LONG TERM SUPPLY CONTRACT
Exhibit
10.14
This
contract is made on the 22nd day of
February, 2006 between CARGILL
PALM PRODUCTS SDN BHD, herewith referred to as "Seller"; and MISSION BIOTECHNOLOGIES SDN
BHD as "Buyer" for the Commodity defined below under the following terms
and conditions.
1
|
Commodity
|
1) Malaysian
Crude Unbleached Palm Oil in bulk
AND/OR
2) Refined
Bleached Deodorized Palm Oil
|
|
2
|
Specifications
|
Crude
Unbleached Palm Oil
|
|
FFA
(Free Fatty Acids)
|
5.00%
Maximum
|
||
Water
|
0.50%
Maximum
|
||
Phosphorus
|
20
ppm max
|
||
Sulphur
|
13
ppm max
|
||
Iodine
Value (IV)
|
120
max
|
||
Waxes
|
10
ppm max
|
||
Solids
Content
|
0.50%
max
|
||
Unsaponifiables
|
2%
max
|
||
State
|
Liquid
> 50 deg C
|
||
Refined
Bleached Deodorized Palm Oil
|
|||
Moisture
& Volatiles
|
0.05%
max
|
||
Acidity
|
0.50%
max
|
||
Phosphorus
|
2
ppm max
|
||
Soap
|
50
ppm max
|
||
Unsaponifiables
|
1
ppm max
|
||
3
|
Weight
and Quality
|
Net
weight and quality final at Buyer's Site
|
|
4
|
Destination
|
Delivered
to Buyer's Site in Kuantan Port. Delivery point shall be the
Junction Point, (i.e, the flange joining the Seller's delivery pipeline
and the Buyer's pipeline at Kuantan Port, Malaysia), OR by road tankers to
the Buyer's facility, at the Seller's option, whichever is more
appropriate at that instance.
|
|
5
|
Quantity
|
Up
to 100,000 MT per annum of CPO and/or RBDPO i.e, up to 8500
to
|
1
10000
tonnes per month. Not later than 90 days prior to the
commencement of the first delivery hereunder and 90 days prior to the
beginning of each subsequent year, the Buyer and Seller shall mutually
agree to minimum and maximum annual quantities to be supplied by the
Seller and purchased by the Buyer for each such year. Provided,
however, that the Parties recognize that quantities during the first six
months of the contract period during and after the initial commissioning
of the Buyer's plant can be significantly less than the above stated
limits. The quantities shall be subject to the production
capacity of the Seller's Kuantan plant.
Provided
further that, 60 days prior to any delivery month, Buyer and Seller shall
agree upon the quantity to be delivered during the delivery month and the
Seller shall supply and Buyer shall buy such agreed Monthly Delivery
Quantities. The actual monthly delivery quantities shall be
within the industry tolerance of plus/minus 2 % of the agreed Monthly
Delivery Quantity as per the Domestic PORAM contracts that is currently
practiced in the palm industry in Malaysia.
Any
additional or reduction in quantity from the above quantity will have to
be mutually agreed upon by both parties at least 1 (one) week prior to the
commencement of the delivery month. Damages for breach of
contract shall be payable for any shortfall below the committed quantity
as per the Domestic PORAM contracts that is currently practiced in the
palm industry in Malaysia.
|
||
6 |
Period
|
For a period up to the end of five years from the start of commercial production of Buyer's facility but no later than up to December 30, 2012 and extendable thereafter subject to mutual agreement between parties. |
7
|
Delivery
|
Seller
to deliver proportionally the agreed Monthly Delivery Quantity for the
respective delivery month on a weekly basis. Failure by the
Buyer to accept or the Seller to deliver on the agreed deliveries is
thereby subject to Penalties as set out in item 11. Buyer will
endeavour to assist in the delivery and OR pipeline transfer if and when
the need arises.
|
8
|
Pricing
|
Base price: The price
will be based on the MPOB Peninsula Malaysia Weighted Average PLUS a
premium of RM10 for Crude Palm Oil and PLUS a premium of RM15 for the
Refined Bleached and Deodorized Palm Oil local delivered price for the
respective delivery month.
As
soon as the current month's MPOB average pricing is released by MPOB, both
parties will have to settle the difference between the provisional and the
contracted price within 7 (seven) working days.
|
9
|
Payment
|
Payment
shall be made in advance before commencement of the
deliveries. The advance payment shall be made in lots of 2000
mt which is approximately the runrate for one week
|
10
|
Cancellation of agreed
quantities for any
given month
|
Buyer/Seller
reserves the right to mutually agree to cancel any outstanding agreed
quantities for any given month. Notice must be given both
verbally and by fax or email at least 10 days notice in advance if the
need arises. Such quantities will then be carried over to the
following month(s) as mutually agreed between parties and on reasonable
basis..
|
11
|
Penalty
|
Penalties
for delay in delivery by Seller or acceptance by Buyer shall be in
accordance with the terms and conditions as set out in the Contract 1
–
|
2
Domestic
Contact for Malaysia Crude Unbleached Palm Oil in Bulk (clause no. 5,
effective 1st
July, 2004) under the Palm Oil Refiners Association of Malaysia (PORAM)
Handbook
|
||
12 | Others | All terms and conditions as set out in this contract are strictly to be adhered to by both parties. Other terms and conditions not specified in this contract shall be referred to and governed by the domestic contract for Malaysian crude unbleached palm oil & The Processed Palm Contracts in bulk issued jointly by the Palm Oil Refiners Association of Malaysia (PORAM) and the Malaysian Palm Oil Association (MPOA) dated 1st July 2004. |
13
|
Conditions
Precedent
|
(i) Buyer's
obligation to purchase and Seller's obligation to sell under this contract
shall be subject to the completion of financing of Buyer's proposed
project at Kuantan no later than June 30, 2006; and
(ii) any
changes in the future in either government policies, market forces or the
status of either of the parties in relation to the palm oil or biodiesel
industry which materially affects either party's ability to continue with
the sale and purchase of the Commodity under this Contract.
|
14
|
Governing
Law
|
Laws
of Malaysia
|
15
|
Arbitration
|
Any
dispute, differences, controversy or claim arising out of or relating to
this Agreement, or the breach, termination or invalidity thereof shall be
decided by arbitration in accordance with the Rules of Arbitration at
Kuala Lumpur Regional Centre for Arbitration in force at such
time
|
16
|
Effective
Date
|
The
contract will be effective upon execution by both
parties.
|
3
IN
WITNESS WHEREOF the respective parties hereto have hereunto set their
hands.
/s/ X X Xxxxxx
|
/s/ Xxxxxxxxx
Xxxxxxxxxxxx
|
|
Name:
|
X X
Xxxxxx
|
Xx.
Xxxxxxxxx Xxxxxxxxxxxx
|
Company:
|
Mission
Technologies Sdn Bhd
|
Cargill
Palm Products Sdn Bhd
|
Title:
|
Managing
Director
|
4