COKE SUPPLY AGREEMENT
THIS CONTRACT made and entered into as of January 1, 2000 between EXXON COMPANY,
U.S.A. (a division of Exxon Mobil Corporation), a New Jersey corporation,
hereinafter called "Seller," and Great Lakes Carbon Corporation, hereinafter
called "Buyer";
ARTICLE I - TERM
This contract shall be effective for the period January 1, 2000 through
December 31, 2002, provided, however, this contract shall be subject to
earlier termination in accordance with provisions therefore contained in
Articles V, VIII, XIII, XIV and XVII, respectively.
ARTICLE II - DEFINITIONS
1. "Coke" shall mean green delayed sponge coke of the quality hereinafter
specified produced at Seller's Baton Rouge Refinery.
2. Metric Ton = 2204.62234 pounds.
3. Wet short tons (WST) shall mean 2000 pounds of Coke and contained moisture.
4. Dry short tons (DST) shall mean 2000 pounds of dry Coke, with the dry weight
of the Coke determined as provided hereinafter.
5. "Terminal" shall mean Seller's Refinery coke terminal that is located west
of Seller's Baton Rouge refinery and which shall receive, crush, sample and
load Coke onto barges on the Mississippi River.
6. "Contract Year" shall mean a calendar year beginning January 1 and ending
December 31.
ARTICLE III - QUANTITIES
A.
Subject to the allocation provisions in Article X hereof and to the provisions
of Article III.B. below, Seller agrees to sell and Buyer agrees to purchase
approximately CONFIDENTIAL TREATMENT in 2000 (to be supplied by approximately
CONFIDENTIAL TREATMENT per month) and CONFIDENTIAL TREATMENT in 2001 and 2001
(to be supplied by approximately CONFIDENTIAL TREATMENT per month) of Seller's
Baton Rouge Coke production having the qualities as set forth in Article IV.
At least three working days prior to the beginning of each month of delivery,
Seller will provide to Buyer a best estimate forecast of Coke quantity and
quality production for each xxxxx at the Baton Rouge Refinery.
B.
The parties acknowledge that periodically Seller's Baton Rouge Refinery
operations may yield Coke having properties different than those set forth in
Article IV. In such event, notwithstanding any provision herein to the
contrary, Buyer has no obligation to purchase the affected Coke production;
provided, however, Seller may offer and Buyer may elect to purchase such
affected Coke production in accordance with the terms of this agreement,
including, but not limited to Article V Price. If Seller offers such affected
Coke production and Buyer elects to purchase, such purchase shall not be
included in the allocation shown in Article III. A.
C.
Determination of the quantity of Coke shipped to Buyer by Seller for billing
purposes shall be made in accordance with the procedures as outlined in Article
VII.
ARTICLE IV - QUALITY
The parties acknowledge that the quality of Coke produced by Seller at its
Baton Rouge Refinery may vary from time to time depending on Seller's refinery
operations. Buyer and Seller agree that no provision in this Agreement shall
be construed to require Seller to produce and sell Coke having specified
qualities or to operate its refinery in a manner to produce Coke having any
specified qualities; however, Seller shall endeavor to use, in its sole
discretion, best efforts to make operational decisions to maximize the quality
of the Coke produced at its Baton Rouge Refinery, without making any implied or
expressed warranty as to the qualities of Coke produced. Seller expects to
produce and deliver Coke that does not exceed the following maximum qualities:
MAXIMUM QUALITIES - DRY COKE
ELEMENT VALUE COMMENTS
Ash CONFIDENTIAL wt.% Analyzed by Seller
Sulfur CONFIDENTIAL wt.% Analyzed by Seller
Volatiles CONFIDENTIAL wt.% Analyzed by Seller
Calcium CONFIDENTIAL ppm Analyzed by Seller
Iron CONFIDENTIAL ppm Analyzed by Seller
Nickel CONFIDENTIAL ppm Analyzed by Seller
Silicon CONFIDENTIAL ppm Analyzed by Seller
Sodium CONFIDENTIAL ppm Analyzed by Seller
Vanadium CONFIDENTIAL ppm Analyzed by Seller
Vanadium + Nickel CONFIDENTIAL ppm Analyzed by Seller
Shot CONFIDENTIAL Visual inspection at
loading Not Analyzed
by Seller
HGI CONFIDENTIAL Typical range Not
analyzed by Seller
Analysis of Coke quality produced shall be performed in accordance with
Appendix A.
ARTICLE V - PRICE
All Coke shall be purchased F.O.B. barge at Seller's Baton Rouge Terminal.
