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EXHIBIT 10.12
CONTRACT FOR SUPPLY
AND
REGENERATION OF SULFURIC ACID
BETWEEN:
CHLORALP,
A simplified stock company with headquarters at 00 Xxxx Xxxx Xxxxxx, 00 000
Xxxxxxxxxx, Xxxxxx,
Hereinafter "CHLORALP,"
party of the first part,
AND:
XXXXX-XXXXXXX CHIMIE
A stock company with headquarters at 00 Xxxx Xxxx Xxxxxx, 00000 Xxxxxxxxxx,
Hereinafter "RPC,"
party of the other part,
WHEREAS:
- CHLORALP has a shop for the manufacture of chlorine on the site of PONT
DE CLAIX (France), (hereinafter "the SHOP"), which consumes virgin
sulfuric acid with the specifications that appear in the Appendix
(hereinafter "VIRGIN ACID"), and which produces process sulfuric acid
(hereinafter "PROCESS ACID") at a H(2)S0(4) concentration on the order
of 75%;
- RPC operates a unit for the manufacture of synthetic sulfuric acid on
its site at Xxx Xxxxxx de Condrieu (France), (hereinafter "the UNIT"),
which uses, among other materials, PROCESS ACID to produce virgin
sulfuric acid, and supplies the SHOP with VIRGIN ACID produced from
PROCESS ACID supplied by the SHOP;
- CHLORALP wishes to maintain the supply of the SHOP in VIRGIN ACID
produced by RPC from PROCESS ACID supplied by CHLORALP, and RPC is
willing to continue rendering this service (hereinafter the "SERVICE");
- CHLORALP may, in addition, buy from RPC quantities of VIRGIN ACID
additional to those bought for the SERVICE (hereinafter "SUPPLEMENTARY
ACID");
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THE PARTIES HAVE AGREED AS FOLLOWS:
ARTICLE 1 - OBJECT
The object of this Contract is the supply by RPC to CHLORALP and the purchase by
CHLORALP from RPC of the SERVICE.
The PROCESS ACID is deemed transformed into VIRGIN ACID only when the latter is
delivered by RPC. The PROCESS ACID is deemed to remain property of CHLORALP
until the passage of the storage tank at the RPC site in Roches de Condrieu, and
RPC shall assure its storage in compliance with the rules of the art, and
safekeeping thereof until it is cracked. RPC shall also assure the storage and
safekeeping of the VIRGIN ACID. Reference to Incoterms made below is without
effect on the provisions of this Article 1.
ARTICLE 2 - QUALITY - GUARANTEES
2.1. The PROCESS ACID and the VIRGIN ACID shall comply with the
specifications appearing in the Appendix.
2.2. In the absence of complaints within a term of twenty (20) days from
receipt, the acids delivered by each of the Parties shall be deemed
compliant with said specifications.
2.3. RPC guarantees only the compliance of the VIRGIN ACID with the
specifications appearing in the Appendix.
2.4. CHLORALP pledges to supply to RPC a PROCESS ACID compliant with the
specifications appearing in the Appendix.
Should CHLORALP modify the process generating the PROCESS ACID and/or
replace it by a new procedure, so that the quality of the PROCESS ACID
may be modified, CHLORALP pledges to first inform RPC. RPC, based on
the information supplied by CHLORALP, reserves in this case the right
to accept or not the PROCESS ACID at its UNIT.
ARTICLE 3 - REGENERATION SERVICE
3.1. CHLORALP pledges to supply to RPC all the volumes of PROCESS ACID
produced from the drying of chlorine from Pont de Claix and, in all
events, a minimum annual quantity of PROCESS ACID not below [*] tons,
base 100% H(2)SO(4).
RPC pledges to supply to CHLORALP, F.O.B. plant of Roches de Condrieu,
[*] of VIRGIN ACID (base 100% H(2)SO(4)) for each ton of PROCESS
ACID (base 100% H(2)SO(4)) delivered by CHLORALP.
* Indicates information deleted based on a Confidential Treatment Request
pursuant to Rule 406 under the Securities Act of 1933, as amended.
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RPC shall inform CHLORALP of the scheduled downtime affecting the
operation of the UNIT. If the supply of the SERVICE is not possible for
reasons other than force majeure at the site of Roches de Condrieu, RPC
pledges to supply the SERVICE at its site in Rieme (Belgium), in which
case the difference in transport cost (Pont de Claix/Xxx Xxxxxx de
Condrieu - Pont de Claix/Rieme) will be paid by RPC. If such supply of
the SERVICE is not possible even at the site of Rieme, RPC shall make
its best efforts to try, however, to assure the supply of the SERVICE
to CHLORALP.
