EXHIBIT 10.3
CHLOR-ALKALI SUPPLY AGREEMENT
-----------------------------
THIS CHLOR-ALKALI SUPPLY AGREEMENT ("AGREEMENT") BETWEEN XXXX CORPORATION
("OLIN"), A VIRGINIA CORPORATION, AND ARCH CHEMICALS, INC. ("ARCH"), A VIRGINIA
CORPORATION, IS EXECUTED AS OF THIS ______ DAY OF ______________, 1999.
1. RECITALS
1.1 Olin ("Seller") is a manufacturing corporation operating
primarily in the chemicals industry. Olin operates liquid chlorine
and caustic production facilities at its Chlor Alkali plants at
Charleston, Tennessee, XxXxxxxx, Alabama, and Niagara Falls, New York,
and from time to time engages in caustic and liquid chlorine commodity
exchanges with other producers.
1.2 Arch ("Buyer") is a specialty chemicals manufacturer which has a
need for a reliable supply of liquid chlorine and caustic (Products).
1.3 To insure a reliable source of supply of the Products for
internal use by Buyer, and to enable Seller to sell to Buyer such
Products under the terms and conditions set forth below, and for other
good and valuable consideration, Seller agrees to sell, and Buyer
agrees to purchase from Seller, the Products described herein.
2. PRODUCT. Membrane Grade or Rayon Grade Caustic (Exhibit 1), Liquid
---------
Chlorine (Exhibit 2).
---------
3. QUANTITY. Buyer agrees to purchase 100% of its requirements of the
Products during the term of the Agreement, but this "requirements" obligation
shall not apply to Products used in any business acquired by Buyer after the
effective date of this Agreement. Buyer initially estimates its requirements
for liquid chlorine at 100,000 tons annually. Buyer initially estimates its
requirements for caustic at 80,000 tons annually. During the Agreement, Buyer
shall continually provide to Seller, in writing, an estimate of its prospective
monthly and quarterly requirements for the respective Products.
4. TERM. The Initial Term shall be five (5) years, from [ ],
through 12/31/2003; and said Initial Term shall extend thereafter automatically
for two (2) year periods (Extended Term). Either party may terminate the
Agreement upon two (2) years written notice; however, written notice of
termination may not be given before December 31, 2001, and any notice of
termination of this Agreement shall be given so that the effective termination
date will be the last day of a calendar year. If such written notice of
termination is given by December 31, 2001, then said Agreement
shall terminate on December 31, 2003. If such written notice of termination is
not given by December 31, 2001, then said Agreement shall renew automatically at
the end of the Initial Term for a period of one (1) year (Extended Term),
commencing January 1, 2004.
5. SHIPPING CONTAINERS. Bulk.
6. METHOD OF SHIPMENT. Seller's Railcars or Seller's Bulk Truck Carriers,
Seller's pipeline, or barge.
7. PRICES. The prices for Products purchased by Buyer from Seller during
the Term of this Agreement shall be established at competitive levels by mutual,
written agreement between Buyer and Seller from time to time.
8. TERMS OF PAYMENT: Net 30 days on cycle billing.
9. ORIGIN. (a) Seller will supply Products under this Agreement from its
own manufacturing facilities or from manufacturing facilities owned by third-
parties with whom Seller has commodity-exchange agreements (Exchange) in place.
Seller will use its best reasonable efforts to tender delivery of Products
F.O.B. at points which would represent the most economical transportation cost
to Buyer. Except as provided in subparagraph (b), Seller retains the sole,
subjective right to manage the Exchange of Products and shall have no liability
to Buyer for such decisions, nor shall such Exchange decision be a breach of
this Agreement.
(b) Regardless of any Exchange conducted by Seller for the Products
subject to this Agreement, in no event shall Buyer be responsible for freight
charges to its Charleston facility. The parties agree to use their best efforts
to enter into Exchanges that will result in freight savings. Any net freight
savings resulting from an Exchange shall be shared equally by the parties. All
Product supplied under an Exchange shall be subject to the same terms and
conditions as set forth in this Agreement.
10. DESTINATION. Buyer's facilities at Lake Charles, Louisiana, Beaumont,
Texas, Shreveport, Louisiana, Doe Run, Kentucky, Charleston, Tennessee, and
Rochester, New York, or any other reasonable USA locations designated by Buyer.
11. COMPARATIVE FAULT, PERSONAL INJURY, PROPERTY DAMAGE, AND ENVIRONMENTAL
INDEMNITY. Seller and Buyer will each defend, indemnify, and hold the other
harmless from any loss, liability, damage, or expense due to any property
damage, bodily injury, death, or any liability for damages, including any
governmental fines, penalties, or assessments arising from the violation of any
local, state, or federal environmental laws whatsoever,
-2-
arising out of, or in connection with, or resulting from, this Agreement, or any
matters related thereto, but only for the amount proximately caused by, or
legally resulting from the respective percentage, if any, of each party's
comparative negligence.
