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EXHIBIT 10.1
ENZYME SUPPLY AGREEMENT
This Agreement is made and is effective as of this 5th day of January,
2001 by and between Genencor International, Inc., a Delaware corporation, with a
place of business located at 000 Xxxxxxxx Xxxxxx Xxxx., Xxxxxxxxx, Xxx Xxxx,
00000 (hereafter "SELLER") and Xxxxxxx, Xxxxxxxxxxxx, a Delaware corporation
with its principal place of business located at 00000 XxXxxxx Xxxx Xxxx,
Xxxxxxx, Xxxxxxxxx 00000 (hereafter "BUYER").
IN CONSIDERATION of the mutual covenants and premises contained herein, SELLER
and BUYER agree as follows:
I. PRODUCT AND SPECIFICATIONS
SELLER agrees to sell to BUYER, and BUYER agrees to purchase from
SELLER enzymes as set forth in Exhibit A, attached hereto, meeting
specifications set forth in Exhibit D, attached hereto, and Kosher designations
as set forth in Exhibit F (hereinafter singularity referred to as "Product" and
collectively referred to as "Products").
II. TERM OF AGREEMENT AND TERMINATION
A. Unless otherwise earlier terminated hereunder, the term of this
Agreement shall commence on January 1, 2001 and end on December 31, 2005 (the
"Initial Term") and shall renew for successive one (1) year periods thereafter.
upon written agreement of the parties. Each calendar year during the term of
this Agreement shall be described as a "Contract Year."
B. Either party may terminate this Agreement, (1) if the other
party materially breaches any obligation set forth herein, which breach has not
been cured within thirty (30) days after receipt of written notice of such
breach from the non-breaching party, or within such additional cure period as
the non-breaching party may so authorize in writing; or (2) if the other party
becomes insolvent, makes a general assignment for the benefit of creditors,
files a voluntary petition in bankruptcy, suffers or permits the appointment of
a receiver for its business or assets, becomes subject to any proceeding under
any bankruptcy or any insolvency law, whether domestic or foreign, or has wound
up or liquidated its business voluntarily or otherwise.
III. PURCHASING AND PRICING
A. BUYER hereby agrees to purchase 100% of its annual requirements
(other than reasonable sample quantities as contemplated under section IV. F.
below) for Products from SELLER for the BUYER'S wet corn milling facilities
located at:
(i) 00000 Xxxxxx Xx 0X, Xxxxxxxx, Xxxxx Xxxxxx 00000;
(ii) 0 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxx 00000-0000;
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(iii) 0000 Xxxxxxxx Xxxx, Xxxxxx, Xxxx 00000-0000;
(iv) 0000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000-0000;
(v) 000 Xxxxxxxxxx Xxxx, Xxxxx, Xxxxxxxx 00000-0000; and
(vi) 0000 00xx Xxxxxx XX, Xxxxx Xxxxxx, Xxxx 00000-0000
(hereinafter collectively referred to as "Facilities", singularly referred to as
a "Facility"). BUYER's estimated annual requirements for Products ("Estimated
Requirements") for the Facilities are set forth in Exhibit A which is attached
hereto and incorporated herein by reference and as amended from time to time.
BUYER does not guarantee that its actual annual requirements are equivalent to
its Estimated Requirements; consequently, BUYER has no obligation to purchase
the Estimated Requirements and shall not be liable to SELLER for its failure to
do so, SELLER acknowledges that BUYER's actual requirements for Products shall
depend on BUYER'S actual use of the Products at the Facilities.
B. BUYER shall pay SELLER for the Products at the prices, and in
accordance with the terms, set forth in Exhibit B, as may be amended by the
parties by written agreement from time to time. The term of payment is net
thirty (30) days from the date: (i) those Products sold in bulk tankers pass the
flange into BUYER'S storage tanks at the relevant Facility; or (ii) packaged
Products cross the threshold of the BUYER's designated warehouse (hereafter
collectively referred to as the "Unload Point"). Freight charges shall be for
BUYER's account or as otherwise agreed on Exhibit B, with carriers chosen by
SELLER and approved by BUYER if requested. Freight charges will be on a
pass-through basis from the SELLER to the BUYER, with no additional costs added
by SELLER. SELLER will use its best efforts to obtain competitive freight rates.
