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EXHIBIT 10.5
OPERATING AND THROUGHPUT AGREEMENT
BETWEEN
XXXXXX TERMINALS INC.
AND
SULPHUR CORPORATION OF CANADA LTD.
DATED AS OF JANUARY 1, 1999
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TABLE OF CONTENTS
1. Interpretation ................................................................................2
2. Services to be Provided by RTI ................................................................6
3. Scheduling Train Arrivals .....................................................................6
4. Estimated Time of Arrival of Trains ...........................................................6
5. Pre-Unloading for Trains ......................................................................7
6. Unloading Procedure for Trains ................................................................7
7. Receipt and Acceptance of Sulphur from Trains .................................................8
8. Specifications of Unit Trains .................................................................9
9. Rail Delayed Arrival Charges ..................................................................9
10. Scheduling Vessel Arrivals ....................................................................9
11. Notice of Readiness...........................................................................10
12. Laydays.......................................................................................10
13. Loading and Hatch Covers......................................................................11
14. Loading Facilities for Vessels................................................................11
15. Demurrage and Despatch and Loading Rate.......................................................12
16. Calculation of Tonnes Loaded..................................................................13
17. Partially Loaded Vessels......................................................................13
18. Combined Loading..............................................................................14
19. Deliveries to and from the Sulphur Terminal...................................................14
20. Sulphur Terminal Personnel ...................................................................14
21. Extra Services ...............................................................................15
22. Throughput Rates and Exclusivity .............................................................15
23. Method of Payment ............................................................................16
24. Throughput Guarantee and Mutual Commitment....................................................17
25. Indemnification...............................................................................18
26. Force Majeure.................................................................................19
27. Insurance.....................................................................................21
28. Limitation of Liability and Immunity..........................................................21
29. Option to Renew...............................................................................21
30. Default and Termination.......................................................................22
31. Arbitration...................................................................................24
32. Taxes.........................................................................................24
33. Confidentiality...............................................................................25
34. Severability..................................................................................26
35. Assignment....................................................................................26
36. Applicable Law and Interpretation.............................................................26
37. Method of Notice..............................................................................27
38. Entire Agreement..............................................................................27
39. Review of Agreement Terms.....................................................................27
40. Counterparts .................................................................................28
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SCHEDULES:
Schedule "A" - Rates
Schedule "B" - Services For The Sulphur Terminal
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OPERATING AND THROUGHPUT AGREEMENT
THIS AGREEMENT is dated for reference the lst day of January, 1999
BETWEEN:
XXXXXX TERMINALS INC., a body corporate duly incorporated
under the laws of Canada, having an office at Prince Rupert,
British Columbia;
("RTI")
AND:
SULPHUR CORPORATION OF CANADA LTD., an Alberta company
extra-provincially registered in British Columbia under Xx.
X00000 having its head office at Suite 620, Alberta Stock
Exchange Tower, 000 - 0xx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx, X0X
0X0;
("SCC')
WHEREAS:
A. RTI owns and operates a bulk cargo handling facility at Xxxxxx Island, Port
of Prince Rupert;
B. SCC intends to develop, construct and operate a sulphur handling facility and
related works at Xxxxxx Island, Port of Price Rupert;
C. SCC has entered or will enter into contracts to store and process sulphur at
the Facility (as defined herein) and to deliver sulphur to and transport sulphur
from the Facility;
D. SCC desires to engage the services of RTI to provide terminal, storage,
processing and shipping services for the Sulphur Terminal, subject to the terms
and conditions contained herein; and
E. SCC and RTI wish to enter into this Agreement for the operation of the
Sulphur Terminal on the terms and conditions hereinafter set out.
NOW THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties agree as follows:
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INTERPRETATION
In and for the purpose of this Agreement, unless there is
something in the subject or context inconsistent therewith:
(a) "Adjustment Date" has the meaning set forth in Section 24.3
of this Agreement.
(b) "Approved Plans" means the plans and specifications for the
Project approved by SCC, RTI and PRPC pursuant to Subsection
5.3 of the Project Agreement.
(c) "Buyers" means the purchasers of sulphur with whom SCC has
contracted to deliver such sulphur.
(d) "Coal Terminal" means the existing bulk coal handling facility
operated by RTI at Xxxxxx Island, Prince Rupert.
(e) "Commencement Date" means the date that sulphur is first
delivered to the Facility from a Unit Train.
(f) "Contract Year" means January I to December 3 1.
(g) "CPI" means the All-Items Canadian Consumer Price Index as
published by Statistics Canada or such successor Index as may
replace same, or, in the event no such Index or successor
Index exists, then the most comparable Index appropriately
adjusted.
(h) "Customs" means the customs office designated by the Minister
of National Revenue for business relating to customs at Port
of Prince Rupert at Xxxxxx Island.
(i) "Delivery Periods" has the meaning set forth in Section 24.3
of this Agreement.
"dwt" means deadweight tonnes of 1,000 kilograms.
(k) "ETA" means estimated time of arrival of a Unit Train or
Vessel, as the case may be.
(1) "Event of Default" has the meaning set forth in Section 30.1
of this Agreement.
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(m) "Exclusivity Period" means the period commencing from the
date of this Agreement and ending on that date which is five
years following the earlier of: (i) the date that sulphur is
first delivered to an ocean-going vessel at the Facility, and
(ii) February 15, 2000.
(n) "Facility" means the Coal Terminal and Sulphur Terminal
together.
(0) "Final Notice" has the meaning set forth in Section 26,5 of
this Agreement.
(p) "Force Majeure Event" has the meaning set forth in Section
26.4 of this Agreement.
(q) "Formed Sulphur" means sulphur pellets in a consistent and
standardized format, convenient to store and handle, with a
minimum of dust creation both in storage and in loading and
able to retain product integrity through the bulk handling
process.
(r) "Liquid Sulphur" means liquid sulphur at a minimum
temperature of 280 degrees Fahrenheit.
(s) "Maximum Annual Throughput" has the meaning set forth in
Section 24.6 of this Agreement.
(t) "Minimum Shipment Requirement" has the meaning set forth in
Section 24.2 of this Agreement.
(u) "Notice" has the meaning set forth in Section 26.4 of this
Agreement.
(v) "Notice of Readiness" has the meaning set forth in Section
11. 1 of this Agreement.
(O) "Phase I Head Lease" has the meaning given to that term in
the Project Agreement.
W Phase I Sublease" means the sublease entered into between
RTI and SCC which is entitled "Phase I Sublease" and which
is dated as of January 1, 1999, as amended from time to
time.
(Y) "Phase II Head Lease" has the meaning given to that term in
the Project Agreement.
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W "Phase 11 Sublease" means the sublease entered into between
RTI and SCC which is entitled "Phase II Sublease" and which
is dated as of January 1, 1999, as amended from time to time.
(aa) "Port" means the Port of Prince Rupert on Xxxxxx Island in
the Province of British Columbia.
(ab) "Prime Rate" means the floating annual rate of interest
announced by RTI's principal banker as its reference rate
then in effect for determining interest rates on Canadian
dollar commercial loans made in Canada by such bank and
commonly known as its "Prime Rate".
(ac) "PRPC" means Prince Rupert Port Corporation and includes all
entities which hereafter become the head lessor under the
Phase I Head Lease or the Phase 11 Head Lease.
(ad) "Project" means the financing, development, design and
construction of the Sulphur Terminal.
