Exhibit 10.14
Earth Sciences, Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000 XXX
xxxxx@xxxxx-xxxxxxxx.xxx
Fax: 000-000-0000
303-279-7641
January 28, 0000
Xxxxxxx X. Xxxxx
President
Chemical Interchange Company
0000 X. Xxxxxxxxx Xxxx.
Xx. Xxxxx, Xx. 00000
RE: Letter of Intent for the Sale and Purchase of Purified Phosphoric
Acid Produced by Earth Sciences Extraction Company in Calgary
Dear Xxxxx:
This Letter of Intent is made and entered into as of the date first written
above, by and between Chemical Interchange Company, a Missouri corporation
(hereinafter known as "CIC"), ESI Resources, Ltd. an Alberta corporation
(hereinafter known as "ESIR") and Earth Sciences Extraction Company, an Alberta
registered limited partnership (hereinafter known as "ESEC") whose sole general
partner is ESIR.
ESEC owns a solvent extraction facility in southeast Calgary, Alberta (the
"Calgary Facility") from which it produces and sells purified phosphoric acid
("PPA") in commercial grades.
CIC is a long-standing marketer and transporter of liquid chemicals with
terminals in various locations in the U.S. CIC desires to acquire a long-term
source of PPA for sale through its terminals and distribution network.
This letter sets forth the intent of the parties with regard to the production
and supply by ESEC and the purchase by CIC of PPA.
Production and Supply by ESEC
-----------------------------
1. ESEC expects to produce PPA at the annual equivalent rate of
approximately 16,500 tons of 75% H3PO4 technical grade PPA in calendar 1999 at
the Calgary Facility.
2. The PPA to be produced by ESEC will meet industry standards for
technical grade white phosphoric acid. The typical properties of the PPA are set
forth on the attached spec sheet.
3. ESEC expects to produce PPA continually throughout the year, but may
adjust its production schedule to coincide with availability of feedstock from
its suppliers. ESEC will make its best efforts to produce and supply the
quantities of PPA requested by CIC, but for reasons outside of its control may
be unable to do so. ESEC will supply CIC with 100% of PPA produced from super
phosphoric acid "SPA" deliveries arranged by CIC.
4. Although ESEC will make its best efforts to arrange appropriate freight
delivery schedules, sales to CIC from the Calgary Facility will be on an f. o.
b. Calgary basis and ESEC assumes no title or risk of loss after PPA has left
the Calgary Facility.
5. ESEC will use CIC as their sole representative East of the Rocky
Mountains. Marketing efforts will be coordinated through close communication
with TwinKem International, Inc. ("TKI"), ESEC's marketing consultant.
6. If ESEC is unable to produce PPA or has reduced production, CIC will be
released from a like portion of its total volume purchases.
Purchase by CIC.
----------------
1. CIC intends to purchase the equivalent of 6,000 to 8,000 tons of 75%
H3PO4 technical grade PPA per year from ESEC commencing with the date hereof.
2. CIC expects to schedule its quarterly purchases in the following manner
over the calendar year: 1st quarter - 1,500 to 2,000 tons, 2nd quarter - 1,500
to 2,000 tons, 3rd quarter - 1,500 to 2,000 tons, 4th quarter - 1,500 to 2,000
tons.
3. CIC expects to continue to purchase a minimum of 6,000 to 8,000 tons of
75% H3PO4 technical grade PPA per year from ESEC for a period of no less than
five (5) years with automatic renewal for three (3) years upon request, however
CIC's requirements may well increase to the level of 15,000 to 20,000 tons per
year.
4. The price to be paid ESEC by CIC will be negotiated from time to time by
the parties as market conditions dictate with the good faith intent that each
party receive the highest margin possible commensurate with their investment and
value added. The price will be stated on a per ton 75% H3PO4 technical grade PPA
f.o.b. the Calgary.
5. Payments for PPA purchased by CIC will be made within thirty (30) days
of the loading for delivery of product unless other credit arrangements,
satisfactory to ESEC, are made. Payment to CIC for any SPA purchased by CIC for
processing in the Calgary Facility will correspond and coincide with CIC's
payments for the equivalent PPA purchased by CIC.
The parties hereto recognize that ESEC may utilize this Letter to confirm to
certain banks, and other potential lenders and investors, expected sales of PPA.
It is the good faith intention of both CIC and ESEC to carry through with the
matters set forth above under U.S. law. CIC and ESEC both acknowledge that third
parties may rely on the matters expressed herein.
CIC and ESEC also acknowledge that the parent company of ESIR, Earth Sciences,
Inc. is a U.S. public company, with certain public disclosure requirements and,
that Earth Sciences, Inc. may disclose the contents of this letter to its
shareholders and the public as it deems necessary.
If the foregoing accurately sets forth the intentions of CIC and ESEC, and has
the approval of CIC, please so indicate by dating and executing a copy hereof in
the space provided below and returning to us.
Earth Sciences Extraction Company
by its General Partner, ESI Resources, Ltd.
/s/ Xxxx X. XxXxxxxxx
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Xxxx X. XxXxxxxxx, President
Acknowledged this 2 day of February, 1999.
Chemical Interchange Company
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
