Exhibit 10.2
TOLL MANUFACTURING AGREEMENT
BY AND BETWEEN
SOLUTIA INC.
AND
PHOSPHORUS DERIVATIVES INC.
DATED NOVEMBER 4, 2005
TOLL MANUFACTURING AGREEMENT
THIS TOLL MANUFACTURING AGREEMENT ("Agreement") made and entered into this
4th day of November, 2005 ("Commencement Date") by and between SOLUTIA INC.
("Manufacturer" or "Solutia"), a company organized and existing under the
laws of the state of Delaware with principal offices located at 000
Xxxxxxxxx Xxxxxx Xxxxx, Xx. Xxxxx, XX 00000, and Phosphorus Derivatives Inc.
("Purchaser"), a corporation organized and existing under the laws of
Delaware with principal offices located at 000 Xxxxxxx Xxxx, Xxxxx 000, Xx.
Xxxxx, XX 00000.
RECITALS
A. Solutia, ICL Performance Products Holding Inc. ("Buyer"), Israel
Chemicals Limited, FMC Corporation and Astaris LLC have entered into an
Asset Purchase Agreement ("APA") dated September 1, 2005 pursuant to which
Buyer is acquiring certain assets of Astaris LLC.
B. Solutia and Buyer are required to enter into this Agreement
under Sections 1.3(b) and 1.3(c) of the APA.
C. Buyer has assigned its rights under the APA to enter into this
Agreement to Purchaser.
NOW THEREFORE, the parties hereto, for and in consideration of the
covenants contained herein and other good and valuable consideration, hereby
agree as follows:
ARTICLE 1 - DEFINITIONS
-----------------------
For the purposes of this Agreement the following terms shall have the
following meanings:
1.01 "Agreement" shall mean this Toll Manufacturing Agreement dated the date
first above written.
1.02 "Anniversary Date" shall mean the date falling on the same day of the
Month as the Commencement Date at intervals of twelve (12) Months.
1.03 "Commencement Date" shall mean the date hereof.
1.04 "Demolition to Grade" and "Demolish to Grade" shall mean with respect
to the Manufacturing Site, removal of above grade columns, walls and
supports to grade level without excavation to a condition reasonably suited
for industrial use but shall not mean removal of below grade slabs,
foundations footings, underground piping, tanks, vaults or other underground
structures.
1.05 "Fixed Costs" shall have the meaning set forth in Schedule 4.01 hereto.
-------------
1.06 "FOB" shall mean the loading by Manufacturer of Product in tote bins or
cages (for export purposes) on trucks or in the case of bulk shipments in
railcars, all without further cost to Purchaser as provided in Section 5
hereof.
2
1.07 "Government Regulations" shall mean any statute, law, ordinance or
regulation issued by any competent governing body or authority.
1.08 "Land" shall mean the parcel of land comprising the Manufacturing Site
which is depicted on the drawing attached hereto as Exhibit 1.08.
------------
1.09 "Lease and Operating Agreement" shall mean the Master Lease and
Operating Agreement between Solutia Inc. and Astaris LLC dated as of April 1,
2000.
1.10 "Manufacturing Site" shall mean that portion of Manufacturer's facility
located at 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, that is occupied by the
P2S5 Unit.
1.11 "Month" or "Months" shall mean calendar month(s) and "day(s)" shall
mean calendar day(s) and "Working Day" shall mean a day during which the
Manufacturing Site is scheduled to be open, operating and transacting
business. "Calendar Year" shall mean the calendar year commencing on any
January 1st and ending on the immediately next succeeding December 31st.
"Year" shall mean any period of three hundred sixty five (three hundred and
sixty-six days in the event that the period includes the 29th day of
February) consecutive days following any given date during a Calendar Year.
"Calendar Quarter" shall mean the three consecutive month period during any
Calendar Year commencing on the first day of each of the months of January,
April, July and October. "Week" shall mean a seven (7) consecutive day
period commencing on each Monday.
1.12 "New Fixed Investments" or "NFI" shall have the meaning set forth in
Schedule 4.01 hereto.
-------------
1.13 "Off-Grade Material" shall mean any product produced by Manufacturer
during the process of converting Raw Materials into Products, which product
does not meet the Specifications.
1.14 "P2S5" shall mean Phosphorous Pentasulfide.
1.15 "P2S5 Assets" shall mean the tangible assets, including building,
machinery and equipment owned by Solutia and used exclusively in the
manufacture of Product at the P2S5 Unit pursuant to the terms of this
Agreement.
1.16 "P2S5 Unit" shall mean the physical plant located at the Manufacturing
Site that produces and packages the Product and the ancillary areas
necessary or appropriate for the production, packaging, shipping and loading
of the Product and unloading and storage of Raw Materials and Packaging
Supplies.
1.17 "Product" shall mean P2S5 meeting the specifications set forth in
Schedule 1.17, as may be amended from time to time as provided herein (the
-------------
"Specifications").
3
1.18 "Production Capacity" shall mean, respectively, the Annual, Quarterly,
Monthly, Weekly and daily production capacity of the P2S5 Unit to produce
Product as set forth on Schedule 1.18 attached hereto.
-------------
1.19 "Purchase Order" shall mean a purchase order for Product submitted to
Manufacturer by Purchaser and shall include the quantity of Product to be
ordered and the time of delivery.
1.20 "Raw Materials" shall mean sulfur and phosphorous meeting the
specifications set forth in Schedule 1.20 hereto ("RM Specifications").
1.21 "Residual Allocated Costs" shall mean, collectively, Utilities, Taxes,
New Fixed Investment and Fixed Costs (as adjusted pursuant to Schedule 4.01)
-------------
as are applicable to the Manufacturing Site during the period provided in
Section 3.03 hereof.
1.22 "Subsidiary" shall mean any company or other form of legal entity in
which either party owns, directly or indirectly, sufficient interest in such
company or entity so as to be able to exercise control, or a company or
entity in which either party owns or controls at least fifty percent (50%)
of the maximum equity, voting or management interest permitted by the laws
of the country in which such company or entity is organized or exists.
1.23 "Taxes" shall have the meaning set forth in Schedule 4.01 hereto.
-------------
1.24 "Technology" shall have the meaning set forth in Article 11 hereof.
1.25 "Term" shall have the meaning set forth in Section 3.01 hereof.
1.26 "Tolling Fee" shall have the meaning set forth in Article 4 hereof.
1.27 "Utilities" shall have the meaning set forth in Schedule 4.01 hereto.
