Exhibit 10.2
CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SALES AGREEMENT
between
TOR MINERALS MALAYSIA Sdn Bhd
and
KERR-McGEE CHEMICAL LLC
for the supply and purchase of
IPOH SYNTHETIC RUTILE
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Securities and Exchange Commission."
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I N D E X
CONTENTS PAGE
1. Scope 3
2. Definitions 3
3. Term 4
4. Quantity 4
5. Price 5
6. Packaging, Delivery and Shipment 6
7. Payment 7
8. Inspection, Weighing, Sampling and Analysis 8
9. Warranty and Rejection 9
10. Taxes and Duties 10
11. Patents 10
12. Risk, Title and Insurance 10
13. Force Majeure 10
14. Default 11
15. Insurance 12
16. Governing Law 12
17. Arbitration 12
18. Assignment 12
19. Notices and Other Documents 13
20. Administration Formalities 13
21. Secrecy 13
22. Entirety 14
Appendix I Product Specifications "**[Confidential Treatment Requested]"
Appendix II Ipoh Cost Calculation "**[Confidential Treatment Requested]"
Appendix III Example of Pricing Calculation "**[Confidential Treatment Requested]"
Appendix IV Sampling Procedures "**[Confidential Treatment Requested]"
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SALES AGREEMENT
THIS AGREEMENT, made this 28th day of March, 2003, by and between TOR Minerals
Malaysia Sdn Bhd, with offices located at 4 1/2 Miles, Lahat Road, 30200 Ipoh,
Perak, Malaysia (hereinafter referred to as "Seller") and KERR-McGEE CHEMICAL
LLC, with a mailing address of 123 Robert S. Kerr Avenue, Oklahoma City,
Oklahoma 73102, USA (hereinafter referred to as "Buyer").
WHEREAS, Seller is a producer of synthetic rutile and Buyer is a manufacturer of
titanium dioxide (TiO2) pigment and consumes synthetic rutile in the production
of such pigment, and
WHEREAS, Seller and Buyer are cooperating in an exchange of information to
assist Seller in providing reliable production of synthetic rutile, and
WHEREAS, Seller desires to sell and Buyer desires to purchase synthetic rutile,
such product more specifically defined in Section 2 below, all pursuant to the
terms hereof.
NOW THEREFORE, in consideration of the promises and mutual undertakings
contained hereunder, Seller and Buyer agree as follows:
1. Scope
-----
Seller agrees to sell and deliver, and Buyer agrees to buy and pay for
Product, subject to the specifications, quantities and prices
hereinafter specified.
2. Definitions
-----------
A. "Agreement" shall mean this Agreement and the attached
Appendices, as modified or amended, in writing, and signed by
Buyer and Seller.
B. "Dollar" or "$" shall mean U.S. dollars and all references to
currency shall be deemed to be United States currency.
C. "In free pratique" shall mean permission granted by the
authorities at a port, being satisfied as to the state of health
of those on board a ship on arrival, for them to make physical
contact with the shore. A ship which is the subject of such
permission is said to be "in free pratique."
D. "Laydays" shall mean days allowed for loading or unloading of a
vessel as agreed upon between Owners and Charterers.
E. "Month" shall mean calendar month.
F. "Product" shall mean synthetic rutile conforming to the
specifications set out in Appendix I attached hereto and made a
part hereof.
G. "STEM" shall mean an agreement of laydays between Buyer and
Seller.
H. "Tonne" shall mean one dry metric tonne of 1000 kilograms.
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3. Term
-----
The term of this Agreement is for period of five calendar years, 2003
through 2007, unless earlier terminated as hereinafter provided, or
extended as the parties may agree in writing.
4. Quantity
--------
A. 2003 Quantity
-------------
During calendar year 2003, Seller shall sell and deliver and
Buyer shall purchase "**[Confidential Treatment Requested]"
tonnes.
B. Right to Purchase Additional Takes
----------------------------------
Subject to agreement on price and the remedy set forth in Article
5(c), Buyer agrees to purchase a minimum of "**[Confidential
Treatment Requested]" tonnes annually for the term of this
Agreement. In addition, TOR grants to KMC the exclusive right and
option, but not the obligation, to purchase from TOR all Product
produced in excess of amounts required by TOR for use in its
internal pigment operations. Seller will make available under
such right and option each during the term hereof not less than
"**[Confidential Treatment Requested]" tonnes annually.
