EXHIBIT 10.10
Certain portions of this exhibit have
been omitted pursuant to a request for
confidential treatment. The omitted
information, which has been marked
"XXXXXXXX" has been filed separately
with the Securities and Exchange
Commission.
BUSINESS CONFIDENTIAL
OXYGEN, NITROGEN, AND ARGON
SUPPLY AGREEMENT
BETWEEN
PRAXAIR, INC.
AND
ROUGE STEEL COMPANY
DEARBORN, MI
TABLE OF CONTENTS
Page
PART I - DEFINITIONS...........................................................1
ARTICLE 1 - DEFINITIONS...................................................1
PART II - OXYGEN SUPPLY........................................................4
ARTICLE 2 - QUANTITY, INSTALLATION, OPERATION AND MAINTENANCE.............4
ARTICLE 3 - GASEOUS OXYGEN RECEIVERS .....................................5
ARTICLE 4 - OXYGEN DELIVERY...............................................6
ARTICLE 5 - SELLER'S SHUTDOWN - OXYGEN SUPPLY SYSTEM......................6
PART III - NITROGEN SUPPLY.....................................................6
ARTICLE 6 - QUANTITY, INSTALLATION, OPERATION AND MAINTENANCE.............6
ARTICLE 7 - NITROGEN DELIVERY.............................................7
ARTICLE 8 - SELLER'S SHUTDOWN - NITROGEN SUPPLY SYSTEM....................7
PART IV - ARGON SUPPLY.........................................................7
ARTICLE 9 - QUANTITY, INSTALLATION, OPERATION AND MAINTENANCE.............7
ARTICLE 10 - ARGON DELIVERY...............................................9
PART V - PRICING AND REPRICING.................................................9
ARTICLE 11 - PRICING AND REPRICING........................................9
PART VI - GENERAL TERMS AND CONDITIONS........................................13
ARTICLE 12 - OXYGEN AND NITROGEN METERS..................................13
ARTICLE 13 - SPECIFICATIONS..............................................14
ARTICLE 14 - PAYMENT.....................................................15
ARTICLE 15 - TAXES.......................................................15
ARTICLE 16 - CONTINGENCIES...............................................15
ARTICLE 17 - ASSIGNMENT..................................................16
ARTICLE 18 - LIABILITY...................................................17
ARTICLE 19 - DURATION OF AGREEMENT.......................................18
ARTICLE 20 - PRIOR AGREEMENT.............................................18
ARTICLE 21 - EARLY TERMINATION OF AGREEMENT..............................18
ARTICLE 22 - PURCHASES BY BUYER FROM A THIRD PARTY.......................18
ARTICLE 23 - RESOLUTION OF DISPUTES......................................19
ARTICLE 24 - EASEMENTS AND RIGHTS OF WAY.................................20
ARTICLE 25 - BUYER'S AND SELLER'S AUTHORIZED REPRESENTATIVES.............20
ARTICLE 26 - FAIR LABOR STANDARDS ACT....................................20
ARTICLE 27 - HEADINGS....................................................20
ARTICLE 28 - SMOKING AND OPEN FLAMES.....................................20
ARTICLE 29 - NON-WAIVER..................................................20
ARTICLE 30 - APPLICABLE LAW..............................................20
ARTICLE 32 - ENTIRE AGREEMENT............................................21
EXHIBIT A -- DRAWING
EXHIBIT B -- EXHIBIT B EQUIPMENT
EXHIBIT C -- DRAWING
EXHIBIT D -- EXAMPLES ILLUSTRATING THE INTENT OF THE PARTIES REGARDING
SUPPLEMENTAL NITROGEN AND SUPPLEMENTAL OXYGEN
EXHIBIT E -- SAMPLE CALCULATION OF LOAD FACTOR
THIS AGREEMENT made and entered into as of December 1, 2002, by and
between Praxair, Inc., a Delaware corporation with an office located at 00 Xxx
Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000-0000 (hereinafter referred to as "Seller") and
Rouge Steel Company, a Delaware corporation with an office located at 0000
Xxxxxx Xxxx, Xxxxxxxx, XX 00000-0000 (hereinafter referred to as "Buyer");
W I T N E S S E T H:
WHEREAS, Buyer requires substantial quantities of oxygen, nitrogen, and
argon for use at its plant at Dearborn, Michigan, and has requested Seller to
supply such quantities of oxygen, nitrogen and argon to such plant; and
WHEREAS, Seller owns and operates facilities for the production of
oxygen, nitrogen and argon at Ecorse, Michigan from which Seller is willing to
supply oxygen, nitrogen and argon to Buyer;
NOW THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, Buyer and Seller agree as follows:
PART I - DEFINITIONS
ARTICLE 1 - DEFINITIONS
As used in this Agreement:
1.1 "Agreement Date" means December 1, 2002.
1.2 "Argon Distributing System" means the system of trunk and service
pipelines owned and operated by Buyer for the transmission of vaporized Liquid
Argon from the Liquid Argon Storage System to the various argon use points
within Buyer's Plant.
1.3 This Article intentionally left blank
1.4 "Buyer's Argon Requirements" means Buyer's total present and future
requirements, in gaseous and liquid form, of argon, other than argon supplied in
cylinders, for use at Buyer's Plant; provided, however, in the event Buyer
should require argon for use at Buyer's Plant in connection with any new
technological process utilized at Buyer's Plant subsequent to the date of this
Agreement which requires investment, either by Buyer or another party, where as
a condition of using such new process Buyer is required to purchase its argon
requirements for use in such process from a supplier other than Seller, and a
similar process is not available from Seller at an equal or lower price and
substantially similar terms and conditions, any argon so required for use at
Buyer's Plant under such conditions shall not be deemed to be included in the
definition of "Buyer's Argon Requirements" for purposes of this Agreement.
1.5 "Buyer's Nitrogen Requirements" means Buyer's total present and
future requirements, in gaseous and liquid form, of nitrogen, other than that
supplied in cylinders, for use at Buyer's Plant; provided, however, in the event
Buyer should require nitrogen for use at Buyer's Plant in connection with
any new technological process utilized at Buyer's Plant subsequent to the date
of this Agreement which requires investment, either by Buyer or another party,
where as a condition of using such new process Buyer is required to purchase its
nitrogen requirements for use in such process from a supplier other than Seller,
and a similar process is not available from Seller at an equal or lower price
and substantially similar terms and conditions, any nitrogen so required for use
at Buyer's Plant under such conditions shall not be deemed to be included in the
definition of "Buyer's Nitrogen Requirements" for purposes of this Agreement;
and further provided, that notwithstanding anything contained in this Article
1.5, in no event shall Buyer be relieved of its obligation to pay for a minimum
of XXXXXXXX Cubic Feet of Gaseous Nitrogen each Month at the then current First
Block Gaseous Nitrogen Price even if no nitrogen is taken during any such Month
as provided in Article 11.3.