-------------
ARTICLE 2 - MANUFACTURE AND SUPPLY OF PRODUCT
---------------------------------------------
2.01 During the Term hereof Manufacturer hereby agrees to manufacture,
fabricate , package and supply Product exclusively for Purchaser in
quantities and at the times specified in the weekly Purchase Orders
submitted pursuant to Article 8 hereof and to package and load the Product
FOB the P2S5 Unit for delivery to Purchaser in accordance with Article 5. To
the best of Manufacturer's knowledge, the Specifications are complete for
production of all Product.
2.02 Purchaser shall provide, at its sole cost and expense, process
technical support as requested by Manufacturer from Purchaser's research and
development functional group as may, in Manufacturer's reasonable judgment,
be necessary to facilitate optimal manufacture of Product at the P2S5 Unit.
4
2.03 Manufacturer and Purchaser shall participate in periodic meetings at
places and times to be agreed as may be necessary to coordinate and
facilitate discussion of issues regarding production, shipping and other
plant logistical matters and operational efficiencies.
2.04 Manufacturer shall cooperate with Purchaser as requested to
manufacture, fabricate, package and supply P2S5 products that have different
specifications than the Products at the commencement of the Term ("New
Products"), provided that Purchaser shall reimburse Manufacturer for any
incremental cost incurred by Manufacturer associated with the development
and manufacture of such New Products pursuant to the agreed specifications
thereof and upon such agreement, such New Products shall be deemed to be
Products hereunder.
ARTICLE 3 - TERM AND TERMINATION
--------------------------------
3.01 The term of this Agreement ("Term") shall be twenty-five (25) years
from the Commencement Date; provided, however, that either party may
terminate this Agreement upon eighteen (18) Months' prior written notice to
the other party, and the effective date of termination by Solutia under this
Section 3.01 may not be prior to the fifth (5th) Anniversary of the
Commencement Date.
3.02 In addition, each party shall have the right to terminate this
Agreement at any time "for cause" upon written notice to the other party in
the event of breach by the other party of any of the representations,
warranties, covenants, indemnities, terms or conditions of this Agreement
which is either (a) not curable by the breaching party's admission, or (b)
if curable, is not cured within sixty (60) Working Days after such written
notice thereof has been provided to the breaching party. If in the
reasonable judgment of the party claiming that the breach is not curable,
the party claiming breach shall provide the other party ten (10) Working
Days' written notice of such non-curable breach with sufficient
particularity as to the facts and issues so as to allow that party an
opportunity to respond.
3.03 In the event that Purchaser terminates this Agreement for any reason
other than pursuant to Section 3.02 hereof, or Manufacturer terminates this
Agreement pursuant to Section 3.02, Purchaser shall reimburse Manufacturer
for (i) all costs associated with Manufacturer's employees made redundant by
such termination pursuant to the terms of Manufacturer's employee severance
policy applicable to such employees, including without limitation
re-training, redeployment, separation and outplacements costs and expenses;
(ii) Manufacturer's Residual Allocated Costs for up to eighteen (18)
consecutive Months following the effective date of such termination; and
(iii) at Purchaser's sole costs and expense, the Demolition to Grade of the
P2S5 Unit, OR, at Purchaser's option, (x) Manufacturer shall transfer
--
ownership of the P2S5 Assets and lease the Land to Purchaser pursuant to a
mutually acceptable lease agreement, or (y) Purchaser shall relocate, at
Purchaser's sole cost and expense, the P2S5 Assets and Demolish to Grade.
The obligations of Purchaser set forth in clauses (i) through (iii) above
shall be referred to hereinafter as "Purchaser's Exit Obligations".
Purchaser's Exit
5
Obligations shall not include any obligation to investigate, remediate or
otherwise respond to the presence, release or threat of release of hazardous
substances or hazardous waste except to the extent and only the extent of
hazardous substances or waste generated or released and the proper disposal
thereof as a result of Purchaser's decontamination and relocation of the
P2S5 Assets and Demolition to Grade. If this Agreement is terminated by
Purchaser or by Manufacturer as provided in this Section 3.03, Manufacturer
shall use its reasonable best efforts to limit the duration and mitigate the
cost of such termination, including the employee redundancy costs and
continuing Residual Allocated Costs.
3.04 In the event that Manufacturer terminates this Agreement for any other
reason than pursuant to Sections 3.02 and 3.07 hereof, or Purchaser
terminates this Agreement pursuant to Section 3.02, at Purchaser's option,
either (x) Manufacturer shall transfer ownership of the P2S5 Assets to
Purchaser and lease the Land pursuant to a mutually acceptable lease
agreement, with rent no greater than that necessary to cover Manufacturer's
actual direct and indirect costs, consistent with Manufacturer's historical
accounting practices at the Manufacturing Site, applicable to a lease of
land within a facility with shared services for multiple tenants, or (y)
Purchaser, at its sole cost and expense, shall relocate the P2S5 Assets and
Demolish to Grade. Purchaser shall bear all costs and expenses of relocating
the P2S5 Assets and Demolition to Grade; provided, however, Purchaser's
obligation to bear such costs and expenses shall not include any obligation
to investigate, remediate or otherwise respond to the presence, release or
threat of release of hazardous substances or hazardous waste except to the
extent and only the extent of hazardous substances or waste generated or
released and the proper disposal thereof as a result of Purchaser's
decontamination and relocation of the P2S5 Assets and Demolition to Grade.
3.05 Purchaser shall have the right to terminate this Agreement for
"hardship" upon twelve (12) Month's prior written notice to Manufacturer in
the event that any one of the following conditions is satisfied: (a) with
respect to the Fixed Costs that are reset by Solutia each year in the annual
P2S5 Unit budget (the components of which are detailed in Schedule 4.01
-------------
hereto), the aggregate amount of such Fixed Costs reflected in the annual
budget for the following Calendar Year exceeds the budget for the current
Calendar Year by more than ten percent (10%) in the aggregate, provided,
that if Purchaser terminates for hardship under this Section 3.05(a) it will
be responsible for up to twenty percent (20%) of such increase in the then
current Fixed Costs during the 12 month notice period; (b) with respect to
the Fixed Costs that are reset by Solutia each year in the annual P2S5 Unit
budget, the aggregate amount of such Fixed Costs reflected in the annual
budget increases by more than thirty-five percent (35%) in the aggregate in
any five (5) consecutive year period during the Term hereof, provided, that
in such case, Purchaser shall be responsible during such twelve (12) Month
notice period for up to forty percent (40%) of such increase in Fixed Costs
in such five (5) consecutive Calendar Year period measured from the
commencement of such five (5) Calendar Year period; or (c) the aggregate
direct and indirect capital expenditure plus project expense by Manufacturer
exceed One Million Seven Hundred Twenty Five Thousand Dollars
($1,725,000.00) in any Calendar Year or Four Million Six Hundred Thousand
Dollars ($4,600,000.00) in any three (3) consecutive Calendar Year period
during the Term
6
hereof. The deadline for Purchaser to deliver written notice of termination
under this Section 3.05 is thirty (30) days after the occurrence of the
condition giving rise to such right to terminate. If Purchaser terminates
this Agreement pursuant to this Article 3.05, in addition to any other
amounts set forth herein, it shall be responsible for Purchaser's Exit
Obligations.
