Quarterly Report — Small Business — Form 10-QSB Filing Table of Contents
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1: 10QSB Quarterly Report -- Small Business HTML 333K
2: EX-10.2 Material Contract HTML 37K
3: EX-10.5 Material Contract HTML 75K
4: EX-31.1 Certification per Sarbanes-Oxley Act (Section 302) HTML 14K
5: EX-32.1 Certification per Sarbanes-Oxley Act (Section 906) HTML 8K
GLOBAL
MATRECHS, having a principal place of business at Suite 201, 90 Grove Street,
Ridgefield, CT06877 and Dow Corning Corporation, a Michigan corporation having
a principal place of business at 2200 W. Salzburg Road, Midland, Michigan48686-0994 (“Dow Corning”) are entering into this Agreement to set forth the
terms and conditions under which DOW CORNING will manufacture the GOODS set
forth in Exhibit A, annexed hereto and made a part hereof, for GLOBAL
MATRECHS.
A.
TERM
AND TERMINATION
This
Agreement will be effective August 1, 2006 and shall terminate on December31,2008. It may be renewed for consecutive additional one year terms upon at least
thirty (30) days advance written notice but may be terminated early in the
following circumstances:
1.
By
written mutual agreement.
2.
For
Cause.
a)
By
a party upon
ninety (90) days prior written notice to the other party (the “Intent to
Terminate Notice”), if, in the opinion of the notifying party, the other
party has failed to perform its responsibilities as outlined in this
agreement. The Intent to Terminate Notice shall
set forth any alleged deficiencies in writing. If the other party
fails to
cure such deficiencies to the satisfaction of the notifying party
within
ninety (90) days from the notice thereof, this agreement shall terminate
immediately following notice from the terminating party that this
agreement shall terminate as a result of the other party’s failure to
remedy the deficiencies set forth in the Intent to Terminate
Notice.
3.
In
the event of any early termination, DOW CORNING shall stop all work
at a
mutually agreed time. DOW CORNING shall be paid a percentage of the
order
price reflecting the percentage of the work performed prior to the
notice
of termination. Within 90 days after receipt of a termination notice,
DOW
CORNING shall submit its claim. GLOBAL MATRECHS reserves the right
to
verify the claim by auditing all relevant
records.
B.
GOODS
DOW
CORNING will manufacture the Paste A and BCP GOODS using GLOBAL MATRECHS
formulations and said GOODS will meet GLOBAL MATRECHS’ specifications. GLOBAL
MATRECHS will provide the licensed formulation to DOW CORNING for the
manufacture of the GOODS. DOW CORNING will procure Part B GOODS from a qualified
source. Part C will be produced by DOW CORNING per DOW CORNING specifications
and relabeled for use by GLOBAL MATRECHS. The GOODS are as defined and described
in Exhibit A.
C.
PRICE TERMS
The
GOODS
will be furnished initially at the price(s) and terms set forth in Exhibit
A.
D.
FREIGHT
TERMS, RISK OF LOSS, TITLE
TRANSFER
Freight
terms are CIP (Carriage Insurance Paid, Incoterm 2000) to customer destinations
in the United States and to GLOBAL MATRECH’S export broker in the United States.
If DOW CORNING ships directly to destinations outside the United States, freight
terms are EXW (Ex Works, Incoterm 2000).
Risk
of
loss and title to the GOODS shall transfer upon delivery by DOW CORNING to
the
carrier at the ship point.
E.
PAYMENT
FOR CAPITAL EXPENDITURES
GLOBAL
MATRECHS agrees to pay up to $265,000 as partial compensation to DOW CORNING
for
the capital investment required by DOW CORNING to modify equipment to
manufacture the GOODS. Payments will be made as follows: GLOBAL MATRECHS will
pay DOW CORNING $125,000 within 30 days of signing this Agreement. DOW CORNING
will charge GLOBAL MATRECHS only its costs to implement the modifications,
hence
upon completion and start-up of the modified equipment. DOW CORNING will either
issue an invoice in an amount not to exceed $140.000 or issue a credit to GLOBAL
MATRECHS towards future purchases of the GOODS. Upon request of GLOBAL MATRECHS,
DOW CORNING will show the detailed costs for the project.
F.
QUANTITIES
AND LEAD TIME
DOW
CORNING will manufacture GOODS on a make-to-order basis. The lead-time for
the
manufacture of the GOODS is 8 weeks. Order volume is a minimum of 4 drums of
Paste A. The maximum order volume for Paste A is 20 drums per
month.
G.