12. FORCE MAJEURE. Failure (in whole or in part) or delay on the part of
either party, or any carrier in the performance of any of the obligations
imposed upon the other hereunder shall be excused and such party shall not be
liable for damages or otherwise on account thereof, when such failure or delay
is the direct or indirect result of any of the following causes whether or not
existing at the date hereof, and whether or not reasonably within the
contemplation of the parties at the date hereof, namely: acts of God,
earthquakes, fire, flood or the elements; malicious mischief, insurrection,
riot, strikes, lockouts, boycotts, picketing or labor disturbances; public
enemy; war (declared or undeclared); compliance with any federal, state or
municipal law, or with any regulation, order or rule (including, but not limited
to, priority, rationing or allocation orders or regulation) of governmental
agencies, or authorities or representatives of any government (foreign or
domestic) acting under claim or color of authority; total or partial failure or
loss or shortage of all or part of transportation facilities ordinarily
available to and used by a party hereto in the performance of the obligations
imposed by this Contract, whether such facilities are such party's own or those
of others; or total or partial loss or shortage of raw or component materials or
products ordinarily required by a party to produce the Product; the
commandeering or requisitioning by civil or military authorities of any raw or
component materials, products, or facilities, including, but not limited to,
producing manufacturing, transportation and delivery facilities, perils of
navigation, even when occasioned by negligence, malfeasance, default or errors
in judgment of the pilot, master, mariners or other servants of the ship's
owner; or any cause whatsoever beyond the control of either party hereto,
whether similar to or dissimilar from the causes herein enumerated; provided,
however, that the settlement of strikes or lockouts shall be entirely within the
discretion of the party having such difficulty and that any requirement that a
force majeure shall be remedied with the exercise of due diligence shall not
require the settlement of strikes or lockouts by acceding to the demands of the
opposing party when such course is inadvisable in the discretion of the party
having such difficulty. If by reason of any such circumstances, Seller's supply
of Product shall be insufficient to meet all of its Product requirements, Seller
shall have the right at its option and without liability to apportion among any
and all of its customers, including its affiliated division and companies, in
such manner as Seller believes equitable. In the event a force majeure is
declared under this Agreement, Buyer shall be excused from purchasing that
portion of its requirements for Products which are purchased from an alternate
supplier during the period of force majeure. If, during a force majeure, Seller
is unable to supply Products via pipeline at Buyer's Charleston facility, Seller
agrees to provide any reasonable, existing unloading and delivery services at
Charleston to facilitate the supply of Product from an alternate means of
supply, but Seller shall not be required to spend or invest any capital or money
to comply with this requirement. Notwithstanding the above, Seller expressly
acknowledges and agrees that it shall not be excused from performing its
obligation to supply Product under this Agreement as a result of its decision to
impose order control on its customers.
13. TERMINATION. If either party shall fail to comply with any material
provisions, requirements, or conditions of this Agreement, or should file a
voluntary petition under any
-3-
bankruptcy law, or be adjudicated a bankrupt, become insolvent, or commit an act
of bankruptcy (Material Breach), and such Material Breach shall go unabated for
a period of at least sixty (60) days, then the aggrieved party, upon three (3)
days written notice to the party in violation of such conditions, may terminate
this contract in whole without prejudice to any other remedy. The aggrieved
party shall give written notice of such Material Breach as soon as possible
following discovery of such Material Breach.
14. CONFIDENTIALITY. Buyer acknowledges that prior to and during year one
(1) of this Agreement, Seller shall be disclosing to Buyer certain pricing and
manufacturing information which it considers confidential and proprietary to
Seller (hereinafter called "Confidential Information"). Buyer agrees during any
term of this Agreement to refrain from disclosing such Confidential Information
to any third person, except to Buyer's outside auditors who are under a written
duty of confidentiality to Buyer. Buyer and such auditors may only disclose
such Confidential Information to employees of Buyer who have a reasonable need
to know such Confidential Information.
15. NOTICES. Any notice or written communication provided for in this
Agreement by either party, shall be in English by facsimile, telegram, and/or
electronic mail, and shall be confirmed immediately by registered air mail
letter, promptly transmitted and addressed to the appropriate party. All
notices and communications shall be sent to the appropriate address set forth
below, until the same is changed by notice in writing to the other party as the
case may be.
If to Seller: Xxxx Corporation
000 Xxxxxx Xxxx XX
Xxxxxxxxx, XX 00000
Attention: President, Chlor Alkali Products
If to Buyer: Arch Chemicals, Inc.