3.2. RPC shall reserve for CHLORALP, in the UNIT, an annual capacity of
[*] tons, base 100% H(2)SO(4).
3.3. Deliveries of PROCESS ACID and requests for shipments of VIRGIN ACID
shall be distributed as regularly as possible throughout the year.
Before the 20th of each month, CHLORALP shall supply to RPC a
provisional plan of deliveries of PROCESS ACID and requests for
shipments of VIRGIN ACID for the following three months.
ARTICLE 4 - PRICE OF THE SERVICE
4.1. CHLORALP shall pay RPC for the SERVICE or for the reservation of the
volume for the UNIT as follows:
4.1.1. Initial price
The price of the SERVICE, for each metric ton of
PROCESS ACID (base 100% H(2)SO(4)) delivered to the
UNIT by CHLORALP, is established at [*] FF/t for the
year 1997.
4.1.2. Revision of the Price of the SERVICE
The parties shall establish by mutual consent, before
November 30 of each year, the price of the SERVICE
applicable to the supply of the SERVICE for the
following year. In the event of disagreement
concerning the price, the Parties may consider and
negotiate other solutions, such as, whereby these
proposals do not constitute a commitment on their
part: an agreement based on the application of the
price proposed by RPC, with possibility for CHLORALP
to reduce the minimum volume as defined in Article
3.1, or an agreement on the application for the year
(n) of the price of the SERVICE applied for the
preceding year (n-1), with possibility for RPC to
reduce the capacity reserved, as defined in Article
3.2. It is understood that, in the absence of all
agreement between the Parties as of December 31 of
the year (n), the price of the SERVICE applied during
that year (n+1) shall be equal to the price of the
SERVICE applied in the preceding year (n), but that,
in this case, the contract shall be canceled
automatically, such cancellation becoming effective
as of December 31 of that year (n+1), unless the
Parties
* Indicates information deleted based on a Confidential Treatment Request
pursuant to Rule 406 under the Securities Act of 1933, as amended.
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decide otherwise.
In all events, the price of the SERVICE may never be
less than [*] FF/T (base 100% H(2)SO(4)).
4.2. The price of the SERVICE applies for PROCESS ACID with a content of
H(2)SO(4) of 65% or more.
RPC may refuse to take delivery of any quantity of PROCESS ACID with a
content of H(2)SO(4) below 65%. If it accepts the delivery and if,
during a given month, the average concentration of the PROCESS ACID
delivered by CHLORALP to RPC is below 65%, the price of the SERVICE
then applicable shall be increased by 5% for each 1% of content below
65%, with a prorate in the event of decimals. The price of the SERVICE
so increased shall be applied to the total quantity, base 100%,
delivered by CHLORALP to RPC in the month in question, calculated based
on the average concentration in the month in question.
4.3. If, during a given calendar year, CHLORALP delivers to RPC a quantity
of PROCESS ACID lower than [*] tons (100% H(2)SO(4), CHLORALP must
pay to RPC an Additional Annual Remuneration "RS" calculated as
follows:
[*]
where:
- PR is the price of the SERVICE for the year in question.
- Qn is the minimum quantity of PROCESS ACID that CHLORALP pledges
to deliver to RPC pursuant to the provisions of Article 3.1
above, i.e. [*] tons, base 100% H(2)SO(4).
- QR is the quantity actually delivered by CHLORALP to RPC during
the calendar year in question.
- q is the average daily quantity (base 100%), deliverable by
CHLORALP to RPC, i.e. Qn/365.
- d is the number of possible days of downtime of the installation
producing PROCESS ACID, due to cases of force majeure.
ARTICLE 5 - ADDITIONAL VIRGIN ACID
5.1. In addition to the VIRGIN ACID supplied by RPC in the framework of the
SERVICE, RPC makes available to CHLORALP volumes of ADDITIONAL ACID.
5.2. The price of the ADDITIONAL ACID is, for 1997, [*] Francs per ton
(base 100%), F.O.B. Roches de Condrieu.
5.3. In subsequent years, the price shall be negotiated specifically between
the Parties.
ARTICLE 6 - INVOICES AND PAYMENT
6.1. The invoices of RPC for the SERVICE shall be drawn up and sent monthly
to CHLORALP for the supplies and services of a given month during the
first ten
* Indicates information deleted based on a Confidential Treatment Request
pursuant to Rule 406 under the Securities Act of 1933, as amended.
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business days of the following month. They shall be paid at thirty (30)
days, end of month, on the 10th of the following month.
6.2. Invoices for the SERVICE shall be drawn up based on H(2)SO(4)
concentrations, measured by RPC. Upon receipt of the invoice, CHLORALP
shall have ten (10) business days to object to the measurements made by
RPC. After this term, no objection shall be admitted.
