AGENCY AGREEMENT
This Agreement shall be deemed to have been made the First day of January,
1987 by and between BERNUTH, XXXXXXX CO INC., a Delaware corporation (the
"Agent") and VERKAUFSGESELLSCHAFT FUER TEERERZEUGNISSE MBH, a German Company
("VfT").
W I T N E S S E T H
WHEREAS, for a number of years the Agent has been purchasing creosote oil such
as is commonly used for timber preservation from VfT for sale to customers in
its own name, but for the account of VfT in North and Central America; and
WHEREAS, the Agent wishes to sell creosote oil as VfT's Agent in certain
localities of the United States of America, but under different terms and
conditions from those that existed in the past; and
WHEREAS, VfT wishes to continue selling its creosote oil in the Territory, using
the Agent's services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
assigned to them herein:
1.01 "In writing" shall include cablegrams, telegrams or telex.
1.02 "Oil" shall mean Creosote Oil such as is commonly
used for timber preservation.
1.03 "Gallon" shall mean U.S. gallon at 100Deg. Fahrenheit.
1.04 "Tonne" shall mean a metric tonne of 1,000 kg.
1.05 "Europe" shall mean countries supplying oil for
shipment from installations situated at ports
in Great Britain (including Eire) or on the
continent of Europe and "European" shall have
the corresponding meaning.
1.06 "Tank Vessel" shall include any parcel tank or motor or
other mechanically propelled tank vessel or
cargo vessel capable of carrying oil in bulk.
1.07 "Shipment in Bulk" shall mean any delivery into a tank vessel.
1.08 "Handling Charges" shall mean all charges whatsoever incidental
to handling of oil after its arrival at
American port or ports of discharge and
including all insurance from FOB European
port but excepting charges for barging.
1.09 "Tariff(s)" shall mean any import duty or tax of any kind
levied by any government in the Territory for
any reason whatsoever.
1.10 "Year" shall mean a period from 1st January to
31st December.
1.11 "Territory" shall mean the states of Maine, Vermont, New
Hampshire, Massachusetts, Rhode Island,
Connecticut, New York, New Jersey, Delaware,
Maryland, Pennsylvania, West Virginia,
Virginia, North Carolina, South Carolina,
Georgia, Alabama, Kentucky, Mississippi,
Tennessee, Louisiana, Oklahoma, Arkansas,
Texas and Florida.
1.12 "Selling Price" this is the actual monthly average selling
price in U.S. dollars per U.S. gallon,
calculated by dividing the total monthly
sales revenues by the quantity sold.
1.13 "Minimum Selling Price" this is the minimum price as advised from
time to time by VfT to the Agent at which
sales are made ex agreed storage terminal in
the Territory.
1.14 "Sales Price" this is the actual price of sale to any
customer ex terminal which is to be
indicated in the Agent's monthly sales
report to VfT.
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1.15 "List Price" this is the publicly declared selling price
announced by the Agent from time to time as
agreed with VfT.
1.16 "FOB" this is Incoterms - International Chamber of
Commerce in Xxxxx 0000.
1.17 "CIF" this is Incoterms - International Chamber of
Commerce in Xxxxx 0000.
2. APPOINTMENT
Subject to the terms and conditions thereof, VfT hereby appoints the Agent
as its exclusive agent for the sale of Oil to customers in the Territory in
its own name, but for the account of VfT.
3. TERM
This Agreement shall be deemed to have come into force as from the First
day of January, 1987, and shall continue in force through 31st December
1989. Thereafter, subject to mutual agreement, this agreement shall
continue on an annual basis with one calendar year's advance notice of
termination to be given by either party.
In the event of any termination and/or expiration of this agreement, on
whatever grounds, the parties hereby expressly agree that the Agent shall
have no additional compensation besides that of his regular commissions
(clause 4) and/or other payments (clause 10) accrued until termination or
expiration hereof.
4. COMMISSIONS
As full compensation for the Agent's services hereunder (but without
prejudice to the Agent's right to be reimbursed for expenses incurred by it
on VfT's behalf, as provided in Section 10 hereof), VfT shall pay the Agent
a commission equal to seven and one half percent (7.5%) of the FOB port of
export return, on all sales of Oil hereunder to the Agent's customer.
5. QUANTITIES AND DELIVERIES
5.01 Three months prior to the end of each full year the Agent shall advise
VfT in writing of the quantity of Oil which the Agent expects to sell
to its customers during the next following full year. Within
fifteen (15)
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business days from the receipt of such advice VfT shall advise the
Agent the quantity which they are willing to deliver and will have
available for shipment in bulk to the Territory during the ensuing
full year which quantity is estimated to be about 17050 tonnes in any
one year subject to Section 12 of this Agreement.
Both the Agent and VfT at any time on mutual agreement may adjust such
quantities, and no change shall be made unless both parties agree.
