Back to top

EX-10.17 JOINT VENTURE AGREEMENT

Joint Venture JV Agreement

EX-10.17 JOINT VENTURE AGREEMENT | Document Parties: OM GROUP INC | GROUPE GEORGE FORREST S.A | LA GENERALE DES CARRIERES ET DES MINES You are currently viewing:
This Joint Venture JV Agreement involves

OM GROUP INC | GROUPE GEORGE FORREST S.A | LA GENERALE DES CARRIERES ET DES MINES

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: EX-10.17 JOINT VENTURE AGREEMENT
Governing Law: Delaware     Date: 3/31/2005
Industry: Chemical Manufacturing    

50 of the Top 250 law firms use our Products every day

 

<PAGE>

                                                                   Exhibit 10.17

 

 

                             JOINT VENTURE AGREEMENT

                             -----------------------

 

 

 

 

 

 

 

 

 

 

BETWEEN

 

 

                    OMG B.V.

 

 

 

                     GROUPE GEORGE FORREST S.A.

 

 

 

AND

 

 

 

                     LA GENERALE DES CARRIERES ET DES MINES

 

 

 

 

 

 

 

 

<PAGE>

 

THE PRESENT AGREEMENT IS ESTABLISHED IN ITS ENTIRETY BY ALL

THE ELEMENTS HEREINAFTER SPECIFIED AND AS REFERRED TO IN THE

RESPECTIVE ARTICLES

 

 

 

 

I.       DEFINITIONS

 

 

 

II.      SPECIAL PROVISIONS

 

     1.       Formation of a Joint Venture

     2.       Representations, Warranties, Title to Assets

     3.       Capital Contributions and. Financing of the Project

     4.       Management

      5.       Preliminary Activities

     6.       Related Agreements

     7.       Liabilities and Commitments of the Parties

     8.       Term and Termination

     9.       Withdrawal Option

     10.      Buffer Stock

     11.      Additional Guarantees

     12.      Developments

 

 

 

 

III.     GENERAL PROVISIONS

 

 

     1.       Hierarchical Order of the Agreements

     2.       Amendments

     3.       Restrictions on Transfers

     4.       Arbitration and Applicable Laws

     5.       Confidentiality

     6.       Force Majeure

     7.       Notices

     8.       No Waiver

     9.       Severability and Headings

     10.      Sovereign Immunity

     11.      Appendices

     12.      Further Engagements

     13.      General Clauses

     14.      Authorizations and Entering into Force

 

 

 

 

 

 

 

 

 

 

 

 

<PAGE>

 

The Present Agreement is concluded between:

 

 

 

 

1.OMG B.V. a company organized and existing under the laws of the Netherlands,

  having its registered office at ROTTERDAM, being a 100 per cent controlled

  subsidiary of OM Group Inc., a company organized and existing under the laws

  of the state of DELAWARE (USA) and having its registered office at 3800

  Terminal Tower, CLEVELAND 44113 OHIO (USA), which shall be together with its

  subsidiary jointly and severally responsible for the obligations of the

  subsidiary, OMG B.V. hereinafter referred to as OMG;

 

 

2.GROUPE GEORGE FORREST S.A., a company organized and existing under the laws

  of Luxembourg and having its registered office at 25 rue de la Chapelle,

  Luxembourg, hereinafter referred to as GGF; and

 

 

3.LA GENERALE DES CARRIERES ET DES MINES, a corporation organized and existing

  under the laws of the Democratic Republic of Congo and having its registered

  office at boulevard Kamanyola, P.O. Box 450, LUBUMBASHI, DEMOCRATIC REPUBLIC

  OF CONGO, hereinafter referred to as GECAMINES, or GCM.

 

 

 

 

Whereas the Parties have concluded a Frame Agreement signed in February 1996

where they have agreed on the general outlines of the establishment of a Joint

Venture to partially or totally process the slag in the site of LUBUMBASHI;

 

Whereas OMG, GGF and GECAMINES have initiated studies to determine the

economical and technical feasibility of a Cobalt Slag Processing Operation in

LUBUMBASHI, DEMOCRATIC REPUBLIC OF CONGO;

 

Whereas the Parties intend to invest in the Processing Plant if the feasibility

proves to be positive;

 

 

<PAGE>

 

                                                                               4

 

 

 

 

 

 

Whereas for the purpose of carrying out the activities of the Project, the

Parties wish to form:

 

  (a) a Joint Venture Company under the laws of JERSEY in the form of a private

    limited liability company or in any other country and/or in such other form

    as agreed by the parties (the Joint Venture, hereinafter referred to as

    J.V.);

 

 

  (b) a Slag Processing Company in the form of a Private Company with Limited

    Responsibility (SPRL) existing under the laws of the DEMOCRATIC REPUBLIC OF

    CONGO, the shares of which shall be primarily owned by the J.V. (hereinafter

    referred to as Slag Processing Company of Lubumbashi or Processing Company

    or S.T.L.);

 

 

 

 

 

Whereas the Parties wish to formalize their Agreement as to the formation and

operation of a J.V. as well as to carry out activities such as feasibility

studies, building of the Plant, Processing of Slag, Purchase of Slag, Sales of

Processed Materials, transportation as well as management related to the

project;

 

 

 

 

 

NOW THEREFORE in consideration of the premises and of the Contracts and

Agreements contained in this Agreement, the Parties hereby agree as follows:

 

 

<PAGE>

 

                                                                               5

 

 

 

 

I.       DEFINITIONS

 

 

The terms defined hereinafter shall for all purposes of this Agreement and

related Contracts have the meanings hereinafter specified, unless otherwise

specified:

 

 

AGREEMENT means this document signed by the Parties and its appendices forming

an integral part of the present Agreement as well as its possible amendments.

 

BUYER means OMG KOKKOLA CHEMICALS Oy (KCO), a subsidiary of the OMG Group,

buying Cobalt Alloy in the Long Term Cobalt Alloy Sales Agreement.

 

PURCHASER means the J.V. purchasing Slag in the Long Term Slag Sales Agreement.

 

COBALT BEARING ALLOY or TREATED MATERIAL means the main end product of the

Processing Company (sometimes also called "Cobalt Alloy") containing cobalt and

copper.

 

YEAR means calendar year beginning on 1st of January and ending on 31st of

December.

 

UMPIRE means a person appointed by mutual agreement of the J.V. and the Buyer or

GECAMINES in accordance with the Long Term Slag Sales Agreement or Long Term

Cobalt Alloy Sales Agreement.

 

CIF means "cost, insurance and freight" as defined in INCOTERMS, 1990 edition.

 

TOLLING AGREEMENT means the Agreement concluded between the J.V. and the

Processing Company for the purpose of processing Slag into Cobalt bearing Alloy.

 

LONG TERM COBALT ALLOY SALES AGREEMENT means the Agreement whereby the J.V.

undertakes to sell Cobalt Alloy to the Buyer and the latter undertakes to buy

Cobalt Alloy from the J.V.