(ae) "Project Agreement" means the Sulphur Handling Facility
Project Agreement entered into between RTI and SCC dated
January 1, 1999 governing the development and construction of
the Sulphur Terminal, as amended from time to time.
(af) "Prorated Tonnage" has the meaning set forth in Section 24.3
of this Agreement.
(ag) "Quarterly Adjustment" has the meaning set forth in Section
(ah) "Railway" means CN Rail.
(ai) "Second Period" means the period of the Term commencing upon
the expiry of the Exclusivity Period and ending upon the
expiry of the Term, excluding any extensions of the Term
pursuant to Section 29.2.
(aj) "Services" has the meaning set forth in Section 2.1 of this
Agreement.
(ak) "Statutory Holidays" means New Year's Day (from noon on
December 31 to 8:00 a.m. on January 2), Good Friday, Easter
Monday, Victoria Day (Monday before May 25), Canada Day (the
first day of July), B.C. Day (the first Monday of August),
Labour Day (the first Monday of September), Thanksgiving Day
(the second Monday of October), Remembrance Day
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(November 11), from noon on December 24, Christmas Day
(December 25), and Boxing Day (December 26), and any other
statutory holiday or holidays which may be declared by the
federal or provincial governments and, for greater certainty,
means in respect of each such holiday the declared hours set
out above or otherwise agreed to between RTI and its
employees from time to time.
(al) "Subleased Lands" means those lands subleased to SCC
pursuant to the Subleases.
(am) "Subleases" means the Phase I Sublease and the Phase Il
Sublease;
(an) "Sulphur Terminal" means the sulphur handling facility
proposed to be financed, developed, designed and constructed
by SCC at Xxxxxx Island, Port of Prince Rupert pursuant to
the Project Agreement and operated by RTI under the terms of
this Agreement.
(ao) "Suppliers" means the suppliers with whom SCC has contracted
for the purchase of sulphur.
(ap) "Tern" has the meaning set forth in Section 2.1 of this
Agreement.
(aq) "Transition Period" means that period, if any, which
commences upon the expiry of the Exclusivity Period and
terminates at the commencement of the first full Contract
Year following such expiry.
(at) "Unit Trains" means unit trains as described in the Approved
Plans.
(as) "Vessels" means the ships on which sulphur is to be loaded
under this Agreement and which shall meet the specifications
set forth in Subsections 14.1 and 14.2 of this Agreement.
1.2 All dollar amounts referred to in this Agreement are expressed in Canadian
dollars, unless otherwise specified.
1.3 The following are the Schedules annexed hereto and incorporated by reference
and deemed to be part thereof:
Schedule "A" - Rates
Schedule "B" - Services for the Sulphur Terminal
1.4 The terms of Schedule "B" to this Agreement shall be agreed to no later than
August 31, 1999. Upon agreement, such terms shall be inserted into Schedule "B"
and shall
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form part of this Agreement, to the same extent as if such terms had been
included in Schedule "B" at the date hereof.
2. SERVICES TO BE PROVIDED BY RTI
2.1 RTI shall provide the following services (the "Services") to SCC with effect
from the Commencement Date until the expiry of the Contract Year ending December
31, 2008 (the "Term"):
(a) Receive Liquid Sulphur destined for the Sulphur Terminal from
Unit Trains;
(b) Within the Sulphur Terminal, transport Liquid Sulphur to and from
storage and to the forming plant, and transport Formed Sulphur
from the forming plant to storage, less such quantities lost in
reasonable and prudent handling operations;
(c) Transport Liquid Sulphur and Formed Sulphur from the Sulphur
Terminal to Vessels, less such quantities lost in reasonable and
prudent handling operations;
(d) Generally perform in connection with the services enumerated in
clauses (a) through (c) above the services necessarily performed
by bulk cargo terminal operators subject to all applicable laws
and regulations and the provisions of this Agreement; and
(e) Furnish personnel for the operation and maintenance of the
Sulphur Terminal in accordance with the terms of Schedule "B".
2.2 SCC hereby grants to RTI an irrevocable license to occupy the Subleased
Lands and the Sulphur Terminal for the purpose of enabling RTI to furnish the
services to be provided by it under this Agreement.
3. SCHEDULING TRAIN ARRIVALS
3.1 At least 15 days before the beginning of each month, SCC will notify RTI of
SCC's planned schedule for the delivery of sulphur by Unit Trains to the
Facility during that month. Sulphur will be so delivered on a reasonably uniform
basis throughout each Contract Year.
4. ESTIMATED TIME OF ARRIVAL OF TRAINS
4.1 SCC shall cause the Railway to notify RTI of the ETA of each Unit Train at
the Facility at least four hours prior to such ETA.
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4.2 If a Unit Train arrives at the Facility prior to its ETA, unloading may be
commenced at any time prior to ETA at RTI's option.
5. PRE-UNLOADING FOR TRAINS
5.1 SCC shall cause the Railway to place, at its expense, each Unit Train on the
trackage provided at the Facility with all rail cars properly coupled, all air
hoses properly connected and the train line completely charged.
5.2 Following the arrival of the Unit Train, RTI may inspect the Unit Train to
determine that it is in a safe and undamaged condition. The time required to
perform such inspection shall be included in the computation of unloading time.
5.3 If on such inspection or subsequent inspection or handling any rolling stock
is found to be damaged or the Unit Train is in any other respect found to be
unsafe, RTI will immediately notify SCC. SCC shall repair or remove any damaged
rolling stock as soon as possible thereafter and ensure that the Unit Train is
in a safe condition for unloading. The time taken to do so will not be included
in the computation of unloading time.
6. UNLOADING PROCEDURE FOR TRAINS
6.1 RTI shall make commercially reasonable efforts to move each Unit Train
through the Facility using a maximum unloading time of 24 hours from the time of
arrival of such Unit Train. Any delay during the course of unloading caused by
the Railway, due to the unavailability of crew to move Unit Trains or otherwise,
or caused by insufficient storage space for Liquid Sulphur at the Facility shall
not be included in unloading time.
6.2 SCC shall furnish or ensure that the Railway furnishes the locomotive power
necessary to move Unit Trains during unloading operations.
6.3 RTI will handle any rail car or locomotive in its possession in accordance
with proper and safe operating procedures. RTI will declare each Unit Train
ready for movement from the Facility with all couplers properly coupled, all air
hoses properly connected, and the train line completely charged. The Railway may
then inspect the Unit Train, and the time taken for such inspection shall not be
included in unloading time. If in any such inspection it is ascertained that a
rail car or locomotive has been damaged or that any coupler is not properly
coupled, any air hose is not properly connected, or the train line not
completely charged, SCC shall cause the Railway to notify RTI prior to the
departure of the Unit Train from the Facility. Any deficiency in the coupling,
connection or charging of any Unit Train shall be corrected by RTI and the time
required for such correction will be included in the unloading time. If the
Railway moves a Unit Train from the Facility, the said inspection will be deemed
to have been made. RTI shall not be responsible for, and SCC shall fully
indemnify RTI from liability for and all direct and indirect costs associated
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with, any claim by the Railway or any other third party arising from or in
connection with any damage to a rail car or locomotive or any deficiency in the
coupling, connection or charging of any Unit Train, unless RTI has been notified
of such damage or deficiency prior to the time that the Unit Train is moved from
the Facility.