Provided that Product meets specifications and KMC confirms the
Product delivered in 2003 has no characteristics that make it
unsuitable for use in KMC's chloride TiO2 process, KMC estimates
it will purchase from TOR approximately "**[Confidential
Treatment Requested]" tonnes of Product in calendar year 2004 and
as much as "**[Confidential Treatment Requested]" tonnes per
calendar year thereafter. Based on availability of Product in
excess of TOR's internal requirements, KMC may purchase volumes
in excess of "**[Confidential Treatment Requested]" tonnes in a
calendar year.
To the extent KMC indicates it will not exercise its right and
option to purchase quantities available from Seller above the
"**[Confidential Treatment Requested]" tonne minimum, such
quantities shall be deemed released and TOR shall be free to use
internally or dispose of such released Product in any manner as
it sees fit. Either TOR or KMC may recommend to pursue a
third-party sale of quantities not optioned by KMC and any
profits will be shared equally by TOR and KMC. However, should
KMC unilaterally decline to purchase the optioned quantities then
TOR has no further obligation to share profits should a
third-party sale occur. In any event TOR, however, shall remain
solely responsible for performing all terms and conditions of any
sale to a third party.
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C. Periodic Planning
-----------------
The parties shall meet periodically at least once in the first
quarter of each calendar year, to agree on Product quantities to
be purchased by KMC that year and to schedule shipments. Seller
will demonstrate evidence at that time that sufficient ilmenite
has been purchased to satisfy Product quantity agreed to be taken
by KMC together with TOR's estimated internal requirements, or
will undertake shortly thereafter efforts to procure sufficient
ilmenite and provide such evidence in a timely manner to KMC. In
the event TOR has not furnished evidence reasonably satisfactory
to KMC of sufficient ilmenite supply by the end of the second
calendar quarter, KMC shall have the right, but not the
obligation, to cancel this Agreement in whole or, at its
discretion, as to any one or more shipments of Product it may
have previously agreed to take.
D. Shipping Allowance
------------------
Actual quantities shipped that are within 2% of the final
quantities scheduled for a Contract Year will be considered
performance of the contractual quantity commitment.
5. Pricing
-------
A. Pricing for 2003
----------------
The price for Product purchased for 2003 shall be a base price of
USD "**[Confidential Treatment Requested]" per tonne, FOB Lumut,
Malaysia, which price takes into account the parties' best
estimate of KMC's equal share of the operating efficiencies and
cost savings to be realized during 2003. Appendix II contains the
calculations used for the cost savings and the cost categories to
be considered by the parties in the future (including and
incorporating the Notes in Appendix II).
B. Pricing after 2003
------------------
In the first quarter of 2004, the parties will meet to confirm
the actual cost savings realized in 2003 compared to the
"**[Confidential Treatment Requested]" per tonne figure in
Article 5(a) above. Such savings are to be shared equally between
the parties. The resulting cost per tonne will then be used as
the price to be paid by KMC accordingly for shipments in 2004.
Thereafter, in the first quarter for each subsequent year the
parties will meet to confirm the actual costs realized in the
prior year, with any cost savings per tonne to be shared equally,
and adjust the prices paid by KMC accordingly for shipments in
the current year. If no savings in cost per tonne are realized or
the cost is higher year over year then the parties shall
negotiate the next year's price. An example of the price
calculation described in this paragraph is shown in Appendix III.
C. Early Termination
-----------------
If agreement cannot be reached on a proper adjustment under
Article 5(b) above for any year and no other alternative is
mutually agreed, then KMC and TOR agree to consult in good faith
together for an additional period of 90 days, but no later than
30 June of the current year, to review the provisions of this
Agreement and consider possible modifications and alternatives
mutually acceptable to both parties. Should a resolution not be
agreed upon by the end of this additional 90 day period, any
further duty by Buyer to take and by Seller to furnish Product
hereunder shall terminate for that year.