 

LONG TERM SLAG SALES AGREEMENT means the Agreement whereby GECAMINES undertakes

to sell Slag to the J.V. and the latter undertakes to buy Slag from GECAMINES.

 

DATE OF DELIVERY means the date on which the J.V. takes and becomes the owner of

the Site Slag according to the terms of the ex-site delivery clause.

 

 

<PAGE>

 

                                                                               6

 

 

 

 

DDU means "delivery duty unpaid" as defined in INCOTERMS, 1990 edition

 

EXW means "ex works delivery" clause as defined in INCOTERMS, 1990 edition.

 

SUPPLIER means the GENERALE DES CARRIERES ET DES MINES supplying Slag in the

Long Term Slag Sales Agreement.

 

J.V. means a private limited liability company having its registered office in

JERSEY.

 

BUSINESS DAY means a day which is not a Saturday, a Sunday or a public holiday

in Finland, The Netherlands or the Democratic Republic of Congo.

 

KCO means OMG KOKKOLA CHEMICALS Oy, a subsidiary of the OMG Group located in

KOKKOLA, REPUBLIC OF FINLAND and established under the laws of the REPUBLIC OF

FINLAND.

 

LMB means the LONDON METAL BULLETIN.

 

LME means the LONDON METAL EXCHANGE.

 

SUPPLY LOT means a part of each delivered supply of Cobalt Alloy containing

approximately 100 tons of Cobalt Alloy as divided by the BUYER in KOKKOLA for

weighing, sampling, analysis and moisture content determination.

 

EXPEDITION LOT means the tonnage of one container of Cobalt Alloy dispatch from

the Processing Plant.

 

USED LOTS means the Lot or Lots of Cobalt Alloy taken into usage by the BUYER

for a period of one month.

 

MONTH means calendar month.

 

PARTIES means the Parties to this Agreement.

 

QUOTATIONAL PERIOD means the Period defined in Article 5 of the Long Term Slag

Sales Agreement or in Article 6.2 in the Long Term Cobalt Alloy Sales Agreement.

 

WEIGHTS AND MEASURES

1 (metric) ton   =        2,204.6 pounds avoirdupois

1 dmt or ts      =        1 dry metric ton

1 wmt or th      =        1 wet metric ton

 

 

<PAGE>

 

                                                                                7

 

 

 

 

 

 

TAKEN INTO USAGE means the taking of the Cobalt Alloy either directly from the

ordinary commercial raw material Stock or alternatively from the Buffer Stock as

a complement of the KOKKOLA Processing Plant.

 

PROJECT means the conception and building of a Processing Plant in LUBUMBASHI

for the purpose of exploiting the Slag Site of LUBUMBASHI as well as the proper

operation of the Processing Plant, the trading operations including related

operations and the distribution of the profits.

 

PROCESSED SLAG means the Slag resulting from the operations in the Processing

Plant

 

SLAG means cobalt bearing slag located in the Site in THE DEMOCRATIC REPUBLIC OF

CONGO and to be used as feeding stock in the Processing plant.

 

SITE or SLAG SITE means the area in the Democratic Republic of Congo where the

Slag is located and available to be delivered to the J.V. pursuant to this

Agreement (called Terril de LUBUMBASHI, originating from the residues of the

WATER JACKET ovens of GECAMINES and namely including the zones I, J, Ki, K2 and

TAS G-L having an average cobalt content of 1,85% as described in further detail

in appendix 1 of the Frame Agreement attached as Appendix 1 to this Agreement).

 

PROCESSED SLAG SITE means the area in the Democratic Republic of Congo where the

processed slag will be stocked.

 

PROCESSING COMPANY means the Company to be set up by the J.V. in the Democratic

Republic of Congo in the form of a SPRL for the purposes of operating the

Processing Plant.

 

COMMERCIAL STOCK means the ordinary stock of Cobalt Alloy enabling the regular

supply of OMG-KCO plant taking into account the periodicity of maritime

arrivals.

 

BUFFER STOCK means the Cobalt Alloy Stock to be established at OMG in KOKKOLA,

FINLAND in accordance with article 10 of the J.V. Agreement and to be kept

separate from the Ordinary Commercial Cobalt Alloy Stock of OMG KOKKOLA

Chemicals Oy.

 

 

<PAGE>

 

                                                                               8

 

 

 

 

 

 

USD means the lawful currency of the UNITED STATES OF AMERICA.

 

PROCESSING PLANT means the Plant to be located in LUBUMBASHI in the DEMOCRATIC

REPUBLIC OF CONGO. The Plant shall be operated by the Processing Company for the

purpose of processing Slag into Cobalt bearing Alloy.

 

SELLER means the J.V. selling Cobalt Alloy in the Long Term Cobalt Alloy Sales

Agreement.

 

<PAGE>

 

II.      SPECIAL PROVISIONS

 

 

 

1.    FORMATION OF THE JOINT VENTURE

-----------------------------------

 

 

1.1. The Parties hereby agree to promptly establish a Joint Venture Company in

  the form of a private limited liability company to be named GROUPEMENT DU

  TRAITEMENT DU TERRIL DE LUBUMBASHI (GTL) or such other name as agreed by the

  Parties.

 

  The By-laws of the J.V. shall be prepared and signed by the Parties in such

  time as unanimously agreed by them.

 

1.2   The primary goals of the J.V. are:

 

     i)    to establish a Processing Company, a subsidiary to the J.V., to be

          registered under the laws of the DEMOCRATIC REPUBLIC OF CONGO and to

          be named Societe de Traitement du Terril de LUBUMBASHI (S.T.L.).

 

     ii)   to conclude and ensure the best possible follow-up of Agreements such

          as:

 

 

          -        The Long Term Slag Sales Agreement

          -        The Long Term Cobalt Alloy Sales Agreement

          -        The Tolling Agreement (related to the processing of

                  the Slag by the Processing Company)

 

     iii) to conclude the Agreement of the Parties concerning the Capital

          contributions, the loans and other financing of the Project as well as

          optimizing and distributing the profits.

 

     iv)   to organize the management and follow-up of the Project.

 

 

 

 

2.       REPRESENTATIONS, WARRANTIES, TITLE TO ASSETS

----------------------------------------------------

 

 

2.1.     Capacity of the Parties

 

     Each of the Parties represents and warrants as follows:

 

     a) that it is a legal entity duly incorporated in its

        country of constitution,

<PAGE>

  b) that it has the corporate capacity to enter into and perform this

    Agreement,

 

    that all corporate and other actions required to authorize the party to

    enter into and perform this Agreement have been taken;

 

  c) that the Party shall not breach any other agreement or contract by entering

    into or performing this Agreement; that this Agreement is valid and binding

    upon in accordance with its terms.

 

 

 

 

 

3. CAPITAL CONTRIBUTIONS AND FINANCING OF THE PROJECT

-----------------------------------------------------

 

3.1. The pre-feasibility study undertaken by OMG has estimated that the total

     investment of the Project will be at about 115 USD million. The total

     amount shall be decided by the Parties after the completion of the

     feasibility studies.