3.06 Manufacturer shall notify Purchaser as soon as reasonably practicable
after Manufacturer receives written notice of termination of any lease and
operating agreement between Manufacturer and any third party at its Sauget,
Illinois site.
3.07 In the event that Manufacturer's aggregate actual amounts of the line
items included in Fixed Costs pursuant to Schedule 4.01 hereto exceed then
-------------
current Fixed Costs by more than One Million Dollars ($1,000,000.00) during
any twelve (12) consecutive Month period and, to the extent Purchaser has
the right to do so hereunder, Purchaser declines to pay such increase in
Fixed Costs pursuant to this Agreement, Manufacturer shall have the right to
terminate this Agreement for "hardship" upon twelve (12) Months' prior
written notice to Purchaser. The deadline for Manufacturer to deliver
written notice of termination under this Section 3.07 is no later than
thirty (30) days after it receives written notice from Purchaser that it
declines to pay such increase in Fixed Costs. In such event Purchaser shall
be responsible for Purchaser's Exit Obligations.
3.08 No termination of this Agreement shall operate to discharge or relieve
any party of any obligations vested pursuant to this Agreement prior to the
effective date of such termination.
ARTICLE 4 - TOLLING FEE
-----------------------
The price for Product supplied by Manufacturer hereunder (the "Tolling Fee")
shall be calculated as set forth in Schedule 4.01 hereto.
-------------
ARTICLE 5 - DELIVERY
--------------------
Manufacturer shall deliver Product in the quantities and on the delivery
date(s) specified in the applicable Purchase Order twenty-four hours, seven
days per Week FOB in carrier vehicles arranged to be delivered by Purchaser
at the P2S5 Unit. Costs incurred by Manufacturer to load trucks and railcars
are included in the Tolling Fee. Manufacturer shall promptly notify
Purchaser of release of Product at the last process valve and upon request,
shall furnish Purchaser copies of all shipping documents. If at any time
Manufacturer fails to deliver Product in the quantity and on the delivery
date specified in the applicable Purchase Order in breach of its obligations
hereunder, Purchaser may cover such purchases of undelivered Product by
purchasing the same quantity of undelivered Product from another supplier on
commercially reasonable terms and may exercise any legal rights it may have
in law or in equity to seek recovery of any direct damages allegedly
incurred in connection with effecting cover that Purchaser could not have
reasonably mitigated; the foregoing is subject to
7
Manufacturer's reservation of rights to assert any legal and equitable
defenses or excuse of performance that may be available generally or under
the terms of this Agreement.
ARTICLE 6 - INVOICING AND PAYMENT OF TOLLING FEE; WORKING FUND; AUDIT RIGHTS
----------------------------------------------------------------------------
6.01 Manufacturer shall invoice Purchaser once per Month on or about the end
of each Month for all amounts due from Purchaser for the preceding Month,
and Purchaser shall pay such invoice by wire transfer or direct debit in
immediately available funds within fifteen (15) days of delivery of
Manufacturer's invoice. The delivery date for invoices that Manufacturer
transmits by e-mail shall be deemed to be the date on which Manufacturer
receives electronic confirmation of receipt of such e-mail from the e-mail
address designated by Purchaser for submission of invoices hereunder. If
e-mail is unavailable, the Manufacturer shall send such invoices by
facsimile to the facsimile telephone number designated by Purchaser for
alternate means of submission of invoices hereunder.
6.02 Purchaser shall be obligated to replenish on a Monthly basis an advance
payment ("Working Fund") to enable Manufacturer to cover reasonably
estimated average Monthly costs and expenses, including inventory carrying
costs, such as dedicated and shared raw materials and stores, for supplying
the Products hereunder. Upon execution hereof, Manufacturer shall credit
toward Purchaser's Working Fund obligation hereunder the working fund
balance of $911,968 previously deposited by Astaris LLC under the Lease and
Operating Agreement. Within fifteen (15) days after Manufacturer notifies
Purchaser of the difference, Purchaser shall pay Manufacturer the difference
between the amount credited in the preceding sentence and the Working Fund
amount required hereunder. The Working Fund shall be adjusted annually by
Calendar Year based on the previous Calendar Year's historical Monthly
costs, and reasonably estimated Monthly costs for the succeeding Calendar
Year or at any other time on account of any significant change in costs,
subject to the mutual agreement of the parties, which agreement will not be
unreasonably withheld. Any payments required to effect any adjustments in
the Working Fund balance shall be paid within fifteen (15) days of delivery
of written notice to Purchaser of the amount of the adjustment.
Upon expiration or termination of this Agreement, any balance remaining in
the Working Fund shall be applied first against any undisputed payments then
owed Manufacturer (including Purchaser's Exit Obligations) by Purchaser and
any remaining balance shall then be returned to Purchaser by the later of
sixty (60) days after termination or expiration of this Agreement or
satisfaction of Purchaser's undisputed payment obligations hereunder.