5.02 The quantities of Oil shipped under this Agreement shall be
ascertained by a competent qualified inspector to be appointed by the
Agent and approved by VfT at the Agent's shore tank installation at a
temperature of 100Deg. Fahrenheit unless otherwise agreed upon in
writing by the parties. The determination of quantity under this
Article shall be binding upon the parties hereto.
The fees incurred for such ascertainment of quantities to be borne by
VfT.
6. QUALITY AND QUALITY CONTROL
6.01 VfT represents and warrants that all Oil delivered hereunder shall
conform to the A.W.P.A. Specification Standard P1 or P13 current at
the time of shipment. The Oil shall conform if required to any new
specification which may be mutually agreed from time to time. Subject
to Section 6.2 hereof, the Oil loaded into any one vessel shall not
contain more than the maximum one percent of water from any one
loading port and shall not have a residue of more than 22 percent
distilling at 355Deg. Celsius for P1 (Class I) Oil or 32 percent for
P13 (Class III) Oil when tested by the Standard A.W.P.A. method A1.
The Oil loaded into vessels shall not be at a temperature in excess of
105Deg. Fahrenheit at the time of loading.
6.02 Should VfT at any time be unable to deliver oil in conformity with
Section 6.1 hereof, VfT shall so inform the Agent as soon as possible.
6.03 The quality of the Oil delivered into each storage in the Territory
shall be determined by means of two representative samples drawn from
the vessel's tanks before discharge by a competent qualified person to
be appointed by the Agent with the approval of VfT. In the event of
more than one port of discharge, two samples shall be taken at each
port. One of the samples from each port shall then be aggregated and
analyzed by a qualified competent chemist. The second representative
sample(s) shall be retained, separately in the case of more than one
port of discharge, by
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the Agent for a period of six months and made available in the event
of any dispute in quality. The fees for the taking and testing of
samples to be borne by VfT.
7. PROCEDURES GOVERNING SALES AND DELIVERY OF OIL
7.01 The Agent shall notify VfT in writing of its list of customers and
potential customers in the Territory, specifying place of delivery,
proposed sales price, and quantity. VfT shall give the Agent
reasonable flexibility to conduct commercial transactions within the
quantity and price guidelines as shall be established by VfT.
7.02 The Agent shall have the authority to sell Oil to customers pursuant
to the price guidelines and shall make its own arrangements with the
customer for the delivery of the Oil. Upon reaching the intake
manifold of the customer's vehicle or vessel, as the case may be,
title to the Oil so delivered shall pass from VfT to the customer.
Risk of loss, destruction, or deterioration shall pass from VfT to the
Agent CIF U.S. port.
7.03 The Agent shall from time to time advise VfT on the levels of price
attainable for sales in the Territory. VfT will then instruct the
Agent of the minimum selling price to be applied to sales and the
Agent shall not make any sales in the Territory below this price
without specific approval of VfT. No sales shall be made for more
than a three-month period ahead at a fixed price without the specific
approval of VfT.
8. DUTIES OF THE AGENT
In consideration of the commission to be paid to it pursuant to Section 4
hereof, the Agent shall perform the following duties:
8.01 The Agent shall diligently promote the sale of VfT's Oil in the
Territory.
8.02 The Agent shall, unless otherwise requested by VfT obtain and
supervise the storage of Oil in storage tanks, at the points of
delivery in such a manner as shall from time to time be mutually
agreed upon.
8.03 The Agent shall obtain, unless otherwise requested, appropriate
insurance on the stocks of Oil in the Territory. Any settlement of
claims received shall be to the benefit of the Agent. The Agent shall
also obtain, unless otherwise requested, appropriate third party
liability insurance with VfT
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named as an additional insured. The cost of such insurance policies
shall be borne entirely by VfT.
8.04 The Agent shall retain on VfT's behalf the services of the independent
experts set forth in Sections 5.02 and 6.03 hereof.
8.05 (Illegible text) the charter parties under which such Oil is
delivered.
8.06 The Agent shall arrange for barging if it is mutually agreed such
services are necessary to the trade. Any costs for barging will be
for VfT's account.
8.07 The Agent shall pay all storage fees, handling and weighing charges on
behalf of VfT. The Agent shall be responsible for the loss of product
between CIF U.S. port and deliveries to customers. The Agent shall be
responsible for quality maintenance in storage tanks and for quality
of supplies to customers.
8.08 If reasonably requested by VfT the Agent shall on VfT's behalf arrange
for freight and freight insurance from European port to port of
discharge in the Territory.
8.09 Accompanying the remittance of funds to VfT each month, the Agent
shall provide VfT with a report on sales during the previous calendar
month, broken down by customer, quantity, sales in solution, point of
delivery and sales price.
8.10 If reasonably requested by VfT, and subject to the Agent's right to
reimbursement therefor, the Agent shall on VfT's behalf pay the
expenses of the insurance policies obtained pursuant to Section 8.03
hereof, the fees of the independent experts retained as per
Section 8.04 hereof, the costs of barging as per Section 8.06 hereof,
and the expenses for freight and freight insurance as per Section 8.08
hereof. VfT shall reimburse the Agent such expenses on presentation
of invoice.