 

     The total capital to be considered below shall therefore be in the order of

     USD 115 millions (or such other figure as determined by the Parties after

     the completion of the feasibility study), possibly further increased to

     obtain the working capital necessary to start the operations.

 

     To that effect, the J.V. shall issue ordinary shares in one or more calls

     for Parties to subscribe, such as described in article 3.2. below and the

     Parties shall undertake to subscribe such issued ordinary shares as

     described below in this article.

 

     i)    OMG undertakes to subscribe 51 per cent of any issued ordinary shares

          of the J.V.

 

     Additionally OMG undertakes to subscribe ** per cent of any ordinary

     shares of the J.V. Company issued prior to the end of 1999 (or such other

     date as agreed by the Parties) ** as further determined in article

     3.1.iii below and described in further details in the Option Agreement

     attached as Appendix 5 to this Agreement.

 

     ii)   GGF undertakes to subscribe 29 per cent of any issued ordinary shares

          of the J.V. Company.

 

     ** Confidential treatment has been requested with respect to certain

     information contained within this document. Confidential portions are

      omitted and filed separately with the Securities and Exchange Commission

     pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934.

 

<PAGE>

 

                                                                              11

 

 

 

 

 

 

  iii) GCM undertakes initially to subscribe one ordinary share of the J.V.

    Company.

 

    Additionally GCM undertakes to progressively purchase ** per cent minus

    one share of the total outstanding issued ordinary share capital of the J.V.

    Company from OMG ** from the date of the subscription till the date of

    the subscription till the date of purchase of such shares by GCM.

 

    For the payment of these purchases GCM ** in compensation for the first

    Slag sales under the Long Term Slag Sale Agreement.

 

    J.V. shall act as the paying agent for the purchase and sales of such

    shares **

 

    GCM will be paid for the supplied Slag by the J.V. only after the shares

    representing ** per cent of the total outstanding ordinary share capital

    of the J.V. Coin an have been fully purchased and paid up **.

 

3.2. The financing as described above shall take place in several separate

     installments and in such a manner as decided by the Parties or by the Board

     of Directors.

 

    The Parties shall contribute to any capital increase in proportion to their

    respective capital contribution obligations as mentioned in Article 3.1.

    above or in any other manner as agreed by the Parties.

 

    The preliminary expenses made by the Parties for the Project may be used by

    them as a capital contribution, such as specified in Article 5 below.

 

    If any Party (the defaulting party) were unable to participate in any of the

    basic capital contributions, duly decided by the Parties or the Board of

    Directors of the J.V. within the limits of the overall funding obligations

    of the Parties, the other Parties shall have the option to increase their

    respective share in the capital of the J.V in proportion to their

    shareholdings.

 

 

 

 

** Confidential treatment has been requested with respect to certain information

contained within this document. Confidential portions are omitted and filed

separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of

the Securities and Exchange Act of 1934.

 

 

 

 

<PAGE>

 

                                                                              12

 

 

 

 

3.3. The Parties agree Chat apart from the obligation to provide with the

     capital contributions mentioned in article 3.1. above, the Project is

     intended to be self-financing to the maximum extent possible.

 

     To the extent the revenues of the J.V. are insufficient to meet with all

     the obligations (including operation expenses and financial charges), the

     Parties shall then seek to obtain additional financing from an outside

     financing source to be primarily secured by the proceeds from the sales of

     the Treated Materials to KCO or by parent guarantees to be provided by the

     Parties in proportion to their respective contributions to the J.V.

 

3.4. Any additional capital increase or a parent loan, which go beyond the

     initial capital can only be requested if so decided by the General Meeting

     or the Board in accordance with the Articles of the J.V.

 

     In the event that a Party (or several Parties) is not able or willing to

     participate in any additional capital contribution, this shall not prevent

     the other Parties (or other Party) to increase their capital contributions

     and accordingly increase their capital share in the J.V.

 

     Failure by any Party to participate in a capital contribution increasing

     the capital beyond the total amount of capital as defined in art. 3.l.

     above, cannot be regarded as a default of the failing Party or Parties.

 

3.5. All the net revenues of the J.V., after payment of all operation costs and

     expenses, financial costs, taxes if any and contributions to any applicable

     reserve funds as may be required by the law, shall be paid out as

     distributions by the J.V. to the Parties in proportion to their capital

     participation.

 

 

<PAGE>

 

                                                                              13

 

 

 

 

 

 

4.       MANAGEMENT

------------------

 

 

4.1. After the signing of this Agreement at the latest, the Parties shall

     establish a temporary Management Committee composed of 6 members and their

     respective alternates.

 

     Each Party shall nominate two representatives thereto.

 

     A Project Manager shall be appointed by OMG to supervise the implementation

     and technical execution of the project until the building of the Processing

     Plant has been completed.

 

4.2. The Project shall be administrated by this temporary Management Committee

     until the J.V. has been formally established and its Board of Directors has

     been elected and nominated.

 

     OMG shall nominate three representatives and 3 alternates to the Board of

     Directors, whereas GGF shall nominate 2 representatives and 2 alternates

     and GCM shall nominate 1 representative and 1 alternate.

 

     The Chairman of the Board shall be elected among the representative members

     of OMG.

 

     Two Vice-Presidents shall be elected. The first Vice- President position

     shall be devolved to the representative of GECAMINES and the second one

     shall be devolved to one of the GGF representatives.

 

4.3. The quorum of the Board of Directors is constituted by the presence of at

     least four directors. The decisions of the Board of Directors shall require

     the affirmative vote of at least four directors.

 

4.4. The quorum of the General Meeting is constituted upon the presence of

     representatives of the Parties possessing at least 66 per cent of the

     capital of the J.V.

 

     All decisions of the General Meeting shall require the affirmative vote of

     representatives of the Parties possessing at least 66 per cent of the

     shares in the J.V. save the decisions which are taken based on the special

     procedure envisaged in art 4.5. below where the affirmative vote of 50 per

     cent of the shares shall be sufficient.

 

 

<PAGE>

 

                                                                              14

 

 

 

 

 

 

In any case the following matters In the General Meeting shall require the

affirmative vote of the representatives of the Parties possessing at least 66

per cent of the Capital of the J.V.

 

a)    the approval of the annual budget;

b)    the increase of the J.V. capital;

c)    An outside financing in excess of 5 percent of the amount of the capital;

d)    winding-up or liquidation of the J.V. Partnership;

e)    the final decision to commence the investment, construction and processing

     Operations as envisaged in Article 5.4. below;

f)    all decisions in relation to. the matters listed above shall also be

     subject to the specific majorities when they relate to the Processing

     Company and/or to the instructions to be given by the J.V. to the Board of

     Directors of the Processing Company.

g)    revision or amendment of any of the Agreements listed in Article 6.