IV. COMPETITIVE OFFER
A. To the extent BUYER maintains its current status as the
"highest volume purchaser" of Products for use in grain processing in the U.S.
from SELLER, SELLER shall provide "best customer" prices to BUYER. For the
purposes of this Section IV A, "highest volume purchaser" shall mean that entity
or individual purchasing the highest dollar amount of enzyme products from
SELLER over a calendar year without requiring materially more customer support
than that amount typically required in the industry, and "best customer "prices
are defined as those which, at industry average dosage rates for the individual
enzyme products, allow BUYER to enjoy the lowest total enzyme cost for fructose
production when compared to prices paid to SELLER by other U.S. corn wet
millers.
B. In the event there is a change in enzyme market conditions such
that BUYER is presented with:
(i) legitimate third party sales materials; or
(ii) a bona fide third party offer for a product
comparable to a Product used in corn syrup production
in quality, quantity and functionality,
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at delivered prices lower than the then current prices for the comparable
Product hereunder delivered, BUYER may notify SELLER in writing of the market
change for such Product, and at SELLER's request, shall supply SELLER with
competitive product samples (with approval of the third party) and reasonable
documentation or other evidence of said offer, including price information. In
the event the third party does not provide BUYER with authorization for BUYER to
supply SELLER with competitive product samples, BUYER and SELLER will conduct
joint testing of the product(s) to determine the relative value of the
product(s). Upon receipt of BUYER's notification, SELLER may submit a new
written price offer within 30 days, which, if satisfactory to BUYER, will become
the new price upon acceptance, or SELLER shall agree that BUYER is released from
its obligation to purchase 100% of its requirements of such Product from SELLER
under this Agreement. If the new offer by SELLER is not satisfactory, BUYER will
provide SELLER a "meet or release" price for the Product and SELLER shall have
10 days to agree, at which time the new price, if agreed by SELLER, will go into
effect, or if not agreed, BUYER shall be released from its obligation to
purchase 100% of its requirement for Product from SELLER under this Agreement.
The prices and terms of this Agreement shall remain in effect and unchanged for
the remaining Products.
C. In the event there is a change in enzyme market conditions such
that BUYER is presented with:
(i) legitimate third party sales materials; or
(ii) a bona fide third party offer for a combination of
products comparable to Products used, in fructose
production in quality, quantity and functionality
(i.e. high temperature liquefaction enzyme such as
SPEZYME XXXX-L; saccharification enzyme such as
OPTIMAX 4060 VHP or OPTIMAX 7525 HP; and
isomerization enzyme such as GENSWEET IGI-SA,
GENSWEET SGI or GENSWEET IGI-HF).
at delivered prices which, at industry average dosage rates for the individual
enzyme products, allow BUYER to enjoy lower total enzyme cost for fructose
production when compared to prices paid to SELLER, BUYER may notify SELLER in
writing of the market change, and at SELLER's request, shall supply SELLER with
competitive product samples (with approval of the third party) and reasonable
documentation or other evidence of said offer, including price information. In
the event the third party does not provide BUYER with authorization for BUYER to
supply SELLER with competitive product samples, BUYER and SELLER will conduct
joint testing of the product(s) to determine the relative value of the
product(s). Upon receipt of BUYER's notification, SELLER may submit a new
written price offer within 30 days, which, if satisfactory to BUYER, will become
the new prices upon acceptance, or SELLER shall agree that BUYER is released
from its obligation to purchase 100% of its requirements of any such Product
within that combination from SELLER under this Agreement. If the new offer by
SELLER is not satisfactory, BUYER will provide SELLER a "meet or release" price
for such Product and SELLER shall have 10 days to agree, at which time the new
prices, if agreed by SELLER, will go into effect, or if not agreed, BUYER shall
be released from its obligation to purchase 100% of its requirement for such
Product within that combination from SELLER under this Agreement. The prices and
terms of this Agreement shall remain in effect and unchanged for
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the remaining Product volumes as long as SELLER continues to supply BUYER more
than 50% of its total dollar volume of enzymes for grain processing.
D. In addition, it is incumbent upon SELLER to reasonably monitor
the grain processing enzyme marketplace and notify BUYER of significant changes
in that market for all or any of the Products delivered hereunder. For the
purposes of this Section IV D, a "change in enzyme market conditions" is defined
as a significant and continuing drop in market prices to all or most U.S.
customers and excludes one-time, multiple product/multiple site or group
discount offers from other enzyme suppliers. Upon BUYER's request after
notification from SELLER, SELLER may submit a new written price offer within 30
days, which, if satisfactory to BUYER, will become the new price upon
acceptance, or SELLER shall agree that BUYER is released from its obligation to
purchase 100% of its requirements of such Product from SELLER under this
Agreement. If the new offer by SELLER is not satisfactory, BUYER will provide
SELLER a "meet or release" price (which price must be no lower than that
reflected in the corresponding third party documentation or other evidence) for
the Product in question and SELLER shall have 10 days to agree, at which time
the new price, if agreed by SELLER, will go into effect, or if not agreed, BUYER
shall be released from its obligation to purchase 100% of its requirements of
such Product from SELLER under this Agreement.