6.4 RTI will use all reasonable efforts to ensure that each rail car is
completely unloaded. SCC and RTI shall co-operate, and SCC shall cause the
Railway to co-operate, in establishing monitoring systems to ensure that
unloading is complete.
6.5 If any locomotives or rail cars are damaged or destroyed by RTI while in the
possession or under the control of RTI, such rail equipment shall be switched or
removed and, subject to Section 6.3, repaired or replaced at the expense of RTI.
RTI shall be deemed to be in possession of locomotives and rail cars so damaged
or destroyed while they are at the Facility.
6.6 RTI and SCC agree that the Facility and associated trackage will be
available for the acceptance of Unit Trains 24 hours per day, every day
including Saturdays, Sundays and holidays but excluding Statutory Holidays,
provided that if the Facility and associated trackage are made available on
Statutory Holidays, SCC shall pay all overtime and other costs arising from the
performance of work on a Statutory Holiday.
7. RECEIPT AND ACCEPTANCE OF SULPHUR FROM TRAINS
7.1 If RTI is unable to receive a Unit Train at or deliver it from the Facility
for any reason, RTI shall forthwith notify the Railway and SCC at the earliest
time possible, recognizing that delays caused by inability to receive or deliver
a Unit Train for any reason may in turn cause additional delays because of the
necessity to operate such train at a different time.
7.2 Each Unit Train shall carry Liquid Sulphur. Any cars carrying anything other
than Liquid Sulphur may be set aside by RTI for later dumping at the earliest
opportunity, or RTI may refuse to unload such cars provided RTI so notifies SCC
and the Railway.
7.3 RTI shall not be liable for delay in dumping a Unit Train if the delay is
caused by mechanical or inherent defects in the Unit Train or because the
sulphur is of such a nature that normal discharge is not possible in RTI's
estimation.
7.4 If and when RTI incurs damages (including economic loss and consequential
damage) or extra costs resulting from dumping cars carrying anything other than
Liquid Sulphur (no matter who caused such non-qualification provided that it was
not RTI), SCC shall pay such damages and extra costs. RTI shall provide notice
by telephone within 24 hours, Saturdays, Sundays and Statutory Holidays
excepted, indicating non-qualification.
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8. SPECIFICATIONS OF UNIT TRAINS
8.1 The specifications for Unit Train loads and dimensions shall be as agreed to
in the Approved Plans. Railcars which do not meet specifications outlined in the
Approved Plans shall be set aside while SCC and the Railway rectify the
situation, and, if corrective action is not taken within 15 days, SCC shall
cause the Railway to remove the railcars from the Facility.
9. RAIL DELAYED ARRIVAL CHARGES
9.1 SCC agrees that commencing with the Unit Train Arrival Date, if a Unit Train
arrives at the Facility more than two hours after the ETA stated by the Railway,
SCC will pay to RTI for each such hour after two hours to a maximum of eight
hours for each occurrence an amount equal to $345. SCC shall pay such amounts to
RTI within 15 days of its receipt of an invoice from RTI detailing such amounts.
For the purposes of this Subsection "Unit Train Arrival Date" means the first
date of arrival at the Facility of a Unit Train which meets in length the
specified number of cars agreed to by the parties in the Approved Plans.
10. SCHEDULING VESSEL ARRIVALS
10.1 Prior to the Commencement Date and thereafter prior to each Contract Year,
SCC shall provide RTI with a written schedule of the proposed shipping schedule
for the period from the Commencement Date until the commencement of the
following full Contract Year or for the forthcoming Contract Year, as the case
may be.
10.2 To allow RTI to coordinate deliveries to Vessels of sulphur with other
cargo handled at the Coal Terminal, SCC shall provide RTI with written schedules
as follows:
(a) At least 13 days prior to the commencement of each month, SCC
shall submit to RTI a proposed shipping schedule for the
following month which includes the names of the Vessels slated
for loading during such month, evenly spaced, their ETA at the
Port and the approximate tonnage to be loaded. RTI shall notify
SCC of either its proposed revision or approval of such schedule
within three days after receipt of the schedule. The actual
schedule, as approved by RTI and SCC, shall specify the tonnage
to be loaded on board each Vessel, with a 10% allowance, the name
and approximate tonnage in dwt of each Vessel and the ETA at the
Port for each Vessel scheduled for such month.
(b) SCC shall notify RTI at least 14 days in advance of the arrival
of each Vessel of its ETA and the declared quantity of sulphur to
be loaded on board the Vessel. Where such ETA or tonnage differs
significantly from the ETA or tonnage set out in the schedule
approved under Subsection 10.2(a), SCC, RTI
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and the relevant Buyer will negotiate together in good faith to
arrive at a mutually satisfactory solution of any problems
thereby occasioned. If no such solution can be agreed upon, the
acceptance of such Vessel shall be subject to SCC's approval. SCC
shall arrange that the master of the arriving Vessel advises by
radio to RTI the Vessel's ETA at each of seven days, 48 hours and
24 hours before it is expected to arrive at the Port.
(c) At the time of submission of the monthly shipping schedule
provided for in Subsection 10.2(a), SCC shall have used its best
efforts to schedule successive arrivals of the Vessels of its
Buyers for loading sulphur at the Port two clear days apart.
11. NOTICE OF READINESS
11.1 Notice of readiness ("Notice of Readiness") may be tendered by the Vessel
after its arrival at the Port during or outside of usual business hours, and
will be accepted at any time of day or night, Saturdays, Sundays and holidays
included, but excluding Statutory Holidays, provided the Vessel is cleared by
Customs and is in free pratique. Notice of Readiness shall be given in writing
to RTI at the Coal Terminal.
11.2 If the Vessel is ordered to await berth at a place where free pratique is
not normally granted, Notice of Readiness may be tendered by radio subject to
free pratique being granted subsequently. In the event that free pratique is not
granted, the previous Notice of Readiness shall be considered null and void, and
the Vessel shall tender a new Notice of Readiness when in free pratique and
ready to load. Vessels shall give Notice of Readiness and be loaded in order of
actual arrival at the Port.
12. LAYDAYS
12.1 Laydays shall commence 24 hours after tender of Notice of Readiness,
provided the Vessel is in every respect ready to load sulphur, in free pratique
and is cleared by Customs, whether the Vessel is in berth or not, unless sooner
worked. Notwithstanding the foregoing, unless the Vessel is sooner worked,
laytime will not start to count before the "Allowed Time" for the "Previously
Loaded Vessel" has elapsed, where (i) "Allowed Time" means 24 hours, plus one
hour for (A) each 10,000 dwt or part thereof of cargo over 150,000 dwt actually
loaded in the case of Vessels loading coal or petroleum coke or (B) each 2,000
dwt or part thereof of cargo over 30,000 dwt actually loaded in the case of
Vessels loading sulphur, after laytime commences for such Vessel, and (ii)
"Previously Loaded Vessel" means, in relation to a Vessel which has given Notice
of Readiness (the "Vessel's Notice"), the Vessel which immediately prior to the
giving of the Vessel's Notice has given Notice of Readiness under this
Agreement, is ready to load sulphur, is in free pratique and is cleared by
Customs.