 

 

 

 

 

 

 

 

4.5. The Parties agree that the management of the J.V. shall vest in the Board

     which may exercise all powers of and do all acts and things on behalf of

     the J.V., save such as are required by the local law to be exercised or

     done by the J.V. in the General Meeting. Nevertheless, in the event that

     the Board of Directors is unable to take a decision in a matter which is

     outside of the day to day management of the J.V. and which indecision may

     threaten to damage the development of the Project or the security of the

     manufacturing of the Slag or the deliveries of Treated Material, such

     matters shall be taken to the General Meeting, which shall have the

     exclusive right to decide upon those matters with an exceptional majority

     of 50 per cent. Before the date of such General Meeting, the Parties will

     use their best endeavors to decrease the discrepancies between their points

     of view.

 

 

4.6. The J.V. shall reimburse the Parties the travel and out of pocket expenses

     incurred by the Board of Directors or their representatives to attend the

     Board meetings.

 

 

<PAGE>

 

                                                                              15

 

 

 

 

4.7. All programs and budgets shall be established on a calendar year basis,

     unless otherwise mutually agreed.

 

4.8. STL shall be managed by a Managing Board that shall appoint and elect the

     General Director.

 

     OMG shall nominate 3 representatives to the Managing Board, whereas GGF

     shall nominate 2 representatives and GCM shall nominate l representative.

 

     The Chairman of the Board shall be elected among the GGF representatives.

 

     Two Vice-Presidents shall be designated and nominated.

 

      The first position shall be devolved to the GECAMINES representative and

     the second position shall be devolved to one of the OMG representatives.

 

 

5.       PRELIMINARY ACTIVITIES

------------------------------

 

 

5.1. Before deciding on the commercial exploitation of the Slag deposit, such

     further investigations and studies (referred to as preliminary activities)

     are necessary to determine the feasibility of the investment, the

     construction and processing activities.

 

 

 

5.2. The costs and expenses incurred by the Parties prior to the setting up of

     the J.V. and approved by the Board of Directors (and by an independent

     auditor, if necessary) shall be considered as a contribution against the

     obligation of the Parties to provide with the capital contribution of the

     J.V. pursuant to Article 3.1. of this Agreement.

 

 

5.3. The technical and administrative services needed to carry out the

     preliminary activities shall as far as possible be rendered by the Parties

     or their affiliated companies on such terms and conditions considered

     reasonable and acceptable by the Board of Directors.

 

 

5.4. Upon completion of the preliminary activities and after the analysis of the

     cobalt contents of the Slag deposit in accordance with Article 3 of the

     Frame Agreement, the Parties shall take their final decision as to whether

     they begin to invest, construct and initiate the Processing operations.

 

 

<PAGE>

 

                                                                               16

 

 

 

 

 

 

 

     That decision shall be taken no later than six months after the signing of

     this Agreement, provided OMG and/or GGF have not made use of the right to

     withdraw.

 

 

6.       RELATED AGREEMENTS

--------------------------

 

 

6.1. Slag Supply

 

 

     A Long Term Slag Sales Agreement shall be concluded between GCM on the one

     hand, and the J.V. on the other hand, whereby the J.V. shall have the

     exclusive right to purchase the Slag located on the well known site of

      LUBUMBASHI on terms and conditions as set out in the Frame Agreement and in

     further details in the Long Term Slag Sales Agreement attached as Appendix

     2 to this Agreement.

 

     To ensure uninterrupted and unhindered continuity of Slag deliveries to the

     J.V. and to the Processing Company in accordance with the terms of the

     Frame Agreement and of the Long Term Slag Sales Agreement, GCM agrees as

     detailed in the above mentioned agreements, to accept that a Cobalt Alloy

     Buffer Stock be created by the J.V. in KOKKOLA FINLAND with a six month

     supply of KCO.

 

     The J.V. shall enter in the accounts and manage the fluctuations of that

     stock.

 

 

6.2. Cobalt Alloy Sales

 

 

     OMG undertakes that KCO shall undertake to purchase from the J.V. all or

     part of the Cobalt Alloy produced in the Processing Plant in accordance

     with the terms and conditions set up in the Long Term Cobalt Alloy Sales

     Agreement attached as Appendix 3 to this Agreement.

 

 

6.3. Management of STL

 

 

     The Board of Directors of the J.V. shall determine the by-laws of STL as

     well as the possible Management Agreement determining the management rules

     of STL in more detail.

 

 

 

<PAGE>

 

                                                                               17

 

 

 

 

 

 

 

 

 

6.4. Construction of the Processing Plant

 

     GGF's affiliates, the SPRL Entreprises Generales MALTA FORREST (EGMF) for

     earth moving and civil works, and NEW BARON & LEVEQUE INTERNATIONAL S.A.

     (NBLI) for site supervision, building, commissioning as well as certain

     engineering activities related to steel structure, piping, electricity and

     instrumentation and certain procurement and follow-up activities, shall be

     designated as nominated subcontractors.

 

     These companies shall provide the J.V. with a cost plus fee bid.

 

     On the basis of that bid, the Board of Directors of the J.V. shall decide

     either to award the Contract to the EGMF and NBLI or to call for tenders to

     third parties. In the latter case the companies EGMF and NBLI shall have

     the right of first refusal.

 

     All the principles, terms and conditions for the above mentioned

     subcontracts are described separately in the Construct ion Agreement.

 

 

 

6.5. Transportation Services

 

 

     The J.V. shall appoint GEORGE FORREST INTERNATIONAL S.A. to organize:

 

     1.    the handling of the Slag and Processed Slag if required after

          completion of the feasibility study.

 

     2.    the transportation of Cobalt-bearing Alloy from the Processing Plant

          to the port of KOKKOLA in Finland, unloading excluded but the

          supervision and related transport insurance included.

 

     That company shall submit a bid to the J.V.

 

     On the basis of that bid, the Board of Directors of the J.V. shall decide

     either to appoint the company or to call for bids from third parties. In

     such case GFI S.A. shall have the right of first refusal.

 

 

<PAGE>

 

                                                                               18

 

 

 

 

 

 

 

6.6. Tolling Agreement

 

 

     The Processing Company, STL, shall enter into a Tolling Agreement with the

     J.V. whereby the J.V. shall grant STL the right to process all of the Slag

     acquired by the J.V. from GCM on terms and conditions as set out in the

     Tolling Agreement attached as Appendix 4 to this Agreement.

 

 

 

7.    LIABILITIES AND COMMITMENTS OF THE PARTIES

-----------------------------------------------

 

7.1. The Parties' liability for the J.V.'s debts and liabilities are limited to

     the capital invested in the J.V.. The J.V. shall be the owner of its assets

     and shall be the obligor in respect to its liabilities.

 

     The Parties shall not be liable for the debts or liabilities of the J.V.,

     except to the extent any such debts or liabilities shall have been

     expressly guaranteed by such Party.

 

7.2. In order to protect the environment in LUBUMBASHI and subject to the

     limitations set out above the Parties undertake to construct, operate and

     maintain their Processing Plant in the Democratic Republic of CONGO in an

     orderly way and corresponding to the rules for protecting the environment

     applicable in the European Union.

 

 

 

 

 

8.    TERM AND TERMINATION

-------------------------

 

8.1. This Agreement shall remain in full force and effect for as long as:

 

     -        the J.V. shall hold any rights,

     -        the assets of the J.V. are not disposed of,

     -        a final settlement after liquidating the J.V. has not

              been made.