E. In the event that new, breakthrough dislocating enzyme
technology becomes available to BUYER, BUYER will provide SELLER written notice
of: (i) the nature and technological/production value of such new technology;
and (ii) the price at which BUYER would continue purchasing the relevant Product
from SELLER despite such new technology. For the purposes of this Section IV E,
"new, breakthrough dislocating enzyme technology" is meant to be a significant
technical innovation, which has not previously been sampled or disclosed to
BUYER at the time of execution of this Agreement and excludes reformulation or
blending of existing enzyme products. SELLER will have 90 days from receipt of
such notice to either: (i) agree to the new price; (ii) provide cost competitive
technology; or (iii) agree that BUYER is released from its obligation to
purchase 100% of its requirements of such Product from SELLER under this
Agreement. If SELLER fails to provide competitive technology or match the price
provided in writing by BUYER, then BUYER shall be released from its obligation
to purchase 100% of its requirements for the relevant Product from SELLER under
this Agreement.
F. Notwithstanding anything to the contrary herein, BUYER shall
have the right to sample and trial product and substitute product produced by
third parties in reasonable sample quantities over reasonable short-term trial
periods, at no more than two Facilities.
V. TAXES AND OTHER CHARGES
BUYER shall be responsible for all federal, state and local taxes, or
charges in lieu of taxes, now or hereafter imposed on the sale or use of the
Product, except for income or other similar taxes imposed on SELLER. Any taxes
for which BUYER is responsible hereunder shall be charged to BUYER and shall be
in addition to the prices set forth in Section III.
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VI. GOVERNMENTAL LAW AND REGULATIONS
SELLER's and BUYER's obligations hereunder shall be subject to all
applicable governmental laws, rules, regulations, executive orders, priorities,
ordinances and restrictions now or hereafter in force. SELLER shall secure such
permits and licenses necessary, at its expense, for the sale of Product
hereunder, unless otherwise agreed by the parties in writing.
VII. RISK OF LOSS
Risk of loss and/or damage to any Product furnished hereunder shall be
upon SELLER until the Product passes the Unload Point at the Facility or as
otherwise agreed in delivery terms in Exhibit B.
VIII. INDEMNITY
SELLER agrees to defend, indemnity and hold harmless BUYER, its
officers, employees, and agents from and against any and all liability, loss,
damage, fine, penalty, cost or expense (including reasonable attorney's fees),
except to the extent caused by BUYER or as otherwise limited within this
Agreement, arising out of any allegation, claim, action or suit arising out of:
(i) failure of the Products supplied to meet specifications or warranties under
this Agreement; (ii) any, alleged or actual, direct or contributory infringement
or misappropriation of any patent, trade secret or other proprietary right
arising from the purchase, use or sale of the Products; (iii) any leak or spill
of any goods while being transported or delivered to BUYER; and/or (iv) the
acts, omissions or willful misconduct of SELLER's employees, subcontractors,
agents and representatives, and all other persons performing any services on
behalf of SELLER hereunder. To the extent that a Product is subject to a
rightful claim that it infringes a patent or copyright, or misappropriates a
trade secret (and in any event if a court of law and competent jurisdiction
finds that such product does, in fact, infringe or so misappropriate), then
SELLER shall also provide BUYER with one of the following forms of relief at
SELLER's option: (a) obtain a license on BUYER's behalf to continue to purchase,
use or sell the Product; (b) redesign the Product so that it does not so
infringe or misappropriate; or (c) refund BUYER the purchase price paid for the
Product. In any and all claims against BUYER by any employee of SELLER, any
subcontractor, anyone directly or indirectly employed by any of them, or anyone
for whose acts any of them may be liable, the indemnification obligation under
this Section shall not be limited in any way by any indemnity or limitation on
the amount or type of damages, compensation or benefits payable by or for
SELLER, any subcontractor, or anyone directly or indirectly employed by any of
them under workers' compensation acts, disability benefit acts, or other
employee benefit acts.