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12.2 After laytime commences, any time lost due to the berth not being available
to the Vessel shall count as laytime unless such non-availability is caused by
SCC or Vessel. The time from the time the Vessel is ordered by RTI to proceed to
berth until the Vessel is alongside the berth and is ready in all respects to
load sulphur shall not count as laytime. Any delays caused by Vessel are not to
count as laytime used. Time lost for reasons beyond RTI's control as set forth
in Part 26 shall not count as laytime used, provided RTI gives SCC notice
thereof in accordance with Part 26. Laytime shall terminate upon completion of
loading.
12.3 Laytime shall include the time taken for the final draught survey provided
that same has been completed with reasonable dispatch. Laytime shall not include
the time taken for any intermediate draught survey requested by a Vessel's
master. Laydays at the Coal Terminal shall be weather working days of 24
consecutive hours, including Saturdays, Sundays and holidays, but excluding,
unless used in which case the time actually used shall be counted, the Statutory
Holidays. Each Vessel shall only proceed to berth for loading after receiving
instructions from RTI.
13. LOADING AND HATCH COVERS
13.1 SCC shall cause each Vessel to provide all necessary lights for night
loading and to remove and replace hatch covers at the expense of the Vessel.
14. LOADING FACILITIES FOR VESSELS
14.1 The maximum size of Vessels permitted to berth without special
authorization from the manager of RTI is as follows:
Maximum
-------
LOA 325 meters
Beam 50 meters
Draught 20 meters
Vessels on which Formed Sulphur is to be loaded shall not be less than 20,000
dwt and shall not exceed 75,000 dwt. Vessels on which Liquid Sulphur is to be
loaded shall not be less than the minimum size agreed to in the Approved Plans
and shall not exceed 75,000 dwt.
14.2 The distance from the forward end of number one hatch to the aft end of the
hatch furthest aft must not exceed 240 metres. Vessels to be furnished for
shipment of Formed Sulphur pursuant to this Agreement will be modern, single
deck bulk carriers
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commonly used in the sulphur trade and suitable in every respect for loading
cargo in the usual way at the Coal Terminal. No tween deck Vessels will be used.
14.3 Vessels not conforming to the specifications in Section 14.1 and 14.2 above
may be accepted from time to time, subject to the written consent of RTI.
15. DEMURRAGE AND DESPATCH AND LOADING RATE
15.1 If, for reasons other than the Vessel's default, RTI shall fail to load a
Vessel within the laytime allowed calculated from the average rates of loading
in tonnes per weather working day below, then demurrage shall be paid by RTI for
all time lost after allowable laytime and, if the Vessel is sooner loaded than
required as aforesaid, then despatch shall be paid by SCC for laytime saved.
Unless otherwise mutually agreed pursuant to the review process provided for in
Section 15.2, the rates are as follows:
Demurrage for Loading Per
Vessel Size Loading Rate 24-Hour Day' (Pro Rata for
(dwt) Tonnes/Day Part) (U.S.$)
Minimum dwt (as set out
in Subsection 14. 1) to and 10,000
including 30,000 dwt.
Over 30,000 dwt.
15,000
0)The above is predicated upon use of self trimming bulk carriers. Dispatch
rates are one half demurrage rates.
15.2 At the written request of EITHER party made within three months of the
commencement of any Contract Year, and no more frequently than once annually,
demurrage and despatch rates will be reviewed in good faith by the parties in
light of then prevailing circumstances so as to maintain the rates at reasonable
commercial levels. If the parties fail to agree on the rates within one month of
the date of delivery of the written request, the matter may be submitted by
either party to arbitration pursuant to Part 3 1. The arbitrator so appointed
shall determine commercially reasonable rates, which shall be retroactive to the
beginning of the applicable Contract Year.
15.3 In the event of a Vessel subject to demurrage being prevented from being
loaded or sailing because of anything described in Part 26, so that RTI believes
a Vessel will be delayed for more than seven days, RTI shall advise SCC and the
parties will try and
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resolve the matter; otherwise, after the seven day period has expired, at the
request of RTI, SCC shall arrange for the Vessel to sail with less than a full
load.
16. CALCULATION OF TONNES LOADED
16.1 The tonnages loaded shall be determined by a survey of Vessel's draught and
utilizing vessel immersion scale weights to the nearest tonne by a marine
surveyor designated by SCC and satisfactory to RTI. The Certificate of Weight
prepared by the aforementioned marine surveyor shall be conclusive and shall
constitute the basis for use in determining final settlement between the
parties. Such weighing shall be for SCC's account.
16.2 RTI may have a representative of its own choosing present at all times when
the weights are being computed or calculated. SCC shall cause such surveyor to
deliver a copy of such survey to SCC and RTI forthwith following such survey.
17. PARTIALLY LOADED VESSELS
17A In this paragraph, "partially loaded vessels" means a Vessel that either
arrives at the Coal Terminal with some of its holds loaded with cargo, or
following the loading of sulphur thereon, departs the Coal Terminal with some of
its holds empty. From time to time RTI shall accept partially loaded vessels,
but only on the following terms and conditions:
(a) RTI shall be obliged to load only into holds that are
completely empty and that have hatch openings sufficient to
permit the cargo loading devices at the Coal Terminal to
operate at normal speed;
(b) for the purpose of determining the average rate of loading of
Cargo on board a partially loaded Vessel, the dwt shall be
deemed conclusively to be equal to the number of tonnes of
sulphur loaded thereon rather than the actual dwt of that
Vessel; and
(C) any demurrage or dispatch money payable hereunder in respect
of a partially loaded vessel shall be determined on the basis
of the dwt size of the partially loaded vessel.
17.2 Both parties agree that the nomination of Vessels for partial loading of
small quantities of cargo is undesirable and will only be done by SCC in very
exceptional circumstances.
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18. COMBINED LOADING
18.1 In this paragraph, "combined loading" means the loading on board a Vessel
at the Coal Terminal of both SCC's sulphur and cargo belonging to one or more
other persons. RTI will from time to time accept Vessels for combined loading on
the condition that the combined quantity of SCC's sulphur to be loaded and the
other intending shipper(s)' stockpile(s) at the Coal Terminal are together
adequate to fully load the Vessel, and on the further condition that such
combined loading is acceptable to RTI.
18.2 The average rate of loading in case of combined loading shall be determined
on the basis of the dwt size of the combined loaded Vessel. If there is no
established custom for determining laytime or paying demurrage or dispatch money
for combined loading at the Coal Terminal, these matters will be agreed by RTI,
SCC and the Buyers of such cargo prior to such loading. The time take for
draught survey for combined loading shall not count as laytime.
19. DELIVERIES TO AND FROM THE SULPHUR TERMINAL
19.1 RTI shall transport sulphur to the Sulphur Terminal from Unit Trains and
from the Sulphur Terminal to Vessels.
19.2 SCC shall make commercially reasonable efforts to ensure that deliveries of
Liquid Sulphur to Vessels during each month are not less than 50% of all sulphur
loaded onto Vessels.
20. SULPHUR TERMINAL PERSONNEL
20.1 RTI shall famish the necessary personnel to operate the Sulphur Terminal in
accordance with the operating procedures set forth in Schedule "B" and to
perform routine and minor maintenance and repairs to liquid and dry storage
facilities, forming plant and boiler comprising the Sulphur Terminal. In
addition, RTI shall furnish first aid, security and office and administration
services for the Sulphur Terminal in accordance with Schedule "B" hereto or as
otherwise agreed by the parties from time to time. The throughput rates payable
by SCC pursuant to Section 22.1 are inclusive of the foregoing services and
facilities but do not include labour and out-of-pocket costs for maintenance and
repair services performed by RTI. Other than the two front-end loaders which RTI
has agreed to purchase at its own cost, all equipment and other items required
by RTI to operate the Sulphur Terminal shall be provided by SCC at its sole cost
and expense.