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D. Financial Statements
--------------------
For purposes of calculating cost as described in Articles 5(a)
and 5(b) above, TOR agrees to prepare, maintain, and provide to
Buyer audited balance sheets, audited profit and loss statements,
and audited cash flow statements (collectively, the Financial
Statements) for TOR Minerals Malaysia Sdn Bhd. on an annual
basis. These financial statements shall also be provided to Buyer
on a quarterly basis after review, but not audit, by TOR's
independent auditing firm. The Financial Statements shall be
prepared in accordance with U.S. GAAP and audited by an
independent auditing firm as designated by Seller and acceptable
to Buyer.
6. Packaging, Delivery and Shipment
--------------------------------
A. Seller shall deliver Product, FOB, into Buyer's vessel at the
general cargo berth in the port of Lumut, Malaysia, in accordance
with INCOTERMS 2000. Buyer shall furnish the cargo vessel at its
expense.
B. Buyer and Seller shall agree on a shipping schedule for each
Contract Year by March 31 of the current year. Failing agreement
by such time, Product shall be taken in roughly equal size
shipments throughout the Contract Year.
C. Notwithstanding the agreed shipping schedule, Buyer shall request
and receive STEM from Seller with respect to each shipment one
month prior to the expected arrival of Buyer's vessel at the port
of Lumut. At the same time, Buyer is to advise of a fourteen (14)
day laydays/cancelling (laycan) spread in which the vessel will
be presented for loading. Twenty-one (21) days prior to the start
of the laycan Buyer is to advise name of performing vessel and
ETA at Lumut while narrowing the laycan to a ten (10) day spread.
Fourteen (14) days prior to commencement of laycan Buyer is to
advise actual nomination with vessel description and ETA at
Lumut. Buyer's vessel is to give seven (7) day, seventy-two (72)
hour, and twenty-four (24) hour telegraphic or radio notice of
expected readiness to load at the port.
D. No loading shall commence until the cleanliness certification
referred to in Clause A, Article 8, Inspection and Weighing, has
been made. Time for loading to count as from 0800 on the next
working day after the vessel is reported ready, in free pratique
and notice tendered in writing, or by radio, during normal office
hours of 0900 to 1700 Monday through Friday and 0900 to 1200
Saturdays, with Sundays and Malaysian national holidays excepted.
E. Buyer shall advise Seller of charter party details relevant to
arranging proper and efficient loading of the vessel. Where
required, vessel's gear should be capable of loading 1000 tonnes
per weather working day. Vessel shall be furnished with the
necessary lighting for night work, should this be required.
Vessel shall be furnished with mechanical sliding, self stowing
hatches to the extent that such vessels are reasonably available.
F. Seller agrees to pay Buyer demurrage or dead freight at the rate
specified in the charter party for Buyer's vessel if Product is
not available for loading. The loading shall be based on CQD
(Customary Quick Dispatch) with no demurrage or dispatch except
as noted in this Clause F.
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7. Payment
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A. The Buyer shall make payment to Seller for the Product shipped
hereunder by wire transfer to the credit of Seller's account
within forty-five (45) days of the date on the bill of lading and
after receipt by Buyer of the documents listed in 7 B. below.
B. The following documents will be dispatched to Buyer's home office
or other office as may be designated by Buyer:
(i) Commercial Invoice
(ii) Bill of Lading
(iii) Certificate of Weight
(iv) Certificate of Analysis
(v) Certificate of Origin
8. Inspection, Weighing, Sampling and Analysis
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A. Inspection and Weighing
-----------------------
(i) Inspection of the holds in Buyer's vessel for cleanliness
and protection and determination by certified weighbridge
weight of Product loaded aboard Buyer's vessel shall be made
by a registered independent surveyor or such other inspector
acceptable to Buyer and Seller. The cost of such shall be
borne by Seller. Such surveyor shall certify cleanliness,
but shall be entitled to reject any vessel not found to be
suitable for loading of Product, provided such surveyor
sends to Buyer, through Seller, or Seller's agent, by
telefax, the reasons for such rejection and his
certification that the Buyer's vessel as presented would not
adequately protect the Product from contamination. Such
rejection shall be for Buyer's account and time will not
count until such time as the holds are declared acceptable
for loading.
(ii) The weight used for invoice purposes will be determined by
certified weighbridge during loading of the Product. If the
weight determined during discharge of the Product by draft
survey performed by an independent surveyor differs by more
than 1.0% from the invoice weight then the parties will
negotiate in good faith in order to agree an acceptable
final weight .
