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EXHIBIT 10.11
DME TOLLING AGREEMENT
THIS AGREEMENT, made and entered into as of this 1st day of October 1998 by and
between DUPONT (U.K.) LIMITED, whose registered office is at Xxxxxxxx Xxx,
Xxxxxxxxx, Xxxxxxxxxxxxx, XX0 0XX, Xxxxxxx (hereinafter referred to as DUPONT)
and CONOCO LIMITED whose registered office is at Xxxx Xxxxx, 000 Xxxx Xxxxxx,
Xxxxxx X0X 0XX, Xxxxxxx (hereinafter referred to as CONTRACTOR).
WHEREAS DUPONT owns certain facilities for the production of DME currently
located at CONTRACTOR's Humber Refinery;
WHEREAS CONTRACTOR is willing to operate such facilities on behalf of DUPONT;
and
WHEREAS, DUPONT desires to avail itself of the services of CONTRACTOR for the
time, in the manner, and upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual undertakings
hereunder, the Parties agree as follows:
1. REPLACEMENT OF PRIOR AGREEMENTS
This agreement shall take the place of and entirely supersede any oral
or written contracts, agreements or arrangements that deal with the
same subject matter as referenced herein except for any rights,
obligations and liabilities which by the terms of that agreement or the
law survive its expiration, termination or cancellation.
2. DEFINITIONS
When used in the Agreement:
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DUPONT EQUIPMENT means the equipment listed in Schedule 1 owned by
DUPONT and to be used in the manufacture of the PRODUCT.
MATERIAL means any matter furnished by or on behalf of and at the
expense of DUPONT to CONTRACTOR for processing, handling or for use in
the production of PRODUCT.
PRODUCT means finished DME meeting SPECIFICATIONS that has been
produced by CONTRACTOR from MATERIAL.
REFINERY means the Humber Refinery owned by CONTRACTOR at which the
DUPONT EQUIPMENT is currently located.
REPLACEMENT COST means the price of MATERIAL plus any costs or fees
paid by DUPONT pursuant to this Agreement for services by CONTRACTOR
for any processing of MATERIAL or PRODUCT. The "price" as used in this
definition of REPLACEMENT COST will be the price of the MATERIAL in
effect at the time the PRODUCT was manufactured.
SERVICES has the meaning ascribed in Section 3.01.
SPECIFICATIONS has the meaning ascribed in Section 3.01.
3. SCOPE OF WORK
3.01 CONTRACTOR shall, except to the extent otherwise expressly stated
herein, furnish all labour, supervision, materials, tools, equipment,
facilities and services to properly and efficiently do all things
necessary to convert MATERIAL to finished PRODUCT in accordance with
Schedule 2 (SPECIFICATIONS), attached hereto and hereinafter referred
to as SPECIFICATIONS. Such SPECIFICATIONS may be
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modified from time to time by mutual written agreement. The services
herein described are hereinafter referred to as SERVICES.
3.02 Provided the MATERIAL complies with the SPECIFICATIONS set out in
Schedule 2 CONTRACTOR will use reasonable endeavours to ensure that the
PRODUCT produced by the DUPONT EQUIPMENT complies with the
SPECIFICATIONS.
4. TITLE
Unless otherwise specified in this Agreement, title to MATERIAL and
PRODUCT shall remain with DUPONT.
5. PERIOD OF AGREEMENT
5.01 This Agreement will become effective as of 1 October 1998 and shall
continue in full force and effect for a period of four (4) years and
shall thereafter continue on a year-to-year basis unless and until
terminated by either party giving two (2) years prior written notice of
termination. For the avoidance of doubt, the earliest date upon which
such termination notice can be effective is 30 September 2002.
5.02 If either Party wishes to terminate this Agreement earlier than as
provided in Section 5.01, it may give notice to the other Party and the
Parties will meet and use reasonable endeavours to agree on mutually
satisfactory arrangements for such early termination.
5.03 Upon the termination or expiration of this Agreement, or any extension
hereof CONTRACTOR shall promptly tender to DUPONT all MATERIAL and
PRODUCT. DUPONT shall have ninety (90) days from the termination or
expiration of this Agreement to physically remove the DUPONT EQUIPMENT
from the REFINERY and at DUPONT's expense restore the site where the
DUPONT EQUIPMENT
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was located to the condition such site was in before the DUPONT
EQUIPMENT was located there.
6. COMPENSATION
6.01 Consideration
As consideration for the SERVICES, DUPONT shall pay to CONTRACTOR the
amounts specified in Schedule 3. If the amount to be paid for any
SERVICES is described in Schedule 3 as "cost", the use of the term
"cost" does not mean CONTRACTOR's cost to provide that Service, but the
cost to DUPONT to receive such Service from CONTRACTOR.
