AMENDED AND RESTATED ON-SITE PRODUCT SUPPLY AGREEMENT BETWEEN THE BOC GROUP, INC. AND COFFEYVILLE RESOURCES NITROGEN FERTILIZERS, LLC DATED AS OF June 1, 2005
Exhibit 10.2
PORTIONS
OF THIS EXHIBIT DENOTED WITH THREE ASTERISKS (***) HAVE BEEN OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
AMENDED
AND RESTATED
BETWEEN
THE BOC GROUP, INC.
AND
COFFEYVILLE RESOURCES NITROGEN FERTILIZERS, LLC
DATED AS OF June 1, 2005
TABLE OF CONTENTS
Page | ||||||
SECTION 1
|
DEFINITIONS | 1 | ||||
SECTION 2
|
THE BOC FACILITY AND THE PIPELINES | 4 | ||||
SECTION 3
|
PURCHASE AND SALE OF PRODUCT | 8 | ||||
SECTION 4
|
PRICING AND PAYMENT | 12 | ||||
SECTION 5
|
ARGON, CO2 BYPRODUCT AND OTHER BYPRODUCTS | 13 | ||||
SECTION 6
|
TAXES | 14 | ||||
SECTION 7
|
PRODUCT SPECIFICATIONS | 14 | ||||
SECTION 8
|
CLAIMS | 15 | ||||
SECTION 9
|
ALLOCATIONS OF RESPONSIBILITY | 15 | ||||
SECTION 10
|
METERS | 17 | ||||
SECTION 11
|
EXCUSED NON-PERFORMANCE | 17 | ||||
SECTION 12
|
PRICE ADJUSTMENTS | 18 | ||||
SECTION 13
|
TERM | 18 | ||||
SECTION 14
|
ASSIGNMENT | 19 | ||||
SECTION 15
|
NOTICES | 19 | ||||
SECTION 16
|
GENERAL REPRESENTATIONS AND WARRANTIES | 20 | ||||
SECTION 17
|
CONFIDENTIALITY | 21 | ||||
SECTION 18
|
RESOLUTION OF DISPUTES | 22 | ||||
SECTION 19
|
INDEMNIFICATION | 22 |
Page | ||||||
SECTION 20
|
INSURANCE | 24 | ||||
SECTION 21
|
TAKING & CASUALTY | 25 | ||||
SECTION 22
|
LIAISONS | 27 | ||||
SECTION 23
|
GENERAL PROVISIONS | 27 | ||||
EXHIBITS |
||||||
EXHIBIT A
|
CERTAIN SPECIFICATIONS, CAPABILITIES AND CAPACITIES | |||||
EXHIBIT B
|
PRICE ADJUSTMENTS | |||||
EXHIBIT C
|
ACCEPTABLE AIR CONTAMINANT LEVELS | |||||
EXHIBIT D
|
THE COFFEYVILLE PLANT SITE | |||||
EXHIBIT E
|
THE BOC PLANT SITE | |||||
EXHIBIT F
|
ITEMS TO BE PROVIDED BY COFFEYVILLE RESOURCES | |||||
EXHIBIT F-l
|
COOLING WATER SPECIFICATIONS | |||||
EXHIBIT F-2
|
HYDROGEN SPECIFICATIONS | |||||
EXHIBIT F-3
|
EXCESS POWER CALCULATION METHODOLOGY | |||||
EXHIBIT G
|
PRICING SCHEDULE | |||||
EXHIBIT H
|
PURCHASE PRICE | |||||
EXHIBIT I
|
TERMINATION FEE | |||||
EXHIBIT J
|
MEMORANDUM OF LICENSE | |||||
EXHIBIT K
|
CALCULATION OF LOST LIQUID ADJUSTMENT FACTOR, JULY 2005 |
iii
AMENDED AND RESTATED ON-SITE PRODUCT SUPPLY AGREEMENT
THIS AMENDED AND RESTATED ON-SITE PRODUCT SUPPLY AGREEMENT (“Agreement”), made and
effective as of the 1st day of June, 2005, by and between THE BOC GROUP, INC., a Delaware
corporation, acting by and through its BOC Gases Division (“BOC”), COFFEYVILLE RESOURCES NITROGEN
FERTILIZERS, LLC, a Delaware limited liability company (“Coffeyville Resources”).
WITNESSETH:
WHEREAS, Farmland Industries, Inc. (“Farmland”) and BOC originally entered into the On-Site
Product Supply Agreement (“Original Agreement”) dated December 3, 1997; and
WHEREAS, Farmland and BOC entered into Amendment No. 1 to the Original Agreement dated December
31, 1999; and
WHEREAS, Farmland assigned the Original Agreement, as amended, to Coffeyville Resources effective
March 4, 2004; and
WHEREAS, Coffeyville Resources and BOC desire to further amend the Original Agreement to
incorporate Amendment No. 1 and to incorporate such further amendments into this Amended and
Restated On-Site Product Supply Agreement, which replaces and supersedes the Original Agreement, as
amended by Amendment No. 1.
IN CONSIDERATION OF THE PROMISES HEREINAFTER CONTAINED, BOC AND COFFEYVILLE RESOURCES HEREBY AGREE
WITH EACH OTHER AS FOLLOWS:
SECTION 1 DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings indicated
below:
(a) “Argon” — a by-product liquid product produced by the BOC Facility.
(b) “BOC
Entities” shall have the meaning given such term in Section 19(c) hereof.
(c) “BOC Facility” — a plant for the production of Product and Argon (the “BOC Plant”),
including metering and related facilities, together with interconnected liquid Oxygen Product and
liquid Nitrogen Product storage vessels and vaporization equipment (the “Liquid Product Storage
Facility”), all connected to the BOC Pipelines and having the production, delivery, liquid storage
and vaporization capabilities or capacities stated in Paragraphs II and III of Exhibit A
hereto, which shall be owned or leased, maintained and operated by BOC on the BOC Plant Site.
(d) “BOC Pipelines” — pipelines suitable for use in connection with the delivery of Product
hereunder, that shall be owned or leased and maintained by BOC, connecting the BOC Facility with
the respective Coffeyville Resources Pipelines.
(e) “BOC Plant” shall have the meaning given such term in Section l(c) hereof.
(f) “BOC Plant Site” — a parcel of land located on the Coffeyville Plant Site on which the BOC
Facility is located, which parcel is more particularly identified on
Exhibit E hereto.
(g) “Bona Fide Offer” — a written offer, made in good faith and setting forth commercially
reasonable terms for the purchase of CO2 Byproduct produced at the
Coffeyville Facilities, which offer shall set forth, in reasonable detail, all information which is
reasonably required to evaluate the economics of the deal, including, at a minimum, if applicable,
information relating to the: (i) distribution or percentage of ownership and/or entitlement to
profits, losses, tax credits, carbon sequestration credits earned in connection with the sale of
CO2 Byproduct, as between BOC, Coffeyville Resources and any third party or parties; (ii) project
costs; (iii) project capacity; (iv) project schedule;
(v) raw
CO2 gas pricing; (vi) finished
product pricing; (vii) marketing rights; and
(viii) operating and maintenance responsibility.
(h) “CDA Product” — clean, dry air product conforming to the product specifications set forth
in Paragraph I of Exhibit A hereto.
(i) “CO2 Byproduct” — the gaseous carbon dioxide produced by the Coffeyville
Facilities as a byproduct and made available as contemplated by
Section 5 hereof.
(j) “Coffeyville Entities” shall have the meaning given such term in Section 19(a) hereof.
(k) “Coffeyville Facilities” — those facilities and plants (including the gasification plant,
ammonia synthesis loop and UAN plant) located at the Coffeyville Plant Site, but not including the
Facilities.
(1) “Coffeyville Pipelines” — pipelines suitable for use in connection with the delivery of
Product hereunder, that shall be owned or leased by Coffeyville Resources and operated and
maintained by or for the benefit of Coffeyville Resources, connecting the Coffeyville Facilities
with the BOC Pipelines at respective points on the boundary of the BOC Plant Site, as agreed upon
by Coffeyville Resources and BOC.
(m) “Coffeyville Plant Site” — the parcel of land near Coffeyville, Kansas on which
Coffeyville Resources’ fertilizer complex (including the Facilities) is located, which parcel is
more particularly identified on Exhibit D hereto.
(n) “Environmental Laws” — any now-existing or hereafter enacted or promulgated federal,
state, local, or other law, statute, ordinance, rule, regulation or court order pertaining to (i)
environmental protection, regulation, contamination or clean-up, (ii) toxic waste, (iii)
2
underground storage tanks, (iv) asbestos or asbestos-containing materials, or (v) the handling,
treatment, storage, use or disposal of Hazardous Substances, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation
and Recovery Act, or state lien or state superlien or environmental protection, regulation,
contamination or clean-up statutes, all as exist from time to time.
(o) “Environmental Loss” — all (i) claims, demands, judgments, liabilities, losses, damages,
civil penalties and civil fines, (ii) attorneys’, experts’, consultants’, contractors’, or
accountants’ fees, expenses, court costs and other out-of-pocket expenses, and (iii) costs of
investigation, characterization, remediation, clean-up and disposal, which arise as a result of a
violation of any Environmental Law or the presence, use, handling, storage, disposal, release,
treatment, processing or utilization of any Hazardous Substances.
(p) “Facilities” — together, the BOC Facility and the BOC Pipelines.
(q) “Force Majeure” — “Force Majeure” shall have the meaning given such term in Section 11(a) hereof.
(r) “Gasification Project” — the gasification to ammonia project at the Coffeyville Plant
Site including, but not limited to, a gasification plant, an ammonia synthesis loop and related
storage facilities, a UAN plant and related storage facilities, coke handling and storage
facilities, and interconnecting piping and related off-site support facilities, including
utilities.
(s) “Hazardous Substance” — any of the substances that are defined or listed in, or otherwise
classified, or which may come to be so defined, listed or classified pursuant to, any applicable
statutes, laws, rules or regulations, as “hazardous substances,” “hazardous materials,” “hazardous
wastes” or “toxic substances,” or any other formulation intended to define, list or classify
substances by reason of deleterious properties, including but not limited to any chemical,
material or substance, exposure to which is prohibited, limited or regulated by any governmental
authority or which may or could pose a hazard to the health and safety of any person in the
vicinity of the Coffeyville Plant Site.
(t) “High Pressure Air Product” — clean, dry air product conforming to the product
specifications set forth in Paragraph I of Exhibit A hereto.
(u) “Liquid Product Storage Facility” shall have the meaning given such term in Section l(c)
hereof.
(v) “Minimum Product Charge” — the minimum monthly charge payable by Coffeyville Resources to
BOC hereunder with respect to Product as more specifically described on Exhibit G hereto,
subject to adjustment as provided herein.
(w) “Nitrogen Product” — nitrogen gas (including vaporized liquid) and liquid conforming to
the product specifications set forth in Paragraph I of
Exhibit A hereto.
3
(x) “Oxygen Product” — oxygen gas (including vaporized liquid) and liquid conforming to the
product specifications set forth in Paragraph I of
Exhibit A hereto.
(y) “Permits” — licenses, permits and approvals of third parties, governmental agencies or
authorities, including licenses, permits and approvals of governmental agencies or authorities
respecting health, safety and the environment.
(z) “Product” — collectively CDA product, Oxygen Product and Nitrogen Product.
(aa) “Standard Cubic Foot” — the quantity of Product which would occupy a cubic foot of space
at a pressure of 14.7 pounds per square inch absolute and a temperature of 70°F (the phrases
“Standard Cubic Foot” and “Standard Cubic Feet” are sometimes hereinafter abbreviated “scf”).
(bb) “Supply Period” — that period of time commencing on June 1, 2005 and ending on April 30,
2020 (subject to extension or earlier termination pursuant to the provisions hereof).