B. Sampling
--------
Each shipment of Product delivered to Buyer's vessel at the port
of Lumut shall be sampled by Seller as detailed in Appendix IV
and analysed as set forth below. The Seller shall take and
distribute representative samples during the loading of the
Buyer's vessel. Such samples shall be thoroughly mixed and
reduced to three (3) samples weighing two kilograms (2 kg) each.
One sample shall be held by Seller to be used as an umpire sample
if and when required; one sample shall be forwarded forthwith to
Buyer by courier; and one sample shall be analyzed for TiO2 and
other specified components by the Buyer's laboratory. Costs of
sampling shall be borne by Seller.
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C. Analysis
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(i) Methods of Analysis
-------------------
All guaranteed elements and relevant typical elements will
be analysed by XRF techniques in conformance with the usual
industry standards for such analysis; provided that Seller
shall use ASTM D1394 for determination of TiO2 content.
(ii) Analysis by Seller
-------------------
Seller shall analyze its part of the sample and the results
of such analysis for each shipment shall be certified and
shall accompany the invoice forwarded to Buyer in accordance
with Article 7.
(iii) Analysis by Buyer
-----------------
Buyer may, but shall not be obliged to, analyse its part of
the sample. Unless Buyer notifies Seller, as soon as
possible but in any event within sixty (60) days of receipt
of the sample, that Buyer's analysis indicated that Product
fails to meet the guaranteed Specifications contained in
Appendix I, the results of Seller's analysis shall be deemed
final and conclusive.
(iv) Umpire Procedure
----------------
Should Buyer's analysis of its part of the sample indicate
that Product does not meet the guaranteed Specifications
contained in Appendix I, Buyer may so advise Seller within
sixty (60) days of Buyer's receiving the sample and Seller
shall forward for analysis the retained sample to such
umpire analyst, (being an independent testing laboratory and
presently agreed to be the SGS laboratories in Australia).
(v) Settlement
----------
If an umpire's analysis is called for, all disputed
characteristics and properties will be analysed. For each of
these analyses, the final and binding analysis shall be that
analysis as was determined by either Buyer or Seller that is
closest to the umpire analysis. Should this result in
confirmation that Product failed to meet the guaranteed
Specification according to Appendix I, Buyer and Seller will
endeavour to reach an equitable adjustment. If such an
adjustment cannot be agreed, the parties shall proceed as
described in Article 9 below. The cost of an umpire's
analysis shall be borne by the party furthest from the
umpire's analysis on the specific characteristic or property
in question.
(vi) Revision of Sampling and Analytical Procedures
----------------------------------------------
The procedures set forth in Clause C, Paragraph (i) of this
Article 8 are believed to be the most satisfactory ones as
of the date of this Agreement. In the event better
procedures become available, Buyer and Seller shall
endeavour in good faith to agree revisions hereto
incorporating such better procedures.
D. Witness
-------
At its own cost, Buyer shall have the right to be present, either
itself or by its authorized representative, at all inspection,
weighing, sampling and analysis procedures.
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9. Warranty and Rejection
----------------------
A. Seller warrants that Product sold and delivered hereunder shall
conform to the Specifications as listed in Appendix I. In the
event that the Product shipped hereunder does not conform to the
specifications, as determined through the weighing, sampling and
analysis procedure described in Article 8 hereof, notification
shall be sent by the party becoming aware of such non-conformity
as soon as practicable informing the other of the
non-conformance. The parties shall in good faith attempt to agree
an equitable adjustment. In the event that the parties are unable
to agree such an adjustment, Seller shall, at its cost and
expense, remove or otherwise dispose of such non-conforming
Product and replace it with an equivalent quantity from Seller's
works which meets the guaranteed Specifications. All costs
associated with the supply of conforming Product from the
Seller's works, including, but not limited to, shipping,
unloading, weighing, and customs clearance, shall be for the
Seller's account.
B. If the Seller's inability to deliver conforming Product should
persist beyond 90 days after notification of non-conformance then
the parties shall attempt to agree on a revised specification and
price for the non-conforming Product. However, if the
non-conformity is of such a nature that it will have a material
negative effect on the process or final product of the Buyer,
then the Buyer may, subject to Article 13(a) below, cancel any
remaining quantities and may pursue any remedy it may have at law
or equity.
