AGREEMENT
This Agreement is made the 21st day of October, 1994, by and between Moyer Packing Company, a Pennsylvania corporation ("MOPAC"), and BIOPURE CORPORATION, a Delaware corporation ("Biopure").
RECITALS
Biopure is in the business of developing oxygen carrying substances derived from bovine hemoglobin for in vivo use in humans and animals. Such substances, as currently being tested and as may hereafter be approved for commercial sale, together with modifications and improvements, are hereinafter referred to as "Product." MOPAC is in the business, among other things, of beef packing. MOPAC and Biopure have previously cooperated in the procurement for Biopure's use of a source of supply of bovine hemoglobin, i. e., blood (the "Material") for the Product.
The parties wish to enter into arrangements on the terms and subject to the conditions set forth in this Agreement to provide
o A spur facility at which Material can be obtained from U. S. Department of Agriculture ("USDA") passed and approved cattle; and
o A separation facility wherein Biopure can carry out the initial (separation) steps in the manufacture of Product from Material supplied by MOPAC; and
o Introducing Biopure to MOPAC's herd sources, so that Biopure may endeavor to directly contract with such sources for Material; and
o At the option of MOPAC, an investment by MOPAC in Biopure.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, MOPAC and Biopure agree as follows:
ARTICLE I
SUPPLY OF MATERIAL
I.1 Requirements Supply. MOPAC agrees to use its best efforts to supply to Biopure and Biopure agrees to purchase from MOPAC all of Biopure's requirements for Material at the "Separation Facility," as defined in Section II.1, on the terms and subject to the conditions hereinafter set forth.
I.2 Sources. MOPAC owns and operates a slaughterhouse located at Souderton, Pennsylvania (the "MOPAC Plant"). All Material purchased and sold hereunder shall be sourced from the MOPAC Plant, as follows:
(a) Beginning promptly following the execution and delivery of this Agreement, MOPAC shall build at MOPAC's expense a segregated "spur" area (the "Spur Facility") from which all Material purchased and sold hereby will be sourced. The Spur Facility shall be a segregated portion of the MOPAC Plant off the main kill line in which cattle supplied by Producers (as hereinafter defined) participating in the Program (as hereinafter defined) are set aside from other cattle to be processed in the MOPAC Plant. Biopure's operations at the Spur Facility will not interfere with the operations of MOPAC within the remainder of the MOPAC Plant. The Spur Facility will be in accordance with the plans and specifications attached hereto as Exhibit I.2. Biopure shall provide all technical support to assure the compliance of the Spur Facility with such plans and specifications and with applicable laws, rules, regulations or other governmental requirements ("Requirements of Law"). The parties agree that MOPAC's total expenditures for materials and services of third parties for the Spur Facility shall not exceed $250,000; Biopure shall promptly pay or reimburse MOPAC for the payment of any excess over $250,000. It is understood that MOPAC shall not include in establishing MOPAC's cost, for purposes of this maximum and for the "asset Agreement," as defined in Article IV, any costs for MOPAC's personnel (other than design, engineering and maintenance personnel) or any allocation of other MOPAC operating, selling, general or administrative or other costs or expenses.
(b) MOPAC shall use its best efforts to maintain in effect, during the term of this Agreement, arrangements with cattle producers ("Producers") who will participate in Biopure's herd management program (Program). For purposes of the previous sentence, MOPAC's best efforts shall consist of MOPAC seeking out Producers who will negotiate with Biopure for participation in the Program; and introducing Biopure to such Producers; but MOPAC shall have no further obligations with respect thereto. MOPAC shall have no obligation whatsoever with regard to feeding, inoculating or otherwise caring for the cattle in the Program, attending to the condition of such cattle or maintaining any medical records or feeding records with respect to such cattle; and Biopure shall contract directly with, and pay all compensation to, such Producers with respect to participation in the Program. MOPAC will assist Biopure's personnel in maintaining segregation of cattle received from Producers, identified as acceptable by Biopure, within the MOPAC Plant so that Materials will be derived only from cattle processed in the Spur Facility; and Biopure shall maintain sufficient personnel at the MOPAC Plant to so identify and segregate such cattle. Such personnel shall be employees or contractors of Biopure.
I.3 Quantities; Price.
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