20.2 At the end of each month during the Term, RTI will provide SCC with a
statement setting forth in detail the maintenance and repair costs reasonably
incurred by RTI in connection with the Sulphur Terminal and showing the amount
(which amount shall
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include a 10% profit allowance) which SCC is required to pay therefor. Within 15
days after receipt of the statement, SCC will pay the amount required to be paid
by it hereunder.
20.3 The provision of maintenance and repairs to the Sulphur Terminal deemed, in
RTI's reasonable estimation, to be major or non-routine shall be excluded from
this Agreement. RTI may perform such maintenance and repairs, subject to the
prior agreement of the parties hereto as to rates for personnel and profit
allowance for the same.
21. EXTRA SERVICES
21.1 Any additional or extraordinary services of RTI not contemplated by this
Agreement shall be provided subject to such extra charges as shall be agreed
upon by the parties acting reasonably.
21.2 Ordinary services to be provided by RTI consist of one handling of sulphur
by discharging Unit Trains, transporting sulphur to the Facility and
transporting sulphur from the Facility to Vessels. Ordinary services to be
provided by RTI do not include mechanical trimming, blending of cargo, supplying
labour to work in abnormal conditions, rehandling, resorting or shifting of
sulphur at instruction of Vessel or Vessel's officer or otherwise through no
fault of RTI. If RTI is required by a Vessel's master to fill holds abnormally
full in such a way that cargo is accumulated on the deck of the Vessel, the
sweeping and/or cleaning of the Vessel's decks shall not be for the account of
RTI.
22. THROUGHPUT RATES AND EXCLUSIVITY
22.1 SCC shall pay to RTI the following throughput rates in the manner set forth
in Part 23 for the discharge of the Unit Train, the handling of sulphur to the
Facility, and the handling of sulphur from the Facility to the Vessel:
(a) during the Exclusivity Period, the throughput rates set forth
in Schedule "A"; and
(b) during the Second Period, the throughput rates agreed upon by
the parties hereto at or about the end of the Exclusivity
Period, and failing such agreement the throughput rates
arbitrated in the manner set out below in Section 31 and
Schedule 'A".
22.2 RTI hereby grants to SCC the exclusive right to handle and throughput
sulphur at the Facility during the Exclusivity Period. After the expiry of the
Exclusivity Period, RTI shall be free to handle and throughput sulphur other
than SCC's sulphur at the Facility, subject if applicable to the prior agreement
of the parties hereto as to rates for the use of the Sulphur Terminal storage
and processing facilities.
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22.3 RTI shall pay to SCC a fee of $ /tonne for each tonne of products, other
than sulphur, which are delivered to Buyers through the Coal Terminal during the
Exclusivity Period using that portion of RTI's pipe and conveyor delivery
systems constructed by SCC under the Project Agreement, provided that this
charge shall only apply in the event that the delivery of such products exceeds
a cumulative amount of 500,000 tonnes and then the charge shall only apply in
respect of the tonnage delivered in excess of 500,000. If such fee becomes
payable at any time during the Exclusivity Period, RTI shall within 30 days of
the end of each calendar quarter during such period make payment to SCC of the
amount payable to it. RTI will take into consideration its commitment to
providing the best quality service in a cost effective way when evaluating a
decision to effect any such deliveries if the same may result in a material
adverse impact on the throughput of sulphur under this Agreement.
22.4 The parties agree that in the event that the operation of the Sulphur
Terminal does not achieve the minimum specifications set out in the Approved
Plans the parties shall at the request of RTI renegotiate the applicable
throughput rates and other charges of RTI under this Agreement and, failing
agreement, shall arbitrate such rates and charges in the manner set out in
Section 31 and, if applicable, Schedule "A" to this Agreement.
23. METHOD OF PAYMENT
23.1 RTI shall invoice SCC upon receipt of the sulphur at the Facility a charge
of one-half of an amount equal to the throughput rates then in force for sulphur
multiplied by the weight measurement provided by SCC, provided that if RTI
disputes such measurement it may provide its own measurement, and the actual
measurement shall be settled by the parties acting reasonably.
23.2 RTI shall invoice on the loading of the sulphur onto Vessels and after RTI
and SCC have received a copy of the draught survey of the Vessel a charge of
one-half of an amount equal to the throughput rate then in force multiplied by
the weight measurement as determined by such draught survey.
23.3 Should the weather be such that an accurate draught survey is impossible in
the opinion of the surveyor, RTI shall upon loading invoice SCC in respect of
90% of the tonnage determined by RTI, in the case of Formed Sulphur, from the
conveyor belt scales used to load sulphur into the Vessel or, in the case of
Liquid Sulphur, from the pipeline flow meter or by such other means agreed to by
the parties and any necessary further payment or refund will be invoiced on
receipt of an "out turn" weight certificate or a survey by a surveyor selected
by SCC and acceptable to RTI at the port of discharge. SCC shall deliver such
certificate or survey to RTI not later than 30 days from the date of sailing
from the Coal Terminal.
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23.4 All invoices are payable upon presentation to SCC or its representative.
The amount of any invoice not paid by SCC within 15 days of presentment shall
bear interest from the date of presentment to the date of payment at a rate
equal to the Prime Rate plus 2%.
24. THROUGHPUT GUARANTEE AND MUTUAL COMMITMENT
24.1 SCC hereby guarantees that a cumulative minimum of 1,000,000 tonnes of
sulphur shall be loaded onto Vessels during the Exclusivity Period. If, at the
end of the Exclusivity Period, SCC shall have caused to be loaded less than the
foregoing amount, SCC shall, within 30 days of the expiry of the Exclusivity
Period, pay to RTI an amount equal to the shortfall in volume multiplied by the
throughput rate then in force pursuant to Schedule "A" for annual shipments up
to and including 300,000 tonnes (which rate is currently $!!! per tonne, subject
to CPI adjustments).
24.2 SCC hereby guarantees that a minimum of 200,000 tonnes of sulphur shall be
loaded onto Vessels in each of the Contract Years for the balance of the Term
(the "Minimum Shipment Requirement") from and after the expiry of the
Exclusivity Period, provided that the Minimum Shipment Requirement shall be
prorated for the Transition Period, by multiplying the Minimum Shipment
Requirement by the same proportion that the Transition Period bears to a full
Contract Year.
24.3 In this Subsection 24.3:
(a) "Delivery Periods" means each period of three, six, nine and
twelve months in a Contract Year commencing on January 1 of that
Contract Year and ending March 31, June 30, September 30 and
December 31, respectively; and
(b) "Adjustment Dates" means the last days of each of the Delivery
Periods.
Subject to Sections 24.4 and 24.5 commencing with the first Contract Year
following the expiry of the Exclusivity Period, if at the end of a Delivery
Period in a Contract Year SCC shall have caused to be loaded onto Vessels less
than the portion ("Prorated Tonnage") of the relevant year's Minimum Shipment
Requirement which is in the same ratio to the Minimum Shipment Requirement as
the relevant Delivery Period is to the Contract Year, SCC shall, within 30 days
after each Adjustment Date, pay to RTI an amount (the "Quarterly Adjustment")
equal to:
(c) the Prorated Tonnage minus the tonnage actually loaded multiplied
by the Throughput Rate then in effect
less
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(d) the aggregate of all previous Quarterly Adjustments paid by SCC
in respect of any prior Delivery Period in the same Contract
Year.