6.02 Taxes
(a) Income, Profits, and Capital Gains Taxes
CONTRACTOR shall pay all income and profits taxes and taxes on
capital gains, and related fines, penalties and interest
thereon assessed or levied against CONTRACTOR by any
government authority or any political subdivision thereof or
by the government of any other country against CONTRACTOR or
CONTRACTOR's subcontractors in respect of the SERVICES.
(b) Other Taxes
All other taxes (other than those specified in Section 6.02
above), assessed on the provision of SERVICES shall be paid by
DUPONT.
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6.03 Invoicing and Payment
(a) DUPONT shall initiate payment of all undisputed amounts
contained in CONTRACTOR's monthly invoices within 30 days
after receipt thereof less any amount DUPONT is required by
law to withhold or deduct. Such payment shall not prejudice
DUPONT's right to subsequently dispute any part of an invoice.
In the event DUPONT disputes an item billed, DUPONT shall,
within 60 days of receipt of CONTRACTOR's invoice, notify
CONTRACTOR of the item in dispute, specifying DUPONT's
complaint. DUPONT may withhold payment of items in dispute
without interest until the dispute is resolved. The undisputed
amount, however, shall be paid without delay.
Where applicable, DUPONT and CONTRACTOR shall agree in advance
the gross lump sum amount to be charged or the "cost" for the
SERVICES to be provided, as specified in Schedule 3, inclusive
of charges, overheads, handling fees and xxxx ups. These sums
will then be calculated and proportioned on a monthly basis
and submitted by CONTRACTOR to DUPONT as described above. In
those areas where work cannot be agreed on a lump sum basis,
the variable basis (described in terms of readily identifiable
metrics) of billing and the required supporting documentation
shall be agreed as part of the service description. Such
documentation will be retained by CONTRACTOR for a reasonable
period subject to verification by DUPONT upon audit.
(b) If any payment is not paid when due, CONTRACTOR shall have the
right, without any liability to DUPONT, or anyone claiming by
or through DUPONT, to immediately cease providing the SERVICES
until the payment in full of all such payments, which right
may be exercised by CONTRACTOR in its sole and
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absolute discretion and shall not affect CONTRACTOR's right or
ability to terminate this Agreement as set forth in Article
18.
6.04 Audits - Third Party Audit
From time to time as agreed by the Parties, each Party shall have the
right to have an independent certified public accounting firm ("CPA
firm"), mutually acceptable to the Parties, audit the other party's
books of accounts and other records pertaining to a dispute arising
from the cost of SERVICES (including invoiced and reimbursed costs)
provided pursuant to this Agreement for a period of twenty-four (24)
months following the end of the calendar year in which such disputed
SERVICES were rendered. Prior to commencing its audit, the CPA firm
shall execute a confidentiality agreement reasonably acceptable to the
audited Party. Upon completing its audit, the CPA firm shall report
only whether or not the charges from the CONTRACTOR to DUPONT hereunder
were correct or, if not, the amount of any overcharge or undercharge.
The Parties agree to accept the determination of the CPA firm as
binding and final, and if the audit determines that either Party owes
money to the other party, the owing Party shall promptly pay such sum
to the other party. The cost of such audit shall be borne by the
requesting party and shall be limited to a duration not to exceed two
(2) months.
7. SHIPMENTS, PLANNING - COMMUNICATION
7.01 Freight charges for all MATERIAL or other items supplied directly by
DUPONT under this Agreement to the REFINERY storage tank and for all
PRODUCT produced hereunder by CONTRACTOR and shipped per DUPONT's
instructions, shall be for DUPONT's account.
7.02 All planning, communication and administrative requirements between the
Parties shall be subject to the terms of the DME Handling and
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Distribution Manual dated January 1995 or as updated by agreement
between the Parties.
8. SAFETY
8.01 If in CONTRACTOR's opinion the safety of any persons or any property is
or would be compromised by the operation of the DUPONT EQUIPMENT then
CONTRACTOR may at any time and from time to time shut down the DUPONT
EQUIPMENT. Except in emergency cases CONTRACTOR shall use reasonable
endeavours to give DUPONT prior notice of any such shut down.
8.02 All personnel, vehicles, trailers and equipment of DUPONT or any of its
agents or contractors must comply with all applicable safety rules and
regulations at all times.
9. ENVIRONMENT
9.01 CONTRACTOR will use reasonable endeavours in the operation of the
DUPONT EQUIPMENT to comply with the Petrochemical Process Authorisation
granted by the Environmental Agency.