6.03 At Purchaser's request, Manufacturer's computation of actual costs of
supplying Product hereunder (meaning Utilities, NFI, Tote Bins, and Taxes)
and application of the indices (meaning Labor, Medical, and CPI) as provided
in Schedule 4.01 to this Agreement may be subject to an annual audit, but
-------------
not more than once in any Calendar Year. Such audit shall be conducted at
Purchaser's sole cost and expense during normal
8
business hours at the Manufacturing Site by an independent certified public
accounting firm (the "Auditor"). Purchaser shall nominate in writing a
proposed Auditor for Manufacturer's reasonable approval and Manufacturer
shall have fifteen (15) Working Days to approve or object to the engagement
of such Auditor. The Audit shall be completed within sixty (60) days after
the later of the date (x) the audit commences or (y) Manufacturer has
furnished the Auditor with the materials reasonably requested by the Auditor
at the commencement of the Audit; provided: (i) the Auditor shall enter into
a customary confidentiality agreement with Manufacturer in a form reasonably
acceptable to Manufacturer, and (ii) Manufacturer's data is conclusively
presumed correct once an audit has been performed and such data is
unchallenged or confirmed as correct in such audit, or, if unaudited, after
two (2) years from the date of entry into Manufacturer's books. Any dispute
between the parties with respect to the computation by Manufacturer of
actual costs shall be conclusively determined by another independent
internationally recognized firm of certified public accountants (the "CPA
Firm") mutually acceptable to the parties, and such determination shall be
final and binding upon the parties. The CPA Firm shall enter into a
confidentiality agreement as provided in clause (i) above and its fees and
expenses shall be paid by the party with the incorrect computation of actual
costs, as determined by the CPA Firm.
ARTICLE 7 - SUPPLY OF RAW MATERIALS
-----------------------------------
7.01 Purchaser shall supply all necessary tote bins and cages (collectively
referred to herein as "Packaging Supplies") and Raw Materials at no cost to
Manufacturer which are necessary for the manufacture, fabrication, packaging
and supply of Product hereunder. Purchaser shall supply Raw Materials and
Packing Supplies on a timely basis and in sufficient quantities for the
Manufacturer to meet Purchaser's forecasts for ordering Product.
Manufacturer agrees to produce Product in accordance with the conversion
ratio as set forth in Schedule 7.01 hereto, subject to no more than a two
-------------
percent (2%) deviation from the yields shown therein, as determined on a
Calendar Year basis which determination shall be provided to Purchaser
within thirty (30) days after the end of such Calendar Year.
7.02 All Raw Materials provided by Purchaser hereunder shall be of
sufficient quality to adhere to the RM Specifications. Purchaser shall
provide certificates of analysis with each Raw Material shipment.
Manufacturer shall not be liable to manufacture or deliver any of the
Products for which Purchaser has failed at any time to provide adequate
quantities of Raw Materials.
7.03 Manufacturer shall be entitled to refuse to take delivery at any time
of any Raw Materials which do not meet the RM Specifications.
7.04 Manufacturer shall receive, store and process all Raw Materials in
compliance with applicable Government Regulations. Manufacturer shall
maintain customary operations, maintenance and security measures to
safeguard Raw Material, Packaging Supplies and Product against pilferage and
theft. Notwithstanding the foregoing, all Raw Materials and Packaging
Supplies provided by Purchaser to Manufacturer shall remain at
9
all times the property of the Purchaser and the risk of loss with respect to
such Raw Materials and Packaging Supplies shall remain with Purchaser while
the same are in Manufacturer's possession and control, and with respect to
Raw Materials either while remaining in original Raw Material form or as
modified when incorporated into Product.
ARTICLE 8 - FORECASTS AND PURCHASE ORDERS
-----------------------------------------
8.01 On or before October 1 during each Calendar Year of the Term hereof,
Purchaser shall provide Manufacturer a non-binding annual forecast
describing on a Monthly basis Purchaser's reasonably best estimate of the
total quantity of Product Purchaser will require during the following
Calendar Year but not in excess of the Annual Production Capacity. If
Manufacturer reasonably believes it will be unable to supply the quantities
in the annual forecast, Manufacturer shall advise Purchaser in writing
within thirty (30) days of the date of Manufacturer's receipt of the annual
forecast and the parties will discuss in good faith in an effort to agree
upon mutually acceptable alternative quantities and delivery dates.
Commencing on the date hereof and thereafter during the Term hereof, not
later than seven (7) Working Days prior to the beginning of each Month,
Purchaser shall provide Manufacturer a non-binding three (3) Month forecast
containing Purchaser's reasonably best estimate of the Monthly volume of
Product Purchaser will require, but not in excess of the Quarterly
Production Capacity. Purchase Orders of Product within the Monthly
forecasted volume, but not in excess of the Monthly Production Capacity,
shall be submitted in writing or electronically on a weekly basis and
adjusted to reflect customer patterns, Raw Material delivery and finished
goods logistics. Weekly Purchase Orders shall not exceed the Weekly
Production Capacity. Purchase Orders shall specify quantity of Product to be
produced and delivered and the delivery time. In no event, shall the
cumulative volume per Purchase Orders from any 12 consecutive months exceed
the Annual Capacity.
8.02 Purchaser will accept quantities of Product as ordered which meet the
Specifications.
8.03 With respect to each delivery of Product hereunder Manufacturer shall
furnish as to each Purchase Order (which will specify the customer of
Purchaser for which the Product is to be produced), the production lot
identification and a certificate of analysis.
8.04 Manufacturer shall be entitled to schedule routine shutdowns of the
P2S5 Unit from time to time so as to be able to perform necessary
maintenance. Manufacturer will coordinate timing of such shutdowns with
Purchaser to limit, to the extent reasonably possible, interruption of
supply of Product and to ensure, the extent reasonably possible, customer
orders are met.
8.05 In the event that Purchaser requests that Manufacturer increase
production capacity at the P2S5 Unit above the Production Capacity, the
actual capital expenditures and project expenses related to such expansion
shall be borne by Purchaser as part of the Tolling Fee. If Purchaser is not
willing to bear such costs, Manufacturer shall be under no obligation to
increase capacity.
10
ARTICLE 9 - RELATIONSHIP OF THE PARTIES
---------------------------------------
It is expressly agreed that the relationship between Manufacturer and
Purchaser hereunder is that of vendor and vendee and that Manufacturer is an
independent contractor, and is not an agent of Purchaser. Neither party, nor
their respective officers, employees or agents thereof are or will be deemed
to be employees, agents, partners, co-venturers or representatives, legal or
otherwise, of the other party or any affiliate thereof for any purpose
whatsoever. Neither party shall have the right or authority to assume or
create any obligation or responsibility, express or implied, on behalf of or
in the name of the other party, or to bind the other party in any manner
whatsoever.