If, in respect of any Delivery Period, the amount described in clause (d) above
exceeds the amount described in clause (c) above, the amount of such excess
shall be repaid by RTI to SCC within 30 days after the relevant Adjustment Date,
together with interest from the date of receipt of such excess by RTI to the
date of repayment thereof to SCC calculated at Prime Rate as from time to time
varied during such period.
24.4 The Quarterly Adjustment provision in Section 24.3 will not apply if the
variation from the Prorated Tonnage is equal to or less than 5% of the Prorated
Tonnage, notwithstanding any provision of Section 24.3, nor will it apply to the
Transition Period. For greater certainty, the Minimum Shipment Requirement must
be met at the end of each Contract Year, whether or not the variation from that
year's Minimum Shipment Requirement is equal to or less than 5% of such Minimum
Shipment Requirement, and at the end of the Transition Period.
24.5 If a shortfall from the Prorated Tonnage is greater than an amount equal to
15% of one-quarter of the Minimum Shipment Requirement for the Contract Year,
the Quarterly Adjustment provision in Section 24.3 will not apply if:
(a) SCC has given Notice of a Force Majeure Event in accordance with
the provisions of Part 26; and
(b) RTI has agreed that a failure of SCC to meet the Prorated Tonnage
will result from the Force Majeure Event.
24.6 SCC shall have the right to ship through the Coal Terminal up to 1,000,000
tonnes of sulphur (the "Maximum Annual Throughput") during each Contract Year of
the Term.
25. INDEMNIFICATION
25.1 RTI will indemnify and save harmless SCC from any losses, costs, expenses,
damages and liabilities which SCC may suffer or incur as a result of any
negligent or wilful act or omission of RTI or the servants, employees,
independent contractors or agents of RTI.
25.2 SCC will indemnify and save harmless RTI from any losses, costs, expenses,
damages and liabilities which RTI may suffer or incur as a result of any
negligent or wilful act or omission of SCC, the Railway, a Vessel which is to be
transporting SCC's sulphur or any of the servants, employees, independent
contractors of any one of such parties.
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25.3 RTI is providing handling, storage and other services as specifically
provided for in this Agreement. However SCC shall retain ultimate legal
responsibility for the sulphur as its owner. SCC shall comply with all
applicable laws, including the Waste Management Act, Transport of Dangerous
Goods Act, Canadian Environmental Protection Act and all other applicable
environmental laws and requirements of environmental agencies, with regard to
the sulphur. SCC shall be responsible, as owner, for all environmental damage or
impacts that may be caused by its sulphur, whether to the Facility or elsewhere.
SCC shall indemnify and save harmless RTI from any losses, costs, cleanup orders
or expenses, fines, penalties, damages and liabilities which may be caused to
the Facility or suffered or incurred by RTI by or from SCC's sulphur.
26. FORCE MAJEURE
26.1 Neither party shall be liable to the other for any delay in or failure to
perform its obligations hereunder (other than non-payment of money) if any such
delay or failure is due to force majeure. In this Agreement "force majeure"
means an act of God or the public enemy, acts or refusals to act of any
governments or governmental agency in either its sovereign or contractual
capacity, governmental restrictions or control on imports, exports or foreign
exchange, freight embargoes, non-availability or mechanical breakdown or
destruction of equipment vital to loading, forming, storage, transporting or
unloading operations not caused by inadequate maintenance, fire, floods, tidal
waves, earthquake, storm, slides, epidemics, quarantine restrictions, war
declared or undeclared, revolution, riots, insurrections, hostilities, civil
disturbances, strikes, walk-outs, work stoppages, lockouts, railroad
obstructions or obstruction of ocean navigation, stoppages of labour, deliberate
work slow downs, other labour difficulties, the taking of the Coal Terminal or
Sulphur Terminal by lawful expropriation, other lawful ouster of RTI or SCC from
the Sulphur Terminal or Coal Terminal or other lawful denial of rights of RTI or
SCC or any other cause beyond the reasonable control of a party, but force
majeure shall not include a lack of funds. The non-availability of labour (other
than by reason of strikes and lock-outs) or materials and hindering subsurface
conditions shall not be a cause beyond the control of SCC or RTI.
26.2 Each party shall have complete discretion in respect of the terms and
conditions of labour contracts and in respect of settlement of labour disputes
and the exercise of its discretion shall in no way prevent such party from being
excused from performance by virtue of Section 26.1 nor cause an event specified
in Section 26.1 to be deemed within such party's control.
26.3 SCC reserves the right that should RTI during any period of time be unable
to perform its obligations due to one or more of the above occurrences, the
sulphur shipped during such period of time may be loaded or unloaded through
other terminal facilities and such tonnage so loaded shall be deducted from the
Minimum Shipment Requirement.
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26.4 If either party becomes aware of an event of force majeure ("Force Majeure
Event"), it shall promptly notify the other party and within 10 days of the
occurrence of a Force Majeure Event shall give written notice ("Notice") thereof
to the other party:
(a) describing the Force Majeure Event in reasonable detail and
stating, to the extent reasonably practicable at such time,
its estimate of the duration of the Force Majeure Event;
(b) setting out in reasonable detail the obligations under this
Agreement which cannot be performed as a result of the
occurrence of the Force Majeure Event; and
(c) containing particulars of the circumstances causing the party
to be unable to perform its obligations under this Agreement
as a direct result of the Force Majeure Event.
26.5 Within thirty (30) days after the end of each Contract Year, commencing in
the Contract Year ending December 31, 2000 SCC may, if it shall have given
Notice of one or more Force Majeure Events during such Contract Year, give a
final notice ("Final Notice") to RTI that due to such Force Majeure Event or
Events it has failed to ship the Minimum Shipment Requirement for such Contract
Year.
26.6 The party which is prevented from performing its obligations under this
Agreement by a Force Majeure Event shall use all reasonable commercial efforts
to curtail, contain or remove the force majeure condition and to resume, with
the least possible delay, compliance with its obligations under this Agreement.
26.7 If either party gives a Notice under Section 26.4 or if RTI receives a
Final Notice from SCC under Section 26.5, and either party wishes to dispute the
claim made in such Notice or Final Notice, as the case may be, that party shall,
within 30 days of such receipt, refer the matter in dispute to a single
arbitrator pursuant to Section 31 of this Agreement. The arbitrator so appointed
shall decide whether the Force Majeure Event occurred and the extent, if any, to
which the delay or failure on the part of the party giving Notice or Final
Notice of the Force Majeure Event has been due to such Force Majeure Event.
26.8 If a party fails to give Notice or Final Notice as required under this Part
26, such party shall not be entitled to rely on this Part 26 to relieve it of
its obligations to perform.
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26.9 In the event SCC claims that its inability to deliver the Minimum Shipment
Requirement is the result of a Force Majeure Event, and its claim is upheld by
the arbitrator or otherwise agreed upon by RTI, any amounts paid by SCC in
excess of the amounts otherwise payable shall be promptly refunded by RTI to
SCC, with or without interest as determined by the arbitrator or agreed between
the parties.