1.6 "Buyer's Oxygen Requirements" means Buyer's total present and
future requirements, in gaseous and liquid form, of oxygen, other than that
supplied in cylinders, for use at Buyer's Plant; provided, however, in the event
Buyer should require oxygen for use at Buyer's Plant in connection with any new
technological process utilized at Buyer's Plant subsequent to the date of this
Agreement which requires investment, either by Buyer or another party, where as
a condition of using such new process Buyer is required to purchase its oxygen
requirements for use in such process from a supplier other than Seller, and a
similar process is not available from Seller at an equal or lower price and
substantially similar terms and conditions, any oxygen so required for use at
Buyer's Plant under such conditions shall not be deemed to be included in the
definition of "Buyer's Oxygen Requirements" for purposes of this Agreement; and
further provided, that notwithstanding anything contained in this Article 1.6,
in no event shall Buyer be relieved of its obligation to pay for a minimum of
XXXXXXXX Cubic Feet of Gaseous Oxygen each Month at the then current First Block
Gaseous Oxygen Price even if no oxygen is taken during any such Month as
provided in Article 11.2.
1.7 "Buyer's Plant" means Buyer's plant at the location referred to in
the first WHEREAS clause above, and any additions thereto.
1.8 "Contract Year" means a period of one (1) year commencing on the
Agreement Date or on any yearly anniversary of such date.
1.9 "Cubic Foot" means that quantity of oxygen, nitrogen, or argon that
would occupy a volume of one cubic foot at 70 degrees Fahrenheit temperature and
14.696 pounds per square inch absolute pressure.
1.10 "Gaseous Nitrogen" means nitrogen delivered (a) at a maximum
instantaneous demand rate not to exceed XXXXXXXX Cubic Feet per minute, or (b)
up to a quantity not to exceed XXXXXXXX Cubic Feet in any Month.
XXXXXXXX - Confidential information has been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately with
the Securities and Exchange Commission.
-2-
1.11 "Gaseous Oxygen" means oxygen delivered (a) at a maximum
instantaneous demand rate not to exceed XXXXXXXX Cubic Feet per minute, or (b)
up to a quantity not to exceed XXXXXXXX Cubic Feet in any Month.
1.12 "Gaseous Oxygen Receivers" means the storage tanks together with
the oxygen regulators and any associated piping and equipment located at Buyer's
Plant which Buyer has sold to Seller as provided in Article 3.1.
1.13 "Liquid Argon" means all argon delivered to Buyer hereunder in
liquid form to the Liquid Argon Storage System.
1.14 "Liquid Argon Delivery Point" means the point at which Liquid
Argon is delivered into the Liquid Argon Storage System.
1.15 "Liquid Argon Storage System" means the storage tanks,
vaporization equipment, piping, controls, devices and instrumentation owned,
installed, operated and maintained by Seller at Buyer's Plant for the storage
and vaporization of Liquid Argon. The location of the Liquid Argon Storage
System is depicted in Exhibit C attached hereto and made a part hereof.
1.16 "Meter and Receiver Site" means that plot of ground at Buyer's
Plant as depicted in Exhibit A attached hereto and made a part hereof which
Buyer has furnished to Seller for the term hereof for the purpose of installing,
maintaining and operating the oxygen and nitrogen meters installed by Seller as
provided in Article 12 and the Gaseous Oxygen Receivers sold by Buyer to Seller
as provided in Article 3.1.
1.17 "Month" means that period of time beginning at twelve o'clock
midnight on the first day of any calendar month and extending to twelve o'clock
midnight on the first day of the following calendar month.
1.18 "Nitrogen Delivery Point" means the flange where Seller's Nitrogen
Pipeline will be connected to the Nitrogen Distributing System at the existing
nitrogen meter station depicted in Exhibit A.
1.19 "Nitrogen Distributing System" means the system of trunk and
service pipelines owned and operated by Buyer for the transmission of nitrogen
from the Nitrogen Delivery Point to the various nitrogen use points within
Buyer's Plant.
1.20 "Nitrogen Supply System" means the facilities owned and operated
by Seller at the location referred to in the second WHEREAS clause above for the
supply, production, compression, storage and vaporization of nitrogen to be
delivered hereunder.
1.21 "Oxygen Delivery Point" means the flange where Seller's Oxygen
Pipeline will be connected to the Oxygen Distributing System within the Meter
and Receiver Site depicted in Exhibit A.
1.22 "Oxygen Distributing System" means the system of trunk and service
pipelines owned and operated by Buyer for the transmission of oxygen from the
Oxygen Delivery Point to the various oxygen use points within Buyer's Plant.
XXXXXXXX - Confidential information has been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately with
the Securities and Exchange Commission.
-3-
1.23 "Oxygen Supply System" means the facilities owned and operated by
Seller at the location referred to in the second WHEREAS clause above for the
production, compression, storage and vaporization of oxygen to be delivered
hereunder.
1.24 "Seller's Nitrogen Pipeline" means the pipeline owned and
maintained by Seller for the delivery of nitrogen from the Nitrogen Supply
System to the Nitrogen Delivery Point.
1.25 "Seller's Oxygen Pipeline" means the pipeline owned and maintained
by Seller for the delivery of oxygen from the Oxygen Supply System to the Oxygen
Delivery Point.
1.26 "Supplemental Nitrogen" means all nitrogen delivered hereunder
during any Month that is not Gaseous Nitrogen as determined by adding (i) the
quantity of nitrogen delivered during such Month at an instantaneous demand rate
in excess of XXXXXXXX Cubic Feet per minute, (ii) the quantity of nitrogen
delivered during such Month pursuant to Article 16 and (iii) the quantity of
nitrogen calculated by subtracting the sum of the quantities of (i) and (ii)
above from the quantity of nitrogen, if any, delivered during such Month that is
in excess of XXXXXXXX Cubic Feet; provided, however, in no event will the
difference so obtained be less than zero. Reference Exhibit D attached hereto
and made a part hereof for an example illustrating the intent of the parties
regarding the meaning of the term "Supplemental Nitrogen".
1.27 "Supplemental Oxygen" means all oxygen delivered hereunder during
any Month that is not Gaseous Oxygen as determined by adding (i) the quantity of
oxygen delivered during such Month at an instantaneous demand rate in excess of
XXXXXXXX Cubic Feet per minute, (ii) the quantity of oxygen delivered during
such Month pursuant to Article 16 and (iii) the quantity of oxygen calculated by
subtracting the sum of the quantities of (i) and (ii) above from the quantity of
oxygen, if any, delivered during such Month that is in excess of XXXXXXXX Cubic
Feet; provided, however, in no event will the difference so obtained be less
than zero. Reference Exhibit D for an example illustrating the intent of the
parties regarding the meaning of the term "Supplemental Oxygen".
1.28 "Quarter" means a calendar quarter.
PART II - OXYGEN SUPPLY
ARTICLE 2 - QUANTITY, INSTALLATION, OPERATION AND MAINTENANCE
2.1 Seller will sell and deliver into the Oxygen Distributing System
and Buyer will purchase and receive from Seller on the terms and conditions
hereinafter set forth Buyer's Oxygen Requirements. Seller will deliver Gaseous
Oxygen to meet Buyer's Oxygen Requirements up to the maximum instantaneous
demand rate set forth in Article 1.11.
