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EXHIBIT 10.15
This Agreement made and entered into on this 24th day of
April, 1995, By and Between DEAD SEA WORKS LTD., of Potash House, Beer Sheva
84100, Israel ("Seller"), and HAIFA CHEMICALS SOUTH LTD., of P.O. Box 1809,
Haifa, Israel, ("Buyer");
W I T N E S S E T H
WHEREAS Buyer and Seller have, on lst January, 1990, entered
into an agreement for the sale of Product (as defined below) for use by Buyer at
its manufacturing facility in Haifa (hereinafter, the "Haifa Agreement"); and
WHEREAS Buyer and Seller desire to enter into an additional
agreement for the sale of Product, for use by Buyer at the Rotem Facility (as
defined below), all in accordance with and subject to the terms and conditions
set out below;
NOW, THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
1. DEFINITIONS
As used herein.
1.1 "Ton" shall mean - 1,000 (one thousand) Kgs.
1.2 "Product" shall mean - Potash as set forth in Exhibit
"A" attached hereto.
1.3 "Contract Year" shall mean - January 1st through
December 31st.
1.4 "Contract Year Quota" shall mean - quantities of
Product to be sold and delivered by Seller and
purchased and received by Buyer in each Contract Year
as set forth in sub-articles 3.1 and 3.2 below.
1.5 "Delivery Location" shall mean - Tzefa Plain.
1.6 "K(2)O" shall mean - the potassium content of the
Product expressed as the [mono oxide] of potassium.
1.7 "Quarter" shall mean - a period of three calendar
months as follows: January 1st through March 31st,
April 1st through June 30th, July 1st through
September 30th, October 1st through December 31st.
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1.8 "Basic Delivered Price" shall mean - the basic
delivered price calculated in accordance with the
provisions of Article 5.1 below.
1.9 "Rotem Facility" shall mean - a facility for
manufacturing Potassium Nitrate, to be constructed by
Buyer at the Rotem Plain, having a manufacturing
capacity of 100,000 +/- 15% Tons of Potassium
Nitrate.
1.10 "The Effective Date" shall mean - 19th September,
1994.
1.11 "Specifications" shall mean - the specifications set
forth in Exhibit "A".
1.12 "Israeli Market Product" shall mean - the quantity of
Product used by Buyer for the manufacture of
Potassium Nitrate and other products, if any, not
exported by Buyer from Israel.
1.13 "Allowed Soot Level" (or "ASL" shall mean - the
maximum permitted level of soot in Product to be
delivered to Buyer hereunder, i.e. 125 (one hundred
and twenty-five) PPM, as determined by the Adequate
Method (as defined in the Haifa Agreement), set out
in Exhibit A attached hereto.
1.14 "Day" shall mean - 24 hours commencing on 00:01
hours.
2. TERM
2.1 This Agreement shall come into effect on the date of
signature thereof by both parties, and shall be
effective through 31st December, 2005.
2.2 This Agreement may only be renewed by a written
instrument signed by both parties hereto setting out
the price, the duration of the renewed term and all
other terms and conditions which shall apply during
any renewed term.
3. QUANTITY
3.1 3.1.1 Seller shall sell and deliver and Buyer
shall purchase and receive during each
Contract Year commencing on the Effective
Date, quantities of Product as set out in
sub-article 3.2 below.
3.1.2 It is agreed that the quantity of Product
set out in sub-article 3.2.1 below shall be
supplied from Seller's Hot Crystallization
plant.
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3.2 3.2.1 Buyer has advised Seller that as of lst
January, 1995, Buyer's annual requirement
for Product shall be 80,000 +/- 15% Tons per
Contract Year.
3.2.2 (a) Notwithstanding the provision of
sub-article 3.2.1 above, during the
contract Year Commencing on 1st
January, 1995 and terminating on
31st December, 1995, Buyer shall be
entitled to reduce the
aforementioned quantity of
80,000+/- 15% Tons by 220+/-15%
tons for each Day during which
manufacturing operations in the
Rotem Facility shall temporarily
stop as a direct result of
running-in problems. Provided that
Buyer shall notify Seller in
writing immediately upon the
occurrence of such stopping of
manufacturing operations (including
the estimated time until the
resuming of manufacturing
operations), and immediately upon
the resuming of manufacturing
operations.
