EXHIBIT 10.51
(*)
(*) AND (*)
CONTRACT
BETWEEN
(*) AND *, HEREINAFTER COLLECTIVELY CALLED "SELLER"
AND
CTI, INC., HEREINAFTER CALLED "BUYER".
BUYER, a Tennessee corporation, having its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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.
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.
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/ ▇▇▇▇▇▇ ▇▇▇▇ 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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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,
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
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,
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.