ARTICLE 10 - PRODUCT ANALYSIS AND SAMPLES
-----------------------------------------
10.01 Manufacturer will analyze Product for compliance with Specifications
in accordance with the laboratory analysis standards set forth in Schedule
--------
10.01 hereto. Purchaser may, upon reasonable advance written notice to
-----
Manufacturer, witness Product analysis conducted by Manufacturer. In
addition to the certificate of analysis to be provided by Manufacturer as
provided in Section 8.03 hereof, Manufacturer shall, upon request by
Purchaser, provide supporting documentation with respect to the applicable
certificate of analysis. Manufacturer shall change the laboratory analysis
standards set forth in Schedule 10.01, upon Purchaser's request or
requirement or the requirement of any Government Regulations, provided
Purchaser agrees to pay any incremental cost to Manufacturer of such change
as part of the Tolling Fee.
10.02 During the Term hereof, Manufacturer shall maintain its standard
production and quality control records for Product supplied hereunder and
retain them for the time period no less than that required under
Manufacturer's then current corporate record retention policy. If
Manufacturer proposes to dispose of any of the foregoing records pursuant to
its then current record retention policy, Purchaser, at its option, upon its
written notification to Manufacturer requesting that such records be
transferred to Purchaser and upon such notification Manufacturer shall
deliver the records to Purchaser. Such records shall be available for
inspection by Purchaser during the applicable record retention period during
normal business hours and upon reasonable advance written request to
Manufacturer.
10.03 Upon the written request of Purchaser, Manufacturer shall maintain at
the P2S5 Unit samples of each production lot or batch for a period of up to
six (6) Months after the production thereof.
10.04 In the event of a disagreement between Purchaser and Manufacturer with
respect to the compliance of any batch or lot of Product with the
Specifications, Purchaser shall have the right to request that a mutually
acceptable independent third party laboratory ("Laboratory") resolve the
dispute based upon the retained sample as provided hereinabove, or if there
is no such retained sample as a result of Purchaser not having requested
such a sample be retained, then upon such Laboratory's analysis of the
alleged
11
non-conforming Product. The findings of such Laboratory shall be final and
binding upon the parties hereto. The prevailing party in such dispute shall
be responsible for the costs incurred to engage the Laboratory.
10.05 At Purchaser's sole cost and expense, Manufacturer will cooperate with
Purchaser to perform special testing of Product to support Purchaser's
customer's requirements.
ARTICLE 11 - LICENSE GRANT
--------------------------
Purchaser hereby grants, or shall cause its affiliates to grant, during the
Term hereof to Manufacturer a non-exclusive, royalty-free license to use
Purchaser's and, as applicable, its affiliates' patents, know-how and all
other technology and confidential or proprietary information (collectively,
"Technology") for the sole purpose of and to the extent required for
manufacturing Product for Purchaser hereunder.
ARTICLE 12 - LIMITED WARRANTY, LIMITATION OF LIABILITY
------------------------------------------------------
12.01 Manufacturer warrants that for a period after delivery of Product of
sixty (60) days for domestic deliveries and ninety (90) days for
international deliveries, Product supplied by Manufacturer shall comply with
the Specifications. Any noncompliance in Off-Grade Material to the extent
caused by (i) a failure of Raw Materials to comply with the RM
Specifications or (ii) Manufacturer's use (but not misuse) of the
Technology, is not covered by this warranty. If Purchaser discovers that any
Product does not comply with Specifications and notifies Manufacturer in
writing during the applicable warranty period, Manufacturer shall replace
such Off-Grade Material, including for these purposes reworking or blending
of the Off-Grade Material with new Product meeting the Specifications. In
the event that, in Manufacturer's reasonable judgment, blending of the
Off-Grade Material is not likely to remedy the noncompliance with
Specifications, Purchaser agrees to use its reasonable best efforts to
market such Off-Grade Material and if successful, no further claim as to
such Off-Grade Material shall be made by Purchaser. Notwithstanding the
foregoing, Manufacturer shall reimburse Purchaser in the exercise of such
reasonable best efforts for any reasonable discounts granted by Purchaser to
its customers that purchase Off-Grade Material to the extent that such
discount was offered solely as an inducement to purchase product that does
not comply with the Specifications.
12.02 THIS LIMITED WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY MADE BY
MANUFACTURER AND IS IN LIEU OF AND EXCLUDES ALL OTHER REPRESENTATIONS OR
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW,
CUSTOM, CONDUCT, USAGE OF TRADE OR OTHERWISE, INCLUDING WITHOUT LIMITATION,
WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, AND THE
RIGHTS AND REMEDIES OF PURCHASER PROVIDED HEREIN ARE EXCLUSIVE OF ANY OTHER
RIGHTS OR REMEDIES OF PURCHASER. PURCHASER'S EXCLUSIVE REMEDY FOR BREACH OF
THE WARRANTY IN SECTION 12.01 WITH RESPECT TO ANY PRODUCT IS TO RECEIVE A
TIMELY
12
REPLACEMENT OF, OR IF NOT TIMELY REPLACED, A CREDIT FOR SUCH PRODUCT.
12.03 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER (WHETHER BASED
IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OTHER TORT OR OTHERWISE) FOR
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES.
ARTICLE 13 - INSURANCE
----------------------
13.01 Each party shall maintain comprehensive general liability insurance,
including product liability coverage and workers compensation liability, as
well as property damage and business interruption insurance, in each case,
with limits of no less than $1,000,000 per occurrence and a combined single
limit of not less than $2,000,000, and with deductibles (or self-insured
retentions) of no more than $1,000,000. Purchaser shall be responsible for
the deductibles and self-insured retentions under Manufacturer's insurance
policies. To the extent permitted by Manufacturer's insurance policies,
Purchaser will have the right upon notice to Manufacturer to control the
defense of any claims within Manufacturer's policy deductibles (or
self-insured retentions) that arise out of the operation of the P2S5 Unit or
Product supplied by Manufacturer hereunder, other than any claims asserted
by Purchaser against Manufacturer.
13.02 (a) In addition to maintaining its customary and ordinary commercial
general liability insurance and product liability, property damage and
business interruption insurance policies (the "Manufacturer's Corporate
Policies"), Manufacturer will procure product liability and property damage
and business interruption insurance coverage applicable solely to the P2S5
Unit ("P2S5 Unit Insurance") with policy limits equal to the then current
deductible or self-insured retention under the applicable Manufacturer's
Corporate Policies. The P2S5 Unit Insurance will contain its own deductible
or self-insured retention amount of not more than one million dollars
($1,000,000).
(b) In lieu of such P2S5 Unit Insurance coverage for product
liability, Purchaser may, at its option, include Manufacturer as a named
insured under Purchaser's product liability insurance policy.