9.02 CONTRACTOR will be entitled to take all steps it deems necessary to
prevent environmental harm or as required by any regulatory agencies.
9.03 CONTRACTOR will on behalf of DUPONT consult with and agree conditions
as appropriate with any relevant regulatory agencies. CONTRACTOR will
advise DUPONT of any agreement that has a significant operational
impact. DUPONT will inform CONTRACTOR of any changes to environmental
requirements relevant to operation of the DUPONT EQUIPMENT.
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10. RECORDS AND INSPECTION
CONTRACTOR agrees to maintain, in accordance with "Generally Accepted
Accounting Principals and Practices", such records as may be necessary
to adequately reflect the accuracy of CONTRACTOR's charges and invoices
for reimbursement under this Agreement and maintain such other
additional records as DUPONT may from time to time reasonably require
in connection with this Agreement. DUPONT shall have the right from
time to time to inspect and verify the records kept by CONTRACTOR in
connection with this Agreement.
DUPONT's duly authorised representatives shall have the right to visit,
observe and inspect CONTRACTOR's production and related facilities
utilised to accomplish the objectives of this Agreement at any time
during CONTRACTOR's normal business hours on reasonable notice to
CONTRACTOR. DUPONT's duly authorised representatives shall also have
the right to select and inspect samples of MATERIAL, MATERIALS which
are in the manufacturing process and PRODUCT in CONTRACTOR's facility
received, obtained or produced under this Agreement.
11. NONDISCLOSURE
CONTRACTOR agrees not to disclose to others without the prior written
consent of DUPONT:
(a) the terms and conditions under which DUPONT has purchased or
plans to purchase SERVICES or
(b) the structure or composition of PRODUCT, information or
methods which are provided by DUPONT, including without
limitation, information about DUPONT's proprietary process for
producing PRODUCT, except when such disclosure is necessary to
provide SERVICES required under this Agreement
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or as required by law. The obligations of non-disclosure in
Clause 11(b) shall be in effect during the term of this
Agreement and any extensions thereof and for ten (10) years
after the termination or expiry of this Agreement.
12. HAZARDS
CONTRACTOR acknowledges that hazards may be involved in providing the
SERVICES. Accordingly, CONTRACTOR agrees to provide its SERVICES in a
careful and workmanlike manner and to take all necessary precautions in
the processing, handling, transportation and disposal of MATERIAL and
PRODUCT involved in this Agreement, to avoid an unhealthy or unsafe
work environment, injuries to persons, damage to property or pollution.
DUPONT may provide CONTRACTOR with certain information regarding the
MATERIAL, including procedures for processing, handling, transporting
and disposal, as well as toxicological data. Any information supplied
by DUPONT shall be the latest information known to DUPONT and relevant
to the work to be provided hereunder. Such information is provided
without warranty or representation as to its completeness or
suitability in providing the SERVICES. The methods employed and the
precautions taken to handle DUPONT EQUIPMENT, MATERIAL and PRODUCT
shall be determined by and rest solely with CONTRACTOR. CONTRACTOR
agrees to provide its employees with a safe and healthy workplace
using, but not limited to, such information as is or may be provided by
DUPONT.
13. REPRESENTATIVES
DUPONT and CONTRACTOR shall each nominate a representative to act as
the primary contact person for the provision of the SERVICES
(collectively, the "Primary Co-ordinators"). The initial Primary
Co-ordinators shall be Xxxxx X. Xxxxxxxxxx for CONTRACTOR and Jan
Schnebelie for DUPONT.
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14. MONITORING COMMITTEE
14.01 Establishment
Both Primary Co-ordinators of the Parties shall constitute the
Monitoring Committee.
14.02 Purpose
The purpose of the Monitoring Committee is to review the implementation
of this Agreement and to use all reasonable efforts to resolve issues
in an effort to ensure the smooth and efficient operation of this
Agreement.
14.03 Frequency of Meetings
The Monitoring Committee shall meet quarterly or as necessary
throughout the duration of this Agreement (other than where the Parties
agree that such a periodic meeting is not necessary) and as otherwise
reasonably requested by either Party.
14.04 Meeting Procedure
The Monitoring Committee shall keep minutes of its meetings and develop
a reasonable procedure if needed.
15. DISPUTE RESOLUTION
15.01 The Parties understand and appreciate that their long term mutual
interests will be best served by effecting a rapid and fair resolution
of any claims or disputes which may arise out of this Agreement or from
any dispute concerning this Agreement's terms. Therefore, each Party
agrees to use its best efforts to resolve all such dispute as rapidly
as
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possible on a fair and equitable basis. Toward this end each Party
agrees to develop and follow a process for presenting, rapidly
assessing, and settling claims and other disputes on a fair and
equitable basis.