BUYER recognizes that the Product is a biological product and
accordingly, the parties shall first attempt to resolve any matters arising out
of Product quality issues through good faith discussions and mutual evaluation
of alternative forms of remedy which may include but not be limited to: (I)
replacement of the Product; (II) repayment of the purchase price for such
Product; (III) submission of a claim through SELLER's insurer; and (IV)
reimbursement of BUYER's out-of-pocket costs directly resulting from the
defective Product up to a maximum of US $5,000,000; provided, however, that
BUYER shall only be obligated to attempt to resolve matters in the !:foregoing
manner for a reasonable period of time, and the foregoing shall in no way impair
or
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limit BUYER's right to seek remedy or recourse against SELLER which it may be
entitled to under this Agreement in any other manner available.
IX. ACCEPTANCE OF DELIVERY OR PAYMENT
Acceptance of any delivery by BUYER or acceptance of payment by SELLER
after breach of the terms and conditions of this Agreement by the other party
shall not waive any rights or remedies accruing to the non-breaching party as a
result of such prior breach. Any non-conformity or default on the part of the
SELLER which is not remedied pursuant to the terms of this Agreement with
respect to three (3) or more Product shipments within the course of a Contract
Year shall be deemed to substantially impair the value of this Agreement
X. CONFIDENTIALITY
BUYER and SELLER have executed the Confidentiality Agreement dated
January 5, 2001 attached hereto as Exhibit E and acknowledge that the terms and
conditions thereof are incorporated herein.
XI. WARRANTY
A. SELLER warrants that (i) it has title to the Product, (ii) the
Product is free of any liens or encumbrances, and (iii) the sale of the Product
hereunder will not infringe any United States patent for the Product or for the
process for making the Product. SELLER shall execute the Continuing Product
Guaranty set forth in Exhibit C which is attached hereto and Incorporated herein
by reference. SELLER warrants that the Product shall conform to the terms of
Exhibit C.
B. SELLER warrants that the Product (i) is free from defects in
material and workmanship; (ii) is of merchantable quality; and (iii) at the
Unload Point, conforms with the Product quality specifications set forth in
Exhibit D which is attached hereto and incorporated herein by reference. A
certificate of analysis certifying compliance with the Product specifications
set forth in Exhibit D will be provided with each shipment, and SELLER shall
properly seal each bulk shipment of Product and provide to BUYER seal numbers on
either the xxxx of lading or certificate of analysis.
C. SELLER warrants that it shall furnish Material Safety Data Sheets
for the Products at or prior to delivery of the Products and shall also furnish
other health or safety information as available. SELLER further warrants that
the Product is subject to the federal "Occupational Safety and Health Act" of
1970, as amended ("OSHA"), or OSHA's state equivalent, and the rules and
regulations, thereunder, and will conform to all applicable standards and
requirements set forth in said Act and rules and regulations.
XII. DELIVERY AND PURCHASE ORDERS
BUYER shall issue a purchase order ("Purchase Order") prior to delivery
of any Product to any of BUYER's Facilities. SELLER will advise BUYER
immediately upon receipt of a Purchase Order if the specified delivery date
cannot be met. Upon the failure of SELLER to comply with the delivery date, as
specified, BUYER has the option to cancel the Purchase Order without liability.
BUYER may designate any reasonable alternative delivery points, if necessary,
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to expedite SELLER's performance under the Purchase Order. BUYER may cancel any
specific Purchase Order for any or no reason by providing written notice to
SELLER at least thirty (30) days prior to shipment of Product by SELLER under
that Purchase Order. The above notwithstanding, to the extent a Purchase Order
contains terms inconsistent with this Agreement, the terms of this Agreement
shall govern.
XIII. INSPECTION AND ACCEPTANCE
BUYER shall have a reasonable time after delivery of Products against
individual Purchase Orders under the Agreement, but in no case exceeding ten
(10) business days, within which to inspect the Products. BUYER shall give
written notice to SELLER of any rejection of such Products, and in the case of
rejected goods, the same shall be returned to SELLER at SELLER's expense or
otherwise disposed of as SELLER shall reasonably request. The reasonable out of
pocket cost of inspection of Products rightfully rejected shall be charged to
SELLER. If reasonable inspection discloses that part of the Products received is
defective or nonconforming, BUYER shall have the right to cancel any unshipped
goods or unperformed services under the Purchase Order. Payment for goods on the
Purchase Order prior to inspection shall not constitute acceptance thereof and
is without prejudice to any and all claims that BUYER may have against SELLER.