For the sake of good order, it is
stated that Buyer's right under
this sub-article 3.2.2(a) shall not
prejudice Buyer's obligation, inter
alia, under sub-article 3.4 below.
(b) Buyer has advised Seller that it
shall purchase and receive during
each of the months November and
December 1994, a quantity of up to
7,000 Tons of Product. This
quantity shall be in addition to
the Contract Year Quota applicable
to the Contract Year commencing on
1st January, 1995.
3.3 Should Buyer request additional tonnage in excess of
the quantity set forth in 3.2.1 above, Seller will
use reasonable efforts to supply the same, but Seller
shall have no obligation to supply such additional
tonnage.
3.4 Without prejudice to the provisions of sub-articles
3.1, 3.2 and 3.3, Buyer has advised Seller that the
estimated quantity of Product to be delivered and
received during each Quarter of the Contract Year
commencing on 1st January, 1995 shall be 20,000 Tons
+/- 15%.
With respect to the Contract Years following 1995,
Buyer shall advise Seller at least 3 (three ) months
prior to the commencement of each Contract Year the
estimated quantity of Product to be delivered and
received during each Quarter of the applicable
contract year. Quantities in respect of each Quarter
may be adjusted by Buyer not later than 30 (thirty)
Days prior to the commencement of the applicable
Quarter.
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3.5 In each calendar month of each Contract Year, Buyer
will take delivery of not less than 5% (five percent)
and not more than 10% (ten percent) of that total
Contract Year quota.
3.6 In the event that Buyer will take delivery of less
than the said 5% during any calendar month
(hereinafter - "the Minimum Monthly Quantity") for
any reason whatsoever, except Seller's default,
Seller will be entitled, without prejudice to any
rights afforded it hereunder and under the law, to
reduce that Contract Year Quota, by amounts not
exceeding in the aggregate the difference between the
Minimum Monthly Quantity and the aggregate quantity
actually received by Buyer during that calendar
month.
3.7 Buyer shall not use the Product purchased hereunder
for the purpose of (a) resale of same; or (b) for the
purpose of manufacturing in any way or manner,
selling or otherwise dealing with technical grade
Potash or SOP.
4. DELIVERY, TITLE RISK & SHIPMENT
4.1 Product shall be delivered to Buyer for Buyer's
trucks at Tzefa Plain.
4.2 Risk of loss and damage to the Product shall pass to
Buyer as Product is progressively loaded upon trucks
at the Delivery Location.
5. PRICE
5.1 The Basic Delivered Price for each Ton of Product
during any Quarter shall be:
BP = WAF - FC
Where:
BP = Basic Delivered Price;
WAF = Weighted average of the fob Israeli port
price received by Seller for non-granulated
potash exported from Israel during the
immediately preceding Quarter;
FC = Variable costs per Ton from fob cars Tzefa
Plain to fob vessel in the port of Ashdod.
5.2 In addition to the Basic Delivered Price buyer shall
pay Seller an amount equal to the amount of export
premiums and benefits (such as, including
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but without limitation, Bituach Shaar or any other
similar or substitute programmes) of whatsoever kind
or nature which would have been paid to Seller or to
which Seller would have been entitled had Product
sold to Buyer hereunder been exported by Seller
during the preceding Quarter.
5.3 5.3.1 In addition to the amounts referred to in
5.1 and 5.2 above, Buyer shall pay Seller a
premium of U.S. $ 4.25 per Ton of Product
sold and delivered to Buyer.
5.3.2 The sum of U.S. $ 4.25 referred to above
shall be adjusted in accordance with the
rate in which the New Index shall increase
or decrease over or below, as the case may
be, the Basic Index. The aforementioned
adjustment shall be effected on the 1st of
January of each Contract Year.
For the purposes hereof -
Index shall mean - the United States
Consumer Price Index For All Urban
Consumers, published by the Bureau of Labor
Statistics of the U.S. Department of Labor.