15.02 If any dispute or claim arising under this Agreement cannot be readily
resolved by the Parties pursuant to Section 15.01, the parties agree to
refer the matter to the Monitoring Committee which shall meet and
attempt to resolve the dispute within fifteen (15) days from the day
the dispute was brought before its attention.
15.03 If any dispute or claim arising under the Agreement cannot be resolved
by the Monitoring committee pursuant to Section 15.02, the Parties
agree to refer the matter to a panel consisting of one (1) senior
executive from each Party for review and resolution. The senior
executive shall not have been directly or indirectly involved in the
claim or dispute. A copy of the Agreement terms, relevant facts, areas
of disagreement and a concise summary of basis of each side's
contention will be provided to both executives who shall review the
same, and attempt to teach a mutual resolution of the issue. The senior
executives shall meet and resolve the dispute within thirty (30) days
of their appointment.
16. LIMITATION OF LIABILITY, WARRANTY AND INDEMNITY
16.01 Unless CONTRACTOR is negligent in the provision of the SERVICES,
CONTRACTOR shall have no liability whatsoever, whether in contract or
in tort, to DUPONT for failure of the PRODUCT to meet the SPECIFICATION
and if CONTRACTOR is so negligent then CONTRACTOR's liability shall be
limited to the REPLACEMENT COST of the PRODUCT which does not meet the
specification. CONTRACTOR shall in no circumstances be negligent for
the purposes of this Clause if; (i) MATERIAL does not meet
specifications;
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or (ii) unless CONTRACTOR has not complied with DUPONT's instructions
for the manufacture of the PRODUCT.
16.02 Notwithstanding anything to the contrary contained herein or at law or
in equity, neither Party shall be liable to the other for punitive,
special, indirect, incidental or consequential damages (including,
without limitation, damages for loss of business profits, business
interruption or any other loss) arising from or relating to any claim
made under this Agreement or regarding the provision of or the failure
to provide the SERVICES.
16.03 Each Party will indemnify and hold each other harmless from all claims,
liabilities, damages, losses, costs, expenses (including, but not
limited to, settlements, judgements, court costs and reasonable legal
fees), arising out of any actual or alleged injury, loss or damage of
any nature whatsoever to that Party's own employees or property
(including, without limitation in the case of DUPONT, the DUPONT
EQUIPMENT and in the case of CONTRACTOR the REFINERY).
16.04 Subject to the limitations set forth in the foregoing provisions of
this Article 16, DUPONT shall indemnify, defend and hold CONTRACTOR
harmless against any and all claims, liabilities, damages, losses,
costs, expenses (including, but not limited to, settlements,
judgements, court costs and reasonable legal fees), fines and penalties
arising out of any injury or death, and any loss or damage of any
nature whatsoever (including, without limitation, loss of or damage to
property, or damage to the environment) due or relating to provision of
the SERVICES except for losses, liabilities, obligations, costs,
expense or damages which are the direct and sole result of the gross
negligence or wilful misconduct of the personnel of CONTRACTOR and/or
any contract personnel who are managed and directed by CONTRACTOR.
16.05 The indemnities contained in this Article 16 shall survive for a period
of three (3) years after the termination of this Agreement for any
reason,
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and any claim or indemnity under this Article must be made by written
notice to the indemnifying Party within one (1) year after the
discovery thereof.
17. DEFAULT
17.01 In the event that either Party hereto shall default in the performance
of any obligation specified herein, the nondefaulting party shall
notify the other Party hereof in writing and, if such default is not
remedied within fourteen (14) days from date of such notice, or if the
other Party is diligently attempting to cure such default but is unable
to cure such default within thirty (30) days from the date of such
notice, then the nondefaulting Party shall have the right to terminate
this Agreement immediately. If, in the nondefaulting Party's sole
opinion, such default may result in substantial property damage,
injury, accident or death, that Party may, at any time, immediately
suspend this Agreement without penalty or damages. Termination under
this article or under any other article of the Agreement shall not
relive or release either party hereto from any rights, liabilities or
obligations which it has accrued prior to the date of such termination.
17.02 If either Party should be adjudged bankrupt or make a general
assignment for the benefit of its creditors, or if a receiver should be
appointed on account of its insolvency, the other Party may, on seven
(7) days written notice terminate this Agreement. Termination under
this article, or any articles hereof, shall not relieve or release the
parties from any rights, liabilities, or obligations which may have
arisen prior to the date of such termination.