 

8.2. The Parties may at any time terminate this Agreement by mutual agreement in

     writing.

 

     In the case of termination by mutual agreement, the Parties shall agree as

     to the terms of the dissolution/liquidation of the J.v.

 

 

<PAGE>

 

                                                                              19

 

 

 

 

 

8.3. The non-defaulting Parties of the J.v. shall be entitled to vote for the

     exclusion of a defaulting Party, if the exclusion is voted unanimously by

      the members representing the non-defaulting Parties after having heard the

     explanations from the defaulting Party in one of the following cases:

 

     - that Party would materially infringe one of the provisions of this

     Agreement or related agreements and would not have remedied such breach as

     required in Article 13.1 of the general provisions;

 

     - that Party would be in default of its obligation related to investment

     needs as defined in Article 3, providing the terms of Article 13.1. of the

     General Provisions have been first made use of.

 

     The non-defaulting Parties may, acting together, either choose to terminate

     this Agreement or to acquire all the shares of the defaulting Party and the

     defaulting party has the obligation to sell all its shares at a price

     defined in article 8.5. below, deducting the possible damages.

 

8.4. In addition to the terms and conditions of Article 8.3., the non-affected

     Parties shall be entitled to vote for the exclusion of any Party affected

     by the occurrence of the following cases:

 

          i) any Party becoming insolvent or having a temporary receiver

          appointed of its assets or an execution of distress or warrant of

          distress levied upon its assets, or if they have a consequence on the

          execution of this Agreement.

 

 

          ii) an order being made or a resolution being passed for winding-up or

          liquidation of any Party except that where any such event is only for

          the purposes of acquisition or amalgamation with another and the

          relevant company emerging is and agrees to be bound by the terms of

          this Agreement, providing an endorsement be made and that such an

          event shall not endanger the completion of operations to the

          satisfaction of the non-affected Parties.

 

 

          iii) the shares of the social capital of a Party have been acquired to

          an extent exceeding 26 percent of the social capital of that Party by

          a competitor of any of the other Parties.

<PAGE>

                                                                              20

 

 

 

 

 

 

 

8.5. In the event of the exclusion of any Party due to Article 8.3 or 8.4 of the

     Special Provisions or to Article 13.1 of the General Provisions, as well as

     in the event of a voluntary withdrawal, the remaining Parties shall be

     entitled (but not obligated) to purchase all the shares, (but not less than

     all the shares) of the excluded or withdrawing Party. That purchase shall

     be in proportion to the shares already held, unless otherwise agreed by the

     non-defaulting Parties. The purchase price shall be set at the book value.

     The book value shall be calculated on the capital of the J.V. including the

     equity capital, retained earnings and reserves less any and all long and

     short term liabilities.

 

     In case any of the Parties would not agree upon the book value, the Parties

     shall appoint an independent internationally accepted auditing firm to make

     such a valuation. Such a valuation shall be binding to all Parties.

 

     Should the Parties not agree upon the auditing firm, the valuation shall be

     decided in an arbitration pursuant to Article 4 of the General Provisions

      of the Agreement.

 

 

 

 

9. WITHDRAWAL OPTION

--------------------

 

It is absolutely essential for the Parties that the results from the preliminary

activities will give sufficient evidence that:

 

    i) the cobalt content of the Slag as to quantity and quality will be to the

     satisfaction of the Parties as defined in Articles 2 of the Long Term Slag

     Sales Agreement in the Appendix 2 hereto.

 

 

    ii) the commercial exploitation is viable to the satisfaction of the

     Parties, in accordance to the feasibility studies, construction and

     investment calculations related to the processing as well as the other

     activity plans to be completed in accordance with Article 5.1 above.

 

 

<PAGE>

 

                                                                               21

 

 

 

 

 

 

 

 

     The Parties shall have a period of consideration of 6 months starting on

     the date of entering into force of this Agreement. Should the conditions

     defined in sub-articles i) and ii) not be fulfilled within the said period

     to the satisfaction of any of the Parties, that Party shall have the right

     to withdraw from this Agreement without any liability to pay any

     compensation or reimbursement of costs to other Parties or any

     reimbursement of its own expenses.

 

 

 

10. BUFFER STOCK

----------------

 

     The Long Term Slag and Cobalt Alloy Sales Agreements set out that the J.V.

     shall constitute and maintain a Cobalt Alloy Buffer Stock in KOKKOLA,

     FINLAND containing the equivalent of 6 months of delivery to KCO.

 

     The J.V. shall arrange for the accounts and manage the fluctuations of the

     Buffer Stock.

 

 

 

11. ADDITIONAL GUARANTEES

-------------------------

 

     GECAMINES undertakes :

 

     (i)   to guarantee for the J.V. an unhindered access right to the Site,

          either by not alienating to a third party or assigning to the J.V. the

          ownership of the strip of land through which access to the Site is

          made and such as mutually agreed, as well as the exclusive rights to

          the Slag.

 

     (ii) to support the obtaining of guarantees from the Government of the

          Democratic Republic of Congo such as a guaranty for a favorable fiscal

          treatment, guarantees concerning the expatriation of the profits, the

          non-expatriation of the Plant and a guarantee that in the case

          GECAMINES would be privatized, all its obligations resulting from this

          Agreement, would remain in force.

 

     (iii) to support the obtaining of other authorizations, permissions, fiscal

          exemptions, export licenses, etc. on behalf of the Processing Company

          and/or the J.V.

 

 

<PAGE>

 

                                                                              22

 

 

 

 

 

 

 

 

     (iv) to give all the necessary assistance to insure a continuous supply of

          electricity and water to the Plant.

 

 

 

 

12. DEVELOPMENTS

----------------

 

 

Given the possible developments in the processing technology in the coming years

and during the validity period of this Agreement, the Parties shall examine the

possibility to improve the quality of the production with the view to increase

its value added.

 

<PAGE>

 

                                                                              23

 

 

 

 

 

 

 

 

 

 

III.     GENERAL PROVISIONS

--------------------------

 

 

 

1.       HIERARCHICAL ORDER OF THE AGREEMENTS

--------------------------------------------

 

     This Agreement is part of the Agreements concluded between the Parties.

 

     The aim of these Agreements is to set up the terms and conditions of the

     purchase of the Slag located at the Site, the setting up of the J.V. and of

     the Processing Company and selling the Cobalt-bearing Alloy to KCO for

     further processing.

 

     These Agreements are :

 

     (i)      JOINT VENTURE AGREEMENT

     (ii)     LONG TERM SLAG SALES AGREEMENT

     (iii)    LONG TERM COBALT ALLOY SALES AGREEMENT

     (iv)     TOLLING AGREEMENT

 

     Although each Agreement mentioned above can be interpreted independently

     and according to its own terms, it is to be noted that it is part of a

     larger contractual arrangement and that it has to be interpreted in light

     of the other Agreement.

 

     In the event of a conflict, the Agreements listed above shall be

     interpreted in the above order so that a prior Agreement shall always

     supersede a later one.