GLOBAL
MATRECHS OBLIGATIONS
GLOBAL
MATRECHS will pay the Price shown in Exhibit A in connection with each order.
GLOBAL
MATRECHS
will be
responsible for addressing any quality complaints with its customers. GLOBAL
MATRECTIS will be responsible for giving final review and approval of all label
design and verbiage. All customer returns will be the responsibility of GLOBAL
MATRECTIS.
2
GLOBAL
MATRECHS will be responsible for providing any technical support for the use
of
the product to the end customer of the GOODS. GLOBAL MATRECHS will also be
responsible for providing technical support, as required by DOW CORNING, to
support and facilitate the manufacture or modification of the
GOODS.
GLOBAL
MATRECHS will be responsible for selling GOODS only to customers located in
the
United States who are subject to the provisions of the Price Anderson Act and/or
who have signed an agreement that includes the clause set forth in Department
of
Energy Acquisition Regulation 952.250-70 “Nuclear Hazards Indemnity Agreement”
or that are otherwise subject to the Price Anderson Act, 42 U.S.C.
2210.
GLOBAL
MATRECHS will be responsible for selling GOODS only to those customers located
outside the United States in countries that are signatories to the Convention
on
Third Party Liability in the Field of Nuclear Energy (Paris Convention) or
the
Convention on Civil Liability for Nuclear Damage (Vienna Convention). In the
case of sale of GOODS outside the United States GLOBAL MATRECHS will complete
a
BIS 711 form and send a copy of the completed document to DOW
CORNING.
H.
DOW
CORNING PERFORMANCE OBLIGATIONS
DOW
CORNING agrees to manufacture the GOODS in accordance with the specifications,
included here as Exhibit B. For GOODS that are out of specification. DOW CORNING
may blend and/or re-process to meet specifications.
DOW
CORNING will provide the resource as reasonably required to assist GLOBAL
MATRECHS in the resolution of quality complaints associated with the failure
of
the GOODS to meet specifications.
DOW
CORNING will provide technical support from a silicone chemistry perspective
concerning specifications and capabilities of the GOODS, except that Dow Corning
will not provide technical support regarding impact of radiation on the GOODS
nor any field application or onsite technical support for the GOODS. Technical
support activities outside the scope of the obligations set forth in this
sub-paragraph will be negotiated on a case by case basis and such activities
will be charged at a rate of $200.00 per hour.
DOW
CORNING will review each request for modifications of the GOODS and will propose
a scope, cost and timeline for such modifications taking into account DOW
CORNING's available resources, modification complexity and applicability with
existing DOW CORNING manufacturing processes. Prior to implementation of any
such modification, DOW CORNING shall secure the written consent of GLOBAL
MATRECHS.
I.
QUALITY
CONTROL
DOW
CORNING has achieved ISO 9002 Registration for Quality in Manufacturing and
agrees that it will maintain this status for the term of this Agreement. DOW
CORNING agrees to maintain a quality assurance program for testing and
inspecting the GOODS and packaging and for certifying compliance with GLOBAL
MATRECHS' specifications by issuing a Certificate of Analysis for each Products.
DOW CORNING is responsible for lot acceptance testing of the GOODS contract
manufactured and will submit a Certificate of Analysis for each lot of GOODS
to
GLOBAL MATR.ECHS. GLOBAL MATRECHS will be responsible for giving notice to
DOW
CORNING of GOODS which are out of specification within thirty (30) business
days
of receipt of the certificate from DOW CORNING.
3
DOW
CORNING will store retained samples of each batch of GOODS manufactured for
a
minimum of one (1) year.
J.
QUALITY
AUDITS
Subject
to the signing of appropriate secrecy agreements and reasonable advance notice,
DOW CORNING will permit GLOBAL MATRECHS’ and/or its customers to inspect and
audit DOW CORNING'S quality control procedures during normal working hours.
Not
to exceed a reasonable number of times per year.
K.
PACKAGING
COMPONENTS
DOW
CORNING shall supply all labels and packaging for the GOODS. The label design
and content will be subject to the final review and approval by GLOBAL
MATRECHS.
L.
TERMS
OF PAYMENT
Net
due
from GLOBAL MATRECHS to DOW CORNING 45 days after receipt of invoice. Finance
charges of 1.5% per month (18% per annum) shall be assessed on late payments
and
will be calculated from the payment due date to the date payment is received.
No
authorized deductions from invoices are permitted. Failure to pay invoices
when
due, failure to pay finance charges when assessed, or unauthorized deductions
from invoices may result in delayed or cancelled shipments.