000 Xxxxxxx 0
Xxxxxxx, XX 00000
Attention: General Counsel
16. DELIVERY. Unless specified otherwise deliveries of Product shall be
made at such times, within the usual business hours of Seller, as Buyer shall
specify by reasonable advance notice to Seller, which shall include any
necessary shipping instructions, and Seller shall prepare and deliver to Buyer
such shipping papers as may be agreed.
17. PRODUCT STEWARDSHIP. The parties agree to adhere to and use their
best efforts to comply with an implement the RESPONSIBLE CARE initiative
developed by the
-4-
Chemical Manufacturers Association (CMA), whether or not both parties are
members of CMA. This duty includes, but is not limited to, adherence to the
GUIDING PRINCIPLES for RESPONSIBLE CARE and implementation of the six CODES OF
MANAGEMENT PRACTICES. In the event either party fails to comply with the
RESPONSIBLE CARE provisions set out above, the non-complying party shall have
thirty (30) days to cure such non-compliance, otherwise the complying party
shall have the right to immediately terminate this Agreement, without liability,
except for any liability for already-incurred imbalances.
18. TITLE. Title to and risk of loss for Product transferred hereunder
shall pass from Seller to Buyer upon delivery to Buyer's location . With
respect to Product delivered by pipeline, title and risk of loss shall pass from
Seller to Buyer at the point where the Seller pipeline enters onto the leased or
owned premises of Buyer. Buyer is free to contract with any designated party
for the passage of title and risk of loss for Product upon Seller's delivery to
such designated party at any shipping location.
19. WARRANTIES. Seller warrants that (a) the Products are of the quality
set forth in Exhibits 1 and 2 hereto, and (b) the title conveyed is good and the
product is free from any lawful security interest, lien or encumbrance. SELLER
MAKES NO FURTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR OTHERWISE. Buyer assumes all risk of patient infringement by
reason of any use Buyer makes of the product in combination with other material
or in the operation of any process.
20. CREDIT. Seller may recover for each shipment hereunder as a separate
transaction, without reference to any other shipment. If Buyer fails to pay any
invoice in accordance with the terms of this contract, Seller may, at its
option, defer further shipments until payment has been made (in which event
Seller may elect to extend the contract period for a time equal to that for
which shipments were so deferred), or, in addition to any other legal remedy,
Seller may decline further performance of this contract. If at any time, in the
judgment of Seller, the financial responsibility of Buyer is impaired, Seller
may change the terms of payment and/or require payment as a condition of
shipment.
21. TAXES. Upon invoice, Buyer shall reimburse Seller for any federal,
state or local excise or other tax, assessment, license fee or other charge, or
increases thereof, which Seller may be required to pay upon the sale,
production, transportation, delivery or use of the Products.
22. GOVERNMENTAL REGULATION. Should Seller elect to discontinue, curtail
or limit the production or sale of the Products in consequence of the
application of any governmental regulation or order (including but not limited
to those relating to environment, Seller shall not be obligated to deliver the
Products from other than the production or shipping points designated herein and
there shall be no obligation to rebuild or repair any damage or destruction to
such production or shipping points in order to fulfill this contract.
-5-
23. CLAIMS. The weights, tares and tests fixed by Seller's invoice shall
govern unless proven to be incorrect. Claims relating to quantity, quality,
weight, condition and loss of or damage to any of the product sold hereunder
shall be waived by Buyer unless made within thirty (30) days after receipt of
Products by Buyer.
24. LIMITATION OF LIABILITY. (a) Buyer's exclusive remedy and Seller's
exclusive liability under this contract or otherwise (including contractual and
tort liability) shall be for damages which shall in no event exceed so much of
the purchase price as is applicable to that portion of the particular shipment
with respect to which damages are claimed. In no event shall Seller be liable
to Buyer for any incidental or consequential damages arising in connection with
this contract or the product sold hereunder.
(b) Except to the extent provided by Seller, Buyer assumes all risks and
liability, and Seller assumes no liability, with respect to transporting or
unloading of the Products (including failure of discharge or unloading
implements or materials used by Buyer), storage, handling, sale and use of the
Products (including its use alone or in combination with other substances or in
the operation of any process), and the compliance or non-compliance with all
federal, state and local laws and regulations applicable to the Product; Seller
assumes the same risks and liability stated in this subparagraph with respect to
Products transported or unloaded by Seller. The limitations stated in Paragraph
24 shall not apply to Paragraph 11 of this Agreement.
25. NON-WAIVER. Seller's or Buyer's waiver of any breach or failure to
enforce any of the terms and conditions of this contract at any time shall not
in any way affect, limit or waive such party's right thereafter to enforce
strict compliance with every term and condition hereof.
26. ASSIGNMENT. Neither Buyer nor Seller shall assign this contract (nor
any right or obligation hereunder), in whole or in part without the prior
written consent of the other, which consent shall not be unreasonably withheld.
It shall be reasonable to withhold consent if the requested assignment is to a
competitor of either party or their related entities, divisions, and
subsidiaries. Any such purported assignment without such consent shall be void.