 

2.       AMENDMENTS

------------------

 

     Any amendments or additions to this Agreement shall be valid only if made

     in writing and signed by duly authorized representatives of the Parties

     hereto.

 

     Should an amendment or modification to this Agreement have an effect to the

     other Agreements, the Parties undertake to change or modify these other

     Agreements in order to avoid any conflicts between this Agreement and the

     other Agreements.

 

<PAGE>

 

                                                                              24

 

 

 

 

3. RESTRICTIONS ON TRANSFERS

----------------------------

 

3.1. A Party shall not have the right to sell, assign, transfer, pledge or

     otherwise dispose of the shares it holds in the J.V. unless priorily

     consented in writing by all the other Parties.

 

 

3.2. The provisions of Article 3.1. shall not be applicable in the case of a

     transfer, sale or assignment of the shares by a Party to its affiliate

     company provided that the transfer, sale or assignment is total and is

     imposed by legitimate reorganization needs of the Party concerned.

 

     For the purposes of this Agreement, an affiliate company shall mean any

     company or entity which is a subsidiary or a parent of the transferor Party

     or which directly or indirectly controls or is controlled by the transferor

     Party.

 

3.3. Any transfer described or permitted in accordance with Articles 3.1 and 3.2

     shall be subject to the transferee giving its written undertaking to be

     bound by all the terms, conditions and undertakings of this Agreement and

     the relating Agreements.

 

 

3.4. Any transfer other than in accordance with Article 3.1. and 3.2. shall not

     be possible without the prior written consent of all Parties.

 

 

 

4. ARBITRATION AND APPLICABLE LAWS

----------------------------------

 

     In the event the Parties are unable to settle a dispute in connection with

     this Agreement out of court, they agree the dispute shall be submitted to

     the French section of the tribunals of Brussels which shall give a verdict

     pursuant to the Belgian laws.

 

 

<PAGE>

 

                                                                               25

 

 

 

 

5. CONFIDENTIALITY

------------------

 

5.1. Unless otherwise provided in this Article, all reports, records, data or

     any other information of any kind whatsoever developed or acquired by any

     Party in connection with the activities of the J.V. and/or the Processing

     Company in the DEMOCRATIC REPUBLIC OF CONGO controlled by the J.V., shall

     be treated as confidential and no Party shall reveal or otherwise disclose

     such confidential information to third parties without the prior consent of

     the other Parties.

 

     The above restrictions shall not apply to the disclosure of confidential

     information to any affiliate companies or any private or public financing

     institutions, any contractors or subcontractors, employees or consultants

     of the Parties or of the J.V. or the Processing Company or to any third

     party to which a Party envisage the transfer, the sale, assignment,

     encumbrance or other disposition of all of its participation in the J.V. in

     accordance to the terms of the Article 3 above.

 

     However, this shall only be applicable provided the confidential

     information shall only be disclosed to third parties having a legitimate

     need for this information and the persons or company to whom such

     disclosure is made shall first undertake in writing to protect the

     confidential nature of such information, to the same extent as the Parties

     are obligated under this Article.

 

     In addition, the above restrictions shall not apply to any Government or

     governmental Department or Agency which has the right to require the

     disclosure of such confidential information.

 

     These restrictions shall also not apply to such confidential information

     which comes into the Public Domain, except the fault from any Party.

 

     This confidentiality obligation shall survive for a period of 5 years

     commencing at the termination/dissolution of this Agreement.

 

     The above mentioned restrictions are not valid for information retained by

     GECAMINES related to the Site.

 

 

<PAGE>

 

                                                                              26

 

 

 

 

 

 

 

 

6. FORCE MAJEURE

----------------

 

6.1. The obligations of any Party shall be suspended to the extent that the

     performance of its obligations is prevented or delayed, in whole or in part

     by :

 

     accidental act, bad weather, floods, slides, mine disasters or major

     accidents, cave-ins, strikes, lock-out, labor disputes, labor shortage,

     demonstrations, riots, sabotage, laws, rules or regulations of agency or

     governmental bodies or any other event beyond such Party's reasonable

     control.

 

     The obligations shall also be suspended in the event of governmental

     actions or inactions, restraints of governmental or other competent

     authorities, inability to obtain or unavoidable delay in obtaining

     necessary materials, facilities and equipment in the open market,

     suspension or refusal of access to the deposit Slag Site, interruption or

     unavoidable delay in communication or transportation, or any other cause,

     whether similar or not to those specifically listed, which shall be beyond

     the reasonable control of the Party.

 

6.2. In the event of such occurrences, the Party affected shall give written

     notice to the other Parties as soon as possible after the occurrence of the

     event causing the delay or prevention, setting out full particulars and

     estimating the duration of the delay or prevention.

 

     The Party affected shall use all possible diligence to remedy the situation

     causing the delay as quickly as possible.

 

     The requirement that any such delay shall be remedied with all possible

     diligence shall not require a Party to settle strikes, lock out or other

     labor conflicts contrary to its wishes and this type of difficulty shall be

     handled within the discretion of the Party concerned.

 

     In the event the situation of force majeure would remain enforce for more

     than 6 months, the Parties shall meet to analyze the situation en envisage

     the termination of this Agreement.

<PAGE>

 

7. NOTICES

----------

 

7.1. All notices required under this Agreement shall be in writing and directed

     to the respective Parties at the following addresses :

 

     If to OMG :

 

          OMG EUROPE GMBH

          Mr Kari MUURAISKANGAS

          Morsenbraicherweg 200

          D - 40470 DUSSELDORF

          GERMANY

          Tel : 00.49.211.96.18.80

          Fax : 00.49.211.61.46.29

 

     If to GGF :

 

          c/o G.F.I. S.A.

          Managing Director

          Parc Industriel

          B - 4400 IVOZ-RAMET

          BELGIUM

          Tel :    00.32.4.338.91.79

          Fax :    00.32.4.338.91.86

 

     If to GECAMINES :

 

          Mr General Director

          Boulevard du Souverain 30

          1000 BRUSSELS

          BELGIUM

          Tel : 00.32.2.676.89.98

          Fax : 00.32.2.676.80.41

          Fax Technical Direction : 00.32.2.676.80.48

 

 

Any notice shall be deemed to have been given to any Party if personally

delivered to a designated officer of the Party to whom the notice is addressed,

or if sent by registered mail, postage prepaid, with return receipt, and

properly addressed as set forth herein, or if sent by fax or telex to an

authorized representative with evidence of transmission receipt.

 

The notice shall be effective as of the moment of personal delivery, or in the

case of mailing, as of the date shown on the return receipt, or in the case of

fax or telex, as of the date faxed or telexed.

 

Any Party may, at any time, change the address to which notices or

communications shall be given by written notice to the other Parties.

 

<PAGE>

 

8. NO WAIVER

------------

 

     The failure of a Party at any time to require the performance of any

     provision of this Agreement shall not affect its right to execute that

     provision and a waiver by such Party upon a breach thereof shall not be

     interpreted as a waiver by such Party of any later non execution of such

     provision or as a waiver by such Party of any other provision of this

     Agreement.

