<PAGE>
As filed with the Securities and Exchange Commission on October 14, 1999
Registration No. 333-85141
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
Amendment No. 1
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
Huntsman ICI Chemicals LLC
(Exact Name of Registrant as Specified in its Charter)
---------------
Delaware 2800 87-0630358
(Primary Standard Industrial (I.R.S. Employer
(State or Other Classification Code Number) Identification Number)
Jurisdiction
of Incorporation or
Organization)
---------------
500 Huntsman Way
Salt Lake City, UT 84108
(801) 584-5700
(Address, Including Zip Code and Telephone Number, Including Area Code, of Co-
Registrants' Principal Executive Offices)
---------------
Robert B. Lence, Esq.
Secretary
Huntsman ICI Chemicals LLC
500 Huntsman Way
Salt Lake City, UT 84108
(801) 584-5700
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
---------------
Copy to:
Phyllis G. Korff, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
(212) 735-3000
---------------
<TABLE>
<CAPTION>
Jurisdiction
Exact Name of Additional of Primary Standard Industrial I.R.S. Employer
Registrants Incorporation Classification Code Number Identification Number
- ------------------------ -------------- --------------------------- ---------------------
<S> <C> <C> <C>
Huntsman ICI Financial
LLC*................... Delaware 2800 87-0632917
Tioxide Group*.......... U.K. 2800 00-0000000
Tioxide Americas Inc.*.. Cayman Islands 2800 98-0015568
</TABLE>
- -------
* Address and telephone of principal executive offices are the same as those
of Huntsman ICI Chemicals LLC.
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
---------------
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 to the Form S-4 Registration Statement is being filed
for the sole purpose of filing additional exhibits.
PART II
Item 20. Indemnification of Officers and Directors
Huntsman ICI Chemicals LLC is empowered by Section 18-108 of the Delaware
Limited Liability Company Act, subject to the procedures and limitations
therein, to indemnify and hold harmless any member or manager or other person
from and against any and all claims and demands whatsoever, subject to such
standards and restrictions, if any, as are set forth in its limited liability
company agreement. Huntsman ICI Chemicals LLC's amended and restated limited
liability company agreement contains no indemnification provisions.
Huntsman ICI Financial LLC is empowered by Section 18-108 of the Delaware
Limited Liability Company Act, subject to the procedures and limitations
therein, to indemnify and hold harmless any member or manager or other person
from and against any and all claims and demands whatsoever, subject to such
standards and restrictions, if any, as are set forth in its limited liability
company agreement. Huntsman ICI Financial LLC's limited liability company
agreement contains no indemnification provisions.
Tioxide Group is an unlimited company having share capital registered in
England and Wales. Section 310 of the U.K. Companies Act of 1985 (as amended)
nullifies any provision contained in a company's articles of association or in
any other contract with the company for exempting any director, officer or
auditor of the company, or indemnifying such person against, any liability that
would attach to him by rule of law in respect of any negligence, default,
breach of duty or breach of trust for which such person may be guilty with
respect to such company. However, Section 310 permits a company to purchase or
maintain insurance for its directors, officers and auditors against liabilities
of this nature and permits a company to indemnify any director, officer or
auditor against any liability incurred by such person that results from
defending any proceedings (civil or criminal) in which a judgment is given in
such person's favor or such person is acquitted or application is made under
Section 144(3) or (4) of the Companies Act (acquisition of shares by innocent
nominee) or Section 727 of the Companies Act (general power to grant relief in
the case of honest and reasonable conduct) where relief is granted to such
director, officer or auditor by the court.
Article 22(a) of the Articles of Association of Tioxide Group indemnifies
every director, officer and auditor of Tioxide Group out of the assets of
Tioxide Group against all losses and liabilities that such person may sustain
in the performance of the duties of his office to the extent permitted by
Section 310 of the Companies Act. Furthermore, Article 22(b) empowers the
directors of Tioxide Group to purchase insurance for any director, officer or
auditor of Tioxide Group as permitted by the Companies Act.
Tioxide Americas Inc. is incorporated in the Cayman Islands. Cayman Islands
law does not specifically limit the extent to which a company's articles of
association may provide for the indemnification of officers and directors,
except to the extent that such provision may be held by the Cayman Islands
courts to be contrary to public policy (e.g., for purporting to provide
indemnification against the consequences of committing a crime). In addition,
an officer or director may not be able to enforce indemnification for his own
dishonesty or wilful neglect or default.
Article 123 of the Articles of Association of Tioxide Americas Inc., which
is filed as an exhibit to this registration statement, contain provisions
providing for the indemnification by Tioxide Americas of an officer, director
or trustee of Tioxide Americas for all actions, proceedings, claims, costs,
charges,
II-1
<PAGE>
losses, damages and expenses which they incur or sustain by reason of any act
done or omitted in or about the execution of their duty in their respective
offices or trusts, except such (if any) as they shall incur or sustain by or
through their own respective wilful neglect or default.
Item 21. Exhibits and Financial Statement Schedules
<TABLE>
<C> <S>
3.1 Certificate of Formation of Huntsman ICI Chemicals LLC*
3.2 Amended and Restated Limited Liability Company Agreement of Huntsman
ICI Chemicals LLC dated June 30, 1999*
3.3 Certificate of Formation of Huntsman ICI Financial LLC*
3.4 Limited Liability Company Agreement of Huntsman ICI Financial LLC dated
June 18, 1999, as amended by the First Amendment dated June 19, 1999*
3.5 Memorandum of Association of Tioxide Group**
3.6 Articles of Association of Tioxide Group**
3.7 Memorandum of Association of Tioxide Americas Inc.*
3.8 Articles of Association of Tioxide Americas Inc.*
4.1 Indenture, dated as of June 30, 1999, among Huntsman ICI Chemicals LLC,
the Guarantors party thereto and Bank One, N.A., as Trustee, relating
to the 10 1/8% Senior Subordinated Notes due 2009*
4.2 Form of certificate of 10 1/8% Senior Subordinated Note due 2009
denominated in dollars (included as Exhibit A-3 to Exhibit 4.1)*
4.3 Form of certificate of 10 1/8% Senior Subordinated Note due 2009
denominated in euros (included as Exhibit A-4 to Exhibit 4.1)*
4.4 Exchange and Registration Rights Agreement dated June 30, 1999, by and
among Huntsman ICI Chemicals LLC, the Guarantors party thereto,
Goldman, Sachs & Co., Deutsche Bank Securities Inc., Chase Securities
Inc. and Warburg Dillon Read LLC*
4.5 Form of Guarantee (included as Exhibit E to Exhibit 4.1)*
5.1 Form of opinion and consent of Skadden, Arps, Slate, Meagher & Flom as
to the legality of the notes to be issued by Huntsman ICI Chemicals
LLC, and the guarantees to be issued by Huntsman ICI Financial LLC, in
the exchange offer**
5.2 Form of opinion and consent of Counsel to Tioxide Group as to the
legality of the guarantees to be issued by Tioxide Group in the
exchange offer**
5.3 Form of opinion and consent of W.S. Walker & Company as to the legality
of the guarantees to be issued by Tioxide Americas Inc. in the exchange
offer**
8.1 Opinion and consent of Skadden, Arps, Slate, Meagher & Flom LLP as to
the tax consequences of the notes to be issued by Huntsman ICI Chemical
LLC**
10.1 Contribution Agreement, dated as of April 15, 1999, by and among
Imperial Chemical Industries PLC, Huntsman Specialty Chemicals
Corporation, Huntsman ICI Holdings LLC and Huntsman ICI Chemicals LLC
as amended by the first Amending Agreement, dated June 4, 1999, the
second Amending Agreement, dated June 30, 1999, and the third Amending
Agreement, dated June 30, 1999*
10.2 Purchase and Sale Agreement (PO/MTBE Business), dated March 21, 1997,
among Texaco, Texaco Chemical Inc. and Huntsman Specialty Chemicals
Corporation*
10.3 Operating and Maintenance Agreement, dated as of March 21, 1997, by and
between Huntsman Specialty Chemicals Corporation and Huntsman
Petrochemical Corporation*
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
10.4 Credit Agreement, dated as of June 30, 1999, by and among Huntsman ICI
Chemicals LLC, Huntsman ICI Holdings LLC, Bankers Trust Company,
Goldman Sachs Credit Partners LP, The Chase Manhattan Bank, and
Warburg Dillon Read and various lending institutions party thereto*
10.5 Asset Sale Agreement, dated June 30, 1999, by and between BP Chemicals
Limited and Huntsman ICI Chemicals LLC+
10.6 Joint Venture Agreement, dated as of October 18, 1993 between Tioxide
Americas Inc. and Kronos Louisiana, Inc.*
10.7 Shareholders Agreement, dated as of January 11, 1982, by and among
Imperial Chemical Industries PLC, ICI American Holdings, Inc. and
Uniroyal, Inc.*
10.8 Operating Agreement, dated December 28, 1981, between Uniroyal, Inc.,
Rubicon Chemicals, Inc. and Rubicon, Inc.*
10.9 Liability and Indemnity Agreement, dated December 28, 1981, by and
among Rubicon Inc., Rubicon Chemicals Inc., Imperial Chemical
Industries PLC, ICI American Holdings Inc., ICI Americas Inc. and
Uniroyal Inc.
10.10 Titanium Dioxide Supply Agreement, dated July 3, 1997, by and between
Imperial Chemicals Industries PLC and Tioxide Group++
10.11 Slag Sales Agreement, dated July 10, 1997, by and between Richards Bay
Iron and Titanium (Proprietary) Limited and Tioxide S.A. (Pty)
Limited++
10.12 Slag Sales Agreement, dated July 10, 1997, by and between Qit-Fer Et
Titane Inc. and Tioxide Europe Limited++
10.13 Supply Agreement, dated April 13, 1999, by and between Shell Trading
International Limited and ICI Chemicals & Polymers Limited++
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges*
21.1 Subsidiaries of Huntsman ICI Chemicals LLC*
23.1 Consent of Deloitte & Touche LLP*
23.2 Consent of Arthur Andersen LLP*
23.3 Consent of KPMG Audit Plc*
23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1)**
24.1 Powers of Attorney (included as part of signature page)*
25.1 Form T-1 Statement of Eligibility of Bank One, N.A. to act as Trustee
under the indenture*
27.1 Financial Data Schedule (for SEC use only)*
99.1 Form of Letter of Transmittal for dollar denominated notes*
99.2 Form of Notice of Guaranteed Delivery for dollar denominated notes*
99.3 Form of Letter of Transmittal for euro denominated notes*
99.4 Form of Notice of Guaranteed Delivery for euro denominated notes*
99.5 Letter to Brokers*
99.6 Letter to Clients*
</TABLE>
- --------
* Previously filed.
** To be filed by amendment.
+ Confidential treatment previously requested. Exhibit omitted and previously
filed separately with the SEC.
++ Portions of this document have been omitted and filed separately with the
SEC pursuant to requests for confidential treatment pursuant to Rule 406 of
the Securities Act.
II-3
<PAGE>
Item 22. Undertakings
The Undersigned registrants hereby undertake:
(1) To file during any period in which offers to sale are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities would
not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) to include any material information with respect to the plan of
distribution previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liabilities under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of the receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Huntsman ICI Chemicals
LLC has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the city of Salt Lake City,
State of Utah, on the 14th day of October, 1999.
Huntsman ICI Chemicals LLC
/s/ J. Kimo Esplin
By: _________________________________
J. Kimo Esplin
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities on the 14th day of October, 1999:
<TABLE>
<CAPTION>
Name Capacities
---- ----------
<S> <C>
Jon M. Huntsman* Chief Executive Officer, Chairman of the
______________________________________ Board of Managers & Manager
Jon M. Huntsman
Jon M. Huntsman, Jr.* Vice Chairman of the Board of Managers and
______________________________________ Manager
Jon M. Huntsman, Jr.
Peter R. Huntsman* President, Chief Operating Officer and
______________________________________ Manager
Peter R. Huntsman
/s/ J. Kimo Esplin Chief Financial Officer
______________________________________
J. Kimo Esplin
</TABLE>
/s/ J. Kimo Esplin
*By: _______________________
J. Kimo Esplin
Attorney-in-Fact
II-5
<PAGE>
HUNTSMAN ICI FINANCIAL LLC
Pursuant to the requirements of the Securities Act, Huntsman ICI Financial
LLC has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the city of Salt Lake City,
State of Utah, on the 14th day of October, 1999.
Huntsman ICI Financial LLC
/s/ J. Kimo Esplin
By: _________________________________
J. Kimo Esplin
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities on the 14th day of October, 1999:
<TABLE>
<CAPTION>
Name Capacities
---- ----------
<S> <C>
Jon M. Huntsman* Chief Executive Officer, Chairman of the
______________________________________ Board of Managers & Manager
Jon M. Huntsman
Jon M. Huntsman, Jr.* Vice Chairman of the Board of Managers and
______________________________________ Manager
Jon M. Huntsman, Jr.
Peter R. Huntsman* President, Chief Operating Officer and
______________________________________ Manager
Peter R. Huntsman
/s/ J. Kimo Esplin Chief Financial Officer
______________________________________
J. Kimo Esplin
</TABLE>
/s/ J. Kimo Esplin
*By: _______________________
J. Kimo Esplin
Attorney-in-Fact
II-6
<PAGE>
TIOXIDE GROUP
Pursuant to the requirements of the Securities Act, Tioxide Group has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Salt Lake City, State of
Utah, on the 14th day of October, 1999.
Tioxide Group
/s/ J. Kimo Esplin
By: _________________________________
J. Kimo Esplin
Director
Pursuant to the requirements of Securities Act of 1933, this registration
statement has been signed by the following persons on the 14th day of October,
1999:
<TABLE>
<CAPTION>
Name Capacities
---- ----------
<S> <C>
Peter R. Huntsman* Chairman of the Board of Directors
______________________________________
Peter R. Huntsman
/s/ J. Kimo Esplin Director
______________________________________
J. Kimo Esplin
L. Russell Healy* Director
______________________________________
L. Russell Healy
</TABLE>
/s/ J. Kimo Esplin
*By: _______________________
J. Kimo Esplin
Attorney-in-Fact
II-7
<PAGE>
TIOXIDE AMERICAS INC.
Pursuant to the requirements of the Securities Act, Tioxide Americas Inc.
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Salt Lake City, State of
Utah, on the 14th day of October, 1999.
Tioxide Americas Inc.
/s/ J. Kimo Esplin
By: _________________________________
J. Kimo Esplin
Director
Pursuant to the requirements of Securities Act of 1933, this registration
statement has been signed by the following persons on the 14th day of October,
1999:
<TABLE>
<CAPTION>
Name Capacities
---- ----------
<S> <C>
Peter R. Huntsman* Chairman of the Board of Directors
______________________________________
Peter R. Huntsman
/s/ J. Kimo Esplin Director
______________________________________
J. Kimo Esplin
L. Russell Healy* Director and Treasurer
______________________________________
L. Russell Healy
/s/ J. Kimo Esplin
*By: _________________________________
J. Kimo Esplin
Attorney-in-Fact
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description of Exhibits
------ -----------------------
<C> <S>
3.1 Certificate of Formation of Huntsman ICI Chemicals LLC*
3.2 Amended and Restated Limited Liability Company Agreement of Huntsman
ICI Chemicals LLC dated June 30, 1999*
3.3 Certificate of Formation of Huntsman ICI Financial LLC*
3.4 Limited Liability Company Agreement of Huntsman ICI Financial LLC dated
June 18, 1999, as amended by the First Amendment dated June 19, 1999*
3.5 Memorandum of Association of Tioxide Group**
3.6 Articles of Association of Tioxide Group**
3.7 Memorandum of Association of Tioxide Americas Inc.*
3.8 Articles of Association of Tioxide Americas Inc.*
4.1 Indenture, dated as of June 30, 1999, among Huntsman ICI Chemicals LLC,
the Guarantors party thereto and Bank One, N.A., as Trustee, relating
to the 10 1/8% Senior Subordinated Notes due 2009*
4.2 Form of certificate of 10 1/8% Senior Subordinated Note due 2009
denominated in dollars (included as Exhibit A-3 to Exhibit 4.1)*
4.3 Form of certificate of 10 1/8% Senior Subordinated Note due 2009
denominated in euros (included as Exhibit A-4 to Exhibit 4.1)*
4.4 Exchange and Registration Rights Agreement dated June 30, 1999, by and
among Huntsman ICI Chemicals LLC, the Guarantors party thereto,
Goldman, Sachs & Co., Deutsche Bank Securities Inc., Chase Securities
Inc. and Warburg Dillon Read LLC*
4.5 Form of Guarantee (included as Exhibit E of Exhibit 4.1)*
5.1 Form of opinion and consent of Skadden, Arps, Slate, Meagher & Flom as
to the legality of the notes to be issued by Huntsman ICI Chemicals
LLC, and the guarantees to be issued by Huntsman ICI Financial LLC, in
the exchange offer**
5.2 Form of opinion and consent of Counsel to Tioxide Group as to the
legality of the guarantees to be issued by Tioxide Group in the
exchange offer**
5.3 Form of opinion and consent of W.S. Walker & Company as to the legality
of the guarantees to be issued by Tioxide Americas Inc. in the exchange
offer**
8.1 Opinion and consent of Skadden, Arps, Slate, Meagher & Flom LLP as to
the tax consequences of the notes to be issued by Huntsman ICI Chemical
LLC**
10.1 Contribution Agreement, dated as of April 15, 1999, by and among
Imperial Chemical Industries PLC, Huntsman Specialty Chemicals
Corporation, Huntsman ICI Holdings LLC and Huntsman ICI Chemicals LLC
as amended by the first Amending Agreement, dated June 4, 1999, the
second Amending Agreement, dated June 30, 1999, and the third Amending
Agreement, dated June 30, 1999*
10.2 Purchase and Sale Agreement (PO/MTBE Business), dated March 21, 1997,
among Texaco, Texaco Chemical Inc. and Huntsman Specialty Chemicals
Corporation*
10.3 Operating and Maintenance Agreement, dated as of March 21, 1997, by and
between Huntsman Specialty Chemicals Corporation and Huntsman
Petrochemical Corporation*
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.4 Credit Agreement, dated as of June 30, 1999, by and among Huntsman ICI
Chemicals LLC, Huntsman ICI Holdings LLC, Bankers Trust Company,
Goldman Sachs Credit Partners LP, The Chase Manhattan Bank, and
Warburg Dillon Read and various lending institutions party thereto*
10.5 Asset Sale Agreement, dated June 30, 1999, by and between BP Chemicals
Limited and Huntsman ICI Chemicals LLC+
10.6 Joint Venture Agreement, dated as of October 18, 1993 between Tioxide
Americas Inc. and Kronos Louisiana, Inc.*
10.7 Shareholders Agreement, dated as of January 11, 1982, by and among
Imperial Chemical Industries PLC, ICI American Holdings, Inc. and
Uniroyal, Inc.*
10.8 Operating Agreement, dated December 28, 1981, between Uniroyal, Inc.,
Rubicon Chemicals, Inc. and Rubicon, Inc.*
10.9 Liability and Indemnity Agreement, dated December 28, 1981, by and
among Rubicon Inc., Rubicon Chemicals Inc., Imperial Chemical
Industries PLC, ICI American Holdings Inc., ICI Americas Inc. and
Uniroyal Inc.
10.10 Titanium Dioxide Supply Agreement, dated July 3, 1997, by and between
Imperial Chemicals Industries PLC and Tioxide Group++
10.11 Slag Sales Agreement, dated July 10, 1997, by and between Richards Bay
Iron and Titanium (Proprietary) Limited and Tioxide S.A. (Pty)
Limited++
10.12 Slag Sales Agreement, dated July 10, 1997, by and between Qit-Fer Et
Titane Inc. and Tioxide Europe Limited++
10.13 Supply Agreement dated April 13, 1998, by and between Shell Trading
International Limited and ICI Chemicals & Polymers Limited++
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges*
21.1 Subsidiaries of Huntsman ICI Chemicals LLC*
23.1 Consent of Deloitte & Touche LLP*
23.2 Consent of Arthur Andersen LLP*
23.3 Consent of KPMG Audit Plc*
23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1)*
24.1 Powers of Attorney (included as part of signature page)*
25.1 Form T-1 Statement of Eligibility of Bank One, N.A. to act as Trustee
under the indenture*
27.1 Financial Data Schedule (for SEC use only)*
99.1 Form of Letter of Transmittal for dollar denominated notes*
99.2 Form of Notice of Guaranteed Delivery for dollar denominated notes*
99.3 Form of Letter of Transmittal for euro denominated notes*
99.4 Form of Notice of Guaranteed Delivery for euro denominated notes*
99.5 Letter to Brokers*
99.6 Letter to Clients*
</TABLE>
- --------
* Previously filed.
** To be filed by amendment.
+ Confidential treatment previously requested. Exhibit omitted and previously
filed separately with the SEC.
++ Portions of this document have been omitted and filed separately with the
SEC pursuant to requests for confidential treatment pursuant to Rule 406 of
the Securities Act.
<PAGE>
EXHIBIT 10.9
LIABILITY AND INDEMNITY AGREEMENT
---------------------------------
AGREEMENT (for convenience called "Liability and Indemnity Agreement")
made as of the 28/th/ day of December, 1981, by and among Rubicon Inc.
