EXHIBIT 10.12
SUPPLY AGREEMENT
Concluded on the date set forth below
by and between
VOESTALPINE TUBULARS Gmbh & Co KG
an Austrian limited partnership
and
GRANT PRIDECO, INC.
A Delaware corporation
to be effective August 1, 2003
PREAMBLE
WHEREAS, VoestAlpine Tubulars GmbH & Co KG (formerly known as
VOEST-ALPINE STAHHLROHR KINDBERG GmbH & Co KG) is a limited partnership duly
organized, validly existing and in good standing under the laws of Austria, with
its principal place of business in Kindberg and business address at Xxxxxx
XxxxXx 00, X-0000 Xxxxxxxx, Xxxxxxx, registered in the commercial register of
the Higher Court of Leoben under the registration number 165400 k (hereinafter
referred to as "Seller"), which has been involved for many years in the
manufacture of casings and tubings; and
WHEREAS, Grant Prideco, Inc. is a company duly organized, validly
existing and in good standing under the laws of Delaware, with its principal
place of business in Houston, Texas and business address at 0000 Xxxx Xxx
Xxxxxxxxx Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (hereinafter referred to as
"Purchaser"), which has been involved in the field of manufacturing of drill
pipe and the processing of casings and tubings; and
WHEREAS, Purchaser and Seller entered a Supply Agreement dated July 23,
1999 that will expire July 31, 2003 (the "Original Supply Agreement"); and
WHEREAS, Purchaser and Seller want to avoid any disruption in the
supply of Materials under the Original Supply Agreement and therefore desire to
enter this agreement on this ______ day of __________, 2003 to be effective on
August 1, 2003 (the "Effective Date")
WHEREAS, Purchaser wishes to purchase and Seller wishes to supply
certain pipes as defined below;
WHEREAS, Purchaser is an affiliate of Seller and Purchaser and Seller
desire, to avoid repetitive negotiations, and to set forth the terms under which
affiliated purchases will be made, Purchaser and Seller (hereinafter referred to
as the "Parties" and each a "Party") wish to enter into this exclusive supply
agreement (hereinafter referred to as "Supply Agreement") on a long-term basis
establishing the terms and conditions of the purchase which will be applicable
to these transactions.
NOW THEREFORE, it is agreed as follows:
1. SALE AND PURCHASE
1.1 Seller herewith grants to Purchaser the right to purchase on a
worldwide basis green pipes (hereinafter referred to as "Green Pipes")
intended for the further processing into drill pipe and other Oil
Country Tubular Goods (hereinafter referred to a "OCTG"). The sale of
Green Pipes by or on behalf of Seller to other persons requires the
prior written consent of Purchaser. If Seller sells Green Pipes to
third persons without the prior written consent of Purchaser, any such
sale shall be credited against Purchaser's Annual Minimum Purchase
Obligation pursuant to Section 2.1.
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For the purposes of this Supply Agreement, Green Pipes shall mean pipes
used to manufacture drill pipe, tubing and casing, provided that plain
end casing and tubing already produced to grade and requiring only end
finishing to be converted to finished OCTG are expressly excluded from
the term "Green Pipes" used in this Supply Agreement.
1.2 Seller grants to Purchaser the right, but Purchaser shall not be
obligated, to purchase API couplings on an exclusive basis in North,
Central and South America (Green Pipes and API couplings are
hereinafter collectively referred to as the "Material").
1.3 Seller and Purchaser agree that Purchaser shall have the sole right to
sell drill pipe and drill pipe hollows in the world. The Seller shall
not, directly or indirectly, sell any drill pipe or drill pipe hollows
without the written consent of the Purchaser.
2. ANNUAL MINIMUM PURCHASE OBLIGATION
2.1 Subject to the provisions of Section 13, Purchaser shall place orders
for purchase and Seller shall sell and deliver Green Pipes in a minimum
quantity of (i) 56,667 for the calendar year of 2003 (7/12 x 60,000
(original agreement ending July 2003)) + (5/12 x 52,000 (the agreement
beginning August 2003)); (ii) _52,000 metric tons for each year on a
calendar year basis thereafter during the term of the Agreement
("Annual Minimum Purchase Obligation"). For the purposes of Section 2
and Section 13 of this Agreement, purchases of Materials made by an
Affiliate of Purchaser shall be attributed to Purchaser. The term
"Affiliate" shall mean, with respect to Purchaser, any individual,
firm, corporation, division, association, partnership, joint venture,
limited liability company, organization or business (collectively
"Entity") that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control
with Purchaser. For purposes of this definition, "control" means the
ownership, directly or indirectly of 50% or more of the voting
securities of an Entity or the possession of the power to direct, or
cause the direction of, the management and policies of that Entity,
whether through the ownership of voting stock, by contract or
otherwise.