 

 

9. SEVERABILITY AND HEADINGS

----------------------------

 

9.1. If any provision of this Agreement or its related Appendices should be null

     and void, such a nullity shall not invalidate all the other provisions in

     this Agreement or related Appendices. The Parties of this Agreement shall

     endeavor to negotiate so as to replace any null and void provision as well

     as any other affected provision.

 

9.2. The headings in this Agreement are considered for convenience only and

     shall not have any effect or limit in interpreting the provisions of this

     Agreement.

 

 

 

 

 

 

10.   SOVEREIGN IMMUNITY

-----------------------

 

     To the extent that a Party may be entitled to claim in any jurisdiction in

     which legal proceedings may at any time be commenced with respect to this

     Agreement, for itself or its activities, properties or assets any immunity

     either :

 

 

- from jurisdiction of any court or arbitration

- from attachment prior to judgment, from execution of a judgment or set-off

- from any other legal process, and to the extent where such immunity could be

  granted by that jurisdiction,

 

 

<PAGE>

 

                         LONG TERM SLAG SALES AGREEMENT

 

 

 

 

 

 

BETWEEN:

 

 

 

 

               GECAMINES

 

 

AND:

 

 

               J. V. GROUPEMENT POUR LE TRAITEMENT DU TERRIL DE

               LUBUMBASHI

 

 

<PAGE>

 

                                                                               2

 

 

 

THE PRESENT AGREEMENT IS ESTABLISHED IN ITS ENTIRETY BY ALL THE ELEMENTS

HEREINAFTER SPECIFIED AND AS REFERRED TO IN THE RESPECTIVE ARTICLES

 

 

 

 

I        DEFINITIONS

 

 

II       SPECIAL PROVISIONS

 

        1        SCOPE                                     

        2        QUALITY AND QUANTITY                      

        3        DELIVERY AND TITLE                        

        4        PRICING                                   

        5        QUOTATIONAL PERIOD                        

        6        BUFFER STOCK                              

        7        PAYMENT                                   

        8        INVOICING CURRENCY AND PAYMENT PROCEDURES

        9        WEIGHING, SAMPLING AND ANALYZING          

        10       TERM AND TERMINATION OF THE AGREEMENT     

        11       TAXES AND OTHER CHARGES AND FEES          

        12       HARDSHIP                                  

        13       LIABILITIES                               

        14       COVENANTS                                 

                                                          

                                                         

                                                         

III      GENERAL DISPOSALS

                                                          

                                                         

        1        HIERARCHICAL ORDER OF THE AGREEMENTS      

        2        AMENDMENTS                                

        3        RESTRICTIONS ON TRANSFERS                 

        4         ARBITRATION AND APPLICABLE LAWS           

        5        CONFIDENTIALITY                           

        6        FORCE MAJEURE                             

        7        NOTICES                                   

        8        NO WAIVER                                  

        9        SEVERABILITY AND HEADINGS                 

        10       SOVEREIGN IMMUNITY                        

        11       APPENDICES                                

        12       FURTHER ENGAGEMENTS                        

        13       GENERAL CLAUSES                           

        14       ENTERING INTO FORCE                       

       

 

<PAGE>

 

                                                                               3

 

 

 

 

 

 

The Present Agreement is concluded between:

 

 

 

LA GENERALE DES CARRIERES ET DES MINES, a public company organized and existing

under the laws of the Democratic Republic of Congo, having its registered office

at Boulevard Kamanyola, B.P. 450, Lubumbashi (Democratic Republic of Congo)

(hereinafter referred to as the SUPPLIER or GECAMINES, or GCM)

 

on the one hand;

 

 

AND

 

 

J. V. GROUPEMENT POUR LE TRAITEMENT DU TERRIL DE LUBUMBASHI,

having its registered office at JERSEY, (hereinafter referred

to as the PURCHASER or GTL)

 

on the other hand;

 

 

WHEREAS the SUPPLIER is the owner of Slag produced in its water-jacket ovens in

Lubumbashi, the Democratic Republic of Congo, and containing among others

cobalt;

 

 

WHEREAS the PURCHASER intends to form a subsidiary company (hereinafter referred

to as the Processing Company) in the Democratic Republic of Congo to establish a

Plant in Lubumbashi for the main purpose of processing all or part of the Slag

existing in the Site. The enriched product obtained after processing is

hereafter referred to as Cobalt Alloy;

 

 

WHEREAS the SUPPLIER, in its position as the owner of the Slag on the Site, is

willing to sell the Slag on a long term basis as and when this Agreement shall

become effective and according to the terms and conditions set out hereafter;

 

 

WHEREAS the Parties estimated in May 1995 that the total quantity of Slag

located in the Site was approximately 13 million tons, out of which at least

some 4 million dry tons were estimated to correspond to the specifications of

the Frame Agreement signed on the 14th of February 1996 and therefore suitable

for processing;

 

 

 

NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS:

 

<PAGE>

 

                                                                               4

 

 

 

 

I.       DEFINITIONS

 

 

The terms defined hereinafter shall for all purposes of this Agreement and

related Contracts have the meanings hereinafter specified, unless otherwise

specified :

 

 

 

AGREEMENT means this document signed by the Parties and its appendices forming

an integral part of the present Agreement as well as its possible amendments.

 

BUYER means OMG KOKKOLA CHEMICALS Oy (KCO), a subsidiary of the OMG Group,

buying Cobalt Alloy in the Long Term Cobalt Alloy Sales Agreement.

 

PURCHASER means the J.V. purchasing Slag in the Long Term Slag

Sales Agreement.

 

COBALT BEARING ALLOY or TREATED MATERIAL means the main end product of the

Processing Company (sometimes also called "Cobalt Alloy") containing cobalt and

copper.

 

YEAR means calendar year beginning on 1st of January and ending on 31st of

December.

 

UMPIRE means a person appointed by mutual agreement of the J.V. and the Buyer or

GECAMINES in accordance with the Long Term Slag Sales Agreement or Long Term

Cobalt Alloy Sales Agreement.

 

CIF means "cost, insurance and freight" as defined in INCOTERMS, 1990 edition.

 

TOLLING AGREEMENT means the Agreement concluded between the J.V. and the

Processing Company for the purpose of processing Slag into Cobalt bearing Alloy.

 

LONG TERM COBALT ALLOY SALES AGREEMENT means the Agreement whereby the J.V.

undertakes to sell Cobalt Alloy to the Buyer and, the latter undertakes to buy

Cobalt Alloy from the J.V.

 

LONG TERM SLAG SALES AGREEMENT means the Agreement whereby GECAMINES undertakes

to sell Slag to the J.V. and the latter undertakes to buy Slag from GECAMINES.

 

 

<PAGE>

 

                                                                              5

 

 

 

 

 

 

 

DATE OF DELIVERY means the date on which the J.V. takes and becomes the owner of

the Site Slag according to the terms of the ex-site delivery clause.

 

DDU means "delivery duty unpaid" as defined in INCOTERMS, 1990 edition

 

EXW means "ex works delivery" clause as defined in INCOTERMS, 1990 edition.