10. Taxes and Duties
----------------
All Malaysian taxes or duties now or hereafter imposed on the export
of Product shall be for the sole account of Seller. All taxes or
duties now or hereafter imposed on the import of the Product by the
country of destination shall be for the sole account of Buyer.
11. Patents
-------
Seller agrees to protect and hold Buyer harmless from and against any
and all claims that Product in the state or form as sold under this
Agreement infringes or allegedly infringes any patent, and Seller
will, at its own cost and expense, defend any and all suits which may
be brought against Buyer on account of said infringement of such
patent or patents, and Seller shall pay any and all fees, costs and
damages awarded in said suits.
12. Risk and Title
--------------
Risk of loss and title shall pass to the Buyer as the Product
progressively clears the rail of Buyer's vessel at the Port of Lumut.
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13. Force Majeure
-------------
The affected party shall promptly notify the other party should any
"Force Majeure", as hereafter defined, occur. Seller's failure or
inability to make, or Buyer's failure or inability to take, any
delivery or deliveries when due, or the failure or inability of either
party to effect timely performance of any other obligation required of
it hereunder, if caused by Force Majeure, shall not constitute a
default hereunder or grounds for any liability to the other; provided
however, that the party so affected shall promptly notify the other
party when such Force Majeure circumstance commences and, again, when
it has ceased to affect its ability to perform its obligations
hereunder. The quantity to be delivered hereunder shall be reduced to
the extent of the deliveries omitted for such cause or causes, unless
both parties agree to a different amount or that the total quantity to
be delivered hereunder shall remain unchanged. As used herein, the
term "Force Majeure" shall mean and include any act of God, nature or
the public enemy, explosion, accident, operation malfunction or
interruption to the extent it could not have been avoided by good
industry practice, fire, storm, earthquake, flood, drought, perils of
the sea, strikes, lockouts, labour disputes, riots, sabotage, embargo,
war (whether or not declared), federal, state, municipal or public
authority legal restriction or limitations or compliance therewith,
failure or delay of transportation, shortage of, or inability to
obtain, raw materials, supplies, equipment, fuel, power supply, or any
other circumstance of a similar or different nature beyond reasonable
control of the party affected thereby. In this connection, a party
shall not be required to resolve labour disputes, except in accordance
with such party's business judgement as to its best interest. Either
party may terminate this Agreement if such an event causing failure or
inability to perform continues for more than 180 days.
14. Default
-------
A. A "default" shall mean any failure by either party to make any
payment or to perform any obligation pursuant to this Agreement
for any reason other than an event of Force Majeure and the party
in default has failed to remedy or diligently to commence to
remedy such failure within thirty (30) days (seven (7) days if
for overdue payment of money) after receiving written notice
thereof from the other party.
B. In the event of a default arising from a breach of Buyer's duty
to pay for Product delivered, Seller shall have the right to
recover the price for the value of the Product delivered and its
reasonable attorney's fees in effecting the recovery. In
addition, Seller shall have the right (subject to Buyer's right
to cure its default pursuant to this Article) to terminate this
Agreement forthwith by providing notice to such effect to Buyer.
Notwithstanding anything contained herein to the contrary, in no
event shall Buyer be liable for consequential, indirect,
incidental or special damages as a result of a default or failure
to pay under this Agreement.
C. In the event of any default by Seller for failure to deliver
Product or to perform in accordance with this Agreement, Seller
(subject to the Seller's right to cure its default pursuant to
this Article) shall compensate Buyer by delivering, as soon as
possible after the default, appropriate quantities of Product
produced at Sellers works in accordance with this Agreement.
Furthermore, should Seller be in default, Buyer shall have the
right (subject to Seller's right to cure its default pursuant to
this Article, and in addition to the remedy for breach of
warranty set out at Article 9 above) to terminate this Agreement
forthwith, by providing notice to such effect to Seller.
Notwithstanding anything contained herein to the contrary, in no
event shall Seller be liable for consequential, indirect,
incidental or special damages as a result of default under this
agreement.
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D. In the event either party becomes bankrupt or insolvent, commits
any act of bankruptcy or insolvency, makes any proposal,
arrangement or compromise with its creditors or if it is
liquidated or if its charter of incorporation is relinquished or
cancelled, the other party shall have the right immediately to
terminate this Agreement without notice or demand.
