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EXHIBIT 10.10
SUPPLY AND PURCHASE AGREEMENT
HYDROCHLORIC ACID
Between:
"CHLORALP" a corporation organized under the laws of France, whose registered
office is located at 00 Xxxx XXxx Xxxxxx, 00 000 Xxxxxxxxxx, Xxxxxx, hereinafter
referred to as "ChlorAlp"
on the one hand,
And:
XXXXX - XXXXXXX CHIMIE, a Societe Anonyme organized under the laws of France,
whose registered office is located at 00 Xxxx Xxxx Xxxxxx, 00 000 Xxxxxxxxxx,
Xxxxxx, hereinafter referred to as "RPC"
on the other hand,
ChlorAlp and RPC being hereafter referred to as the "Parties";
WITNESSETH:
- whereas ChlorAlp operates at Pont de Claix (Isere) a unit producing chlorine
and caustic soda products and needs for such production Hydrochloric Acid,
- whereas RPC operates several production units at Pont de Claix (Isere) and
in particular an Hydrochloric Acid unit and is interested to supply ChlorAlp
with said product,
- whereas ChlorAlp and RPC wish therefore to enter into a long - term supply and
purchase agreement in order to provide ChlorAlp with Hydrochloric Acid;
ARTICLE 1. OBJECT
The object of the present agreement (the "Agreement") is to define the terms and
conditions according to which RPC shall supply ChlorAlp, and ChlorAlp shall
purchase from RPC Hydrochloric Acid, as defined with its Specifications in
Schedule 1 of this Agreement (hereinafter the "Product").
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ARTICLE 2. SUPPLY AND PURCHASE OBLIGATIONS
2.1. Quantity
RPC undertakes to supply to ChlorAlp, and ChlorAlp undertakes to purchase from
RPC, during each calendar year of the Term of this Agreement as defined in
Article 6 hereafter, one hundred per cent (100%) of the quantities of
Product needed by ChlorAlp for its brine operation on Pont de Claix Site
(hereinafter the "Quantity" or "Q").
For the calendar year 1996, the annual Quantity was [*] Metric Tons (100%
BASIS) and for the calendar year 1997, the annual Quantity is estimated to be
[*] Metric Tons.
2.2. Supply Program
Each year, prior to October 31, ChlorAlp will notify to RPC of its estimated
purchase requirements for the Product during the subsequent calendar year (the
"Estimated Purchase Requirements").
The Estimated Purchase Requirements divided by 12 months shall constitute the
basis for ChlorAlp's monthly orders, except during the months when turnarounds
are conducted.
Therefore, ChlorAlp shall not unreasonably by more than 20% decrease or
increase its monthly orders without prior notice to RPC.
At least five business days before the first business day of month (m),
ChlorAlp shall send to RPC firm orders for deliveries of Product for month (m),
and shall communicate to RPC its best estimates of the quantities of Product
planned to be ordered for the two following months (m + 1) and (m + 2),
unless otherwise agreed.
RPC and ChlorAlp shall meet at the minimum twice a year with a view to
exchanging mutual information on ChlorAlp's demands and needs, to updating
schedules and solving any difficulties in applying this Agreement.
2.3. Delivery.
Product shall be delivered by pipe to the brine preparation unit of ChlorAlp.
The delivery point shall be the valve at which the delivery pipe connects at the
entrance of ChlorAlp's brine preparation unit, with RPC's pipes.
Turnarounds
Both Parties agree to coordinate in order to decide jointly the date and
duration of the turnarounds of their respective Pont de Claix production units.
ARTICLE 3. PRICE
3.1. The "Initial Price" ("P0") of the Product to be paid by RPC to ChlorAlp
is defined as follows:
* Indicates information deleted based on a Confidential Treatment Request
pursuant to Rule 406 under the Securities Act of 1933.
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[*]
3.2. Such Initial Price shall be revised for the first time on January 1998,
and thereafter twice a year, in accordance with the following revision formula:
[*]
where:
P is the revised Price to be applied for the current semester (n) (the
"Revision Semester")
P (n - 1): is the Price applied to the Product for semester (n - 1) immediately
preceding the Revision Semester.
SP is the value of the average weighted selling price (as defined below) of
the Product (on a delivered basis, and net of rebates and discounts) by RPC
to its customers on the free market (i.e excluding sales within RP and
processing arrangements).
SP (n - 1) is the value of SP on semester (n - 1) immediatly preceding the
Revision Semester
SP (n - 2 ) is the value of SP on semester (n - 2) immediately preceding
semester (n - 1)
For the calculation of SP, it is agreed between the Parties that:
(i) the value of SP shall be weighted in proportion of the respective volume
of sales of Product corresponding to each customer. For avoidance of doubt,
the following example is given:
[*]
(ii) SP is converted in French Francs according to the average exchange rates of
the Semester (n - 1) immediatly preceding the Revision Semester, calculated
on the basis of the "Cours Indicatifs des Devises - Moyenne Mensuelle"
published monthly by "Banque de France - Services des Changes".
3.3. For the implementation of this provision, ChlorAlp shall be entitled to
audit, through an independent auditor bound to secrecy, the calculation of SP
made by RPC for any year.