Either party shall have the right to assign this contract and its rights and
obligations hereunder, without obtaining the prior written consent of the other,
to any entity with which either party (a) merges, (b) sells a substantial part
of its assets or business, or (c) sells a substantial part of its assets or
business relating to the manufacture and/or sale of the Product.
27. APPLICABLE LAW. Tennessee law shall apply to the interpretation of
this Agreement for any matter arising from the sale of Product produced from
Seller's Charleston, Tennessee Facility, without giving effect to its conflict
of law provisions. Otherwise, this contract shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
its conflict of law provisions.
-6-
28. CAPTIONS. The titles contained in this contract are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this contract.
29. SEVERABILITY. If any provision of this contract shall be prohibited
or invalid, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
and the remaining provisions of this contract.
30. AMENDMENT. This contract is intended as the final expression of the
parties' agreement and is the complete and exclusive statement of the terms
hereof. No statements or agreements, oral or written, made prior to or at the
signing hereof, shall vary or modify the written terms hereof; and neither party
shall claim any amendment, modification or release from any provisions hereof by
reason of (a) a course of action or mutual agreement unless such agreement is in
writing signed by the other party and specifically stating it as an amendment to
this contract, (b) course of performance, or (c) usage of trade. No
modification or addition to this contract shall be affected by the
acknowledgment or acceptance by Seller of any purchase order, acknowledgment,
release or other forms submitted by Buyer containing other or different terms or
conditions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
XXXX CORPORATION ARCH CHEMICALS, INC.
CHLOR ALKALI PRODUCTS DIVISION
By: ___________________________ By: ____________________________
Name:__________________________ Name:___________________________
Title:_________________________ Title:__________________________
-7-
0 CHLOR ALKALI PRODUCTS
000 00XX XXXXXX X. X., XXXXX 000, XXXXXXXXX, XX 00000
423/000-0000 - FAX: 423/000-0000
CAUSTIC SODA SPECIFICATIONS
GRADE
-----
COMPONENT BASIS RAYON MEMBRANE COMMERCIAL
--------- ----- ----- -------- ----------
NaOH weight% 50.0 - 51.5 49.5 - 51.5 49.0 - 52.0
Na\2\O weight% 38.7 - 39.9 38.3 - 39.9 38.0 - 40.3
Na\2\CO\3\ weight% 0.06 0.05 0.2
NaCl ppm 30 75 11,000
Na\2\SO\4\ ppm 20 100 200
NaClO\3\ ppm 1 5 3,000
Iron (Fe) ppm 2.0 2.0 7
Si (Silicon) ppm 10 2.4 195
Al (Aluminum) ppm 3 0.25 20
Ca (Calcium) ppm 20 0.5 45
Mg (Magnesium) ppm 1.2 0.1 12
Mn ppm 0.4 0.2 1
Ni ppm 0.3 0.5 2
Cu ppm 0.5 0.2 2
Hg ppm 0.5 0.01 N.D.*
* Note: N.D. is below Minimum Detection Limit (MDL) of 0.01 ppm
. Certified by the NSF for the XXXX/XXX 00 Xxxxxxxx
. Xxxxxxxxx the Food Chemical Codex IV(FCC IV) requirements
. Satisfies the AWWA Standard B-501-93
EXHIBIT 1
CHLOR ALKALI PRODUCTS
000 00XX XXXXXX X. X., XXXXX 000, XXXXXXXXX, XX 00000
423/000-0000 - FAX: 423/000-0000
--------------------------------------------------------------------------------
CHLORINE SPECIFICATIONS
CHEMICAL PROPERTIES AUGUSTA CHARLESTON XXXXXXXX NIACHLOR
-------------------- ------- ---------- -------- --------
Purity, weight % 99.5 min. 99.5 min. 99.5 min. 99.5 min.
Moisture, ppm 75 max. 75 max. 30 max 50 max.
Non-volatile Residue, ppm 30 max. 30 max. 30 max. 50 max.
Arsenic, as As, ppm 3 max. 3 max. 3 max. 3 max.
Lead, as Pb, ppm 5 max. 5 max. 5 max. 5 max.
Mercury, as Hg, ppm 1 max. 1 max. 1 max. 1 max.
Heavy Metals, as Pb, ppm 10 max. 10 max. 10 max. 10 max.
Carbon Tetrachloride, ppm 100 max. 100 max. 100 max. 100 max.
Trihalomethanes, ppm 300 max. 300 max. 300 max. 300 max.
. Certified by the NSF for the XXXX/XXX 00 Xxxxxxxx
. Xxxxxxxxx the Food Chemical Codex IV(FCC IV) requirements
. Satisfies the AWWA Standard B-301-92
--------------------------------------------------------------------------------
EXHIBIT 2