("Rubicon"), a Louisiana corporation having its principal office at Geismar,
Louisiana, Rubicon Chemicals Inc. ("RCI"), a Louisiana corporation having its
principal office at Geismar, Louisiana, Imperial Chemical Industries PLC ("ICI
PLC"), an English company having its registered office at Imperial Chemical
House, Millbank, London SW1P 3JF, England, ICI American Holdings Inc. ("ICI"), a
Delaware corporation and a wholly-owned subsidiary of ICI PLC, having its
principal office at One Rollins Plaza, Wilmington, Delaware 19877, ICI Americas
Inc. ("ICI-AM"), a Delaware corporation and a wholly-owned subsidiary of ICI,
having its principal office at One Rollins Plaza, Wilmington, Delaware 19877,
and UNIROYAL, Inc. ("Uniroyal"), a New Jersey corporation having its principal
office at Benson Road, Middlebury, Connecticut 06749;
WHEREAS:
(1) Uniroyal (formerly named Untied States Rubber Company) and ICI PLC
caused RCI to be formed in 1963 and thereafter, directly or indirectly, each
owned 50% of RCI's capital stock until Uniroyal sold its 50% to ICI.
(2) Pursuant to Agreements entered into in 1963 and 1964 RCI built and
operated plants to manufacture toluene diisocyanate ("TDI"), diphenylamine
("DPA") and aniline.
(3) RCI, ICI PLC and Uniroyal are parties to a Liability and Indemnity
Agreement, dated May 7, 1964 ("the 1964 Agreement").
(4) Pursuant to Agreements entered into in 1972, RCI built and operated a
plant to manufacture diphenylmethane diisocyanate ("MDI").
(5) RCI, ICI PLC and Uniroyal are parties to a Liability and Indemnity
Agreement, dated April 1, 1972 ("the 1972 Agreement").
(6) Pursuant to agreements entered into as of April 1, 1977, RCI
constructed expansions of its facilities for the manufacture of aniline and DPA,
its waste
<PAGE>
disposal capacity and certain of its Off-sites, and, upon Completion thereof,
operated certain parts of its facilities to perform conversion services for ICI-
AM and Uniroyal in accordance with an agreement, dated as of April 1, 1977
("Original Operating Agreement") among RCI, ICI-AM and Uniroyal.
(7) RCI, ICI PLC, ICI-AM and Uniroyal are the parties to a Liability and
Indemnity Agreement, dated April 1, 1977 ("the 1977 Agreement").
(8) In December 1981 RCI caused the formation of Rubicon and entered into a
so-called Exchange Agreement, dated as of December 28, 1981, with Rubicon
pursuant to which RCI transferred to Rubicon certain of its assets and
liabilities and Rubicon issued to RCI 400,000 shares of its Class A and 400,000
shares of its Class B common stock and assumed certain liabilities of RCI.
(9) On December 31, 1981 RCI distributed as dividends its 400,000 Class A
shares of Rubicon's common stock to Uniroyal and its 400,000 Class B shares of
Rubicon's common stock to ICI, which were then the respective owners of all of
RCI's Class A and Class B common stock.
(10) Pursuant to an agreement, dated as of December 28, 1981 ("Operating
Agreement") among ICI-AM, Uniroyal, RCI and Rubicon, which amends and restates
the Original Operating Agreement, Rubicon will operate certain parts of its
facilities to perform conversion services for ICI-AM and Uniroyal, will operate
certain facilities belonging to RCI for RCI and will operate certain parts of
its facilities to perform other services for ICI-AM, Uniroyal and RCI.
(11) In contemplation of such arrangements, the parties desire to provide
certain allocations of liability among them which, in some instances, may not be
consistent with findings or judgments rendered in litigation but which are
consistent with what the parties consider to be their respective contractual
rights and obligations.
(12) In contemplation of such arrangements, the parties desire to supersede
the 1977 Agreement and incorporate into this Agreement the allocation of
liability among the parties on the terms and conditions hereinafter set forth,
except that such supersession will apply solely and exclusively to liabilities
which are based upon events occurring after the date of this Agreement.
2
<PAGE>
NOW, THEREFORE, for and in consideration of the covenants herein contained,
the parties hereto, intending to be legally bound hereby, agree as follows.
1. Definitions
-----------
1.1 All terms which are defined in the Operating Agreement and any Exhibit
thereto are used in this Agreement as so defined.
1.2 The words "Liability" and "Liabilities", when capitalized, shall mean
those liabilities described in paragraphs 3.1, 3.2 and 3.3.
1.3 The words "Other Parties", when capitalized, shall mean Uniroyal, ICI
PLC, ICI, ICI-AM and RCI.
2. Supersession of Prior Agreements
--------------------------------
2.1 The provisions of this Agreement will apply solely to Liabilities
which are based upon events occurring after December 28, 1981. After that date,
the provisions of this Agreement shall supersede the 1977 Agreement; provided,
however, that such supersession shall not apply to any Liability which is based
upon events occurring prior to such date; and the 1964 Agreement, the 1972
Agreement and the 1977 Agreement, as appropriate, shall continue in effect as to
any such Liability.
3. Allocation of Liability
-----------------------
3.1 Except as provided in paragraph 3.3, Rubicon shall defend each of the
Other Parties at Rubicon's expense, using its best efforts, against all claims,
suits, actions or proceedings of any kind, in which it is alleged that any or
all of the Other Parties directly or indirectly controlled, owned, leased,
designed, constructed, maintained, repaired, used or operated any of the
facilities operated by Rubicon pursuant to the Operating Agreement or that any
such party sold, furnished or supplied materials, chemicals, processes or
machinery used at or by those facilities, or that any such party directly or
indirectly produced, stored, handled or used any of the products at such
facilities which were produced by those facilities or any of the materials or
chemicals used in their production, or that any such party directly or
indirectly violated any statute, ordinance, regulation, provision or rule of the
federal, state, county, parish or municipal government in connection therewith.
Rubicon shall defend notwithstanding the identity, status or standing of the
person or entity
3
<PAGE>
asserting the claim, the theory of liability or the type of relief demanded,
including penalties and fines, or the negligence or fault of any or all of the
Other Parties, and Rubicon shall indemnify each of the Other Parties for any
expense incurred (including investigation costs and attorneys' fees) and any
payment made by them, or any of them, or on their behalf in settlement or in
satisfaction of any judgment, award, decree, penalty or fine (insofar as
permitted by law) notwithstanding the negligence of any or all of the Other
Parties. To the extent that money damages are not involved, such as in an
action for injunctive relief, Rubicon shall defend each of the Other Parties and
indemnify them to the extent that it can reasonably do so.
3.2 Rubicon shall defend each of the Other Parties at Rubicon's expense,
using its best efforts, from all claims, suits, actions, or proceedings of any
kind against them or any of them which involve personal injuries, illness or
death to Rubicon employees occurring in the course of or arising out of their
employment, notwithstanding the identity, status or standing of the claimant,
petitioner or plaintiff, the theory of liability (including, but not limited to,
negligence, implied and express warranty, strict tort liability, workers'
compensation or OSHA regulation or rule), or the type of relief demanded
(including penalties or fines) or the negligence or fault of any or all of the
Other Parties, and Rubicon shall indemnify each of the Other Parties for any
expense incurred (including investigation costs and attorneys' fees) and any
payment made by them, or any of them, or on their behalf in settlement or in
satisfaction of any judgment, award, decree, penalty or fine (insofar as
permitted by law) notwithstanding the negligence of any or all of the Other
Parties.
3.3 Each of Uniroyal, ICI-AM and RCI, severally and not in solido, shall,
at its expense, using its best efforts, defend Rubicon from all claims, suits,
actions or proceedings of any kind against Rubicon, for personal injury or
death, property damage or economic loss to anyone, caused by or resulting from
products produced for it by Rubicon or caused or resulting from reliance upon a
representation or warranty made at any time with respect thereto, but only if
such injury, death, damage or loss occurs away from premises owned by or rented
to Rubicon and after possession of such product has been relinquished by
Rubicon, notwithstanding the identity, status or standing of the claimant,
petitioner or plaintiff, the theory of liability (tort, contract or other) or
the negligence or fault of Rubicon, and each of Uniroyal, ICI-AM and RCI,
severally and not in solido, shall indemnify Rubicon for any expense incurred
(including investigation costs and attorneys' fees) and any payment made by it
or on its behalf in settlement or in satisfaction of any judgment, decree or
award notwithstanding the negligence of Rubicon.
4
<PAGE>
3.4 If and to the extent that Rubicon fails for any reason effectively to
defend and indemnify any or all of the Other Parties from any Liability referred
to in paragraphs 3.1 and 3.2 and the Other Parties, or any of them, incur such
Liability, then
(i) if such Liability is caused by or results from the Aniline
Facilities, benzene or any product produced by the Aniline Facilities, then
ICI and ICI-AM, on the one hand, and Uniroyal, on the other hand, will, as
between themselves, share the loss, cost or damage (including costs of
defense) resulting form the Liability in the proportions of the percentage
entitlements of Uniroyal and ICI-AM, respectively, to aniline;
(ii) if such Liability is caused by or results from the DPA plant or
DPA, Uniroyal will bear all of the loss, cost or damage (including costs of
defense) resulting from the Liability;
(iii) if such Liability is caused by or derived from the TDI plant,
the MDI plant, the TDA/DNT plant, TDI, MDI, TDA or DNT, RCI and ICI will
bear all of the loss, cost or damage (including costs of defense) resulting
from the Liability; and
(iv) is such Liability is caused by or results from other than as
specified in (i), (ii) or (iii), ICI, ICI-AM and RCI, on the one hand, and
Uniroyal, on the other hand, will, as between themselves, share the loss,
cost or damage (including costs of defense) resulting from the Liability in
the same proportions as the allocations Rubicon would have made to ICI-AM
and RCI, on the one hand, and Uniroyal, on the other hand, in accordance
with the provisions of the Operating Agreement, of the costs which would
have been incurred by Rubicon as a result of such loss, cost or damage
(including costs of defense) if Rubicon had defended and indemnified the
Other Parties as provided in paragraphs 3.1 and 3.2.
4. Insurance
---------
4.1 Rubicon shall maintain the following insurances in force, in forms
agreeable to both Uniroyal and ICI.
a. Comprehensive general liability insurance with a limit of
$50,000,000 or such other limit as may be agreed upon between Uniroyal and
5
<PAGE>
ICI from time to time. This insurance shall name the Other Parties as
insureds but need not name such Other Parties with respect to Liabilities
referred to in paragraph 3.3. The policy shall contain a severability of
interests clause to cover each insured as through a separate policy had
been issued to each and shall not exclude a Liability assumed by any
insured under this Agreement.
b. Workers' compensation and employers liability insurance.
c. Environmental impairment liability insurance, with limits as agreed
upon by Uniroyal and ICI to the extent that such coverage is available on
terms acceptable to Uniroyal and ICI.
Rubicon shall annually review with Uniroyal and ICI the amounts and kinds
of the above insurances to be carried in the ensuing period, and shall obtain
such coverage as directed by Uniroyal and ICI.
5. Release of Certain Liabilities
------------------------------
5.1 ICI-AM and RCI, severally and in solido, Uniroyal and Rubicon hereby
release each other, without limit as to amount, from all liability in respect of
all casualty losses (whether caused by negligence or not), including loss of use
arising therefrom, which could have been covered by policies of Fire and
Extended Coverage Insurance and Boiler and Machinery Insurance.
5.2 The provisions of this Section 5 are in addition to, and not a
limitation of, the provisions of Section 3.
6. General Provisions
------------------
6.1 This Agreement shall continue in effect for as long as the Operating
Agreement continues in effect; provided, however, that the rights and
obligations set forth in this Agreement shall survive its termination as to any
Liability which accrued prior thereto.
6.2 This Agreement shall be binding upon and shall enure to the benefit of
the Parties, their successors and permitted assigns. This Agreement may not be
assigned by Rubicon. It shall be assigned by ICI PLC, ICI, ICI-AM and RCI or
Uniroyal in and only in conjunction with an assignment of the Operating
Agreement
6
<PAGE>
by ICI-AM and RCI or Uniroyal, as provided therein; provided, however, that the
rights and obligations of the assignor set forth in this Agreement shall survive
its assignment as to any Liability which accrued prior thereto.
6.3 Failure of any party to insist, in any one or more instances, upon a
strict performance of any of the terms of this Agreement or the waiver by any
party of any term or right or any default of any other party hereunder will not
be deemed or construed as a waiver or a relinquishment for the future of any
such term, right or default.
6.4 All questions relating to the validity, interpretation or performance
of this Agreement shall be determined in accordance with the law of the State of
Louisiana.
6.5 This Agreement may be amended from time to time only by written
instrument executed on behalf of Rubicon by its President when specifically
authorized by its Board of Directors and duly executed by each of the Other
Parties.
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day,
month and year first above written.
Rubicon Inc.
By: /s/ [Authorized Officer]
Rubicon Chemicals Inc.
By: /s/ [Authorized Officer]
Imperial Chemicals Industries PLC
By: /s/ [Authorized Officer]
ICI American Holdings Inc.
By: /s/ [Authorized Officer]
ICI Americas Inc.
By: /s/ [Authorized Officer]
UNIROYAL, Inc.
By: /s/ [Authorized Officer]
8
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.10
**Confidential portions of this Exhibit have been omitted pursuant to the Rules
and Regulations of the Securities and Exchange Commission. The symbol "[+++++]"
has been used to identify information which is the subject of a Confidential
Treatment Request.**
DATED 3/rd/ July 1997
IMPERIAL CHEMICAL INDUSTRIES PLC
- AND -
TIOXIDE GROUP LIMITED
SUPPLY AGREEMENT
<PAGE>
DATED 3/rd/ July 1997
BETWEEN
1. IMPERIAL CHEMICAL INDUSTRIES PLC trading as ICI Paints whose Registered
Office is at 9 Millbank, London SWIP 3JF ("ICI"); and
2. TIOXIDE GROUP LIMITED whose Registered Office is at Lincoln House, 137/143
Hammersmith Road, London W14 0QL ("Tioxide").
RECITAL
- -------
The purpose of this agreement is to set out the terms on which the ICI Paints
Users in the specified Territories will purchase Titanium Dioxide from Tioxide
and Tioxide will supply Titanium Dioxide to the ICI Paints Users and is entered
into in recognition of ICI's status as Tioxide's largest customer.
1. Definitions
-----------
In this agreement the following words shall have the following meanings:
"ICI Paints User/s" means any ICI Company/Companies or
business/businesses involved in the manufacture of
surface coatings in each of the Territories who
purchase Titanium Dioxide from Tioxide.
"the Territory/ies" means those countries set out in Schedule I hereto
or any of them.
"Quarter" means a period of 3 calendar months, the first
Quarter commencing on [+++++].
"[+++++]" [+++++]
"[+++++]" [+++++]
"ICI Paints" means the ICI Paints Business.
"Contract Year" a period of 12 consecutive months, the first
commencing [+++++].
<PAGE>
"On Time and in Full" means delivery within the agreed lead time
and in the full and accurate quantity
ordered.
"TiO\\2\\" means Rutile Titanium Dioxide in a dry form.
"Volume" means metric tonnes of TiO\\2\\.
"B/L date" means Bill of Lading date.
"Region(s)" means the areas of the world set out below
containing the listed Territories.
North America
-------------
containing USA, Canada, Puerto Rico, Mexico.
Europe
------
containing UK, Eire, France, Germany, Spain,
Italy and Poland.
ANZ
---
containing Australia, New Zealand, Fiji,
Papua New Guinea.
Asia
----
containing India, Pakistan, Malaysia,
Singapore, Thailand, Indonesia, Taiwan,
Peoples Republic of China, Sri Lanka,
Vietnam, Philippines.
"[+++++]" [+++++].
"Confidential Information" means all information disclosed by one party
to the other in writing or otherwise provided
that each such item of information would
appear to a reasonable person to be
confidential or either contains or bears
thereon in either case a promi-
2
<PAGE>
nent position, or is accompanied by a written
statement that the same is confidentia1 or
proprietary. Any information relating to
[+++++] and [+++++] will be Confidential
Information.
1. TERRITORIES
-----------
1.1 A list of the countries governed by this agreement at the date hereof is
attached as Schedule I.
Where a new company is established or acquired in a Territory by ICI with
an ICI shareholding of more than 50%.
1.1.1. If ICI is already a customer of Tioxide in that Territory as defined in
Schedule I hereto such company will, upon its acquisition or
establishment, be subject to this Agreement.
1.1.2. If ICI is not already a customer of Tioxide in that Territory as defined
in Schedule I hereto such company will be so subject only by agreement
between the parties hereto.
2. TERM
----
This agreement shall commence on [+++++] and shall continue for a period
of four years until [+++++], provided that 12 months notice of
termination has been served by either party to take effect on that date.
If not so terminated on that date then this agreement shall continue
until terminated by either party on 12 months notice in writing to be
given at any time.
3. SUPPLY COMMITMENT
-----------------
(a) Where Tioxide supplies [+++++] of an ICI Paints User's requirements
in an individual Territory in any Contact Year than in the
succeeding Contract Year Tioxide shall be obliged to supply [+++++]
of the normal requirements of such ICI Paints User if called upon
to do so. Notice shall be given by the ICI Paints User of such a
requirement in accordance with the forecast schedule set out in
Clause 4.
(b) Where Tioxide supplies less than [+++++] of an ICI Paints User's
total requirement in a Territory in any Contract Year then in the
succeeding Contract Year Tioxide agrees it shall be obliged to
supply
3
<PAGE>
up to [+++++] to the ICI Paints User if called upon to do so.
Notice shall be given of such requirement in accordance with Clause
4.
4. FORECAST AND COMMITMENT TO VOLUME
---------------------------------
4.1 (a) By 30th June and 31st December in each Contract Year, ICI Paints
Headquarters at Slough will supply to Tioxide at its London Head-
quarters a two year demand forecast (current year plus the
following year) detailing quantities and grade of Tioxide pigment
expected to be required by each Region for each Quarter in each of
those years.
(b) On receipt of this demand forecast Tioxide will assess it against
its planned availability. If any potential problem in meeting this
demand forecast is foreseen, Tioxide and ICI Paints will discuss
the problem and its resolution.
(c) The forecast for each year's offtake will not exceed a volume
[+++++].
(d) No Quarter's forecast in each year will exceed a volume [+++++].
4.2 ICI Paints will target to buy globally from Tioxide [+++++] metric tonnes
of TiO\\2\\ per Contract Year.
The division between Chloride and Sulphate grades will be as follows:
(a) Any ICI offtake over [+++++] metric tonnes will be taken as
Sulphate product.
(b) Offtake at or below [+++++] metric tonnes will be as set out below
[+++++].
4
<PAGE>
<TABLE>
<CAPTION>
Chloride (Kt) Sulphate (Kt) TOTAL
<S> <C> <C> <C>
North America [+++++] [+++++] [+++++]
Canada and Mexico
ANZ, Fiji, Papua [+++++] [+++++] [+++++]
New Guinea & Asia
Europe [+++++] [+++++] [+++++]
[+++++]
</TABLE>
Chloride offtake by ICI may be taken anywhere in the Territories subject
to grade and sourcing constraints.
4.3 On the basis of the forecasting arrangements set out in Clause 4.1
Tioxide undertakes to use all reasonable endeavours to supply in each
Contract Year the volume of TiO\\2\\ in accordance with ICI's forecast
for that year. ICI undertakes to use all reasonable endeavours to
purchase volume in accordance with its forecast.
4.4 If in any Region the actual demand from the ICI Paints User is in excess
of the forecast then Tioxide will use all reasonable endeavours to supply
the TiO\\2\\ required.
4.5 Both parties agree to work actively to develop and continually enhance a
methodology that gives both parties the maximum visibility of short and
medium term demand.
4.6 In the event that ICI shall acquire a new business in a Territory as
defined in Schedule I hereto during the course of this agreement which is
buying TiO\\2\\ from Tioxide at the date of such acquisition for the
purpose of forecasting the following shall apply. Such amount of TiO\\2\\
as is being purchased from Tioxide by such business shall be added to the
existing offtake by ICI to form a new base tonnage.
5. PRICE
-----
5.1 Price shall be [+++++] and, subject as hereinafter provided, [+++++].
Where [+++++].
5.2 [+++++] shall only be applicable to purchases of TiO\\2\\ by ICI from
Tioxide in any Contract Year if in that Year the following conditions are
satisfied:
5
<PAGE>
5.2.1 The total volume of TiO\\2\\ purchased by ICI is at least [+++++]; and
5.2.2 The volume of TiO\\2\\ purchased by ICI in
(a) North America
(b) ANZ, Fiji, Papua New Guinea and Asia; and
(c) Europe
is at least, respectively, [+++++] and [+++++].
In the event that in any Contract Year any condition specified in this
Clause is not satisfied then the price payable in that year shall be
[+++++] for the TiO\\2\\ supplied.
The [+++++] will however continue to apply to such purchases.
5.3 The parties hereto shall as soon as reasonably practicable after having
signed this agreement, appoint a person, firm or corporation ("The
Appointee") who shall be responsible for recommending to the parties
[+++++] in every Territory for the purposes of this agreement.
5.4 The parties hereto shall endeavour to ensure that the duration of the
contract under which the Appointee is engaged is consistent with the term
of this agreement. The costs associated with the Appointee's engagement
(including, without limitation, fees and expenses payable to the
Appointee) shall be borne equally between ICI and Tioxide.
5.5 Prior to each occasion on which, in accordance with the provisions
hereof, [+++++] falls to be determined, each of ICI and Tioxide shall
submit to the appointee in writing such information as its possesses and
which it considers may be relevant for the purpose of enabling the
Appointee to assess [+++++] in each territory. The Appointee shall be
entitled to interrogate each party hereto with respect to the information
which it has submitted and to request further information from each
party.
5.6 The parties hereto shall, in submitting information to the Appointee
pursuant to Clause 5.5 do so timeously and the Appointee shall make his
recommendation of [+++++] for each Territory within 10 business days of
the information from both such parties having been submitted.