2.2. This Article intentionally left blank.
2.3 If, from time to time, Buyer requires to purchase oxygen at an
instantaneous demand rate in excess of the maximum instantaneous demand rate for
Gaseous Oxygen as set forth in Article 1.11, Seller
XXXXXXXX - Confidential information has been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately with
the Securities and Exchange Commission.
-4-
will, during the term of this Agreement, sell and deliver such oxygen as
Supplemental Oxygen to the extent that Seller, in its reasonable discretion,
deems that it has such oxygen available for Buyer and delivery may be made
within the flow and pressure limitations of Seller's Oxygen Pipeline and the
metering equipment installed pursuant to Article 12.
2.4 Seller shall, at its sole expense, own, maintain and operate the
Oxygen Supply System, Seller's Oxygen Pipeline and the metering equipment and
communications system installed pursuant to Article 12 during the term of this
Agreement. All of the foregoing shall be and remain the sole property of Seller
and, within a period of one hundred eighty (180) days following termination of
this Agreement, Seller shall have the option to remove any and all components
thereof that may then be situated at Buyer's Plant or leave same in place and
pass title of any such components left in place to Buyer. In removing any such
components that may be situated at Buyer's Plant as aforesaid, Seller shall not
unreasonably interfere with the business or operations of Buyer and to the
extent Seller does so interfere with the business or operations of Buyer, Seller
shall reimburse Buyer for any damages sustained by Buyer as a result thereof.
2.5 Buyer shall, during the term of this Agreement, maintain the Oxygen
Distributing System and Seller, at no cost to Buyer, will maintain the
connection between Seller's Oxygen Pipeline and the Oxygen Distributing System.
ARTICLE 3 - GASEOUS OXYGEN RECEIVERS
3.1 Buyer has sold to Seller and Seller has bought from Buyer all
right, title and interest in and to the equipment specified in Exhibit B
attached hereto and made a part hereof, including without limitation, the
Gaseous Oxygen Receivers as more particularly identified in Exhibit B. The
equipment specified in Exhibit B is sometimes hereinafter collectively referred
to as the "Exhibit B Equipment".
3.2 This Article left intentionally blank
3.3 The Exhibit B Equipment has been sold by Buyer to Seller "as is,
where is" free and clear of all liens, security interests and encumbrances of
any kind.
3.4 During the term of this Agreement Seller shall, at its expense,
inspect, maintain, operate, repair and replace the Exhibit B Equipment;
provided, however, in the event any item of Exhibit B Equipment or any component
thereof specifically identified on Exhibit B as Exhibit B Equipment for which
Buyer will be required to bear the cost of repair or replacement, needs to be
repaired or replaced during the term hereof, and the parties agree that such
need exists, Seller shall, at Buyer's expense, cause such item of Exhibit B
Equipment or component thereof to be repaired or replaced and Buyer shall
reimburse Seller for any costs, including without limitation the cost of
material and labor, incurred by Seller in connection with such repair or
replacement within thirty (30) days following the date of Seller's invoice
therefor.
3.5 This Article intentionally left blank.
-5-
3.6 Effective as of the date this Agreement terminates, Seller shall
resell to Buyer and Buyer shall repurchase from Seller for ten (10) dollars all
of Seller's right, title and interest in and to the Exhibit B Equipment on the
same basis as Seller has purchased same from Buyer as provided in Article 3.3.
ARTICLE 4 - OXYGEN DELIVERY
4.1 Oxygen will be delivered from the Oxygen Supply System at a
pressure of not less than 275 pounds per square inch gauge or more than 450
pounds per square inch gauge to a regulator which will deliver oxygen into the
Oxygen Distributing System at a pressure of not less 180 pounds per square inch
gauge or more than 220 pounds per square inch gauge. Seller's pressure relief
valves will actuate on Seller's Oxygen Pipeline at 475 pounds per square inch
gauge. Buyer shall be responsible for installing and maintaining appropriate
relief devices on the Oxygen Distributing System.
4.2 Title to and risk of loss of oxygen delivered through Seller's
Oxygen Pipeline shall pass to Buyer at the Oxygen Delivery Point.
ARTICLE 5 - SELLER'S SHUTDOWN - OXYGEN SUPPLY SYSTEM
5.1 Seller will have the right from time to time to shut down the
Oxygen Supply System for such period of time as may be necessary for Seller to
make ordinary repairs for maintenance and/or thawing necessary and consistent
with proper operation. During any such period, Seller shall deliver from storage
Buyer's Oxygen Requirements.
PART III - NITROGEN SUPPLY
ARTICLE 6 - QUANTITY, INSTALLATION, OPERATION AND MAINTENANCE
6.1 Seller will sell and deliver into the Nitrogen Distributing System
and Buyer will purchase and receive from Seller on the terms and conditions
hereinafter set forth Buyer's Nitrogen Requirements. Seller will deliver Gaseous
Nitrogen to meet Buyer's Nitrogen Requirements up to the maximum instantaneous
demand rate set forth in Article 1.10.
6.2 If, from time to time, Buyer requires to purchase nitrogen at an
instantaneous demand rate in excess of the maximum instantaneous demand rate for
Gaseous Nitrogen as set forth in Article 1.10, Seller will, during the term of
this Agreement, sell and deliver such nitrogen as Supplemental Nitrogen to the
extent that Seller, in its reasonable discretion, deems that it has such
nitrogen available for Buyer and delivery may be made within the flow and
pressure limitations of Seller's Nitrogen Pipeline and the metering equipment
installed pursuant to Article 12.
-6-
6.3 Seller shall, at its sole expense, own, maintain and operate the
Nitrogen Supply System, Seller's Nitrogen Pipeline and the metering equipment
and communications system installed pursuant to Article 12 during the term of
this Agreement. All of the foregoing shall be and remain the sole property of
Seller and, within a period of one hundred eighty (180) days following
termination of this Agreement, Seller shall have the option to remove any and
all components thereof which may then be situated at Buyer's Plant or leave same
in place and pass title of any such components left in place to Buyer. In
removing any such components that may be situated at Buyer's Plant as aforesaid,
Seller shall not unreasonably interfere with the business or operations of Buyer
and to the extent Seller does so interfere with the business or operations of
Buyer, Seller shall reimburse Buyer for any damages sustained by Buyer as a
result thereof.
6.4 Buyer shall, during the term of this Agreement, maintain the
Nitrogen Distributing System, and Seller at no cost to Buyer, will maintain the
connection between Seller's Nitrogen Pipeline and the Nitrogen Distributing
System.