M.
HOLD
HARMLESS
GLOBAL
MATRECHS will. indemnify and defend DOW-CORNING, its directors. officers,
employees, agents, representatives, successors and assigns, against any and
all
suits, actions or proceedings, at law or in equity, and from any and all claims,
demands, losses, judgments, damages, costs, expenses (including attorney fees
and expenses). or liabilities, including without limitation claims for personal
injury, death or property damage, (collectively. “damages”) resulting directly
or indirectly from use or handling of the GOODS or any act or omission of GLOBAL
MATRECHS in the performance of this Agreement, or GLOBAL MATRECHS' failure
or
alleged failure to comply with applicable laws and regulations, any warranty
or
alleged warranty, and/or the sale. transfer or use of the GOODS. The parties
shall give each other prompt notice of any claim, lawsuit, government inquiry
or
investigation which is or may be subject to the indemnity agreement set forth
herein and the parties shall fully cooperate in relation to any such matter,
including making available documents and witnesses in response to discovery
requests or to assist in the defense of any such matter. GLOBAL MATRECHS may
at
its option and its expense assume the defense of any claim or lawsuit brought
against DOW CORNING and subject to this hold harmless, using counsel of
reasonable skills selected by GLOBAL MATRECHS which shall be acceptable to
DOW
CORNING, agreement by DOW CORNING to such counsel not to be unreasonably
withheld.
4
N.
GOVERNMENTAL
REGULATIONS/AUDITS
GLOBAL
MATRECHS warrants that the marketing, use and transportation of the GOODS will
be carried out in full compliance with all applicable national, state and local
laws and regulations including health, safety and environmental laws and
regulations. Proper disposal of all waste, including shipping containers, is
specifically included as part of GLOBAL MATRECHS’ duty under this Agreement and
GLOBAL MATRECHS agrees to indemnify DOW CORNING in accordance with paragraph
NI
(HOLD HARMLESS).
Subject
to the reasonable advance notice, DOW CORNING will allow a governmental
regulatory body to inspect and audit DOW CORNING's manufacturing procedures
during normal working hours. DOW CORNING will absorb the costs (including
personnel time) for such audits up to an amount of $20,000 for the first year
of
this agreement and $10,000 for any subsequent year. GLOBAL MATRECHS shall be
responsible for costs in excess of those amounts.
The
cost
to DOW CORNING of any changes in government regulations affecting the
manufacture of the GOODS will be the responsibility of GLOBAL MATRECHS and
negotiated on a case by case basis.
O.
EXPORT
CONTROL
GLOBAL
MATRECHS agrees to be responsible for being knowledgeable as to all laws,
regulations. and requirements regarding the export, re-export, resale, shipment,
or diversion of GOODS or any other Dow Corning items (whether tangible or
intangible. including without limitation commodities, software, technology,
and
technical data). GLOBAL MATR.ECHS acknowledges that the GOODS listed in Exhibit
A may be export controlled under the United States International Traffic in
Arms
Regulations or Export Administration Regulations. GLOBAL MATRECHS agrees it
will
not in any form export, re-export, resell, ship or divert or cause to be
exported. re-exported, resold. shipped or diverted, directly or indirectly,
any
product or technical data furnished hereunder to any country, end-use, or
end-user that requires an export license or other approval without first
obtaining such license or approval. Additionally. GLOBAL MATRECHS agrees to
abide by the regulations of the U.S. Office of Foreign Asset Control (OFAC),
which administers U.S. trade sanctions and embargoes. As of the date of this
amendment. OFAC regulations currently, include without limitation Iran, Cuba.
Syria and Sudan.
In
the
event that GLOBAL MATRECHS requires an export license, GLOBAL MATRECHS agrees
to
notify DOW CORNING of its intent to apply for such a license, agrees to obtain
all necessary export licenses and clearances at its cost, and will furnish
a
copy of the license to DOW CORNING’s Export Compliance Manager at dce.export@dowcorning.com.
5
P.
EXCLUSIVITY
GLOBAL
MATRECHS agrees that it shall have the GOODS manufactured exclusively by DOW
CORNING except, if DOW CORNING does not supply the required quantities of GOODS,
GLOBAL MATRECHS may purchase GOODS from third parties only for the duration
of
the time period in which DOW CORNING is unable to supply such quantities of
GOODS and only to the extent that DOW CORNING does not supply the quantity
of
GOODS requested by GLOBAL MATRECHS.
Q.
EXPRESS
WARRANTY AND REMEDY
With
respect to the GOODS purchased hereunder, DOW CORNING expressly warrants that
the GOODS shall conform to the precise specifications in
Exhibit B.