SECTION 2 THE BOC FACILITY AND THE PIPELINES
(a) BOC shall indemnify and hold Coffeyville Resources and the other Coffeyville
Entities harmless from and against any and all claims, damages, liabilities, losses, costs and
expenses (including reasonable attorneys’ fees), arising from (i) noncompliance by BOC or BOC
Entities with any Environmental Laws or (ii) conditions on, at or under the BOC Plant Site, in
each case, caused by BOC’s construction of the Facilities or other operations from and after the
date that BOC occupies the BOC Plant Site. Coffeyville Resources shall indemnify and hold BOC and
the other BOC Entities harmless from and against any and all claims, damages, liabilities, losses,
costs and expenses (including reasonable attorneys’ fees), arising from (i) noncompliance by
Coffeyville Resources or Coffeyville Entities with any Environmental Laws caused by Coffeyville
Resource’s occupation, use or operation of the Coffeyville Facilities or the Coffeyville Plant
Site (whether prior to, on, or following the date that BOC occupies the BOC Plant Site) or (ii)
conditions on, at or under the BOC Plant Site prior to the date that BOC occupies the BOC Plant
Site. All indemnification obligations pursuant to this Section 2(a) shall be subject to the
provisions of Section 19(e) and 19(f) hereof.
(b) Subject to section 2(d), the BOC Plant Site shall be occupied exclusively by BOC solely
for the construction, use, operation and maintenance of the Facilities for the supply of Products
as contemplated hereunder and the retention and sale of certain other industrial gases as set forth
in Sections 3 and 5 hereof, without cost for such occupancy, until the Facilities are removed in
accordance with the terms hereinafter provided.
(c) Commencing on the date of execution and delivery of this Agreement, Coffeyville Resources
grants to BOC and its directors, officers, employees, agents, contractors and subcontractors,
with or without vehicles, equipment, materials and machinery, the following easements,
rights-of-way and licenses over the Coffeyville Plant Site (provided that any such use shall not
unreasonably interfere with the use or occupancy by or on behalf of Coffeyville
4
Resources of the Coffeyville Plant Site and that BOC will cooperate with Coffeyville Resources and
any and all third parties at the Coffeyville Plant Site to coordinate such use):
(i) at all times by day or by night to enter upon and use all or any of the Coffeyville
Plant Site for the purpose of installing, maintaining, repairing, reconstructing,
renovating, replacing, modifying, operating or removing all or any portion of the BOC
Facilities located thereon;
(ii) in locations reasonably satisfactory to BOC and Coffeyville Resources and subject
to Coffeyville Resource’s reasonable direction at all times by day or by night for road
purposes, to enter upon, cross, pass and xxxxxx over and exit from all or any of the
Coffeyville Plant Site to the extent reasonably necessary for access and egress to and from
the BOC Plant Site; and
(iii) in locations reasonably satisfactory to BOC and Coffeyville Resources and
subject to Coffeyville Resource’s reasonable direction, at all times by day or by night, to
enter upon and use all or any of the Coffeyville Plant Site for other purposes to the
extent reasonably necessary to enable BOC to perform its obligations under this Agreement;
all of which easements, rights-of-way and licenses are granted subject to BOC’s compliance with the
reasonable security and safety requirements and rules of Coffeyville Resources, and shall remain in
full force and effect until the earlier of: (i) 360 days after the expiration or other termination
of this Agreement; or (ii) the date the Facilities are removed from the BOC Plant Site. Farmland
previously delivered to BOC a Memorandum of License in the form attached hereto as Exhibit J, which
remains in effect.
(d) Coffeyville Resources hereby reserves for itself and for its agents, contractors, tenants,
licensees and employees: (i) the non-exclusive right to use the BOC Plant Site for such ingress,
egress, utility facilities and other connections and uses as may be reasonably necessary in
connection with the ownership, use, enjoyment, repair, maintenance and expansion of the Coffeyville
Facilities; (ii) the non-exclusive right to use a 12-feet-wide portion of the BOC east-west pipe
rack within the BOC Plant Site with a loading capacity up to 30 pounds per square foot for the
installation, operation and maintenance by Coffeyville Resources of its cable tray and cables;
provided, however, that Coffeyville Resources shall not exercise its rights with respect to any
such reserved rights in any manner that unreasonably interferes with the use of the BOC Plant Site
by BOC in accordance with the terms of this Agreement (except that Coffeyville Resources may
interfere with BOC’s use of the BOC Plant Site to the extent necessary to comply with any
Environmental Laws or that certain Resource Conservation and Recovery Act (RCRA) Facility
Investigation Order dated October 24, 1995, issued to Farmland Industries, Inc., Coffeyville
Resources’ predecessor, by the United States Environmental Protection Agency, which interference
shall not be deemed a Force Majeure for purposes of this Agreement).
(e) The BOC Facilities are not intended to be or to become a fixture or otherwise part of the
BOC Plant Site, or of any other property owned by Coffeyville Resources or its assigns
notwithstanding the manner in which it, or any part of it, is installed or affixed, but said
Facilities are intended to remain the personal property of BOC (or its lessor) at all times.
Coffeyville
5
Resources shall indemnify and hold BOC harmless from and against any and all losses, costs,
damages, claims and liabilities arising out of any inability (including any delay) on the part of
BOC to remove all or any part of the Facilities from the BOC Plant Site, pursuant to Section 2(j)
or otherwise, because of any right on the part of Coffeyville Resources or its assigns to the
effect that the same is a fixture or otherwise part of the BOC Plant Site and may not be removed
from the BOC Plant Site (including any assertion of any such right), together with all costs and
expenses (including reasonable legal fees) incurred by BOC in resisting any such right or
assertion, whether or not such resistance was successful, such indemnification to be subject to the
provisions of Sections 19(e) and 19(f) hereof.
(f) Coffeyville Resources shall provide, at the BOC Facility, sufficient quantities of the
items listed on Exhibit F as may, from time to time, be reasonably required for the construction,
operation and maintenance of the BOC Facility, all of which shall be, except as set forth in
Exhibit F or otherwise specified herein, without cost to BOC. Coffeyville Resources acknowledges
that BOC intends to operate the BOC Plant at all times during the Supply Period, including those
times when Coffeyville Resources does not desire to take delivery of any Product, and Coffeyville
Resources shall provide sufficient quantities of the items listed on Exhibit F as may be reasonably
required to operate the BOC Plant at all such times during the Supply Period.
(g) BOC shall not do or permit others under its control to do any work in or about the BOC
Plant Site, or related to any repair, rebuilding, restoration, replacement, alteration of or
addition to the BOC Plant Site, unless BOC shall have first procured and paid for all necessary
Permits in accordance with the provisions of Section 9(d) hereof.
(h) In the event that any of the contaminant levels of the atmosphere at the BOC Plant Site
exceed the applicable amount set forth on Exhibit C hereto after the date hereof and, in
the reasonable opinion of BOC, operation of the BOC Facility may be hazardous or the BOC Facility
may be damaged, or BOC’s ability to meet the product specifications set forth in Paragraph I of
Exhibit A hereto may be impaired as a result of such condition (a “Hazardous Condition”),
Coffeyville Resources and BOC shall proceed as set forth in this Section 2(h). BOC shall promptly
notify Coffeyville Resources thereof, specifying the particular contaminant levels and the effect
thereof. Upon receipt of such notice, Coffeyville Resources shall, at its election within sixty
(60) days thereafter proceed to do one of the following: (i) correct such condition by removal or
modification of the contaminant source; (ii) request BOC to make such additions or modifications
to the BOC Facility as BOC deems reasonably necessary to compensate for such Hazardous Condition,
whereupon BOC shall undertake to do the same; or (iii) terminate this Agreement by providing
written notice to BOC and paying to BOC the applicable termination fee listed on Exhibit I
hereto. The cost of any action taken pursuant to the preceding sentence other than the payment of
a termination fee by Coffeyville Resources pursuant to clause (iii) of such sentence shall be (x)
borne by Coffeyville Resources if Coffeyville Resources was the cause of the Hazardous Condition,
(y) borne by BOC if BOC was the cause of the Hazardous Condition, and (z) in all other cases borne
equally by BOC and Coffeyville Resources.
6
(i) Neither Coffeyville Resources nor BOC shall do or suffer anything to be done whereby the
BOC Plant Site or the Facilities or any part thereof may be encumbered by any mechanics’ lien or
other similar lien and if whenever and as often as any mechanics’ lien, or other similar lien is
filed against the BOC Plant Site or the Facilities or any part thereof purporting to be for or on
account of any labor, materials or services furnished in connection with any work in or about the
BOC Plant Site or the Facilities done by, for or under the authority of either party hereto or
anyone claiming by, through or under such party, such party shall discharge the same of record
within sixty (60) days after the date of filing. Notwithstanding the above, each party hereto shall
have the right to contest any such mechanics’ lien or other similar lien if within said sixty (60)
day period stated above it notifies the other party in writing of its intention so to do and, if
requested by the other party, deposits with such party a bond in favor of such party, with a surety
company acceptable to such party as surety, in the total sum of at least one hundred twenty-five
percent (125%) of the amount of the lien claim so contested, indemnifying and protecting such party
from and against any liability, loss, damage, cost and expense of whatever kind or nature growing
out of or in any way connected with said lien and the contest thereof, and if, and provided
further, such party diligently prosecutes such contest, at all times effectively stays or prevents
any official or judicial sale of the BOC Plant Site or the Facilities, or any part thereof or
interest therein, under execution or otherwise, and pays or otherwise satisfies any final judgment
adjudging or enforcing such contested lien claim and thereafter promptly procures record release or
satisfaction thereof.
(j) BOC shall have 360 days from and after any expiration or termination of this Agreement to
remove the Facilities from the BOC Plant Site. BOC shall restore the BOC Plant Site to the
condition it was in immediately prior to the time it was made available to BOC by Coffeyville
Resources’ predecessor, Farmland Industries, Inc., but not including removing any foundations or
other underground installations, and upon said removal of the Facilities, such foundation and
underground installations shall become the property of Coffeyville Resources.
(k) Coffeyville Resources, for itself and its duly authorized representatives and agents,
reserves the right, upon reasonable notice to BOC, to enter the BOC Plant Site during the term of
this Agreement for the purpose of (i) examining and inspecting the same as permitted hereunder and
for the purpose of exercising any and all of Coffeyville Resource’s other rights under this
Agreement, (ii) performing, at Coffeyville Resources’ option, such work in and about the BOC Plant
Site as may be made necessary by reason of BOC’s default under any of the provisions of this
Agreement, (iii) conducting environmental assessment, monitoring or compliance activities, and
(iv) for such other purposes as Coffeyville Resources may reasonably determine to be necessary or
appropriate. Coffeyville Resources may, during the progress of said work and activities mentioned
in (ii) and (iii) above, keep and store on the BOC Plant Site all necessary materials, supplies
and equipment, and Coffeyville Resources shall not be liable for any inconvenience, annoyances,
disturbance, loss of business or other damage suffered by reason of the performance of any such
work or by the storage of materials, supplies and equipment or by Coffeyville Resources’ exercise
of any of its rights under this Agreement, except to the extent caused by the negligence of
Coffeyville Resources or its representatives or agents.
7
(1) BOC
will consult with Coffeyville Resources and use all reasonable efforts to coordinate
scheduled maintenance and other temporary scheduled interruptions in the operations of the
Facilities during periods of scheduled down time for the Coffeyville Facilities.
(m) BOC shall cooperate with Coffeyville Resources and any and all third parties at the
Coffeyville Plant Site to coordinate the activities of all parties working at the Coffeyville Plant
Site. Coffeyville Resources shall have the right, from time to time, to designate a contractor,
agent or other representative of Coffeyville Resources’ choice to coordinate the activities of all
contractors working on or near the BOC Plant Site or in connection with the Gasification Project.
BOC shall cooperate with all such coordination efforts and shall take such steps as may be
reasonably required for the orderly progress of the Gasification Project without interruption or
disruption attributable to the acts or omissions of BOC. Coffeyville Resources and BOC shall, in
general, and to the best of their ability, conduct their respective operations on or near the BOC
Plant Site in such a manner as to cause no interference or disruption with the other’s operations.
BOC acknowledges that Coffeyville Resources intends to operate the Coffeyville Facilities
twenty-four (24) hours a day, seven days a week, during the time that BOC is performing its
obligations hereunder, and BOC shall undertake its obligations hereunder in a manner that does not
interrupt or disrupt the operations of the Coffeyville Facilities.