New Index shall mean - the Index last known
at the time when each payment shall be
effected;
Basic Index shall mean - the Index last
known on 1st September, 1994, i.e. 447.5
points.
6. DISCOUNTS
6.1 For the purposes of this article 6, "Extra Discount
Period" shall mean - the period during which Buyer
shall be entitled to an additional discount as set
forth in article 6.3 below, which period shall begin
on the Effective Date and shall terminate after Buyer
shall have received the discount referred to in 6.3
below - for and in respect of a total quantity of the
first 400,000 Tons of Product sold to Buyer hereunder
following the Effective Date.
6.2 Following the Effective Date and during the life of
this Agreement, Buyer shall receive a discount of 3%
(three percent) on the Basic Delivered Price and on
the amounts referred to in sub-article 5.2 above, on
all Product sold and delivered to it by Seller.
6.3 In addition to the discount referred to in
sub-article 6.2 above, Buyer shall be entitled to
receive a discount only for and in respect of Product
sold and
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delivered to Buyer during the Extra Discount Period
at the rate of U.S. $ 4.25 per Ton of Product sold
and delivered to Buyer, said sum to be adjusted in
accordance with the provisions of sub-article 5.3.2
above.
6.4 For the avoidance of doubt, it is hereby clarified
that amounts or payments pursuant to the provisions
of sub-article 5.3 above shall not be deemed or
considered as part of the price for the purpose of
calculating the discount referred to in sub-article
6.2 above.
6.5 Notwithstanding anything to the contrary herein
contained, it is agreed that in the event that the
granting of the discounts referred to in sub-article
6.2 or 6.3 above shall result in a delivered price
payable to Seller of less than the Minimum Price (as
defined below), then the discounts shall be adjusted
so that the delivered price shall not be less than
the Minimum Price.
For the purposes hereof the "Minimum Price" shall
mean - cost of production plus all other expenses
incurred by Seller up to and including the Delivery
Location, as reflected in the audited financial
statements of Seller.
7. TERMS OF PAYMENT
7.1 Seller shall invoice Buyer, at the end of each
calendar month or as soon as practicable thereafter,
for Product delivered during that calendar month.
Premiums and all other payments (if any) due to
Seller pursuant to the provisions of this Agreement
as well as all discounts due to Buyer (if any) shall
be reflected in each monthly invoice;
7.2 Payments in full for Product delivered shall be made
by Buyer within 60 (sixty) Days from the end of the
calendar month in which that Product was delivered.
7.3 Overdue amounts shall carry interest at the then
current LIBOR Rate (taking into consideration amount
and time involved) + 2% from date on which payment is
due pursuant to the provisions hereof until actual
payment. The above is in addition to all rights and
remedies which Seller may have in case of default by
Buyer.
7.4 Invoices shall be in U.S.$ and all payments
(including interest) shall be made in said currency
unless otherwise agreed upon by the parties hereto.
In the event that it will not be permitted to effect
payments in U.S.$ then the currency used for payments
shall be Israeli and the amount of New
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Israeli Shekels payable shall be determined in
accordance with (i) with respect to sales of Israeli
Market Product - the representative rate of exchange
(as published by the Bank of Israel) published
immediately before actual payment is made; and (ii)
with respect to all other sales of Product the then
prevailing rate of exchange for the conversion by
Seller of U.S.$ (being proceeds to export sales) into
Israeli Shekels excluding any premiums which Seller
is entitled to receive from Buyer under any other
provisions hereof.
In the event that the representative rate of exchange
shall not be published by the Bank of Israel then a
substituting rate shall be used, which shall resemble
the principles reflected in the determination of the
representative rate of exchange.
8. WARRANTY
8.1 Seller warrants that Product delivered hereunder
shall materially conform to the Specifications.
THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
EXPRESSED OR IMPLIED AND SELLER EXPRESSLY DISCLAIMS
ALL OTHER WARRANTIES INCLUDING, BUT WITHOUT
LIMITATION, THAT PRODUCT WILL BE FIT FOR BUYER'S
PARTICULAR USE OR PURPOSE.
Unless Seller receives written notice otherwise
within 15 (fifteen) Days after delivery of the
Product to Buyer, the Product shall be deemed to
conform to Specifications.