Buyer shall pay a purchase price for Coke that adjusts based on certain
qualities of Coke actually delivered. The purchase price shall be determined
as follows:
1. The base purchase price for Coke containing CONFIDENTIAL TREATMENT and
CONFIDENTIAL TREATMENT shall be the Quarterly Base Purchase Price (QBPP) per
dry short ton as determined below, calculated for the applicable quarter in
which the Coke is delivered:
A. 1Q00 QBPP = CONFIDENTIAL TREATMENT. Initial quarter of contract period
will not be true-up adjusted; subsequent QBPPs shall be determined as
follows:
QBPP = CONFIDENTIAL TREATMENT
(a) Note: CONFIDENTIAL TREATMENT
B. 'True-up' - Pace E-1 used to calculate the above QBPP as set forth in
Section 1.A. above for any delivery quarter shall be compared to Pace 3
of the same delivery quarter used to determine the QBPP. If the
difference between the applicable Pace E-1 and adjusted Pace Table 3
average for a delivery quarter varies by more than plus or minus
CONFIDENTIAL TREATMENT of the Pace E-1 used to calculate the QBPP for
that delivery quarter, the QBPP for that quarter shall be recalculated,
substituting the adjusted Pace Table 3 average for Pace E-1 in the QBPP
formula. The difference between the original QBPP and the revised QBPP
for that quarter as set forth in this Section 1.B. shall be added to or
subtracted from the QBPP for the next delivery quarter.
SEE ATTACHMENT B FOR EXAMPLES OF THE ABOVE 'TRUE-UP' CALCULATION
C. Definitions for Article V price calculations:
Pace E = Representative Green Petroleum Coke Blend Feedstock for U.S.
Gulf Coast Market Calciners as reported in Table E-2 of the Pace
Petroleum Coke Quarterly. EX: 4Q99 will be reported in the 4Q99 report
which is expected to be published by Pace in first quarter 2000 (1Q00).
Pace E-1 = The most recently published monthly average estimate of Gulf
Coast Anode Grade Calcined Coke Export Prices as reported in Table 1 of
the monthly review of the Pace Petroleum Coke Quarterly. EX: February
2000 will be reported in the February 2000 monthly update which is
expected to be published by Pace in March 2000.
Pace 3 - Summary of U.S. Calcined Petroleum Coke Exports = Actual
weighted average of calcined petroleum coke exports for Customs Districts
New Orleans and Port Xxxxxx as reported in Table 3 of the Monthly Review
of the Pace Petroleum Coke Quarterly, averaged for the calendar quarter.
EXAMPLE:
1Q00 data will reported as follows: January 2000 will be
reported in the March 2000 Monthly Review, expected to be
published April 2000, February 2000 will be reported in the
April 2000 Monthly Review, expected to be published May 2000,
March 2000 will be reported in the May 2000 Monthly Review,
expected to be published June 2000.
Calculation of the Pace 3 average shall be determined as follows:
(1) all exports for New Orleans and Port Xxxxxx shall be weight averaged
(2) export values greater than CONFIDENTIAL TREATMENT or less than
CONFIDENTIAL TREATMENT of the weight average of all of the exports for
New Orleans and Port Xxxxxx shall be deleted, (3) any such values greater
than CONFIDENTIAL TREATMENT or less than CONFIDENTIAL TREATMENT of the
weight average calculation, per (1) above, for tonnage equal to or
greater than CONFIDENTIAL TREATMENT metric tons, shall be included in the
average calculated value except where any single reported export value is
greater than CONFIDENTIAL TREATMENT or less than CONFIDENTIAL TREATMENT
of the weight average calculation, in which case it shall be deleted and
(4) the remaining exports shall be averaged a second time to determine
the weight average of the actual exports of that month. The adjusted
weight average of the three months shall be compared to Table E-1 for the
same delivery quarter in accordance with Section 1.B. above.
D. Notwithstanding any provision herein to the contrary, Seller shall have
the right to withhold up to CONFIDENTIAL TREATMENT per month, from each
month's total shot free Coke production, for the purpose of making spot
sales.
2. Quality Adjustments:
With respect to the actual delivery prices, the final price paid by the
Buyer will vary according to the following:
A. CONFIDENTIAL TREATMENT- To reflect the quality of actual Coke delivered,
for Coke with CONFIDENTIAL TREATMENT content greater than CONFIDENTIAL
TREATMENT, the purchase price shall be decreased by CONFIDENTIAL
TREATMENT of the applicable QBPP for each 0.1 wt.% increase in the
CONFIDENTIAL TREATMENT content above CONFIDENTIAL TREATMENT and increased
by CONFIDENTIAL TREATMENT of the applicable QBPP for each 0.1 wt.%
decrease in the CONFIDENTIAL TREATMENT content below CONFIDENTIAL
TREATMENT. (Ex:CONFIDENTIAL TREATMENT QBPP,CONFIDENTIAL TREATMENT equals
an increase of CONFIDENTIAL TREATMENT).
For Coke with CONFIDENTIAL TREATMENT content less than CONFIDENTIAL
TREATMENT, the purchase price shall be increased by an additional
CONFIDENTIAL TREATMENT for each 0.1 wt.% decrease in CONFIDENTIAL
TREATMENT content below CONFIDENTIAL TREATMENT. The quality adjustments
for less than CONFIDENTIAL TREATMENT are cumulative. All values for
CONFIDENTIAL TREATMENT percent are expressed to the nearest 0.1 wt.% in
accordance with ASTM procedures E-29-20 shown in 2.E. below, and the
price adjustment shall be rounded to the nearest $0.01/DST. (Ex:
CONFIDENTIAL TREATMENT QBPP,CONFIDENTIAL TREATMENT equals an increase
of CONFIDENTIAL TREATMENT).