SECTION 3 PURCHASE AND SALE OF PRODUCT
(a) It is anticipated that the BOC Plant will be operated on a continuous basis during the
Supply Period and will produce a uniform volume of Product. From time to time Coffeyville Resources
will advise BOC of the volume of Product it will purchase from BOC, such advice to be effective
until new advice is given by Coffeyville Resources. Coffeyville Resources shall pay BOC for such
Product in accordance with the provisions of Section 4 hereof. In the event Coffeyville Resources
desires to take delivery of less Product than that amount described
in Paragraph II of Exhibit A
hereto, then Coffeyville Resources will continue to pay BOC for such Product in accordance with the
provisions of Section 4 hereof, provided, however, that in the event that Coffeyville Resources
desires to purchase less Product than that amount described in Paragraph II of Exhibit A for a
period of more than twenty-four (24) hours, then the Supply Period shall be extended by that number
of hours that is equal to the number of hours for which Coffeyville Resources desires to take
delivery of less Product than that amount described in
Paragraph II of Exhibit A, but not to exceed
180 days, and there shall be no Minimum Product Charge during such extension period.
(b) (i) During the Supply Period, BOC shall sell and deliver to Coffeyville Resources, and
Coffeyville Resources shall purchase and accept from BOC, Coffeyville Resources’ requirements of
Product for its Gasification Project located at the Coffeyville Plant Site; provided, however, that
BOC shall not be obligated to supply gaseous Oxygen Product or gaseous Nitrogen Product from the
BOC Plant to Coffeyville Resources at an instantaneous flow rate in excess of the applicable rate
that is stated in Paragraph II of Exhibit A or vaporized liquid Oxygen Product or vaporized liquid
Nitrogen Product from the Liquid Product Storage Facility at a rate in excess of the applicable
vaporization capacity set forth in Paragraph III of Exhibit A.
8
Delivery and transfer of title to all Product shall be made at the point where each of the
Coffeyville Pipelines are connected to the corresponding BOC Pipelines.
(ii) BOC’s
delivery commitments to Coffeyville Resources, as stated in Paragraph 3(b) (i)
above, shall be satisfied, primarily, by the delivery of gaseous Product produced at the BOC Plant;
however, if the BOC Plant is not operating, or Coffeyville Resources’ requirements exceed the
capacity of the BOC Plant, BOC will then supply Coffeyville Resources with vaporized liquid Product
delivered from the inventory of the Liquid Product Storage Facility. If requested by Coffeyville
Resources, BOC will replenish the inventory of the Liquid Product Storage Facility with hauled-in
liquid product to the extent available from outside sources (“Supplemental Product”). Supplemental
Product shall be billed to Coffeyville Resources as set forth in Paragraphs IV and V of Exhibit G.
(iii) During the Supply Period, Coffeyville Resources shall not purchase any Oxygen Products
or Nitrogen Products for any other use at the Coffeyville Plant Site from any third party except
as set forth in section 3(d) below.
(c) In the event that during the Supply Period BOC elects to produce Product in excess of the
amount of Product to be purchased by Coffeyville Resources hereunder for the purpose of retaining,
marketing and selling such Product for its own account pursuant to Section 5 hereof, BOC shall pay
Coffeyville Resources any incremental cost Coffeyville Resources incurs in order to provide
sufficient quantities of those items provided by Coffeyville Resources pursuant to Section 2(f)
hereof to allow BOC to produce such excess Product.
For the purposes of this Section 3(c), Coffeyville Resources’ incremental costs for liquid
Oxygen Product and liquid Nitrogen Product retained by BOC for its own account and sold to third
parties shall be deemed paid in full upon the credit to Coffeyville Resources by BOC of the
following amounts:
(***) per ton of such liquid Oxygen Product
(***) per ton of such liquid Nitrogen Product
(***) per ton of such liquid Nitrogen Product
BOC shall meter all quantities of such liquid Product on BOC’s truck scales and shall calculate and
provide to Coffeyville Resources all credits due to Coffeyville Resources therefor on a monthly
basis. Coffeyville Resources will apply those credits against BOC’s invoices for the Minimum
Product Charge.
(d)
If at any time during the Supply Period Coffeyville Resource’s
requirements for Product exceed, or are expected to exceed, any of
the instantaneous flow rates set forth in Paragraph II of
Exhibit A by an amount which exceeds such instantaneous flow
rate by at least 10 percent (the amount of such excess over and
above 10% defined herein as “Excess Product”), then:
i.
Coffeyville Resources shall promptly provide BOC with written notice
(“Excess Product Notice”) of the need for such Excess
Product in accordance with Section 15 of this Agreement. Such
Excess Product Notice shall include the approximate quantity of
Excess
9
Product
and the approximate date by which Coffeyville Resources requires such
Excess Product (“Excess Product Date”); and
ii.
For 60 days following BOC’s receipt of such Excess Product
Notice, BOC and Coffeyville Resources shall work together to jointly
develop and request for Proposal (“RFP”) for the purpose of
soliciting bids from third parties and BOC for supplying Excess
Product to the Coffeyville Facilities by the Excess Product Date. BOC
and Coffeyville Resources agree that it is their mutual intention
that the RFP will not provide for the solicitation of bids for the
sale of equipment, but will be limited to contracts for the supply of
Excess Product; and
iii.
Coffeyville Resources shall have 60 days from the date BOC and
Coffeyville Resources complete preparation of the RFP to distribute
the RFP and solicit bids from BOC and any third party bidders
(“Bidding Period”); provided, however, that if BOC and
Coffeyville fail to complete the RFP by the time described in
Section 3(d)(ii) above, then Coffeyville Resources may submit
its own RFP to BOC and third parties and the 60 day Bidding
Period would then start on the date of Coffeyville Resources’
distribution of such RFP; and
iv.
Within 7 days after the conclusion of the Bidding Period,
Coffeyville Resources shall provide BOC with written notice
(“Bid Decision Notice”), in accordance with Section 15
of this Agreement, as to whether: (a) it agrees to accept
BOC’s bid; or (b) intends to accept one of the bids
submitted by a third party; and
v.
If Coffeyville Resources accepts BOC’S bid, then
Coffeyville Resources shall purchase its Excess Product from BOC as
of the Excess Product Date in accordance with the terms and
conditions of BOC’s bid; and
(***)
10
(***)
11
SECTION 4 PRICING AND PAYMENT
(a) Except as otherwise provided herein, Coffeyville Resources shall pay BOC in
accordance with the pricing schedule set forth on Exhibit G hereto.
(b) On or before the 10th day of each month, BOC shall submit an invoice (each, a “Minimum
Product Charge Invoice”) to Coffeyville Resources covering the Minimum Product Charge applicable to
such month. All Minimum Product Charge Invoices shall be on a net cash basis, payable by
Coffeyviile Resources within twenty (20) days after receipt thereof. In the event BOC has not
received payment within forty (40) days of the date of a Minimum Product Charge Invoice, BOC at its
sole option may assess interest thereon at an annual rate equal to the prime rate then in effect at
Chase Manhattan Bank, N.A., plus two percent (2%) from and after the date such payment was due to
the date when paid.
(c) On or before the 10th of each month, BOC shall submit an invoice (each, an “Other Charges
Invoice”) to Coffeyville Resources covering all charges and other sums other than the Minimum
Product Charge, if any, applicable to the immediately preceding month as well as all Product
delivered prior to such month that was not covered by a prior invoice. All Other Charges Invoices
shall be on a net cash basis, payable by Coffeyville Resources within ten (10) days after receipt
thereof. In the event BOC has not received payment within thirty (30) days of the date of an Other
Charges Invoice, BOC at its sole option may assess interest thereon at an annual rate equal to the
prime rate then in effect at Chase Manhattan Bank, NA, plus two percent (2%) from and after the
date such payment was due to the date when paid.
(d) From time to time during the term of this Agreement, BOC shall have the right to increase
the applicable unit prices for liquid Products in the pricing schedule set forth on Exhibit G
hereto pursuant to this Section 4(d) by giving Coffeyville Resources written notice thereof. Said
increased prices shall become effective thirty (30) days after the date of said notice; provided,
however, that if Coffeyville Resources, within fifteen (15) days
after the date of said notice, furnishes BOC with a bona fide, firm,
written offer from a responsible seller offering to sell Coffeyville
Resources comparable Product, in like quantities, under similar
conditions and at a lower price, BOC shall within fifteen (15) days
thereafter agree to either: (i) meet said lower price; or
(ii) reinstate the price thereof in effect at the time of said
notice of increase, whichever BOC, in its sole discretion, may elect.
(e) During the Supply Period, Coffeyville Resources will provide a monthly credit to BOC for
Lost Liquid Production (as “Lost Liquid Production” is defined below). The credit shall be
calculated on a monthly basis using the following formula:
($46/ton)[(Operating Days in Month)(120) — (Actual Tons Liquid Production)] = Credit
and will
be capped at $70,000 in any single month. The $46/ton price and
$70,000/month cap will
adjust (up or down) on a monthly basis based upon the actual total power cost as billed to
Coffeyville Resources by the City of Coffeyville, Kansas (expressed as $/KWH) compared to the
actual total power cost in June 2005 (expressed as $/KWH). The actual total power cost in June
12
2005 was $.03965/KWH. As an example, attached as Exhibit K is the adjustment calculation per this
paragraph for July 2005. For purposes of this Section 4(e), the following terms shall have the
meanings set forth below:
(i) “Operating Day” shall mean hours of operation in any calendar day during which BOC is
providing all Products at the purity volumes and pressures provided for herein divided by 24.
(ii) “Liquid Production” shall mean the sum of liquid Nitrogen Product and liquid Oxygen
Product as determined by BOC scale tickets.
(iii) “Lost Liquid Production” shall mean Liquid Production which is not realized by BOC
solely due to the supply of High Pressure Air Product by BOC to Coffeyville Resources pursuant to
this Agreement.
SECTION 5 ARGON, CO2 BYPRODUCT AND OTHER BYPRODUCTS
(a) During the Supply Period, BOC shall be entitled to retain, market and sell for its
own account: (i) all Argon produced by the BOC Plant; (ii) all CO2 Byproduct, except to
the extent retained by Coffeyville Resources or its affiliates and except to the extent otherwise
provided in or pursuant to Section 5(b) herein; and (iii) all other byproducts and other industrial
gases, in liquid or gaseous form, produced by the BOC Plant, including Product in excess of BOC’s
obligations to supply same to Coffeyville Resources hereunder. BOC shall be solely responsible
for the proper disposal, in accordance with all applicable Environmental Laws and Permits of any
and all byproducts and other emissions and wastes generated by the BOC Plant (including from CO2
Byproduct delivered to BOC) other than Products delivered to Coffeyville Resources hereunder.
Except as permitted by Section 5(b) herein, Coffeyville Resources agrees that it will not sell or
deliver CO2 Byproduct to anyone other than BOC, its affiliates and affiliates of Coffeyville
Resources.
(b) Subject to Paragraph 5(a) above, BOC and Coffeyville Resources hereby agree as follows:
(i) For
a period of no less than 90 days, commencing as of the effective date
of this Agreement, which period shall be referred to as the
“Initial Negotiating Period,” BOC and Coffeyville Resources
shall negotiate in good faith to jointly develop projects relating to
the marketing and sale of CO2 Byproduct produced by the
Coffeyville Facilities (“CO2 Projects”) which
are mutually acceptable to both parties. BOC and Coffeyville
Resources further agree that each party can own up to a maximum of
50% of any individual CO2 Project.
(ii) If
BOC and Coffeyville fail to jointly develop CO2 Projects
mutually acceptable to both parties during the Initial Negotiating
Period, then, at any time after the expiration of the Initial
Negotiating Period, either BOC or Coffeyville Resources (the
“Proposing Party”) shall provide the other party (the
“Receiving Party”) with written Notice of a Bona Fide Offer
setting forth all terms of said Bona Fide Offer. Said Notice shall be
provided in accordance with
13
Section 15 of this Agreement. A Bona
Fide Offer may come from a third party, Coffeyville Resources or BOC.
