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EXHIBIT 10.4
MEMORANDUM OF AGREEMENT
made and entered into by and between
SASOL CHEMICAL INDUSTRIES (PTY) LTD
a company incorporated under the laws of
the Republic of South Africa, having its registered office
at 0 Xxxxxxx Xxxxxx, Xxxxxxxx, 0000 Xxxxxxxx xx Xxxxx Xxxxxx
(hereinafter referred to as SASOLCHEM)
and
JLM MARKETING INCORPORATED
a company incorporated under the laws of the
State of Delaware, United States of America,
having its registered office at
0000 Xxxxxx Xxxxx Xxxxxxx, XXXXX, XX 00000
Xxxxxx Xxxxxx of America
(hereinafter referred to as JLM)
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WHEREAS SASOLCHEM is a producer of MEK (methyl-ethyl ketone), hereinafter
referred to as the PRODUCT;
WHEREAS SASOLCHEM desires to export the PRODUCT to JLM for the marketing of the
PRODUCT in the USA and Canada; and
WHEREAS JLM is willing to purchase the PRODUCT from SASOLCHEM for the marketing
of the PRODUCT in the USA and Canada.
NOW, therefore, the parties have agreed as follows:
1 SALE AND PURCHASE
SASOLCHEM hereby agrees to sell the PRODUCT to JLM and JLM agrees to
purchase the PRODUCT from SASOLCHEM. The volume of product supplied to JLM
under this Agreement shall only be resold in the USA. JLM agrees not to
sell the PRODUCT into any other market unless prior approval is obtained
from SASOLCHEM.
2 DURATION
This Agreement shall become effective on 1 July 1992 and shall continue on
an evergreen basis until terminated by either party by giving 6 (six)
months written notice of termination to the other party. No such notice of
termination shall, however, be given so as to take effect before 31
December 1993.
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3 QUALITY
SASOLCHEM shall supply the PRODUCT, at the point of sale as defined in
Clause 4(a), in conformity with the specification of the PRODUCT as set
out in Annexure "A" hereto.
4 TERMS OF SALE AND PRICE
(a) SASOLCHEM shall supply the PRODUCT to JLM on a CIF USA port basis, unless
the parties mutually agree otherwise. Ownership and risk in the PRODUCT
shall pass to JLM at the inlet flange (the point of sale) of the vessel
where the PRODUCT is loaded in Durban. (Incoterms latest edition to
apply).
(b) JLM shall purchase the PRODUCT from SASOLCHEM and sell it in its own name
and for its own account.
(c) Sales are to be made and invoiced by SASOLCHEM to JLM at the provisional
price for the PRODUCT as agreed between the parties for each calendar
quarter before the middle of each preceding quarter.
In case the parties do not agree on the provisional price, the final price
of the preceding calendar quarter shall be the provisional price for the
new calendar quarter.
(d) Payment for the PRODUCT shall be made by JLM to SASOLCHEM within 45 days
after the Xxxx of Lading date.
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Payment of all amounts owing in terms of this Agreement shall be made in
US Dollars at such Bank in the Republic of South Africa, or elsewhere, as
SASOLCHEM may from time to time nominate, free of any bank commission
outside the Republic of South Africa, or any other deduction whatsoever.
(e) The provisional price agreed for each calendar quarter in accordance
with Clause 4(c) shall be subject to review and adjustment by the end of
the month immediately following each calendar quarter. In order to
determine the final price for each quarter, JLM shall advise SASOLCHEM, by
means of an audited certificate if so requested by SASOLCHEM, of JLM's
selling price of the PRODUCT in the USA and Canada for each quarter, and
to such other purchasers as are approved by SASOLCHEM pursuant to
paragraph 1 hereof.
The final CIF, USA port, duty unpaid price for each quarter shall be
calculated as follows:
JLM's average delivered selling price of the PRODUCT for each quarter,
minus actual pipeline, barge, storage and surveying costs
minus duty paid by JLM
minus finance charges for 30 days calculated at the prime bank rate in the
USA
= CIF USA port duty unpaid price.
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A commission of *** of the CIF, duty unpaid price, shall be paid to JLM.
Any difference between the final price as calculated above and the
provisional price as determined in accordance with Clause 4(c), shall be
adjusted, ie in case the final price is higher than the provisional price
fixed for each quarter, JLM shall pay the additional amount to SASOLCHEM
and in case the final price is lower than the provisional price for each
quarter, SASOLCHEM shall pay the amount owing to JLM. All settlements
shall be effected within 15 days after the final figures have been
submitted.
5 QUANTITIES
SASOLCHEM shall advise JLM during October of each year of the quantity of
the PRODUCT SASOLCHEM estimates to be available for export to JLM during
the following calendar year. JLM shall in turn advise SASOLCHEM whether or
not it expects to be able to sell the estimated volume.
By not later than the middle of each quarter the parties shall negotiate
the actual quantities of the PRODUCT to be shipped during the following
quarter.
The quantities of the PRODUCT to be shipped each calendar year shall be
spread as evenly as possible between the four quarters.
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SASOLCHEM advises JLM that the estimated quantity available for calendar
year 1993 is 6 0OO (SIX THOUSAND) metric tons.
