Supply Agreement Sample Contract
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Supply Agreement Sample Contract
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CONFIDENTIAL TREATMENT REQUESTED UNDER
C.F.R. SECTIONS 200.80(b)(4), 200.83 AND 230.406.
**** INDICATES OMITTED MATERIAL THAT IS THE
SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST
FILED SEPARATELY WITH THE COMMISSION.
THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
(Sodium Carbonate, Anhydrous)
High Purity Dense Grade for Domestic Locations
Standard Grade Dense Soda Ash for Export Locations
THIS SUPPLY CONTRACT, dated as of February 29, 1996, between OCI Chemical Corporation, a Delaware corporation (herein, together with its successors and assigns, “ Seller ”), and Rhone-Poulenc Inc., a New York corporation (herein, together with its successors and permitted assigns, “ Buyer ”):
Buyer agrees to purchase from Seller and Seller agrees to sell to Buyer, on the following terms and conditions:
1. Contract Period. This Contract covers the period from the date hereof to December 31, 2005, and shall continue thereafter for successive terms of one calendar year each, unless terminated by Buyer or Seller on not less than 12 months prior written notice to the other party or unless sooner terminated as provided herein.
2. Material. This Contract covers the following material:
(a) For Deliveries to Domestic Locations: High Purity Dense Grade Soda Ash (Sodium Carbonate, Anhydrous), as per the attached specifications which are hereby incorporated into and made part of this Contract.
(b) For Deliveries to Export Locations: Standard Grade Dense Soda Ash (Sodium Carbonate, Anhydrous), as per the attached specifications which are hereby incorporated into and made part of this Contract.
If higher purity or grade of material is produced by Seller; Seller will give Buyer access thereto on a competitive basis with Seller’s offers to other buyers.
3. Quantity. ****
A portion of the foregoing quantity shown for **** has previously been supplied during **** prior to the consummation on the date hereof of the transactions contemplated by the Stock Purchase Agreement, dated as of November 29, 1995 (the “ Stock Purchase Agreement ”), between Seller, Buyer and others.
At least thirty (30) days prior to January 1 of each year, commencing with 1997. Buyer shall provide written notice to Seller of **** shall be incorporated herein; provided that to the extent **** during the then current calendar year, **** shall be incorporated only with Seller’s consent.
**** are to be estimated one hundred twenty (120) days prior to the end of the calendar year for the upcoming year by Buyer. Seller is to agree to such volume by ninety (90) days prior to the end of the year.
4. Price. The pricing for domestic deliveries in any year shall be ****
Domestic deliveries hereunder shall be made to destinations at the aforesaid price freight pre pay and add. Seller shall prepay freight and shall invoice Purchaser for such freight charges at its most favorable rates. For (****) this reference price for ****. For **** pricing shall be
negotiated between Buyer and Seller by no later than 90 days prior to the end of each calendar year for the next calendar year. ****.
Seller shall provide notice to Buyer of any domestic price changes made in accordance with the above provisions, including, in reasonable detail, the calculations supporting any such price change. Buyer shall be afforded reasonable access to Seller’s records on reasonable advance notice and during Seller’s normal business hours for the purpose of verifying the calculation by Seller of any price change applicable hereunder. At Buyer’s request, its independent public accountants may audit the calculations used by Seller to verify the calculations and components used to determine price. If discrepancies are noted, Buyer and Seller shall agree to adjust prices accordingly. Any such audits will be conducted at mutually agreed upon times, but no more frequently than once each year. All costs of such audits shall be for the account of Buyer.
5. Packages. For domestic deliveries, Seller’s standard Hopper Cars and Hopper Trucks; Pressure Differential Hopper Cars may be supplied by Seller. For export deliveries, bulk ocean going vessel. Additionally Buyer may require other containers or packages and will reimburse Seller’s costs for same.
6. Terms. Buyer acknowledges that it shall make payments on a monthly basis, without any right of offset, as follows: ****. Seller shall invoice all domestic shipments in a single invoice monthly. Buyer is to provide letter of credit support reasonably acceptable to Seller for all export shipments.
7. Deliveries. Unless otherwise specified herein, deliveries shall be made in approximately equal monthly quantities, except that Seller reserves the right to limit monthly deliveries to the pro rated estimated or minimum quantity provided for in this Contract.
8. Weights. In case of bulk carload or hoppertruck shipments, Shipper’s weight certified to by sworn Weighmaster, shall govern within 1/29, unless proven wrong by Buyer.