6
<PAGE>
5.7 The Appointee shall keep confidential any information submitted to him by
either party in accordance with the foregoing provisions of this clause
and without prejudice to the generality, shall not reveal to either party
hereto or any other party, any information submitted to him by the other
party. The Parties may each appoint an independent auditor to verify the
submissions of the other party to the Appointee if they so wish.
5.8 The Appointee, in recommending [+++++] in a Territory, shall have regard
to the following principles:
5.8.1 [+++++] is based upon delivered duty paid in ICI Paints Users plant,
except where CIF (or some other term) is the agreed delivery term. A list
of Territories where CIF is the agreed delivery term is attached hereto
as Schedule IV. Schedule V hereto lists the Territory in which "C and F"
is the agreed delivery term.
5.8.2 If any of ICI Paints competitors in a territory do not pay on time to
standard terms, full account shall be taken of that fact in assessing
[+++++] for the Territory concerned.
5.9 Tioxide's usual small delivery surcharges applying to its other customers
in a Territory will also apply to ICI Paints deliveries in that
Territory.
5.10 During each quarter a reconciliation will be conducted (by the designated
local senior Manager responsible from Tioxide and ICI Paints,
respectively) in respect of the [+++++] to apply to the previous quarter
in each Territory. The difference between the newly agreed [+++++] and
that price at which TiO\\2\\ had previously been invoiced will be paid
not later than 8 weeks after the end of the quarter in question by ICI
Paints to Tioxide or by Tioxide to ICI Paints, as the case requires. At
the end of any Contract Year in which a condition specified in Clause 5.2
has not been satisfied, a further reconciliation will be conducted to
establish what (if any) payment is due from ICI to Tioxide in consequence
thereof and any payment due shall be made by ICI not later than the
expiration of the period of 8 weeks next following the end of that Year.
5.11 "[+++++]". For certain major Territory groups [+++++] may apply in which,
if [+++++].
Territory groups for which this principle is presently agreed are:-
7
<PAGE>
Group A [+++++]
Group B [+++++]
Group C [+++++]
Group D [+++++]
At the commencement of the contract the values of x and y will be as
shown in the following table:
x y
Group A [+++++] [+++++]
Group B [+++++] [+++++]
Group C [+++++] [+++++]
Group D [+++++] [+++++]
The value of x in the Territory Group will be reviewed from time to time.
6. PAYMENT
-------
A schedule of agreed payment terms is attached as Schedule III. These
terms can only be varied by written agreement between the parties.
ICI shall ensure that payment is received by Tioxide on or before the
relevant due date specified in Schedule III.
7. [+++++]
-------
7.1 [+++++]
7.2 [+++++]
7.2.1 The following [+++++] will be applied:
8
<PAGE>
[+++++] [+++++]
[+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
[+++++] [+++++]
7.2.2 [+++++] in the Territories or as requested by ICI Paints by Tioxide
[+++++]
7.2.3 The parties agree to keep the existence and [+++++] under this
agreement confidential to themselves.
8. CHANGE IN CIRCUMSTANCES
-----------------------
Both parties will consult with each other in the event of any significant
change in circumstances in their businesses affecting this Agreement.
9. SERVICE AND DELIVERY
--------------------
Tioxide will use its best endeavours to supply all orders "On Time and In
Full".
10. GRADE AVAILABILITY
------------------
Tioxide's products are made to globally consistent specifications, but
not all grades are made in all regions of the world.
Nevertheless Tioxide will use its best endeavours to meet ICI Paints
Users' technical requirements for TiO\\2\\.
11. TECHNICAL AND COST REDUCTION CO-OPERATION
-----------------------------------------
9
<PAGE>
11.1 In each Region, the Tioxide regional coatings technical service and
product development teams will maintain regular contact with ICI Paints
Users in that Region.
11.2 Tioxide's central Research and Technology surface coatings team will also
maintain regular contact with its designated opposite numbers in ICI
Paints.
11.3 Through these contracts, ICI Paints' technical requirements will be taken
into account by Tioxide in setting up its global and local Research
programmes.
11.4 A formal technical review of matters arising from these contracts, and
appropriate actions, will be arranged between the parties at least once a
year.
11.5 Tioxide will give ICI Paints the first customer appraisal prior to
disclosure to any other party of any relevant new developments it makes
relating to Tio\\2\\ in surface coatings provided that such development
has not been initiated by another of Tioxide's customers. Upon Tioxide
presenting ICI with a new development, ICI will report back to Tioxide
within 120 days of receiving adequate information from Tioxide on its
views on such developments and pending such report Tioxide will not
disclose such development to any other party. The parties may extend such
period by agreement.
11.6 When a new product is developed by Tioxide for the surface coatings
market, with ICI's technical co-operation, then ICI shall enjoy an
exclusive lead time from the date when its surface coating containing the
new product is brought to market - the length of lead time to be agreed on
a case by case basis. During that lead time Tioxide will not supply or
sample such new product to any other party. Such new product shall be
available for purchase by any ICI Paints User.
11.7 Specifications for all grades supplied by Tioxide to ICI Paints will be
agreed between the parties, and will be consistent worldwide.
11.8 There may occasionally be a need for local funding by Tioxide of technical
costs incurred by ICI Paints Users e.g. in reformulation to a Tioxide
grade. Such funding will be a matter of local negotiation between the ICI
Paints User and Tioxide.
11.9 SERVICE
-------
10
<PAGE>
It is agreed that ICI will implement a supplier assessment programme based
on the Dulux Australia "Supplier of the Year" programme. This will provide
a basis for review of specific relationship and service issues.
11.10 COST REVIEW
-----------
It is expected that effective management of the supply chain between
Tioxide and ICI Paints will result in operational cost savings which the
parties agree will be shared by both businesses. Tioxide agrees with ICI
to fully address possible cost, product evaluation and development
efficiencies and any other possible sources of cost savings throughout the
term of this contract and to implement identified savings by mutual
agreement.
12. CONFIDENTIALITY
---------------
Each party will take all proper steps to keep confidential all
Confidential Information of the other which is disclosed to or obtained by
it pursuant to or as a result of this Agreement, and will not divulge the
same to any third party and will allow access to the same to only such
staff as may be involved in carrying out this agreement and then on the
basis that they will respect such Confidential Information except to the
extent that any such Confidential Information becomes public through no
fault of that party. Upon termination of this Agreement each party will
return to the other any equipment and written data (without retaining
copies thereof) provided for the purposes of this Agreement.
Notwithstanding the termination or expiry of this Agreement for whatever
reason the obligations and restriction in this clause shall be valid for a
period of five years from the date of signature hereof.
13. FORCE MAJEURE
-------------
If either party is prevented from carrying out any of its obligations
under this Agreement by circumstances beyond its control (such
circumstances hereinafter being referred to as "Force Majeure") then for
so long as such Force Majeure circumstances continue neither shall be
liable to the other for a failure to perform such obligations as a result
of Force Majeure PROVIDED THAT each party shall as soon as reasonably
practicable on becoming aware of circumstances constituting Force Majeure
notify the other of the nature of the Force Majeure and its likely
duration. The force majeure affecting Tioxide having been so notified ICI
may, if it so elects, employ another company business or person to perform
any obligations so affected by Force Majeure.
11
<PAGE>
14. DISPUTES
--------
In the event of a dispute between the parties the senior managers of
either party responsible for purchasing and selling TiO\\2\\ shall attempt
to resolve the dispute. Failing that the CEOs of ICI Paints and Tioxide
for the time being shall attempt to resolve the dispute. If that process
fails to resolve the dispute then parties may have recourse to law in
accordance with the Agreement.
15. LIABILITY
---------
Tioxide will indemnify ICI and its subsidiaries for any losses, actions,
costs, demands, expenses or liabilities of any kind which ICI may incur
which shall arise:
(a) From Tioxide's default under this contract or
(b) By the supply of TiO\\2\\ by Tioxide which is not of a satisfactory
quality or not fit for the purpose for which ICI will use the TiO\\2\\.
(c) Fails to be delivered on time to any ICI Paints User.
Tioxide's liability under this clause or as a result of any legal action
taken by ICI or its subsidiaries shall be limited to the sum of [+++++]
for each individual incident and to an aggregate sum in each contract year
for multiple incidents of [+++++].
Subject to the foregoing provisions of this clause, Tioxide gives no
warranty as to the merchantable quality or fitness for purpose of any
TiO\\2\\ which is sold to ICI under this agreement and any condition or
warranty as to its merchantable quality or fitness for purpose, whether
express or implied by law under the Sale and Supply of Goods Act or
otherwise, is excluded.
16. OTHER TERMS AND CONDITIONS
--------------------------
(i) Any detailed supply arrangements not covered in this agreement will be
covered by local agreements in each Territory as necessary. Should there
be any conflict in the terms and conditions of this agreement and any such
local agreements then the terms and conditions of this agreement shall
prevail. This agreement supersedes all previous agreements in force
between the parties relating to the subject matter hereof.
12
<PAGE>
(ii) In the event that a change of control of the ownership of either party
occurs in such a way so as to raise issues of compliance with Anti-Trust
Competition Legislation in any country of the world then this contract
shall be reviewed and such amendments made to bring its provisions into
compliance with such laws whilst maintaining the terms of this agreement
to the greatest extent legally possible.
17. NOTICES
-------
Notices, reports or communication shall be deemed to have been given only
if given in writing and delivered by hand or by courier service or sent by
telex or facsimile transmission and confirmed by first class airmail to
the other party at the following address:
In the case of ICI Paints: The Secretary
ICI Paints
Wexham Road
Slough
SL2 5DS
England
In the case of Tioxide: The Secretary
Tioxide group Ltd.
Lincoln House
137/143 Hammersmith Road
London
W14 0QL
18. The law of England and the jurisdiction of the English courts shall apply
to this agreement.
13
<PAGE>
SCHEDULE I
LIST OF TERRITORIES
-------------------
UK/Eire
Germany
France
Spain
Italy
USA
Canada
Mexico
Australia
New Zealand
Fiji
Papua New Guinea
India
Pakistan
Malaysia
Singapore
Thailand
Indonesia
Taiwan
Peoples Republic of China
Vietnam
Philippines
Puerto Rico
Poland
Sri Lanka
14
<PAGE>
SCHEDULE II
LIST OF MAJOR TiO\\2\\ PRODUCERS
--------------------------------
[+++++]
15
<PAGE>
SCHEDULE III
AGREED PAYMENT TERMS
--------------------
- --------------------------------------------------------------------------------
TERRITORY TERMS
- --------------------------------------------------------------------------------
UK/EIRE 20/th/ of the month following invoice
- --------------------------------------------------------------------------------
FRANCE 30 days from end of month of invoice 1% discount
for payment on 10/th/ of following month
- --------------------------------------------------------------------------------
GERMANY 30 days net
2% discount for payment within 14 days
- --------------------------------------------------------------------------------
ITALY 90 days net
- --------------------------------------------------------------------------------
SPAIN 90 days net
- --------------------------------------------------------------------------------
USA 60 days net
1% discount for payment within 30 days
- --------------------------------------------------------------------------------
CANADA 60 days net
1% discount for payment with in 30 days
- --------------------------------------------------------------------------------
MEXICO 60 days net
- --------------------------------------------------------------------------------
NEW ZEALAND 30 days from month end
- --------------------------------------------------------------------------------
AUSTRALIA 45 days from month end
- --------------------------------------------------------------------------------
FIJI 30 days from month end
- --------------------------------------------------------------------------------
PAPUA NEW GUINEA 60 days after B/L date
- --------------------------------------------------------------------------------
INDONESIA 90 days after B/L date
- --------------------------------------------------------------------------------
SINGAPORE 60 days from month end
- --------------------------------------------------------------------------------
MALAYSIA 30 days from month end
- --------------------------------------------------------------------------------
THAILAND 90 days from B/L date
- --------------------------------------------------------------------------------
TAIWAN 90 days from month end
- --------------------------------------------------------------------------------
PEOPLE REPUBLIC OF CHINA 60 days from month end
- --------------------------------------------------------------------------------
INDIA 90 days after B/L date
- --------------------------------------------------------------------------------
PAKISTAN 150 days from B/L date
- --------------------------------------------------------------------------------
VIETNAM 90 days after B/L date
- --------------------------------------------------------------------------------
PHILIPPINES 90 days after B/L date
- --------------------------------------------------------------------------------
Sri Lanka 90 days after B/L date
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
Puerto Rico 60 days net
- --------------------------------------------------------------------------------
SCHEDULE IV
TERRITORIES WHERE CIF IS THE AGREED DELIVERY TERM
-------------------------------------------------
India
Pakistan
Thailand
Indonesia
Peoples Republic of China
Poland
Papua New Guinea
Philippines
Singapore
Sri Lanka
Vietnam
17
<PAGE>
SCHEDULE V
TERRITORY WHERE C AND F IS THE AGREED DELIVERY TERM
---------------------------------------------------
Pakistan
18
<PAGE>
SIGNED FOR AND ON BEHALF OF
IMPERIAL CHEMICAL INDUSTRIES PLC:
SIGNED /s/ [Authorized Officer]
TITLE Chief Financial Officer, ICI Paints
WITNESS /s/ [Authorized Person]
TITLE Senior Legal Counsel, ICI Paints
SIGNED FOR AN ON BEHALF OF
TIOXIDE GROUP LIMITED
SIGNED /s/ [Authorized Officer]
TITLE Chairman & CEO
WITNESS /s/ [Authorized Person]
TITLE Finance Director
19
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.11
**Confidential portions of this Exhibit have been omitted pursuant to the Rules
and Regulations of the Securities and Exchange Commission. The symbol "[+++++]"
has been used to identify information which is the subject of a Confidential
Treatment Request.**
SLAG SALES AGREEMENT
--------------------
THIS AGREEMENT is made as of this 10th day of July, 1997 by and between
RICHARDS BAY IRON AND TITANIUM (PROPRIETARY) LIMITED, a South African
corporation with offices at Richards Bay, Natal, South Africa (hereafter
"RBIT"), and TIOXIDE S.A. (PTY) LIMITED, a company with an office in
Umbogintwini, South Africa (hereafter, the "Buyer").
[+++++];
WHEREAS Buyer has equipped its pigment plant at Umbogintwini, South Africa
with special facilities to enable the transportation, delivery, handling and use
of the special slag product and RBIT has equipped its facility at Richards Bay,
South Africa to produce, handle and ship the special slag product;
WHEREAS RBIT agrees to sell such quantities of the special slag product as
Buyer requests and Buyer agrees to fulfill from RBIT [+++++] requirements to
[+++++] during the term of this Agreement, within a specified range of annual
volumes;
<PAGE>
WHEREAS both Buyer and RBIT require long notice of any cancellation of
supply or purchase of the special slag product as both parties would be required
to make significant changes to their facilities and operations to produce or
accept alternative products;
NOW THEREFORE, for and in consideration of the covenants and conditions
herein contained, the parties hereto agree as follows, effective January 1,
1997:
ARTICLE I.
SCOPE
RBIT agrees to sell and deliver, and Buyer agrees to buy and take delivery
of, a special titanium-bearing slag (hereinafter "Product"), produced at RBIT's
plant at Richards Bay, Kwazulu Natal, South Africa (hereinafter "RBIT's plant"),
for use at Buyer's pigment plant at Umbogintwini, South Africa (hereinafter
called "Buyer's plant"), in the quantities and at the times specified herein and
in accordance with the terms of this Agreement (the "Agreement").
ARTICLE II.
DEFINITIONS
Unless otherwise indicated, a "ton" is a metric ton of one thousand
kilograms dry weight, a "month," "quarter" and a "year" are a calendar month, a
calendar quarter and a calendar year, respectively, and "dollars," "cents" and
the dollar and cents signs ("$" and "c") refer to lawful money of the United
States of America.
2
<PAGE>
"Official Samples" has the meaning given to it in Article XI and all percentages
are based on dry weights. "Party" means RBIT as one party and Buyer as one
party. "STEM" shall mean that Product will be available and ready for loading at
the point of shipment on the date stated and in the quantity specified.
ARTICLE III.
TERM
A. Unless terminated earlier in accordance with provisions hereof, this
Agreement shall be for an initial term of [+++++] commencing on January 1,
1997 and ending on [+++++] and shall automatically continue in full force
and effect for additional periods of one (1) month each until terminated by
either party giving to the other party not less than [+++++] prior written
notice.
B. In the event either party shall become bankrupt, insolvent, commit any act
of bankruptcy or insolvency, or compromise with its creditors, then the
other party shall have the option, without notice or demand, to cancel this
Agreement and demand damages hereunder. The preceding rights are without
prejudice to any other rights and remedies as are available to the parties
hereunder or otherwise under the law.
C. In the event of permanent closure of Buyer's plant, Buyer or Seller shall
have the right to terminate this Agreement. If regulatory conditions
prescribed by government preclude consumption of Product at Buyer's plant,
both parties
3
<PAGE>
undertake to adapt their Product or process, as the case may be, to permit
compliance with such regulations within a reasonable time, failing which
Buyer or Seller shall have the right to terminate this Agreement. Buyer
shall inform RBIT at the earliest opportunity of either circumstance.
ARTICLE IV.
QUANTITY
A. In consideration of RBIT's agreement to supply Product in such quantities
as Buyer may request pursuant to Article IV.B Buyer shall [+++++].
B. Buyer shall, no later than September 30 in each year of the Agreement,
advise RBIT in writing of its total requirement for Product for Buyer's
plant in the coming year, subject to an annual maximum of [+++++] tons and
an annual minimum amount of [+++++] tons (the "Contracted Quantity"). Such
Contracted Quantity shall be binding on the parties.
ARTICLE V.
PRICE
A. Basic Price
-----------
1. The basic price for Product of [+++++] TiO\\2\\ for [+++++] shall be
[+++++] per ton, Ex Works RBIT's plant at Richards Bay (the "Basic
Price"). For each successive year of the Agreement the Basic Price
shall be [+++++].
4
<PAGE>
2. The term "Escalation" as it relates to this Agreement is defined as
the percentage increase in the All Items, All Urban Consumer Price
Index as reported in the Detailed CPI Report issued by the US
Department of Labor ("AUCPI"), for the period of December to December
immediately preceding the applicable year, multiplied by the price to
which such Escalation must be added. If there is no increase, or if
there is a decrease in the AUCPI, Escalation shall be zero. For the
year 1998, reference shall be made to the period of December 1996 to
December 1997. For each subsequent year, reference shall be made to
the period of December to December immediately preceding the
applicable year.
B. Adjustment for TiO\\2\\ Content
-----------------------------
1. The Basic Prices established under this Article V. are for Product
which meets the specifications set forth in Paragraphs A and B of
Article IX (hereinafter the "Specifications"). If the TiO\\2\\ content
of Product exceeds eighty-five percent (85%), the price shall be
adjusted upwards by one-one hundred seventieth (1/170th) of the Basic
Price for each whole increment of one-half percent (0.5%) by which the
TiO\\2\\ content of Product exceeds eighty-five percent (85%). If the
TiO\\2\\ content of Product is less than eighty-five percent (85%),
the price shall be adjusted downwards by one-one hundred seventieth
5
<PAGE>
(1/170th) of the Basic Price for each whole decrement of one-half
percent (0.5%) or part thereof by which the TiO\\2\\ content of
Product is less than eighty-five percent (85%). 2. If the insoluble
TiO\\2\\ content of Product exceeds two percent (2%), the price shall
be adjusted downwards by one-one hundred seventieth (1/170th) of the
Basic Price for each increment of one-half percent (0.5%) or part
thereof by which the insoluble TiO\\2\\ content exceeds two percent
(2%).
ARTICLE VI.
SHIPMENTS
Shipments shall be made by railcars provided by Buyer. The terms and
conditions of shipments shall be mutually agreed upon by the parties. Shipments
shall be spread more or less evenly over the year. Cleanliness of railroad cars
shall be solely Buyer's responsibility.
ARTICLE VII.
TITLE AND RISK OF LOSS
Title to and risk of loss in Product shall pass to Buyer upon loading on
board railcars at RBIT's plant. Once the title to and risk of loss in Product
has passed to Buyer, RBIT shall not be responsible for any loses or damages of
any kind and
6
<PAGE>
howsoever arising in connection with Product or otherwise, except as expressly
provided in this Agreement.
ARTICLE VIII.
INVOICING AND PAYMENT
A. Regular payments
----------------
RBIT shall invoice buyer for shipments on a monthly basis, on the
assumption that the TiO\\2\\ content of each shipment is [+++++] and
payment shall be made within fifteen (15) days of the date RBIT's invoice
in South African rands converted at the spot rate of exchange for U.S.
dollars as reported by the First National Bank Limited at the close of
business on the last day of the previous month for deliveries during any
month. RBIT shall accept payment from any of Buyer's affiliate companies,
but Buyer shall remain primarily and separately liable for all sums due
under this Agreement.
B. Final Invoice
-------------
Any price adjustment which may be necessary as a result of the outcome of
RBIT's analysis of the Official Sample shall be embodied in a final
invoice. In the case of a debit to Buyer, the final invoice shall be
presented, and payment by Buyer shall be effected, in the same manner as in
Article VII.A above. In the case of credit to Buyer, RBIT shall remit the
relevant amount to
7
<PAGE>
Buyer by telegraphic transfer within thirty (30) days of preparation of the
final invoice.
C. Other Invoices and Payments
---------------------------
Payment of other amounts due hereunder, such as the fees referred to in
Article XI.A, XI.B.2 and XI.B.5 herein, shall be made by Buyer to RBIT upon
receipt of an invoice for such amounts.
ARTICLE IX.
SPECIFICATIONS
A. The Product shall contain a minimum of [+++++] TiO\2\ by weight
determined as set forth in Article XI of this Agreement.