E. Neither this right of termination nor any other remedy provided
for in this Agreement shall be deemed exclusive or an election of
remedies, and shall not affect any other rights and remedies as
may be available to a party at law or equity, provided however,
that neither shall be liable to the other for consequential,
indirect, incidental or special damages including, but not
limited to, loss of profits.
15. Insurance
---------
At all times during the term of this Agreement, Seller agrees to carry
and maintain with companies authorized to do business in Malaysia,
with an A.M. Best Companies Inc. or equivalent a rating of B+ or
better, or as otherwise acceptable to Buyer, the following:
The "Casualty Insurance" covering loss or damage to the Ipoh
Plant for an amount not less than USD $10,000,000 with a maximum
deductible of USD $1,000,000. Such policy shall expressly waive
subrogation against the Buyer, its affiliates, and their
officers, directors, employees, and agents.
16. Governing Law
-------------
This Agreement shall be governed by and construed under the laws of
the State of Oklahoma, other than its choice of law rules.
17. Arbitration
-----------
In the event of any controversy, dispute or claim arising out of this
Agreement or alleged breach thereof, the parties shall endeavour to
settle that controversy, dispute, claim or alleged breach in an
amicable manner. Should the parties fail to do so within forty-five
(45) days after first notice, that controversy, dispute, claim or
alleged breach shall be finally settled in New York City under the
Rules of the American Arbitration Association by a majority of three
(3) arbitrators appointed in accordance with the rules of that
Association then prevailing.
18. Assignment
----------
Neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed. The preceding
sentence shall not apply to assignments made to parents, subsidiaries,
or related corporations of the parties hereto or, in the case of
Buyer, to a financially capable purchaser of all or essentially all of
Buyer's TiO2 pigment business, provided that in all cases the assignee
agrees in writing to assume all its assignor's duties and obligation
hereunder and the party executing this Agreement agrees to and shall
remain secondarily responsible for performance of its obligation
hereunder unless such is waived in writing by the other party.
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19. Notices and Other Documents
---------------------------
All notices and other documents required to be given to the Buyer
shall be addressed to:
Manager, Material Procurement
Kerr-McGee Chemical LLC
123 Robert S. Kerr Avenue
Oklahoma City, Oklahoma 73102
USA
Facsimile: (450) 270-3755
All notices and other documents required to given to the Seller shall
be addressed to:
TOR Minerals Malaysia Sdn Bhd
41/2Miles
Lahat Road
30200 Ipoh
Perak, Malaysia
Facsimilte: (605) 322-2535
All notices and other documents shall be sent properly addressed,
postage prepaid, by priority mail or by reputable international
courier (in either of which cases they shall be deemed to have been
given or served on the sixth day after their posting or handing to the
courier). Notices may also be given by facsimile and, in such case,
the notice shall be deemed to have been given the day after facsimile
transmission is confirmed by automatic answer back. All notices given
by facsimile shall also be confirmed by priority mail or courier, sent
in the manner provided above. For the purposes of this Agreement, the
phrase "other documents" shall include samples of Product. Either
party may, by notice in writing to the other, alter its address of
service.
20. Administration Formalities
--------------------------
In addition to Article 10 above for taxes and duties, Seller shall
comply with all applicable regulations concerning the export of
Product from Malaysia and Buyer shall comply with all regulations
concerning the import of Product for the country or countries of
destination.
21. Secrecy
-------
Each party shall keep confidential all reports, records, data,
opinions and technical and other information obtained from the other
party in the course of negotiations for and the performance of this
Agreement. To the extent a party to this Agreement is obliged as a
matter of law to disclose the other's information, it may do so,
provided the party whose information is to be disclosed is given prior
written notice of such pending disclosure and an opportunity to appear
and object or seek a protective order.
22. Entirety
--------
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and there are no
understandings, representations or warranties made or relied on,
except those expressly set forth herein. No amendment, addition to,
alteration, modification or waiver of all or part of this Agreement
shall be of any force or effect unless in writing and signed by the
party against whom it is being enforced.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorised respective representatives.
