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EXHIBIT 10.27
LONG-TERM SUPPLY AGREEMENT
DULY MADE AND EXECUTED ON THIS 19 DAY OF MARCH, 1996
BY AND BETWEEN
BROMINE COMPOUNDS LTD.
an Israeli Company
of Makleff Xxxxx
00 Xxxxxxxx Xxxxxx, XX Xxx 000, Xxxx Xxxxx 00000, Israel
for itself and/or on behalf of its Affiliates
("BCL")
of the first part
AND
TETRA TECHNOLOGIES, INC.
a Delaware corporation
of 00000 0-00 Xxxxx, Xxx Xxxxxxxxx, Xxxxx, XXX
for itself and/or on behalf of its Affiliates
("TETRA")
of the second part
WHEREAS TETRA wishes to purchase from BCL Calcium Bromide ***
solution meeting the specifications set for on Appendix A
hereto (the "Product") and BCL wishes to supply the Product to
TETRA, on the terms and conditions detailed in this Agreement:
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
promises contained herein, the parties stipulate, affirm and agree as follows:
*** CONFIDENTIAL TREATMENT REQUESTED
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1. PURCHASE AND SALE
During the term of this Agreement, TETRA agrees to purchase at lease
ninety percent (90%) of the entire external requirements of TETRA of
the Product from BCL and BCL agrees to supply such quantities of the
Product to TETRA, according to the terms detailed below.
***
2. SPECIFICATIONS
Specifications for the Product shall be as detailed in APPENDIX A
hereto (the "Specifications").
3. PRICING AND PAYMENT
3.1 Pricing: The prices for the Product will be determined as
specified in APPENDIX B hereto.
By not later than *** of every year commencing ***, the
parties will re-evaluate and agree upon the prices for the
Product which will be effective during the following year. ***
3.2 Invoices and Payment: BCL or its designated Affiliate shall
invoice TETRA on the date of each delivery. All payments
shall be made in US dollars unless otherwise agreed from time
to time by the parties, within *** days of each invoice. All
payments shall be made by TETRA by bank transfer to an account
designated by BCL. Late payments will bear interest at the
rate of *** per month.
3.3 Governmental Charges and Taxes: All taxes, duties, excises,
levies and assessments of any nature or description, except
(1) taxes imposed on or measured by BCL's income and (ii) any
taxes, duties, excises, levies and assessments imposed on the
export of Product by BCL that may be imposed or assessed by
any government body or authority based on sales of Product
under this Agreement will be for the sold account of TETRA and
TETRA shall indemnify and hold BCL harmless from any such
taxes, duties, levies and assessments paid for or on behalf of
BCL.
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4. FORECASTS AND ORDERS
4.1 Firm Orders and Forecasts:
4.1.1 On or before *** of each year during the term of this
Agreement, TETRA shall notify BCL or its designated
Affiliate in writing of its a good faith estimate of
90% of the entire external requirements of TETRA for
Product for the next year (the "Base Amount"). TETRA
estimates that the Base Amount for *** will be ***.
Each year during the term hereof, TETRA agrees to
purchase, ***, at least *** of the Base Amount, as
equally as reasonably possible over the calendar
quarters covered by the Base Amount for such year.
TETRA agrees that it will not adjust the Base Amount
(upward or downward) from one contract year to the
next during the term hereof by more than *** from the
actual purchases by TETRA hereunder during the 12
month period immediately preceding such estimate;
provided, however, that, for purposes of making this
adjustment, TETRA may elect to exclude amounts
purchased hereunder that were in excess of *** of the
Base Amount, if any, from the amount of such actual
purchases.
4.1.2 BCL agrees to supply Product ordered by TETRA
hereunder, up to a maximum of *** of the Base Amount
for each year during the term hereof. If TETRA
requires more than *** of the Base Amount, BCL shall
not be obligated but shall have the right of first
refusal to supply *** of such excess, if a price can
be mutually agreed to by TETRA and BCL. *** .
4.2 Purchase Orders: TETRA shall fax or otherwise transmit
purchase orders or verbal instructions for firm quantities of
Product to BCL or its designated Affiliate. Each such
purchase order shall specify the requested (A) quantity of
Product, (B) delivery time, (C) destination, and (D) labeling
instructions and may include other specific shipping, freight
or delivery instructions. In the event of a conflict between
the terms of any purchase order of TETRA and this Agreement,
this Agreement shall control.
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5. DELIVERY AND ACCEPTANCE OF PRODUCTS
5.1 Shipping: Products will be shipped *** or as agreed upon by
both parties to the destination specified by TETRA in its
purchase order and approved by BCL.