ARTICLE 7 - NITROGEN DELIVERY
7.1 Nitrogen will be delivered into the Nitrogen Distributing System at
a pressure of not less than 150 pounds per square inch gauge or more than 225
pounds per square inch gauge. Pressure relief valves will actuate on Seller's
Nitrogen Pipeline at 275 pounds per square inch gauge and Buyer shall be
responsible for installing appropriate relief devices on the Nitrogen
Distributing System.
7.2 Title to and risk of loss of nitrogen delivered through Seller's
Nitrogen Pipeline shall pass to Buyer at the Nitrogen Delivery Point.
ARTICLE 8 - SELLER'S SHUTDOWN - NITROGEN SUPPLY SYSTEM
8.1 Seller will have the right from time to time to shut down the
Nitrogen Supply System for such period of time as may be necessary for Seller to
make ordinary repairs for maintenance and/or thawing necessary and consistent
with proper operation. During any such period, Seller shall deliver from storage
Buyer's Nitrogen Requirements.
PART IV - ARGON SUPPLY
ARTICLE 9 - QUANTITY, INSTALLATION, OPERATION AND MAINTENANCE
9.1 Seller will sell and deliver to Buyer and Buyer will purchase and
receive from Seller, on the terms and conditions hereinafter set forth, Buyer's
Argon Requirements. Buyer will give Seller reasonable advance notice of the
quantities of Liquid Argon needed for Buyer's use. Seller will deliver such
quantities within a reasonable time not to exceed twenty-four (24) hours after
receipt of order. The delivery of Liquid
-7-
Argon by Seller will constitute Buyer's purchase thereof, and the quantities
delivered will be measured by the method Seller regularly uses for the type of
delivery made. Buyer grants to Seller the right of twenty-four (24) hour access
to the Liquid Argon Storage System for the performance of this Agreement, and if
Buyer fails to grant such access, Buyer will pay Seller any special expenses
incurred. Seller will only make full truckload deliveries of Liquid Argon unless
otherwise agreed to by Buyer and Seller.
9.2 Seller, at its expense, unless otherwise provided herein, will: (i)
install the Liquid Argon Storage System and make the connections to the Argon
Distributing System as depicted in Exhibit C for the distribution of Liquid
Argon; (ii) maintain the Liquid Argon Storage System; and (iii) remove the
Liquid Argon Storage System within a reasonable time not to exceed one hundred
eighty (180) days following termination of this Agreement. In addition, Seller
may, at its expense, and for reasons other than a substantial change in Buyer's
Argon Requirements, method of supply or Buyer's Plant and with Buyer's approval,
such approval not to be unreasonably withheld, remove the Liquid Argon Storage
System or any part thereof, and replace it with another argon supply system or
another Liquid Argon Storage System or part thereof, as Seller may deem
appropriate for the supply of Buyer's Argon Requirements. The Liquid Argon
Storage System will remain the property of Seller at all times. If Seller
relocates or removes all or part of the Liquid Argon Storage System and installs
a replacement due to a substantial change in Buyer's Argon Requirements, method
of supply or Buyer's Plant, Seller may charge Buyer the cost of such removal and
installation as approved by Buyer prior to said removal and installation, such
approval not to be unreasonably withheld. If the Liquid Argon Storage System is
damaged by Buyer, its agents, employees, contractors or invitees, the cost of
repairs reasonably required by Seller will be borne by Buyer. At the time Liquid
Argon is first delivered hereunder, the Liquid Argon Storage System will include
storage tanks with capacities of 3,000 gallons with atmospheric vaporizers and
11,000 gallons with steam vaporizers.
9.3 Buyer, at its expense, has provided and will continue to provide:
(i) a site for the Liquid Argon Storage System with access by road which is
reasonably acceptable to Seller; (ii) a foundation for the Liquid Argon Storage
System which is reasonably acceptable to Seller; (iii) fencing to prevent
tampering which is reasonably acceptable to Seller; and (iv) isolation barriers
which are reasonably acceptable to Seller. In addition, Buyer, at its expense,
has obtained and will continue to maintain all necessary permits and licenses
for the Liquid Argon Storage System and has furnished and will continue to
furnish all utilities reasonably required by Seller in connection with the
Liquid Argon Storage System, such as electric power, lighting, telephone, water
and/or steam. The facilities furnished by Buyer for the purpose of delivering
such utilities to the points on the Liquid Argon Storage System site designated
by Seller have been found satisfactory by Seller and Buyer will continue to
furnish such facilities hereunder. Buyer will prevent persons other than
Seller's representatives or Buyer's employees, agents, contractors or invitees
authorized by Seller, from entering the Liquid Argon Storage System site,
delaying delivery, or altering, repairing, adjusting, or otherwise tampering
with the Liquid Argon Storage System.
-8-
9.4 Buyer shall, during the term of this Agreement, maintain the Argon
Distributing System, and Seller, at no cost to Buyer, will maintain the
connection between the Liquid Argon Storage System and the Argon Distributing
System depicted in Exhibit C.
ARTICLE 10 - ARGON DELIVERY
10.1 Liquid Argon will be vaporized by the Liquid Argon Storage System
and transferred into the Argon Distributing System at a pressure of not less
than 150 pounds per square inch gauge or more than 220 pounds per square inch
gauge. Pressure relief valves will actuate on the Liquid Argon Storage System at
265 pounds per square inch gauge and Buyer shall be responsible for installing
appropriate relief devices on the Argon Distributing System.
10.2 Title to and risk of loss of Liquid Argon shall pass to Buyer at
the Liquid Argon Delivery Point.
PART V - PRICING AND REPRICING
ARTICLE 11 - PRICING AND REPRICING
11.1 As promptly as possible after the end of each Month, Seller will
read the metering equipment installed pursuant to Article 12 to determine the
quantities of oxygen and nitrogen delivered to Buyer during such Month. Based
upon such readings, Seller will invoice Buyer and Buyer will pay Seller in
accordance with the prices set forth below as adjusted under Articles 11.4 and
11.8 plus the amount of any sales, use or other excise taxes now or hereafter
imposed by law on Buyer by reason of such sale or delivery.
BASE GASEOUS OXYGEN PRICES
--------------------------
FIRST BLOCK
-----------
First XXXXXXXX Cubic Feet per Month $ XXXXXXXX per Month
SECOND BLOCK
------------
Next XXXXXXXX Cubic Feet per Month $ XXXXXXXX per 100 Cubic Feet
BASE SUPPLEMENTAL OXYGEN PRICE
------------------------------
Any Quantity $ XXXXXXXX per 100 Cubic Feet
XXXXXXXX - Confidential information has been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately with
the Securities and Exchange Commission.
-9-
BASE GASEOUS NITROGEN PRICE
---------------------------
FIRST BLOCK
-----------
First XXXXXXXX Cubic Feet per Month $ XXXXXXXX per Month
SECOND BLOCK
------------
Next XXXXXXXX Cubic Feet per Month $ XXXXXXXX per 100 Cubic Feet
BASE SUPPLEMENTAL NITROGEN PRICE
--------------------------------
Any Quantity $ XXXXXXXX per 100 Cubic Feet
11.2 Buyer will be obligated to pay Seller for a minimum of XXXXXXXX
Cubic Feet of Gaseous Oxygen each Month at the then current First Block Gaseous
Oxygen Price as set forth in Article 11.1, as adjusted under Article 11.4, even
if no oxygen is taken by Buyer during any such Month.