(iii) For
a period of no less than 90 days, commencing as of the date
written Notice of a Bona Fide Offer is received by the Receiving
Party, BOC and Coffeyville Resources shall negotiate in good faith to
consider the Bona Fide Offer. If BOC and Coffeyville Resources agree
to accept the Bona Fide Offer, then, unless the parties agree
otherwise, all profits, losses, tax credits and carbon sequestration
credits earned in connection with the sale of CO2
Byproduct associated with the Bona Fide Offer shall be shared between
BOC and Coffeyville Resources in the same proportion as the ownership
proposed in connection with the related Bona Fide Offer. If, at the
expiration of 90 days, BOC and Coffeyville Resources have not
reached agreement as to whether to accept or reject the Bona Fide
Offer, then the Proposing Party shall be authorized to accept the
Bona Fide Offer, and
shall have the exclusive right to retain 100% of all profits, tax
credits and losses earned in connection with the sale of
CO2 Byproduct to such Third Party Buyer. In that event,
the Proposing Party shall indemnify and hold the Receiving Party, its
directors, officers, agents, employees, subsidiaries, and affiliates,
harmless from and against any and all claims, demands, judgments,
liabilities or expenses arising out of or in any way connected with
the Proposing Party’s use, transportation, marketing or sale of
such CO2 Byproduct.
SECTION 6 TAXES
(a) Coffeyville Resources shall pay the amount of all Federal, state and local taxes, however
denominated (except taxes on BOC’s net income or for its general privilege to conduct business in
any state), arising in connection with the production, sale or delivery of any Product hereunder,
including, without limitation, all real and personal property taxes (and any payments associated
with such taxes) applicable to the Facilities, or any part thereof. BOC agrees to use its
commercially reasonable best efforts to secure such exemptions from real and personal property
taxes as may be available now and from time to time with respect to the BOC Facilities. BOC will
cooperate with Coffeyville Resources should Coffeyville Resources desire to contest any sales or
other tax assessed by any governmental unit, all at Coffeyville Resources’ expense.
(b) In the event that any tax covered by this Section 6 should be assessed against and paid by
a party other than the party required hereunder to pay such tax, such other party shall promptly
reimburse such party for such payment
(c) Upon request, a properly completed exemption certificate (where appropriate) for any tax
from which a party claims exemption shall be provided to the other party.
SECTION 7 PRODUCT SPECIFICATIONS
BOC warrants that all Products and gas sold and delivered to Coffeyville Resources under this
Agreement shall conform to the product specifications set forth in
Paragraph I of Exhibit A
hereto. THE WARRANTY SET FORTH IN THIS PARAGRAPH 7 IS IN LIEU OF ALL OTHER WARRANTIES,
REPRESENTATIONS OR CONDITIONS OF ANY KIND OR
14
NATURE, EXPRESS OR IMPLIED, IN FACT OR BY LAW, RESPECTING THE PRODUCTS AND GAS
SOLD TO COFFEYVILLE RESOURCES.
SECTION 8 CLAIMS
Written notice of all claims having anything to do with any Products delivered by BOC
to the Coffeyville Pipelines or for failure to make timely delivery, shall be made within
forty-five (45) days of such delivery, or of the date on which such delivery was to have been
made, as the case may be. Written notice of all claims with respect
to billing matters shall be
made within one (1) year of the date of the relevant invoice. Failure by Coffeyville Resources to
give such written notice within such time shall constitute a complete defense for BOC against such
claims by Coffeyville Resources, except as otherwise specifically provided in Section 9 hereof.
SECTION 9 ALLOCATIONS OF RESPONSIBILITY
(a) BOC shall bear the risk of loss with respect to all Product until Product is
delivered by BOC to Coffeyville Resources under Section 3(b) hereof, at which time risk of loss
shall pass to Coffeyville Resources.
(b) Coffeyville Resources acknowledges that there are hazards associated with the use of
Product. BOC will provide Coffeyville Resources with Material Safety Data Sheets setting forth the
general hazards and safety information relating to Product. Coffeyville Resources hereby assumes
all responsibility for warning its employees and its independent contractors exposed to Product of
all such hazards and shall hold harmless and indemnify BOC from and against all liability arising
from any failure to make such warnings, such indemnification to be subject to the provisions of
Sections 19(e) and 19(f) hereof. BOC shall promptly notify Coffeyville Resources of any
additional hazards of which BOC may, from time to time, become aware.
(c) Final determination of the suitability of the Product (assuming such Product conforms to
the specifications and other requirements of this Agreement) for any use contemplated by
Coffeyville Resources is the sole responsibility of Coffeyville Resources, and BOC shall have no
responsibility in connection therewith. Coffeyville Resources shall avail itself of testing
devices to determine the purity of Product before Coffeyville Resources uses it at Coffeyville
Resources’ discretion, but no error in, or failure to make, any such test shall impair any right on
the part of Coffeyville Resources to pursue its remedies for breach of warranty hereunder.
(d) BOC shall obtain, comply with and preserve in full force and effect all Permits necessary
for the maintenance and operation of the BOC Facility. BOC shall cause all such Permits to be
made available for inspection by Coffeyville Resources. Coffeyville Resources shall cooperate with
BOC in obtaining and preserving all Permits necessary for the maintenance and operation of the BOC
Facility and shall reimburse BOC for the actual cost of such Permits. BOC shall cooperate with
Coffeyville Resources in obtaining and preserving any Permits necessary for the maintenance and
operation of the Coffeyville Facilities. Prior to obtaining any Permit necessary for the
maintenance or operation of the BOC Facility, BOC shall give
15
Coffeyville Resources notice thereof. If obtaining any Permit necessary for the maintenance
or operation of the BOC Facility would have the direct or indirect effect of impairing Coffeyville
Resources’ ownership, maintenance, operation and/or reasonably contemplated expansion of the
Coffeyville Facilities, Coffeyville Resources shall give BOC notice thereof; and the parties shall
cooperate to arrive at a fair and equitable resolution of such impairment.
(e) BOC agrees to make such modifications to the BOC Facility as are required by governmental
agencies or authorities, by the modification or change in interpretation of any applicable laws or
Permits, or by the enactment or adoption of any new laws, so as to ensure that BOC’s maintenance
and operation of the BOC Facility and Coffeyville Resources’ ownership, maintenance and operation
of the Coffeyville Facilities, are in compliance therewith.
(f) Other than any termination right Coffeyville Resources may have pursuant to the provisions
of Section 13 hereof, Coffeyville Resources’ exclusive remedy for each unexcused failure on the
part of BOC to deliver gaseous Product produced at the BOC Plant to Coffeyville Resources when
required hereunder (including the delivery of gas that does not conform to the product
specifications set forth in Paragraph I of Exhibit A hereto), whether or not such failure was
caused, in whole or in part by any negligence, shall be to receive an abatement of the fees
(together with any then applicable price adjustment) which Coffeyville Resources would otherwise
have been obligated to pay to BOC pursuant to Section 4(a) of this Agreement from the date such
failure occurs until such time as BOC resumes delivery of gaseous Product as required hereunder and
all Products so delivered conform to the product specifications set
forth in Paragraph I of Exhibit A hereto.
(g) Other than any termination right Coffeyville Resources may have pursuant to the provisions
of Section 13 hereof, Coffeyville Resources’ exclusive remedy for each unexcused failure on the
part of BOC to deliver liquid Product from the Liquid Product Storage Facility or vaporized liquid
product to Coffeyville Resources when required hereunder, whether or not such failure was caused,
in whole or in part by any negligence, shall be to recover from BOC the difference between the cost
to Coffeyville Resources of any reasonable purchase of Product in substitution for the Product that
BOC so failed to deliver and the price of such quantity of Product hereunder, increased by any
expenses incurred by Coffeyville Resources in connection with the procurement of the substitute
Product and reduced by any expenses saved by Coffeyville Resources due to procurement of the
substitute Product.
(h) Other than any termination right Coffeyville Resources may have pursuant to the
provisions of Section 13 hereof, Coffeyville Resources’ exclusive remedy for each unexcused
failure or act on the part of BOC whereby liquid product or vaporized liquid product that does not
conform to the product specifications set forth in Paragraph I
of Exhibit A hereto is delivered
from the Liquid Product Storage Facility to Coffeyville Resources, whether or not such failure or
act was, in whole or in part, negligent, shall be to receive a refund of the price of such
quantity of non-conforming product, or the replacement thereof with Product that does conform to
said product specifications at no additional charge to Coffeyville Resources.
(i) Except to the extent that BOC’s rights and obligations are materially adversely affected
thereby, BOC shall provide all documents, reports, acknowledgments, consents to
16
assignments, certifications and other information reasonably requested by any person or entity, or
group of persons or entities, extending credit or making any financial accommodations directly or
indirectly to Coffeyville Resources, or for Coffeyville Resources’ benefit, for purposes of
financing or refinancing in any manner any costs or expenses related to the construction,
commissioning or operation of all or any part of the Gasification Project (each, a “Finance
Party”). BOC shall cooperate with all Finance Parties to the fullest extent possible. BOC shall
also enter into such amendments to this Agreement as Coffeyville Resources may reasonably request
in order to comply with any requirements imposed by any Finance Party to the extent that BOC’s
rights and obligations are not materially adversely affected thereby.
SECTION 10 METERS
BOC shall install and maintain such metering as may be necessary hereunder. Such metering
shall be inspected by BOC for accuracy at least once per year. In addition, such metering shall
also be inspected and tested for accuracy at such other times as either party may reasonably elect.
Coffeyville Resources shall be notified of the times such tests are to be made and may observe such
tests. BOC shall bear the cost of all such tests, except those requested by Coffeyville Resources
that show that the meter tested was accurate within two percent (2%). If any meter is found to be
inaccurate by more than two percent (2%), any xxxxxxxx based on such meter shall be adjusted to
offset such inaccuracy with respect to only those deliveries made during the thirty (30) day period
prior to such test or during the latter half of the period of time since the said meter was last
previously tested, whichever period of time is shorter.
SECTION 11 EXCUSED NON-PERFORMANCE
(a) Any failure, in whole or in part, by either party timely to perform any obligation on
its part to be performed under this Agreement (except the obligation to pay monies when due) shall
be excused to the extent that such failure is caused by any circumstance which is not within the
reasonable control of the party whose performance is prevented, restricted or otherwise interfered
with, including without limitation, by any act of God, flood, storm, earthquake, fire, explosion,
strikes, lockouts, industrial disputes or disturbances or other labor difficulty (regardless of
the reasonableness of the demands of labor or the power of the party concerned to concede), riot,
war, blockades, civil disorder, equipment breakdown or malfunction that was unavoidable through
proper maintenance, failure of product machinery or transportation facilities that was unavoidable
through proper maintenance, failure of or interference with utilities or other sources of supply,
accident or by any order, request or decree of any governmental body or agency (each, a “Force
Majeure”). Upon the occurrence of a Force Majeure, the party affected thereby shall give prompt
written notice thereof to the other party.
(b) Each time that, due to any Force Majeure, BOC delivers less Product than is required by
Coffeyville Resources under Section 3(a) or Coffeyville Resources is unable to take any Product for
five (5) or more consecutive full days, that portion of the Minimum Product Charge (together with
any then applicable price adjustment) which Coffeyville Resources would otherwise have been
obligated to pay to BOC pursuant to this Agreement that is
apportionable to such full days shall be
abated. (Said number of full days shall be determined by dividing twenty-four into the number of
hours during which any such failure to deliver continued and
17
disregarding any fractional remainder). If either BOC or Coffeyville Resources so elects in
writing, the Supply Period shall be extended for two times the number of full days with respect to
which such Minimum Product Charge was so abated.
(c) Subject to BOC’s obligations pursuant to Paragraph 2(1) hereof, BOC shall perform routine
maintenance (scheduled and unscheduled) on the BOC Facility in accordance with generally accepted
industry practices, and any such maintenance shall not be deemed a breach under this Agreement.