B. CONFIDENTIAL TREATMENT - To reflect the quality of actual Coke delivered,
the purchase price shall be decreased by CONFIDENTIAL TREATMENT of the
applicable QBPP for each 0.1 wt.% increase in the CONFIDENTIAL TREATMENT
content above CONFIDENTIAL TREATMENT and increased by CONFIDENTIAL
TREATMENT of the applicable QBPP for each 0.1 wt.% decrease in the
CONFIDENTIAL TREATMENT content below CONFIDENTIAL TREATMENT. All values
for CONFIDENTIAL TREATMENT percent are expressed to the nearest 0.1 wt.%
in accordance with ASTM procedures E-29-90 shown in 2.E. below, and the
price adjustment shall be rounded to the nearest $0.01/DST.
(Ex:CONFIDENTIAL TREATMENT QBPP,CONFIDENTIAL TREATMENT equals an increase
of CONFIDENTIAL TREATMENT).
C. CONFIDENTIAL TREATMENT- To reflect the quality of actual Coke delivered,
the purchase price shall be decreased by CONFIDENTIAL TREATMENT of the
applicable QBPP for each 10 ppm increase in the CONFIDENTIAL TREATMENT
content above CONFIDENTIAL TREATMENT and increased by CONFIDENTIAL
TREATMENT of the applicable QBPP for each 10 ppm decrease in the
CONFIDENTIAL TREATMENT content below CONFIDENTIAL TREATMENT. All values
for CONFIDENTIAL TREATMENT content are expressed to the nearest 10 ppm
in accordance with ASTM procedures E-29-90 shown in 2.E. below, and the
price adjustment shall be rounded to the nearest CONFIDENTIAL TREATMENT.
(Ex:CONFIDENTIAL TREATMENT QBPP,CONFIDENTIAL TREATMENT equals a decrease
of CONFIDENTIAL TREATMENT).
D. The final price will be the sum of the QBPP and the three quality
adjustments shown above.
E. ASTM Test Result Rounding Procedures (E-29-90)
1. If the last digit is >5, round up.
2. If the last digit is <5, round down.
3. If the last digit is 5:
A. If the digit before the 5 is even, round down.
B. If the digit before the 5 is odd, round up.
3. Special Provisions
A. Expanded Specification Coke
1. Should Seller produce Coke with quality parameters that exceed the
contract maximum specifications as defined in Article IV, at its
option Seller will deliver and Buyer will accept up to CONFIDENTIAL
TREATMENT per calendar quarter of non-anode quality coke as defined
below. Additional tonnage of Expanded Specification Coke per calendar
quarter shall be by mutual agreement. Any such Coke delivered by
Seller shall be incremental to Buyers annual contract volume as
defined in Article III.
EXPENDED SPECIFICATION COKE QUALITY PARAMETERS
PARAMETERS MAXIMUM
Category 1
Sulfur CONFIDENTIAL TREATMENT
Volatiles "
Shot "
Category 2
Sulfur "
Volatiles "
Shot "
2. Pricing of Expanded Specification Coke
Category 1 Coke shall be priced as follows:
The most recently published monthly mid-point average estimate of Gulf
Coast High Sulfur Less than 50 HGI Coke Export Prices as reported in
Table 1 of the latest monthly supplement of the Pace Petroleum Coke
Quarterly,CONFIDENTIAL TREATMENT.
EXAMPLE: 8/99 Pace (range CONFIDENTIAL TREATMENT) average CONFIDENTIAL
TREATMENT +CONFIDENTIAL TREATMENT =CONFIDENTIAL TREATMENT
Category 2 Coke shall be priced as follows:
The most recently published monthly mid-point average estimate of Gulf
Coast High Sulfur Less than 50 HGI Coke Export Prices as reported in
Table 1 of the latest monthly supplement of the Pace Petroleum Coke
Quarterly,CONFIDENTIAL TREATMENT.
EXAMPLE: 8/99 Pace (range CONFIDENTIAL TREATMENT) average CONFIDENTIAL
TREATMENT +CONFIDENTIAL TREATMENT=CONFIDENTIAL TREATMENT
4. Other:
If, during the term of this Agreement (a) Pace should fail to publish any
referenced price for purposes of the preceding formulas in Article V-1.
through V-2. or (b) the pricing formula as described in Article V-1. and
V-2. should result in a price for Coke that either party deems to be
sufficiently misaligned with market conditions as to warrant a price change
to reflect a fair market price, either party may request a change in the
pricing basis for this Agreement. The party requesting the change shall
notify the other party in writing, and Buyer and Seller shall meet or
teleconference withing sixty days following the giving of the Change
Notification to discuss the pricing basis. If, within ninety (90) days
following the receipt of the Change Notification, the parties do not reach
a mutual agreement on what constitutes a fair and reasonable pricing basis,
this Agreement will terminate on the ninety-first (91) day following the
receipt of the Change Notification. During the period from the receipt of
the Change Notification until the later of the conclusion of the pricing
basis re-negotiation or Agreement termination, (a) Buyer will continue to
pay for Coke in accordance with Article V or (b) if Pace has ceased to
publish any referenced price for the applicable formula price determination,
Buyer will pay provisionally in accordance with Article V until a revised
pricing formula is negotiated and such revised pricing formula shall be
retroactive to the delivery quarter for which Pace ceased publishing Pace E,
Pace E-1 and/or Pace 3 data as described in Article V.