5.2 Title and Risk of Loss: Title to and risk of loss of Products
sold pursuant to this Agreement shall pass to TETRA ***
5.3 Certificate of Analysis, Quality, Inspection and Acceptance:
BCL agrees to provide to TETRA, promptly after shipment, a
certificate of quality for each bulk shipment of Product sold
to TETRA hereunder with regard to the characteristics set
forth on the Specifications. All quantities of the Product
delivered Pursuant to this Agreement shall be subject to
inspection, sampling and sampling retainage by Tetra at the
time the Product is delivered to determine their material
conformity with the Specifications. If Product delivered does
not materially conform with the Specifications, TETRA shall
notify BCL of such non-conformity and shall promptly ship one
kilogram of the Product to BCL for evaluation. BCL shall
promptly evaluate such Product and, if BCL determines that, as
a result of BCL's act or omission, the quality of Product does
not conform Specifications, then BCL shall, at Tetra's option,
either (i) credit Tetra's account by an agreed-upon amount, or
(ii) replace the non-conforming product and BCL shall notify
TETRA as to whether to return the non-conforming Product to
BCL. BCL shall be responsible for all costs and related
expenses of return or disposal of non-conforming Product. In
the event TETRA and BCL disagree as to whether the conforms to
the Specifications, the parties agree that a sample of the
allegedly non-conforming Product shall be provided to an
independent testing laboratory as to the conformity of the
Product to the Specifications shall be binding upon the
parties. Credit of TETRA's account or replacement, at no
charge, of non-conforming quantities of the Product shall be
the sole and exclusive remedy of TETRA in the event of
non-conformance of the Product to the Specifications.
6. FORCE MAJEURE
6.1 No Default: The failure of either BCL or TETRA to perform its
obligations under this Agreement, if caused by "Force Majeure"
(as hereinafter defined), shall not constitute a default
hereunder nor subject the party so failing to any liability to
the other; provided, however, that the party affected by such
Force Majeure shall promptly notify the other of (i) the
existence of such Force Majeure, (ii) its expected duration,
(iii) the estimated effect such Force Majeure will have on the
affected party's ability to perform its obligations hereunder,
and (iv) when such Force Majeure circumstance has ceased to
affect its ability to perform its obligations hereunder.
6.2 Definition: As used herein, the term "Force Majeure" shall
mean and include any circumstance beyond the reasonable
control of the affected party, including
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without limitation, the following;. any act of God or the
public enemy, accident, explosion, fire, storm, earthquake,
flood, drought, perils of the sea, casualty, strikes, lockouts,
labor troubles (whether or not such labor trouble is within the
reasonable control of the party affected thereby), riots,
sabotage, embargo, war (whether or not declared and whether or
not the USA. or Israel is a participant), any applicable law,
regulation, order (whether of the USA. or otherwise) (including
laws, regulations and orders pertaining to protection of the
environment, licenses, priority, seizure or requisition),
failure or delay of transportation, and shortage of or
inability to purchase supplies (including from other companies
in the Israeli Chemicals Ltd. group), equipment, fuel or labor
and, ***.
6.3 Reasonable Efforts: BCL and TETRA shall each use all
commercially reasonable efforts to eliminate any circumstance
of Force Majeure which affects its ability to carry out its
responsibilities under this Agreement.
7. APPORTIONMENT
In the event of a shortage or anticipated shortage of Product
available to BCL for supply hereunder, BCL agrees to allocate the
amount of Product available to BCL to ensure that TETRA receives an
equitable portion thereof ***
8. RIGHT OF FIRST REFUSAL
TETRA hereby grants to BCL a right of first refusal during the term of
this Agreement to supply to TETRA and its Affiliates *** of all the
external requirements (as defined in Section 1 above) of brominated
clear brine fluids (other than Product) produced by Israeli Chemicals
Ltd. Group for oil and gas well applications ("CBF") of TETRA and its
Affiliates. TETRA will notify BCL of the quantities of the required
CBF and the price and other material terms at which TETRA is prepared
to purchase same. If TETRA has received a third party quote, it
shall submit same to BCL. BCL will have thirty (30) days to notify
TETRA of its agreement to supply such CBF at the specified price and
terms more favorable. ***
9. TERM, DEFAULT AND TERMINATION
9.1 Term: The term of this Agreement will commence as of January
1, 1996 and will extend *** unless terminated (i) by either
party at any time and for any reason, by giving at least ***
prior written notice to the other party, or (ii) according to
Section 9.4 below. In order to remove doubt this Agreement
shall continue to be in full force and effect during such
period of notice.