9. LIABILITY & CLAIMS
9.1 Seller shall not be liable for special, consequential
or coincidental damages arising out of non-delivery,
use, inability to use or any other cause whatsoever,
whether in contract, tort or otherwise.
9.2 Without prejudice to the provisions of sub-articles
9.1 above and 9.4 below, in no event shall any claim
made by Buyer for non-delivery of the Product,
shortage of weight, deficiency in analysis or for any
other reason whatsoever be greater than the purchase
price of that portion of the product in respect of
which such claim is made.
The amount referred to above constitutes the maximum
amount that may be claimed by Buyer in respect of
damages not excluded from Seller's
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liability under the provisions of sub-article 9.1
above and shall not be interpreted so as to impose an
obligation upon Seller to indemnify, compensate or
otherwise pay Buyer the above amount.
9.3 All claims shall be supported by appropriate
documentary evidence and must be made in writing,
within 15 (fifteen) Days after delivery of Product to
Buyer. Failure to give written notice of claim within
the specified time shall constitute a waiver by Buyer
of all claims in respect of such Product.
9.4 In the event that Product shall not conform to the
Specifications, the following shall apply:
9.4.1 If Product delivered shall (a) contain more
than 1,000 PPM insolubles in water; and/or
(b) contain soot at a higher level than the
Allowed Soot Level, Buyer shall have the
option to either reject such Product (in
accordance with the provisions hereinbelow
stipulated), or take delivery of same but
not pay in respect thereof the premium
referred to in sub-article 5.3 above (as
shall be adjusted in accordance with the
provisions of sub-article 5.3.2 above) if
Product is sold not within the Extra
Discount Period; in the event that Product
referred to in (a) or (b) above shall be
sold within the Extra Discount Period, as
the case may be, Buyer shall have the option
to either reject such Product (in accordance
with the provisions hereinbelow stipulated),
or take delivery of same and receive a
discount (in addition to the discounts
referred to in sub- articles 6.2 and 6.3
above) at the rate of U.S.$ 4.25 per Ton of
such Product, said sum to be adjusted in
accordance with the provisions of
sub-article 5.3.2 above.
9.4.2 If Product delivered shall have less than
60% (sixty percent) K2O a pro rata rebate
will be allowed in case of undertest
(calculated on the basis of 60% K2O).
9.4.3 If Product delivered shall materially not
conform to Specifications (other than
specifications referred to in 9.4.1 and
9.4.2 above) Buyer shall be entitled to
reject such Product in accordance with the
provisions hereinbelow stipulated.
9.5 Buyer's right to reject Product as above set forth
shall only apply to Product which shall not have been
contaminated or impaired subsequent to delivery
thereof to Buyer and Buyer shall be entitled to
exercise same if, and only if, a claim in respect
thereof shall have been made in accordance
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with the provisions of sub-article 9.3 above within
the time therein stipulated.
9.6 In the event of rejection of Product as above
mentioned, the following shall apply:
9.6.1 Buyer shall ship such Product and it shall
be promptly unloaded at the Delivery
Location. All costs of loading (if any) at
the Rotem Facility, shipment therefrom the
Delivery Location and unloading of Product
rejected as aforesaid, will be borne by
Seller.
9.6.2 Seller shall replace the rejected Product by
delivering to Buyer an equivalent quantity.
Buyer shall not be required to pay for
rejected and returned Products in accordance
with the provisions of this article 9. All
costs of loading replacing Product at the
Delivery Location and shipping it therefrom
to the Rotem Facility will be borne by
Seller.
9.6.3 Buyer shall not be entitled to receive and
Seller shall not be required to pay Buyer
compensation, indemnification or other
payments or expenses of whatsoever kind or
nature with regard to rejected Product, the
rejection of Product or as a consequence
thereof or otherwise, except that if Seller
shall have received payment for Product
which has been rejected pursuant to the
terms hereof and has not replaced same as in
9.6.2 set forth, Seller shall apply any
amount so received as credit for future
purchases of Product hereunder.