Seller shall invoice Buyer (by AUTOFAX) for each Coke delivery to the
following billing address:
Great Lakes Carbon Corporation
Attn: Accounts Payable
00000 Xxxxxxxxxx Xxxxx Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Buyer shall pay the invoiced amount via Electronic Funds Transfer (EFT).
Payment shall be due on the tenth day after date of the invoice.
ARTICLE VI - DELIVERY
1. Coke delivered hereunder to Buyer shall be loaded by Seller into barges
provided by Seller.
2. Title and risk of loss to the Coke delivered under this Agreement shall
pass from Seller to Buyer when the barge is released to Buyer.
3. From the time of title transfer, Buyer shall be responsible for all barge
transportation charges, as applicable, including demurrage, in route to
Buyer's destination.
4. Seller shall be responsible for cleanliness inspection and approval of
barges prior to loading.
ARTICLE VII - MEASUREMENTS
BARGES
A. The quantity of Coke loaded aboard bares shall be determined by a
qualified independent inspector, selected by Seller. Cost of said
inspection will be shared equally between Seller and Buyer. The
moisture content, as determined in accordance with Appendix A, will be
deducted from the wet Coke weight to determine dry weight of Coke
delivered to the barge.
B. Seller shall cause the Terminal operator to take a composite Coke sample
from each barge. The sample will be split by Seller's laboratory and a
portion of at least one-gallon will be made available to Buyer. Seller
will analyze its sample for moisture, sulfur, volatiles, ash and metals
in accordance with the procedures in Appendix A. In the event Seller
elects to have an independent laboratory analyze Seller's sample, the
independent laboratory's analysis charges shall be split 50/50 between
Buyer and Seller. Invoicing will be based on the analysis of Seller's
sample. Both parties shall retain composite samples for a period of
three months.
C. Seller will arrange for the duplicate laboratory composite sample to be
sent to Buyer from Seller's courier's office. Buyer will be responsible
for selecting a courier for delivery from Baton Rouge to Buyer's Plant
and payment of courier's fee.
D. In case of any quality dispute, if the difference between Buyer's and
Seller's analysis exceeds the variance shown below, an analysis shall be
performed by a qualified independent inspector, agreed to by both
parties, using the same ASTM procedures as outlined in Appendix A, with
costs to be shared 50/50. The sample to be used shall be Seller's
retained sample. A quality discrepancy shall be deemed to exist if the
sample analysis between Buyer and Seller differs by more than any of the
qualities listed below:
QUALITY UNITS MAXIMUM LAB VARIANCE
Ash Wt. % 0.08
Sulfur Wt. % 0.30
Volatiles Wt. % 0.80
Calcium ppm 40
Iron ppm 60
Nickel ppm 50
Silicon ppm 60
Sodium ppm 60
Vanadium ppm 40
In the event of a quality dispute, Buyer's acceptance of the Coke and/or Coke
pricing for qualities of Coke delivered will then be based on the average of
the two analytical results that are the closest together; i.e., the average of
the two closest results reported by Seller, Buyer and independent lab. Both
parties agree to review the allowable Max Lab Variance at six-month intervals.
Determination of shot content in the Coke shall be done per visual inspection
at load by Seller's Terminal Operator. In the event the Buyer's visual
inspection at discharge determines the shot content of the Coke exceeds "Nil",
Buyer shall notify Seller. Seller shall arrange for a visual inspection and
sample for the Coke to be taken at the discharge location. If such visual
inspection or analysis of the Coke sample indicates shot content greater than
"Nil", 1) Buyer may elect to return the Coke to Seller or 2) Buyer and Seller
may elect to negotiate a mutually acceptable price discount for the Coke in
question.
ARTICLE VIII - TAXES
A. It is agreed that any duty, tax, gross receipts tax, sales or use tax,
environmental fees or otherwise (but exclusive of taxes based on net
income)which Seller may be required to collect or pay under any municipal,
state, federal other laws now in effect with respect to the manufacture,
sales inspection, transportation, storage, delivery or use of the Coke
covered by this Agreement shall be added to the price to be paid by the
Buyer. With respect to any sales or use taxes due and owing, Seller agrees
to delete such taxes provided that Buyer supplies Seller with a properly
completed resale or exemption certificate.