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9.2 Supply during Notice Period. In the event BCL terminates this
Agreement under Section 9.1 above, during the *** period
referred to in Section 9.1 above, prices for Product under this
Agreement shall be ***
9.3 Default: Either party shall be in default under this
Agreement if it fails to perform any of its undertakings or
obligations contained in this Agreement in any material
respect. Either party shall also be in default under this
Agreement if it makes an assignment for the benefit of its
creditors; files an action or petition for relief under
applicable bankruptcy or insolvency laws; has filed against it
an involuntary petition to have it declared bankrupt in which
it acquiesces or which is not being actively disputed by TETRA
within sixty (60) days from the date of such filing or the
appointment if a receiver for all or substantially al of its
business or assets.
9.4 Termination upon Default: Upon default by either party under
this Agreement, the non-defaulting party may give written
notice of its intention to terminate this Agreement detailing
the alleged default. The defaulting party shall have thirty
(30) days from the date of receipt of such notice to cure the
default. If the default is not cured within such (30) day
period, the non-defaulting party shall have the right to
terminate this Agreement immediately by giving written notice
thereof to the defaulting party. The failure of the
non-defaulting party to so terminate this Agreement shall not
preclude it from giving notice under this Section to the
defaulting party with regard to the same or similar defaults
at any time in the future.
9.5 Survival of Sections: Articles 10 and 11 shall survive
termination of this Agreement for any reason.
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9.6 Limitation of Liability: IN NO EVENT WILL EITHER PARTY TO
THIS AGREEMENT BE LIABLE TO THE OTHER FOR ANY INCIDENTAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER THE CLAIM
FOR DAMAGES IS BASED ON CONTRACT BREACH OF WARRANTY,
NEGLIGENCE, STRICT LIABILITY OR OTHERWISE.
10. INDEMNIFICATION
TETRA agrees to indemnify and hold BCL harmless from and against any
and all claims, damages and liabilities whatsoever, asserted by any
person or entity, resulting directly or indirectly from the use of the
Product either alone or in connection with TETRA's products.
11. CONFIDENTIALITY
11.1 Confidential Information: In this Section, "Confidential
Information" shall mean (I) any confidential or proprietary
information relating to the activities and business of either
of the parties that is disclosed during the term of this.
Agreement by either of the parties to the other in connection
with this Agreement and (ii) confidential or proprietary
information relating to technology or know-how that is
disclosed during the term of this Agreement by either of the
parties to the other that is disclosed to the other in
connection with this Agreement. Except as otherwise required
by law or court order or as expressly authorized in writing by
the party disclosing the Confidential Information (the
"Disclosing Party"), during the term of this Agreement and for
a period of *** following any termination of this Agreement,
the recipient of such information (the "Recipient") agrees to
hold all Confidential information received hereunder in strict
confidence and not to disclose it to any other person. In
addition, the Recipient agrees not to use any Confidential
Information except for the purposes contemplated by this
Agreement. The parties agree to hold in strict confidence and
not to disclose to any other person the existence and terms of
this Agreement, except as may be required by any applicable
law, rule or regulation, including any regulation of the
United States Securities and Exchange Commission or its
counterpart in Israel. However, this obligation of
nondisclosure shall not apply to such information which is
publicly disclosed as required by such applicable law, rule or
regulation.
11.2 Exclusions: The term "Confidential Information" shall not
include information (i) which was already in the possession of
the Recipient, as evidenced by its written records (including,
for this purpose, any information that is recorded on computer
readable media), at the time of disclosure pursuant to this
Agreement, (ii) which is lawfully received by the Recipient
after the date hereof from a third party which is not,
directly or indirectly, under a secrecy obligation to the
Disclosing Party, or (iii) which is, at the time of disclosure
to the Recipient, or
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subsequently becomes, public knowledge otherwise than through
a breach of the obligations of the Recipient under this
Agreement.
11.3 Permitted Disclosures: A party may disclose Confidential
information employees of any Affiliate who have a need to
carry out the responsibilities of the party under this
Agreement, provided that each recipient of such information:
11.3.1 shall be informed of the Recipient's obligations with
respect to such information pursuant to this
Agreement, and
11.3.2 shall be bound to comply with the terms of this
Agreement or the equivalent thereof.
11.4 Enforcement and Indemnity: Each party will, upon written
request from the other (i) enforce the provisions of this
Article 11 against an such employee (including a former
employee) who received Confidential Information during the
course of his or her employment with a party (an "Employee"),
or permit the Disclosing Party to enforce said provisions
against any such Employee on its behalf, and (ii) indemnify
the other party upon demand against all loss, damage,
liability or expense caused by wrongful disclosure or use of
Confidential information by such Employee.
12. MISCELLANEOUS
12.1 Affiliate: For the purposes of this Agreement, "Affiliate"
shall mean any entity (i) which owns, directly or indirectly,
at least 50% of the outstanding voting securities of a party
hereto, or (ii) at least 50% of whose outstanding voting
securities (or other ownership interests) are directly or
indirectly owned by a party hereto or by a person who directly
or indirectly owns at least 50% of the voting securities of a
party hereto.