9.7 Buyer shall not delay or withhold payments in respect
of Product delivered notwithstanding any claim which
has been or could have been made by Buyer except for
payments in respect of Product rejected and returned
by Buyer pursuant to the provisions of sub-article
9.6 above.
10. TAXES
10.1 Value Added Tax due or payable with regard to the
sale and purchase of the Product hereunder shall be
borne and paid by Buyer.
10.2 If any tax (other than tax on the overall net income
of Seller), charge, fee, levy or duty shall be
imposed or increased upon the sale or purchase of the
Product at any time after the date of signature
hereof, the amount thereof shall be borne and paid by
Buyer.
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11. FORCE MAJEURE
11.1 Each of the parties hereto shall be relieved of its
obligations hereunder if and to the extent that it is
prevented from performing the same by any cause
beyond its reasonable control, including, without in
any way limiting the generality of the foregoing,
acts of God, war, the elements, explosion, fire,
riots, strike, lock-out or other differences with
workmen (neither party shall be required to settle
any labour dispute against its own best judgment),
shortage of utility, facility, material or labour,
breakdown, accident or compliance with or other
action taken to carry out the intent or purpose of
any law or regulation.
The party so affected shall promptly notify the other
of the existence of such cause, of its expected
duration, and of the estimated effect thereof (to the
extent known) on its ability to perform its
obligations hereunder.
Each party so affected shall promptly notify the
other party when such cause ceases to affect its
ability to perform its obligations hereunder.
12. ALLOCATION
12.1 In the event of Seller's inability, for any of the
causes set forth in Article 11.1 above, to supply the
total demand of Seller's customers (anywhere in the
world) for the Product, Seller shall have the right
to allocate its available supply among Seller's
customers on a fair and equitable basis, and the
relevant Contract Year Quota shall be adjusted
accordingly.
13. DEFAULT BY OR INSOLVENCY OF BUYER
13.1 If Buyer fails to pay any amount due or payable to
Seller hereunder within the stipulated time, Seller
may, in addition to any other rights it may have,
suspend shipment and delivery of Product until such
default is made good.
In the event that such suspension shall result in
Buyer receiving, during any calendar month, less than
the Minimum Monthly Quantity (as defined in
sub-article 3.6 above) the provisions of sub-article
3.6 shall apply.
Waiver by Seller of any default by Buyer hereunder
shall not be deemed as a waiver of any default
thereafter occurring.
13.2 Non payment within the times herein set for payment
and a breach of or non-compliance with any of the
provisions of sub-article 3.1, 3.2, 3.7, 7.2, 9.7 and
15.1 shall be deemed as a fundamental breach of this
Agreement.
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13.3 If Buyer becomes insolvent or ceases to function as a
going concern or if a Receiver for it is appointed or
applied for, or a petition under any bankruptcy or
reorganization statute is field by it or against it,
or if it makes an assignment for the benefit of
creditors or takes advantage of any insolvency
statute, Seller may forthwith terminate this
Agreement without further liability to Buyer but such
termination shall be without prejudice to the rights
of the parties with respect to Product therefore
delivered to Buyer.
14. WEIGHT AND ANALYSIS
14.1 The weight of the Product delivered hereunder shall
be determined by weighing on officially certified
scales designated by Seller and the cost of weighing
shall be for the account of Seller.
Such weighing shall be binding on both parties hereto
and shall serve as a basis for billing Buyer
hereunder.
14.2 14.2.1 Seller shall, at its plant in Sdom, take a
sample from each Shipment of Product and
shall analyse the same in accordance with
the analysis method then used by Seller.
"Shipment of Product" shall mean - total
quantity of Product in Sdom shipped to Buyer
on any Day.
Each sample taken shall be divided into
three portions. One portion shall be
analysed by Seller as herein provided. One
portion shall be made available to Buyer and
shall be shipped to the Rotem Facility at
Buyer's account, once a week. One portion
shall be retained by Seller for a period of
not less than 30 (thirty) Days.
14.2.2 Seller shall telefax to Buyer (at the Rotem
Facility) daily copies of the analysis
results.
14.2.3 Until such time that the analysis method
referred to in 14.2.5 below shall be applied
(if at all), Seller's analysis results
referred to above shall be binding on the
parties hereto.