2.2 Subject to the provisions of Section 2.1 and Section 13, Purchaser
shall use good faith efforts to place orders in monthly lot amounts
that are consistent with the Annual Minimum Purchase Obligations of
this agreement, with a minimum of 100 metric tons per dimension upon
individual purchase orders placed by Purchaser. The Parties agree from
time to time that Purchaser's monthly purchase (lot amounts) may vary
based on Purchaser's good faith needs, provided, however, that without
the consent of Seller, each order shall not deviate from the previous
order by more than 2,000 metric tons. Purchaser's failure to place
orders of Green Pipe in an amount equal to the Annual Minimum Purchase
Obligation shall not constitute a default under this Supply Agreement
and Seller's only remedy for that failure will be the right to receive
the penalties provided for under Section 13 and no more.
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2.3 Purchaser shall be entitled to order in excess of its Annual Minimum
Purchase Obligation up to 80,000 metric tons per year. Orders exceeding
80,000 metric tons require the prior consent of Seller.
3. TERM AND TERMINATION
3.1 This Supply Agreement shall commence on August 1, 2003 (the "Effective
Date"), and shall be concluded for an original term on July 31, 2007.
This Supply Agreement shall automatically be renewed for successive
one-year periods, unless terminated at the end of the original term or
any renewal period in writing, subject to a six-month termination
period. Nine months prior to the expiration of the original term the
Parties shall meet to negotiate terms and conditions for a renewal of
the Supply Agreement.
3.2 If either Party is in material default of any of its obligations under
this Supply Agreement and such default continues unremedied for 90 days
after written notice thereof by the Party not in default, such
non-defaulting Party may cancel this Supply Agreement and/or any orders
which may be affected by such default and shall have the right, in its
sole discretion, to exercise all rights and remedies available to it
under this Supply Agreement, including, but not limited to Section 13,
or to exercise such rights and remedies as provided for in other
agreements concluded between the Parties or their affiliates, including
but not limited to the Operating Agreement dated July 23, 1999
concluded between VOEST-ALPINE SCHIENEN GmbH & Co KG and GRANT PRIDECO,
INC.
3.3 An uncured failure to pay any amounts due to Seller under this Supply
Agreement which is not contested within 90 days of submission of the
invoice therefor as provided in Section 4.3 hereof shall be considered
a material default by Purchaser in the meaning of Section 3.2.
3.4 Continued failure by Seller to materially meet the quality and
specification requirements of the delivery requirements under this
Supply Agreement or breach by Seller of the exclusivity provisions of
Section 1.1 and Section 1.3 hereof shall be considered a material
default by Seller in the meaning of Section 3.2.
3.5 Furthermore, Seller may by written notice to Purchaser forthwith
terminate this Supply Agreement;
(a) if bankruptcy proceedings are opened against Purchaser, or
Purchaser is insolvent; or
(b) if Purchaser or an affiliated entity no longer holds any
limited partnership interest in Seller.
3.6 Furthermore, Purchaser may by written notice to Seller forthwith
terminate this Supply Agreement:
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(a) if bankruptcy proceedings are opened against Seller, or
Seller is insolvent, or
(b) if Purchaser or an affiliated entity no longer holds any
limited partnership interest in Seller.
3.7 (i) If an event of force majeure occurs, the affected Party shall
promptly give notice thereof to the other Party and use its best
efforts to cure or correct such event of force majeure. Seller may,
during a period of shortage or delay due to any such causes, prorate
its supply in such a manner as deemed equitable in the judgement of
Seller. The Annual Minimum Purchase Obligation and the term of this
Supply agreement as provided in Section 3.1 herein shall be adjusted
accordingly based upon the duration of any force majeure event. If the
event of force majeure shall continue for a period of twelve months,
either Party shall have the right to forthwith terminate this Supply
Agreement.
(ii) For the purpose of the Supply Agreement "force majeure" shall mean
all circumstances which are beyond the control of a Party exercising a
normal standard of care and which prevents such Party from complying
with its contractual obligations hereunder. Subject to the foregoing
and without limiting the generality of the foregoing, the following
circumstances in particular shall be regarded as force majeure: acts of
God; hurricane, tornado; labor strike, lockout or other industrial
disturbance; war, riot, sabotage, act of public enemy, terrorist act or
gang violence, blockade; serious epidemic; earthquake or other earth
movement, flood or other natural disaster; bomb blast or other
explosion; fire, shortage of goods essential to a Party's performance
of this Agreement, or their delay by a carrier; or, government action
that prevents performance. It is explicitly agreed among the parties
that any changes in market conditions or the institution of U.S.