B. With respect to any newly enacted taxes or fees, as enumerated above that
become effective after the date of this Agreement:
(1) Seller shall give Buyer written notice of any such addition or increase
and following receipt of such notice; Buyer may refuse by written reply
to Seller within thirty days to pay such increase or addition. Seller
shall then, by notice in writing given to Buyer within thirty days
after receipt of Buyer's reply, advise Buyer whether or not Seller
elects to pay the same without reimbursement from Buyer; and if Seller
then elects not to pay aforesaid increases and additions without
reimbursement from Buyer, Seller may terminate this Agreement
immediately upon giving written notice to Buyer as to Coke remaining
undelivered.
(2) Buyer agrees to reimburse Seller for any such taxes and Seller agrees
to assign any right to refund or protest to Buyer should Buyer wish to
contest such newly enacted taxes or fees; or
(3) Seller may, at Buyer's written request, pay such taxes or fees under
protest and to take all actions necessary to contest the validity,
applicability or any other like challenge with respect to the amount
or application of any such taxes or fees and institute actions
necessary to recover said payments solely at Buyer's expense and
through counsel designated by Buyer.
ARTICLE IX - INSPECTION, CLAIMS AND LIABILITY
A. Any claim for defect or variance in quality or shortage of quantity shall
be made, and Seller shall be notified and given an opportunity to inspect,
within ten days after (1) product(s) reach their destination, in the event
Seller's analysis survey and inspection results were provided to Buyer
before products(s) reached their destination or (2) Buyer receives Seller's
analysis survey and inspection results, in the event Buyer receives same
after delivery of products to their destination. Notwithstanding the
preceding sentence, in the event Buyer fails to unload and inspect Coke
within ten days after the product reached its destination, Buyer may reject
the product if it contains shot; provided, however, in the event Buyer
rejects Coke, containing shot outside of the time period specified in the
previous sentence, Buyer shall pay and be responsible for all barge
demurrage and transportation costs accruing between the date the product
reached its destination and the date of product rejection. Subject to the
previous sentence, failure of Buyer to observe this provision or any action
by Buyer which impedes identification of an alleged defect shall operate as
a waiver of Buyer's rights to make any such claim; provided, however, that
such failure or action shall not operate as a waiver of Buyer's right to
make claims for bodily injury or property damage. In the event of a claim
for defect or variance in quality, Seller shall provide the results of an
independent lab analysis, in accordance with Article VII.D., within ten days
of notification of the quality claim by Buyer; if Seller fails to provide
Buyer with the independent lab analysis within ten days of the claim
notification, Buyer's analysis shall be determinative of quality for
purposes of acceptance of the Coke and pricing for the quality of Coke
delivered.
BUYER ASSUMES ALL RISKS OF LOSSES THAT RESULT FROM THE USE OF THE COKE
PURCHASED HEREUNDER WHETHER USED SINGLY OR IN COMBINATION WITH OTHER
SUBSTANCES OR IN ANY PROCESS PROVIDED, HOWEVER, THAT NOTHING HEREIN
SHALL RELIEVE SELLER OF ANY RESPONSIBILITY FOR BODILY INJURY (INCLUDING
DEATH) AND PROPERTY DAMAGE RESULTING FROM BREACH OF THE WARRANTIES
CONTAINED HEREIN OR FROM SELLER'S NEGLIGENCE. SELLER SHALL NOT BE
LIABLE, WHETHER AS TO GOODS DELIVERED OR FOR NON-DELIVERY OF GOODS,
FOR ANY EXEMPLARY OR SPECIAL DAMAGES, OR FOR CONSEQUENTIAL DAMAGES
EXCEPT FOR THOSE DAMAGES FOR BODILY INJURY (INCLUDING DEATH) OR
PROPERTY DAMAGE WHICH PROXIMATELY RESULT FROM BREACH OF THE
WARRANTIES CONTAINED HEREIN OR FROM SELLER'S SOLE NEGLIGENCE OR FROM
SELLER'S RESPECTIVE SHARE OF JOINT NEGLIGENCE.
B. EACH PARTY TO THIS CONTRACT SHALL INDEMNIFY, DEFEND AND HOLD THE OTHER
HARMLESS FROM CLAIMS, DEMANDS AND CAUSES OF ACTION ASSERTED AGAINST
THE OTHER BY ANY OTHER PERSON (INCLUDING WITHOUT LIMITATION EMPLOYEES
OF EITHER PARTY) FOR PERSONAL INJURY OR DEATH, OR FOR LOSS OF OR DAMAGE
TO PROPERTY, RESULTING FROM THE WILLFUL OR NEGLIGENT ACTS OR OMISSIONS
OF THE INDEMNIFYING PARTY. WHERE PERSONAL INJURY, DEATH, OR LOSS OF OR
DAMAGE TO PROPERTY IS THE RESULT OF THE JOINT NEGLIGENCE OR
MISCONDUCT OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE TO
INDEMNIFY EACH OTHER IN PROPORTION TO THEIR RESPECTIVE SHARE OF SUCH
JOINT NEGLIGENCE OR MISCONDUCT.