12.2 Status of Parties: No agency, partnership or joint venture
relationship is or is intended to be created or implied by
this Agreement.
12.3 Severability: If any provision of this Agreement or the
application of any such provision to any party or
circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such
provision to such person or circumstances, other than those to
which it is so determined to be invalid and unenforceable
shall not be affected thereby, and each provision hereof shall
be validated and shall be enforced to the fullest extent
permitted by law.
12.4 Governing Law: This Agreement shall be governed, construed
and interpreted in accordance with the laws of England.
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12.5 Arbitration: Any disputes arising under or in
connection with the validity interpretation and
performance of this Agreement that cannot be resolved
amicably by the parties shall be finally settled in
arbitration before a single arbitrator. The parties
shall endeavor in good faith to mutually agree on the
selection of an arbitrator of commercial disputes
practicing in London, England. If the parties cannot
mutually agree on the selection of an arbitrator
within sixty (60) days of the request, they shall
apply to the London Chamber of Commercial Arbitration
to appoint one. The arbitrator thus selected shall
be empowered to adopt the procedural rules that will
govern the arbitration, but will be otherwise bound
by the substantive laws of England. The arbitration
proceeding shall be held in London, England.
Arbitration proceeding shall be conducted in the
English language and all documents submitted as
evidence in such proceedings shall be in the English
language. The arbitrator will be required to give
detailed reasons for his determination. The decision
of any such arbitrator shall be final and binding on
the parties.
Notwithstanding the aforesaid, the parties hereby acknowledge
that a breach by either party of this Agreement may not be
adequately compensated by monetary damages. Accordingly, in
the event of such a breach, the parties recognize that the
non-breaching party may have the immediate right to secure an
order from any competent court enjoining such breach. This
right shall be enforceable without prejudice to any other
rights the non-breaching party has in law or under this
Agreement.
12.6 Waiver: Any failure by either party to this Agreement to
comply with any of its obligations, agreements or covenants
hereunder may be expressly waived by the other party. No
waiver by any part of any of its rights hereunder shall be
construed as a waiver of such rights in connection with any
subsequent failure.
12.7 Entire Agreement: This Agreement, together with the
Appendices described herein and delivered in connection
herewith, embodies the entire Agreement and understanding of
the parties hereto and supersedes any prior agreements or
understanding, written or oral, and all discussions between
the parties. This Agreement can only be amended by a written
document duly executed by the parties and referencing that
this Agreement is being amended.
12.8 Headings: Headings of the Sections of this Agreement are for
reference purposes only and shall not be deemed to have any
substantive effect.
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12.9 Assignment: This Agreement is personal and may not be
assigned by either party without the prior written consent of
the other; which shall not be unreasonably withheld; provided,
however, that (i) BCL and TETRA may each assign any or all of
its obligations hereunder to any of their Affiliates (provided
that the assigning party remains ultimately responsible
according to this Agreement), (ii) TETRA may assign this
Agreement and its rights hereunder at any time during the term
hereof as security to any entity that provides financing to
TETRA (although any assignment by such entity upon foreclosure
must be approved by BCL in its reasonable discretion.
12.10 Binding Effect; Benefits: This Agreement shall inure to the
benefits of and be binding upon the parties hereto and their
respective successors and permitted assigns; provided,
however, that nothing in this Agreement shall be construed to
confer any rights, remedies, obligations or liabilities on any
person other than the parties hereto or their respective
successors and permitted assigns.
12.11 Notices: Any notice to be given under this Agreement shall be
in writing and may be delivered or be sent by prepaid
registered post sent airmail addressed to the party at the
address set forth on the first page of this Agreement.
Notices served by post shall be deemed served on the (14th)
business day after the date of posting. For this purpose,
"business day" means any day other than a Saturday, Sunday or
a day which is a public holiday in either Israel or the United
States. This Section shall not preclude the giving of notice
by other methods of instantaneous written communications,
including fax, which notices shall be deemed received within
forty-eight (48) hours after being successfully sent.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written:
BROMINE COMPOUNDS LTD. TETRA TECHNOLOGIES, INC.
By: /s/ [illegible] By: /s/ Xxxxxxx X. Xxxxx
--------------------- --------------------------
Title: President Title: President and CEO
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APPENDIX A
SPECIFICATION
PRODUCT: CALCIUM BROMIDE ***
SYNONYMS/
ABBREVIATIONS:
DATE: 31/08/93
-----
Appearance: Clear ***
Assay (as CaBr2) %: ***
Density 20/20 C G/ML: ***
Crystallization pt. C: ***
pH (1:10 Dilution): ***
Packing: Bulk
00
XXXXXXXX X
(Section 3)
PRICING
***