26.10 Each of RTI and SCC will designate, and if applicable SCC will cause the
Railway to designate, senior operations personnel to a joint committee with a
mandate to meet as soon as practicable following the giving of Notice of a Force
Majeure Event and from time to time thereafter as such committee may consider
desirable, for the purposes of reviewing any information relative to such Force
Majeure Event made available to the committee by any party and assessing the
circumstances of the Force Majeure Event. Such committee shall keep a written
record of its meetings which shall be available to all parties in any subsequent
arbitration proceedings.
27. INSURANCE
27.1 RTI shall carry and include in the throughput rate specified in Schedule
"A" workers' compensation insurance for the protection of its employees and
public liability insurance for the protection of third parties, as well as
insurance for RTI's legal liability for damage to the Vessel and its equipment
and for loss of or damage to sulphur. The public liability insurance shall be in
an amount of not less than $10 million.
28. LIMITATION OF LIABILITY AND IMMUNITY
28.1 If SCC obtains a limitation of its liability or an immunity from damages
from its Buyers or Suppliers or the persons engaged to ship its sulphur with
respect to matters which in turn are the responsibility of RTI under this
Agreement, SCC will include RTI as an express beneficiary as its interest
appears.
28.2 To the extent permitted by applicable law, SCC shall provide RTI with a
waiver of liability satisfactory in content to RTI and executed by each testing
company utilizing the sampling plant and such testing company's employees in
respect of damages while on the Facility. If such waivers are not provided for
any reason other than illegality, SCC shall indemnify RTI against any and all
claims, actions and proceedings in respect of such damages.
29. OPTION TO RENEW
29.1 The right of renewal granted by Subsection 29.2 may only be exercised in
writing from SCC to RTI given by a date not later than 18 months before the
expiry of the Term and provided that this Agreement has not been earlier
terminated by any other
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provision hereof. Any renewal under Subsection 29.2 shall only be effective if
and shall be conditional upon:
(a) the Phase I Sublease being renewed for the corresponding term;
and
(b) the Phase 11 Head Lease and the Phase II Sublease each being
extended, replaced or renewed for a corresponding term both on
terms satisfactory to RTI, in its sole discretion.
Subject to the foregoing, the giving of such notice shall without further act
renew this Agreement for the period specified in Subsection 29.2.
29.2 Subject to Subsection 29. 1, SCC shall have the option to extend the Term
for a period of ten years. The applicable throughput rate for the period of
extension will be agreed by SCC and RTI at or about the time of exercise of the
option and, failing agreement, will be arbitrated in the manner set out in
Section 31 and Schedule "A". The rates so determined will apply for the first
five years of the period of extension. At the end of such five year period the
parties shall agree upon the rates to apply to the second five year period of
the extension period and failing such agreement the throughput rates for such
period shall be arbitrated in the manner set out below in Section 31 and
Schedule "A".
30. DEFAULT AND TERMINATION
30.1 Each of the following will be an event of default ("Event of Default")
under this Agreement:
(a) either party commits a material default in the performance of
its obligations hereunder, notice has been given to such party
by the other party specifying the default and such default
remains unremedied, and:
(i) in respect of a failure to make a payment required
under this Agreement, more than three business days
has elapsed since the date that the notice of default
is delivered to such party;
(ii) in any other case, more than 30 days have elapsed
since the date that the notice of default is
delivered to such party;
(b) an event of default by either party occurs under either of the
Subleases or under the Project Agreement; or
(c) either party commits or becomes subject to any one or more of
the following:
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(i) if a party files of a petition in bankruptcy or for
re-organization or for an arrangement pursuant to any
applicable bankruptcy law or under any similar law,
now or hereafter in effect, or is adjudged by a Court
of competent jurisdiction a bankrupt or becomes
insolvent or makes an assignment for the benefit of
its creditors or admits in writing its inability to
pay its debts generally as they become due or is
dissolved or suspends payments generally of its
obligations;
(ii) if a petition is filed proposing the adjudication of
a party as a bankrupt or its re-organization pursuant
to any applicable bankruptcy law or any similar law,
now or hereafter in effect, and:
(A) the party affected consents to the filing
thereof; or
(B) the petition is not discharged or denied within
60 days after the filing thereof or the petition
is not diligently defended;
(iii) if a receiver, receiver-manager, trustee or
liquidator (or other similar official) is appointed
to take charge of a party or of all or substantially
all of the business or assets of a party, and:
(A) the party affected consents to such
appointment; or
(B) the appointment is not discharged or
withdrawn or action is not diligently taken
by that party to secure the discharge of
that official within 60 days after the
appointment.
30.2 Upon the occurrence of an Event of Default and at any time thereafter, the
party who has not committed such Event of Default may:
(a) terminate this Agreement, the Subleases and the Project
Agreement by written notice to the other party to that effect,
effective on a date specified in such notice, which date shall
be not earlier than the date on which such notice is given; or
(b) exercise any other right or remedy available to it, at law or
in equity.
30.3 If either the Phase I Head Lease or the Phase I Sublease or the Phase 11
Head Lease or the Phase 11 Sublease is terminated or cancelled or the term of
the Phase I Head Lease or the Phase I Sublease or the Phase 11 Head Lease or the
Phase II Sublease expires and is not extended, replaced or renewed, RTI may,
upon 14 days' written notice to SCC terminate this Agreement in which case SCC
shall not be entitled to any compensation from RTI.
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30.4 No remedy conferred on a party under this Agreement is intended to be
exclusive. Each and every remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at
law or equity or by statute or otherwise. The exercise of any one or more
remedies shall not preclude the simultaneous or later exercise by a party of any
or all other such remedies. A party may by written instrument waive any breach
by the other party of the terms of this Agreement. No course of dealing between
the par-ties nor any delay in exercising any rights hereunder shall operate as a
waiver of rights.
30.5 If a party is prevented by a Force Majeure Event from substantially
performing its obligations under this Agreement for a period of 12 or more
consecutive months, then the other party shall be entitled to terminate this
Agreement by written notice to that effect to the party so prevented from
performing its obligations.
31. ARBITRATION
31.1 If any dispute arising out of or in connection with this Agreement cannot
be resolved through negotiation between the parties, the dispute shall be
submitted to arbitration in accordance with this Subsection. If within 30 days
after either party gives notice to the other of a dispute the parties agree upon
a single arbitrator, the arbitration will be held before such arbitrator;
otherwise, the arbitration shall be before a board of three arbitrators
comprising one appointed by RTI, one appointed by SCC, and one appointed by the
two arbitrators thus appointed. If RTI and SCC shall, after 14 days' notice,
fail to appoint such arbitrator, or if the two arbitrators fail to appoint a
third arbitrator within 14 days' from their own appointment, then upon
application by either party, the arbitrator or third arbitrator, as the case may
be, shall be selected in the manner provided in the Commercial Arbitration Act
(Canada). The provisions of this Subsection 31.1 shall be deemed to be a
"submission" to arbitration within the provisions of the Commercial Arbitration
Act (Canada). The parties to this Agreement agree that the rules of the British
Columbia International Commercial Arbitration Centre for the conduct of domestic
commercial arbitrations shall not apply to such arbitration. The decision of the
arbitrator (where a single arbitrator has been agreed upon) or a majority of the
arbitrators (where three arbitrators have been appointed) shall be final and
binding on the parties. The arbitrator(s) shall be required to render his, her
or their decision within 60 days of the conclusion of the arbitration
proceedings.