ARTICLE X - FAILURE TO PERFORM
A. Any delays in or failure to perform by either Seller or Buyer shall not
constitute default hereunder or give rise to any claims for damages if and
to the extent that such delay or failure is caused by occurrences beyond the
reasonable control of the party affected (and in the case of Seller,
occurrences affecting a supplier or suppliers of Seller), including but not
limited to, acts of God or the public enemy; expropriation or confiscation
of facilities; compliance with any governmental allocation, functional
divestiture law or rationing program or any other regulation, rule, order
or request of any governmental authority (whether valid or invalid and
whether similar or dissimilar to those above named), acts of war, rebellion
or sabotage or damage resulting therefrom; embargoes or other import or
export restrictions; reduction of transportation capacity; reduction in
refining capacity; breakdown or temporary disruption of Seller's Baton Rouge
Refinery operations; accidental breakdown of transportation facilities;
inability to obtain necessary industrial supplies, energy or equipment;
fires, floods, explosions, accidents or breakdowns; riots or strikes or
other concerted acts of workers, whether direct or indirect; or any other
causes whether or not of the same class or kind as those specifically above
named which are not within the reasonable control of the party affected
and which, by the exercise of reasonable diligence, said party is unable
to prevent or provide against. In the event of such delay or failure, the
party affected will give notice and full particulars in writing to the
other party as soon as possible. In the event of such delay or failure,
Seller shall not be obligated to purchase or obtain other Coke of the kind
deliverable hereunder, or crude petroleum from which such Coke is derived.
Neither party hereto shall be required to settle strikes, differences with
workers or government claims by acceding to any demands when in the
discretion of the party whose performance is interfered with, it would be
inadvisable to accede to such demands.
B. If, for any reason whatsoever, whether within the control of Seller or not,
Seller's supplies of Coke of the kind deliverable hereunder out of the
Baton Rouge refinery are inadequate to meet its contract obligations to
customers for such Coke, or if Seller determines, in its sole discretion,
in consideration of raw material availability or refining conditions that
it is appropriate to impose a plan of allocation, the obligations of Seller
under this Agreement shall be reduced as Seller may determine as a part of
a plan for allocation to its customers consistently applied on a pro rata
basis. Seller, in its sole discretion, shall determine the Coke quality,
quantity, and loading schedule available to its customers and, to the extent
possible, will make such determinations after giving consideration to all
customers' needs and preferences. In any allocation of Coke production,
Seller's allocation plan shall include the following:
1. Seller's "customers" for Coke of the kind deliverable hereunder shall
mean (i) purchasers pursuant to current contracts and (ii) new
purchasers to whom Seller determines to commence selling at its sole
option. The new customers to whom volumes may be offered would be
limited to those to whom a denial could be construed as condoning
questionable trade practices such as restraint of trade.
2. In the event Seller imposes an allocation as a result of or directly
arising out of compliance with any governmental allocation, functional
divestiture law or rationing program or any other rule or request of
any governmental authority, "customers" defined in Article X.B.1 above
shall also include purchasers to whom Seller commences selling as a
result of such governmental action. Seller shall have the right to give
preference in any allocation as described in the preceding sentence to
those customers whose needs (including resellers who sell for similar
needs) are related to (i) protection of life or health, (ii) production
and transportation of food and energy, (iii) mass transportation
customers, and (iv) national defense.
3. Seller's allocation plans shall be applied after making provisions for
its own requirements for Coke of the kind deliverable hereunder for
exploring for, producing, manufacturing and transporting all forms of
energy, petroleum, petrochemical, mining, and energy products. In the
context of this subsection, "Seller" shall include Exxon Corporation and
all if its divisions, subsidiaries, and affiliates whether wholly or
partially controlled and whether domestic or foreign.
C. Seller shall be under no obligation to make deliveries hereunder at any
time when in its sole judgment it has reason to believe that the making of
such delivery would be likely to cause strikes to be called against it or
cause its properties to be picketed.
D. Neither Buyer nor Seller shall be required to make up performance omitted
on account of any of the causes set forth in Article X.
ARTICLE XI - MODIFICATION, WAIVER, ASSIGNMENT & TERMINATION
This Agreement may be modified or rescinded only by a writing signed by both
parties or their duly authorized agents.
No waiver by either party of any breach of any of the covenants or conditions
herein contained to be performed by the other party shall be construed as a
waiver of any succeeding breach of the same or any other covenant or condition.
This Agreement is not assignable or transferable by either party without the
prior written consent of the other, which consent shall not be unreasonably
withheld.
This Agreement terminates and supersedes any prior agreement between the
parties hereto, covering the purchase and sale of Coke except for rights
and obligations with respect to Coke delivered under any such prior agreement.
ARTICLE XII - NOTICES
Any notice required to be given under Articles X, XIII and XVII of this
Agreement and any notice regarding any actual or alleged breach of this
Agreement shall be sent by certified or registered U.S. Mail, return receipt
requested, to the addresses set forth below or to such other addresses as
either party may notify the other of in writing. Such notices shall be deemed
to have been given on the date received by the other party.