18. FORCE MAJEURE
18.01 No liability shall result to either Party from delay in performance or
from non performance caused by circumstances beyond the control of the
Party who has delayed performance or not performed. The
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nonperforming Party shall be diligent in attempting to remove any such
cause and shall promptly notify the other Party of its extent and
probably duration.
18.02 If the nonperforming Party who has delayed performance or not performed
on account of circumstances beyond its control is unable to remove the
causes within seven (7) days, the other Party shall have the right to
terminate, without penalty, this entire Agreement or any portion of it.
19. INDEPENDENT CONTRACTOR
It is understood that employees, methods, facilities and equipment of
CONTRACTOR shall at all times be under its exclusive direction and
control. CONTRACTOR's relationship to DUPONT shall be that of an
independent contractor. Nothing in the Agreement shall be construed to
constitute CONTRACTOR, or any of its employees, as an agent, associate,
joint venturer or partner of DUPONT.
20. COMPLIANCE WITH LAWS
CONTRACTOR agrees that in the performance of the SERVICES provided
hereunder, including but not limited to, the disposal of any waste
MATERIAL or PRODUCT, it will comply with all applicable laws, rules and
regulations of governmental authorities in connection therewith.
21. NOTICES
CONTRACTOR correspondence, information, documents, notices or invoices
to DUPONT shall be sent personally or by first-class mail or fax to:
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Attention: Xxxx Xxxxx
c/o DuPont de Nemours International S.A.
0, xxxxxx xx Xxxxxxxx
X.X. Xxx 00, Xx Xxxxx-Xxxxxxxx
Xxxxxx - Xxxxxxxxxxx
Fax: x00-00-000 61 69
DUPONT correspondence, information, documents, notices or payments to
CONTRACTOR shall be sent personally or by first class mail or fax to:
Attention: Xxxxx X. Xxxxxxxxxx
Xxxxx Xxxxxxxxxxxx
Xxxxxxx, Xxxxxxxxxxxx, X.X.
XX00 0XX
Fax: x00-0000-000 455
Either Party may change its address for notice hereunder upon no less
than thirty (30) days prior written notice thereof to the other Party.
22. AUTHORITY
The Parties hereby represent that they have full power and authority to
enter into and perform this Agreement and the Parties do not know of
any contract, agreements, provisos or undertakings which would prevent
the full execution and performance of this Agreement.
23. ASSIGNMENT
Neither Party shall, without the prior written consent of the other
Party, assign or transfer this Agreement, in whole or in part.
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24. RESERVATION OF RIGHTS
Either Party's waiver of any of its remedies afforded hereunder or by
law is without prejudice and shall not operate to waive any other
remedies which such Party shall have available to it, nor shall such
waiver operate to waive such Party's rights to any remedies due to a
future breach, whether of a like or different character.
25. HEADINGS
All headings of the Articles of this Agreement are inserted for
convenience only and shall not affect any construction or
interpretations of this Agreement.
26. APPLICABLE LAW
This Agreement will be governed by and construed in accordance with the
laws of England and the courts within England will be the only courts
of competent jurisdiction. This Agreement will not be governed by the
U.N. Convention on Contracts for the International Sale of Goods.
27. SEVERABILITY
In the event that any Article of this Agreement shall be found to be
void or unenforceable, such findings shall not be construed to render
any other Article of this Agreement either void or unenforceable, and
all other Articles shall remain in full force and effect unless the
Article(s) which is/are invalid or unenforceable shall substantially
affect the rights or obligations granted to or undertaken by either
Party.
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28. ENTIRETY
This Agreement, together with the Schedules specifically referenced and
attached hereto, embodies the entire understanding between DUPONT and
CONTRACTOR and, except as otherwise specifically stated herein, there
are no contracts, understandings, conditions, or representations, oral
or written, with reference to the subject matter hereof which are not
merged herein. Except as otherwise specifically stated, no modification
hereto shall be of any force or effect unless (1) reduced to writing
and signed by both parties hereto, and (2) expressly referred to as
being modifications of this agreement.
30. FIXED COST AND YIELD IMPROVEMENTS
CONTRACTOR will maintain a continuous improvement management system.
Any fixed cost or yield improvements over 1.43Kg methanol/Kg DME due to
CONTRACTOR's efforts will be shared equally between the Parties. Any
yield improvements due to technology change will be for the benefit of
DUPONT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorised representatives.
CONOCO LIMITED DUPONT (U.K.) LIMITED
BY: BY:
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TITLE: TITLE:
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