6 SECRECY
JLM shall not reveal during the currency of this Agreement or after its
expiry or termination, the trade secrets of SASOLCHEM nor use such secrets
otherwise than for purposes of the implementation of this Agreement.
7 ALTERNATIVE EXPORT CHANNELS
JLM or SASOLCHEM may engage other exporters and/or distributors for the
PRODUCT with the prior consent of the other party in order to overcome any
trade difficulties which might arise. Such consent will not be
unreasonably withheld.
8 APPLICABLE LAW/ARBITRATION CLAUSE
The Agreement shall be governed by English (UK) law. Any dispute hereunder
that cannot be settled amicably shall be submitted to arbitration of the
International Chamber of Commerce. The place of arbitration shall be
London.
9 LIABILITY
SASOLCHEM shall not be liable for any damage suffered by anyone as a
result of the use of the PRODUCT sold under this Agreement either in its
form as sold or in a processed form or otherwise and in particular
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SASOLCHEM shall not be liable for consequential damage of any kind
including, but not limited to, product liability or loss of profit.
Against claims in respect of all the foregoing JLM undertakes to fully
indemnify and hold SASOLCHEM harmless, which indemnity and holding
harmless shall also encompass legal costs of any nature, including costs
as between attorney and client. Unless JLM notifies SASOLCHEM of any claim
for damages within 60 (SIXTY) days after JLM's receipt in the USA of the
PRODUCT, provided that for any cause of damage not reasonably discoverable
within such 60 day period, any claim of damages must be made within
180(ONE HUNDRED AND EIGHTY) days after JLM's receipt in the USA of the
PRODUCT JLM has notified SASOLCHEM that JLM has insurance coverage against
liability.
10 FORCE MAJEURE
Neither of the parties shall be held liable in respect of failure to
fulfil its obligations in terms of this Agreement, when, but only for as
long as such failure is caused by or arises from force majeure such as,
but not limited to, the lawful order of a state, war, civil commotion,
riots, insurrection, strikes, lock-outs, fires, explosions, floods, or
other like circumstances, in so far as any of the aforementioned events
is beyond its control, arises after conclusion of this Agreement and has
not been wholly or partially caused by its negligence or that of its
contractors, agents, employees or functionaries.
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In such cases the affected party shall immediately notify the other party
of such failure and shall use its best endeavours to remove the said
circumstances with the least delay possible, so that the contractual
obligations can, as soon as possible, be fulfilled in the manner provided
for.
11 INCORRECT OR DEFECTIVE PRODUCT
Should SASOLCHEM deliver PRODUCT which does not comply with the
specification contained in this Agreement, SASOLCHEM shall replace at
SASOLCHEM'S cost, the delivered PRODUCT by the correct one or one
complying with the said specification.
The parties shall jointly decide how best to sell or dispose of PRODUCT
delivered that does not comply with the specification. The incurred
selling or disposal costs shall be for SASOLCHEM's account.
12 NOTICES AND DOMICILIUM
For all purposes arising out of this Agreement, the parties hereby choose
domicilium citandi en executandi respectively as follows:
SASOL CHEMICAL INDUSTRIES (PTY) LTD
0 XXXXXXX XXXXXX
XXXXXXXX
XXXXXXXXXXXX 20O1
REPUBLIC OF SOUTH AFRICA
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JLM MARKETING INC.
0000 XXXXXX XXXXX XXXXXXX
XXXXX, XX 00000
XXXXXX XXXXXX OF AMERICA
Either party may from time to time change its domicilium by notice in
writing to the other party.
SIGNED AT Johannesburg on this the 11th day of January 1994
WITNESSES:
1 /s/ /s/
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for and on behalf of
SASOL CHEMICAL INDUSTRIES
(PTY) LTD
2 /s/
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SIGNED AT Tampa, Florida on this the 2nd day of March 1994
WITNESSES:
1 /s/ /s/
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for and on behalf of
JLM MARKETING INC.
2 /s/
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[SASOL CHEM LOGO]
METHYL ETHYL KETONE
EXPORT SALES SPECIFICATION
(CODE NO 221/20)
SPECIFICATION
PROPERTIES UNITS LIMITS TEST METHODS
COMPOSITION
Colour (Pt Co) Xxxxx + 10 max ASTM D1209
Appearance - Clear and free of sediment
Density at 20'C kg/l 0,804 - 0,806 ASTM D1298
Water Content mass % 0,05 max ASTM D1364
MEK mass % 99,5 min
Distillation at 101,3 kPa ASTM D86
Initial Boiling Point (degree C) 79,0 min
Dry Point (degree C) 80,5 max
Acidity as CH3COOH mass % 0,003 max ASTM D1613
Residue on Evaporation mass % 0,002 MAX ASTM D1353
Permanganate Test
at 25(degree)C minute 120 min ASTM D1363
USES:
As a solvent in the following applications:
lacquers, lacquer thinners, epoxy thinners, natural and synthetic resins,
polyurethane adhesives, gums and rubbers, liquid printing inks, PVC cloth
manufacture and as a cleaning agent for metal surfaces. Refining and
dewaxing of mineral and lubricating oils. Production of MEK peroxide and
pharmaceuticals.
SASOLCHEM
ISSUE NO: DVDW 7/92