To Exxon at: To Buyer at:
----------- -----------
Exxon Company, U.S.A. Great Lakes Carbon Corporation
Attention: Industry Fuels Manager Attn: Vice President - Raw Materials
P.O. Box 2180 00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
All other written notices required to be given or contemplated hereunder shall
be either personally delivered or sent by U.S. Mail, facsimile transmission,
telex, or telegram to the addresses set forth below or to such other addresses
as either party may notify the other of in writing:
To Exxon at: To Buyer at:
----------- -----------
Exxon Company, U.S.A. Great Lakes Carbon Corporation
Attention: Industry Fuels Manager Attn: Vice President - Raw Materials
P.O. Box 2180 00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
ARTICLE XIII - NEW OR CHANGED REGULATIONS
The parties are entering into this Agreement in reliance on the regulations,
laws and arrangements with governments or governmental instrumentalities
(hereinafter called "Regulations") in effect on the date of execution by
Seller affecting the Coke sold hereunder insofar as said Regulations affect
Buyer, Seller or Seller's suppliers. If the effect of any changes in any
Regulation or of any new Regulation (1) is not covered by any other provision
of this Agreement, and (2) in the affected party's judgment, any such change
has a significant and material effect upon the party (or if Seller,upon
Seller's suppliers), the affected party may request renegotiation of the terms
of this Agreement, to be completed within 60 days of written request therefore,
failing which the affected party shall have the right to terminate this
Agreement effective thirty days after the end of the said sixty-day period.
Such right to request renegotiation or, upon failure to agree, to terminate,
shall without limitation also be available if Regulations undertake to regulate
the prices of Coke covered by this Agreement.
ARTICLE XIV - COMPLIANCE WITH LAWS AND REGULATIONS
EACH PARTY AGREES TO INDEMNIFY, DEFEND AND HOLD THE OTHER PARTY, ITS
SUCCESSORS AND ASSIGNS, HARMLESS AGAINST ALL LOSSES, CLAIMS, CAUSES OF
ACTION, PENALTIES AND LIABILITIES ARISING OUT OF THE FIRST PARTY'S FAILURE
TO COMPLY WITH ALL APPLICABLE FEDERAL, STATE AND LOCAL LAWS, ORDINANCES,
REGULATIONS, RULES AND ORDERS, INCLUDING, BUT NOT LIMITED TO, THOSE
GOVERNING POLLUTION, AND SUCH FAILURE OF COMPLIANCE SHALL ENTITLE THE
SECOND PARTY TO TERMINATE THIS AGREEMENT IMMEDIATELY.
ARTICLE XV - GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO ANY PRINCIPLES OF CHOICE OF LAWS IN TEXAS OR IN ANY OTHER STATE.
ARTICLE XVI - EXPRESS WARRANTIES: EXCLUSION OF OTHER WARRANTIES
Seller warrants (i) that the Coke supplied hereunder will conform to the
promises and affirmations of fact made herein, (ii) that it will convey good
title to the Coke supplied hereunder, free of all liens, and (iii) that the
Coke supplied hereunder shall be of merchantable quality.
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
WARRANTIES, WHETHER WRITTEN, ORAL OR IMPLIED. THE IMPLIED WARRANTY OF
FITNESS FOR PARTICULAR PURPOSE IS EXPRESSLY EXCLUDED AND DISCLAIMED.
ARTICLE XVII - FINANCIAL RESPONSIBILITY
If, during the duration of this Agreement, in the sole judgment of Seller,
reasonable grounds arise for believing the financial responsibility of Buyer
has become impaired or unsatisfactory, advance cash payment or other adequate
assurance of performance shall be given by Buyer upon written demand by Seller,
and shipments may be withheld until such payment or assurance is received.
If such payment or assurance is not received within 15 days of demand, Seller
may terminate this Agreement at any time upon written notice. If there are
instituted by or against Buyer proceedings in bankruptcy or under any
insolvency law, Seller may terminate this Agreement at any time upon written
notice.
ARTICLE XVIII - BUSINESS PRACTICES
Each party agrees:
(1) To comply with all laws and lawful regulations applicable to any
activities carried out in the name of or on behalf of the other party under
the provisions of this Agreement and/or any amendments to it.
(2) That all financial settlements, billing and reports rendered to the other
party as provided for in this Agreement and/or any amendments to it will to
the best of its knowledge and belief reflect properly the facts about all
activities and transactions related to this Agreement, which data may be
relied upon as being complete and accurate in any further recording and
reporting made by such other party for whatever purpose.
(3) To notify the other party promptly upon discovery of any instance where
the notifying party fails to comply with provision (1) above, or where the
notifying party has reason to believe data covered by (2) above is no longer
accurate and complete.
ARTICLE XIX - CONFLICT OF INTEREST
Each party, in performing its obligations under this Agreement, shall establish
and maintain appropriate business standards, procedures, and controls,
including those necessary to avoid any real or apparent impropriety or adverse
impact on the interests of the other party. Each party shall review with
reasonable frequency during the term of this Agreement such business standards
and procedures including, without limitation, those related to the activities
of its employees and agents in their relations with the other party's
employees, agents, and representatives, and other third parties.
