EXHIBIT 10.13
MANUFACTURING SERVICES AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is entered into and effective as of April 1 , 2008, by and between MACH ONE CORPORATION, a Nevada corporation ("Mach One"), and NUTRITIONAL SOLUTIONS LLC, a Nevada corporation (" NSL" ) (collectively, the "Parties").
W I T N E S S E T H :
WHEREAS, NSL desires to purchase from Mach One, on an exclusive basis, certain raw materials as defined herein; and
WHEREAS, NSL requires manufacturing for commercial sale of its products and has need for processing capacity for a specified time and in a specified manner;
WHEREAS, Mach One possesses suitable manufacturing facilities for product required by NSL, and will use its best efforts to manufacture product in a timely manner according to NSL'S specifications and in accordance with good manufacturing practices and the terms of this Agreement;
WHEREAS, NSL has agreed to exclusively purchase certain raw materials from Mach one and has engaged Mach One to process certain quantities of product; and Mach One has agreed to exclusively sell certain raw materials to NSL and has agreed to process certain quantities of product for NSL.
NOW THEREFORE, in consideration of the foregoing premises, which are incorporated into and made a part of this Agreement, and of the mutual covenants which are recited herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
Each of the following defined terms means the singular or the plural as required by the context in which the term appears:
1.1 "BATCH" shall mean all Excess Colostrum of a uniform character and quality that is produced from a single manufacturing procedure in accordance with established parameters and according to a single manufacturing order during that same cycle of manufacture.
1.2 " EXCESS COLOSTRUM" shall mean all Grade A Colostrum available from time to time, if any, after Mach One has met its manufacturing and production needs.
1.3 "COST OF MANUFACTURING" shall mean the sum of:
(i) the direct labor costs, including benefits, associated with making and fully packaging each Product; and
(ii) the manufacturing plant overhead costs associated with making and fully packaging each Product, including without limitation: manufacturing plant administrative salaries, including benefits; rent; equipment and manufacturing plant maintenance; real estate taxes; utilities; insurance; depreciation; amortization; and quality control costs; and
(iii) the raw material and related costs associated with making and fully packaging each Product.
All such costs shall be calculated in accordance with United States generally accepted accounting principles consistently applied.
1.4 "FACILITY" shall mean Mach One's manufacturing facility located at 974 Silver Beach Road, Belgium, WI 53004.
1.5 "MARGIN" shall mean TEN PERCENT (10%) of the Cost of Manufacturing as defined herein.
1.6 "PERSON" shall mean any individual, partnership, association, governmental instrumentality, corporation, trust or other legal person or entity.
1.7 "PROCESSING," "PROCESS," and "PROCESSED" shall have comparable meanings and shall mean the act of manufacturing and inspecting Product in accordance with this Agreement, specified procedures and Specifications.
1.8 "PROCESSING FEE" shall mean the consideration payable to Mach One for Processing each Batch of Product.
1.9 "PRODUCT" shall mean those products from time to time set forth in a schedule hereto which NSL requests that Mach One Process and Mach One agrees to Process.
1.10 "PROPRIETARY INFORMATION" shall mean all confidential information disclosed by one Party to the other at any time prior to or during the term of this Agreement pursuant to or in furtherance of this Agreement, except that which the Party receiving such Proprietary Information can establish by competent evidence:
(i) was known to the receiving Party or any of its Affiliates at the time of disclosure;
(ii) was generally available to the public or was otherwise part of the public domain at the time of disclosure;
(iii) became generally available to the public or became otherwise part of the public domain after disclosure other than through any act or omission of the receiving Party in breach of this Agreement;
(iv) was independently developed by the receiving Party or any of its Affiliates without the aid, application or use of the Proprietary Information disclosed; or
(v) became known to the receiving Party after disclosure from a source who had the lawful right to disclose such information, other than the disclosing Party and other than from a third party who had an obligation to the disclosing Party not to disclose such information to others.
The Specifications and all other information generated by Mach One with respect to Processing of Product shall be deemed the Proprietary Information of NSL, with the exception of information relating to the Process made by Mach One in its existing technology which are generally applicable to the manufacture of products.
1.11 "REGULATORY AUTHORITIES" shall mean any governmental or regulatory authorities having jurisdiction over the manufacture and commercial sale of any Product.
1.12 "SPECIFICATIONS" shall mean, with respect to each Product, those specifications and services set forth in a Schedule supplied by NSL at the time Mach One is engaged to manufacture such Product.