(c) At the request of the Purchaser, no later than thirty (30) days
prior to each annual renewal by Manufacturer of the P2S5 Unit Insurance
("P2S5 Insurance Renewal Date"), Manufacturer will provide Purchaser
reasonably sufficient information for Purchaser to evaluate procuring its
own quotation for insurance to replace the P2S5 Unit Insurance for the
applicable renewal period. Manufacturer shall in each case proceed to obtain
its own P2S5 Unit Insurance renewal quotations. At the request of Purchaser
not later than ten (10) days prior to the P2S5 Insurance Renewal Date, the
parties will jointly evaluate their respective quotations, including
descriptions or copies of the then current Manufacturer's Corporate Policies
and P2S5 Unit Insurance sufficient for Purchaser to obtain bids for
comparable insurance, and if Purchaser's quotation (i) is from an insurance
company rated at least A by AM Best, (ii) has a premium of at least a five
13
percent (5%) below the quotation obtained by Manufacturer, (iii) provides
coverage at least as comprehensive as Manufacturer's quotation, (iv) is not
duplicative of Manufacturer's Corporate Policies and (iv) does not conflict
with, compromise, limit, prejudice or increase the cost of or otherwise have
an adverse effect on Manufacturer's Corporate Policies' or the renewal
thereof. Manufacturer will subscribe for such insurance coverage proposed by
Purchaser and such insurance shall then become the P2S5 Unit Policy for the
applicable renewal period. In such event, the Solutia Insurance line item of
Fixed Costs pursuant to Schedule 4.01 hereto shall be reset to account for
-------------
the lower premium.
13.03 Purchaser shall, with respect to Manufacturer's Corporate Policies, be
responsible for any increase in premiums or retroactive premium adjustment
attributable to insurance proceeds and recoveries received by Manufacturer
for claims arising out of the operation of the P2S5 Unit or Product supplied
by Manufacturer hereunder.
ARTICLE 14 - INDEMNIFICATION
----------------------------
14.01 Subject to Purchaser's obligation under Article 13 hereof to bear the
cost of Manufacturer's insurance policy deductibles, each party agrees to
indemnify, defend and hold the other party and its affiliates and their
respective officers, directors, partners, equityholders, stockholders,
employees, agents and representatives (the "Indemnified Persons") harmless
from and in respect of any and all losses, claims, liabilities, obligations,
damages, fines, penalties and costs (in each case including reasonable
out-of-pocket expenses (including reasonable fees and expenses of counsel,
experts and accountants and reasonable fees and expenses to enforce this
indemnity)) (each a "Loss" and collectively, "Losses"), that are asserted
---- ------
against or paid, suffered or incurred by any Indemnified Persons which,
directly or indirectly, arise out of any third party personal injury or
property damage claims arising out of or resulting from the negligent acts
or omissions of the other party hereunder.
14.02 If there occurs an event which a party asserts is an indemnifiable
event pursuant to Section 14.01, the Indemnified Persons shall notify the
other party obligated to provide indemnification (the "Indemnifying Party")
promptly in writing specifying the facts constituting the basis for such
claim and the amount, to the extent known, of the claim asserted. If such
event involves (i) any third party claim or (ii) the commencement of any
Proceeding by a third person (such third party claim and Proceeding
hereinafter referred to collectively as a "Third Party Claim"), the party
seeking indemnification will give such Indemnifying Party prompt written
notice of such Third Party Claim or the commencement of such Proceeding;
provided, however, that the failure to provide prompt notice as provided
-------- -------
herein (whether with respect to a Third Party Claim or otherwise) will
relieve the Indemnifying Party of its obligations hereunder only to the
extent that such failure prejudices the Indemnifying Party hereunder. In
case any such Third Party Claim shall be brought against any party seeking
indemnification, it shall notify the Indemnifying Party of the commencement
thereof promptly in writing specifying the facts constituting the basis for
such claim and the amount, to the extent known, of the claim asserted. The
Indemnifying Party shall be entitled to participate
14
therein and to assume the defense thereof, with counsel selected by the
Indemnifying Party; provided that the Indemnifying Party notifies the
--------
Indemnified Party in writing of its election to assume such defense within
twenty (20) Working Days of receipt of notice from the Indemnified Party of
such Third Party Claim. After notice from the Indemnifying Party to the
Indemnified Persons of such election so to assume the defense thereof, the
Indemnifying Party shall not, except as provided in this Section 14.02, be
liable to the Indemnified Persons for any legal expenses of other counsel or
any other expenses subsequently incurred by such party or parties in
connection with the defense thereof. Notwithstanding the Indemnifying
Party's election to so assume the defense of any such Third Party Claim, the
Indemnified Party shall have the right to employ separate counsel at its
sole cost and expense and participate in (but not control) such defense. The
Indemnifying Party and the Indemnified Party agree to cooperate with each
other and their respective counsel in connection with the defense,
negotiation or settlement of any such Third Party Claim, including providing
access to any relevant books and records and properties. If the Indemnifying
Party assumes the defense of a Third Party Claim, no settlement or
compromise thereof may be effected by the Indemnifying Party without the
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed. If the Indemnifying Party elects not to
assume the defense of a Third Party Claim, the Indemnified Party may assume
the defense of any such Third Party Claim with counsel selected by the
Indemnified Party, and the Indemnifying Party shall bear reasonable fees and
expenses of such counsel.
ARTICLE 15 - OWNERSHIP AND RISK OF LOSS
---------------------------------------
Title to, and risk of loss for or damage and other incidents to, the Raw
Materials and Packaging Supplies supplied by Purchaser shall remain with
Purchaser at all times. Title to, risk of loss for or damage and incidents
of ownership shall pass to Purchaser at the time Product is loaded into
totes or railcars at the P2S5 Unit.
ARTICLE 16 - CONFIDENTIALITY; COVENANT NOT TO COMPETE
-----------------------------------------------------
16.01 Manufacturer shall treat and maintain, and cause its employees and
agents to treat and maintain, as Purchaser's confidential property, and not
use or disclose to others during the Term hereof and for three (3) years
following termination of this Agreement any information (including any
technical information, experience or data) regarding Purchaser's products,
plans, programs, operations, or customers which may be heretofore or
hereafter disclosed to, or come within the knowledge of, Manufacturer, its
directors, officers, employees or agents in the performance of this
Agreement, without in each instance securing the prior written consent of
Purchaser.