14.2.4 Buyer shall be entitled to analyse samples
of Product taken from Seller as provided in
14.2.1 above.
14.2.5 If Buyer's analysis result shall indicate
the Product delivered contains more than
1,000 PPM insolubles in water and Buyer's
and
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Seller's respective analysis results
referred to above shall differ by more than
10% with regard to the PPM insolubles in
water content in the Product, or shall
substantially differ with regard to other
Specifications that materially affects Buyer
(except the K2O content in Product; and
except the levels of soot content in Product
- said level to be determined in accordance
with the Adequate Method referred to in
sub-article 1.13 above), then Buyer shall be
entitled to request that samples shall be
analysed in a way to be agreed upon between
the parties.
14.2.6 If the parties shall fail to agree as to the
analysis method, the matter shall be
referred to an individual to be appointed by
both parties who is well conversed with the
chemical issues involved.
In the absence of agreement between the
parties as to whom that individual should
be, he shall be appointed at the joint
request of the parties by the then head of
the chemistry department of the Ben Gurion
University in Beer-Sheva.
14.2.7 The decision of the individual appointed
shall be final and binding upon the parties.
14.2.8 Buyer shall have the right to take samples
at the Delivery Location.
If Buyer shall analyse samples taken at the
Delivery Location and shall continuously
receive results regarding the PPM insolubles
in water content which substantially differ
from Seller's analysis results in a way
which materially affects Buyer then, at the
request of Buyer, Seller and Buyer shall
hold discussions, exchange views and carry
on such agreed tests and experiments with a
view of finding out the reason for such
substantially different results.
15. RIGHT OF SET-OFF
15.1 Buyer shall not be entitled to set-off, or otherwise
deduct any sums from any amount which may be due or
payable to Seller hereunder or otherwise.
16. WAIVER OF DEFAULT
16.1 Any failure by either party at any time, or time to
time, to enforce or require the strict keeping and
performance of any term or condition of this
Agreement shall not constitute a waiver by such party
of any subsequent
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breach of such term or condition, or of the right of
such party to avail itself of such remedies as it may
have for any such subsequent breach.
17. ASSIGNMENT
17.1 This Agreement or any right or obligation thereunder
shall not be assignable in whole or in part by either
party without the prior written consent of the other
party, except that Seller may assign its right to
receive payments hereunder.
Any assignment without such prior written consent (if
consent is required) shall be deemed void ab initio.
18. ENTIRE AGREEMENT AND HEADINGS
18.1 This Agreement constitutes the entire agreement
between the parties hereto with reference to the
subject matter hereof, and all proposals,
negotiations, representations, if any, made prior and
with reference hereto are merged herein. No past
conduct or custom of trade previously applied in the
parties' past business between themselves shall at
any time affect the interpretation of this Agreement.
No terms or conditions, other than those stated
herein, and no agreement or understanding in any way
modifying the terms and conditions stated herein,
shall be binding on either party unless made in
writing and signed by both parties.
18.2 The headings herein are for the sake of convenience
only and shall not be relied upon in the
interpretation or construction of this Agreement.
19. CPA'S CERTIFICATES
19.1 At the request of Buyer, Seller shall deliver to
Buyer, as soon as practicable after termination of
each Contract Year a letter from Seller's CPA
certifying that pricing of Product sold and delivered
to Buyer during the Contract Year conform to the
applicable provisions of the Agreement.
19.2 At the request of Seller, Buyer shall deliver to
Seller, as soon as practicable after termination of
each Contract Year a letter from Buyer's CPA
certifying the quantity of Israeli Market Product
declared by Buyer in respect of that Contract Year
conform to the applicable provision of the Agreement.
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20. STAMP DUTIES
20.1 Stamp duties in respect of this Agreement shall be
borne and paid for by Buyer.
21. NOTICES
21.1 All notices and other communications hereunder shall
be in writing and shall be addressed to the parties
at their respective above mentioned address.
21.2 Either party may change the address or official to
which notices shall be given by notice to the other
party as herein provided.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed.
/s/ /s/ Amiad Cohen
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Dead Sea Works Ltd. Haifa Chemicals South Ltd.
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