ARTICLE XX - AUDIT
Each party and its duly authorized representatives shall have the right to
witness custody transfer measurement procedures. In addition, each party and
its duly authorized representatives shall have access to the accounting records
and other documents maintained by the other party which relate to materials
being delivered to the other party under this Agreement, and shall have the
right to audit such records at any reasonable time or times within three years
after the termination of the Agreement.
ARTICLE XXI - DRAWBACK
Seller and Buyer reserve the right to claim duty drawback resulting from duty
paid imported merchandise used in the manufacture of product delivered to
Buyer. When said product is exported, or used in the manufacture of a product
that is exported, Buyer will notify Seller promptly of its exportation. If
duty drawback is applicable under the laws and regulations of U.S. Customs,
Seller will prepare a mutually acceptable written agreement, detailing each
party's responsibilities, to be executed by both parties.
ARTICLE XXII - ENTIRE AGREEMENT
This writing and its Appendices are intended by the parties to be the final
expression of their agreement and are also intended to be the complete and
exclusive statement of the terms of this Agreement. There are no oral
understandings, representations or warranties affecting it.
In witness whereof, the parties hereto have duly caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
Exxon Company, U.S.A. Great Lakes Carbon Corporation
(a division of Exxon Mobil
Corporation)
By: /s/XXXXXXX X. XXXXXX, XX. By: /s/XXXXX X. XXXXX
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Title: MANAGER INDUSTRY FUELS Title: VICE PRESIDENT RAW MATERIALS
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Date: 12/06/99 Date: 12/10/99
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APPENDIX A
Sampling and Testing Procedure for Petroleum Coke
1. Sampling By Seller
Representative Coke samples shall be obtained; primary sampling methods
per automated belt sampler meeting ASTM D-2234 standard. Secondary
sampling method shall be manual sampling. Sample increments shall be
regularly and systematically collected so that the gross sample will
proportionately represent the contents of the car(s) or barge. Duplicate
samples shall be obtained upon request for the use of either party.
2. Sample Preparation By Seller
The gross sample shall be reduced according to ASTM D2013 (quartering,
xxxxxx, etc.) to obtain sufficient material for analysis.
3. The following shall be determined by appropriate ASTM or other mutually
agreeable procedures:
Test Test Method
Ash ASTM D-5142-90
Calcium X-Ray Flourescence
` Iron X-Ray Flourescence
Moisture ASTM D-5142-90
Nickel X-Ray Flourescence
Silicon X-Ray Flourescence
Sodium X-Ray Flourescence
Sulfur ASTM D-1552-90
Vanadium X-Ray Flourescence
Volatile Matter ASTM D-5142-90
4. Determination of Moisture, Volatile Matter and Ash By Seller
Laboratory testing of petroleum Coke shall be performed using dry Coke
samples. Moisture, volatile matter and ash shall be tested according to
the most recent ASTM 5142-90, or any subsequent ASTM approved, procedure.
Procedure may be performed using automated analyzers such as MAC-400 or
equivalent.
5. Determination of Sulfur, Vanadium, and Nickel Content By Seller
The analytical sample shall be crushed to pass a number 60 mesh sieve.
The sample shall be prepared by pressing a pellet with a suitable binder.
The sample pellet must be prepared with the same binder and pressing force
used to press standard pellets.
Sulfur is tested (analyzed) by LECO according to ASTM D 1552-90. Vanadium
and nickel are analyzed by X-ray flourescence. Seller reserves the right
to develop ICP or A-A as reference procedures.
ATTACHMENT B
EXAMPLE OF TRUE-UP CALCULATION
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'TRUE-UP' PROVISION IN ARTICLE V.1.B. - TRUE UP OF 2Q00 AS APPLIED TO THE 3Q00
QBPP CALCULATION
2Q00 'True-up' process: Pace 3 for 1Q00, published in March/April/May Pace
---------------------- Quarterly Monthly Reviews (available April/May/June)
February 2000 Pace E-1 estimate: CONFIDENTIAL
TREATMENT
If 1Q00 Pace 3 average value is between CONFIDENTIAL
TREATMENT
1Q00 Pace F average value:CONFIDENTIAL TREATMENT
Assumptions:
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1Q00 QBPP =CONFIDENTIAL TREATMENT
Pace E3Q99 -CONFIDENTIAL TREATMENT
Pace E-1 3Q00 =CONFIDENTIAL TREATMENT
Pace 3 1Q00 =CONFIDENTIAL TREATMENT
2Q00 QBPP =CONFIDENTIAL TREATMENT
Calculation of QBPP adjustment:
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Pace 3 1Q00 average =CONFIDENTIAL TREATMENT; recalculate 2Q00 QBPP
CONFIDENTIAL TREATMENT as follows:
CONFIDENTIAL TREATMENT
'True-up' 2Q00 QBPP:
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CONFIDENTIAL TREATMENT+ (0.00) + (4.23) =CONFIDENTIAL TREATMENT
CONFIDENTIAL TREATMENT - CONFIDENTIAL TREATMENT = CONFIDENTIAL TREATMENT
will be subtracted from 3Q00 QBPP that will be calculated using the formula
in Article V.1.A.
