CREOSOTE OIL SUPPLY CONTRACT
BETWEEN
KMG BERNUTH, INC.
00000 XXXXXX XXXXX 000
XXXXXXX, XXXXX 00000
X.X.X.
(HEREINAFTER CALLED "BUYER")
AND
RUTGERS VFT N.V.
XXXXXXXXX 00
0000 XXXXXXX
XXXXXXX
(HEREINAFTER CALLED "SELLER") Note: The marks [*****] indicate that
material has been omitted under a request for
confidential treatment and filed separately
with the SEC.
WITNESSETH
Whereas the Buyer has been acting for a number of years as Agent of the
Seller's group for the sale of Creosote Oil, such as is commonly used for
timber preservation, to customers situated within the South East of the
United States.
Whereas the Seller wishes to continue selling its Creosote in the United
States and whereas the Buyer wishes to continue selling the Seller's creosote
to its customers.
Now therefore both parties desire to establish a business relationship
whereby the Buyer will be acting no longer as an Agent but in its own name
and for its own account.
1. PURCHASE AND SALE
Seller shall sell to Buyer and Buyer shall purchase from Seller minimum
[*****] metric Tons of Creosote Oil per calendar year, in 1998 a minimum of
[*****].
2
It is understood that if the Buyer wants to buy a higher quantity, the
Seller will do its reasonable commercial endeavors to set the quantity
asked for available. For the purposes of this clause "Metric Ton" shall
mean 1.000 kilogram.
2. DURATION
This contract is entered into for a 3 years and 2 months period, as from
01/11/98 terminating on 31/12/2001. Thereafter this agreement shall
continue on an annual basis with two calendar years advance notice of
termination to be given by either party in writing by registered mail.
3. PRICE
The price for the period 01/11/98 to 31/12/98 will be [*****] FOB
Zelzate/Belgium (Incoterms 1990). As from the 01/01/99 to the 31/12/99 the
price will be [*****] FOB Zelzate. Thereafter the price will increase with
at least [*****] per each calendar year (prices to be negotiated).
4. PAYMENT
Each delivery shall be considered as a separate transaction. All invoices
shall be made at the price determined in accordance with clause 3 hereof
and shall be due and payable within 90 calendar days from Xxxx of Lading
date. Buyer shall pay by bank transfer free of charges to Seller's
nominated bank.
5. QUANTITIES AND DELIVERIES
5.1 Three months prior to the end of each calendar year, the Buyer shall
advise the Seller in writing of the quantity and of a tentative
shipping plan for the next following year. Within 15 business days
from the receipt of such advice the Seller shall advise the Buyer the
quantity which he is willing to deliver and will have available for
shipment in bulk during the ensuing year. The quantity is estimated
to be between [*****] T. and [*****] T. in any one year subject to
clause 1 and clauses 9 and 10 of this agreement.
5.2 The loading quantity and Xxxx of Lading quantity of Oil shipped under
this Agreement ascertained by a competent qualified independent
surveyor appointed by the Seller is binding on the parties. The cost
of the independent surveyor for the loadport shall be to seller's
account.
3
6. QUALITY AND QUALITY CONTROL
6.1 The Creosote Oil shall meet the specification as attached in Annex A
and will be loaded with a minimum temperature of 55 DEG. C.
6.2 The quality of the oil delivered shall be determined by means of a
representative composite sample drawn from the shore tanks before
loading by a competent qualified surveyor appointed by the Seller.
The sample will be divided in three portions:
1 to be analysed by a qualified competent chemist at loadport
1 for retain of Seller for a period of 6 months
1 to be given with the ship for handing over to the Buyer.
Quality control costs at loadport for account of the Seller. The
Seller will provide the Buyer with the quality analysis results.
7. LIABILITY OF SELLER
Seller warrants that the creosote will meets the specification. If by
Seller's mistake delivered material is found to be defective or otherwise
fails to conform to the specification Buyer shall nevertheless use every
reasonable effort to utilise the creosote. Liability of Seller shall never
exceed the free delivered value of the relevant shipment of creosote.
Further claims of Buyer against the Seller for whatever reason, especially
because of consequential damages, are expressly excluded.
8. EXCLUSIVITY
The Seller ensures and warrants that during the lifetime of the contract he
shall not sell AWPA specification P1/P13 and P2 grade creosote oil to wood
treaters in the United States and/or P1/P13 and P2 grade creosote oil
consumed in the United States as a wood preservative other than through
Buyer.