 

SUPPLIER means the GENERALE DES CARRIERES ET DES MINES supplying Slag in the

Long Term Slag Sales Agreement.

 

J.V. means a private limited liability company having its registered

office in JERSEY .

 

BUSINESS DAY means a day which is not a Saturday, a Sunday or a public holiday

in Finland, The Netherlands or the Democratic Republic of Congo.

 

KCO means OMG KOKKOLA CHEMICALS Oy, a subsidiary of the OMG Group located in

KOKKOLA, REPUBLIC OF FINLAND and established under the laws of the REPUBLIC OF

FINLAND.

 

LMB means the LONDON METAL BULLETIN.

 

LME means the LONDON METAL EXCHANGE.

 

SUPPLY LOT means a part of each delivered supply of Cobalt Alloy containing

approximately 100 tons of Cobalt Alloy as divided by the BUYER in KOKKOLA for

weighing, sampling, analysis and moisture content determination.

 

EXPEDITION LOT means the tonnage of one container of Cobalt Alloy dispatch from

the Processing Plant.

 

USED LOTS means the Lot or Lots of Cobalt Alloy taken into usage by the BUYER

for a period of one month.

 

MONTH means calendar month.

 

PARTIES means the Parties to this Agreement.

 

 

<PAGE>

 

                                                                                6

 

 

 

 

 

QUOTATIONAL PERIOD means the Period defined in Article 5 of the Long Term Slag

Sales Agreement or in Article 6.2 in the Long Term Cobalt Alloy Sales Agreement.

 

WEIGHTS AND MEASURES

1 (metric) ton   =        2,204.6 pounds avoirdupois

1 dmt or ts      =        1 dry metric ton

1 wmt or th      =        1 wet metric ton

 

TAKEN INTO USAGE means the taking of the Cobalt Alloy either directly from the

ordinary commercial raw material Stock or alternatively from the Buffer Stock as

a complement of the KOKKOLA Processing Plant.

 

PROJECT means the conception and building of a Processing Plant in LUBUMBASHI

for the purpose of exploiting the Slag Site of LUBUMBASHI as well as the proper

operation of the Processing Plant, the trading operations including related

operations and the distribution of the profits.

 

PROCESSED SLAG means the Slag resulting from the operations in the Processing

Plant

 

SLAG means cobalt bearing slag located in the Site in THE DEMOCRATIC REPUBLIC OF

CONGO and to be used as feeding stock in the Processing plant.

 

SITE or SLAG SITE means the area in the Democratic Republic of Congo where the

Slag is located and available to be delivered to the J.V. pursuant to this

Agreement (called Terril de LUBUMBASHI, originating from the residues of the

WATER JACKET ovens of GECAMINES and namely including the zones I, J, K1, K2 and

TAS G-L having an average cobalt content of 1,85% as described in further detail

in appendix 1 of the Frame Agreement attached as Appendix 1 to this Agreement).

 

PROCESSED SLAG SITE means the area in the Democratic Republic of Congo where the

processed slag will be stocked.

 

PROCESSING COMPANY means the Company to be set up by the J.V. in the Democratic

Republic of Congo in the form of a SPRL for the purposes of operating the

Processing Plant.

 

COMMERCIAL STOCK means the ordinary stock of Cobalt Alloy enabling the regular

supply of OMG-KCO plant taking into account the periodicity of maritime

arrivals.

 

<PAGE>

 

                                                                                7

 

 

 

 

 

 

 

 

BUFFER STOCK means the Cobalt Alloy Stock to be established at OMG in KOKKOLA,

FINLAND in accordance with article 10 of the J.V. Agreement and to be kept

separate from the Ordinary Commercial Cobalt Alloy Stock of OMG KOKKOLA

Chemicals Oy.

 

USD means the lawful currency of the UNITED STATES OF AMERICA.

 

PROCESSING PLANT means the Plant to be located in LUBUMBASHI in the DEMOCRATIC

REPUBLIC OF CONGO. The Plant shall be operated by the Processing Company for the

purpose of processing Slag into Cobalt bearing Alloy.

 

SELLER means the J.V. selling Cobalt Alloy in the Long Term Cobalt Alloy Sales

Agreement.

 

<PAGE>

 

                                                                               8

 

 

 

 

 

 

 

                             II. SPECIAL PROVISIONS

                             ----------------------

 

1.       SCOPE

        -----

 

The Parties agree that, according to this Agreement, the Slag located in the

Site corresponding to the specifications set out in article 2 hereafter shall be

reserved and intended to the usage of the PURCHASER and of the Processing

Company, in accordance with the terms and conditions set out in this Agreement .

 

Hence, subject to the terms and conditions of this Agreement:

 

 

(i) the SUPPLIER undertakes to sell the Slag available in the Site and

corresponding to the quantities and specifications set out in Article 2

hereafter to the PURCHASER.

 

(ii) the PURCHASER undertakes to buy the Slag available in the Site and

corresponding to the quantities and specifications set out in Article 2

hereafter from the SUPPLIER.

 

The SUPPLIER agrees not to sell the Slag available in the Site and corresponding

to the quantities and specifications set out in Article 2 below, to any other

buyer than the PURCHASER during the validity period of this Agreement and except

with prior written consent of the PURCHASER.

 

In support of the right to take the Slag in the Site, the SUPPLIER hereby

irrevocably and unconditionally guarantees to the PURCHASER and the Processing

Company a free and unhindered access to the Site during the validity period of

this Agreement.

 

In order to safeguard the effectiveness of this access, the SUPPLIER agrees

either not to alienate to a third party or to transfer to the J.V. the use of

the strip of land through which access to the Site is made and such as mutually

agreed.

 

<PAGE>

 

                                                                               9

 

 

 

 

 

 

 

 

2.       QUALITY AND QUANTITY

        ---------------------

 

2.1. The Slag shall be delivered EXW the Site.

 

 

2.2. Information on the quality and quantity of the Slag is based at this stage

on information given by the SUPPLIER. This Agreement covers the tonnages of the

Slag in stock zones I, J, K1, K2 and TAS-GL (a map of the stock zones is

attached as Appendix 1 forming an integral part of this Agreement) :

 

 

This represents at least 4 million dry tons of Slag having the following average

analysis (and is attached as Appendix 2 and forming an integral part of this

Agreement) :

 

          -Co: 1.85%

          -Cu: 1.39%

          -Zn: 7.49%

 

The quantity of Slag mentioned in Appendix 2 should be sufficient for the

production of Cobalt Alloy containing 5,000 tons of Cobalt per year for a period

of 15 years.

 

 

2.3. Should the total tonnage of Slag corresponding to the minimal

specifications be higher than the total quantities indicated above, the

PURCHASER shall have the right of first refusal to buy the excess of the Slag at

terms and conditions to be set out.

 

In case GECAMINES wants to utilize other part of the stock than what is defined

in Article 2.2, the PURCHASER shall have the right of pre-emption to use it

within 3 months after the written notice addressed by


SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Close this window