The making or failure to make any inspection of, or payment for, or acceptance
of the Products, shall in no way impair BUYER's right to exercise any other
remedies to which BUYER may be entitled under this Agreement, except where such
remedies necessarily arise out of knowledge regarding Products that could only
be known by reasonable, general inspection, which does not require sampling,
testing, or analysis of the Products. Acceptance of any Products by BUYER after
breach of the terms and conditions of the Purchase Order by SELLER shall not
waive any rights or remedies accruing to BUYER as a result of such prior breach.
XIV. EQUAL OPPORTUNITY
Where applicable, SELLER shall comply with the requirements of the Fair
Labor Standards Act of 1938, as amended, in producing the Product or performing
the services hereunder. BUYER is an equal opportunity employer and is a
government contractor; therefore, this contract is subject to the rules and
regulations imposed upon contractors and subcontractors pursuant to 41 C.F.R.
Chapters 60 and 61. Unless this contract is exempt by regulations issued by the
Secretary of Labor, there is incorporated herein by reference: 41 C.F.R. Section
60-741.4.
XV. ACCEPTANCE
Acceptance is limited to the exact terms of this Agreement. None of the
terms in this Agreement may be modified, added to, suspended, or otherwise
altered, except with the written consent of the party whose rights would be
adversely affected.
XVI. ENTIRE AGREEMENT
This Agreement (including all attachments) constitutes the entire
understanding of the parties and shall govern all sales of Product by SELLER to
BUYER. All previous negotiations and understandings concerning the subject
matter of this Agreement are merged herein. In the
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event of any conflict between this Agreement and any other documents, the
provisions herein shall govern.
XVII. ASSIGNMENT
This Agreement shall inure to the benefit of, and be binding
upon, the successors in interest of the parties hereto; provided, however, that
neither party shall assign its rights or delegate its performance or obligations
hereunder without the express prior written consent of the other, and any
assignment or delegation without such consent shall be void.
XVIII. APPLICABLE LAW
This Agreement shall be interpreted and construed in accordance with
and shall be governed by the laws of the State of Minnesota without regard to
its conflicts of law provisions.
XIX. WAIVER
A waiver by either party to this Agreement of any breach hereof or a
failure by either party to enforce any of the terms and conditions of this
Agreement shall not in any way affect, limit, or waive the right of such party
to enforce or compel strict performance of every term and condition of this
Agreement.
XX. EXCUSE FROM PERFORMANCE
Neither party hereto shall be liable to the other for failure or delay
in performance of its obligations hereunder when such failure or delay is
occasioned by force majeure, being a cause not within its reasonable control,
including, but not limited to, acts of God, acts of public disturbance, riots,
war or the public enemy, fire, windstorm, floods, strikes or other labor
disputes, or governmental intervention, only for so long as the force majeure
and/or any resulting failure or delay in performance continue.
XXI. NOTICE
Any notice required to be given pursuant to this Agreement shall be in
writing and given by either: (i) U.S. mail to the party to receive such notice
by registered mail, return receipt requested; (ii) overnight courier, providing
written receipt; or (iii) by telecopier with confirmation of receipt. Notice
shall be deemed given when received or delivery is refused. Notice may be given
to such other person or address as either party may designate in writing.
Notice to SELLER shall be addressed to:
Genencor International, Inc.
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Legal Department
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Notice to BUYER shall be addressed to:
Xxxxxxx, Xxxxxxxxxxxx
000 Xxxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxx, Xxxxxxxx, 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
XXII. DISPUTE RESOLUTION
To the extent that the parties cannot first resolve any controversies
between them through good faith discussions, any controversy or claim arising
out of, or relating to this Agreement or the breach thereof, shall be settled by
arbitration in accordance with the commercial rules in effect of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court having jurisdiction thereof. Such arbitration shall be held in
Minneapolis, Minnesota, unless the parties agree in writing to a different
location. Such award shall be final and binding and the arbitrator shall not be
empowered to award punitive damages.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written.
GENENCOR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Title: Senior Vice President
XXXXXXX, XXXXXXXXXXXX
By: /s/ Xxxx Xxxx
---------------------------------
Title: AVP-Engineering
N.S. Sweetners
COPIES OF OMITTED EXHIBITS WILL BE PROVIDED UPON WRITTEN REQUEST, SUBJECT TO ANY
CONFIDENTIAL TREATMENT.
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