Separation Process. 5.1 CUSTOMER and Fermic have determined that additional Separation Equipment might be required to conduct the separation process at the Facility. Fermic will use commercially reasonable efforts to locate the needed Separation Equipment within the Fermic organization. If Fermic is able to locate the additional Separation Equipment within the Fermic organization, and such equipment is available, then Fermic will install such equipment at its Facility, at no cost to CUSTOMER. If Fermic can not locate the additional Separation Equipment within the Fermic organization, then CUSTOMER will purchase the additional Separation Equipment (“Customer Supplied Separation Equipment”) needed by Fermic at the Facility in order to produce Separation Product at the Facility. The Customer Supplied Separation Equipment shall be used solely by -5- Fermic to produce Separated Product for the CUSTOMER. Fermic and CUSTOMER will determine the optimum design for the processing requirements to convert Fermentation Product into Separated Product, locate vendors for the Customer Supplied Separation Equipment, determine whether new or used equipment should be purchased, purchase the Customer Supplied Separation Equipment for installation at the Facility, and work with Fermic’s contractor to install the Customer Supplied Separation Equipment. Other than equipment items included in the Customer Supplied Separation Equipment, which shall be paid for by CUSTOMER, CUSTOMER will be responsible for the costs of any structural changes or additions to the Facility that may be needed for the installation and operation of the Separating Equipment. All such changes or additions must be pre-approved by CUSTOMER in writing. The cost for changes and additions not pre-approved by CUSTOMER will be the responsibility of Fermic. Upon termination of this Agreement, Fermic will give the CUSTOMER or CUSTOMER’s contractors reasonable access to the Facility in order to allow for the removal by the CUSTOMER or the CUSTOMER’S contractor of the Customer Supplied Separation Equipment. 5.2 After Fermic has installed the Separation Equipment, including, if necessary, any Customer Supplied Separation Equipment, the Parties will meet to develop a developmental start up program for the separation process. Upon the CUSTOMER’s approval of the developmental start-up process for the separation process, the separation process shall be governed pursuant to the terms of this Article V. The CUSTOMER shall have the right to use CUSTOMER’S operators at the Facility to produce the Separation Product and use of the CUSTOMER’s operators will be a factor in determining the Separation Tolling Fee. 5.3 Schedule C shall set forth the amount of Separation Product that should be produced based upon the amounts of Raw Materials used and Fermentation Product used and the process and product specifications. 5.4 The Parties shall negotiate in good faith a tolling fee for the separation process (the “Separation Tolling Fee”) which is based upon the methodology used by the Parties in determining the Fermentation Tolling Fee. In no event should the Separation Tolling Fee be above 50% of the Fermentation Tolling Fee. To the extent the Separation Product does not meet the specifications set forth in this Agreement, and in the event that CUSTOMER is not operating the separation process, the Separation Tolling Fee shall be reduced or refunded to CUSTOMER, if the CUSTOMER has already paid the Separation Tolling Fee to Fermic, by the pro-rata amount based on the amount of off spec Separation Product produced by the total amount of Separation Product and off-spec Separation Product produced by Fermic. In addition, Fermic shall be responsible for paying or refunding to the CUSTOMER, if the CUSTOMER has already paid, the total cost of the Raw Materials and Fermentation Product used in connection with the production of the off-spec Separation Product. 5.5 If, prior to the Initial Termination Date, this Agreement terminates for any reason other than CUSTOMER’s breach of this Agreement, CUSTOMER shall have the right to remove the Customer Supplied Separation Equipment (at CUSTOMER’s expense) from the Facility and Fermic will grant reasonable access rights to CUSTOMER or CUSTOMER’s contractors to remove the Customer Supplied Separation Equipment.
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Sources: Toll Manufacturing Agreement
Separation Process. 5.1 CUSTOMER and Fermic have determined that additional Separation Equipment might be required to conduct the separation process at the Facility. Fermic will use commercially reasonable efforts to locate the needed Separation Equipment within the Fermic organization. If Fermic is able to locate the additional Separation Equipment within the Fermic organization, and such equipment is available, then Fermic will install such equipment at its Facility, at no cost to CUSTOMER. If Fermic can not locate the additional Separation Equipment within the Fermic organization, then CUSTOMER will purchase the additional Separation Equipment (“Customer Supplied Separation Equipment”) needed by Fermic at the Facility in order to produce Separation Product at the Facility. The Customer Supplied Separation Equipment shall be used solely by -5- Fermic to produce Separated Product for the CUSTOMER. Fermic and CUSTOMER will determine the optimum design for the processing requirements to convert Fermentation Product into Separated Product, locate vendors for the Customer Supplied Separation Equipment, determine whether new or used equipment should be purchased, purchase the Customer Supplied Separation Equipment for installation at the Facility, and work with Fermic’s contractor to install the Customer Supplied Separation Equipment. Other than equipment items included in the Customer Supplied Separation Equipment, which shall be paid for by CUSTOMER, CUSTOMER will be responsible for the costs of any structural changes or additions to the Facility that may be needed for the installation and operation of the Separating Equipment. All such changes or additions must be pre-approved by CUSTOMER in writing. The cost for changes and additions not pre-approved by CUSTOMER will be the responsibility of Fermic. Upon termination of this Agreement, Fermic will give the CUSTOMER or CUSTOMER’s contractors reasonable access to the Facility in order to allow for the removal by the CUSTOMER or the CUSTOMER’S contractor of the Customer Supplied Separation Equipment.
5.2 After Fermic has installed the Separation Equipment, including, if necessary, any Customer Supplied Separation Equipment, the Parties will meet to develop a developmental start up program for the separation process. Upon the CUSTOMER’s approval of the developmental start-up process for the separation process, the separation process shall be governed pursuant to the terms of this Article V. The CUSTOMER shall have the right to use CUSTOMER’S operators at the Facility to produce the Separation Product and use of the CUSTOMER’s operators will be a factor in determining the Separation Tolling Fee.
5.3 Schedule C shall set forth the amount of Separation Product that should be produced based upon the amounts of Raw Materials used and Fermentation Product used and the process and product specifications.
5.4 The Parties shall negotiate in good faith a tolling fee for the separation process (the “Separation Tolling Fee”) which is based upon the methodology used by the Parties in determining the Fermentation Tolling Fee. In no event should the Separation Tolling Fee be above 50% of the Fermentation Tolling Fee. To the extent the Separation Product does not meet the specifications set forth in this Agreement, and in the event that CUSTOMER is not operating the separation process, the Separation Tolling Fee shall be reduced or refunded to CUSTOMER, if the CUSTOMER has already paid the Separation Tolling Fee to Fermic, by the pro-rata amount based on the amount of off spec Separation Product produced by the total amount of Separation Product and off-spec Separation Product produced by Fermic. In addition, Fermic shall be responsible for paying or refunding to the CUSTOMER, if the CUSTOMER has already paid, the total cost of the Raw Materials and Fermentation Product used in connection with the production of the off-spec Separation Product.
5.5 If, prior to the Initial Termination Date, this Agreement terminates for any reason other than CUSTOMER’s breach of this Agreement, CUSTOMER shall have the right to remove the Customer Supplied Separation Equipment (at CUSTOMER’s expense) from the Facility and Fermic will grant reasonable access rights to CUSTOMER or CUSTOMER’s contractors to remove the Customer Supplied Separation Equipment.
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