GLOBAL
MATRECHS' exclusive remedy and DOW CORNING's sole responsibility for any claim
or cause of action arising under this Agreement is expressly limited, at DOW
CORNING’S option, to either:
1.
Replacement
or refund of the purchase price of the GOODS shown to be other than
as
warranted, or
2.
Payment
not to exceed the purchase price of the specific GOODS subject to
the
claim.
Any
replacement, refund or payment is conditional on GLOBAL MATRECHS giving DOW
CORNING notice within 90 days from the date of shipment by DOW CORNING that
the
GOODS are other than as warranted. Failure by GLOBAL MATRECHS to give this
notice within the 90-day period shall constitute a waiver by GLOBAL MATRECHS
of
all claims under this Agreement with respect to the GOODS.
In
no
event shall Dow Corning be liable to GLOBAL MATRECHS for any incidental.
consequential or punitive damages of any nature, including but not limited
to
lost profits, lost business or damage to the good will or reputation, whether
or
not such damages arise out of Dow Corning's negligence.
R.
PATENTS
If
any
suit is brought against DOW CORNING for infringement of any United States
Letters Patent alleging that the (mops, formulations or the methods of contract
manufacturing GOODS liar GLOBAL M.ATRECHS infringe any United States or foreign
patent. GLOBAL MATRECHS shall, at its own expense, defend and control the suit
against these allegations, and shall pay any award of damages assessed against
DOW CORNING in the suit to the extent that the damages are awarded in connection
specifically with the alleged infringement, provided that the alleged
infringement is not based on a deviation by DOW CORNING from the contract
manufacturing process as approved by GLOBAL MATRECHS, and further provided
that
DOW CORNING gives GLOBAL MATRECHS prompt notice in writing of the institution
of
the suit and, to the full extent of DOW CORNING's power to do so, DOW CORNING
permits GLOBAL MATRECHS to defend and control the suit against these
allegations. In any event, DOW CORNING shall have the right to be represented
by
its own counsel, at DOW CORNING's own expense. GLOBAL MATRECHS shall indemnify,
defend and hold DOW CORNING harmless against any claim, loss or expense arising
out of DOW CORNING's compliance with any specifications furnished by GLOBAL
MATRECHS with respect to the GOODS, processing instructions or techniques,
and
raw materials and packaging components supplied or approved by GLOBAL
MATRECHS.
6
S.
FORCE
MAJEURE
In
the
event of war, fire, flood, strike, labor troubles, breakage of equipment,
accident, riot, act of governmental authority, terrorism, Acts of God, or other
contingencies beyond the reasonable control of the Parties or, in the event
of
inability to obtain, on terms reasonably judged by DOW CORNING to be
practicable, any raw materials or energy used in connection with the GOODS
the
quantities affected shall be eliminated from this Agreement without liability,
but the other terms of this Agreement shall remain unaffected. DOW CORNING
may,
during any shortage due to any of the contingencies, allocate its raw materials
and finished GOODS in any manner that, in the opinion of DOW CORNING, is fair
and reasonable.
In
the
event information becomes available to DOW CORNING or GLOBAL MATRECHS which
indicates a significant increased risk of potentially adverse human or
environmental effects associated with the manufacture, sale, use, or disposal
of
the GOODS, raw materials or intermediates which are used to manufacture the
GOODS, either party may terminate this Agreement without penalty or further
obligation by providing written notice to the other.
T.
LIABILITY
INSURANCE
GLOBAL
MATRECHS shall have adequate insurance coverage to protect its business and
DOW
CORNING’S interests, with at least the following coverage:
-
Statutory
Workers Compensation;
-
$100,000
Employers’ Liability
-
$1,000,000
combined single limit Automotive Liability;
and
-
$2,000,000
Commercial General Liability (including Contractual
Liability).
GLOBAL
MATRECHS shall present a Certificate of Insurance, with DOW CORNING listed
as
the Certificate Holder, indicating the above coverage is met or
exceeded.
If
requested, DOW CORNING will provide GLOBAL MATRECHS with evidence of DOW
CORNING’S Comprehensive General Liability insurance coverage and associated
vendor endorsements.
U.
TAXES
Any
tax
or other government charge now or in the future levied upon the production,
sale, use or shipment of GOODS may, at DOW CORNING's option, be added to the
cost of the Product.
7
V.
