CONFIDENTIAL TREATMENT REQUESTED FOR ALL ([ ]) BRACKETED INFORMATION. THE
CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
Agreement made the 28th day of January one thousand nine hundred and eighty
between BOC LIMITED whose registered office is situated at Harmmersmith House,
London W6 and hereinafter called "Carbide Industries" of the one part and
GUNNESS WHARF LIMITED whose registered office is situated at Gunness Wharf, Nr
Scunthorpe, Humberside of the other part
WHEREAS:
(1) Under a Licensing Agreement dated 2 July 1973 Carbide
Industries have been granted by Gunness Wharf Limited the
use of certain lands at Althorpe Wharf, Althorpe, Humberside
to erect and operate a facility for the production and
distribution of Carbide Mixtures
(2) Carbide Industries now wish to expand the facility at
Althorpe Wharf aforesaid and under a Licensing Agreement
dated 28th January 1980 Carbide Industries have been granted
by Gunness Wharf Limited the use of certain lands at
Althorpe Wharf aforesaid for the erection and operation of
the extended facility for the production and distribution of
Carbide Mixtures
(3) Under an Agreement dated 2 July 1973 Gunness Wharf Limited
were appointed Managing Agents of the facility.
(4) Carbide Industries are desirous of appointing Managing
Agents to manage the said extended facility and have
requested Gunness Wharf Limited to accept such appointment
(5) Gunness Wharf Limited has agreed to accept such appointment
and is hereinafter in the Agreement referred to as the
"Managing Agents"
NOW THIS AGREEMENT WITNESSETH as follows
1. DEFINITIONS
In this Agreement except where the context otherwise requires the
following expressions shall mean:
Facilities
The mixing and grinding plant together with all ancillary plant
equipment and services which is situated at Althorpe Wharf on the
Effective Date including the containers used in connection therewith
for the distribution of CILTREAT
Extended Facilities
The Facilities as defined above as modified developed expanded and
changed so as to enable Carbide Industries to supply increased
quantities of CILTREAT together with a warehouse built at Althorpe
Wharf and a laboratory and any other equipment which the Parties have
agreed shall be installed.
Plant
The Facilities and all or part of the Extended Facilities as the case
may be.
CILTREAT
The Carbide Mixtures as specified in Appendix I hereto or as may be
specified by Carbide Industries from time to time during the period
of this Agreement.
Althorpe Wharf
The lands licensed to Carbide Industries by the Managing Agents
situated at Althorpe, Humberside.
Gunness Wharf
The site where the calcium carbide and diamidkalk are discharged from
vessel.
Raw Materials
The calcium carbide diamidkalk and nitrogen and any other materials
agreed from time to time and required for the production of CILTREAT
BSC Works
The works of the British Steel Corporation situated at Scunthorpe,
Humberside and/or Lackenby, Teesside and/or Ravenscraig, Lanarkshire
or such other locations as are specified by Carbide Industries
Carbide Industries Representative
An employee or employees of Carbide Industries based at the Plant.
Effective Date
1 November 1979
Completion Date
The date when Carbide Industries shall certify to the Managing Agents
and the Managing Agents shall agree (such agreement not to be
unreasonably withheld) that the extended Facilities are complete and
capable of supplying [ ] of CILTREAT.
Store
8,400 sq. ft. of warehouse accommodation suitable for the storage of
calcium carbide and diamidkalk which is owned by the Managing Agents
and is situated at Althorpe Wharf and hired to Carbide Industries.
2
Operating Instructions
Written instructions on operation of the Plant issued by the Carbide
Industries Representative or other nominated Carbide Industries
employee
Maintenance Procedures
Written procedures for Plant Maintenance issued by the Carbide
Industries Representative or other nominated Carbide Industries
employee
ton
A metric ton of 1,000 kilogrammes
week
A period of seven days commencing 00.01 hours Sunday
month
A calendar month
Programme Period
6 months commencing on any 1 October or 1 April
year
12 months commencing on any 1 October
2. STATUS OF MANAGING AGENTS
Except as otherwise expressly provided for in this Agreement the
relationship between Carbide Industries and the Managing Agents shall
be that of principal and agent. The Managing Agents accept the duty
of managing and operating the Plant and agree to afford to Carbide
Industries the full benefit of their ability, knowledge and
organisation.
3. DUTIES
Within the overall concept of their general managership of the Plant,
the Managing Agents shall inter alia be responsible for:
(i) The receipt and storage at the Plant and/or the Store of the
Raw Materials required for the production of CILTREAT. The
ordering and calling forward of Raw Materials shall normally
be carried out by the Carbide Industries Representative, but
when so requested by Carbide Industries the Managing Agents
shall order and call forward from the suppliers nominated by
Carbide Industries Raw Materials required for the production
of CILTREAT. No responsibility shall attach to the Managing
Agents as a result of any failure to obtain the Raw Materials
on time when properly requisitioned by them.