9. Meet or Release (Competitive Offer). If after 36 months following the effective date of this Agreement Buyer receives a written offer from a reputable United States producer not controlled by or controlling Buyer, to supply, in place of Seller, all or a portion (which portion shall be no less than 12 month’s supply) of the goods remaining to be supplied hereunder which are of like quality, for a like use and deliverable in like quantities, at an F.O.B. Green River price less than the then effective F.O.B. Green River reference price hereunder, and Buyer determines in its sole discretion that it is willing to accept such offer, then upon Buyer’s written notice stating all the terms and conditions, including the quantity the Buyer intends to purchase of the competitive offer, Seller may by written notice within thirty (30) days of receipt of Buyer’s notice: (a) meet the competitive offer for the quantity that Buyer intends to purchase from the competitive source and amend this Contract accordingly; or (b) choose not to meet the competitive offer but instead deduct from the
quantity provided in this Contract the quantity that Buyer intends to purchase from the competitive source, and amend this Contract accordingly. If Seller has not exercised its options above within said thirty (30) days, then Buyer may either (i) elect option (b) on behalf of Seller by written notice to Seller within thirty (30) days after the expiration of such period for Seller’s election, or (ii) cancel this Contract upon six (6) months’ prior written notice.
10. Buyer’s Additional Cancellation Option. If during the term of this Contract, Seller determines that it intends to engage, directly or indirectly, in the production and sale in the United States of sodium bicarbonate, then Seller shall give Buyer written notice, at least two years (to the extent reasonably practicable) in advance of the date production of sodium bicarbonate by or for Seller is to commence. If such notice is given or Seller otherwise engages, directly or indirectly, in the production and sale in the United States of sodium bicarbonate without having given such notice, then Buyer shall have the option of canceling this Contract on not less than ninety (90) days’ prior written notice to Seller.
11. Title and Risk of Loss. Title and Risk of Loss with respect to the material sold hereunder shall transfer to Buyer at the Wyoming Partnership Plant, Green River, Wyoming.
12. Warranties. Seller warrants that the material delivered hereunder shall meet Seller’s standard quality or such other specifications as have been expressly attached hereto and made part of this Contract. SELLER MAKES NO OTHER EXPRESS WARRANTIES; THERE ARE NO IMPLIED WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION OF THE FACE OF ANY SHIPMENT AND THERE IS NO IMPLIED WARRANTY OF MERCHANTABILITY; AND BUYER ASSUMES ALL RISK AND LIABILITY FOR ALL LOSS, DAMAGE OR INJURY TO PERSON OR PROPERTY RESULTING FROM THE USE OF SAID MATERIAL IN MANUFACTURING PROCESSES OR IN COMBINATION WITH OTHER SUBSTANCES, OR OTHERWISE.
13. Limitation of Liability. No claim of any kind, whether as to materials delivered or for nondelivery of materials, and whether arising in tort or contract, shall be greater in amount than the purchase price of the materials in respect of which such damages are claimed. Notwithstanding the foregoing, the failure to give notice of claim within ninety (90) days from the day of delivery, or the date fixed for delivery, as the case may be, shall constitute a waiver by Buyer of all claims in respect of such materials. In no event shall Seller be liable for special, indirect or consequential damages.
14. Returnable Containers. All returnable containers used in making deliveries hereunder are Seller’s property and shall be used by Buyer only for proper storage of Seller’s material originally delivered hereunder. Buyer shall return such containers to Seller’s shipping point, in substantially the same condition received (normal wear and tear excepted), within two months from the date of original shipment.
15. Taxes. Buyer shall reimburse Seller for all taxes, excise or other charges that Seller may be required to pay to any government (national, state, provincial or local) upon,
or measured by, the sale, production, transportation or use of any material sold hereunder. Seller may at its option add to the price of the materials sold hereunder the amount of any increase in transportation charges for shipments to Buyer.
16. Force Majeure. Neither party shall be liable for its failure to perform hereunder if said performance is made impracticable due to any circumstances beyond the reasonable control of the party affected, including, but not limited to, acts of God, fires, floods, wars, sabotage, accidents, labor disputes or shortages, plant shutdown, equipment failure, voluntary or involuntary compliance with any law, order, rule or regulation of government agency or authority, or inability to obtain material (including power and fuel), equipment or transportation. The affected party may omit purchases or deliveries during the period of continuance of such circumstances and the contract quantity shall be reduced by the quantities omitted. During any period when Seller shall be unable to supply the total demands for any material provided for in this Contract, whether caused by the circumstances specified above or otherwise. Seller