Antidumping and Countervailing Duty proceeding shall (subject to the
provisions of Section 12) not be considered as force majeure events.
3.8 Any termination of this Supply Agreement will not affect any individual
purchase order which may have been issued by Purchaser prior to the
date of termination, unless stated otherwise herein. The provisions of
Sections 8, 9, 10, 11, 12, 13, 15, and 16.3 shall survive any
termination of this Supply Agreement. In case this Supply Agreement is
terminated, Purchaser shall pay within 60 (sixty) days after the date
of termination any still outstanding Purchase Price or penalty payments
due to Seller. In the event this Supply Agreement is terminated by
Purchaser pursuant to this Section 3 as a result of a material default
by Seller, any penalty payments due to Seller pursuant to Section 13
accruing on or after the date of such material default shall not be
paid and shall be deemed to be forfeited by Seller.
4. PURCHASE PRICE/INVOICE
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4.1 The base purchase price for the Green Pipes is the same price utilized
in the predecessor contract ("Purchase Price") and shall include
European sales tax and all export taxes and duties if applicable to
Green Pipes. The Purchase Price is based on Purchaser's specifications
in Purchaser's specification No. 359 (1), rev. O, dated May 7, 1998. To
the extent there are deviations from this specification, the Purchase
Price shall be adjusted as set forth on ANNEX A, to the extent provided
in ANNEX A. ANNEX B sets forth length requirements for ANNEX A.
Deviations not contemplated by ANNEXES A AND B shall result in an
adjustment to the Purchase Price that reflects the differential in
costs of manufacture of the product from Purchaser's specification No.
359 (1). Purchaser shall consult with Seller on any change in
specifications and will not request specifications which Seller cannot
fulfill with commercially reasonable efforts. The Purchase Price is
calculated on the basis of C.I.F. Houston in accordance with Incoterms
2000. Upon Purchaser's request, the Green Pipes shall be delivered to a
destination port other than Houston. If any change in delivery terms
pursuant to Purchaser's request results in a higher or lower cost to
Seller, the Purchase Price shall be increased or decreased accordingly.
4.2 During the term of this Supply Agreement (including the renewal
periods), the Purchase Price shall be subject to adjustment on a
semi-annual basis (starting on the first day of the sixth calendar
month following the Effective Date of this Supply Agreement). The
adjustment shall be computed on the basis of the average of seamless
alloy casing and tubing prices as reported by the Preston Pipe Report
or any report replacing it at the time of order placement and shall be
effected for all purchase orders given on or after the first day of the
calendar month following the issuance of such Preston Pipe Report. The
basis of assessment shall be the average of seamless alloy casing and
tubing prices as reported in the Preston Pipe Report published in
January 1999 and reflecting actual October 1998 prices. This report
shall be regarded as the 100 Index. The index figure, however, is
limited to upward fluctuations of not more than 5%, based on the 100
Index during the term of this Supply Agreement. Downwards fluctuations
may be made, but not below the 100 Index.
4.3 Invoices will be submitted by Seller to Purchaser. Invoices will
reference Purchaser's purchase order number and will contain such other
information as Purchaser may reasonably request. Purchaser shall effect
payment within sixty (60) calendar days after the vessel arrival in the
port of destination or net 105 days from ocean xxxx of lading date,
whichever comes first. Purchaser shall pay interest on overdue invoice
payments that are not contested as provided in Section 3.3 from the due
date up to the actual date of payment at the rate determined to be
three percent (3%) per annum above the six months EURIBOR.
4.4 The Parties may agree from time to time to set off any amount owed by
Seller to Purchaser pursuant to this Supply Agreement against any
amount owed by Purchaser to Seller pursuant to this Supply Agreement.
4.5 In the event the Green Pipe being purchased by Purchaser does not meet
the specifications and is rejected, Purchaser may elect to credit
amounts paid for that
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Green Pipe against other purchases or to set off against penalties due
by Purchaser pursuant to Section 13 if Seller agrees to the rejection
or if it is determined that the Green Pipe does not meet the required
specifications.