8.11 The Agent shall represent VfT in its day-to-day relations with
Environmental Protection Administration, the A.W.P.I. and other United
States governmental and administrative bodies provided, however, that
the Agent shall not be responsible for such representation in any
administrative proceeding or lawsuit brought by any of the foregoing
against VfT.
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8.12 The Agent shall make the payments to VfT as set forth in Section 10
hereof and in the manner specified therein.
8.13 The Agent shall not without the prior approval of VfT arrange on
behalf of VfT any swaps, purchases or other Agency Contracts for the
sale of Oil within the Territory.
9. RESPONSIBILITY OF AGENT
9.01 No diminution on the payments to be made pursuant to Section 10 hereof
shall be made by reason of the failure of the Agent's customer to make
full payment for the Oil delivered to such a customer. Any del
credere-commission insofar as included in the fee according to
Section 10.
9.02 The Agent shall be responsible for any deterioration in the quality of
Oil after delivery thereof into the shore tank installation at the
point of discharge.
10. PAYMENTS AND COMMISSIONS
No later than forty-five (45) days following the end of the month in which
the customer shall have taken title to a quantity of Oil pursuant to
Section 7.02 hereof, the Agent shall make payment, therefor, to VfT. The
amount of payment shall be the total invoice value for all such Oil, as is
sold in that month, reduced by the following amounts:
(i) The Agent's commission as specified in Section 4 hereof;
(ii) Monthly storage costs, handling costs, tariffs, and barging costs
as agreed between VfT and the Agent;
(iii) All other costs invoiced to the Agent and to be paid by the Agent
on VfT's behalf pursuant to Section 8.10 hereof.
11. COVENANTS OF VFT
11.01 VfT shall deliver Oil in the quantity and quality and in the manner
specified in Sections 5 and 6 hereof.
11.02 VfT shall not either as principal or agents, directly or indirectly,
and either alone or jointly with any other person, firm or
corporation, handle, sell or deal in or be interested in the handling,
selling or dealing in or Oil for importation or shipment in bulk into
or to the Territory or knowingly sell to any person, firm or
corporation any oil for shipment in bulk to the
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Territory, other than pursuant to this Agreement or with the
Agent's consent.
12. HARDSHIP
If during the period for which this Agreement is in force, the application
of the Agreement would seriously and permanently prejudice one of the
parties, the parties shall meet and make every effort to come to an
amicable agreement so as to lessen or remove such prejudice.
13. FORCE MAJEURE
In the event the performance of this Agreement by either party is affected
by strike, fire, riot, war (declared or undeclared), Act of God, Government
regulations, or Government request or requisitions for national defense or
other purpose, or failure or shortage of railway, or vessel service
normally available to either party hereto, or breakdown of, or injury to
facilities used for production, manufacture, or transportation, or storage
of Oil, or any other cause beyond the reasonable control of the parties
hereto, the suffering party may, at its option, suspend the performance of
this Agreement in whole or in part during the period of such event to the
extent reasonably required by such event, and no liability for damages
shall attach against either party on account thereof. In the event that
the performance of VfT is completely suspended, the Agent shall have the
right to liquidate the Oil owned by VfT that is in storage in the United
States in a commercially reasonable manner for the account of VfT.
14. ENTIRETY OF AGREEMENT
This agreement constitutes the entire agreement between the parties hereto,
and there are no understandings, representations, or warranties of any kind
except those expressly set forth herein. Neither this Agreement nor any of
the rights, obligations, or liabilities of either of the parties hereunder
may be amended, changed or added to in any respect except by written
instrument executed by a duly authorized representative of each of the
parties.
15. TRANSFERS
Neither party shall without the previous consent in writing of the other
assign or dispose of the benefits of this agreement or any part thereof,
but without committing a breach of this clause, the sellers may transfer
the benefits and burdens of this agreement to any other association or
company to which they may transfer their business or that part of it that
relates to the shipment of Oil in bulk.
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The present agreement may be transferred to any associate company in which
the transferring party or its parent company directly or indirectly holds
at least 50% of the capital.
16. GOVERNING LAWS
This Agreement shall be deemed a German Agreement and shall be construed
and operate and have effect in all respects according to the Laws of the
Federal Republic of Germany.
17. ARBITRATION
All disputes arising in connection with this Agreement shall be settled by
a single Arbitrator acceptable to both parties. Should the parties fail to
agree the dispute shall be finally settled under the Laws of the Federal
Republic of Germany.
VERKAUFSGESELLSCHAFT FUER BERNUTH XXXXXXX CO INC.
TEERERZEUGNISSE MBH
By: /s/ XXXXXX XXXXXXXX By: /s/ XXXXX XXXXXXX
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Title: Title: PRESIDENT
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Date: DUISBURG, 25TH MAY 1987 Date: JULY 2, 1987
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