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
1
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.
(ii) The receipt of the calcium carbide and diamidkalk at Gunness
Wharf or at such
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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 [
] 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 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
4
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 the management operation and maintenance
of the Plant
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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) [ ] per month
during single shift operation
(ii) [ ] per month during
two shift operation
(iii) [ ] per month during
three shift operation
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
Calcium Carbide in Drums [ ] per ton
Calcium Carbide in Containers [ ] per ton
Diamidkalk in Big Bags [ ] per ton
(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 [ ] per ton (comprised
of [ ] per ton as being the transport
charge on [ ]together with a [ ]
OPEC Fuel Surcharge)
(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
(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
6
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) The Operation Charge [
] and the Operation
Charge shall be calculated so as to enable the Managing
Agents exactly to recover [ ] from Carbide
Industries. The Managing Agents shall consult with and obtain
the approval of Carbide Industries prior to agreeing any
change in the number of employees and terms and conditions of
employment at the Plant subject to the provision that Carbide
Industries will not unreasonably withhold approval to any
change aforesaid requested by the Managing Agents so as to
enable the Plant to be operated in a businesslike and
efficient manner. In adopting this Procedure, the Parties
anticipate that labour costs at the Plant will vary
approximately in line with variations in labour costs
incurred by the Managing Agents at Gunness Wharf and with
other labour costs in the surrounding area.
(ii) With effect from 1 October 1980, the Management
charge as provided for in Clause 4(i)(b) shall be
varied in accordance with changes in the [
] The Management
Charge shall varied by multiplying it by the
[ ] for the July
immediately preceding the 1 October in question and
dividing it by the [ ] and
the amended Management Charge shall apply for the
year commencing on that date.
(iii) With effect from [ ] the Handling Charge
and the Transport Charge as provided for in Clause
4(ii) and 4(iii) shall be subject to
7
variation to the extent that the [
] changes. The Managing Agents
shall provide Carbide Industries with a detailed
breakdown of any such cost changes and where
requested by Carbide Industries shall provide
Carbide Industries with such further information on
the nature and extent of cost changes that Carbide
Industries may require. The Parties shall meet at
least one week prior to each 1 February and shall
agree the Handling Charge and the Transport Charge
to apply for the twelve months commencing on the
next 1 February on the basis that the Handling
Charge and Transport Charge shall be varied by the
same percentage as the [ ] in providing these
services has varied. In adopting this procedure for
the variation of the Handling and Transport Charges,
the Parties agree that it is their intention that
the Agreement shall operate between them fairly, and
if in the course of performance unfairness to either
Party is disclosed or anticipated then the Parties
shall use their best endeavours to agree upon such
action as may be necessary and equitable to remove
the cause or causes of the same.
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) If a notice is given under sub-clause (i) (a) of
this Clause, Carbide Industries shall by the expiry
of such notice period pay to the Managing Agents a
sum equivalent to [
] subject always
to the provision that the Managing Agents shall use
their best endeavours to offer suitable alternative
employment to any such employee and shall endeavour
to persuade any such employee to accept such an
offer.
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 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
9
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 or Company for
the purpose of carrying out duties required to be performed
under the terms of this Agreement.
13. FORCE MAJEURE
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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
Signed by /s/
-----------------------------------------------
For and on behalf of BOC Limited
11
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
2.1 CILTREAT 60 shall mean a mixture of Calcium Carbide and CILFIL
containing not less than [ ]
Calcium Carbide
2/2 CILTREAT 65 shall mean a mixture of Calcium Carbide and CILFIL
containing not less than [ ]
Calcium Carbide
2.3 CILTREAT 70 shall mean a mixture of Calcium Carbide and CILFIL
containing not less than [ ]
Calcium Carbide
2.4 CILTREAT 75 shall mean a mixture of Calcium Carbide and CILFIL
containing not less than [ ]
Calcium Carbide
2.5 CILTREAT 80 shall mean a mixture of Calcium Carbide and CILFIL
containing not less than [ ]
Calcium Carbide
2.6 CILTREAT 85 shall mean a mixture of Calcium Carbide and CILFIL
containing not less than [ ]
Calcium Carbide
The percentage of Calcium Carbide shall be calculated by [
]
13
OPERATION CHARGE
The Operation Charge shall comprise a Labour Charge and a Plant Charge being
(1) Labour Charge
The Labour Charge shall be the [
]
[
]
[ ]
[ ]
[
]
[
]
The Parties shall agree the number of employees of the Managing Agents who
shall be employed at the Plant from time to time having regard to Carbide
Industries CILTREAT requirements. In the light of present knowledge the Parties
anticipate that the maximum number of employees who shall be required to
operate the Plant shall be as follows:
For single shift operation [ ] men
For two shift operation [ ] men
For three shift operation [ ] men
The Parties having due regard to CILTREAT requirements and safety
considerations will use their best endeavours to minimise the number of
personnel employed at the Plant at any time. For the avoidance of doubt, it is
agreed that the costs or any Management personnel employed by the Managing
Agents at the Plant or elsewhere shall be included in the Management Fee.
(2) Plant Charge
The Plant Charge shall be the [ ]
[
]
[
14
]
[ ]
[ ]
15