5. PURCHASE ORDERS
5.1 This Supply Agreement does not constitute a purchase order. Purchases
under this Supply Agreement shall be made with purchase orders in a
form mutually agreed upon, placed by Purchaser.
5.2 Any individual purchase order shall be acknowledged by Seller. Each
order acknowledgment shall contain either Seller's confirmation of the
delivery date as requested by Purchaser or Seller's own estimated
delivery date, which shall be no later than 10 days after Purchaser's
requested delivery date. Unless otherwise agreed to by Purchaser and
Seller there shall be at least two (2) months between receipt of the
purchase order and the delivery date. For the purposes of this Supply
Agreement, the date on which material is delivered shall be the ocean
xxxx of lading date.
5.3 If Seller is unable to furnish the total quantity as ordered by
Purchaser, Seller shall without undue delay advise Purchaser. In such
an event, Purchaser shall have the option to cancel, at no charge,
within 10 days from receipt of such advice the portion of the
individual purchase order which Seller is unable to furnish and the
entire amount of the cancelled portion shall be credited against the
Annual Minimum Purchase Obligation.
6. DELIVERY DATES
6.1 Seller agrees to make every reasonable effort to meet the delivery
dates specified by Purchaser in any purchase order. If Seller is late
in the delivery of Green Pipes by 14 or more days, such late shipment
shall be counted for the Purchaser's monthly orders under Section 2.1
of this Supply Agreement for both the month in which the order was
placed and the following month. If Seller is late in the delivery of
Green Pipes by one or more months, Purchaser shall have the option to
cancel, at no charge, the portion of the individual purchase order
which has not yet been delivered and the entire amount of the cancelled
portion shall be credited against the Annual Minimum Purchase
Obligation.
6.2 Delivery is C.I.F. Houston in accordance with Incoterms 2000. Purchaser
may also request, as specified in any particular purchase order, that
the delivery destination of the Material be a location other than
Houston. For the calculation of the Purchase Price, Section 4.1 of this
Supply Agreement shall apply.
7. HAZARDOUS CONDITIONS
7.1 In the event that Seller or Purchaser learns of any issue relating to a
potential safety hazard or unsafe condition in any of the Material, or
is advised of such by competent
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authorities of any government having jurisdiction over such Material,
it will immediately advise the other Party by the most expeditious
means of communication. The Parties shall cooperate in communication
with the public and governmental agencies and in correcting any such
condition that is found to exist.
7.2 The Parties shall consult with each other prior to making any
statements to the public or to any governmental agency concerning
issues related to the safety hazard or unsafe condition except in
circumstances in which a failure to do so would prevent the timely
notification which may be required to be given under an applicable law
or regulation.
7.3 Expenses associated with the correction of a safety hazard or unsafe
condition by or associated with the Material, including reasonable
attorney's fees, court costs, expenses, and the like, if they become
necessary, shall be borne by the Party which caused such safety hazard
or unsafe condition, subject only to any other arrangement negotiated
by the Parties in light of the particular facts and circumstances then
existing.
8. CONFIDENTIAL INFORMATION
The parties understand and agree that information concerning any of the
information set forth herein is confidential to each of them and shall,
except as may otherwise be required by law, regulation or order, only
be disclosed to unaffiliated third parties, in writing or orally, upon
the specific prior written agreement of the Parties, provided, however,
that if any of such terms have previously been disclosed, for any of
the foregoing reasons, these terms shall no longer be treated as
confidential by either Party.
9. PATENTS
9.1 Each Party hereby represents to the other Party that, to the best of
its knowledge, there are no third-party patent, trade secret, or
copyright rights which would be infringed by the manufacture, use or
sale of the Material to be supplied hereunder.
9.2 Each Party will defend any suit or proceeding brought against the other
Party, any of its affiliates or their customers, based on a claim that
the manufacture, use or sale of the Material purchased hereunder
constitutes an infringement of any patent or copyright of any country
or any trade secret to the extent and only to the extent such suit or
proceeding is attributable to the actions or omissions by such Party;
provided that each Party is notified by the other Party in writing and
given authority, information and assistance for the defense of same.
If, as a result of any such suit or proceeding, the use or sale of the
Material purchased hereunder is enjoined, both Parties shall use their
best efforts to modify any infringing Material so that it becomes
non-infringing.
