refinancing the Facility. Such assignment, for purposes of financing or
refinancing, may be to any entities providing debt or credit to Supplier or
the Facility or any trustee or other representative of such entities and
the initial assignees or designees thereof (but not to any subsequent
assignees or designees).
Notwithstanding the foregoing:
(a) Purchaser agrees to execute and deliver, at no expense to Supplier,
such documents and/or instruments as may be reasonably required by
Supplier or any other person providing financing or refinancing,
including, without limitation, opinions of counsel and written
confirmation, as of date of Financial Closing, of the satisfaction by
Supplier of all conditions required to be satisfied under this
Agreement as of such date.
(b) Supplier hereby agrees and consents to Purchaser contracting with a
joint venture between Kafus Industries Ltd. or an affiliate thereof
and Purchaser for the joint venture to supply market development,
research and advertising services in support of the marketing and
distribution of the Product by Purchaser hereunder; provided, that the
foregoing shall not be deemed to relieve Purchaser of any of its
duties or obligations thereunder.
10.3 Amendment
This Agreement may not be modified or amended, nor may the provisions
hereof be waived, except in writing signed by the parties hereto.
10.4 No Waiver
Any waiver by any party hereto of any of its rights hereunder shall be
without prejudice to its future assertion of any such right or of any other
right hereunder, and any delay in exercising any right shall not operate as
a waiver thereof or any other right.
10.5 Applicable Law
This Agreement shall be governed by and construed in accordance with the
laws of the state of North Carolina.
10.6 Headings
Section headings used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.
10.7 Arbitration
(a) All disputes, controversies or differences which may arise between the
parties, regardless of value should be first attempted to be resolved
between the parties in a friendly manner and only once all reasonable
attempts at resolving such differences have been exhausted, or where,
without immediate resolution to an apparently unresolvable difference
will cause significant economic hardship on one of the parties, shall
Arbitration be used as a method of dispute resolution.
(b) All disputes, controversies, claims or differences which may arise
between the parties hereto out of or in relation to or in connection
with this Agreement or the breach thereof where the amount claimed or
in dispute is $1,000,000 or less (exclusive of costs and attorney's
fees and expenses) shall be finally settled by arbitration conducted
in accordance with the Commercial Arbitration Rules (the "Rules") of
the ----- American Arbitration Association ("AAA"), as from time to
time in effect any and all --- disputes concerning the suitability of
any Shipment of the Products purchased and sold hereunder shall be
determined by an independent testing laboratory with substantial
industry experience. Whenever any dispute, controversy, claim or
difference which may be submitted to arbitration under this Section
10.7 arises between the parties hereto, either party hereby may given
to the other party hereto notice, in accordance with Section 10.8
hereof of its intention to submit such dispute, controversy, claim or
difference to arbitration.
(c) Arbitration shall take place before one arbitrator agreed to by the
parties or, in the event agreement cannot be reached about such
appointment, the arbitrator shall be appointed by the AAA. Once
appointed, such arbitrator shall be neutral.
(d) The parties hereto agree that all fees and expenses associated with
the arbitration, including attorneys' fees and expenses, shall be
borne by the parties as determined by the arbitration.
(e) The determination of such arbitrators shall be final and binding upon
the parties to the arbitration, and judgment upon the award rendered
by arbitrators may be entered in any court having jurisdiction, or
application may be made to such court for a judicial acceptance of the
award and an order of enforcement, as the case may be. The arbitrators
shall set forth the grounds for their decisions in the award.
(f) The place of arbitration shall be in Raleigh, North Carolina if
Arbitration is initiated by Purchaser and in Raleigh, North Carolina
if Arbitration is initiated by Supplier.
10.8 Notices
All notices and other communications given hereunder must be in writing and
may be sent by personal delivery, by overnight courier or delivery service
for which a delivery receipt can be obtained, by facsimile for which
receipt is confirmed or by certified mail, return receipt requested (or the
functional equivalent) to any party at the address of the party shown
below. Any party hereto may change its address by giving notice in writing
to the other party or parties of such change.
if to Supplier:
Hyaton Organics Inc.
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Attention: President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
if to Purchaser:
▇▇▇▇▇-▇▇▇▇▇▇ Company
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Attention: Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Copy: ▇▇▇▇▇-▇▇▇▇▇▇ Company
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Attention; President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
All notices and other communications given to any party hereto in
accordance with the provision of this Agreement shall be deemed to have
been given on the date of receipt if delivered by hand or overnight courier
service or sent by facsimile, or on the date five (5) Business Days after
dispatch by certified or registered mail if mailed.
10.8 Partial Invalidity
The unenforceability or invalidity of any term or provision contained
herein, or of any portion thereof, shall not affect the validity or
enforceability of any other term or provision, or portion thereof, herein
contained.
10.9 No Agency Relationship
Nothing contained in this Agreement shall be construed as creating any
agency, joint venture or partnership between the parties. Each party shall
at all times be an independent contractor under this Agreement.
10.10 Non-Disclosure and Confidentiality
Supplier acknowledges that, by reason of the Agreement, it will become
privy to confidential information belonging to Purchaser, including the
identities of Purchaser's customers, agents and contractors and pricing
information. Supplier agrees that it will not, without the prior written
consent of Purchaser, disclose to any third party or use for its own
benefit any such confidential information either during the continuance of
the Agreement or thereafter.
Purchaser acknowledges that it shall become privy to confidential
information such as production forecasts and other information belonging to
Supplier. Purchaser agrees that it will not, without the prior written
consent of Supplier, disclose to any third party or use for its own benefit
any such confidential information either during the continuance of the
Agreement or thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first written above.
Hyaton Organics Inc.
By: ____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇-▇▇▇▇▇▇ Company
By: ____________________________________
Name: ▇▇▇▇ ▇▇▇▇
Title: Vice President, New Business Development
Schedule A
REQUIRED ANNUAL AMOUNT
Short tons (2000 pounds)
TOTAL GROWING
PRODUCTION FERTILZER MEDIA
YEAR 1 15,000 5,000 10,000
YEAR 2 30,000 10,000 20,000
YEAR 3-5 50,000 17,000 33,000
Schedule B
MINIMUM PURCHASE PRICE - FOB FACILITY
$US per Short Ton
I. GROWING MEDIA
Professional/All-Purpose Mix $_____ per ton (1)
II. FERTILIZERS
MTO (Magic Touch Organic) $_____ per ton (1)
(1) Confidential portion has been omitted and filed separately with the
Commission.
Schedule C
NET SELLING PRICE DEFINITION
A. PRICE TO PURCHASER'S CUSTOMER = ($000)
LESS
B. DIRECT COSTS:
1. Freight cost to customer from shipping point
2. Handling
3. Customs
4. Storage*
5. Interest carrying cost for prepayment of account over 30 days
EQUALS
C. NET SELLING PRICE
*Monthly storage charge including in and out charges at public warehousing
facilities.
Note: Purchaser's overhead and fixed costs not included.