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(ii) The receipt of the calcium carbide and diamidkalk at Gunness
Wharf or at such other site as may be arranged by the Managing
Agents with the prior authorisation of Carbide Industries, the
clearing of correctly prepared ships documents, the discharge
of the said materials from ship to the Plant or to Store as
directed by Carbide Industries and the transfer of the said
materials from Store to the Plant or within the Plant. The
most recently published Standard Trading Conditions currently
the 1978 Edition as set out in Appendix III of the Institute
of Freight Forwarders Limited, and the General Conditions of
Contract of the National Association of Warehouse Keepers, as
amended and set out in Appendix III thereto shall apply as
appropriate except insofar as in conflict with this Agreement
in which case the terms of this Agreement shall prevail.
(iii) The storage of the Raw Materials in the warehouse located at
the Plant and in the Store.
(iv) From the Effective Date until the Completion Date the
production of such quantities of CILTREAT as Carbide
Industries may require and as are agreed by the Parties to be
capable of achievement by the Plant having regard to the fact
that on occasions during this period, Carbide Industries will
require to interfere with normal production in the Facilities.
The Parties will use their best endeavours to maintain a
CILTREAT supply capability averaging at least [ ]
during this period. Carbide Industries shall advise the
Managing Agents in advance of the occasions and likely
duration of dislocation to normal production and the Managing
Agents shall use their best endeavours to meet the
requirements of the BSC Works
(v) With effect from the Completion Date the production of such
quantities of CILTREAT as Carbide Industries may require up
to a maximum rate of [
] week or up to such greater production rate as
may be shown and agreed by the Managing Agents to
be capable of achievement from time to time under
normal operating conditions by the carrying out of
the grinding and mixing process in the Plant in
accordance with the Operating Instructions
(vi) The transfer of such quantities of CILTREAT so produced
into containers provided at the cost of Carbide Industries
for delivery to the BSC Works (and elsewhere as agreed from
time to time) as are required in accordance with the
contractual arrangements between Carbide Industries and the
British Steel Corporation provided that such Contractual
arrangements be in accord with the terms and provisions of
the arrangement between Carbide Industries and the Managing
Agents
(vii) The weighing of and despatch by road transport of the loaded
containers to the BSC Works (or elsewhere as agreed from
time to time) and the return or the
4
recovery of the empty containers from the BSC Works to the
Plant. The road transport shall be selected or provided by
the Managing Agents at competitive rates to be agreed with
Carbide Industries save that if Carbide Industries in good
faith consider such rates to be uncompetitive or the service
offered by a third party to be superior then Carbide
Industries shall be entitled to nominate other road
haulier(s) subject to the right of the Managing Agents to
require Carbide Industries not to use a particular road
haulier if the Managing Agents have valid and bona fide
reasons for not wishing to operate with that road haulier,
such reasons being unconnected with the preference of
Carbide Industries to use such alternative road haulier
instead of the Managing Agents and the Managing Agents shall
be responsible for calling forward such other transport to
meet Carbide Industries delivery requirements. Where the
Managing Agents are used as hauliers, the most recently
published Conditions of Carriage of the Road Haulage
Association Limited, currently the 1967 edition (Clause 3(4)
amended December 1971) as set out in Appendix I hereto shall
apply as appropriate except insofar as in conflict with this
Agreement, in which case the terms of this Agreement shall
prevail
(viii) The carrying out or provision by others of certain routine
scheduled maintenance of the Plant in accordance with
Maintenance Procedures issued in writing by Carbide
Industries
(ix) The carrying out or provision by others of certain
incidental non-routine or extraordinary maintenance and the
repair of the Plant in accordance with instructions issued
by Carbide Industries
(x) The provision of services and consumable supplies other than
power necessary for the operation of the Plant including oil
grease cleaning materials and first aid and protective
equipment
(xi) The packing or repacking of calcium carbide into drums or
other containers provided by Carbide Industries at Carbide
Industries cost and the labelling, weighing and despatch
thereof in accordance with the instructions issued by
Carbide Industries
(xii) The provision of an analytical service in a form to be
agreed in writing from time to time for the purpose of
checking that the CILTREAT produced in the Plant conforms to
the specification set out in the said Operating Instructions
(xiii) The provision of such management information including
accounting recording of Raw Materials production and
finished product stocks and maintenance reporting as may be
agreed in writing from time to time
(xiv) The consultation with the Carbide Industries representative
on matters affecting
5
the management operation and maintenance of the Plant
4. REMUNERATION
With effect from the Effective Date Carbide Industries shall pay to
the Managing Agents in respect of their duties
(i) in managing operating and maintaining the Plant the
following Charges:
(a) an Operation Charge, being the actual
costs incurred by the Managing Agents in
providing labour to operate and maintain
the Plant, in providing protective
clothing and services for and provision of
fork lift trucks as set out in Appendix II
(b) a Management Charge being
A A Standing Charge being
(i) [ ]
(ii) [ ]
(iii) [ ]
B A Tonnage Charge of [
]
(ii) in discharging the calcium carbide and diamidkalk
from vessel to road transport (as set out In Clause
3 (ii)) a Handling Charge being
[ ]
[ ]
[ ]
(iii) in transporting the calcium carbide and diamidkalk
from Gunness Wharf to the Plant or the Store and
the return of empty packages from the Plant or the
Store to Gunness Wharf and the loading onto vessels
a Transport Charge of [
]
(iv) in storing calcium carbide and diamidkalk in the
Store in accordance with the provisions of Clause 8
a Storage Charge to be mutually agreed by the
Parties.