10. WARRANTY
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10.1 Green Pipes manufactured by Seller for Purchaser under this Supply
Agreement shall be of the kind and quality as provided in Section 1 of
this Supply Agreement and as per the specification mutually agreed by
the Parties and the applicable parts of the API standards. In case of a
conflict between the specification and the API standards, the
specification shall prevail. The review or approval by Purchaser of any
designs, engineering drawings, quality control procedures, or any other
aspect of the design and manufacture of Material hereunder shall not
relieve Seller of the responsibility for producing Material which
complies with the specification and all current local, state and
federal governmental specifications and standards existing at the date
of delivery as expressly stated and identified in the specification.
Further, Seller shall be responsible for producing Material which is of
good workmanship and performance and of merchantable quality. Seller
also warrants that it complies with all Austrian regulations applicable
to the manufacturing of Material. Seller also shall be responsible for
any mill-related defects in the Material, including, but no limited to,
laps, slugs, gouges, slivers and seams, detected prior to or after
processing.
10.2 The warranty period extends for, and warranty claims may only be
asserted in writing by Purchaser against Seller within, the first 12
months of service of the Green Pipes or within 2 years after delivery
of the Green Pipes to Purchaser, whichever comes first. Warranty claims
for corrosion or mechanical damage may only be asserted in writing by
Purchaser against Seller within six (6) months after the Material's
arrival at its port of destination.
10.3 In case Purchaser asserts warranty claims against Seller, Seller shall
have the right to examine such Material within 30 calendar days. If any
of the delivered Materials fails to meet the warranties set forth
above, Seller shall, as promptly as practicable and at its expense,
repair, replace or cause to be repaired or replaced same without undue
delay. In either case, the cost of freight and handling to return or
replace the Material shall be at the expense of Seller and the Seller
shall reimburse Purchaser for the costs of any fabrication and
reasonable additional inspection costs incurred by Purchaser in the
processing of the defective Material.
10.4 In the event that a warranty claim exists and Seller has accepted to be
responsible for the warranty claim, or is otherwise determined to be
responsible, Seller will at Purchaser's option issue credit against
future invoices or set off against due penalty payments or Seller will
pay to Purchaser the amount due within 30 days receipt of a debit
memorandum or some other written request for payment.
10.5 Notwithstanding any provision to the contrary, the Parties may agree to
an adjustment in the Purchase Price or to a (partial) cancellation of
the respective purchase order in the event of any failure or defect in
the Material.
11. PRODUCT LIABILITY
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11.1 In the event that product liability claims are asserted against Seller
or Purchaser such Party will immediately advise the other Party of such
claim by the most expeditious means of communication. The Parties shall
cooperate in communication with the public and governmental agencies
with respect to such liability claim.
11.2 Each Party shall defend any suit or proceeding brought against the
other Party, any of its affiliates or their customers, based on product
liability claims for which they are responsible. Unless agreed
otherwise, until such time as responsibility has been determined, the
Parties shall bear the costs and expenses (including, but not limited
to, reasonable attorney's fees and expenses, settlements, judgments,
and court costs) arising out of or related to product liability in the
ratio of the value added to the finished product by each Party.
11.3 In the event a product liability claim is successfully asserted against
one of the Parties, the Party which caused such defect agrees to
protect, defend, hold harmless, indemnify, and reimburse the other
Party and its distributors, dealers, affiliates, insurers, and
customers during the term of this Supply Agreement and any time
thereafter for any and all liabilities, losses, damages, costs and
expenses (including but not limited to, reasonable attorney's fees and
expenses, settlements, judgments, and court costs) arising out of or
related to such liability, demand, lawsuit, action or claim.
11.4 If the Party which caused such defect cannot be identified, the Parties
shall bear all liabilities, losses, damages, costs and expenses
(including, but not limited to, reasonable attorney's fees and
expenses, overhead, settlements, judgments, and court costs) arising
out of or related to such liability, demand, lawsuit, action or claim
in the ratio of the value added to the Green Pipe by each Party.
11.5 Both Parties shall maintain, at their own expense, appropriate
insurance in the amount of at least US$ 25 million for injury, death,
or property damage. Satisfactory evidence by copy of certificate of
insurance thereof shall be submitted annually to the other Party upon
the other Party's request. Such insurance shall be carried during the
term of this Supply Agreement, including extension, and for at least
three (3) years thereafter.
12. PURCHASER'S AND SELLER'S LIABILITIES
12.1 The Parties shall consult with each other on a regular basis on
procedures on how to minimize any risk with respect to the imposition
of U.S. Antidumping or Countervailing Duties provided that such
consultation is not in violation of law and is commercially reasonable.