SECTION 12 PRICE ADJUSTMENTS
Annually during the Supply Period, the Minimum Product Charge and the unit prices for gaseous
Product purchased by Coffeyville Resources hereunder shall be subject to price adjustment by BOC
as set forth in Exhibit B hereto.
SECTION 13 TERM
(a) This Agreement shall be in effect from the date first set forth above to the expiration or
termination of the Supply Period.
(b) Either party shall have the right to terminate this Agreement in accordance with this
Section 13(b) at any time in the event the other party fails to perform any material obligation
hereunder for reasons other than a Force Majeure or as a direct result of a breach by the other
party (a “Material Breach”). If either party (the “Other Party”) considers the other party (a
“Breaching Party”) to have committed a Material Breach, the Other Party may give to the Breaching
Party a notice of Material Breach stating the act or circumstances contended to be a Material
Breach and the section of the Agreement alleged to have been breached, and demanding that the
Material Breach be cured. If the Breaching Party fails to cure the Material Breach within thirty
(30) days after receipt of the notice of Material Breach, the Other Party may terminate this
Agreement upon thirty (30) days’ notice to the Breaching Party. If the nature of the Material
Breach is such that it cannot be cured in thirty (30) days but a cure is commenced during such
thirty (30) day period and diligently pursued thereafter, then such cure must be completed within
180 days from the date of notice of Material Breach, or the Other Party may terminate this
Agreement on notice at any time after the expiration of such 180-day period unless such breach is
then cured.
(c) Either party shall have the right to terminate this Agreement upon written notice to the
other party upon (i) any failure by the other party to satisfy any final judgment, decree or order
against the other party which has not been stayed or appealed within thirty (30) days after the
entry thereof and which would materially adversely affect the other party’s ability to perform its
obligations under this Agreement if not so satisfied, stayed or appealed, or (ii) the other party
shall (A) be or become insolvent or generally fail to pay its debts as they become due, or (B)
voluntarily file a petition in bankruptcy or for reorganization under the United States Bankruptcy
Code, or (C) have filed involuntarily against it a petition in bankruptcy or for reorganization
under the United States Bankruptcy Code, which petition has not been stayed or dismissed within
sixty (60) days after the filing thereof, or (D) voluntarily initiate any act, process or
18
proceeding under any insolvency law or other statute or law providing for the modification or
adjustment of the rights of creditors, or (E) have initiated involuntarily against it any act,
process or proceeding under any insolvency law or other statute or law providing for the
modification or adjustment of the rights of creditors; which act, process or proceeding has not
been stayed or dismissed within sixty (60) days after the initiation thereof, or (iii) the other
party is a party to any merger or consolidation in which it is not the surviving entity or is
dissolved or liquidated.
(d) In the event that this Agreement is terminated by Coffeyville Resources pursuant to
Section 13(b) or 13(c) hereof, Coffeyville Resources shall have the right and option to purchase
the Facilities on an “as is” and “where is” basis from BOC at the applicable purchase price listed
on Exhibit H hereto (such option shall be referred to herein as the “Option”). The term of
the Option shall commence on the date of such termination and shall expire 180 days thereafter.
Coffeyville Resources may exercise the Option by providing written notice to BOC of its election to
exercise the Option. In the event that Coffeyville Resources elects to exercise the Option, BOC
shall sell and convey to Coffeyville Resources, and Coffeyville Resources shall purchase from BOC,
the Facilities. The closing of the purchase of the Facilities shall take place on a mutually
agreeable business day within sixty (60) days following the date BOC receives Coffeyville
Resources’ notice of its election to exercise the Option. At the closing, Coffeyville Resources
shall pay BOC the purchase price (as calculated above), and BOC shall transfer and assign the
Facilities to Coffeyville Resources and shall deliver to Coffeyville a xxxx of sale and such other
appropriate instruments of transfer and physical possession as shall, in the reasonable opinion of
counsel for Coffeyville Resources, be effective to vest in Coffeyville Resources good and
marketable title to the Facilities.
SECTION 14 ASSIGNMENT
This Agreement is not assignable by either BOC or Coffeyville Resources except upon the
written consent of the other party; provided, however, that such consent shall not be unreasonably
withheld. Notwithstanding the foregoing sentence, Coffeyville Resources may assign this Agreement
as contemplated or required by its financing scheme or to an affiliate without the consent of BOC
so long as BOC’s rights and obligations are not materially adversely affected thereby. The Parties
agree that for purposes of this Section 14, BOC’s rights and obligations shall not be deemed to be
materially adversely affected by an assignment so long as Coffeyville Resources remains
secondarily liable under this Agreement following such assignment.
SECTION 15 NOTICES
Any notice or other communication required or permitted to be given pursuant to this
Agreement shall be deemed to have been duly given if delivered personally or sent by telex,
telecopy, facsimile transmission or certified mail (postage prepaid, return receipt requested),
addressed as provided below. Until another address or addresses shall
be furnished in writing by
either party, notices to BOC shall be given in duplicate, addressed
as follows:
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The BOC Group, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
And a copy also sent to:
BOC Gases
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Vice President — Product Management
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Vice President — Product Management
and notices to Coffeyville Resources shall be addressed as follows:
Coffeyville Resources Nitrogen Fertilizers, LLC
00 Xxxx Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxxx 00000
00 Xxxx Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxxx 00000
Attention: Chief Operating Officer
And a copy also sent to:
Coffeyville Resources Nitrogen Fertilizers, LLC
X.X. Xxx 0000
000 X. Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxx 00000
X.X. Xxx 0000
000 X. Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxx 00000
Attention: Plant Manager
SECTION 16 GENERAL REPRESENTATIONS AND WARRANTIES
(a) Each of the parties hereto make the following representations and warranties
to the other party hereto, each of which is true and correct on the date hereof:
(i) Such party is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of the state of its organization, and is duly
qualified to transact business in the State of Kansas.
(ii) Such party has the corporate power to execute and deliver this Agreement and to
carry out the transactions contemplated hereby, and perform its obligations hereunder. The
execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not violate, nor constitute a breach or default under,
the constituent documents of such party or any provision of any
20
mortgage, lien, lease, agreement, instrument, order, judgment, decree, law, Permit or
other restriction of any kind or character to which such party is subject.
(iii) There is no claim, litigation or proceeding pending or, to the best knowledge of
such party, threatened against such party which, if decided adversely to such party, would
preclude it from consummating the transactions contemplated hereby or performing the
obligations hereunder or would subject the other party to any liability.
(iv) This Agreement has been duly authorized, executed and delivered by such party and
is valid, binding and enforceable against it in accordance with its terms.
(b) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, NEITHER PARTY HAS MADE ANY WARRANTIES,
EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
SECTION 17 CONFIDENTIALITY
The parties acknowledge and agree that to the extent either party receives any proprietary or
confidential information regarding operations of the other (“Confidential Information”), such
Confidential Information represents valuable information to the party disclosing such Confidential
Information (the “Disclosing Party’), and the party receiving such Confidential Information (the
“Receiving Party’) agrees (a) not to disclose any Confidential Information of the Disclosing Party
to any third party without the written consent of the Disclosing Party, (b) not to use any
Confidential Information of the Disclosing Party for any purpose, other than to accomplish the
transactions contemplated under this Agreement, without the prior written consent of the Disclosing
Party, (c) to limit access to the Disclosing Party’s Confidential Information to the Receiving
Party’s employees who are directly involved with the transactions described in this Agreement, (d)
to inform each employee to whom the Disclosing Party’s Confidential Information is disclosed of the
restrictions as to the use and disclosure of such confidential Information and to ensure that each
such employee shall observe such restrictions, and (e) to return all of the Disclosing Party’s
Confidential Information upon termination of this Agreement. The restrictions on use and disclosure
described above shall not apply to information that (i) was known to either party prior to
disclosure by the other party, (ii) is or becomes part of the public knowledge or literature,
through no fault of the party to which it was disclosed, (iii) is subsequently received as a matter
of right without restriction or disclosure from a third party lawfully having possession thereof,
or (iv) in the reasonable opinion of counsel to the Disclosing Party, is required to be disclosed
by applicable law or regulation, by order of court or other governmental authority, or pursuant to
any listing agreement with, or the rules or regulations of any national securities exchange on
which securities of such party are listed or traded; provided, however, that prior to any such
disclosure, the Receiving Party shall provide the Disclosing Party with reasonable notice and an
opportunity to dispute or otherwise object to the required disclosure.
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SECTION 18 RESOLUTION OF DISPUTES
Except as otherwise specifically provided herein, the parties will in good faith attempt
to resolve promptly and amicably any dispute (which term includes the failure to reach any
agreement or grant any approval contemplated hereunder) between the parties arising out of or
relating to this Agreement pursuant to this Section 18. In the event that a party to this Agreement
has reasonable grounds to believe that the other party hereto has failed to fulfill any obligation
hereunder, that its expectation of receiving due performance under this Agreement may be impaired,
or that any other type of dispute between the parties arising out of or relating to this Agreement
exists, such party will promptly notify the other in writing of the substance of its belief. The
party receiving such notice must respond in writing within thirty (30) of receipt of such notice,
which response must (i) provide evidence of cure of the condition specified or provide an
explanation of why it believes that its performance is in accordance with the terms and conditions
of this Agreement, and (ii) specify three (3) proposed dates, all of which must be within thirty
(30) days from the date of the response, for a meeting to resolve the dispute. The claiming party
will then select one (1) of the three (3) dates, and a dispute resolution meeting will be held on
that date, which meeting shall be attended by a representative of each party with the power to
settle the dispute and at which time the representatives shall engage in good faith discussions in
an effort to resolve the dispute. If such representatives fail to resolve the dispute at such
meeting, they will work together to resolve the dispute for a fifteen (15) day period following the
meeting. If the dispute is not resolved within such fifteen (15) day period, the representatives
shall refer the matter to the two individuals with primary operational responsibility for the
respective parties at the level immediately subordinate to the respective chief executive officers
of the parties. If such individuals fail to resolve the dispute within thirty (30) days, despite
good faith attempts to do so, the parties will be free to pursue the remedies allowed under
applicable law without prejudice. Regardless of the nature of the dispute that exists between the
parties, both parties must continue to perform their obligations under this Agreement during any
dispute resolution efforts.
SECTION 19 INDEMNIFICATION
(a) BOC agrees to indemnify and hold Coffeyville Resources, its directors, officers,
agents, employees, subsidiaries and affiliates (collectively, “Coffeyville Entities”) harmless
from and against any and all claims, demands, judgments, liabilities or expenses for injury,
sickness, disease or death to employees or other persons, or damage to property (subject to the
limitations of Section 19(f) hereof) arising out of or in any way connected with BOC’s design,
engineering, construction, installation, operation or maintenance of the BOC Facility or failure
to comply with applicable laws or Permits related thereto or breach of any of the provisions of
this Agreement. BOC agrees to defend, on behalf of the Coffeyville Entities, any suits, actions or
proceedings arising out of or in any manner connected with any of the aforesaid causes and to
reimburse the Coffeyville Entities for reasonable attorneys’ fees, settlements, losses, damages,
satisfactions, costs or other expenses incurred by the Coffeyville Entities arising out of or in
any manner connected with such suits, actions or proceedings. BOC’s obligation to indemnify,
defend, reimburse and hold the Coffeyville Entities harmless shall extend to and include, but not
be limited to, claims, demands, judgments, liabilities and expenses resulting from the personal
injury, sickness, disease or death of any persons, regardless of whether BOC has paid the person
22
under the provisions of any workers’ compensation statute or law, or other similar federal or
state legislation for the protection of employees. BOC’s indemnification obligations hereunder
shall exclude any liabilities (i) arising from any breach for which exclusive remedies are
otherwise provided hereunder or (ii) to the extent caused by the negligence of Coffeyville
Resources, its employees, agents or subcontractors.