11.3 Buyer will be obligated to pay Seller for a minimum of XXXXXXXX
Cubic Feet of Gaseous Nitrogen each Month at the then current First Block
Gaseous Nitrogen Price as set forth in Article 11.1, as adjusted under Article
11.4, even if no nitrogen is taken by Buyer during any such Month.
11.4 The Base Gaseous Nitrogen Prices will be adjusted as of the first
day of each Quarter during the term of this Agreement based upon changes in the
cost of electric power and the Producer Price Index-Industrial Commodities Less
Fuel (BLS Series ID# WPU03T15M05), hereinafter the "PPI", using the following
formula:
|- -|
NPn = BPn|.40(Enew) (PPInew) |
| ------ + .40------- + .20|
| (Ebase) (PPIbase) |
|- -|
where:
NPn = New Gaseous Nitrogen Price
BPn = Base Gaseous Nitrogen Price
and Ebase, Enew, PPIbase and PPInew shall have the meanings set forth below in
this Article 11.4.
The Base Gaseous Oxygen Prices set forth in Article 11.1 will be adjusted as of
the first day of each Quarter during the term of this Agreement based upon
changes in the cost of electric power, the PPI and the quantities of oxygen
delivered by Seller to Buyer under this Agreement using the following formula:
NPo = BPo x {(.54 x (Enew/Ebase)) + (.20 x (PPInew/PPIbase)) + 0.26} x
(LFbase/LFnew)
XXXXXXXX - Confidential information has been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately with
the Securities and Exchange Commission.
-10-
Where:
NPo = New Gaseous Oxygen Price
BPo = Base Gaseous Oxygen Price
LFbase = XXXXXXXX
LFnew = The lesser of LFbase or T
---
H
Where:
T = The aggregate quantity of Gaseous Oxygen and Supplemental
Oxygen delivered by Seller to Buyer under this Agreement
during the Quarter immediately preceding the Quarter in which
an adjustment becomes effective; and
H = The average of the highest twelve (12) aggregate quantities
of Gaseous Oxygen and Supplemental Oxygen delivered by Seller
to Buyer under this Agreement during any hours of the
applicable Quarter referenced in the definition of T above,
multiplied by the total number of hours in such Quarter.
Examples illustrating the intent of the parties with respect
to the calculation of LFnew are set forth in Exhibit E
attached hereto and made a part hereof.
PPIbase = The three month average of the PPI as published by the
United States Department of Labor, Bureau of Labor Statistics
for the Months of January, February and March, 2002.
PPInew = The average monthly PPI published by the United States
Department of Labor, Bureau of Labor Statistics for the
Quarter immediately preceding the Quarter in which an
adjustment is made using the most current data available at
the end of any such Quarter. If the PPI is revised and
published on some other base, the values will be adjusted to
the new base in accord with such conversion schedule or factor
as may be supplied by the Bureau of Labor Statistics.
Enew = XXXXXXXX
Ebase = $ XXXXXXXX /kWh
Buyer will have the right through an independent third party auditor to audit
the data and calculations used by the Seller in performing its obligations under
this Agreement with respect to the calculation of Enew and Ebase pursuant to
this Article 11. The auditor will report to Buyer only the
XXXXXXXX - Confidential information has been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately with
the Securities and Exchange Commission.
-11-
auditor's conclusion as to what the auditor considers the correct application
of the terms and conditions of this Agreement, and will not divulge any of the
detailed factors or assumptions behind the auditor's conclusion. Buyer will
provide not less than thirty (30) days prior written notice of its intention to
initiate any such audit. Each audit must be initiated not later than the end of
the sixth month following the Quarter under audit. Payment of auditor's fees
will be shared equally between Buyer and Seller.
11.5 This Article intentionally left blank.
11.6 Seller will invoice Buyer and Buyer will pay Seller for Liquid
Argon supplied hereunder in accord with the price set forth below, as adjusted
in accord with Article 11.7, plus the amount of any sales, use or other excise
tax now or hereafter imposed in connection with the supply of Liquid Argon
hereunder.
BASE LIQUID ARGON PRICE
-----------------------
Any Quantity (up to XXXXXXXX Cubic $ XXXXXXXX per 100 cubic feet
Feet per Month)
In addition to the price set forth above, Buyer will pay to Seller each
Month during the term of this Agreement beginning with the Month in which the
Agreement Date occurs a Base Liquid Argon Monthly Charge of $ XXXXXXXX plus the
amount of any sales, use or other excise tax related thereto; provided, however,
in the event this Agreement terminates on a date other than the last day of a
Month, such charge shall be prorated for such Month.
11.7 The Base Liquid Argon Price set forth in Article 11.6 shall be
adjusted on the first day of each Quarter during the term of this Agreement
based upon changes in the cost of electric power and the PPI using the following
formula:
|- -|
NPa = BPa|.40(Enew) (PPInew) |
| ------ + .40------- + .20|
| (Ebase) (PPIbase) |
|- -|
where:
NPa = New Liquid Argon Price
BPa = Base Liquid Argon Price
and Ebase, Enew, PPIbase and PPInew shall have the same meanings as provided in
Article 11.4.
11.8 The Base Supplemental Oxygen Price and the Base Supplemental
Nitrogen Price set forth in Article 11.1 may be adjusted by Seller at any time
during the term of this Agreement by giving Buyer not less than thirty (30) days
prior written notice of the effective date of the adjustment. In the event Buyer
is able, within sixty (60) days following receipt of Seller's notice of
adjustment, to provide Seller with documentary evidence that it can obtain a
lower price for Supplemental Oxygen or Supplemental Nitrogen and Seller is
unwilling to either meet that lower price or rescind the notice of adjustment
within thirty (30) days
XXXXXXXX - Confidential information has been omitted pursuant to a request for
confidential treatment. The omitted information has been filed separately with
the Securities and Exchange Commission.
-12-
after Seller receives such documentary evidence, Buyer shall have the right to
purchase Supplemental Oxygen or Supplemental Nitrogen from another supplier. Any
increases under this Article 11.8 will be limited to 5% per Contract Year.
11.9 If the PPI referred to in Article 11.4 is revised and published on
some base other than 1982=100, the values of PPIbase and PPInew used in the
price formulas in Articles 11.4 and 11.7 will be adjusted to the new base in
accord with such conversion schedule or factor as may be supplied by the
publisher of such index. Should any of the publications or schedules containing
PPIbase, PPInew, Ebase, or Enew cease to exist or generate the necessary data, a
new index will be established by reference to other public sources of similar
information as may be mutually agreed upon by the parties. If no other public
source of such information is available, then the parties will in good faith
establish a new method for determining a similar index within sixty (60) days of
the acknowledged cessation of the public source data.