B. The Product shall meet the following specifications:
1. Maximum [+++++] content of [+++++] by weight;
2. Maximum [+++++] content of [+++++] by weight;
3. Maximum [+++++] content of [+++++] by weight;
4. Maximum [+++++] content of [+++++] by weight;
5. Maximum [+++++] of [+++++] and typically of [+++++] by weight.
C. The specifications set out in Article IX.A and B above shall be referred to
in this Agreement as the "Specifications."
ARTICLE X.
WARRANTY
8
<PAGE>
A. RBIT warrants that Product sold and delivered hereunder shall conform to
the Specifications set forth in Article IX hereof.
B. In the event that any shipment of Product sold and delivered hereunder does
not conform to the Specifications and in the event the parties are unable
to agree on an equitable price adjustment, RBIT shall, at its cost and
expense, remove or otherwise dispose of such non-conforming Product and
replace it as soon as practicable but in any event within ninety (90) days
of notification, with an equivalent quantity of Product which meets the
Specifications. The obligation to remove or dispose of and replace non-
conforming Product shall not be applicable in the event Buyer fails to give
notice of such non-conforming Product as provided for in Article XI.C.
The warranty and remedy expressed in this Article X is the sole and
exclusive warranty made by RBIT with respect to the product to be delivered
under this Agreement. RBIT makes no other warranty, express, implied
(including any warranty of merchantability or fitness for a particular
purpose), statutory or otherwise.
C. RBIT shall not be responsible for any damages whatsoever, whether direct,
indirect, consequential or incidental, relating directly or indirectly to
the use, sale and/or resale of any product. RBIT's sole obligation in the
event of sale and delivery of non-conforming product shall be that set
forth in this Article
9
<PAGE>
X. Buyer agrees to indemnify and hold RBIT harmless from and against any
claims, losses, damages, costs, expenses or liability of whatsoever nature
from third parties arising out of or in connection with such use, sale
and/or resale of any product.
ARTICLE XI.
INSPECTION, WEIGHING, SAMPLING AND ANALYSIS
A. Inspection and Weighing
-----------------------
1. RBIT shall determine the weight of Product by weighing the railroad
car, before and after loading, on RBIT's government approved,
inspected and certified track scale. The weight so determined shall
then be adjusted for moisture content and the resulting dry weight
will be the final weight on which payment shall be made. The cost of
weighing shall be for RBIT's account.
2. Buyer shall be entitled, at its own expense, to verify the accuracy of
the weighing equipment referred to in paragraph XI.A.1. In the event
such verification reveals a weight discrepancy of more than one
percent (1%), the parties shall negotiate a mutually acceptable price
adjustment, failing which, the matter shall be referred to
arbitration.
B. Sampling
--------
10
<PAGE>
1. Sampling - Each shipment of Product loaded onto railcars at RBIT's
--------
Plant at Richards Bay shall be sampled by Bureau Veritas or such other
independent testing laboratory as may be agreed between Buyer and
RBIT. Such independent laboratory shall take and distribute
representative samples consisting of a monthly composite of individual
shipment samples (herein called "Official Sample(s)") in accordance
with the "SATP Slag Sampling and Sample Preparation Procedure," as set
forth in Exhibit "A" Procedure "SAM 080," attached hereto and made a
part hereof.
2. Lab Fees - The fees for services of such independent testing
--------
laboratory shall be borne equally by RBIT and Buyer. Buyer shall pay
RBIT for Buyer's one-half of such fees within seven (7) days after
receipt of an invoice therefor.
C. Analysis
--------
1. Methods of Analysis - All analyses shall be made by the methods
-------------------
outlined in Exhibit "B" Procedure "SAM 004," Exhibit "C" Procedure
"SAM 006," Exhibit "D" Procedure "SAM 008," Exhibit "E" Procedure
"SAM 001," Exhibit "G" Procedure "SAM 051," which are attached hereto
and made a part hereof.
11
<PAGE>
2. Analysis by RBIT - RBIT shall analyse the Official Samples and the
----------------
results of such analysis shall be provided to Buyer not later than
twenty-one (21) days following the end of the month in which the
shipments were made.
3. Analysis by Buyer - Buyer may, but shall not be obligated to, analyse
-----------------
the Official Samples. Unless Buyer notifies RBIT, within sixty (60)
days of receipt of an Official Sample, that Buyer's analysis indicates
that Product fails to meet the Specifications or that the TiO//2//
content is more than [+++++] different from RBIT's analysis, the
results of RBIT's analysis shall be final and conclusive.
4. Umpire Procedure - Should Buyer's analysis of the Official Samples
----------------
indicate that Product does not meet the Specifications or that the
TiO\\2\\ content of Products is more than [+++++] different from
RBIT's analysis, Buyer may so advise RBIT, who will then request the
independent testing laboratory referred to above to forward for
analysis its retained Official. Sample to such umpire analyst (being
an independent testing laboratory) as shall be agreed to from time to
time by the parties. The parties hereby agree that Inspectorate
Griffith Limited, 2 Perry Road, Witham, Essex, CN8 3TU, U.K., shall be
the initial umpire analyst.
12
<PAGE>
5. Settlement - The umpire's analysis as to TiO\\2\\content and that of
----------
Buyer or RBIT, whichever is in closer agreement to the umpire's
analysis, shall be averaged to establish the revised analysis for the
shipment. If the umpire's analysis is exactly halfway between Buyer's
and RBIT's analyses, such umpire's analysis shall then be used to
establish the revised analysis for the shipment.
If such revised analysis results in a price adjustment in accordance
with the procedures described in this Agreement, RBIT shall issue a
credit or debit invoice as the case may be. If an umpire's analysis is
required on any Specifications other than TiO\\2\\, the umpire's
analysis and that of Buyer or RBIT, whichever is in closer agreement
to the umpire's analysis, shall be averaged as the basis for final
settlement; provided, however, that if the umpire's analysis is
exactly halfway between Buyer's and RBIT's analyses, the umpire's
analysis shall be the basis for final settlement. If such analysis
determines that Product does not meet each of such Specifications, the
parties shall proceed as described in Article X of this Agreement. The
cost of an umpire's analysis shall be paid by the party whose analysis
varies most from umpire's analysis unless such variations are equal,
whereupon, the cost shall be borne equally by the parties.
13
<PAGE>
D. Revisions of Sampling and Analytical Procedures
-----------------------------------------------
The procedures set forth in the Exhibits referred to in this Article XI are
believed to be the most satisfactory ones now available. In the event
better procedures become available, each of said Exhibits may be revised
with the written approval of Buyer and RBIT.
ARTICLE XII.
ARBITRATION
Any dispute between RBIT and Buyer arising out of or in any way connected with
this Agreement, its negotiation, performance, breach, existence or validity
shall, unless settled by mutual agreement, be referred first, for conciliation
and, failing settlement thereunder, for final and binding arbitration, in
London, England, under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce. The arbitration shall be presided over by
three (3) arbitrators of which RBIT shall appoint one and Buyer shall appoint
another, and the two appointed arbitrators shall appoint the Chairman of the
arbitral tribunal within sixty (60) days following their appointment by the
parties hereto, failing which the Chairman shall be appointed by the
International Court of Arbitration of the International Chamber of Commerce. The
language of the arbitration shall be English.
ARTICLE XIII.
TAXES AND DUTIES
14
<PAGE>
All taxes or duties now or hereafter imposed in connection with this Agreement
shall be for the sole account of Buyer.
ARTICLE XIV.
PATENTS
A. RBIT agrees to protect and hold Buyer harmless against any and all claims
that Product in the state or form as sold under this Agreement infringes or
allegedly infringes any product claims of any South African patent owned by
third parties. RBIT will, at its own cost and expense, defend any and all
suits which may be brought against Buyer on account of alleged infringement
of such South African patent or patents, and RBIT shall pay any and all
fees, costs and damages awarded in said suits; provided, however, that the
total liability for damages under this Article XIV shall in no event exceed
the aggregate sales price of Product sold to buyer during the previous year
in which such alleged infringement commenced.
B. RBIT's obligations pursuant to this Article XIV shall be conditional upon
Buyer giving prompt notice to RBIT of any claims by third parties of any
such alleged infringement and of all information available to Buyer in
respect of such alleged infringement or claim.
ARTICLE XV.
FORCE MAJEURE
15
<PAGE>
In the event of any contingency which is beyond the reasonable control of RBIT
or Buyer, including, but not limited to (i) any strike, lockout, industrial
dispute, difference with workmen, accident, fire, explosion, earthquake, flood,
mobilization, war (whether declared or undeclared), act of any belligerent in
any such war, civil commotion, riot, rebellion, revolution or blockade, (ii) any
requirement, regulation, restriction, or other act of any Government, whether
legal or otherwise, (iii) any inability to secure or delay in securing export
licenses or import licenses, cargo space or other transportation facilities
necessary for the shipment or receipt of Product or fuel or other supplies or
material including ilmenite ore, water or electric power necessary for the
operation of the mines and plants where Product is produced or consumed, (iv)
any delay in or interruption to transportation by rail, water or other wise, (v)
any damage to or destruction of such mines or plants or any breakdown of plants
or machinery of RBIT or Buyer, or (vi) any other contingency, excluding market
conditions of any kind, which is beyond the reasonable control of RBIT or Buyer,
whether or not of the nature or character hereinbefore specifically enumerated,
which event delays or interferes with the performance of this Agreement or the
consumption of Product (an event of "Force Majeure"), then such event shall be
considered sufficient justification for delay in making shipment or delivery or
taking delivery or performance hereunder (other than the payment of money), in
whole or in part, until such event ceases to exist, and this Agreement shall be
deemed suspended
16
<PAGE>
for so long as such event delays or interferes with the performance hereof,
provided that prompt notice of any such event be given by the party affected to
the other party. Any delay or interference which affects RBIT's supply of
Product to customers shall entitle RBIT to allocate equitably any available
Product among customers in its discretion.
Anything to the contrary herein notwithstanding, if such event of Force
Majeure occurs, the obligation of RBIT to sell and deliver and of Buyer to buy
and to take the Contracted Quantity of Product with respect to any year shall
terminate (unless otherwise agreed between the parties) at the end of the year
as to quantities of Product which have not been loaded aboard Buyer's railcar at
Richards Bay by the end of the year due to such event of Force Majeure. Nothing
contained in this Article shall require Buyer to pay for, or RBIT to make up or
compensate for, any Product not delivered due to the application of this Article
XV.
ARTICLE XVI.
DEFAULT & LIMITS OF LIABILITY
For purposes of this Article XVI, a "default" shall mean any failure by either
party to make any payment or to perform any obligation under or pursuant to this
Agreement for any reason other than an event of Force Majeure as defined in
Article XV.
No default shall be deemed to have occurred unless the party in default shall
have first been given notice of such default and shall have failed to cure such
default
17
<PAGE>
within thirty (30) days in the event of a failure to pay and in all other events
of default, within ninety (90) days after receipt of such written notice.
In the event of a default arising from a breach of Buyer's duty to pay for
Product delivered for the total amount of the Contracted Quantity in any
particular year, RBIT shall have the right to seek damages for all loss or
damage actually sustained as a direct result of the default. In addition, RBIT
shall have the right (subject to Buyer's right to cure its default pursuant to
this Article) to terminate this Agreement forthwith by providing notice to such
effect to Buyer. Notwithstanding anything contained herein to the contrary, in
no event shall Buyer be liable for consequential, indirect or special damages as
a result of a default for failure to pay under this Agreement.
In the event of any default by RBIT arising from a failure to deliver
Product pursuant to this Agreement, RBIT (subject to RBIT's rights to cure its
default pursuant to this Article) shall compensate Buyer for all loss or damage
actually sustained as a direct result of the failure to deliver but excluding
indirect, consequential, punitive or contingent damages of the default Buyer
may suffer therewith including, but not limited to, loss of revenue or profits
as a result of Buyer's inability to operate, or shut down of its operations,
loss of use of equipment, or cost of substitute equipment, claims of third
parties, and the like. Buyer shall not, however, be entitled to terminate its
obligations to purchase Product under this Agreement.
18
<PAGE>
ARTICLE XVII.
WAIVER OF DEFAULT
Any failure by either party to give notice in writing to the other party of any
breach or default in any of the terms or conditions of this Agreement shall not
constitute a waiver therefor, nor shall any delay by either party in enforcing
any of its rights hereunder be deemed a waiver of such rights nor shall a waiver
by either party of any defaults of the other party be deemed a waiver of any
other or subsequent defaults.
ARTICLE XVIII.
NOTICE
Any notice to be given to any party under the terms of this Agreement shall be
deemed to have been delivered by courier service or transmitted by telefax and
subsequently confirmed by prepaid registered mail to the respective addresses or
telefax numbers given below:
TO RBIT: Attention: General Manager, Marketing
---------
Richards Bay Iron and Titanium (Proprietary) Limited
P.O. Box 401
Richards Bay
South Africa 3900
Telefax:(27) 351 9013160
19
<PAGE>
WITH COPY TO: Attention: Director, Sales & Marketing,
----------
Titania Slag and Rutile
Rio Tinto - Iron & Titanium Inc.
770 Sherbrooke West
Suite 1800
Montreal, Quebec
Canada, H3A 1G1
Telefax: 1 (514) 286-9336
TO BUYER: Attention: Group Minerals Manager
---------
Tioxide S.A. (Pty) Limited
Private Bag X 504
Umbogintwini, South Africa 4120
Telefax: 27 3194 2416
or to such other address or telefax number as either party shall so designate by
providing notice of such other address telefax or telex number in accordance
with the provisions of this Article. All notice shall be deemed to have been
received on the day of delivery, if delivered by courier service or on the day
of transmission, if sent by telefax, during normal business hours (9:00 a.m to
4:00 p.m.) of the recipient, failing which, such notice shall be deemed to have
been received on the next business day.
ARTICLE XIX
ASSIGNMENT
A. No party may assign its rights or obligations under this Agreement without
the prior written consent of the other party. The preceding sentence shall
not apply to assignments made to parents, subsidiaries, or related
corporations,
20
<PAGE>
partnerships or other entities of the parties hereto, providing that the
party executing this Agreement shall remain primarily responsible for
performance of its obligations hereunder unless such is waived in writing
by the other party. In the event of a non-agreed assignment, the party not
so assigning shall have the right to terminate this Agreement by giving
thirty (30) days written notice of its intent to terminate.
B. In the event of a sale by Buyer or Buyer's plant to a third party, Buyer
agrees to obtain as an integral part of such sale the assumption by the
purchaser of the obligation to purchase Product from RBIT upon the same
terms and conditions as in this Agreement.
ARTICLE XX.
ENTIRE AGREEMENT; AMENDMENT, MODIFICATION
This Agreement states the entire understanding between the parties hereto with
respect to the subject matter hereof, and there are no agreements or
understandings, oral or written, express or implied with reference to the
subject matter hereof that are not merged herein or superseded hereby. This
Agreement may not be changed, modified or supplemented in any manner orally or
otherwise except by an instrument in writing signed by a duly authorized
representative of each of the parties hereto. The parties recognize that, for
administrative purposes, documents such as purchase orders, acknowledgments,
invoices and similar documents may be used during the
21
<PAGE>
time this Agreement is in force. In no event shall any term or condition
contained in any such administrative document be interpreted as amending or
modifying the terms of this Agreement whether such administrative documents are
signed or not.
ARTICLE XXI
GOVERNING LAW
This Agreement shall, in all respects, be governed by and construed in
accordance with the laws of South Africa, to the exclusion of the United Nations
Convention on the International Sale of Goods.
ARTICLE XXI
CONFIDENTIALITY
This Agreement and information obtained by one party from the other by virtue of
this Agreement, shall remain confidential and shall not be disclosed to any
third party without the prior written consent of the other party, unless such
information is publicly available, or previously known to the recipient or is
required to be disclosed by law.
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized respective representatives, as of the day and year
first above written.
RICHARDS BAY IRON AND TITANIUM TIOXIDE S.A. (PTY) LIMITED
(PROPRIETARY) LIMITED
By: /s/ B.J. Grierson By: /s/ D.M. Callon
Name: B.J. Grierson Name: D.M. Callon
Title: Chairman Title: Managing Director
23
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.12
**Confidential portions of this Exhibit have been omitted pursuant to the Rules
and Regulations of the Securities and Exchange Commission. The symbol "[+++++]"
has been used to identify information which is the subject of a Confidential
Treatment Request.**
SLAG SALES AGREEMENT
--------------------
THIS AGREEMENT dated the 10th day of July, 1997 by and between QIT-FER ET
TITANE INC., a Quebec corporation with offices at 1625, Marie-Victorin, Tracy,
Quebec, Canada, J3R 1M6 (hereinafter "QIT"), and TIOXIDE EUROPE LIMITED, an
English company with its Registered Office at Tioxide House, 137-143 Hammersmith
Road, London W14 0QL, England (hereinafter, the "Buyer");
WHEREAS, QIT and Buyer entered into a Slag Sales Agreement dated October
14, 1991 as amended March 24, 1993, July 30, 1993 and January 10, 1995 (the
"Agreement");
WHEREAS, the amendment dated January 10, 1995 was declared by an arbitral
panel to be null and void with the consequence that the parties are left without
an agreement for the supply of titanium-bearing slag ("Product") for the period
of 1996 and beyond;
WHEREAS, as of December 31, 1996, Buyer had excess stocks of Product
amounting to approximately one year's consumption;
WHEREAS, Buyer has informed QIT that, notwithstanding its accumulation of
an excess inventory of Product, Buyer nevertheless wishes to maintain its on-
going relationship with QIT and ensure the continued supply of Product;
<PAGE>
WHEREAS, over the next four years, QIT is ready to reduce the supplies of
Product in accordance with the provisions set forth below to enable Buyer to
reduce its inventory to a normal level in a progressive and orderly fashion;
WHEREAS, Buyer also wishes to have the option (but not the obligation) to
purchase Product in subsequent years at a price to be agreed upon;
WHEREAS, QIT is willing to reserve a block of productive capacity of
Product exclusively to meet Buyer's pigment manufacturing requirements during
the term of this new Agreement and [+++++], in a manner that allows QIT to plan
with maximum efficiency the production of Product in line with a predictable
purchase and consumption pattern by Buyer;
WHEREAS, for QIT to keep open sufficient capacity to meet Buyer's needs in
subsequent years of this Agreement (should Buyer choose to exercise this
option), whilst not being assured of the continued utilization of that capacity
in the meantime is, Buyer recognizes, a significant risk that QIT can only be
expected to undertake if it has reasonable expectations as to the quantities of
Product to be purchased in the future;
WHEREAS, the parties accordingly are desirous of entering into this new
Agreement whereby the manufacture, purchase and consumption of Product is
established for the mutual benefit of enhancing predictability and coordination
of the operations of each of the parties.
NOW THEREFORE, for and in consideration of the covenants and conditions
herein contained, the parties hereto confirm their agreement as follows,
effective [+++++]:
ARTICLE I. SCOPE
- ----------------
2
<PAGE>
QIT agrees to sell and deliver, and Buyer agrees to buy and take delivery of for
its Calais and Scarlino pigment plants, titanium bearing slag (hereafter called
"Product"), produced at QIT's plant at Sorel, Quebec, Canada (hereinafter called
"QIT's Plant"), in the quantities and at the times specified herein and in
accordance with the terms of this Agreement.
ARTICLE II. DEFINITIONS
- ------------------------
Unless otherwise indicated, a "ton" is a metric ton of one thousand kilograms
dry weight, a "month" and a "year" are a calendar month and a calendar year,
respectively, and "dollar," "cents" and the dollar and cents sign ("$" and "c")
refer to lawful money of the United States of America, "Official Samples" has
the meaning given to it in Article XI and all percentages are based on dry
weights. "Party" means QIT as one party and Buyer as one party. "STEM" shall
mean that Product will be available and ready for loading at the point of
shipment on the date stated and in the quantity specified.
ARTICLE III. TERM
- ------------------
A. Unless terminated earlier pursuant to the provisions contained herein, this
Agreement shall be for an initial term of [+++++] and ending on [+++++] and
shall automatically continue in full force after the initial term for
additional periods of [+++++] each until terminated by either party giving
to the other party not less than [+++++] prior written notice.
B. In the event either Buyer or QIT shall become bankrupt, insolvent, commit
any act of bankruptcy or insolvency, or compromise with its creditors, then
the other party shall have
3
<PAGE>
the option, without notice or demand, to cancel this Agreement as it
pertains to Product or, at its option, to require specific performance and
demand damages hereunder to the extent such performance does not occur. The
preceding rights are without prejudice to any other rights and remedies as
are available to the parties hereunder or otherwise under the law.
ARTICLE IV. QUANTITY
- ---------------------
A. The quantity of Product ("Quantity") to be produced, sold and delivered for
each year of the term of this Agreement (or any renewal thereof) shall be
as follows:
1. For each of the years [+++++], the Quantity shall be [+++++];
2. For [+++++], the Quantity shall be [+++++] tons of Product, provided
that:
a) Buyer may [+++++];
b) On or before [+++++], Buyer shall notify QIT of the Quantity,
expressed in tons, that Buyer wishes to purchase for [+++++]
pursuant to this Article IV.A.2. Notwithstanding the foregoing,
Buyer shall have the option at any time prior to [+++++] of
[+++++];
c) Buyer's right to [+++++] pursuant to paragraph a) above shall be
available only on the condition that [+++++] at any of its Scarlino
or Calais sulphate pigment plants during the term of this Agreement
with the exception of [+++++];
4
<PAGE>
d) QIT may request buyer to provide a written statement, confirmed by
an independent auditor of Seller to the effect that the condition
referred to in paragraph c) above has been fulfilled;
e) During the term of this Agreement, Buyer shall inform QIT at half-
year intervals (commencing [+++++]) of the level of Product
inventories at its Calais and Scarlino plants and of the quantity
of Product consumed during the previous six (6) calendar months.