(b) BOC shall, at its sole expense, defend any claims, suits, actions or proceedings brought
against the Coffeyville Entities based on a claim that the design, engineering, construction,
installation, operation or maintenance of the Facilities or the use of any equipment, process or
technology, or any part thereof, furnished or manufactured by BOC or any of BOC’s agents or
subcontractors under this Agreement constitutes any infringement of U.S. patents or copyrights or
constitutes an improper use of any other proprietary rights (except where such infringement or
improper use is caused by the use of the Facilities in combination with any other equipment or
process not supplied by, on behalf, or at the request of BOC or any of BOC’s agents or
subcontractors or previously agreed in writing by BOC) (an “Alleged Infringement”), and BOC shall
pay all damages and costs awarded by a court of competent jurisdiction unappealed or unappealable
against Coffeyville Resources, provided that BOC is notified promptly in writing of any such claim
(except that the failure to promptly provide such notice shall not release BOC from such
obligations except to the extent BOC is materially prejudiced thereby), shall be given adequate
authority, information and assistance for the defense of same and shall have the full control of
the defense of any such suit, action or proceeding. BOC’s obligation to pay damages and costs
under the foregoing sentence shall only apply to the extent the Alleged Infringement is caused by
BOC. Coffeyville Resources shall have the right to participate at its own expense. BOC agrees to
reimburse the Coffeyville Entities for any claims, settlements, losses, damages, satisfactions,
costs or other expenses incurred by the Coffeyville Entities arising out of or in any manner
connected with such claims, suits, actions or proceedings, to the extent the Alleged Infringement
is caused by BOC. At BOC’s option, and at its expense, BOC may: (a) procure the right to continue
using the Facilities as contemplated under this Agreement; or (b) replace the Facilities with
non-infringing equipment (or modify the Facilities), provided that such replaced or modified
Facilities shall not differ functionally from the original Facilities in any material way.
(c) Coffeyville Resources agrees to indemnify and hold BOC, its directors, officers, agents,
employees, subsidiaries and affiliates (collectively, “BOC Entities”) harmless from and against any
and all claims, demands, judgments, liabilities and expenses for injury, sickness, disease or death
to employees or other persons, or damage to property owned by parties other than BOC Entities,
arising out of or in any way connected with Coffeyville Resources’ design, engineering,
construction, installation, operation or maintenance of the Coffeyville Facilities or failure to
comply with applicable laws or Permits related thereto or breach of any of the provisions of this
Agreement. Coffeyville Resources agrees to defend, on behalf of the BOC Entities, any suits,
actions or proceedings arising out of or in any manner connected with any of the aforesaid causes
and to reimburse the BOC Entities for reasonable attorneys’ fees, settlements, losses, damages,
satisfactions, costs or other expenses incurred by the BOC Entities arising out of or in any manner
connected with such suits, actions or proceedings. Coffeyville Resources’ obligation to indemnify,
defend, reimburse and hold the BOC Entities harmless shall extend to and include, but not be
limited to, claims, demands, judgments, liabilities and expenses
23
resulting from the personal injury, sickness, disease or death of any persons, regardless of
whether Coffeyville Resources has paid the person under the provisions of any workers’ compensation
statute or law, or other similar federal or state legislation for the protection of employees.
Purchaser’s indemnification obligations hereunder shall exclude any liabilities (i) arising from
any breach for which exclusive remedies are otherwise provided hereunder or (ii) to the extent
caused by the negligence of BOC, its employees, agents or subcontractors.
(d) Each
Party agrees to defend, indemnify, and hold harmless the other Party from any loss,
expense, claim, liability, demand or judgment arising out of or resulting from bodily injury to its
employees while on property controlled by, and with the permission of, the other Party, except to
the extent caused by the negligence of the other Party, its employees, agents or subcontractors.
(e) A party entitled to indemnification under any provision of this Agreement is referred to
herein as an “Indemnified Party,” and a party required to provide such indemnification is
referred to herein as an “Indemnifying Party.” Promptly after receipt by an Indemnified Party of
notice of the commencement of any action or the making of any claim, such Indemnified Party will,
if a claim in respect thereof is to be made against the Indemnifying Party, notify the Indemnifying
Party in writing thereof. In case any such action or claim is brought against any Indemnified
Party, and it notifies the Indemnifying Party of the commencement or making thereof, the
Indemnifying Party will be entitled to participate therein and, to the extent that the Indemnifying
Party may elect by written notice to the Indemnified Party promptly after receiving the aforesaid
notice from such Indemnified Party, to assume the defense thereof. Upon receipt of notice from the
Indemnifying Party to such Indemnified Party of its election so to assume the defense of such
action or claim, the Indemnifying Party will not be liable to such Indemnified Party under such
indemnification for any legal or other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof.
(f) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES UNDER ANY CIRCUMSTANCES, INCLUDING, WITHOUT LIMITATION,
LOST PROFITS OR DAMAGES DUE TO LOSS OF USE OF A FACILITY OR INDIRECT OR
CONSEQUENTIAL DAMAGES CAUSED BY OR ARISING OUT OF, IN WHOLE OR IN PART, ANY NEGLIGENT ACT OR
OMISSION.
SECTION 20 INSURANCE
BOC, at its sole cost and expense, shall secure and maintain during the term of this
Agreement, the following minimum insurance coverage with respect to the BOC Plant and its
operations:
(1) | Workers’ compensation insurance which fully complies with applicable workers’ compensation and occupational disease laws and which shall cover all of BOC’s employees performing services in connection with matters contemplated by this Agreement. BOC shall obtain and provide to Coffeyville Resources a valid waiver of any right of subrogation against Coffeyville Resources or its employees |
24
for any injury or death to a person covered by or compensated under BOC’s workers’ compensation insurance, which waiver shall be executed by each of BOC’s workers’ compensation insurance carriers. | |||
(2) | Employer’s liability insurance with limits of not less than $1,000,000 per occurrence. | ||
(3) | Comprehensive commercial general liability insurance including products and completed operations, broad form property damage and broad form contractual liability, with a limit for bodily injury or death of not less than $10,000,000 per occurrence and a limit for property damage of not less than $10,000,000 per occurrence, or a combined single limit for bodily injury, death and property damage of not less $10,000,000 per occurrence. The annual aggregate limit shall not be less than $20,000,000. Coffeyville Resources shall be listed as an additional insured on such policies. | ||
(4) | Automobile liability insurance with a combined single limit for bodily injury, death and property damage of not less than $2,000,000 per occurrence. | ||
(5) | Property insurance for loss or damage to any property of BOC located within the Facilities, with limits of not less than $20,000,000. | ||
(6) | Such other insurance as required by law. |
BOC shall obtain and provide to Coffeyville Resources a valid waiver of any right of subrogation
against Coffeyville Resources for damage to any property of BOC covered by BOC’s property
insurance, which waiver shall be executed by each of BOC’s property insurance carriers. Similarly,
Coffeyville Resources shall obtain and provide to BOC a valid waiver of any right of subrogation
against BOC for damage to the property of Coffeyville Resources covered by Coffeyville Resources’
property insurance, which waiver shall be executed by each of Coffeyville Resources’ property
insurance carriers. The insurance requirements listed above are the minimum requirements that are
acceptable to Coffeyville Resources as of the date hereof and shall not be considered indicative
of the ultimate amounts and types of insurance needed by BOC. Neither failure to comply nor full
compliance with the insurance provisions of this Agreement shall limit or relieve BOC from its
obligations under this Agreement. Upon request of Coffeyville Resources, BOC shall promptly
furnish Coffeyville Resources certificates of insurance on forms reasonably approved by
Coffeyville Resources listing all policies required of BOC above. Such certificates must provide
for not less than 30 days’ prior written notice to Coffeyville Resources in the event of
cancellation, nonrenewal or material change of any of such policies.
SECTION 21 TAKING & CASUALTY
(a) In the event that the Facilities, or any material part thereof, shall be taken by
any public authority or for any public use, or by the action of any public authority, then this
Agreement may be terminated at the election of either BOC or Coffeyville Resources. Such
25
election shall be made by the giving of notice by one party to the other within thirty (30) days
after the right of election accrues. For purposes of this subsection (a), what constitutes a
“material part” of the Facilities shall be reasonably determined by BOC.
In the event of such a taking, Coffeyville Resources shall be entitled to the entire award,
except that BOC shall be entitled to receive any portion of the award made specifically for
damages sustained to BOC’s equipment, trade fixtures, moving expenses, the unamortized cost of its
leasehold improvements, or loss of any portion of its business.
If neither BOC nor Coffeyville Resources exercises any right of election provided in this
subsection (a), this Agreement shall continue in full force and effect and BOC shall proceed to
diligently and expeditiously repair or rebuild the Facilities to as nearly as possible the same
condition as prior to the taking; provided, however, that the Minimum Product Charge (together with
any then applicable price adjustment) which Coffeyville Resources would otherwise have been
obligated to pay to BOC pursuant to this Agreement shall be abated from the date of the taking
until such time as the Facilities are so repaired or rebuilt. To the extent that the awards or
payments are insufficient to repair or rebuild the Facilities, BOC shall bear all excess costs of
repairing and rebuilding the Facilities.
(b) In the event that the Facilities, or any material part thereof, shall be destroyed or
damaged by fire or casualty, and such destruction or damage is so severe that, based on any
reasonable estimates (which BOC shall deliver to Coffeyville Resources within thirty (30) days of
such destruction or damage), the Facilities cannot be placed in proper condition for use within
sixteen (16) months of the date of the fire or casualty, then this Agreement may be terminated at
the election of BOC or Coffeyville Resources. Such election shall be made by the giving of notice
by one party to the other within sixty (60) days after the right of election accrues. For purposes
of this subsection (b), what constitutes a “material part” of the Facilities shall be reasonably
determined by BOC.
In the event of termination pursuant to this subsection (b), BOC shall be entitled to the
entire sum of insurance proceeds attributable to the buildings, fixtures and other property which
is not owned by Coffeyville Resources, which proceeds are received by either BOC or Coffeyville
Resources in connection with the fire or other casualty. BOC shall be entitled to receive the
proceeds of any insurance purchased by BOC to cover its personal property, equipment and business
operations.
If neither BOC nor Coffeyville Resources exercises any right of election provided in this
subsection (b), this Agreement shall continue in full force and effect and BOC shall proceed to
diligently and expeditiously repair or rebuild the Facilities to as nearly as possible the same
condition as prior to the taking, damage or destruction, provided, however, that the Minimum
Product Charge (together with any then applicable price adjustment) which Coffeyville Resources
would otherwise have been obligated to pay to BOC pursuant to this Agreement shall be abated from
the date of the fire or casualty until such time as the Facilities are so repaired or rebuilt. To
the extent that the proceeds of insurance are insufficient to repair or rebuild the Facilities,
BOC shall bear all excess costs of repairing and rebuilding the Facilities.
26
SECTION 22 LIAISONS
BOC and Coffeyville Resources shall each appoint and notify the other of a representative who
shall be responsible for coordination and liaison between the parties. Either party may change its
representative upon written notice to the other party.
SECTION 23 GENERAL PROVISIONS
(a) The section headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or of any provision hereof.
(b) All of the Exhibits attached hereto are incorporated herein and made a part of this
Agreement by reference thereto.
(c) This Agreement, and the Settlement Agreement and Mutual Release which the parties have
entered into contemporaneously herewith, set forth the entire agreement between BOC and Coffeyville
Resources with respect to the production, purchase and sale of Product for use at the Coffeyville
Facilities. This Agreement supersedes and cancels all prior and contemporaneous agreements and
understandings between the parties, whether oral or written, relating to the subject matter hereof,
including, without limitation, (a) that certain letter agreement between BOC and Farmland
Industries, Inc., dated May 14, 1997; (b) the December 3, 1997 On-Site Product Supply Agreement
between The BOC Group, Inc. and Farmland Industries, Inc.; (c) Amendment No. 1 to the On-Site
Product Supply Agreement between The BOC Group, Inc. and Farmland Industries, Inc., dated December
31, 1999 and (d) that certain letter agreement between BOC and Coffeyville Resources dated August
31, 2005.
(d) No amendment, modification, change, waiver or discharge of, or addition to, any provision
of this Agreement shall be effective unless the same is in writing and is signed or otherwise
assented to in writing by an authorized individual on behalf of each party, and unless such writing
specifically states that the same constitutes such an amendment, modification, change, waiver or
discharge of, or addition to, one or more provisions of this Agreement.