5. METHOD OF PAYMENT
6
(i) In respect of the Labour Charge as provided for in
Clause 4 and Appendix II the Managing Agents will
invoice Carbide Industries with the best possible
estimate of the amount of the Labour Charge at the
beginning of the month to which the Charge refers and
within 10 days of receipt of invoice Carbide
Industries will pay the Managing Agents this amount.
Within 7 days of the end of the month to which the
Labour Charge relates the Managing Agents will send
Carbide Industries a statement showing the exact
amount of the Labour Charge in that month and will
issue an appropriate credit or debit which will be
paid within 10 days.
(ii) In respect of the Charges as set out in Clause 4
(except for the Labour Charge), the Managing Agents
will invoice Carbide Industries in respect of these
Charges within ten days of the end of the month
concerned and Carbide Industries will pay the
Managing Agents by the end of the month immediately
following the month to which the Charge relates.
6. VARIATION OF REMUNERATION
The Charges as set out in Clause 4 of this Agreement may be varied in
accordance with the following provisions:
(i) [
]
(ii) [
7
]
(iii) [
]
7. DURATION
(i) This Agreement shall come into effect from the
Effective Date and shall continue in force until
terminated:
(a) by Carbide Industries giving to the
Managing Agents not less than 12 months
written notice, such notice expiring on
the third anniversary of the Effective
Date or at any time thereafter.
(b) by the Managing Agents giving to Carbide
Industries not less than 12 months written
notice expiring not earlier than the
eleventh anniversary of the Appointed Date
as provided for in an agreement between
Carbide Industries and British Steel
Corporation and such date to be advised by
Carbide Industries to the Managing Agents.
(ii) [
8
]
8. STORAGE
The Managing Agents shall make available to Carbide Industries the
Store. In respect of the hiring of the Store Carbide Industries shall
be liable for payment of rates levied by the local authority in
addition to the Storage Charge provided for in Clause 4 (iv). The
Managing Agents shall be responsible for the maintenance and repair
of the Store and for the insurance against fire, explosion and other
usual perils as agreed by the Parties for full reinstatement value of
the building. Storage shall be in accordance with The General
Conditions of Contract of the National Association of Warehouse
Keepers and the Standard Trading Conditions of the Institute of
Freight Forwarders Limited as amended and set out in Appendix III
hereto which shall apply as appropriate except insofar as in conflict
with this Agreement in which case the terms of this Agreement shall
prevail.
9. CONFIDENTIALITY
The Managing Agents undertake to keep in confidence all information
relating to the plant and process for the manufacture of CILTREAT
disclosed to them by Carbide Industries and shall not disclose such
information in whole or in part to any third party without the prior
written consent of Carbide Industries.
10. PROPERTY, MAINTENANCE AND SAFEGUARD
(i) The Plant and all Raw Materials and work in progress and all
stores spares plans designs specifications accounts records
and other, documents associated with the construction and
operation of the Plant and all monies provided by Carbide
Industries and held by the Managing Agents in connection
therewith shall at all times remain the property of Carbide
Industries and shall be dealt with as they may direct. For the
avoidance of doubt this clause shall not apply to payments due
or made under Clause 4 hereof and Carbide Industries shall
indemnify the Managing Agents against all actions or claims
resulting from or related to the Managing Agents complying
with this Clause save such actions and claims as result from
the negligence or default of the Managing Agents, provided
always that the conduct and control of all claims arising
under this indemnity shall be vested in Carbide Industries
(ii) Carbide Industries shall have the right at all times to enter
the Plant and to inspect the same and all Raw Materials and
work in progress thereat and subject to
9
reasonable notice being given to inspect all agency documents
in relation thereto
(iii) The Managing Agents shall in the performance of their
obligations as Managing Agents under this Agreement take all
reasonable steps to ensure the safety of the Plant and the
Raw Materials and work in progress therein and to prevent
the occurrence of any event whereby the operation of the
Plant might be interrupted or any property of Carbide
Industries might be damaged or destroyed provided always
that where such steps shall necessitate financial
expenditure they shall consult with Carbide Industries who
shall meet all expenditure approved by them.