3. Subject to an agreement on price prior to [+++++] in accordance with the
procedure described in Article V of the Agreement, QIT shall offer
Tioxide for the year [+++++], a Quantity equal to [+++++].
ARTICLE V. PRICE
- -----------------
A. Basic Price
-----------
1. For [+++++], the price of QIT Product of [+++++] content shall be
[+++++] per ton FOB Sorel ("Basic Price").
2. For [+++++] and each subsequent year, the Basic Price of Product shall
be [+++++].
3. The term "Escalation" when used in this Agreement shall mean the
percentage increase, if any, in the annual average All Items, All-Urban
United States Consumer Price Index published by the US Department of
Labor, for the period of December to December immediately preceding the
applicable year, multiplied by the price to which such Escalation must
be added.
5
<PAGE>
4. For [+++++] and for each subsequent year that this Agreement is in
force, the parties agree to negotiate the price of Product on or before
[+++++] or, as the case may be, [+++++], failing which this Agreement
shall automatically terminate on [+++++] or on the [+++++].
B. Price Adjustment for TiO\\2\\ Content
-------------------------------------
1. The Basic Price established under Article V.A. is for Product which
meets the specifications set forth in Paragraphs A and B of Article IX
(hereinafter the "Specifications").
2. If the TiO\\2\\ content of Product exceeds eighty percent (80%), the
price shall be adjusted upwards by one-one hundred sixtieth (1/160th) of
the Basic Price for each whole increment of one-half percent (0.5%) by
which the TiO\\2\\ content of Product exceeds eighty percent (80%). If
the TiO\\2\\ content of Product is less than eighty percent (80%), the
price shall be adjusted downwards by one-one hundred sixtieth (1/160th)
of the Basic Price for each whole decrement of one-half percent (0.5%)
or part thereof by which the TiO\\2\\ content of Product is less than
eighty percent (80%).
3. If the insoluble TiO\\2\\ content of Product exceeds two percent (2.0%),
the price shall be adjusted downwards by one-one hundred sixtieth
(1/160th) of the Basic Price for each one-half percent (0.5%) or part
thereof by which the insoluble TiO\\2\\ content of Product exceeds two
percent (2.0%).
4. Product with a TiO\\2\\ content of less than seventy-six percent (76%)
may be rejected by Buyer at its option and shall be replaced by QIT as
provided in Article X.
6
<PAGE>
ARTICLE VI. SHIPMENTS
- ----------------------
A. QIT shall deliver Product into Buyer's Vessel at QIT's dock, Sorel, Quebec.
QIT and Buyer shall agree on a shipping schedule whereby deliveries are
spread more or less evenly throughout the year. QIT will make all
reasonable efforts to meet Buyer's manufacturing requirements with regard
to advance shipments to the extent that such does not disadvantage other
customers of QIT. Buyer shall obtain any import licences or other documents
that may be required to import Product into the country of destination. In
the event that the Product shipped during any quarter of a year is less
than [+++++] of the Quantity for such year, and provided QIT has made
available for delivery [+++++] of the Quantity of such year under the terms
and conditions of this Article VI for the quarter in question, QIT shall be
[+++++] referred to in Article VIII C. In the event that Product shipped
during any quarter of a year is greater than [+++++] of the Quantity for
such year, Buyer shall be [+++++] referred to in Article VIII C. For the
year [+++++], fifty percent (50%) of the Quantity for the year will be
shipped in the third quarter and fifty percent (50%) in the fourth quarter,
and the above mentioned [+++++]. Furthermore, in the event that Buyer does
not ship the total Quantity for a year prior to December 31 of such year,
Buyer will [+++++].
B. Buyer shall arrange for and furnish a cargo vessel (herein called "Buyer's
Vessel"). Notwithstanding the agreed shipping schedule, Buyer shall request
and receive STEM from QIT with respect to each shipment, one (1) month
prior to the arrival of Buyer's Vessel at Sorel. So far as possible, Buyer
shall give QIT not less than 10 days' notice of the expected
7
<PAGE>
date of arrival of each Buyer's Vessel at Sorel. QIT will load cargo in
lower holds only and will spout-trim cargo. Any levelling required by other
means than spout-trimming and any other abnormal loading costs, including
time required therefor, shall be for Buyer's account. Cleanliness and/or
protection of the holds of Buyer's Vessel shall be solely Buyer's
responsibility. As a convenience to Buyer however, QIT shall, prior to
loading, undertake on Buyer's behalf the inspection of the holds of Buyer's
Vessel and, if deemed necessary by QIT, QIT shall on Buyer's behalf require
any such necessary cleaning and/or protection to be performed, but in no
event shall QIT be liable for contamination or any other damages in
connection with cleanliness and/or protection of Buyer's Vessel, whether
caused by QIT own negligence or otherwise. Buyer's Vessel shall shift to
anchor during such cleaning and/or protection. The costs of such cleaning
and/or protection shall be for Buyer's account including the costs of
delays caused to Buyer's Vessel and time used therefor shall not count as
laytime.
C. QIT agrees to load at a minimum rate of [+++++] tons per weather working
day of 24 consecutive hours. Notice of readiness shall be presented to QIT
during office hours, which at present are 9:00 a.m. to 5:00 p.m., Monday
through Friday, and 9:00 a.m. to 12:00 Noon Saturdays. Laytime shall start
at 8:00 a.m. on the working day next following the delivery and acceptance
of such notice of readiness, whether Buyer's Vessel is in berth or not. Any
time from noon Saturday to 8:00 a.m. Monday and any time on holidays and
before laytime starts shall not count as laytime unless used, and, if used,
only half such time to count as laytime. It is contemplated that vessels
will normally be loaded and discharged in turn.
8
<PAGE>
However, QIT may at its option delay docking and loading Buyer's Vessel or
request Buyer's Vessel to shift to anchor or other berth to give preference
to QIT's ore or coal vessels even though Buyer's Vessel shall have been
presented for loading prior to QIT's ore or coal vessels. If QIT exercises
its option in the preceding sentence and Buyer's Vessel is not loaded in
turn, QIT shall be liable for any demurrage due to delay incurred by such
loading out of turn and the costs of Buyer's Vessel shifting to anchor and
reberthing.
D. Buyer shall furnish demurrage rates to QIT at least one day in advance of
arrival of a Buyer's Vessel. QIT agrees to pay Buyer demurrage if loading
is not completed in the allowed time at the rate specified in the Charter
Party, but only up to a maximum of [+++++] per day, fractions of a day to
be adjusted pro rata. Buyer agrees to pay QIT despatch for laytime saved at
half the demurrage rate specified in the Charter Party, but only up to a
maximum of [+++++] per day, fractions of a day to be adjusted pro rata.
E. QIT makes no representations, and none are implied, as regards its loading
dock or the water depth thereat, except that so long as the St. Lawrence
River level is not less than 13.1 feet above mean sea-level at Sorel,
Quebec, as recorded by the Canadian Hydrographic Survey, the minimum water
depth at QIT's dock will be thirty (30) feet.
ARTICLE VII TITLE AND RISK OF LOSS
- -----------------------------------
Title to and risk of loss in Product shall pass to Buyer when the Product has
effectively passed the ship's rail of Buyer's Vessel at QIT's dock at Sorel,
Quebec, Canada. Once the title to and risk of loss in Product has passed to
Buyer, QIT shall not be responsible for any losses or damages of any kind
9
<PAGE>
and howsoever arising in connection with Product or otherwise, except as
expressly provided in this Agreement.
ARTICLE VII INVOICING AND PAYMENT
- ----------------------------------
A. Regular Payments
----------------
Unless otherwise agreed, payment for Product shall be made by Buyer in U.S.
dollars by telegraphic transfer to QIT, to such account as QIT shall notify
to Buyer, within ten (10) days of the date of the bill of lading referred
to below provided, however, that QIT shall have provided Buyer with the
following documents:
1. QIT's commercial invoice covering the shipment, based on the assumption
that the TiO\\2\\ content of Product is [+++++];
2. QIT's weight certificate;
3. A full set of clean on-board ocean bills of lading concerning the
shipment by Buyer's vessel in question, designating "QIT-Fer et Titane
Inc." as shipper and "Tioxide Group Limited" as consignee; and
4. Such other documents and papers as may be required to clear Product for
shipment from Canada to the port of destination.
The above mentioned documents shall be forwarded to Buyer at such address
as Buyer shall have designated in accordance with Article XVIII. QIT shall
accept payment from any of Buyer's affiliate companies, but Buyer shall
remain primarily and separately liable for all sums due under this
Agreement.
10
<PAGE>
B. Final Invoice and Payment
-------------------------
Any adjustment which may be necessary as a result of the outcome of the
analysis of the Official Samples shall be embodied in a final invoice.
Payment by Buyer of the total amount due, if any, on the final invoice
shall be effected in same manner as specified in Article VIII.A above. In
the event the final invoice reflects an amount due from QIT to Buyer, QIT
shall remit the appropriate amount to Buyer by telegraphic transfer within
thirty (30) days of the date of the final invoice.
C. Final Annual Invoice
--------------------
By January 31 of each year, QIT shall prepare and present a Final Annual
Invoice relating to the [+++++], pursuant to Article VI.A, for the previous
year.
Payment of the total amount due, if any, on the Final Annual Invoice shall
be effected by telegraphic transfer within seven (7) days of preparation of
such Final Annual Invoice.
D. Other Invoices and Payments
---------------------------
Payment of other amounts due hereunder, such as the indemnity and fees
referred to in Articles XI.B.2 and XI.C.5 shall be made by Buyer to QIT
upon receipt of the invoice for such amounts.
ARTICLE IX. SPECIFICATIONS
- ---------------------------
A. The Product shall contain a minimum of [+++++] equivalent TiO\\2\\ by
weight determined as set forth in Article XI of this Agreement and shall be
screened through a sixteen millimetre (16mm) screen.
11
<PAGE>
B. The Product shall meet the following Specifications:
1. Maximum [+++++] content of [+++++] by weight;
2. Maximum [+++++] content of [+++++] by weight;
3. Maximum [+++++] content of [+++++] by weight;
4. Maximum [+++++] content of [+++++] by weight; and
5. Maximum [+++++] content of [+++++] by weight; and
6. Maximum [+++++] content or [+++++] of [+++++] and typically of [+++++]
by weight.
C. The specifications set out in Article IX.A and B. above shall be referred
to in this Agreement as the "Specifications".
ARTICLE X. WARRANTY
- --------------------
A. QIT warrants that the Product sold and delivered hereunder shall conform to
the Specifications set forth in Article IX, hereof.
B. In the event that any Product sold and delivered hereunder does not conform
to said Specifications and in the event the parties are unable to agree on
an equitable adjustment, QIT shall, at its cost and expense, remove or
otherwise dispose of such non-conforming Product and replace it with an
equivalent quantity of Product which meets the Specifications. The
obligation to remove or dispose of and replace non-conforming Product shall
not be applicable in the event Buyer fails to give notice of such non-
conforming Product as provided for in Article XI.C.
12
<PAGE>
The warranty and remedy expressed in this Article X is the sole and
exclusive warranty made by QIT with respect to the Product to be delivered
under this Agreement. QIT makes no other warranty, express, implied
(including any warranty of merchantability or fitness for a particular
purpose), statutory or otherwise.
C. QIT shall not be responsible for any damage whatsoever, whether direct,
indirect, consequential or incidental relating directly or indirectly to
the use, sale and/or resale of any Product. QIT's sole obligation in the
event of delivery of non-conforming Product shall be that set forth in this
Article X. Buyer agrees to indemnify and hold QIT harmless from and
against any claims, losses, damages, costs, expenses or liability of
whatsoever nature from third parties arising out of or in connection with
such use, sale and/or resale of any Product.
ARTICLE XI. INSPECTION, WEIGHING, SAMPLING AND ANALYSIS
- --------------------------------------------------------
A. Inspection and Weighing
-----------------------
1. Weight of Product loaded aboard Buyer's Vessel shall be determined by
the use of a weightometer which QIT shall make all reasonable effort to
inspect, maintain and keep properly adjusted for accuracy. Weight,
recorded by weightometer, shall be corrected for average weightometer
variation. This corrected weight, which includes moisture, shall then be
adjusted for the moisture content. The resulting dry weight shall be the
basis on which Product is invoiced for payment.
2. Copies of the inspection certificates of the weightometer shall be
provided to Buyer by QIT upon request.
13
<PAGE>
B. Sampling
--------
1. Each shipment of Product loaded aboard Buyer's Vessel shall be sampled
at QIT's Plant by Caleb Brett Canada Ltee, 4099 St-Jean-Baptiste,
Montreal, Quebec, Canada, an independent testing laboratory, or such
other independent testing laboratory as shall be agreed upon by Buyer
and QIT.
Such independent laboratory shall take and distribute representative
samples (herein called "Official Sample(s)") from each shipment in
accordance with the Sampling and Sample Preparation Procedure, set forth
in Exhibit "A" - Procedure "SAM S-101", attached hereto and made a part
hereof.
2. Lab Fees - The fees for services of such independent testing laboratory
--------
shall be paid equally by QIT and Buyer.
C. Analysis
--------
1. Methods of Analysis - All analyses shall be made by the methods outlined
-------------------
in Exhibit "B" - Procedure "SAM S-009", Exhibit "C" - Procedure "SAM S-
010", Exhibit "D" - Procedure "SAM S-005", Exhibit "E" - Procedure "SAM
S-008", Exhibit "F" - Procedure SAM S-007, Exhibit "G" - Procedure SAM
S-003, which are attached hereto and made a part hereof or by such other
methods as QIT shall consider appropriate provided that the results
obtained from such other methods are consistent with the results which
would be obtained by using the methods outlined in the above-mentioned
Exhibits.
14
<PAGE>
2. Analysis by QIT - QIT shall analyse the Official Samples and the results
---------------
of such analysis for each shipment shall be provided to Buyer not later
than thirty (30) days following the date of such shipment.
3. Analysis by Buyer - Buyer may, but shall not be obligated to, analyse
-----------------
the Official Samples. Unless Buyer notifies QIT, within sixty (60) days
of receipt of an Official Sample, that Buyer's analysis indicates that
Product fails to meet the Specifications or that the TiO\\2\\ content is
more than [+++++] different from QIT's analysis, the results of QIT's
analysis shall be final and conclusive.
4. Umpire Procedure - Should Buyer's analysis of the Official Samples
----------------
indicate that Product does not meet the Specifications or that the
TiO\\2\\ content of Product is more than [+++++] different from QIT's
analysis, Buyer may so advise QIT, who will then request the independent
testing laboratory referred to above to forward for analysis its
retained Official Sample to such umpire analyst (being an independent
testing laboratory) as shall be agreed to from time to time by the
parties. The parties hereby agree that Inspectorate Samplers & Analyst
Inc., P.O. Box 50, 180 South Main Street, Amber, Pennsylvania, U.S.A. -
19002 shall be the initial umpire analyst. The umpire shall analyse the
Official Sample in accordance with the methods outlined in the Exhibits
referred to in Article XI.C.1.
5. Settlement - The umpire's analysis as to TiO\\2\\ content and that of
----------
Buyer or QIT, whichever is in closer agreement to the umpire's analysis,
shall be averaged to establish the revised analysis for the shipment. If
the umpire's analysis is exactly
15
<PAGE>
halfway between Buyer's and RBIT's analyses, such umpire's analysis
shall then be used to establish the revised analysis for the shipment.
If such revised analysis results in a price adjustment in accordance
with the procedure described in this Agreement, QIT shall issue a credit
or debit invoice as the case may be. If an umpire's analysis is required
on any Specification other than TiO\\2\\, the umpire's analysis and that
of Buyer or QIT, whichever is in closer agreement to the umpire's
analysis, shall be averaged as the basis for final settlement; provided
that if the umpire's analysis lies exactly halfway between Buyer's and
QIT's analysis, the umpire's analysis shall be the basis for final
settlement. If such analysis determines that Product does not meet each
of such Specifications, the parties shall proceed as described in
Article X of this Agreement. The cost of an umpire's analysis shall be
paid by the party whose analysis varies most from the umpire's analysis
unless such variations are equal, whereupon, the cost shall be borne
equally by the parties.
D. Revision of Sampling and Analytical Procedures
----------------------------------------------
The procedures set forth in the Exhibits referred to in this Article are
believed to be the most satisfactory ones now available. In the event
better procedures become available, each of said Exhibits may be revised
with the written approval of Buyer and QIT.
ARTICLE XII. ARBITRATION
- ------------------------
16
<PAGE>
Any dispute between QIT and buyer arising out of or in any way connected with
this Agreement, its negotiation, performance, breach, existence or validity
shall, unless settled by mutual agreement, be referred first, for conciliation
and, failing settlement thereunder, for final and binding arbitration in London,
England, under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce. The arbitration shall be presided over by three (3)
arbitrators of which QIT shall appoint one and Buyer shall appoint another, and
the two appointed arbitrators shall appoint the Chairman of the arbitral
tribunal within sixty (60) days following their appointment by the parties
hereto, failing which the Chairman shall be appointed by the International Court
of Arbitration of the International Chamber of Commerce. The language of the
arbitration shall be English.
ARTICLE XIII. TAXES AND DUTIES
- ------------------------------
Canadian taxes or duties now or hereafter imposed on the export of the Product
during the term of this Agreement shall be for the sole account of QIT. All
other taxes or duties now or hereafter imposed during the Term of this Agreement
shall be for the sole account of Buyer.
ARTICLE XIV. PATENTS
- ---------------------
A. QIT agrees to protect and hold Buyer harmless against any and all claims
that Product, in the state or form as sold under this Agreement, infringes
or allegedly infringes any product claims of any Canadian patent owned by
third parties. QIT will, at its own cost and expense, defend any and all
suits which may be brought against Buyer on account of said infringement of
such Canadian patent or patents, and QIT shall pay any and all fees, costs
and damages
17
<PAGE>
awarded in said suits; provided, however, that the total liability for
damages under this Article XIV shall in no event exceed the aggregate sales
price of Product sold to Buyer during the year in which such infringement
commenced.
B. QIT's obligations pursuant to this Article XIV shall be conditional upon
Buyer giving prompt notice to QIT of any claims by third parties of any
such alleged infringement and of all information available to Buyer in
respect of such alleged infringement or claim.
ARTICLE XV. FORCE MAJEURE
- --------------------------
In the event of any contingency which is beyond the reasonable control of QIT or
Buyer including, but not limited to (i) any strike, lockout, industrial dispute,
difference with workmen, accident, fire, explosion, earthquake, flood,
mobilization, war (whether declared or undeclared), act of any belligerent in
any such war, riot, rebellion, revolution or blockade, (ii) any requirement,
regulation, restriction, or other act of any Government, whether legal or
otherwise, (iii) any inability to secure or delay in securing export licenses or
import licenses, cargo space or other transportation facilities necessary for
the shipment or receipt of Product or fuel or other supplies or material
including ilmenite ore or electric power necessary for the operation of the
mines and plants where Product is produced or consumed, (iv) any delay in or
interruption to transportation by rail, water or otherwise, (v) any damage to or
destruction of such mines or plants of QIT or Buyer, or (vi) any other
contingency, excluding market conditions of any sort, which is beyond the
reasonable control of QIT or Buyer, whether or not of the nature or character
hereinbefore specifically enumerated, which event delays or interferes with the
performance of this Agreement or the consumption of Product (an event
18
<PAGE>
of "Force Majeure"), then such event shall be considered sufficient
justification for delay in making shipment or delivery or taking delivery or
performance hereunder (other than the payment of money), in whole or in part,
until such event ceases to exist and this Agreement shall be deemed suspended
for so long as such event delays or interferes with the performance hereof,
provided that prompt notice of any such event be given by the party affected to
the other party. Any delay or interference which affects QIT's supply of Product
to customers shall entitle QIT to allocate equitably any available Product among
customers in its discretion.
Anything to the contrary herein notwithstanding, if such event of Force Majeure
occurs, the obligation of QIT to sell and deliver and of Buyer to buy and to
take delivery of Product with respect to any year shall terminate (unless
otherwise agreed between the parties) at the end of the year as to quantities of
Product which have not been loaded aboard Buyer's Vessel at Sorel, by the end of
the year due to such event of Force Majeure. Nothing contained in this Article
shall require Buyer to pay for, or QIT to make up or compensate for, any Product
not delivered due to the application of this Article XV.
ARTICLE XVI. DEFAULT & LIMITS OF LIABILITY
- ------------------------------------------
For purposes of this Article XVI, a "default" shall mean any failure by either
party to make any payment or to perform any obligation under or pursuant to this
Agreement for any reason other than an event of force majeure as defined in
Article XV.
19
<PAGE>
No default shall be deemed to have occurred unless the party in default shall
have first been given written notice of such default and shall have failed to
cure such default within thirty (30) days in the event of a failure to pay and
in all other events, within ninety (90) days after receipt of such written
notice.
In the event of a default arising from a breach of Buyer's duty to pay for
Product delivered or for the total amount of the Contracted Quantity in any
particular year, QIT shall have the right to seek damages for all loss or damage
actually sustained as a direct result of the default. In addition, QIT shall
have the right (subject to Buyer's right to cure its default pursuant to this
Article) to terminate this Agreement forthwith by providing notice to such
effect to Buyer. Notwithstanding anything contained herein to the contrary, in
no event shall Buyer be liable for consequential, indirect or special damages as
a result of a default for failure to pay under this Agreement.
