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Title: |
Manufacturing Agreement |
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Date: |
2002 |
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Preview shows 5KB of 26KB total |
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Price: |
$39 |
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ID: |
#254177 |
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This Agreement, effective as of the 19th day of October, 2001, ("Effective Date") is between CP Kelco U.S. Inc., 8355 Aero Drive, San Diego, CA 92123 ("CP Kelco"), and OmegaTech, Inc., 4909 Nautilus Court North, Suite 208, Boulder, Colorado 80301, USA ("OmegaTech").
WHEREAS certain products (specifically, those listed on Exhibit 1 attached hereto; hereinafter the Products) shall be manufactured by CP Kelco for OmegaTech, pursuant to this agreement (the Agreement); and
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the adequacy and receipt of which is hereby acknowledged, the parties agree to the following terms and conditions.
1.1 This Agreement shall be effective October 19, 2001 and will continue in full force and effect for thirty-nine (39) months, renewable upon review and mutual consent at the end of thirty-nine (39) months unless terminated pursuant to paragraph 9.1.
1.2 OmegaTech shall purchase and CP Kelco shall deliver a minimum of * kg of Products, from CP Kelcos existing inventory, during the period October 1, 2001 to December 31, 2001. Should OmegaTech purchase less than the minimum quantity during the period, OmegaTech shall reimburse CP Kelco any shortfall between $345,600 and the actual sales revenues for the period.
1.3 OmegaTech shall purchase and CP Kelco shall deliver a minimum of * kg of Products during each of the periods i) January 1, 2002 to December 31, 2002, ii) January 1, 2003 to December 31, 2003 and iii) January 1, 2004 to December 31, 2004. Should OmegaTech purchase less than the minimum quantity during any given period, OmegaTech shall reimburse CP Kelco any shortfall between $2,400,000 and the actual sales revenues for that period.
1.4 For purposes of calculating OmegaTechs annual purchases, the purchase of one (1) kg of DHA Crude Oil will be counted as three (3) kg of Product.
1.5 In July of each year, OmegaTech will provide CP Kelco with a non-binding forecast of monthly purchases for the following calendar year, January through December. OmegaTech will issue binding purchase orders to CP Kelco for product to be delivered within 3 months of receipt of that purchase order. All Product, with the exception of the * kg of Product described in Section 1.2, will be produced on a "make to order" basis and will be delivered to OmegaTech within three months of the Product's date of manufacture. All purchase orders will be written to purchase a "full batch" quantity of the specified product.
*The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.
1.6 The pricing to be paid by OmegaTech for Product purchased from CP Kelco under this agreement is described in Exhibit 1. The payment terms for all purchases shall be net 60 days, FOB Plant, San Diego California.
1.7 OmegaTech agrees to make a payment of $300,000 to CP Kelco by December 15, 2001. This payment is intended to be used by CP Kelco for the purchase of DHA process equipment located at the CP Kelco plant in San Diego, but currently owned by Pharmacia Corporation. OmegaTech will be reimbursed for this $300,000 payment through a $0.40 rebate on each kg purchase of DHA Gold, Gold Value Fat, HUFA 3050, DHA INT, HUFA 2000 INT and HUFA 2050 etc. or $1.20 rebate for each kg purchase of DHA Crude Oil, on the first * kg of Product purchased under this agreement. In the event that this agreement is terminated prior to OmegaTech having purchased * kg of Product due to a material breach on the part of CP Kelco, force majeure or Act of God, CP Kelco agrees to reimburse OmegaTech within 60 days of termination that portion of the $300,000 payment provided for in Section 1.7 that has not been rebated back to OmegaTech at the time of termination. In all other cases the $300,000 payment provided for in Section 1.7 is non-refundable.
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