11. ORDERS FOR CILTREAT
(i) From the Effective Date until the Completion Date while the
extended Facilities are being built and commissioned Carbide
Industries and the Managing Agents will work as closely as
possible with the British Steel Corporation in meeting their
requirements for CILTREAT.
(ii) Two weeks prior to any Programme Period the Managing Agents
will be given Carbide Industries' best possible estimate of
the production and sales requirements of CILTREAT for that
Programme Period. The Managing Agents shall be provided with
written details of the weekly production and sales
requirements of CILTREAT (by grades) not less than 57 hours
before the commencement of each week.
12. BREACH OF CONTRACT AND LIQUIDATION
(i) Carbide Industries and the Managing Agents shall be entitled
to terminate this Agreement by not less than three months
notice in writing given by the one to the other at any time if
(subject always to the right of the other party to refer the
matter to arbitration under Clause 14 hereof) after hearing
any representation that the other may make that the other has
committed any breach of or has failed to observe and perform
to a significant degree any of the provisions of this
Agreement and has failed to rectify such breach or omission on
reasonable written notice thereof
(ii) Either Party shall be entitled to terminate this Agreement
either in whole or in part by notice in writing given by
that Party to the other at any time if the other Party shall
have passed a Resolution providing for their liquidation
except for the purposes of reconstruction or amalgamation or
if a receiver shall be appointed of any of their assets or
if circumstances shall have arisen which shall entitle any
person to appoint a receiver
(iii) Upon the termination of this Agreement either in whole or in
part under either of the above provisions Carbide Industries
shall be entitled to employ any person firm
10
or Company for the purpose of carrying out duties required
to be performed under the terms of this Agreement.
13. FORCE MAJEURE
If at any time during this Agreement either Party shall be prevented
by force majeure (which expression where used in this Agreement shall
include acts of God strikes lockouts labour disputes fire accident or
any other cause whatsoever whether or not of a like kind beyond that
Party's control) from carrying out the duties or performing the
services to be provided hereunder they shall not be liable to the
other Party for any loss thereby sustained but shall take all
reasonable steps expeditiously to ensure the resumption of the duties
and services with the minimum of delay. During any such force majeure
period Carbide Industries shall advise the Managing Agents as to
which services Carbide Industries require the Managing Agents to
provide at the Plant and Carbide Industries shall reimburse to the
Managing Agents the actual costs incurred by the Managing Agents in
providing services authorised by Carbide Industries. It is agreed
that during any force majeure period the Management Fee as provided
for in Clause 4 shall continue to be paid.
14. ARBITRATION
In the case of any dispute or difference arising between the Parties
as to the construction of this Agreement or the rights duties or
obligations of either party hereunder or any matter arising out of or
concerning the same and assuming the Parties cannot come to a
mutually agreeable understanding within a thirty day period every
such dispute or matter of difference shall be referred to a single
arbitrator in the case the Parties can agree upon one otherwise to
some person appointed by the President for the time being of the
London Chamber of Commerce and in either case in accordance with and
subject to the provisions of the Arbitration Act 1950 c: any
Statutory Modification or Re-enactment thereof for the time being in
force.
15. TERMINATION OF AGREEMENT DATED 2 JULY 1973
It is hereby agreed that an Agreement dated 2 July 1973 between the
Parties shall from the Effective Date cease to be of any further
force and effect except insofar as relating to liabilities incurred
or obligations outstanding by either Party at such date.
AS WITNESS WHEREOF
The Parties have executed this Agreement the day and year first above written
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Signed by /s/
-----------------------------------------
For and on behalf of BOC Limited
In the presence of /s/
--------------------------------
Signed by /s/ Director
-----------------------------------------
/s/ Secretary
----------------------------------------------
For and on behalf of Gunness Wharf Limited
12
APPENDIX I
1 Size Specification
All grades of CILTREAT shall conform to the following size specification
[ ]
[ ]
[ ]
2 Carbide content
[
]
[
]
[
]
[
]
[
]
[
]
[
]
13
OPERATION CHARGE
The Operation Charge shall comprise a Labour Charge and a Plant Charge being
(1) Labour Charge
[
]
[
]
[ ]
[ ]
[
]
[
]
[
]
[ ]
[ ]
[ ]
[
]
(2) Plant Charge
[ ]
[ ]
14
[
]
[ ]
[ ]
15