FOR TOR MINERALS MALAYSIA SDN BHD.:
Name: /s/LEE HEE CHEW
Title: Managing Director
Date: 1 April 2003
FOR KERR-MCGEE CHEMICAL LLC
Name: /s/ Samual A. Hewes
Title: Vice President, Strategic Services
Date: April 16, 2003
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APPENDIX I
TOR MINERALS MALAYSIA SYNTHETIC RUTILE SPECIFICATIONS
"**[CONFIDENTIAL TREATMENT REQUESTED]"
IPOH SR Specifications
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Typical Max Min
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TjO2
Fe203
A12O3
CaO
MgO
SnO2
Cr2O3
MnO
v2O5
SiO2
ZrO2
Nb2O5
PbO
S
U+Th
---------------------------------------------------------------------------
Particle Size & Density
Wt% From To
---------------------------------------------------------------------------
500
355
212
150
106
75
-75
D5O
Bulk Density
---------------------------------------------------------------------------
"** [Confidential Treatment Requested] indicates portions of this document have
been deleted from this document and have been separately filed with the
Securities and Exchange Commission."
APPENDIX II
TOR Minerals Maylasia, Inc.
Contract Cost Forecast
Year 2002 and 2003
(All Amounts in Malaysian Ringil Unless Noted)
"**[CONFIDENTIAL TREATMENT REQUESTED]"
Cost Drivers Identified
------------------------------------------------------------
YTD September 2002 Semi-Fixed/Production Month
----------------------------------------- ----------------------------------
Shutdown Production Total Fixed/Month % Fixed % Var SemiFixed Var/Unit
-------- ---------- ----- ----------- ------- ----- --------- --------
Material-Ilmenite
material - Acid
Fuel Oil - Utilities
Fuel Oil - Reductant
Diesel - Utilities
Diesel - Reductant
Boric Acid
Caustic Soda Liquid
Electricity
Water
Direct Labor
Indirect Labor
Maintenance
Production OH
Depn-Fixed SL
Depn-Unit of Production
Total
Production Units
Cost Per Tonne (RM)
Cost Per Tonne (USD)
- -------------------------------------------------------------------------------------------------------------------------------
"** [Confidential Treatment Requested] indicates portions of this document have been deleted from this document and have been
separately filed with the Securities and Exchange Commission."
YTC September 2002 Based on Cost Drivers Estimated Year 2003
---------------------------------------- -------------------------------------------
Fixed Semi Fixed Variable Total Fixed SemiFixed Var Total Cost
----- ---------- -------- ----- ----- ---------- --- ----------
Material-Ilmenite
Material Acid
Fuel Oil - Utilities
Fuel Oil - Reductant
Diesel - Utilities
Diesel - Reductant
Boric Acid
Caustic Soda Liquid
Electricity
Water
Direct Labor
Indirect Labor
Maintenance
Production OH
Depn-fixed SL
Depn-Unit of Prod.
Total
Production Volume
Cost Per Tonne (RM)
Cost Per Tonne (USD)
Production Months
Total Months in Period
Conversion Rate (Ringit/USD)
- --------------------------------------------------------------------------------------------------------------------------------
"** [Confidential Treatment Requested] indicates portions of this document have been deleted from this document and have been
separately filed with the Securities and Exchange Commission."
APPENDIX III
CONTRACTUAL PRICING EXAMPLE
"**[CONFIDENTIAL TREATMENT REQUESTED]"
- ----------------------------------------------------------------------------------------
Change in Cost
Price Paid Actual Cost from Previous Year 50% Share
Calendar Year ($/MT) ($/MT) ($/MT) ($/MT)
- ----------------------------------------------------------------------------------------
2003
- ----------------------------------------------------------------------------------------
2004
- ----------------------------------------------------------------------------------------
2005
- ----------------------------------------------------------------------------------------
2006
- ----------------------------------------------------------------------------------------
2007
- ----------------------------------------------------------------------------------------
2008
- ----------------------------------------------------------------------------------------
"** [Confidential Treatment Requested] indicates portions of this document have
been deleted from this document and have been separately filed with the
Securities and Exchange Commission."
APPENDIX IV
IPOH SHIPMENT SAMPLING PROCEDURE AT THE PORT OF LUMUT, MALAYSIA
"**[CONFIDENTIAL TREATMENT REQUESTED]"
- -------------------------------------------------------------------------------
"** [Confidential Treatment Requested] indicates portions of this document have
been deleted from this document and have been separately filed with the
Securities and Exchange Commission."