1.13 "TECHNOLOGY" shall mean all the technical information, whether tangible or intangible, including (without limitation) any and all data, techniques, discoveries, inventions, processes, know-how, patents (including any continuation, extension, re-issue or renewal patents), patent applications, inventor certificates, trade secrets, methods of production and other proprietary information, that NSL has rights to (as either owner, licensee or sublicensee), or may hereafter obtain rights to, relating to the Products; and specifically excluding information relating to the Process made by Mach One in its existing technology which are generally applicable to the manufacture of products.
1.14 "WASTE" shall mean all rejects or waste relating to the manufacture of a Batch, including but not limited to rejected, excess or unusable Raw Materials or Product.
ARTICLE II EXCLUSIVE PURCHASE OF EXCESS COLOSTROM FROM MACH ONE; FEE FOR EXCLUSIVITY; PAYMENT BEFORE MANUFACTURE
2.1 EXCLUSIVE PURCHASE OF EXCESS COLOSTRUM. NSL irrevocably agrees, during the term of this Agreement, to promptly and immediately purchase all Excess Colostrum of Mach One upon the giving of written notice by Mach One to NSL. Such notice shall not be less than monthly.
2.2 PAYMENT FOR EXCESS COLOSTRUM. NSL agrees to pay Mach One in full for all Excess Colostrum within thirty (30) days after receipt of notice provided in Section 2.1 above. During the Term of this Agreement NSL and Mach One hereby agree that all Excess Colostrom shall be sold to NSL by Mach One at $31.00 per gallon.
2.3 PAYMENT FOR EXCESS COLOSTRUM AS CONDITION TO MANUFACTURE OF NSL PRODUCT. It is expressly agreed by the parties that prompt payment for Excess Colostrum is an express condition to Mach One' s agreement to Manufacture Product as provided in Article III below. Further, the failure of NSL to promptly make three consecutive payments for Excess Colostrum on a timely basis shall be grounds for Mach One to immediately call a default under this Agreement and terminate the exclusive right of NSL to further purchase Excess Colostrum.
ARTICLE III: MANUFACTURE OF PRODUCT; PROCESSING OF MATERIALS
3.1 MACH ONE SERVICES. Provided NSL payment for Excess Colostrum are current, Mach One shall (i) provide all required Raw Materials; (ii) furnish all labor, equipment and facilities necessary, (iii) Process Product and (iv) ship the Product on a regularly scheduled basis.
For each Batch Processed by Mach One, Mach One agrees to exercise its best efforts to meet the following Processing schedule:
1. Mach One will quality inspect and endeavor to release Product within five (5) business days of the completion of Processing.
2. Mach One shall Process as quickly as possible and, promptly notify NSL of completion of Processing of each batch.
Mach One may, without the consent of NSL, arrange for any Product to be formulated, labeled and packaged by an Affiliate of Mach One, or, with the consent of NSL (such consent not to be unreasonably withheld), by a third party under a contract with Mach One, in either case at facilities which comply with current good manufacturing practices as established by the applicable
Regulatory Authorities in the countries in which such Product is approved for commercial sale; provided that nothing herein shall be construed to diminish or limit Mach One's responsibilities to fulfill its obligations hereunder.
Mach One shall, at NSL's request, cause the Product to be labeled and packaged in accordance with the applicable requirements of the appropriate Regulatory Authorities of each country and NSL's reasonable instructions.
Nothing in this Agreement shall preclude Mach One from performing manufacturing services for Mach One or for third parties other than NSL.
3.2 WASTE DISPOSAL
Mach One shall be responsible for disposal of all Waste of manufacturing produced at Mach One's Facility. All costs incurred pursuant to this section shall be charged to and paid for by NSL.
ARTICLE IV - DELIVERY AND TITLE
4.1 Mach One shall ship the Product at NSL's expense and in accordance with NSL's written instructions, FOB Mach One's Facility.
4.2 Title to all work in process to produce Product, and all completed Product, shall at all times remain in NSL Mach One shall assume liability for, and defend, indemnify and hold NSL, its employees, agents, officers and directors harmless from and against any loss or damage relating to the Raw Materials, the work in process to produce Product and completed Product arising from Mach One's negligence or willful misconduct while Mach One has custody and control over the Raw Materials, work in process to produce the Product and/or the completed Product.
4.3. Upon such receipt, NSL may reject Product on a Batch-by-Batch basis only (i) in the event such Batch of Product fails to meet the Specifications, and (ii) by giving written notice of rejection to Mach One within twenty (20) days following receipt by NSL. The failure of NSL to reject Product in the manner set forth above shall constitute acceptance thereof. Acceptance of a Batch by NSL shall be deemed final disposition, and a subsequent rejection of the Batch by NSL shall not be allowed.
4.4 (a) Any claim by NSL submitted to Mach One pursuant to Section 4.3 shall be accompanied by a specific reason for rej ...
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