In the event of any default by QIT arising from a failure to deliver Product
pursuant to this Agreement, QIT (subject to QIT's rights to cure its default
pursuant to this Article) shall compensate Buyer for all loss or damage actually
sustained as a direct result of the failure to deliver but excluding indirect,
consequential, punitive or contingent damages as a result of the default Buyer
may suffer therewith including, but not limited to, loss of revenue or profits
as a result of Buyer's inability to operate, or shut down of its operations,
loss of use of equipment, or cost of substitute equipment, claims of third
parties, and the like. Buyer shall not, however, be entitled to terminate its
obligations to purchase Product under this Agreement.
20
<PAGE>
ARTICLE XVII. WAIVER OF DEFAULT
- --------------------------------
Any failure by either party to give notice in writing to the other party of any
breach or default in any of the terms or conditions of this Agreement shall not
constitute a waiver thereof, nor shall any delay by either party in enforcing
any of its rights hereunder be deemed a waiver of such rights nor shall a waiver
by either party of any defaults of the other party be deemed a waiver of any
other or subsequent defaults.
ARTICLE XVIII. NOTICE
- ---------------------
Any notice to be given to any party under the terms of this Agreement shall be
deemed to have been delivered by courier service or transmitted by telefax and
subsequently confirmed by prepaid registered mail to the respective addresses or
telefax numbers given below:
TO QIT: QIT-Fer et Titane Inc.
c/o Rio Tinto Iron & Titanium Inc.
770 Sherbrooke West
Suite 1800
Montreal, Quebec
Canada, H3A 1G1
Telefax: 1 (514) 286-9336
Attention: Director, Sales & Marketing,
---------
Titania Slag and Rutile
TO BUYER: Tioxide Europe Limited
Tioxide House
137-143 Hammersmith Road
London W14 0QL
England
Telefax: 44.71.331.7778
Attention: Group Minerals Manager
---------
21
<PAGE>
or to such other address or telefax number as either party shall so designate by
providing notice of such other address or telefax number in accordance with the
provisions of this Article. All notices shall be deemed to have been received on
the day of delivery, if delivered by courier service or on the day of
transmission, if sent by facsimile, during normal business hours (9:00 am to
5:00 pm) of the recipient, failing which, such notice shall be deemed to have
been received on the next business day.
ARTICLE XIX. ASSIGNMENT
- -----------------------
A. No party may assign its rights or obligations under this Agreement without
the prior written consent of the other party. The preceding sentence shall
not apply to assignments made to parents, subsidiaries, or related
corporations, partnerships or other entities of the parties hereto,
providing that the party executing this Agreement shall remain primarily
responsible for performance of its obligations hereunder unless such
responsibility is waived in writing by the other party. In the event of a
non agreed assignment, the party not so assigning shall have the right to
terminate this Agreement by giving thirty (30) days written notice of its
intent to terminate.
B. In the event of a sale by Buyer of its Scarlino and/or Calais plant(s) to a
third party, Buyer agrees to obtain as an integral part of such sale, the
assumption by the purchaser of the obligation to purchase from QIT upon the
same terms and conditions as in this Agreement, the Product volumes
corresponding to, in the case of the Scarlino plant, 80/180 times the
22
<PAGE>
volumes stated in Article IV and, in the case of the Calais plant, 100/180
times the volumes stated in Article IV.
ARTICLE XX. ENTIRE AGREEMENT; AMENDMENT, MODIFICATION
- ------------------------------------------------------
This Agreement states the entire understanding between the parties hereto with
respect to the subject matter hereof, and there are no agreements or
understandings, oral or written, express or implied with reference to the
subject matter hereof that are not merged herein or superseded hereby. This
Agreement may not be changed, modified or supplemented in any manner orally or
otherwise except by an instrument in writing signed by a duly authorized
representative of each of the parties hereto. The parties recognize that, for
administrative purposes, documents such as purchase orders, acknowledgments,
invoices and similar documents may be used during the term of this Agreement. In
no event shall any term or condition contained in any such administrative
documents be interpreted as amending or modifying the terms of this Agreement
whether such administrative documents are signed or not.
ARTICLE XXI. SUBSTITUTE PRODUCT
- -------------------------------
A. QIT shall use its best efforts to supply Product in accordance with the
wishes of Buyer. QIT shall however have the right, at its option, of
substituting titanium slag produced by Richards Bay Iron and Titanium
(Proprietary) Limited ("Substitute Product") for Product to be delivered
under this Agreement by giving Buyer not less than six (6) months notice of
its intent to do so in which case the provisions of Addendum "A" hereto
shall apply as
23
<PAGE>
applicable. At the time QIT gives notice of its intent to substitute, it
shall also specify the amount to be substituted, which shall not be less
than [+++++] tons per year and not more than [+++++] tons per year. The
supply of Substitute Product shall be so arranged such that Buyer shall not
be obliged to change from Substitute Product to Product or vice versa more
than once per year.
B. In the event Substitute Product is supplied, the terms of this Agreement
shall be read as if made between the substituted supplier and Buyer but
responsibility for the supply of Substitute Product shall remain with the
supplier of Product being substituted. The Quantity of Product shall be
converted on the basis that [+++++] tons of QIT's Product shall be the
equivalent of [+++++] tons of Substitute Product.
ARTICLE XXII. GOVERNING LAW
- ---------------------------
This Agreement shall, in all respects, be governed by and construed in
accordance with the laws of Quebec, to the exclusion of the United Nations
Convention on the International Sale of Goods.
ARTICLE XXII. CONFIDENTIALITY
- -----------------------------
This Agreement and information obtained by one party from the other by virtue of
this Agreement, shall remain confidential and shall not be disclosed to any
third party without the prior written consent of the other party, unless such
information is publicly available, or previously known to the recipient or is
required to be disclosed by law.
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective representatives, as of the day and
year first above written.
QIT-FER ET TITANE INC. TIOXIDE EUROPE LIMITED
By: /s/ B.J. Grierson By: /s/ D.J. Croft
Name: B.J. Grierson Name: D.J. Croft
Title: Chairman Title: Tioxide Group Controller
25
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.13
**Confidential portions of this Exhibit have been omitted pursuant to the Rules
and Regulations of the Securities and Exchange Commission. The symbol "[+++++]"
has been used to identify information which is the subject of a Confidential
Treatment Request.**
SHELL TRADING INTERNATIONAL LIMITED
AND
ICI CHEMICALS & POLYMERS LIMITED
SUPPLY AGREEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. SUPPLY .............................................................. 1
2. QUANTITIES .......................................................... 2
3. QUALITY ............................................................. 4
4. METHOD AND RATE OF SUPPLY ........................................... 6
5. ICI FACILITIES ...................................................... 7
6. NOMINATION .......................................................... 8
7. VOLUMES AND LOGISTICS ............................................... 11
8. PRICES .............................................................. 11
9. QUARTERLY QUALITY AND QUANTITY RECONCILIATION ....................... 15
10. MEASUREMENT, SAMPLING AND TESTING ................................... 18
11. RISK AND TITLE ...................................................... 21
12. SHIPPING RISKS ...................................................... 21
13. COMMENCEMENT AND DURATION ........................................... 22
14. INVOICING AND PAYMENT ............................................... 24
15. TAXES AND DUTIES .................................................... 26
16. ASSIGNMENT/CHANGE OF REFINERY OWNERSHIP ............................. 27
17. LIABILITIES ......................................................... 27
18. EXCLUSION OF WARRANTIES/PROVISION OF PRODUCT SAFETY
DATA SHEETS ......................................................... 30
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
19. DISCHARGE CONDITIONS AND DEMURRAGE .................................. 30
20. FORCE MAJEURE ....................................................... 33
21. APPLICABLE LAW, ARBITRATION AND EXPERT .............................. 35
22. ADDITIONAL CONDITIONS ............................................... 36
23. NEW AND CHANGED REGULATIONS ......................................... 37
24. NOTICES ............................................................. 38
25. COSTS ............................................................... 38
26. GENERAL ............................................................. 39
27. WARRANTY OF STASCO .................................................. 40
28. DEFINITIONS ......................................................... 40
</TABLE>
APPENDIX 1: SPECIFICATION OF STIL PRODUCTS
APPENDIX 2: OPTIMIX A AND B
APPENDIX 3: SPECIFICATION OF ICI PRODUCTS
APPENDIX 4: PRODUCT TOLERANCES PER CARGO
APPENDIX 5: RECONCILIATION PROCESS
APPENDIX 6: EXAMPLE OF THE NOMINATION PROCESS
APPENDIX 7A: EXAMPLE OF THE RECONCILIATION PROCESS
APPENDIX 7B: 'Q4'99 RECONCILIATION PROCESS
APPENDIX 7C: 'TERMINATION RECONCILIATION PROCESS' (EXAMPLE)
APPENDIX 8A: NAPTHA AND PUL PRICE PUBLICATION (EXAMPLE)
APPENDIX 8B: BENZENE, TOLUENE, XYLENE PRICE PUBLICATION (EXAMPLE)
APPENDIX 8C: ETHYLENE PRICE PUBLICATION (EXAMPLE)
-ii-
<PAGE>
SHELL TRADING INTERNATIONAL LIMITED
AND
ICI CHEMICALS & POLYMERS LIMITED
SUPPLY AGREEMENT
1. SUPPLY
Shell International Trading and Shipping Company Limited whose registered
office is at Shell Max House, London, WC2R OZA ("STASCO") for and on behalf
of Shell Trading International Limited whom registered office is at Shall
Centre, London SEI 7NA ("STIL") hereby agrees to sell to ICI Chemicals &
Polymers Limited whose registered office is at The Heath, Runcorn,
Cheshire, WA7 4QF ("ICI") and ICI hereby agrees to buy from STIL the
following products (hereinafter referred to as "STIL Products"), in the
quantities and subject to the qualities as set forth in this Agreement:
(i) Reformate from refineries owned or operated by companies affiliated
with STIL, including but not limited to:
1. [+++++]
2. [+++++]
3. [+++++]
(ii) Benzene/Toluene Heart-cut from refineries owned or operated by
companies affiliated with STIL, including but not limited to:
1. [+++++]
(iii) Benzene Heart-cut from refineries, owned or operated by companies
affiliated with STIL, including but not limited to:
1. [+++++]
(iv) Reformate, Benzene/Toluene Heart-cut and Benzene Heart-cut from
other sources to be approved by ICI
<PAGE>
Additionally, ICI hereby agrees to sell to STIL and STIL hereby agrees to
buy from ICI, ICI's entire production stream of the following products from
ICI's North Tees Works (hereinafter referred to as "ICI Products"), subject
to the qualities and limitations in the quantities as set forth in this
Agreement:
(i) C9 Aromatics
(ii) Splitter Heavy Reject Stream
Further, the parties may in the future agree the sale by ICI to STIL, FOB
at ICI's jetty at Teesside, of Raffinate (non-aromatic C5/C6 cut), pygas,
naphtha and other streams in such volumes and upon such terms and
conditions as shall be agreed in writing.
2. QUANTITIES
a) Quantity of STIL Products Purchased
The quantity of STIL Products purchased by ICI hereunder shall be the
quantity of STIL Products [+++++] and measured in accordance with the
latest versions of ASTM Standards and API Manual of Petroleum
Measurement Standards (MPMS) generally accepted in the petroleum
industry.
b) Minimum Quantities
Due to the nature of shipping in bulk, it is expected by the parties
that STIL will not deliver products in the same quantity or
proportion [+++++] However, except as set forth below, STIL shall
schedule and deliver sufficient quantities of STIL Products during
each month such that [+++++].
c) Excess Quantities Delivered
STIL may, but shall not be obligated to, deliver quantities [+++++]
and ICI shall purchase and pay for such STIL Products, provided that
ICI shall not be required to pay for such products until the date pro
vided for in Clauses 13 f) and 14 and further provided that ICI is
able to accept the additional product within the storage facilities
dedicated to STIL Products under this Agreement or, to the extent
that it does not jeopardize normal operations, ICI's other storage
capabilities,
2
<PAGE>
subject nevertheless to the provisions stated in the second paragraph
of Clause 5 a).
d) Quantities of ICI Products
Subject to the STIL Quarterly Product Stream Notification (as
referred to in Clause 6 c) meeting the Optimix composition for C9s
and C10s, as set forth in Appendix 2, the maximum quantity of ICI
Products shall be:
Product Maximum in thousand tonnes per annum
[+++++] [+++++]
[+++++] [+++++]
STIL shall schedule and take delivery of the ICI Products on a
reasonably regular basis and in a manner which can reasonably be
anticipated will avoid there being any constraint to ICI's
manufacturing process, provided that it shall not be required to take
product on other than a backhaul basis.
e) Initial Purchase of Tank Heels
ICI agrees to purchase and pay by [+++++] representing the Tank
Heels. The pricing month shall be [+++++]. If STIL fails to deliver
the Tank Heels without default of ICI, the payment shall take place
as set forth in Clause 14 a) on or prior to [+++++] and the pricing
month shall be the month of delivery.
The Tank Heels for each tank shall be as set forth below:
Tank Tank Heel Quantity Product
N3018F [+++++] Heavy reformate
F8/002 [+++++] Heavy reformate
F8/001 [+++++] Light reformate
N3000F [+++++] Light reformate
3
<PAGE>
F8/003 [+++++] Heart-cuts
Heavy reformat refers to full-range reformates from [+++++] and
[+++++].
Light reformate refers to reformate from [+++++].
Heart-cuts refers to Benzene/Toluene Heart-cut and Benzene Heart-cut
from [+++++] and [+++++] and traded heart-cuts.
f) Tank Stock
Subject to the availability of the relevant tanks and no later than
40 days after the Stock Build Date as defined in Clause 13 d), the
minimum individual stocks of reformates and Heart-cuts in the tanks
"Minimum Operating Stock") shall, subject to the other provisions of
this Agreement, be:
(i) Reformate [+++++]
(ii) Heart-cuts [+++++]
Following the service of any notice to terminate this Agreement, ICI
may by notes to STIL reduce the level of [+++++]. Upon giving such
notice the provisions of Clause 2 c) shall cease to apply.
3. QUALITY
a) Deliveries from STIL
(i) Supply Points
Each supply point (refinery) other than those specified herein shall
be subject to initial approval of ICI. Details of any intended supply
point which is not described herein shall be submitted to ICI by STIL
and ICI shall notify STIL that it either approves or disapproves such
supply point within 3 working days after request from STIL. ICI shall
not unreasonably withhold approval of such supply point. A failure by
ICI to disapprove such supply point within 3 working days shall be
deemed approval by ICI of such supply point. If ICI shall disapprove
such supply point, it shall within 10 working days from STIL's
request
4
<PAGE>
for approval, include in its notice of disapproval its full rationale
for disapproving such supply point.
(ii) Product Specifications
The STIL Products shall upon delivery, unless otherwise agreed by
ICI, meet the specifications set forth in Appendix 1, as amended from
time to time, if and as other supply points are added.
(iii) Product Tolerances
Any delivery under this Agreement shall be made under the prevailing
Quarterly Composition of the Product Streams (referred to in Clause
6c). The measured content of Benzene, Toluene and Xylenes for each
cargo shall fall within the Product Tolerances set forth in Appendix
4. ICI may decline to accept any cargo for which the measured content
for Benzene, Toluene or Xylenes falls outside the Product Tolerances
set forth in Appendix 4 based upon the prevailing Quarterly
Composition of the Product Streams.
b) Deliveries from ICI
The ICI Products shall upon delivery, unless otherwise agreed by
STIL, meet the specifications set forth in Appendix 3.
4. METHOD AND RATE OF SUPPLY
a) STIL Products
STIL Products shall be delivered ex-ship at ICI's North Tees Works,
England. For each delivery of STIL Products supplied under this
Agreement the parties shall agree a loading date range from which an
estimate may be made of the discharge date range. It is understood
that any loading date range for the STIL Products (and hence
estimated discharge date range) is always subject to change in which
case STIL will advise ICI promptly (and in any event prior to
completion of loading) of such changes. Subject to the provisions of
Clauses 2b, 7 and 20 of this Agreement, nothing in this Agreement
shall be construed as imposing on STIL an obligation to deliver the
STIL Product within a particular date range at the place of delivery.
5
<PAGE>
All vessels used by STIL to deliver STIL Products and/or to take ICI
Products shall be subject to approval by ICI (such approval not to be
unreasonably withheld). STIL shall have the right to substitute
product (so long as it otherwise meets the requirements of this
Agreement) to be shipped in such vessels at its sole discretion.
The STIL Products delivered to ICI shall unless otherwise agreed be
in:
(i) [+++++] for reformates and
(ii) [+++++] for Benzene Heart-cut and Benzene/Toleune heartcut.
b) ICI Products
ICI Products shall be delivered FOB STIL's vessel at ICI's North Tees
Works, England. Subject to the provisions of Clause 2d), for each
delivery of ICI Products supplied under this Agreement the parties
shall agree a loading date range.
In order to allow STIL a backhaul freight optimisation, ICI will load
[+++++] on to the vessels provided and agreed between the parties for
this purpose.
5. ICI FACILITIES
a) Minimum Storage Capacity for STIL Products
Other than as provided under Clause 13 d) herein ICI agrees to
provide at all times during the term of this Agreement the following
minimum storage capacity for the storage of STIL Products located in
reasonable proximity to ICI's jetties at its North Tees Works,
England (hereinafter referred to as "ICI Storage Tanks"):
Tank Capacity ([+++++])
N3018F [+++++]
F8/002 [+++++]
F8/001 [+++++]
N3000F [+++++]
6
<PAGE>
F8/003 [+++++]
The above tankage capacity shall be maintained all at times by ICI.
Additional tankage may be provided by ICI at the request of STIL,
such provision to be agreed between the parties.
ICI shall have the right to perform required maintenance an any
storage tanks and production facilities. In such an event the parties
shall use reasonable endeavors to mitigate the effect of such
maintenance, provided always that ICI must make available other
storage capacity in substitution for tanks N3018F/ F8/003 in respect
of the [+++++]and [+++++] streams of STIL Products.
ICI may at any time provide substitute storage tanks with the prior
approval of STIL, such approval not to be unreasonably withheld.
b) Minimum Storage Capacity for ICI Products
ICI shall provide at all times during the term of this Agreement the
following minimum storage capacity for the storage of ICI Products to
be delivered to STIL located in reasonable proximity to ICI's jetties
at North Tees Works, England.
Tank Capacity ([+++++])
N2782F [+++++]
N2783F [+++++]
ICI may at any time provide substitute storage tanks with the prior
approval of STIL, such approval not to be unreasonably withheld.
c) Loading and Unloading Facilities
ICI shall arrange for all vessels to be discharged and/or loaded as
expeditiously as possible. ICI shall at all material times and at
their own expense provide and maintain or cause to be provided and
maintained in good working order all necessary flexible hoses,
connections, pipelines, tankage facilities and other accommodation
for discharge and/or loading of the products from and/or to the
vessel.
7
<PAGE>
6. NOMINATION
a) Optimix Notification
On or before the 35th calendar day prior to the commencement of each
quarter, ICI shall notify STIL as to whether it is electing to be
supplied under the OPTIMIX Mode A nomination or OPTIMIX Mode B1 or
OPTIMIX Mode B2 nomination procedure. Optimix A, Optimix B1 and
Optimix B2 qualities are fully defined in Appendix 2. ICI shall not
be entitled to nominate Optimix Mode B2 for more than two calendar
quarters in any twelve month period but shall otherwise be free to
nominate the mode of supply without restriction.
b) Quarterly Volume Optimix Nomination
On or before the 35th calendar day prior to the commencement of each
quarter, ICI shall notify STIL [+++++] of Optimix A or B1 OR B2 as
appropriate for the quarter. The nominated range shall fall within
the following minimum and maximum limits:
Optimix A: [+++++]
Optimix B1 or B2: [+++++]
c) Quarterly Product Stream Quality Notification
On or before the 30/th/ calendar day prior to the commencement of
each quarter, STIL shall notify ICI of the intended quantity and
quality composition of the Product Streams to be delivered to ICI
("Quarterly Composition of the Product Streams") and shall
demonstrate that these shall be capable of complying with the
nominated Optimix quality requirements for the following quarter. ICI
shall have two working days after receipt to notify STIL of any
defect in the mathematical calculation and the parties shall
immediately consult to resolve any such defect. If no agreement is
reached (such agreement not to be unreasonably withheld) then STIL
shall deliver or otherwise make available the last agreed quality
composition of the Product Streams until a new agreement is reached
or at the request of either party, the issue may be submitted to an
expert under Clause 21 C) for resolution. For the avoidance of doubt,
such submission shall not relieve the parties of their respective
obligations to deliver and take products under this Agreement. The
Quarterly Composition of the Product shall specify the estimated
content of the following compo-
8
<PAGE>
nents: Benzene, Toluene, Xylene, Ethytbensene, C9s and C10s for each
of the products and each of the supply points.
However, if as a result of the foregoing provisions, ICI is required
to process a higher proportion of Heavy reformate as opposed to Light
reformate than that set out in Appendix 2, then STIL will reimburse
to ICI any additional costs (energy) reasonably incurred by ICI.
d) Estimated Monthly Optimix Nomination
On or before the 35/th/ calendar day prior to the commencement of
each month, ICI shall notify to STIL [+++++] being the estimated
quantity of Optimix A or B1 or B2 as appropriate to be delivered
under this Agreement ("Estimated Monthly Nominated Quantity"). The
nominated range shall fall within the following minimum and maximum
limits as appropriate for Optimix A or B1 or B2.