31.2 Any arbitrations shall be conducted in Vancouver, British Columbia unless
otherwise agreed to.
32. TAXES
32.1 Any tax (excluding income tax), duty, charge or fee including but not
limited to the federal Goods and Services Tax and amendments to or substitutions
therefor now or hereafter levied by any government body having jurisdiction over
the sulphur delivered
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and/or services performed under this Agreement, or required to be paid or
collected by RTI by reason of the storage and handling of the sulphur hereunder,
shall be paid by SCC in addition to any monies payable by SCC under this
Agreement.
33. CONFIDENTIALITY
33.1 For the purposes of this Part 33, "Confidential Information" means
collectively (i) information concerning the business or affairs of any party,
(ii) information concerning the Project or the transactions contemplated by this
Agreement, (iii) negotiations and communications between the parties or their
representatives, (iv) this Agreement and the agreement formed by its acceptance,
and (v) all documents, materials, copies and adaptations relating to the
foregoing, excluding in all cases information that is of public record or
available to the public by reason other than disclosure involving breach of
confidence or breach of confidentiality.
33.2 The parties agree as follows:
(a) to use Confidential Information solely for the purpose of
carrying out the purpose and intent of this Agreement and for
no other purpose;
(b) to keep all Confidential Information strictly confidential
except as may be required by law, and provided that the
parties may disclose Confidential Information, on a strictly
confidential basis, to their respective officers, agents,
employees, consultants, professional advisors, auditors and
lenders and, with the consent of the other parties hereto, to
third parties, to the extent such disclosure is necessary to
carry out the purpose and intent of this Agreement;
(c) to take all reasonable precautions necessary to prevent any
unauthorized access to or use, disclosure or reproduction of
Confidential Information; and
(d) that all Confidential Information shall, as among the parties
hereto, remain property of the party providing same, and upon
termination of the agreement formed by acceptance of this
Agreement and the Sublease and Operating Agreement (if
executed and delivered), each party agrees to return on
request all Confidential Information and all documents and
materials containing Confidential Information provided by any
other parties.
33.3 If at any time, notwithstanding the other provisions of this Section 33,
one party hereto is obliged by law to release Confidential Information to third
parties then the other party hereto shall be released from its obligations of
confidentiality with respect to that same information and to the same extent of
the first party's disclosure.
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34. SEVERABILITY
34.1 If any provision of this Agreement is illegal or unenforceable in any
relevant jurisdiction then such provision shall be deemed severable from every
other provision of this Agreement and this Agreement shall remain in full force
and effect save for any such provisions.
35. ASSIGNMENT
35.1 The rights of SCC under this Agreement shall not be transferred, assigned,
sold, mortgaged, sublicensed, sublet or disposed of in any other manner, in
whole or in part, to any other party without in any case first obtaining the
prior written consent of RTI which consent may be withheld and there shall be no
obligation upon the party withholding such consent, under any circumstances, to
justify the withholding of its consent. Notwithstanding any such consent being
given by RTI and such transfer, assignment, sale, mortgage, subletting,
sublicensing or disposition being effected, SCC shall remain bound to RTI for
the fulfillment of all of its obligations under this Agreement.
35.2 RTI may assign its rights and obligations under this Agreement without the
consent of SCC and upon such assignment and the assignee's agreement to assume
all the obligations on the part of RTI under this Agreement, RTI shall have no
liability for any subsequent breach of any obligation on the part of RTI by the
assignee.
35.3 If SCC is a corporation, the shares of which are not publicly traded on a
stock exchange and if, by the sale or other disposition of its shares or
securities, the control or beneficial ownership of such corporation is changed
at any time after the execution of this Agreement without the prior written
consent of RTI, RTI may, at its option, terminate this Agreement, the Subleases
and the Project Agreement upon giving fifty (50) days' notice to SCC of its
intention to terminate.
36. APPLICABLE LAW AND INTERPRETATION
36.1 This Agreement shall be governed by and construed under the laws of the
Province of British Columbia and the laws of Canada applicable therein and the
parties hereto hereby irrevocably attorn to the non-exclusive jurisdiction of
the courts of the Province of British Columbia. The provisions of this Agreement
shall be construed as a whole according to their common meaning and not strictly
for or against RTI or SCC. The plural shall include the singular. The masculine
gender shall include the feminine. The definitions contained in this Agreement
shall also apply to all schedules referred to herein and attached unless
otherwise indicated. Time is of the essence of this Agreement and each of its
provisions. Headings are included for convenience only, and shall have no effect
upon the construction or interpretation of this Agreement or any of the
schedules hereto.
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37. METHOD OF NOTICE
37.1 All notices and other communications required or permitted hereunder shall
be in writing and either physically delivered or sent by facsimile transmission
(receipt confirmed) to the intended recipient as follows:
if to RTI: Post Office Bag 0000
Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx
X0X0X0
Attention: General Manager and Chief Operating Officer
Fax No.: 000-000-0000
if to SCC: Suite 620, Alberta Stock Exchange Tower
000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. Xxx X. XxxXxxxxx
President
Fax No.: 000-000-0000
or at such other addresses of which either party may from time to time notify
the other in writing. Any notice, approval or other communication so given shall
be deemed to have been given and received on the date on which it is delivered
if delivered and on the day transmitted if confirmed by facsimile.
38. ENTIRE AGREEMENT
38.1 There are no covenants, agreements, conditions or representations relating
to the subject matter of this Agreement subsisting between the parties hereto,
except as expressly set forth or incorporated in, or contemplated by, this
Agreement, the Subleases and Project Agreement or as concurrently or
subsequently agreed in writing. All prior communications, discussions,
representations, expressions of interest and, without limitation, the two
letters of intent exchanged between SCC and RTI dated May 29, 1998 and June 1,
1998 are hereby superseded, cancelled and of no force or effect whatsoever.
39. REVIEW OF AGREEMENT TERMS
39.1 The parties agree to undertake a review of the terms of this Agreement six
months from the date of first shipment of sulphur to a Vessel and to negotiate
in good faith in an attempt to make any amendments or modifications which either
party believes are reasonably required to address any circumstances not
contemplated hereby which arise in
31
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RTI's provision of terminal, storage, processing and shipping services for the
Facility. In the event that the parties are unable to agree upon any proposed
amendments then the terms of this Agreement shall continue in force unamended.
39.2 The parties agree that in the event that the capacity of the Sulphur
Terminal is expanded to accommodate the annual shipment through the Sulphur
Terminal of over 1,000,000 tonnes of sulphur the parties shall renegotiate the
throughput guarantee, the minimum and maximum shipment requirements, the
applicable throughput rates and the contents of Schedule "B" to this Agreement
and, failing agreement, shall arbitrate such matters in the manner set out in
Section 31 and, if applicable, Schedule "A" to this Agreement.
40. COUNTERPARTS
40.1 This Agreement may be executed in any number of counterparts and delivered
by facsimile, each of which counterparts shall together, for all purposes,
constitute one and the same instrument, binding on the parties, and each of
which shall together be deemed to be an original, notwithstanding that all of
the parties are not signatory to the same counterpart or facsimile.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
XXXXXX TERMINALS INC.
By:
Authorized Signatory
By:
Authorized Signatory
SULPHUR CORPORATION OF CANADA LTD.
By:
Authorized Signatory
By:
Authorized Signatory