PART VI - GENERAL TERMS AND CONDITIONS
ARTICLE 12 - OXYGEN AND NITROGEN METERS
12.1 Seller has installed or will install meters on Seller's Oxygen
Pipeline and Seller's Nitrogen Pipeline at the Meter and Receiver Site and at
the existing nitrogen meter station depicted in Exhibit A to measure the
quantities of Gaseous Oxygen, Supplemental Oxygen, Gaseous Nitrogen and
Supplemental Nitrogen delivered hereunder. The meters shall be operated and
maintained by Seller. Buyer grants to Seller the right of access to the Meter
and Receiver Site during the term of this Agreement, and thereafter, for the
removal of same. Buyer, at its expense, will provide a roadway to the Meter and
Receiver Site. Buyer, at its expense, will provide facilities for and will
deliver 110-volt electric power to the metering equipment. Seller has installed
or will install a communications system from the metering equipment to the
Oxygen Supply System and Nitrogen Supply System by a mutually acceptable route
over Buyer's property. Buyer grants to Seller the right of access to the
communications system for the purpose of maintaining said system during the term
of this Agreement, and thereafter, for the removal of same.
12.2 Seller, at its expense, will test, calibrate and certify the
metering equipment at regular intervals (at least annually) as determined by
Seller, and Buyer may have its representatives present during such tests. Copies
of the calibration certification shall be provided to Buyer. Readings will be
corrected to standard cubic feet measured at 70 degrees Fahrenheit and 14.696
pounds per square inch absolute pressure. At any time requested by Buyer, Seller
will test the metering equipment in the presence of Buyer's representatives, and
if the metering equipment is found on such test to be accurate, Buyer will pay
Seller the cost and expense of such test, but if the metering equipment is found
on such test to be inaccurate, then the cost and expense of such test and of
correcting the inaccuracy in the metering equipment will be borne by Seller. If
on any test any metering equipment is found to be inaccurate, a correcting
invoice will be rendered
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to cover the actual amount of oxygen or nitrogen delivered to Buyer through such
metering equipment for the thirty (30) day period prior to the date on which
such test was made, or the period from the date such metering equipment was last
tested and considered accurate whichever period is shorter. If on any test of
any metering equipment its inaccuracy is not over two percent (2%), either fast
or slow, such metering equipment will be considered accurate.
ARTICLE 13 - SPECIFICATIONS
13.1 Oxygen delivered hereunder will be at least 99.5% pure. Nitrogen
delivered hereunder will be at least 99.999% inert with a dewpoint of not over
minus 84 degrees Fahrenheit temperature. Argon delivered hereunder will be at
least 99.998% pure with a dewpoint of not over minus 80 degrees Fahrenheit
temperature. Buyer may refuse delivery of any oxygen, nitrogen or argon which
does not conform to the foregoing specifications by providing Seller with verbal
notice within eight (8) hours and subsequent written confirmation within five
(5) days of delivery thereof and no charge will be made for any oxygen, nitrogen
or argon so refused. Seller will immediately, or as soon as practicable, replace
any such refused oxygen, nitrogen or argon with conforming oxygen, nitrogen or
argon at the same price as that oxygen, nitrogen or argon which was so refused
by Buyer. Since Buyer may obtain devices which have the capability of testing
the purity of oxygen, nitrogen or argon delivered hereunder and may refuse at no
cost oxygen, nitrogen or argon delivered hereunder which does not meet the
foregoing specifications, no claim of any kind with respect to oxygen, nitrogen
or argon delivered hereunder, whether or not based on negligence, warranty, or
any other theory of law will be greater than the purchase price of the quantity
of nonconforming oxygen, nitrogen or argon in respect to which such claim is
made. This represents Buyer's exclusive remedy with respect to claims relating
to the purity of oxygen, nitrogen or argon. Seller will have no liability for
any incidental, consequential, indirect or special damages hereunder. THERE ARE
NO EXPRESS WARRANTIES BY SELLER WITH RESPECT TO OXYGEN, NITROGEN OR ARGON OTHER
THAN THOSE SPECIFIED IN THIS ARTICLE 13. NO WARRANTIES BY SELLER (OTHER THAN
WARRANTY OF TITLE AS PROVIDED IN THE UNIFORM COMMERCIAL CODE) SHALL BE IMPLIED
OR OTHERWISE CREATED UNDER THE UNIFORM COMMERCIAL CODE, INCLUDING BUT NOT
LIMITED TO WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.
13.2 At the beginning of each Month during the term hereof Seller shall
provide Buyer with a Certificate of Conformance indicating that oxygen and
nitrogen delivered hereunder during the immediately preceding Month conformed to
the specifications set forth in Article 13.1.
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ARTICLE 14 - PAYMENT
14.1 Terms of payment for all products and services provided under this
Agreement will be net thirty (30) days following the date of invoice. If Buyer
fails to make timely payment in accordance with the terms of this Agreement, or
its financial responsibility becomes otherwise impaired, Seller reserves the
right, among other remedies, to:
(a) Refuse to supply oxygen, nitrogen or argon except for
receipt of cash with order and/or payment in full of all outstanding charges;
and/or
(b) Assess and collect from Buyer a monthly late charge on any
delinquent balance at the interest rate permitted by law which charge shall be
payable by Buyer within fifteen (15) days following the date of invoice
therefor.
14.2 If Buyer fails to make timely payment in accordance with the terms
of this Agreement and such failure continues for a period of thirty (30) days
following written notice of such failure by Seller, Seller shall have the right
to terminate or suspend this Agreement.
ARTICLE 15 - TAXES
15.1 Subject to the provisions of Articles 11.1 and 11.6, Seller shall
pay or cause to be paid the taxes lawfully levied by any federal, state or local
governmental authority on Seller, including without limitation any taxes
applicable to any product delivered hereunder prior to its delivery to Buyer,
and Seller shall hold Buyer harmless therefrom. Buyer shall pay all taxes
lawfully levied by any federal, state or local governmental authority on Buyer,
including without limitation any taxes applicable to any product delivered
hereunder at and after delivery thereof to Buyer or for the account of Buyer,
and shall agree to hold Seller harmless therefrom. If Seller is required to
remit or pay any taxes that are lawfully levied on Buyer, Buyer shall reimburse
Seller for such remission or payment within thirty (30) days following the date
of Seller's invoice therefor. If Buyer is required to remit or pay any taxes
that are lawfully levied on Seller, Seller shall reimburse Buyer for such
remission or payment within thirty (30) days following the date of Buyer's
invoice therefor. Notwithstanding the foregoing, Buyer shall have no liability
for any taxes which are derived from Seller's gross or net income or for the
Michigan Single Business Tax.