* Indicates information deleted based on a Confidential Treatment Request
pursuant to Rule 406 under the Securities Act of 1933.
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The mission of said auditor shall be:
- to determine the real average weighted selling price of the Product invoiced
by RPC on a delivered basis and net of rebates and discounts, to its other
customers during said year (the "Real SP");
- to compare such real average weighted selling price with the value of SP paid
by ChlorAlp in the revision formula, during the same period ("Paid SP");
- to calculate, if any, the required regularization of the Price, to be made
between the Parties, for the quantities of Product delivered by RPC to ChlorAlp
during the audited period, should it be any difference between the "Real SP"
and the "Paid SP".
The audit shall be conducted with no less than two (2) business days prior
written notice thereof, delivered to RPC, on business days and during regular
business hours of RPC. The auditor shall notify the Parties of its conclusion
within thirty days from the date of its appointment. The Parties shall have a
thirty days days delay from the date of notification to reach an agreement upon
the conclusion of the auditor and the related regularization of the Price.
Should such an agreement not been reached within such a delay, then such
difference shall be settled in accordance with the provisions set forth in
Article 7.7 of this Agreement.
ChlorAlp shall bear the costs of the audit.
3.4. For the implementation of this Article, the Price is understood CIP
ChlorAlp' Pont de Claix plant, France (INCO Terms 1990) and prices of
reference shall be on a delivered basis and before taxes.
3.5. RPC shall invoice ChlorAlp on a monthly basis.
Payment term shall be of thirty days, end of the month, the tenth, and made by
bank transfer.
ARTICLE 4. QUALITY PRODUCT WARRANTY.
RPC warrants that the Product shall comply with the specifications as described
in Schedule 1 attached to the present Agreement (the "Specifications"), and
shall be free from defects and of good material and workmanship.
RPC shall be liable only for replacement of nonconforming lot of Product
under the following conditions:
All claims by ChlorAlp for nonconforming Products shall be deemed waived
unless made by ChlorAlp in writing within twenty (20) days from the delivery
date of such Product.
If RPC agrees with ChlorAlp's claim, it will, at its expense, immediately
replace the nonconforming lot of Product by a conforming lot of same.
If RPC does not agree with ChlorAlp's claim, either may request an expert
appraisal by an independant laboratory, to determine whether said Product
complies with said Specifications. The report of such independant laboratory
shall be conclusive and binding on the Parties hereto.
All expenses related to such appraisal shall be borne by the Party found in
default.
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RPC and ChlorAlp being "industrial of the same speciality", ChlorAlp
acknowledge that the above warranty constitutes its exclusive remedy and RPC's
total liability for claims regarding the Product for "hidden defaults" ("vices
caches") and RPC excludes any implied warranties of merchantability and fitness
for a particular purpose and all other express or implied representations or
warranties. ChlorAlp waives all other claims against RPC and RPC shall not be
liable to ChlorAlp for any other direct or indirect damages.
The warranty and all limitations on ChlorAlp's remedies and on RPC's liability
provided in this Article shall survive the expiration, termination or
cancellation of this Agreement.
ARTICLE 5. TRANSFER OF TITLE AND RISK
Title to the Product and all risk for loss or any damage thereto shall pass to
ChlorAlp as the Product passes the delivery point as defined in Section 2.3
hereabove.
ARTICLE 6. TERM
This Agreement shall come into force on October 1st and, except as provided in
Article 7.2 below, shall remain in force for a period of fifteen (15) years
(the "Term"). Unless terminated by either Party giving written notice to the
other not less than one (1) year prior to the end of the Term, it shall be
renewed automatically for an unlimited period. Thereafter, it shall be
terminated by either Party giving at any time to the other Party not less than
(1) year prior written notice.
If and when RPC's interest becomes lower than 50% of the capital of ChlorALp,
the Term of this Agreement shall automatically be changed to a (10) ten years
period running from the date on which RPC's interest is lower than 50%. It
shall, in such case, thereafter be renewed for an equivalent period of ten
years, unless terminated by either Party giving the other Party not less 5 years
prior written notice prior to (i) the end of the initial 10 years period or (ii)
the end of each subsequent 10 years period.
ARTICLE 7. GENERAL PROVISIONS
7.1. Secrecy
Each Party agree that all information disclosed to it by the other Party under
the present Agreement (the "Information") shall be held and treated in the
utmost and strictest confidence and neither Party shall use said Information to
benefit itself or others, except for the purpose defined in Article 1
hereabove. The receiving Party shall not disclose any Information to a third
Party unless and until expressly authorized in writing to do so by the
disclosing Party, provided, however, that, either Party may transmit any
Information disclosed hereunder to any of its Affiliate. Each Party shall be
held accountable for the compliance of these Affiliates with the terms of this
Article.
For the implementation of this Agreement, the term "Affiliate" of
either Party shall mean a company which, directly or indirectly, controls, is
controlled by, or is under common control with said Party.
"Control" shall mean the control as defined by Articles 355.1 and following of
the law of July 24, 1996, on commercial companies.