9. CREOSOTE COUNCIL II
The Seller continues its membership to Creosote Council II. Buyer will
continue as Seller's designated representative to Creosote Council II
unless Seller stipulates otherwise.
4
10. HARDSHIP
If during the period for which this agreement is in force, the application
of the agreement would seriously prejudice one of the parties, the parties
shall meet and make every effort to come to an amicable agreement so as to
lessen or remove such prejudice.
11. FORCE MAJEURE
In the event the performance of this Agreement by either party is affected
by strike, fire, riot, war (declared or undeclared), Act of God, Government
regulations, or Government request or requisitions for national defense or
other purpose, or breakdown of, or injury to facilities used for
production, or storage of Oil, or any other cause beyond the reasonable
control of the parties hereto, the suffering party may, at its option,
suspend the performance of this Agreement in whole or in part during the
period of such event to the extent reasonably required by such event, and
no liability for damages shall attach against either party on account
thereof.
12. ENTIRETY OF AGREEMENT
This agreement constitutes the entire agreement between the parties hereto,
and there are no understandings, representations or warranties of any kind
except those expressly set forth herein. Neither this Agreement nor any of
the rights, obligations, or liabilities of either of the parties hereunder
may be amended, changed or added to in any respect except by written
instrument executed by duly authorised representatives of each of the
parties.
13. TRANSFERS
Neither party shall without the previous consent in writing of the other
assign or dispose of the benefits of this agreement or any part thereof,
but without committing a breach of this clause, the sellers may transfer
the benefits and burdens of this agreement to any other association or
company to which they may transfer their business or that part of it that
relates to the shipment of Oil in bulk.
The present agreement may be transferred to any associate company in which
the transferring party or its parent company directly or indirectly holds
at least 50% of the capital.
5
14. ARBITRATION
The parties hereto shall do their best to settle all disputes and
controversies arising out of or in connection with this Agreement in an
amicable way. Any controversy or claim arising from or relating to this
Agreement or any Amendment to this Agreement, in particular concerning its
existence, validity or default, which can mutually not be friendly resolved
shall be finally decided by a court of arbitration of the Zurich Chamber of
Commerce pursuant to its rules of Arbitration and the following terms.
The Court of Arbitration shall have its seat in Zurich, Switzerland.
The number of arbitrators shall be three. Each of the parties shall
nominate one arbitrator. The arbitrators thus appointed shall appoint a
third member, who is to be their chairman. The chairman shall be a lawyer,
familiar with international business transactions and with the English
language. If within 30 days one party shall not have complied with a
summons by the other party to appoint its arbitrator or, if within 30 days
the two arbitrators properly selected shall not reach agreement concerning
the chairman, each of the parties may apply to the Court of Appeals of the
Canton of Zurich to make such appointment.
The language to be used in the arbitrary proceedings shall be English.
The Court of Arbitration shall decide in accordance with the material laws
as valid and applicable in the Canton of Switzerland.
RUTGERS VFT N.V. KMG BERNUTH INC.
/s/ /s/
By Xx. Xxxxxxxxx Xxxxxx X. Xxxxxxxx
Vice President, General Manager
/s/
By Mr. Xxxxxx Xxxxx 00 Xxxxxxxx, 0000
Date 1st November 1998
ANNEX A
N.V. RUTGERS VFT
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CREOSOTE E23
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SPECIFICATIONS BLC 1 (USA) East Coast
-------------- VFT (April 1991) AWPA P1-89
WARM IMPREGNATION
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TESTS UNIT VALUES METHOD
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1. Water vol% max. 1,5 WEI APP 4
2. Density 38/15,5 DEG. C g/ml min. 1,070 WEI APP 3
3. Insolubles in Toluene % max. 0,5 BSS 144
4. Distillation (AWPA based on waterfree AWPA
product in quantity):
0 - 210 DEG. C % max. 2,0
0 - 235 DEG. C % max. 12,0
0 - 270 DEG. C % 00 - 00
0 - 000 XXX. C % 00 - 00
0 - 000 XXX. C % 00 - 00
Xxxxxx xx 000 XXX. C % 23 - 35
5. Density 38/15,5 DEG. C BSS 144
Fraction 235/315 DEG. C g/ml min. 1,028
Fraction 315/355 DEG. C g/ml min. 1,100
6. Naphthalin content (GC) % max. 10,0 GC
7. Cristalisation point DEG. C max. 28 WEI APP 5
DEG. F max. 85
Remark:
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Expedition during the winter DEG. C max. 24
(between 01/10 and 01/03)
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