ARTICLE 16 - CONTINGENCIES
16.1 Neither party hereto will be liable to the other for default or
delay in the performance of any of its obligations hereunder (except any
obligation to make payments when due) due to an act of God, accident, fire,
flood, storm, riot, war, sabotage, explosion, strike, labor disturbance or other
concerted acts of workers beyond the reasonable control of the party claiming
excuse from performance which has the effect of disrupting the claiming party's
ability to perform hereunder and which also meets the other tests set forth in
this Article 16.1, national defense requirement, governmental law, ordinance,
rule or regulation, whether valid
-15-
or invalid, extraordinary failure of equipment or apparatus, inability to
obtain electricity (whether or not such electricity is purchased on an
interruptible basis) or other type of energy, raw material, labor, equipment or
transportation, or any similar or different contingency beyond its reasonable
control which would make performance commercially impracticable whether or not
the contingency is of the same class as those enumerated above, it being
expressly agreed that such enumeration shall be nonexclusive, provided however,
neither business downturn nor economic conditions will qualify as a contingency
within the meaning of this Article 16.
16.2 If, for any period, a contingency covered by Article 16.1 reduces
or fully interrupts the delivery of oxygen or nitrogen hereunder, Buyer and
Seller will have no commitment under Articles 2.1 or 6.1. In that event, Seller
will allocate in a fair and reasonable manner, between Buyer and Seller's own
needs and customers elsewhere, any oxygen or nitrogen which Seller has
reasonably available in storage within the Oxygen Supply System or Nitrogen
Supply System. Seller will so deliver such oxygen or nitrogen to Buyer, and
Seller will give prompt notice to Buyer of the reduction or interruption. Buyer
will accept and pay for any such oxygen or nitrogen so delivered before said
notice is given. Upon receiving said notice, Buyer will either advise Seller to
discontinue said deliveries or request that they be continued. Seller will
continue said deliveries, if so requested, for as long as Seller, in its
discretion, deems that its own needs and contract commitments to others will
permit. Buyer will pay for any such oxygen or nitrogen delivered pursuant to
this Article 16.2 at the price for Supplemental Oxygen or Supplemental Nitrogen,
as the case may be, specified in Article 11.1 as adjusted under Article 11.8
plus any additional costs related to special handling.
16.3 During any Month in which the quantity of Gaseous Oxygen or
Gaseous Nitrogen purchased by Buyer is less than the minimum purchase obligation
set forth in Articles 11.2 or 11.3, respectively, because of a contingency as
provided in Article 16.1 affecting Seller or Buyer, Buyer's minimum purchase
obligation for such Month shall be reduced pro rata according to the duration of
the contingency during such Month and the term of this Agreement shall be
extended one (1) day for each contingency day or part thereof which has caused
said reduction in Buyer's minimum purchase obligation.
16.4 In the event a Seller's contingency reduces or eliminates Seller's
capability to produce and/or deliver Liquid Argon, Seller will allocate Liquid
Argon among the requirements of all its regular customers in a fair and
reasonable manner.
16.5 As utilized in Article 16.1 "extraordinary failure of equipment or
apparatus" shall mean a failure of equipment or apparatus that arises from
causes beyond Buyer's or Seller's control, rather than failure that arises from
Buyer's or Seller's lack of proper operation, maintenance, design, or
engineering.
ARTICLE 17 - ASSIGNMENT
17.1 This Agreement shall inure to the benefit of and bind the
respective successors and assigns of the parties hereto and except as provided
below, any assignment of this Agreement without the prior
-16-
written consent of the other party, which consent shall not be unreasonably
withheld, shall be void. Either party may assign its rights under this
Agreement, including its right to receive payments hereunder, to a subsidiary,
affiliate or any financial institution, but in such case the assigning party
shall remain liable to the other party for the assigning party's obligations
hereunder. The nonassigning party shall promptly acknowledge such assignment in
writing after notice of assignment is received from the assigning party.
ARTICLE 18 - LIABILITY
18.1 Buyer acknowledges that there are hazards associated with the
storage, use and handling of argon, oxygen and nitrogen and Buyer agrees that
its personnel concerned with argon, oxygen and nitrogen are aware of such
hazards. Buyer shall be responsible for complying with all relevant reporting
obligations under all applicable laws, including but not limited to the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections
11001-11049 (EPCRA, also commonly known as Title III of the Superfund Amendments
and Reauthorization Act of 1986, XXXX Title III) resulting from the presence at
Buyer's Plant of argon, oxygen and nitrogen supplied under this Agreement. Buyer
shall be responsible for warning and protecting its employees, independent
contractors and others exposed to the hazards posed by Buyer's storage, use and
handling of argon, oxygen and nitrogen. Buyer also assumes all responsibility
for the suitability and the results of using oxygen, nitrogen and argon alone or
in combination with other articles or substances and in any manufacturing
process. Buyer will notify Seller in advance of any anticipated construction,
renovation, or change in operations in the area of the Meter and Receiver Site
or the Liquid Argon Storage System so that any hazards associated with same can
be minimized. Neither party will be liable to the other party for any loss or
damage to the other's property which may occur because of the performance of
this Agreement regardless of which party may be negligent. Neither Buyer nor
Seller will be liable for any incidental, consequential, indirect or special
damages or charges under this Agreement. Buyer will receive documents from
Seller, including Seller's Material Safety Data Sheet(s) containing Seller's
safety and health information pertaining to argon, oxygen and nitrogen delivered
hereunder and Buyer will incorporate such information into Buyer's safety
program. Each party hereby agrees to indemnify the other and hold the other
harmless from any actions, lawsuits, demands, claims, losses, expenses, costs,
including but not limited to legal fees, and damages, arising from the injury,
illness or death of their respective employees while engaged in activities
connected with this Agreement, whether or not such injury, illness or death is
claimed to have been caused by, resulted from, or was in any way connected with
the negligence of the party to be indemnified.
18.2 Buyer will hold Seller harmless from and against liens and claims
against any of Seller's equipment due to its location at Buyer's Plant.
-17-
ARTICLE 19 - DURATION OF AGREEMENT
19.1 This Agreement will be in effect from the Agreement Date and will
continue in effect until December 1, 2011 or as may be extended pursuant to
Article 16.3 and thereafter until terminated by either party upon giving not
less than twelve (12) months prior written notice of such termination to the
other party.
ARTICLE 20 - PRIOR AGREEMENT
20.1 Effective as of the Agreement Date, this Agreement shall supersede
and cancel the existing agreement dated November 16, 1993, as amended, between
the parties hereto relating to the supply of oxygen, argon and nitrogen to
Buyer's Plant.