FAIR
LABOR STANDARDS ACT
DOW
CORNING hereby certifies that the GOODS to be supplied to GLOBAL MATRECHS under
this Agreement will be produced in compliance with the requirements of the
Fair
Labor Standards Act, as amended, and of regulations and orders of the United
States Department of Labor issued under that Act.
W.
RELATIONSHIP
OF PARTIES
DOW
CORNING and GLOBAL MATRECHS are independent contracting parties and nothing
in
this Agreement shall make either party the agent or legal representative of
the
other for any purpose whatsoever, nor does it grant either party any authority
to assume or to create any obligation on behalf of or in the name of the other.
DOW CORNING shall assume all of the rights, obligations and liabilities
applicable to it as an independent contractor; and any provisions of this
Agreement which may appear to give GLOBAL MATRECHS the right to direct or
supervise DOW CORNING as to the details of doing the work encompassed by this
Agreement or to exercise a measure of control over the work shall be deemed
to
mean that DOW CORNING shall follow the desires of GLOBAL. MATRECHS in the
results of the work only..
X.
SEVERABILITY
If
any
term of this Agreement is invalid or unenforceable under any statute,
regulation, ordinance, executive order or other rule of law, such term shall
be
deemed reformed or deleted, but only to the extent necessary to comply with
such
statute, regulation, ordinance, order or rule, and the remaining provisions
of
this purchase order shall remain in full force and effect.
Y.
WAIVER
The
failure of either party to insist upon the performance of any term or condition
of this agreement, or to exercise any right hereunder, shall not be construed
as
a waiver of the future performance of any such term or condition or the future
exercise of such right.
Z.
GOVERNING
LAW; DISPUTES
This
Agreement shall be construed and interpreted in accordance with the laws of
the
State of Michigan. All disputes involving this agreement shall be adjudicated
exclusively in the Circuit Court for the county of Bay, State of Michigan,
or
the U.S. District Court for the Sixth District of Michigan.
AA.
COMMENCEMENT
OF SUIT
Suit
for
breach of this Agreement must be commenced within two years after the cause
of
action has accrued.
8
BB.
ENTIRE
AGREEMENT
The
terms
and conditions in this document and the secrecy agreement dated October 10,2005, which is incorporated by reference as if fully set forth herein, contain
the entire agreement between DOW CORNING and GLOBAL MATRECHS with respect to
the
subject matter hereof. This Agreement supersedes all previous agreements and
understandings between DOW CORNING and GLOBAL MATRECHS relating to the
manufacture or contract manufacture of the GOODS. Any modification or change
to
this Agreement must be in writing and signed by both parties.
CC.
NON-ASSIGNMENT
Neither
Party shall assign or transfer its rights and duties under this Agreement
without the other party's prior written consent, which shall not be unreasonably
withheld.
The
authorized representatives of GLOBAL MATRECHS and DOW CORNING have executed
this
Agreement on the dates indicated below.
DOW
CORNING may change the prices no more than once every six months not to exceed
a
ten percent (10%) increase in a calendar year. DOW CORNING will give GLOBAL
MATRECHS at least forty-five (45) days prior written notice of such
charge.
Formulation
changes may result in an adjustment of the prices listed above. Upon
establishing a price for the formulation, the price may only be adjusted as
described above.
(1)
Confidential material redacted and filed separately with the Securities and
Exchange Commission.
EXHIBIT
B
SPECIFICATIONS
FOR GOODS
We
will need a cure QC and must be part of the test and a report shall be submitted
to Global for each batch.
Product
LAR
Test
Target
Range(1)
Specification(1)
NuCap™
BCP
Viscosity,
cP
******
*******
Silanol,
%
******
*******
Appearance
NVC,
3
hrs/150C
******
Conditions
of Curing: Mix ********************** (1)
Tack
Free Time
******
*******
Tensile
Strength
******
*******
Elongation
******
*******
NuCap™
Paste A
Appearance
*******
Viscosity
******
Conditions
of Curing: Mix ********************** (1)
Specific
Gravity
*******
Tensile
Strength
******
*******
Elongation
******
*******
Adhesion
to Carbon Steel
*****
*******
NuCap™
Part B
N/A
*****
*******
NuCap™
Part C
Appearance
*****
*******
*
*******(1)
(1)
Confidential material redacted and filed separately with the Securities
and
Exchange Commission.
EXHIBIT
C
TEST
METHODS
Dow
Corning will use its standard internal test methods to determine all LAR
test
results noted in Exhibit B of this agreement. Dow Corning will supply a copy
of
these test methods upon the request of Global Matrechs.
Dates Referenced Herein and Documents Incorporated by Reference