Optimix A [+++++]
Optimix B1or B2 [+++++]
The mid-point of the Estimated Monthly Nominated Quantity shall
additionally be within [+++++] Estimated Quarterly Nominated Quantity
for the quarter in which the month falls, unless otherwise mutually
agreed.
e) Final Monthly Optimix Nomination
On or before the 5/th/ calendar day prior to the commencement of each
month, ICI shall notify STIL of the required quantity of Optimix to
be delivered under this Agreement ("Nominated Optimix Quantity"). The
Nominated Quantity shall be within the range of the Estimated Monthly
Nominated Quantity previously nominated for the month in accordance
with Clause 6 d) above.
f) Yearly Product Nomination
ICI shall ensure that in any 12 month period starting from the
Commencement Date or anniversary thereof the sum of the Monthly
Optimix Nominated Quantity for the 12 month period [+++++]
9
<PAGE>
g) Monthly STIL Product Nomination
Within 3 working days after receipt of the Nominated Optimix
Quantity, STIL (or its nominees) shall notify ICI of the quantities
of STIL Products that STIL will schedule to deliver or otherwise have
available to ICI during the month of nomination which shall provide
the product pursuant to the Quarterly Composition of the Product
Streams ("STIL Products Nomination"). ICI shall have one working day
after receipt to notify STIL of any defect in the mathematical
calculation and the parties shall immediately consult to resolve any
such defect. If no agreement is reached before the commencement of
the month (such agreement not to be unreasonably withheld), then STIL
shall deliver or otherwise make available the STIL Products
Nomination, within the tolerances set out in Appendix 4 based upon
the prevailing Quarterly Composition of the Product Streams and any
adjustments shall be resolved through the reconciliation process as
set out in Clause 9.
h) Monthly STIL Product Availability
On or before the 5/th/ calendar day prior to the commencement of each
month, ICI shall notify STIL of the quantity of ICI Products likely
to be available for export to STIL under this Agreement, which
[+++++] set forth in Clause 2 d) of this Agreement. The availability
of ICI Products is determined by [+++++].
7. VOLUMES AND LOGISTICS
a) STIL (or its nominees) and ICI will arrange cargo scheduling jointly
to ensure smooth logistics in line with ICI's storage capacities.
Each party will nominate an individual to coordinate logistics.
b) ICI shall provide to the person nominated by STIL (or its nominees)
daily tank readings of each of the ICI Storage Tanks and shall, upon
request, provide access to the ICI Storage Tanks at any reasonable
time to any representative designated by STIL for purposes associated
with this agreement.
8. PRICES
10
<PAGE>
a) The delivered prices for the STIL Products shall be:
The Benzene Heart-cut price per metric tonne
= [+++++]
The Benzene/Toluene Heart-cut price per metric tonne
= [+++++]
The Reformate price P(R) per metric tonne
= [+++++]
b) Prices for the ICI Products - P (C9) and P (SHR) - per metric tonne
shall be as follows:
[+++++]
c) Price for Ethylbenzene per metric tonne for reconciliation purposes
shall be as follows:
[+++++]
d) Price for Xylene (Virgin) for reconciliation purposes shall be [+++++]
e) The above symbols shall have the following meaning:
P(Bz)= [+++++]
P(Tol) = [+++++]
P(R) = [+++++]
P(C9) = [+++++]
P(SHR) = [+++++]
P(N) = [+++++]
P(PUL) = [+++++]
P(Eth) = [+++++]
P(EB) = [+++++]
f) The price formulas set forth in paragraphs a) and b) above shall be
[+++++].
11
<PAGE>
g) The price shall be calculated to three (3) decimal places and the
following arithmetic rules shall be applied to do this:
(i) If the fourth decimal place is five (5) or greater than five (5)
then the third decimal place shall be rounded up to the next
digit.
(ii) If the fourth decimal place is four (4) or less than four (4)
then the third decimal place will be unchanged.
h) In the event that any index referenced in this Agreement (including
any exhibits thereto) ceases to be published or if the publisher
changes quotation criteria, the parties shall meet to discuss an
alternative index which most closely replaces the index as it is
published on the date this Agreement is executed. If the parties fail
to agree within 30 days after either party notifies the other party,
the issue shall be submitted to an expert in accordance with Clause 21
c) of this Agreement. To assist the expert in such determination, each
party shall submit one, and only one, proposed replacement index and
the expert shall determine which of the two proposed indexes most
closely approximates the index which is changed or no longer
published.
9. QUARTERLY QUALITY AND QUANTITY RECONCILIATION
a) Quarterly Reconciliation
There will be a quarterly reconciliation and quantity and quality for
the purpose of reconciling the actual quantity and quality of product
consumed or lost by ICI as against the quantity of product nominated
by ICI. Reconciliation takes place once every quarter, however within
the reconciliation process the quantity reconciliation reference
period is the month and the quality reconciliation reference period is
the quarter.
b) ICI will declare the reconciliation payment due (from STIL to ICI, or
from ICI to STIL as the case may be) for any quarter to STIL on or
before the 10/th/ day of the first month following that quarter. This
declaration ('Quarterly Reconciliation Declaration') will include:
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(i) Declaration of quantities consumed or lost during the quarter
(ii) Declaration of reconciliation payment required for quantity
(iii) Declaration of reconciliation payment required for quality
(iv) Declaration of total reconciliation payment due
(v) Details of calculations used to compute the reconciliation
payment due
The reconciliation payment will be referred to as the 'Total
Reconciliation Payment'.
c) Any reconciliation payment shall be made [+++++] the period of
reconciliation.
d) The financial reconciliation involves three steps designed to
calculate the payment due for the Net Amount Utilised during the
previous calendar quarter:
(i) Quantity reconciliation -- calculating the 'Quantity
Reconciliation Payment'
(ii) Quality reconciliation -- calculating the 'Quality
Reconciliation Payment'
(iii) Overall financial reconciliation -- calculating the "Total
Reconciliation Payment'
The total financial amount generated by those three steps represents
the reconciliation payment in its entirety.
e) Process
ICI will maintain a database of daily and cumulative delivery
(quantity and quality); and daily consumption and loss. The data will
be based on the following sources:
(i) Delivery data: based on the Certificate of Quantity and Quality.
(ii) Consumption and loss: calculated an a daily basis based on:
daily stock deltas based on ICI daily stock dip; and quantity
and quality of products discharged, determined by the
Certificate of Quantity and Quality
This database will be used to calculate the actual quantity and
quality of the Net Amount Utilised during the quarter. Main outputs
will be
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monthly and quarterly quantities of the Net Amount Utilised, and
cumulative quality of material delivered in the quarter ('Quarterly
Quality') on FIFO (First In First Out) basis as described in Clause 9
g) of this Agreement. The data will be kept substantially in the
format set out in Appendix 7a.
f) The Quantity Reconciliation Process
The quantity reconciliation payment is the difference between the
amount invoiced for the quarter, and the value of the Net Amount
Utilised during the quarter. The value of the Net Amount Utilised
during each month shall be determined by multiplying the prices for
the nominated Optimix quality during the same month (in accordance
with Appendix 2); and Net Amount Utilised during each month (as
calculated from the ICI database detailed in Clause 9 e) above, and
declared in the Quarterly Reconciliation Declaration). These monthly
values of the Net Amount Utilised shall then be summed to give the
quantity reconciliation value during the quarter.
g) The Quality Reconciliation Process
The quality used during the quarter shall be determined on the basis
of FIFO, the product shall be deemed to be removed from the storage
tanks in the same order in which that product was delivered into those
tanks (including any product carried forward from the previous
quarter). Any product for which payment was not made by ICI during the
quarter shall be carried forward into the next quarter.
The quality is determined by the [+++++] For each component, the
difference between the content for the nominated Optimix quality, and
its content in the Net Amount Utilised in the quarter, is [+++++]
to give a reconciliation payment for each component. The
reconciliation payments for each of the four components are then
summed to give the quality reconciliation payment.
h) The Overall Financial Reconciliation
The 'Total Reconciliation Payment' is determined by the sum of the
Quantity Reconciliation Payment and the Quality Reconciliation
Payment. These payments are defined in the sections above.
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i) The detailed methodology is defined in Appendix 5.
Each calculation to be made under this Clause 9 shall be calculated to
two (2) decimal places and the following arithmetic rules shall be
applied to do this:
(i) If the third decimal place is five (5) or greater than five (5)
then the third decimal place shall be rounded up to the next
digit.
(ii) If the third decimal place is four (4) or less then four (4) then
the third decimal place will be unchanged.
j) Any dispute between the parties arising under this Clause 9 shall be
referred to an expert for determination pursuant to Clause 21 c) of
this Agreement
10. MEASUREMENT, SAMPLING AND TESTING
a) The quantity of STIL Product discharged and ICI Product loaded shall
be that discharged or loaded at the place of delivery and shall be
based on North Tees Works port meter measurements in accordance with
API MPMS Chapter 5 or in the absence of port meters, the meters of any
delivering or receiving vessels. Meters shall be proved on each
delivery in accordance with API MPMS Chapter 4, except as set forth
below.
b) The quantity and quality of products shall be determined at the place
of delivery by an independent Inspector instructed in accordance with
the Agreement and who is satisfactory to both ICI and STIL. Unless
otherwise agreed STIL will appoint and instruct the Inspector and the
charges of the Inspector to so act shall be shared equally between ICI
and STIL. Any charges of the Inspector for performing duties not
specified in the Agreement will be for the account of the party so
instructing the Inspector.
c) The Inspector shall be instructed to issue and send a telex, cable or
facsimile showing the quantity and quality of products discharged
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<PAGE>
and/or loaded to STIL and ICI immediately upon completion of discharge
or loading of the products and then issue, sign and send the
Certificate of Quantity and Quality showing the quantity and quality
of products to ICI and STIL as soon as possible thereafter. The
Certificate of Quantity and Quality issued shall state the methodology
and show the calculations used to determine the quantity and quality
of products.
d) The results of measurement, sampling and testing as evidenced by the
Inspector's certificate shall, for the purposes of this Agreement, be
treated as conclusive as to the quantity and quality of products
discharged or loaded, save for fraud or manifest error.
e) ICI shall ensure that both the Inspector and STIL's representative has
full access to any part of the products handling or storage facilities
deemed necessary by the Inspector or STIL's representative in order to
determine the quantity and quality of the products discharged or
loaded. The Inspector shall take and retain two sealed, labelled and
dated samples from vessel tanks, discharging or loading line and
receiving tanks for each grade of products delivered under this
Agreement.
f) On every occasion the Inspector takes any other samples in accordance
with the methodology and procedures described in this Agreement, the
Inspector shall take two further samples which shall be sealed,
labelled, dated and retained. STIL, ICI or their respective
representatives may instruct the Inspector to take and retain other
samples. The Inspector shall be instructed to retain samples for at
least 90 days from completion of discharge or loading date and may be
instructed to retain them for a longer period by ICI or STIL or their
respective representatives.
g) ICI will give or will procure that STIL's representative and the
Inspector are given full access to and copies of the latest records
covering the maintenance, calibration and proving of all equipment
used to determine the quantity of products discharged or loaded in
order to record that such equipment is in the opinion of the Inspector
and STIL's representative in a suitable condition to determine
accurately the quantity of Products discharged or loaded.
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<PAGE>
h) For products delivered from STIL's vessel directly into static shore
tanks (that is shore tanks to or from which no products are being
pumped other than the products being delivered under this Agreement)
and where metering facilities are not available, or where in the
opinion of the Inspector the meter did not perform in accordance with
API MPMS Chapter 5, or where the meters were not proven for that
delivery in accordance with API MPMS Chapter 4, the quantity of
products shall be based on discharge port shore tank gaugings in
accordance with API MPMS Chapter 3.
For ICI Products delivered to STIL's vessel directly from ICI's static
shore tanks (that is shore tanks to or from which no products are
being pumped other than the products being delivered under this
Agreement) and metering facilities are not available, or where in the
opinion of the Inspector the meter did not perform in accordance with
API MPMS Chapter 5, or where the meters were not proven for that
delivery in accordance with API MPMS Chapter 4, the quantity of
products shall be based on loading port shore tank gaugings in
accordance with API MPMS Chapter 3.
i) For products delivered from STIL's vessel directly into active shore
tanks (shore tanks where products are being pumped out of the tank
during delivery hereunder) and where no correctly functioning or
proven discharge port meters are available in accordance with Clause
10(a) above, the quantity of products shall be that determined at the
load part as evidenced by certificates of quantity (or bills of lading
where certificates of quantity are not available) and in accordance
with measurement, sampling and testing used at the load port. The
Inspector will be instructed to indicate on the documents showing the
quantity of products issued under Clause 10(c) that the products were
delivered into active shore tanks.
j) For products delivered to STIL's vessel directly from active shore
tanks (shore tanks where products are being pumped out of the tank
during delivery hereunder) and where no correctly functioning or
proven loading part meters are available in accordance with Clause
10(a) above, then the quantity of products shall be that determined at
the discharge port as evidenced by certificates of quantity (or bills
of lading where certificates of quantity are not available) and in
accordance with measurement, sampling and testing used at the
discharge
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<PAGE>
port. The Inspector will be instructed to indicate on the documents
showing the quantity of products issued under Clause 10(c) that the
products were delivered from active shore tanks.
k) Temperature measurements shall be taken by manual measurement of shore
tanks in accordance with API MPMS Chapter 7. Where metering facilities
are used for quantity determination, temperature measurement shall be
taken at the metering manifold using integral temperature compensators
or by manually integrating temperature over the discharge or loading.
The quantity of products shall be adjusted to volume at 60F in
accordance with Table Number 6A of ASTM-IP Petroleum Measurement
Tables (ASTM designation D-1250. IP designation 200) or such other
measure as determined in a definitive agreement.
11. RISK AND TITLE
a) The STIL Products delivered under this Agreement shall be at the risk
of, and the property in the STIL Products shall pass to ICI as soon as
they pass the vessel's permanent hose connection at ICI's North Tees
Works, England. Any loss of or damage to the STIL Products during
discharge shall, unless caused by the vessel or her officers or crew,
be for the account of ICI.
b) The ICI Products delivered under this Agreement shall be at the risk
of, and the property in the ICI Products shall pass to STIL as soon as
they pass the vessel's permanent hose connection at ICI's North Tees
Works, England. Any loss of or damage to the ICI Products during
loading shall, unless caused by the terminal or any shore facilities
or personnel, be for the account of STIL.
12. SHIPPING RISKS
a) If and so long as voyages to any of the ports of loading or discharge
under this Agreement in each case within CWE or any sea areas through
which the vessel has to travel in performance of this Agreement, incur
additional insurance or war risk insurance premiums in
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<PAGE>
excess of those prevailing at the date of this Agreement for either
vessel's hull and machinery or cargo or both, the cost of such
additional insurance and/or additional premiums for each delivery of
STIL Products shall be shared equally by ICI and STIL in addition to
the price stipulated in this Agreement. In all cases outside CWE, such
cost shall be borne by STIL.
b) STIL reserve the right to refuse at any time:
(i) to direct any vessel to undertake or to complete such a voyage to
the intended port of discharge if such vessel is required in
performance of this Agreement.
a) to transit or to proceed or to remain in waters so that the
vessel concerned would be involved in a breach of the Institute
of London Underwriters Warranties or, in STIL's reasonable
opinion, risk to its safety or risk of ice damage; or
b) to transit or to proceed to or to remain in waters where there
is war (de facto or de lure) or threat thereof; or
(ii) to direct any vessel to undertake a voyage to the intended
destination if such vessel is required in performance of the
terms of this Agreement to transit waters which, in STIL's
reasonable opinion, would involve abnormal risk or delay.
c) If ICI requests and STIL agrees to direct a vessel to undertake or to
complete a voyage as referred to in Clause 12 b) (a) above then ICI
undertakes to reimburse STIL in addition to the price for each supply
of STIL Products as provided in this Agreement for costs to STIL of
any additional insurance premiums and any other sums that STIL is
required to pay to vessel owners including but not limited to any sums
in respect of any amounts deductible under vessel owners' insurance
and any other costs and or expenses incurred by STIL.
13. COMMENCEMENT AND DURATION
a) This Agreement shall commence on the [+++++] (the "Commencement
Date"), however, during the period [+++++] to [+++++] an interim
agreement shall apply as set forth in Clause 13 c), d) and e) below.
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b) This Agreement shall continue until terminated by either party giving
not less than [+++++] notice, notice not to be given before [+++++].
c) ICI shall notify the Optimix quality and nominate the Optimix quantity
for the fourth quarter of [+++++] prior to [+++++]. STIL shall invoice
the [+++++]. The Optimix quality shall apply for invoicing purposes to
[+++++]. The nomination will include the pre-deliveries. The invoice
for the first quarter of this Agreement shall exclude pre-deliveries
for which payment was made by ICI.
d) ICI shall give STIL access to Tank Stocks storage capacity before the
Commencement Date as defined herein. ICI shall indicate by [+++++] the
earliest date from which STIL will be able to deliver the first
quantities of STIL Products (the "Stock Build Date"). This Stock Build
Date shall fall between [+++++]. On the Stock Build Date:
(i) ICI shall make available [+++++] storage capacity for the
reception of STIL Products.
(ii) 15 days after the Stock Build Date, ICI shall make available a
further [+++++] of storage capacity
(ii) 40 days after the Stock Build Date, ICI shall make available the
full storage capacity as defined in Clause 5 a).
(iv) The date at which ICI may start taking STIL Products from the
Tank Stocks defined as the On Stream Date shall be agreed between
the parties but may not fall within the first 20 days following
the Stock Build Date.
e) Notwithstanding Clause 13 d) ICI and STIL shall use their reasonable
endeavors to accommodate early delivery of reformate and heart-cuts in
the second and third quarters of [+++++]. Those deliveries shall be
paid on the [+++++] and such volumes of pre-deliveries shall be taken
into account as deliveries during the fourth quarter for nomination
and reconciliation purposes. ICI shall pay for the Tank Heels on the
[+++++]. The reconciliation process for the fourth quarter of 1999
will comprise the Tank Heels, the Minimum Operating Stock and the
quantity consumed or lost by ICI. An example of this process for
illustrative purposes is contained in Appendix 7b.
f) At the termination or other ending of this Agreement, there shall be a
final reconciliation in accordance with Clause 9 of this Agreement.
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<PAGE>
ICI shall pay STIL for any product delivered by STIL for which payment
has not been made. Payment shall be due [+++++] ("Bill of Lading") of
the last delivery of STIL product. An example of this process for
illustrative purposes is contained in Appendix 7c.
g) Both parties acknowledge that during the transition period as being
the fourth quarter of [+++++] it may be at times difficult to meet the
cargo tolerances as specified in Appendix 4 and the C9 specification
in terms of lead as set forth in Appendix 3. The parties will
cooperate to mitigate any consequences.
14. INVOICING AND PAYMENT
a) STIL Products
As soon as reasonably possible after the end of each month, STIL shall
issue an invoice to ICI (Facsimile accepted) calculated with reference
to the monthly STIL Products Nomination for that month as defined in
Clause 6 g). The price of the Benzene Heartcut and Benzene/Toluene
Heartcut components of the STIL Product Nomination Split shall be
calculated with reference to the [+++++] described in Appendix 2. For
all STIL Products the price formulas as defined in Clause 8 above
apply. An example of the monthly payment calculation is set forth in
Appendix 7. Such invoice shell be paid by ICI to STIL [+++++].
b) ICI Products
As soon as reasonably possible after the end of each month, ICI shall
issue an invoice to STIL (Facsimile accepted). For all ICI Products
the price formulas as defined in Clause 8 above apply.
Such invoice shall be paid by STIL to ICI [+++++].
c) Provisional Invoicing
Where the pricing terms for the product to be supplied hereunder do
not allow and/or, where needed hereunder, the Inspector's discharged
quantity figures are not available in time for a final invoice to be
dispatched in time for payment to be made by the due date, either
party may invoice the other on a provisional basis. In the case of a
provisional invoice, the loaded quantity will be used and a document
recording the loaded details presented to that other party instead of
the
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<PAGE>
discharge details as described in Clause 10. A final invoice will be
dispatched as soon as is practical thereafter.
Any resultant additional payment or overpayment will be paid
immediately by the relevant party to the other.
d) Each quarter, a reconciliation shall be conducted as set forth under
Clause 9 and shall be due for payment on or before [+++++].
e) Unless otherwise agreed the payment of any other costs, expenses or
charges which arise under the terms of this Agreement shall be made
against presentation of the payee's invoice (following the incurring
of such costs, expenses or charges) and shall be for immediate
settlement by the payer on or by the date advised thereon.
f) All payments to be made by ICI to STIL under this Agreement shall be
made free of all charges and without asserting at the time for payment
any set off, counterclaim or right to withhold whatsoever, unless
specifically permitted hereunder, in United States Dollars in New York
to STIL's account number [+++++] with the [+++++] (or to such other
bank account as may be advised by STIL to ICI from time to time)
quoting STIL's invoice number and ICI's name.
All payments to be made by STIL to ICI under this Agreement shall be
made free of all charges and without asserting at the time for payment
any set off, counterclaim or right to withhold whatsoever, unless
specifically permitted hereunder, in United States Dollars direct to
[+++++] for credit to ICI Petrochemicals account number [+++++] (or to
such other bank account as may be advised by ICI to STIL from time to
time) quoting ICI's invoice number and STIL's name.
g) Unless otherwise agreed in writing [+++++]
h) The foregoing shall not be construed as an indication of any
willingness on the part of either party, to provide extended credit as
a matter of course and shall be without prejudice to any rights and
remedies which that party may have under this Agreement or otherwise.
i) Where the last day for payment falls on a Saturday or on a weekday
other than Monday which is not a banking day in such place as may be
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designated by the recipient party for payment, then any such payment
shall be made on the nearest preceding banking day. Where the last day
for payment falls on a Sunday or a Monday which is not a banking day
in such place so designated, then any such payment shall be made on
the next following banking day.