6.3. Possible invoices for the Additional Annual Payment applicable to a
calendar year shall be drawn up during the first month of the following
year. Payment shall be made at 30 days, end of month, on the 10th of
the following month.
ARTICLE 7 - TERM
This Contract shall become effective as of its signing by the Parties, and shall
remain in effect for an initial term of 4 years, as of January 1, 1997, i.e.
until December 31, 2000, subject to the provisions of Article 4.1.2.
It shall be extended by tacit renewal for successive terms of one (1) year,
unless notice of cancellation is sent by one of the Parties to the other by
registered letter with acknowledgment of receipt, at least six (6) months before
the expiration date of the initial term or any of the renewal terms.
ARTICLE 8 - ADVANCE CANCELLATION
If either one of the Parties fails to meet one of its obligations hereunder, and
it is not remedied within a term of thirty (30) days after notification of such
non-compliance by the other Part, sent by registered letter with acknowledgment
of receipt, the latter shall be entitled to cancel this Contract by right,
effective immediately, by registered letter with acknowledgment of receipt, sent
to the defaulting party, subject to settlement of any invoice owed for any
supply of the SERVICE before the date of said cancellation and non-contested.
ARTICLE 9 - FORCE MAJEURE
Circumstances of force majeure are considered to be, without limitation thereto,
circumstances such as war, insurrection, natural disasters, flood, fires,
explosions, strikes and work conflicts, embargo, shortage of raw materials,
scrapping of important parts, administrative decisions preventing CHLORALP from
operating its shop producing PROCESS ACID or preventing RPC from operating its
UNIT.
The affected Party shall be released from meeting its obligations within the
limits of the impediment. However, it must make all efforts to alleviate as much
as possible its own non-compliance (by all measures or substitutions deemed
necessary and valid, in agreement with the other Party), and resume its
obligations as soon as the cause disappears.
The Party affected by a case of force majeure must inform the other without
delay, by registered letter with acknowledgment of receipt, indicating the
foreseeable duration of its impediment and, if applicable, indicating the
provisions it intends to make in order to remedy the situation.
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ARTICLE 10 - PROTECTION
If, due to unforeseen or unforeseeable circumstances beyond the control of the
Parties during the implementation term of this contract, a major change occurs
in the economic conditions which led to the execution hereof, and, as a
consequence, the implementation of some of its provisions would cause severe and
durable damage to either one of the Parties, the Parties shall consult to
determine, by mutual agreement, the new conditions applicable to this contract,
which would allow replacing both Parties in a contractual situation comparable
to that prevailing at the time of the execution hereof.
ARTICLE 11 - ASSIGNMENT OF THE RIGHTS AND OBLIGATIONS OF THE CONTRACT
Neither Party may assign to a third party the rights and obligations arising
from this Contract without prior agreement of the other Parties, unless such
third party is its successor under a merger, absorption or contribution of the
entire, or practically the entire, activity hereunder.
For the purposes of this Article, the Affiliates of a Party shall not be deemed
third parties. "Affiliate" is understood as any entity controlling, controlled
by, or under control of a Party, whereby "control" means ownership of at least
50% of the capital.
ARTICLE 12 - CONFLICTS
This Contract is governed by French law.
Any conflict between the Parties arising from the implementation of this
Contract, and not resolved between them by amicable agreement, shall be
exclusively and finally resolved according to the Conciliation and Arbitration
Rules of the International Chamber of Commerce, by three arbitrators designated
pursuant to said rules. Arbitration shall take place in Paris, and shall be
conducted in French and/or English.
Drawn up in Paris
in two originals
CHLORALP XXXXX-XXXXXXX CHIMIE
17 Oct 97 date 17/10/97
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/s/ Xxxxxxx X. Xxxxxxx signature /s/ Xxxxxx Xxxxxxx
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ANNEX
SPECIFICATIONS
PROCESS ACID
Sulfuric acid content : 65% mini
Ashes at 1000(degrees) C : 0.1% maxi
Na + K : 1000 ppm maxi
Cl : 500 ppm maxi
P : 100 ppm maxi
F : 10 ppm maxi
Heavy metals : 1000 ppm maxi
Water : addition at 100%
Monophase liquid
Absence of matter in suspension
VIRGIN ACID
Total acidimetric content (%) 92 mini - 95 maxi in winter
expressed in H(2)SO(4) for 100g mini 95 to 98 except in winter
sulfur dioxide (mg/kg) 50 maxi
iron (mg/kg) 30 maxi
nitrogen, nitric (mg/kg) 10 maxi