16.02 Each party shall treat and maintain, and cause its employees and
agents to treat and maintain, the other party's information as confidential
property, and not use or disclose to others any information (including any
technical information, experience or data) regarding the other party's
products, plans, programs, plants, processes, costs, equipment, operations,
or customers which may be heretofore or hereafter disclosed to, or come
within the knowledge of a party, its directors, officers, employees or
agents in the
15
performance of this Agreement, without in each instance securing the prior
written consent of the other party.
16.03 The provisions of this Article 16 shall not apply to any information
referred to in this Article which the disclosing party establishes (i) has
been published and has become part of the public domain other than by acts
or omissions of that party, its employees or agents, (ii) has been furnished
or made known to the disclosing party by third parties (not including for
these purposes FMC) without restriction on disclosure or use, or (iii) was
lawfully in the disclosing party's possession (except for these purposes
Purchaser's Technology) prior to disclosure thereof by the other party and
was not acquired by the party, its employees or agents directly or
indirectly from the disclosing party or its employees or agents. Specific
information shall not be deemed to fall within any of these exceptions
merely because it is within the scope of more general information which
falls into one or more of these exceptions.
16.04 During the first five (5) years during the Term hereof, Manufacturer
shall not directly or indirectly, as an owner, equityholder, manager,
operator, consultant, member, partner, licensor, contractor, agent or in any
other capacity, engage, or provide any financing or lease or license any
assets to any person that engages or, to the knowledge of such Manufacturer,
intends to engage in any business or other enterprise that develops,
manufacturers, produces, distributes, licenses, mines, markets or sells any
Product; provided, however, that Manufacturer is not hereby prevented from
investing in or acquiring any equity or debt securities in a person if (x)
the investment is for passive investment purposes only (e.g., pension fund
investment) without any participation in the management of such person and
the securities owned by Manufacturer, do not comprise more than two percent
(2%) of the total issued and outstanding debt or equity securities of such
person or (y) if the condition in the preceding subclause (x) is not
fulfilled, Manufacturer completely divests itself, or enters into a
definitive written agreement for the sale, of the debt or equity securities
as promptly as practicable and in any event prior to the six (6) month
anniversary of the closing of such investment. Further, commencing on the
date hereof and for a period of five (5) years after the expiration or
termination hereof, Manufacturer shall not, directly or indirectly,
manufacture or sell Product or any product which can reasonably replace or
be substituted for Product produced hereunder; provided, however, that,
-------- -------
commencing upon the sixth anniversary of this Agreement during the period
prescribed in the preceding clause of this sentence: (i) Manufacturer's
pension funds are not hereby prevented from investing in or acquiring any
equity or debt securities in a person which might be engaged in any business
in competition with the Product and (ii) Manufacturer is not prevented from
(x) investing in or acquiring any equity or debt securities in any person if
the investment is for passive investment purposes only (that is without any
participation in the management of such person) or (y) acquiring a
controlling stake in, and active management of, any person provided that
such person does not derive more than twenty percent (20%) of its net
revenue from any product which competes with any Product produced under this
Agreement or (z) if the condition in the preceding subclause (y) is not
fulfilled, Manufacturer completely divests itself, or enters into a
definitive written agreement for the sale of that portion of the business of
any such person which does sell products which compete with the Products as
16
promptly as practicable and in any event prior to the twelve (12) month
anniversary of the closing of such investment or acquisition.
ARTICLE 17 - PERMITS AND LICENSES; COMPLIANCE WITH LAW
------------------------------------------------------
17.01 During the Term hereof, Manufacturer hereby undertakes to make timely
applications to all competent authorities and obtain and maintain, at its
expense all licenses, consents, permits and other authorizations required to
operate the P2S5 Unit, including the renewals thereof. Commencing on the
second anniversary of the date of this Agreement, Purchaser shall indemnify
Manufacturer against liability arising from any claim by a third party
alleging that its rights have been infringed by reason of use by
Manufacturer of the Technology supplied hereunder.
17.02 Manufacturer and Purchaser each agree to perform their respective
obligations hereunder in compliance with Government Regulations. Pursuant to
the provisions contained in Schedule 4.01, Purchaser agrees to reimburse
-------------
Manufacturer for any operating expenses, capital and project expenses
required by Manufacturer to be incurred to comply with new or existing
environmental laws or amendments thereto or Government Regulations
applicable to the production of Product at the P2S5 Unit during the Term so
as to enable Manufacturer to lawfully continue to manufacture Product
hereunder in accordance with its then current manufacturing process. For the
avoidance of doubt, Purchaser shall not be responsible for costs incurred to
correct non-compliance with environmental laws or Government Regulations
first occurring prior to or after the Term. In connection with
Manufacturer's activity hereunder, Manufacturer shall be responsible for any
and all costs of environmental investigation and remediation and other
response actions with respect to the environmental condition of the
Manufacturing Site and for any fines or other sanctions or impositions
assessed in connection with Manufacturer's activities hereunder for
noncompliance with Government Regulations related to protection of the
environment. Manufacturer shall have the sole responsibility for procuring
all required permits in Manufacturer's name and shall comply with all
permits required by applicable Government Regulation, and comply with all
Government Regulations with respect to storage, transportation, treatment,
recycling, and disposal of any solid or hazardous wastes generated in
connection with Manufacturer's activities.
ARTICLE 18 - FORCE MAJEURE
--------------------------
18.01 Neither party shall be responsible for any failure to comply with the
terms of this Agreement, or for any delay in performance of, or failure to
perform under this Agreement, where such failure or delay is due to causes
beyond the reasonable control of the party failing to perform, including,
but not be restricted to, fire, storm, flood, earthquake, explosion,
accident, acts of the public enemy, war, riots, terrorism, rebellion,
insurrection, sabotage, epidemic, quarantine restrictions, labor disputes,
labor strikes, lockouts, boycotts, labor shortages, transportation embargoes
or failures or delays or interruptions in transportation or shortages of
transportation equipment, inability to secure necessary raw materials or
machinery, failure of machinery, acts of God, acts of any government,
whether national, municipal or otherwise, or any agency thereof, and
17
judicial or legislative action, new or amended laws or regulations, orders
of courts or acts of civil or military authorities.
18.02 A strike, lockout or other labor disturbance shall be deemed to be
beyond the reasonable control of the party whose performance is prevented by
such strike or labor disturbance, and nothing in this Agreement shall be
construed as requiring either party to accede to the demands of employees
that such party considers contrary to its interests, whether or not those
employees are represented by a union or other organization.