15. TAXES AND DUTIES
a) All taxes, duties, charges or imposts, whether retroactive or not,
which are levied in the country in which the Products are discharged
on or by reference to, or on or by reference to amounts payable with
respect to the Products or the vessel (other than those defined by
Worldscale for owners' account) shall be for purchaser's account, and
the purchaser of each Product shall reimburse the seller for the full
amount of any such taxes, duties, charges or imposts which the seller
is obliged to pay.
b) The purchaser of each product will obtain at its own risk and expense
any import license or other official authorization necessary for the
importation of the goods.
c) Without prejudice to the above, as between the parties to the
Agreement the purchaser of each product shall be responsible for
complying with Customs entry procedures at the discharge port and
liable to Customs authorities for all duties and taxes that arise in
respect of such Customs entry.
d) In the absence of a declaration by STIL to the contrary, STIL hereby
declares that ICI Products taken by STIL are for delivery outside of
the UK.
16. ASSIGNMENT/CHANGE OF REFINERY OWNERSHIP
a) Any assignment of this Agreement shall be by novation agreement.
Neither party shall assign this Agreement without the consent of the
other party, such consent and agreement to novate not to be
unreasonably withheld.
b) If at any time STIL shall announce an intent to sell or close one or
more of the named refineries, STIL will have the right to terminate
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this Agreement upon giving not less [+++++]. Promptly following
notice, the parties shall meet and discuss the implications thereof
and shall seek to agree appropriate amendments to this Agreement to
avoid the termination. In the absence of agreement and provided that
there is a sale or closure of any one or more of the named refineries,
this Agreement shall terminate in accordance with the notice.
17. LIABILITIES
a) Except as specifically hereinafter provided, neither party shall be
liable to the other (whether in contract, negligence and/or tort) for
any indirect, special or consequential losses or damages, other than
as specifically set forth herein.
b) Any claim in respect of a shortage in quantity or defeat in the
quality of products will only be considered by the seller of such
product if notice in writing of such claim is received by the seller
within forty-five (45) days after the Bill of Lading date (Bill of
Lading date equals day zero) for the particular cargo and such notice
is followed by a fully documented claim to be received by the seller
within sixty (60) days after the Bill of Lading date (Bill of Lading
date equals day zero). If the buyer fails to give notice of or to
submit any such claim within the time limits, the buyer's claim is
deemed to be waived and any liability on the part of the seller
extinguished.
c) If STIL shall default in the delivery of STIL Products, ICI shall be
entitled:
(i) to acquire substitute products from a third party or third
parties; and/or
(ii) to acquire downstream products that would otherwise had been
derived from STIL Products
and, except as limited below, all additional costs and losses
reasonably incurred by ICI in so doing shall be promptly refunded by
STIL to ICI.
STIL's liability (whether in contract, negligence and/or tort) for
default in the delivery of STIL Products shall be limited to the price
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specified in Clause 8 times the amount of the STIL Products which STIL
has failed to deliver due to its default under this Agreement.
d) If STIL shall default in taking the ICI Products, ICI shall be
entitled to, and shall at STIL's request sell such products to a third
party or third parties and, except as limited below, all additional
costs and losses reasonably incurred by ICI in so doing shall be
promptly refunded by STIL to ICI. STIL's liability (whether in
contract, negligence and/or tort) for default in the taking of ICI
Products shall be limited to the price specified in Clause 8 times the
amount of the STIL Products which STIL has failed to take due to its
default under this Agreement.
e) If ICI shall default in nominating or taking the STIL Products, STIL
shall be entitled to and shall at ICI's request sell such products to
a third party or third parties and except as limited below all
additional costs and losses reasonably incurred by STIL in so doing
shall be promptly refunded by ICI to STIL.
ICI's liability (whether in contract, negligence and/or tort) for
default in nominating and/or taking the STIL Products and for default
in delivering the ICI Products shall be limited to the price specified
in Clause 8 times the amount of the STIL Products which ICI has failed
to nominate or take or the ICI Products which ICI has failed to
deliver respectively due to its default under this Agreement.
f) If STIL shall supply any STIL Products that shall not meet the
relevant specification described in Appendix 1, STIL shall promptly
refund to ICI all costs and losses reasonably incurred by ICI arising
therefrom provided that STIL's liability (whether in contract,
negligence and/or tort) under this Paragraph f) shall be limited to
the price specified in Clause 8 times the amount of the STIL Products
which failed to meet the relevant specifications described in Appendix
1.
g) If ICI shall supply any ICI Products that shall not meet the relevant
specification described in Appendix 3, ICI shall promptly refund to
STIL all costs and losses reasonably incurred by STIL arising
therefrom provided that ICI's liability (whether in contract,
negligence and/or tort) under this Paragraph g) shall be limited to
the price specified in Clause 8 times the amount of the ICI Products
which failed to meet the relevant specifications described in Appendix
3.
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h) In all of the circumstances referred to in paragraph c) to g) above,
each party shall be under a duty to take all reasonable steps to
mitigate the costs and losses incurred by it.
i) Nothing contained in this Clause 17 shall have the effect of excluding
either party's liability for death and personal injury caused by that
party's negligence.
j) The parties acknowledge that damages may not represent an adequate
remedy for a default on the part of either party to deliver products
hereunder and that in the circumstances an order for specific
performance may be an appropriate remedy.
18. EXCLUSION OF WARRANTIES/PROVISION OF PRODUCT SAFETY DATA SHEETS
a) The product specifications herein constitute the whole of each party's
obligations with respect to the quality of product to be supplied and
(save to the extent that exclusion thereof is not permitted or is
ineffective by operation of law) all statutory or other conditions or
warranties, with respect to the description, merchantability or
quality of the products or its fitness for any purpose are hereby
excluded.
b) Notwithstanding the foregoing, each party shall, prior to first
delivery of the product concerned, provide to the other party product
safety data sheets relating to their respective products.
19. DISCHARGE CONDITIONS AND DEMURRAGE
a) STIL has the right to deliver and ICI shall accept the delivery of the
total quantity of STIL Products that STIL is entitled and/or obligated
to deliver under this Agreement together with the amount of sediment
and water as might be present in the tanks arising from the handling
of the STIL Products by STIL and/or companies affiliated to STIL
and/or the vessel operator acting always as a Reasonable and Prudent
Operator. ICI shall not be obliged to accept delivery of STIL Products
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<PAGE>
under this Agreement if it has reasonable grounds to suppose that they
contain a quantity of water and sediment in excess of such amount.
b) ICI shall accept discharge of the STIL Products at a berth which ICI
shall provide or cause to be provided free of charge and which the
vessel can safely reach and leave and at which such vessel can lie and
discharge safely afloat. All charges at the discharge port (including
berth shifting for backhauls of ICI Products), other than those
defined by Worldscale as being for owner's account, shall be paid by
ICI.
c) Unless otherwise agreed, for the purposes of this Agreement a full
cargo shall be deemed to be the full carrying capacity of the vessel.
The time allowed for discharging a full cargo shall be [+++++] Sundays
and holidays included, and shall begin to run either:-
(i) six (6) hours after notice has been tendered by the Master or his
representative to ICI, or their representative, of the vessel's
readiness in all respects to discharge, berth or no berth, at any
time of the night or day; or
(ii) when the vessel is securely moored, whichever is earlier
d) Such notice of readiness may for the purposes of this Agreement be
tendered at any time after the vessel has arrived within the customary
anchorage or waiting place of the port of discharge or, if the vessel
moves directly to the discharge berth, when the vessel is securely
moored to the berth.
e) [+++++]
f) If the vessel is loading ICI Products, the time allowed for loading
shall be [+++++] Sundays and holidays included, and shall begin to run
either:
(i) If the vessel is discharging STIL Products, at the expiration of
allowed discharge time as set forth in Clause 19 c) above; or
(ii) if the vessel is not discharging STIL Products,
a. six (6) hours after notice has been tendered by the Master
or his representative to ICI, or their representative, of
the vessel's readiness in all respects to dis-
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charge, berth or no berth, at any time of the night or day;
or
b. when the vessel is securely moored, whichever is earlier.
g) If the vessel is not loading ICI Products, laytime shall cease on
disconnection of cargo hoses on completion of discharging. If the
vessel is loading ICI Products, laytime shall cease on disconnection
of cargo hoses on completion of loading. Provided, however, that in
either case, if the vessel is delayed after disconnection of cargo
hoses for ICI's purposes in excess of one hour, laytime shall continue
to run and demurrage, if incurred, shall continue to be payable from
disconnection of cargo hoses until the termination of such delay.
h) Time shall not count against laytime, or if the vessel is on
demurrage, for demurrage, when spent or lost:
(i) on an inward passage moving from her waiting place, even if
lightening has occurred there, to the North Tees Works; or
(ii) whilst the vessel is handling or preparing to handle ballast or
bunkers, unless this is carried out concurrent with discharging or
other normal cargo operations such that no loss of time is involved,
or is carried out to comply with shore restrictions; or
(iii) by any delay due to fault, failure or inefficiency of the
vessel, or if departure is delayed for vessel's purposes other than
for reasons pertaining to safety of the vessel over which the vessel
has no control, or
(iv) awaiting tide, tug boats, pilot, daylight or moderation of
weather prior to berthing, ice, immigration, customs or pratique
unless any or all of these delays are occasioned by shifting berth for
ICI's account or unless any or all of these delays are the direct
result of an initial delay or delays caused to the vessel for ICI's
account.
No other event shall suspend the running time to be counted as laytime
or demurrage even if it is an event of a type described in Clause 20
a).
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i) If the laytime allowance as provided for in this Clause 19 is exceeded
ICI shall pay to STIL demurrage for all such excess time at the full
rate specified below. ICI's liability for demurrage shall be absolute
and shall not, in any case, be subject to the provisions of an
exceptions or Force Majeure provision.
j) Unless otherwise agreed, the rate of demurrage to be used for the
purposes of this Agreement shall be as follows:
(i) if the vessel is on voyage charter, the rate specified in the
charterparty; or
(ii) if the vessel is not on a voyage charter, then the rate shall
be the single voyage market level current in London on the date of
commencement of loading of the voyage concerned for a vessel of
similar type and summer deadweight to that actually involved. Such
market level shall be agreed by ICI and STIL and shall be appropriate
to the site of the vessel concerned. In default of agreement between
ICI and STIL the market level is to be determined as the average rate
advised by two independent brokers mutually acceptable to ICI and
STIL. If ICI and STIL are unable to agree to two independent brokers
then two such brokers shall be nominated by the Chairman for the time
being of the London Tanker Brokers' Panel.
k) Payment of demurrage duty payable under this Agreement shall be made
by ICI to STIL [+++++] of STIL's invoice (date of invoice equals day
zero), and shall comply with the provisions of Clause 14.
20. FORCE MAJEURE
a) If either party is by reason of Force Majeure rendered unable wholly
or in part to carry out its obligations under this Agreement then (a)
the party affected shall give notice in writing of such Force Majeure
to the other party as soon as possible after the occurrence of the
cause relied on and (b) the party affected shall be released from its
obligations hereunder to the extent to which they are affected by the
circumstances of Force Majeure and for the period during which those
circumstances exist; provided that:
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(i) the party affected shall use all reasonable endeavors to
terminate or mitigate the effect of the circumstances of Force
Majeure with all reasonable speed,
(ii) nothing in this clause shall relieve either party of its
obligations to make any payments due hereunder.
b) In this clause "Force Majeure" means circumstances beyond the control
of the party concerned and which notwithstanding the exercise by it of
reasonable diligence and foresight it was unable to prevent or
overcome. In assessing the circumstances of Force Majeure the standard
to be expected of a party shall be that of a Reasonable and Prudent
Operator.
For the avoidance of doubt:
(i) Force Majeure shall include the failure of a supplier to supply
STIL Products to STIL as a result of that suppliers' Force
Majeure provided, in such case, that STIL has used its
reasonable endeavors to obtain alternative supplies of STIL
Products from other supply sources on terms reasonably
acceptable to STIL, but has been unable to obtain such STIL
Products.
(ii) In the case of ICI, Force Majeure shall include the failure of
a customer to take and/or of ICI's inability to consume
downstream products derived from the STIL Products as a result
of that customer's, and/or ICI's Force Majeure provided, in
such case, that ICI has used its reasonable endeavors to seek
alternative customers on terms reasonably acceptable to ICI.
c) The party subject to Force Majeure shall:
(i) Use all reasonable endeavors, to remedy or abate the Force
Majeure as expeditiously as possible; and
(ii) Resume performance as expeditiously as possible after termination
of the Force Majeure or the Force Majeure has abated to an extent
which permits resumption of such performance; and
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(iii) Notify the other party when the Force Majeure has terminated or
abated to an extent which permits resumption of performance to
occur; and
(iv) Keep the other party regularly informed during the course of the
Force Majeure as to when resumption of performance shall or is
likely to occur.
21. APPLICABLE LAW, ARBITRATION AND EXPERT
a) The proper law of this Agreement will be English Law and English Law
shall be used for interpreting this Agreement and for resolving all
claim or disputes arising out of or in connection with this Agreement
(whether based in contract in tort or on any other legal doctrine).
Any such claim or dispute not settled by negotiation shall be settled
by arbitration in London before a single arbitrator agreed upon by
both parties or if not so agreed appointed in accordance with the
Arbitration Act 1996 as amended from time to time. The arbitration
shall be conducted in English in accordance with the provisions of the
Arbitration Act 1996 as amended from time to time, the seat of the
arbitration shall be England and the arbitration award shall be final
without appeal to the courts.
b) The UN Convention of the International Sale of Goods (1980) shall not
apply.
c) Where pursuant to any provisions in this Agreement a matter is
required to be determined by an expert, the expert shall be a person
fitted by the possession of expert knowledge for the determination of
the particular matter in question. The expert shall be appointed by
agreement between STIL and ICI, or, in default of such agreement, by
the President for the time being of the Institute of Petroleum in
London.
d) STIL and ICI shall furnish the expert with all written or oral
information which he may reasonably require for his determination.
e) The cost of the services of the expert, if appointed, shall be shared
equally between STIL and ICI.
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22. ADDITIONAL CONDITIONS
a) If either party should go into liquidation (other than voluntary
liquidation for the purpose of corporate reconstruction), or if a
receiver or sequestrator of the undertaking and assets (or any part
thereof) of either party should be appointed, or if either party
should become bankrupt or insolvent, enter into a Deed of Arrangement
or a composition for the benefit of its creditors, or should do or
suffer any equivalent act or thing under any applicable law, the other
party may, by written notice, forthwith terminate this Agreement
without prejudice to any right of action or claim accrued at the date
of termination.
b) If at any time the bank debt of either party (the "First Party")
should be assessed in the standard credit ratings published by
Standard and Poor's or Moody's at 'B' or less than 'B', that First
Party may be required by the other party (the "Second Party") to
provide security of payment by either (and at the First Party's
option) making advance cash payment or providing a letter of credit or
providing such other security as may be reasonably acceptable to the
Second Party.
In the case of ICI, the bank debt referred to in the preceding
paragraph shall be that of Imperial Chemical Industries plc, or if
this Agreement be novated by ICI, it shall be the bank debt of the
novatee (or the novatee's parent company if the novatee's bank debt is
not separately assessed).
In the case of STIL the bank debt referred to in the preceding
paragraph shall be that of Shell Petroleum Company Limited, or if this
Agreement be novated by STIL, it shall be the bank debt of the novatee
(or the novatee's parent company if the novatee's bank debt is not
separately assessed).
Any amounts then due by the First Party to the Second Party shall in
such event become payable. In the event that a cargo has not already
been delivered, the Second Party may withhold any cargo until such
payment or a letter of credit or other security shall have been
received by them. If the First Party fail to provide such payment or a
letter of credit or security on demand by the Second Party within a
period of
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three (3) London banking days after such demand is made, the First
Party shall be in repudiatory breach hereof and the Second Party may
forthwith by notice terminate this Agreement without prejudice to any
rights of action or claims either party may have under this Agreement
or otherwise.
23. NEW AND CHANGED REGULATIONS
a) It is understood by the parties that the parties are entering into
this Agreement in reliance on the laws, rules, Regulations, decrees,
agreements, concessions and arrangements (hereinafter called
"Regulations") in effect on the date hereof with governments,
government instrumentalities or public authorities affecting the
products sold hereunder including, but without limitation to the
generality of the foregoing, those relating to the production,
acquisition, gathering, manufacturing, transportation, storage,
trading or delivery thereof, insofar as such Regulations affect ICI or
STIL or their respective affiliates.
b) In the event that at any time and from time to time during the term of
this Agreement any Regulations are changed or new Regulations become
effective whether by law, decree or regulation or by response to the
insistence or request of any governmental or public authority or any
person purporting to act therefore, and the effect of such changed or
new Regulations (a) is not covered by any other provision of this
Agreement, and (b) has a material adverse economic effect upon a party
or their respective affiliates in a manner related to this Agreement,
such party shall have the option to request renegotiation of the
prices or other pertinent terms provided for in this Agreement. The
said option may be exercised by either party at any time after such
changed or new Regulation is promulgated, by written notice of desire
to renegotiate, such notice to contain the new prices or terms desired
by such party. If the parties do not agree upon new prices or terms
satisfactory to both within thirty (30) days after a party gave such
notice, such party shall have the right to terminate this Agreement at
the end of the said thirty (30) day period. Any Products lifted during
such thirty (30) days period shall be sold and purchased at the price
and on the terms applying hereunder without any adjustment in respect
of the new or changed Regulations concerned.
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24. NOTICES
Unless otherwise specifically provided, all notices to be given hereunder
by either party to the other shall be sufficiently given if in writing and
sent by first class post or facsimile and delivered/addressed to the other
party as follows:
To STIL:
STASCO, OTF/51 and OPT/23
Shell Mex House
Strand, London WC2R OZA
-- Telex SHELL LONDON 919651 (ATTN OTF/51 and OPT/23)
-- Facsimile LONDON 0171/ 546-6610 (ATTN OTF/51 and OPT/23)
To ICI:
The Company Secretary
ICI Chemicals & Polymers Limited
PO Box 13, The Heath
Runcom Cheshire, WA7 4QF
-- Facsimile 01928/580778
Either party may change its address for service by giving notice thereof to
the other party.
25. COSTS
Each of the parties will be solely responsible for their respective costs
and expenses relating to or incurred in negotiating or preparing this
Agreement.
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26. GENERAL
a) In this Agreement where the context admits:
(i) references to this Agreement include the Appendices hereto.
(ii) references to Clauses are references to Clauses in this
Agreement.
b) The headings and any sub-headings are inserted for convenience only
and shall not affect the construction of this Agreement.
c) No waiver by either party of any default or defaults by the other
party in the performance of any of the provisions of this Agreement
shall operate or be construed as a waiver of any other or further
default or defaults, whether of a like or different character, nor
shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right or any
like right accruing to it thereafter. No failure of either party to
exercise any power given to it hereunder or to insist upon strict
compliance by the other of any obligation or condition hereof and no
custom or practice of the parties at variance with the terms hereof
shall constitute a waiver of any of the party's rights hereunder.
d) This Agreement may not be modified, varied or amended except by an
instrument in writing signed by both parties.
e) If at any time any one or more provisions contained in this Agreement
is or becomes invalid, illegal or unenforceable in any respect under
the laws of any applicable jurisdiction the validity, legality or
enforceability of the remaining provisions hereof shall not be in any
way affected or impaired thereby.
f) Confidentiality
(i) STIL agrees that during the term of this Agreement and for a
period of 12 months thereafter STIL will maintain in confidence
the following data:
a) The prices of the ICI Products
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b) The quantities of the ICI Products to be shipped under this
Agreement
c) The specifications of the ICI Products
(ii) ICI agrees that during the term of this Agreement and for a
period of 12 months thereafter ICI will maintain in confidence
the following data:
a) The prices of the STIL Products
b) The quantities of the STIL Products to be shipped under this
Agreement
c) The specifications of the STIL Products
27. WARRANTY OF STASCO
STASCO warrants to ICI that it has the full right and authority to enter
into this Agreement for and on behalf of STIL.
28. DEFINITIONS
a) "banking day" means a day when the banks in the specified place are
open for the transaction of normal banking business;
b) "calendar" means a gregorian calendar;
c) "CWE" means One safe port Euromed, not east of but including Greece
and excluding Yugoslavia, former Yugoslavia and Albania plus One safe
port UK, continental seaboard Gibraltar -- Hamburg including Eire plus
Scandinavia including Denmark and Finland. This whole range always
within Worldscale limits.
d) "day" means a calendar day;
e) "ICI Storage Tanks" means the tanks described in Clause 5 which shall
be dedicated to the storage of STIL Products.
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f) "kt" means a quantity equivalent to a mass of 1,000 metric tonnes;
g) "month" means a calendar month;
h) "Net Amount Utilised" [+++++].
i) "quarter" means a period of three consecutive months beginning on
1/st/ January or 1/st/ April or 1/st/ July or 1/st/ October.
j) "Sellers' suppliers" means any body or person being a direct or
indirect source of supply for Sellers;
k) "Standards of a Reasonable and Prudent Operator" means the standards,
practices, methods and procedures conforming to law and that degree of
skill, diligence, prudence and foresight which could reasonably be
expected from a skilled and experience operator and/or contractor
engaged in the same type of undertaking under the same or similar
circumstances and "Reasonable and Prudent Operator" shall be construed
accordingly.
l) "Tank Stock" means the minimum stock in tanks during a month as
specified under Clause 2 f).
m) "Worldscale" means Worldwide Tanker Nominal Freight Scale.
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SHELL INTERNATIONAL TRADING AND SHIPPING COMPANY LIMITED
for and on behalf of
SHELL TRADING INTERNATIONAL LIMITED
Signed: /s/ [Authorized Officer]
Date: 13 April 1999
ICI CHEMICALS & POLYMERS LIMITED
Signed: /s/ [Authorized Officer]
Date: 13 April 1999
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