(e) The parties may, from time to time, use purchase orders, acknowledgments or other
instruments to order, acknowledge or specify delivery times, suspensions, quantities or other
similar specific matters concerning the Product or relating to performance hereunder, but the same
are intended for convenience and record purposes only and any provisions which may be contained
therein are not intended to (nor shall they serve to) add to or otherwise amend or modify any
provision of this Agreement, even if signed or accepted on behalf of either party with or without
qualification.
(f) If any provision of this Agreement shall be declared void or unenforceable by any judicial
or administrative authority, the validity of any other provision and of the entire Agreement shall
not be affected thereby and it is the intention of the parties that any such provision be reformed
so as to make it enforceable to the maximum extent permissible under applicable law.
27
(g) This Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
(h) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF KANSAS WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SAID STATE. Any legal action or
proceeding with respect to this Agreement or any document related hereto shall be brought
exclusively in the courts of the State of Kansas or of the United States of America for the
District of Kansas, and, by execution and delivery of this Agreement, the parties hereto hereby
accept, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts. The
parties hereto hereby irrevocably waive any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now
or hereafter have to the bringing of any such action or proceeding in such respective
jurisdictions.
(i) The parties will comply with all applicable law and regulations in the performance of
this Amended and Restated On-Site Product Supply Agreement.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE
DAY AND YEAR FIRST ABOVE WRITTEN.
THE BOC GROUP, INC. | ||||
By: Name: |
/s/ Xxxxxx Xxxx
|
|||
Title:
|
PRESIDENT | |||
Date:
|
13 JUNE 06 |
COFFEYVILLE RESOURCES NITROGEN FERTILIZERS, LLC | ||||
By:
|
/s/ Xxxxxxx X. Xxxxxxx
|
|||
Name:
|
||||
Title:
|
C.O.O. | |||
Date:
|
6/9/06 |
28
EXHIBIT A
CERTAIN SPECIFICATIONS, CAPABILITIES AND CAPACITIES
The product specifications set forth below specify normal operating specifications and,
accordingly, the parties agree that delivery of Product not meeting the indicated specifications
shall not be deemed a breach by BOC and BOC shall not be required to shut down the BOC Plant unless
Coffeyville Resources expressly instructs BOC to do so in writing.* From time to time Coffeyville
Resources may instruct BOC to decrease the normal operating specifications for Product by written
notice, accepted by BOC.
*except as otherwise set forth below for Nitrogen Product |
I. | Product Specifications |
A. | Purity: | ||
Oxygen Product: 99.60 mol.% (normal operating) | |||
Nitrogen Product, with inerts: |
99.99 mol.%
not more than 5 ppm of oxygen (normal operating, 10 ppm trip point)
CDA Product: Dew point -40°F (normal operating)
High Pressure Air Product: Dew Point -40°F (normal operating)
B. | Pressure at BOC Plant Battery Limits: | ||
To the Gasification Project: |
gaseous Oxygen Product: 850 psig ± 10 psi
gaseous Nitrogen Product: 500 psig ± 10 psi
CDA Product: 135 psig ± 10 psi
High Pressure Air Product: 900 psig ± 10 psi
To the adjacent refinery facility owned by Coffeyville Resources Refining &
Marketing LLC or its successors or assigns (the “Refinery”):
gaseous Nitrogen Product: 200 psig ± 10 psi
gaseous Oxygen Product: 70 psig ± 10 psi
29
Notwithstanding that the above referenced Products may ultimately be used by
the Refinery, it is strictly understood that BOC’s delivery hereunder is
fulfilled by delivery to Coffeyville Resources at the point where each of
the Coffeyville Pipelines are connected to the corresponding BOC Pipelines.
II. Production and Delivery Capabilities:
A. | High-Pressure (850 +/-10 psig) gaseous Oxygen Product: | ||
(***) scf per hour (maximum instantaneous flow rate at 14.3 psia and 105°F dry bulb and 78°F wet bulb and cooling water at 85°F). |
B. | Low Pressure (70 +/- 5 psig) gaseous Oxygen Product to Refinery: | ||
(***) scf per hour (maximum instantaneous flow rate at 14.3 psia and 105°F dry bulb and 78°F wet bulb and cooling water at 85°F |
C. | High-Pressure Air Product (900 +/-10 psig) for use in Urea Process #1 Decomposer Exchanger: | ||
(***) scf per hour (maximum instantaneous flow rate at 14.3 psia and 105°F dry bulb and 78°F wet bulb and cooling water at 85°F). | |||
D. | gaseous Nitrogen Product (both 500 +/- 10 psig and 200 +/-10 psig, but excluding 1300 and 120 psig referred to in Section III A immediately below): | ||
1,240,000 total scf per hour (maximum instantaneous flow rate at 14.3 psia and 105°F dry bulb and 78°F wet bulb and cooling water at 85°F). | |||
E. | CDA Product: | ||
351,000 scf per hour (maximum instantaneous flow rate at 14.3 psia and 105°F dry bulb and 78°F wet bulb and cooling water at 85°F) | |||
III. | Liquid Product Capacity |
A. | liquid Nitrogen Product |
Storage: | 11,000 gallons (allocated) | |||
Vaporization: | (***) scf per hour at 120 psig | |||
(***) scf per hour at 1300 psig for up to 8 hours of continuous service |
B. | liquid Oxygen Product |
Storage: | 11,000 gallons (allocated) |
30
Vaporization: | (***) scf per hour at 850 psig for up to 8 hours of continuous service |
31
EXHIBIT B
PRICE ADJUSTMENTS
I. | PROCEDURES |
A. | Price adjustments shall be determined annually by BOC preparing a statement setting forth the change in the relevant index referred to below which may have occurred during the preceding calendar year and the price adjustment resulting therefrom, together with supporting computations prepared in the manner set forth in Paragraph II of this Exhibit B. Each such price adjustment shall be effective for the entire calendar year during which such statement is so prepared, upon notice to Coffeyville Resources by BOC. | ||
B. | If the index referred to below is modified in any significant way or is no longer published, a new, substantially equivalent index shall be selected by mutual agreement of the parties. |
II. | COMPUTATIONS | |
The following computations determine whether the monthly Minimum Product Charge and the unit prices for gaseous Product sold hereunder shall be increased or decreased: | ||
The monthly Minimum Product Charge and the unit prices for gaseous Product will increase or decrease based upon the change in the annual average hourly earnings for the Series ID - ceu3232500006 (as reported by the U.S. Department of Labor, Bureau of Labor Statistics and hereafter referred to as “CAPI”) above a base level, which shall be the 2005 Annual Average CAPI. The applicable monthly Minimum Product Charge for a given year will be calculated in accordance with the formula below: |
CMPC | = | BMPC | X | ( | 1 | + | CAPI2 | - | CAPI1 | ) | ||||||||||||||||||
CAPI1 |
where:
CMPC | = | Current monthly Minimum Product Charge, and each gaseous Product price, individually | ||||
BMPC | = | Base monthly Minimum Product Charge, and each gaseous Product price, individually, as follows: | ||||
$313,885 — Base Monthly Minimum Product Charge $0.085 — Base Gaseous Oxygen |
||||||
$0.097 — Base Gaseous Nitrogen | ||||||
$0.019 — Base CDA Product |
32
CAPI1 | = | 2005 Annual Average CAPI |
||||
CAPI2 | = | Most recent Annual Average CAPI |
33
EXHIBIT C
ACCEPTABLE AIR CONTAMINANT LEVELS
MAXIMUM CONTINUOUS | ||||
COMPONENT | CONCENTRATION (VPM) | |||
Carbon Dioxide |
500.00 | |||
Methane |
20.00 | |||
Ethane |
0.20 | |||
Acetylene |
5.00 | |||
Ethylene |
0.10 | |||
Propane |
0.03 | |||
Propylene |
1.00 | |||
Butane |
1.00 | |||
>C4 (non-aromatic) |
1.00 | |||
Sulfur Compounds |
Nil | |||
Chlorides |
Nil | |||
NO and NO2 |
1.00 | |||
N2O |
0.50 |
34
EXHIBIT D
THE COFFEYVILLE PLANT SITE
35
EXHIBIT D AMENDED AND RESTATED ON-SITE PRODUCT SUPPLY AGREEMENT BETWEEN THE BOC GROUP. INC. AND COFFEYVILLE RESOURCES NITROGEN FERTILIZERS, LLC PARKING Coffeyvllie Plant Site |
EXHIBIT E
THE BOC PLANT SITE
EXHIBIT F
ITEMS
TO BE PROVIDED BY COFFEYVILLE RESOURCES
Except as otherwise provided in this Agreement, the following items shall be provided by Coffeyville Resources: |
Permanent Utilities
Power,
13.8 kv*
Steam
ASU 5,480 LB/hr average,
15,330 LB/hr peak;
primary 600 psig minimum,
490°F; secondary 550 psig
minimum, 550°F
primary 600 psig minimum,
490°F; secondary 550 psig
minimum, 550°F
Reactor 6,200 LB/hr when
Vaporizing
100 psig minimum, 330°F
Hydrogen,
1875 scfh average
(within
specifications
listed on Exhibit F-2)
listed on Exhibit F-2)
Telephone Line
Cooling water supply (within specifications listed on Exhibit F-1)
and return (15,175 gpm)
Steam and condensate drain
Sewer services, oil/water, storm and sanitary
Potable water
Fire water
Instrument air
and return (15,175 gpm)
Steam and condensate drain
Sewer services, oil/water, storm and sanitary
Potable water
Fire water
Instrument air
All Tie-Ins (including final Pipeline and utility pipeline tie-ins)
Permanent security and site access
* | While permanent power is intended to be provided at Coffeyville Resources’ cost, the following shall apply: |
BOC and Coffeyville Resources shall split the cost of power above 29.092 MW and below 35.00 MW
(“Excess Power”) on a 50/50 basis. The Excess Power will be calculated on a monthly basis in
accordance with the methodology set forth in Exhibit F-3, using actual demand, coincident peak,
MWH usage, and energy and PCA charges set forth on the invoices issued by the City of
Coffeyville to Coffeyville Resources.
37
EXHIBIT F-1
COOLING WATER SPECIFICATIONS
The following are the requirements for the cooling water being provided by Coffeyville Resources:
• | Pressure at battery limits | 55 psig | ||||
• | Allowable pressure drop at battery levels | 25 psi | ||||
• | Maximum temperature rise at battery levels | 20°F | ||||
• | Specifications: |
Circulating Water | ||||
Total Alkalinity (methyl orange) |
250 ppm | |||
Total Suspended Solids |
5 ppm | |||
Total Dissolved Solids |
3500 ppm | |||
Iron |
3 ppm | |||
Calcium Hardness (as CaCO3) |
1000 ppm | |||
Silica (SiO2) |
200 ppm | |||
Sulfates (SO4) |
500 ppm | |||
Chlorides (CI) |
350 ppm | |||
Chlorine (free) |
0.5 ppm | |||
Total Phosphates (as P) |
10 ppm | |||
pH |
7.0-8.5 | * | ||
Corrosives (H2S, organic acids, etc.) |
Nil | |||
Organic matter |
Nil | |||
Copper |
1 ppm | |||
Zinc |
1 ppm |
* | Infrequent and short-interval excursions up to 8.9 are possible, and Coffeyville Resources will alarm at 8.5. |
38
EXHIBIT F-2
HYDROGEN SPECIFICATIONS
The hydrogen being provided by Coffeyville Resources shall have a minimum purity of 99.3%
hydrogen and shall conform to the following additional purity requirements:
Component | Maximum Amount | |||
Oxygen |
0.1% | |||
Nitrogen |
0.6% | |||
Carbon Monoxide |
2 ppm | |||
Carbon Dioxide |
2 ppm | |||
Water |
0.1% | |||
Methane |
2 ppm | |||
Total Hydrocarbons |
2 ppm | |||
Argon |
0.2% |
39
EXHIBIT F-3
Excess Power Calculation Methodology, June 2005
Demand Allocation
|
29.092 MW per Contract | |
Coincident Demand
|
34.620 MW City of Coffeyville Invoice | |
Excess Demand
|
5.528 MW | |
Actual Usage
|
23.818 MW City of Coffeyville Invoice |
Excess Usage
Actual Usage — (Demand Allocation x Operating Days in Month x 24 Hrs.)