18.03 The party claiming excuse from performance shall send prompt written
notice to the other party declaring force majeure and setting forth a brief
description of the event of force majeure and the extent of the excuse
claimed. Such notice of force majeure shall be deemed accepted by the
recipient unless objected to in writing within ten (10) days after receipt
thereof. The requirement of giving prompt written notice of an event of
force majeure shall be a covenant only and shall not be deemed to be a
condition.
18.04 If due to a force majeure event either party is unable to perform any
of its obligations under this Agreement (other than obligations of Purchaser
to pay invoices for Product previously delivered in the performance of this
Agreement), then the performance of the party unable to perform shall be
excused to the extent made necessary by such force majeure event and during
it continuance; provided, however, that the party unable to perform shall
use its commercially reasonable efforts to remedy or overcome, unless
commercially impracticable, such force majeure event. Manufacturer may, for
example, make partial delivery to Purchaser in proportions that are
reasonable under the circumstances. Deliveries suspended or not made by
reason of this Article 18 shall be cancelled without obligation or
liability, but this Agreement shall otherwise remain unaffected.
ARTICLE 19 - NOTICES
--------------------
Any notice, demand, or communication required or permitted to be given
hereunder by any provision of this Agreement shall be in writing and shall
be deemed to have been sufficiently given or served for all purposes if (a)
personally delivered, when delivered, (b) mailed by certified first class
mail, prepaid with return receipt requested, on the earlier of the date
actually delivered and the fifth (5th) Business Day after mailing, (c) sent
by a nationally recognized overnight courier service, to the recipient at
the address below indicated, on the earlier of the date actually delivered
and the third (3rd) Business Day after sending or (d) delivered by facsimile
which is confirmed in writing by sending a copy of such facsimile to the
recipient thereof when confirmation thereof is received:
18
If to the Purchaser or ICL:
Israel Chemicals Limited
Xxxxxxxxxx Xxxxx
00 Xxxxxx Xxxxxx
Xxx Xxxx 00000, Xxxxxx
Attention: Xxxxxxxxx Xxx
972-3-684-4434 (telecopier)
With a copy (which shall not constitute notice to the
Buyer or ICL) to:
Shavit Bar-On Gal-On Tzin Nov Yagur, Law Offices
Sonol Tower - 20th Floor
52 Xxxxxxxx Xxxxx Xxxx
Xxx Xxxx 00000 Xxxxxx
Attention: Xxxx Xxxxxx
972-3-791-2801 (telecopier)
With a copy (which shall not constitute notice to the
Buyer or ICL) to:
Dechert LLP
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
(000) 000-0000 (telecopier)
If to Manufacturer: To each of the following addresses/locations
Solutia Inc.
000 Xxxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Facsimile: 000-000-0000
Attn: General Manager B2B Chemicals
With a copy to:
Solutia Inc.
000 Xxxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Facsimile: 000-000-0000
Attn: General Counsel
19
With a copy (which shall not constitute notice to any
Owner or Seller) to:
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
(000) 000-0000 (telecopier)
ARTICLE 20 - SUCCESSORS AND ASSIGNS
-----------------------------------
No party may assign or otherwise transfer any of its rights, or delegate the
performance of its obligations under this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld. Any change in control of a party shall be deemed to be an
assignment for purposes of this Article 20 requiring consent of the other
party. Any attempted assignment, transfer or delegation without such consent
shall be void and of no effect. For purposes of this Article 20, a change in
control shall be deemed to occur if substantially all of the assets or more
than 35% of the equity securities or voting control of the equity securities
or voting interest of a party is acquired by a single party or several
parties acting in concert.
ARTICLE 21 - MISCELLANEOUS
--------------------------
21.01 This Agreement constitutes the full understanding of the parties, a
complete allocation of risks between them and a complete and exclusive
statement of the terms and conditions of their agreement with respect to the
supply by Manufacturer and the purchase by Purchaser of Product and all
prior agreements, negotiations, dealings and understandings relating
thereto, whether written or oral, regarding the subject matter hereof, are
hereby superseded and merged into this Agreement. No conditions, usages of
trade, course of dealing or performance, understanding or agreement
purporting to modify, vary, explain or supplement the terms or conditions of
this Agreement shall be binding unless hereafter made in writing and signed
by the party to be bound, and no modification shall be effected by the
acknowledgment or acceptance of any forms containing terms or conditions at
variance with or in addition to those set forth in this Agreement. The terms
and conditions of this Agreement shall control the rights of the parties
notwithstanding any inconsistent or additional terms and conditions
contained in any purchase order, acknowledgment, invoice, or other similar
order or shipping document which may be used by either party.
21.02 No waiver by either party with respect to any breach or default or of
any right or remedy and no course of dealing or performance shall be deemed
to constitute a continuing waiver of any other breach or default of any
other right or remedy, unless such waiver be expressed in writing signed by
the party to be bound.
21.03 Headings as to the contents of particular Articles are inserted for
convenience only and do not form part of this Agreement.
20
21.04 The validity, interpretation and performance of this Agreement and any
dispute connected herewith shall be governed by and construed in accordance
with the laws of the Illinois. In considering any dispute hereunder, the
parties expressly agree that this Agreement shall be construed as being
between residents of Illinois performing a contract solely with in Illinois
and that all laws, court precedents, custom practice and usage relating to
conflicts of laws shall be disregarded in their entirety in determining the
parties' rights and obligations hereunder.
21.05 If any term, condition or provision of this Agreement or any
application thereof shall be held invalid or unenforceable, the remainder of
this Agreement, or any other application of such term, condition or
provision, shall not be affected thereby and this Agreement shall be
construed, enforced and performed so as to implement the parties' intent
hereunder as if such invalid or unenforceable provision did not exist.
21.06 Purchaser will be entitled to inspect the Manufacturing Site and P2S5
Unit upon reasonable advance written notice to Manufacturer. Manufacturer
will supervise and provide reasonable assistance and support for visits to
the Manufacturing Site and P2S5 Unit by Purchaser's customers.
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be executed in two original copies by their respective duly
authorized representatives the day and year first above written.
SOLUTIA INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
PHOSPHORUS DERIVATIVE INC.
By: /s/ Xxxxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
21
Schedules
---------
1.08 Land
1.17 Product Specifications
1.18 Production Capacity
1.20 Raw Materials Specifications
4.01 Tolling Fee
7.01 Conversion Ratio
10.01 Laboratory Analysis Standards