ARTICLE 21 - EARLY TERMINATION OF AGREEMENT
21.1 If Buyer permanently shuts down its iron and steelmaking
operations at Buyer's Plant, then Buyer may terminate this Agreement per the
schedule below by providing Seller not less than one hundred eighty (180) days
prior written notice of such termination. A termination fee, as liquidated
damages and not as a penalty, determined in accordance with the following
schedule, shall be payable by Buyer to Seller not less than ninety (90) days
prior to the effective date of such termination:
The Effective Date of Termination Termination Fee
--------------------------------- ---------------
Before December 31, 2002 $ 12,000,000
January 1, 2003 through December 31, 2003 $ 9,000,000
January 1, 2004 through December 31, 2004 $ 6,000,000
January 1, 2005 through December 31, 2005 $ 3,000,000
January 1, 2006 or later $ 0
ARTICLE 22 - PURCHASES BY BUYER FROM A THIRD PARTY
22.1 In the event that Seller is unable to supply all or any part of
Buyer's requirements for Supplemental Oxygen or Supplemental Nitrogen for any
reason during the term hereof, Buyer shall have the right to purchase such
requirements, or part thereof, from another supplier during the period of such
inability. This right of Buyer shall not entitle Buyer to recover from Seller
any incidental, indirect, consequential or special damages or any part of the
purchase price paid to any such other supplier, including but not limited to the
difference between the price of such other supplier and the prices specified
herein. Upon notice from Seller that the inability to supply on the part of
Seller has concluded, Buyer shall promptly resume its purchases from Seller.
-18-
22.2 During the term of this Agreement Buyer shall have the right to
initiate good faith negotiations with Seller for the purpose of determining
whether the prices for Supplemental Oxygen and Supplemental Nitrogen set forth
herein, as adjusted as provided herein, are fair market prices. In making such a
determination, the parties shall take into consideration all of the terms and
conditions contained in this Agreement, including without limitation
instantaneous delivery rates, delivery pressures, backup obligations, minimum
take or pay obligations, requirement obligations, repricing provisions, payment
terms and the duration of this Agreement. Buyer may exercise its right under
this Article 22.2 at any time during the term of this Agreement. In the event
Buyer exercises such right and Buyer and Seller are unable to agree whether the
prices set forth herein for Supplemental Oxygen or Supplemental Nitrogen are
fair market prices, Buyer may request competitive bids from other responsible
suppliers. If as a result of any such request Buyer receives credible written
evidence that Supplemental Oxygen or Supplemental Nitrogen can be supplied to
Buyer's Plant by a responsible third party supplier under terms and conditions
substantially the same as those contained in this Agreement at the time of such
request and at a price that is lower than the price for Supplemental Oxygen or
Supplemental Nitrogen set forth herein, as adjusted as provided herein, Buyer
shall furnish such evidence to Seller and if, within thirty (30) days after
receipt of such evidence, Seller does not agree to meet such lower price, Buyer
may elect, within thirty (30) days thereafter, to purchase all or a portion of
the product or products (Supplemental Oxygen or Supplemental Nitrogen) to which
such lower price applies from such third party supplier by giving Seller not
less than thirty (30) days prior written notice of such election. If Seller
agrees to meet the lower price, such price shall become effective on the first
day of the Month following the Month in which the evidence of such lower price
is received by Seller.
ARTICLE 23 - RESOLUTION OF DISPUTES
23.1 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, or, that its expectation of receiving due performance under this
Agreement may be impaired, such party will promptly notify the other party in
writing of the substance of its belief. The party receiving such notice must
respond in writing within thirty (30) days of receipt of such notice and either
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 also specify three (3) dates, all of which
must be within thirty (30) days from the date of its response, for a meeting to
resolve the dispute and by providing either (a) evidence of cure of the
condition specified, or (b) evidence that said party has diligently commenced to
cure the condition specified and will diligently continue to prosecute such
cure, or (c) an explanation of why it believes that its performance is in
accordance with the terms and conditions of this Agreement. The claiming party
will then select one (1) of the three (3) dates, and a dispute resolution
meeting will be held. In addition, each party shall have the right to require
that the
-19-
responsible officers from each of the companies who is authorized to execute or
amend this Agreement be in attendance at such dispute resolution meeting. If the
parties cannot, in good faith discussions, resolve their dispute, they will be
free to pursue the remedies allowed under law without prejudice.
ARTICLE 24 - EASEMENTS AND RIGHTS OF WAY
24.1 Buyer shall provide Seller at no cost during the term hereof with
any necessary rights of way on, over, across or through Buyer's Plant as Seller
may require for the installation, operation and maintenance of Seller's Oxygen
Pipeline and Seller's Nitrogen Pipeline.
ARTICLE 25 - BUYER'S AND SELLER'S AUTHORIZED REPRESENTATIVES
25.1 Buyer's and Seller's authorized representatives shall have the
right to enter the Meter and Receiver Site at all times. Buyer shall exercise
all reasonable precautions to prevent its unauthorized employees or anyone other
than Seller's representatives or Buyer's employees authorized by Seller from
altering, repairing, adjusting or tampering with any of Seller's equipment
located at Buyer's Plant and to prevent trespassing on or entrance to the Meter
and Receiver Site by any unauthorized person or persons.
ARTICLE 26 - FAIR LABOR STANDARDS ACT
26.1 Seller represents that all oxygen, nitrogen and argon delivered to
Buyer hereunder will be produced in compliance with the Fair Labor Standards Act
of 1938, as amended.
ARTICLE 27 - HEADINGS
27.1 Headings and titles are for convenience of reference only, and are
not to be used in the interpretation of any provision herein.
ARTICLE 28 - SMOKING AND OPEN FLAMES
28.1 Buyer agrees to prohibit smoking or unauthorized open flames
within the Meter and Receiver Site and to prohibit the storage of highly
flammable materials within 100 feet thereof in order to minimize the risk of
fire exposure.
ARTICLE 29 - NON-WAIVER
29.1 Either party's failure to enforce any rights or remedies it may
have hereunder shall not constitute a waiver of any other subsequent rights or
remedies.
ARTICLE 30 - APPLICABLE LAW
30.1 This Agreement shall be construed in accordance with the laws of
the State of Michigan.
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ARTICLE 31 - NOTICES
31.1 Any notice required to be given by either party to the other under
any provisions of this Agreement shall be in writing and sent by mail to the
other party, as follows:
SELLER: Praxair, Inc.
0000 Xxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 00000
Attn: Region Vice-President
Fax: 000-000-0000
BUYER: Rouge Steel Company
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attn: Director, Purchasing and Transportation
INVOICES: Rouge Steel Company
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attn: Accounts Payable
or to such other party or such other address as either party shall from time to
time designate for the purpose.
ARTICLE 32 - ENTIRE AGREEMENT
32.1 The entire agreement is contained herein. The parties acknowledge
that they have read and understand this Agreement, that they have consulted with
counsel of their choice regarding this Agreement, that there are no other
promises, representations or warranties affecting this Agreement, and that any
other or different terms and conditions in any purchase orders issued or
accepted hereunder shall be deemed null and void. Neither of the parties shall
be bound by any decision, definitions, warranties, or representations with
respect to the subject matter hereof other than as expressly provided herein, or
as duly set forth on or subsequent to the date hereof in writing and signed by
the parties to be bound thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
ROUGE STEEL COMPANY PRAXAIR, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx By: /s/ Xxxx X. Xxxxx
------------------------------- ------------------------------------
Title: Vice Chairman and CFO Title: Executive Vice President
---------------------------- --------------------------------
Date: 12-03-02 Date: 12-09-02
----------------------------- ---------------------------------
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