23,818,000 — (29,092 x 30 x 24)
23,818,000—20,946,240 | = | 2,871,760 KWH |
Demand Charge
Excess Demand | x $8670 per MW | |||||||||
5.528 | x $8670 | = | $48,425.28 | |||||||
Schedule 5 | 5.528 x $73.12 | = | $404.21 | |||||||
Schedule 6 | 5.528 x $72.80 | = | $402.44 |
Usage Charge
Base Energy | 2,871,760 x .01870 | = | $53,701.91 | |||
PCA | 2,871,760 x .00271 | = | $7,782.47 | |||
Wheeling | 2,871,760 x .00200 | = | $5,743.52 | |||
TOTAL | $116,459.83 | |||||
50/50 Split | $58,229.92 |
Excess Power Charge to be reimbursed by BOC to Coffeyville Resources
40
EXHIBIT G
PRICING SCHEDULE
I. | During the Supply Period, Coffeyville Resources shall pay BOC $313,855 per month as a monthly Minimum Product Charge for the commitment of the Facilities and the availability during each calendar month of high pressure gaseous Oxygen Product from the output of the BOC Plant at instantaneous flow rates not exceeding (***) scf per hour, low pressure gaseous Oxygen Product at instaneous flow rates not exceeding (***) scf per hour, gaseous Nitrogen Product (both 500 psi and 200 psi) from the output of the BOC Plant at instantaneous flow rates not exceeding a total of 1,240,000 scf per hour, and High Pressure Air Product at instantaneous flow rates not exceeding (***) scf per hour and CDA Product at instantaneous flow rates not exceeding 351,000 scf per hour. | |
II. | During the Supply Period, Coffeyville Resources shall pay BOC $.085 per 100 scf for all quantities of gaseous Oxygen Product delivered to Coffeyville Resources during a calendar month from the output of the BOC Plant, at total instantaneous flow rates exceeding 1,618,700 scf per hour. | |
III. | During the Supply Period, Coffeyville Resources shall pay BOC $0.097 per 100 scf for all quantities of gaseous Nitrogen Product delivered to Coffeyville Resources during a calendar month from the output of the BOC Plant, at instantaneous flow rates exceeding a total of 1,240,000 scf per hour. | |
IV. | During the Supply Period, Coffeyville Resources shall pay BOC (***) per 100 scf for the gaseous equivalent of all liquid Oxygen Product delivered from the inventory of the Liquid Product Storage Facility. Supplemental Product delivered to Coffeyville Resources at Coffeyville Resources’ request in accordance with Paragraph 3b(ii) shall be billed to Coffeyville Resources FOB point of origin. | |
V. | During the Supply Period, Coffeyville Resources shall pay BOC (***) per 100 scf for the gaseous equivalent of all liquid Nitrogen Product delivered from the inventory of the Liquid Product Storage Facility. Supplemental Product delivered to Coffeyville Resources at Coffeyville Resources’ request in accordance with Paragraph 3b(ii) shall be billed to Coffeyville Resources FOB point of origin. | |
VI. | During the Supply Period, Coffeyville Resources shall pay BOC (***) per 100 scf for all quantities of CDA Product delivered to Coffeyville Resources during a calendar month at instantaneous flow rates exceeding 351,000 scf per hour. | |
The Minimum Product Charge and the unit prices for gaseous Product set forth above in Paragraphs
I, II, III and VI of this Exhibit G shall be subject to adjustment as more specifically
set forth in Section 12 of the Agreement and on Exhibit B to the Agreement.
41
EXHIBIT H
PURCHASE PRICE
Paragraph 13(d)
Year of Supply Period During Which Purchase Occurs | Purchase Price | |||
1. June 1, 2005 - May 31, 2006 |
(***) | |||
2. June 1, 2006-May 31, 2007 |
(***) | |||
3. June 1, 2007-May 31, 2008 |
(***) | |||
4, June 1, 2008-May 31, 2009 |
(***) | |||
5. June l, 2009-May 31, 2010 |
(***) | |||
6. June 1, 2010-May 31, 2011 |
(***) | |||
7. June l, 2011-May 31, 2012 |
(***) | |||
8. June 1, 2012-May 31, 2013 |
(***) | |||
9. June 1, 2013-May 31, 2014 |
(***) | |||
10. June 1, 2014-May 31, 2015 |
(***) | |||
11. June 1, 2015-May 31, 2016 |
(***) | |||
12. June 1, 2016-May 31, 2017 |
(***) | |||
13. June 1, 2017-May 31, 2018 |
(***) | |||
14. June 1, 2018-May 31, 2019 |
(***) | |||
15. June 1, 2019-April 30, 2020 |
(***) |
BOC retains ownership of the liquid oxygen and liquid nitrogen storage tanks.
42
EXHIBIT I
TERMINATION FEE
Paragraph 2(h)
Year of Supply Period During Which Termination Occurs | Termination Fee | ||||
1. June 1, 2005-May 31, 2006
|
(***) | ||||
2. June 1, 2006-May 31, 2007
|
(***) | ||||
3. June 1, 2007-May 31, 2008
|
(***) | ||||
4. June 1, 2008-May 31, 2009
|
(***) | ||||
5. June 1, 2009-May 31, 2010
|
(***) | ||||
6. June 1, 2010-May 31, 2011
|
(***) | ||||
7. June 1, 2011-May 31, 2012
|
(***) | ||||
8. June l, 2012-May 31, 2013
|
(***) | ||||
9. June 1, 2013-May 31, 2014
|
(***) | ||||
10. June 1, 2014-May 31, 2015
|
(***) | ||||
11. June 1, 2015-May 31, 2016
|
(***) | ||||
12. June l, 2016-May 31, 2017
|
(***) | ||||
13. June 1, 2017-May 31, 2018
|
(***) | ||||
14. June 1, 2018-May 31, 2019
|
(***) | ||||
15. June 1, 2019-April 30, 2020
|
(***) |
43
EXHIBIT J
FARMLAND MEMORANDUM OF LICENSE
44
MEMORANDUM OF LICENSE
THIS
MEMORANDUM, made and entered into as of this 23rd day of December,
1997, by and between Farmland Industries, Inc., a Kansas cooperative corporation, hereinafter
called “Farmland,” and The BOC Group, Inc., a Delaware corporation, hereinafter called “BOC”.
WITNESSETH:
1. Farmland hereby grants to BOC and its directors, officers, employees, agents,
contractors and subcontractors, (a) a non-exclusive license, in common with Farmland, its
employees, agents, contractors and licensees, for ingress, egress and access, with or without
vehicles, equipment, materials and machinery over and across the lands and property owned by
Farmland in Xxxxxxxxxx County, Kansas, to and from the parcel of land which is more
particularly described on Exhibit A attached hereto and by this reference made a part hereof
(the “BOC Site”), and (b) an exclusive license to occupy, use and construct on the BOC Site
(subject to the reservation by Farmland for itself and its employees, agents, contractors,
tenants and licensees of the right to use the BOC Site for certain designated purposes), and
to install, modify, improve, operate and remove any and all equipment, machinery and other
facilities installed thereon during the term of such license, all of which equipment,
machinery and facilities shall be deemed to be, and shall remain, the personal property of
BOC, all as more fully set forth in and subject to the provisions of that certain On-Site
Product Supply Agreement (the “Agreement”), dated as of December 3, 1997 and effective as of
December 12, 1997, by and between Farmland and BOC. The Agreement is hereby incorporated by
reference and made a part hereof as if fully set forth herein.
2. The term of the Agreement commences on December 12, 1997, and ends as provided in
Section 13(a) of the Agreement.
3. In the event of any conflict or inconsistency between the terms of this Memorandum and
the terms of the Agreement, the terms of the Agreement shall control.
IN
WITNESS WHEREOF, Farmland and BOC have executed this Memorandum as of the
date first above written,
The BOC Group, Inc.
|
Farmland Industries, Inc.
|
|||||||||
By: Name: |
/s/ Xxxxx Xxxxxxx
|
By: Name: |
/s/Xxxxx X. Holiday
|
|||||||
Title:
|
Pres. – BOC Gases Americas | Title: | PROJECT MANAGER | |||||||
Date: 1/19/98
|
Date: | 12-23-97 |
Xxxxxxxxx Xxxxxxx The Bcc Group 000 Xxxxxxxx xxx Xxxxxx Xxxx, XX 00000-0000 |
$12.00 MISCELLANEOUS DOCUMENT 11 MAR 98 2:08 P.M. RECEIPT 00 XXXXX XX XXXXXX XXXXXXXXXX XXXXXX RECORDED BOOK 468 PAGE 93 XXXXXX XXXXXX — REGISTER OF DEEDS |
STATE OF
|
MISSOURI | ) | ||||||
) | SS. | |||||||
COUNTY OF
|
CLAY | ) | ||||||
This
instrument was acknowledged before me this
23rd day
of December, 1997,
by Xxxxx X. Holiday, as Project Manager of Farmland
Industries, Inc., a Kansas corporation.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year
last above written.
/s/ Xxxx X. Xxxxxxxxx
Notary Public in and for said County and State |
||||
My Commission Expires: |
||
XXXX X. XXXXXXXXX |
||
Notary Public — State of Missouri |
||
Commissioned In Clay County |
||
My Commission Expires June 2, 0000 |
XXXXX XX
|
Xxx Xxxxxx | ) | ||||||
) | SS. | |||||||
COUNTY OF
|
Union | ) | ||||||
This
instrument was acknowledged before me this
19th day
of January,
1998, by Xxxxx Xxxxxxx as Vice President of The BOC Group, Inc., a Delaware corporation.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year
last above written.
/s/ Xxxxxxx X. Xxxxxxxx
Notary Public in and for said County and State |
||
My Commission Expires: |
|
XXXXXXX X. XXXXXXXX |
|
Notary
Public of New Jersey |
|
My
Commission Expires August 24, 19[ILLEGIBLE] |
-2-
Exhibit A
A PART OF BLOCK 9 OF XXXXXXXXXX’X ADDITION TO THE CITY OF COFFEYVILLE, XXXXXXXXXX COUNTY, KANSAS,
DESCRIBED AS FOLLOWS: COMMENCING AT THE SE CORNER OF SAID BLOCK 9; THENCE ON AN ASSUMED BEARING OF
N89°18’05”W ALONG THE SOUTH LINE OF SAID BLOCK 9 A DISTANCE OF 63.00 FEET TO THE TRUE POINT OF
BEGINNING; THENCE CONTINUING N89°18’05”W ALONG SAID SOUTH LINE A DISTANCE OF 300.03 FEET; THENCE
N°00’00”E A DISTANCE OF 290.64 FEET; THENCE
N90°00’00”E A DISTANCE OF 300.00 FEET; THENCE
S00°00’00”E A DISTANCE OF 294.30 FEET TO THE POINT OF BEGINNING.
Record and return to:
Xxxxxxxxx Xxxxxxx
The Boc Group
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
Xxxxxxxxx Xxxxxxx
The Boc Group
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
EXHIBIT K
Calculation of Lost Liquid Adjustment Factor, July 2005
June 2005 Total Power Xxxx
|
$1,675,534.28 | |
June 2005 Total Usage (KWH)
|
42,263,000.00 | |
June 2005 Total Power Cost ($/KWH)
|
$1,675,534.28 /42,263,000 =$.03965/KWH | |
July 2005 Total Power Xxxx
|
$1,674,041.22 | |
July 2005 Total Usage (KWH)
|
44,069,000.00 | |
July 2005 Total Power Cost ($/KWH)
|
$1,674,041.22 /44,069,000 = $.03799/KWH | |
July 2005 Adjustment Factor
|
July Total Cost / June Total Cost = $.03799 / $.03965 = .9581 | |
July 2005 Liquid Margin/Ton
|
$46 × .9581 = $44.07 | |
July Cap
|
$70,000 × .9581 = $67,067 |
45