12.2 To this end, Seller shall employ a special sales advisor ("Special
Sales Advisor"). The appointment and dismissal of said Special Sales
Advisor shall be at the recommendation of Purchaser and require the
unanimous vote of the representatives of GRANT and VOEST-ALPINE
SCHIENEN GmbH & Co KG to the Supervisory
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Board of the general partner of the Seller. The Special Sales Advisor
shall report to the Management Board of Seller.
12.3 If, despite these measures, a proceeding or investigation is initiated
to lead to the imposition of U.S. Antidumping or Countervailing Duties
on products covered by this Supply Agreement either Party may, upon
written notice to the other, request a stay on the performance of the
obligations under Sections 1, 2 and 13 under this Supply Agreement
during the proceeding or investigation not to exceed two years;
provided, however, that such Party reasonably determines that continued
sales may subject the Party or the sales to the imposition of U.S.
Antidumping or Countervailing Duties. During the period of the stay,
all rights and obligations of the Parties under the above-referenced
Sections shall cease.
12.4 At any time during the stay under Section 12.3, either Party may
request that this Supply Agreement not be stayed and that Green Pipe
continue to be imported into the U.S. provided that the requesting
Party (i) agrees to indemnify the other Party for the additional duties
or payments imposed (ii) agrees to post any required bonds and (iii)
provides adequate assurances of payment for the additional duties or
payments.
12.5 In the event that actual additional duties or payments are imposed,
either Party may elect to terminate this Supply Agreement provided that
the other Party may require the Supply Agreement not be terminated as
long as such Party (i) agrees to indemnify the other Party for any
additional duties or Payments imposed and (ii) provides adequate
assurances of payment for the additional duties and payments.
12.6 If a proceeding or investigation is initiated threatening to lead to
the imposition of U.S. Antidumping or Countervailing Duties with
respect to products subject to this Supply Agreement. Purchaser shall,
at its expense, defend Seller in such action. Purchaser shall be
entitled to control the defense, but Seller shall be entitled to
participate in the action.
12.7 This Section 12 provides for the exclusive remedies for any action by
the Parties that may lead to the imposition of U.S. Antidumping or
Countervailing Duties.
13. PENALTY
13.1 Purchaser agrees to pay a penalty of EURO 43.60 for each metric ton to
the extent that purchaser orders fell short of the Annual Minimum
Purchase Obligation of Purchaser required under Section 2.1 based on a
two (2) year average for the first two years of the Supply Agreement
and a two (2) year average for the last two years of the Supply
Agreement (for clarification the Parties intend to take a two year
average of Materials purchased by the Purchaser during years 1 and 2 of
the contract and compare the two year average to the Annual Minimum
Purchase Obligation. If the average for that period is equal to or
above the Annual Minimum Purchase Obligation, no penalties will be due.
If the average for that period is below the Annual Minimum Purchase
Obligation then a penalty will be due, which will be an
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amount equal to: [each metric ton the average is below the Annual
Minimum Purchase Obligation x the period averaged (2 years) x the
penalty (EURO 43.60). The same calculation and averaging will be
calculated for the two (2) year period comprising years 3 and 4 of the
contract. Purchaser shall pay any penalties due within 30 days
following the end of the two year period during which the penalties
arose.
13.2 Any penalties paid pursuant to Section 13.1 may be applied by and
repaid to Purchaser against separate invoices for purchases in excess
of the Annual Minimum Purchase Obligation in the following two-year
period. Any such penalty shall, at the request of Purchaser, be applied
or repaid immediately following the year in which the purchases were in
excess of the Minimum Purchase Obligations. However, the amount of the
purchased Materials (over the Annual Minimum Purchase Obligation) that
is used to obtain a refund of the penalty under this Section 13.2 shall
not also be used in the two (2) year average under Section 13.1 for
that current two (2) year period.
13.3 For calculation purposes of the penalty only, any order placed by
Purchaser (or its Affiliates) which was not delivered in compliance
with this Supply Agreement, shall be deducted from the Annual Minimum
Purchase Obligation. In case this Supply Agreement is terminated, the
penalty due for the last year prior to termination pursuant to Section
13.1 shall be calculated on a pro rata basis.
14. CURRENCY
All the amount payable under this Supply Agreement that are denominated
in EURO.
15. DISPUTE RESOLUTION
All disputes arising out of this Supply Agreement or related to its
violation, termination or nullity shall be finally settled under the
Rules of Arbitration and Conciliation of the International Arbitral
Centre of the Austrian Federal Economic Chamber in Vienna (Vienna
Rules) by three arbitrators appointed in accordance with these rules.
The substantive law of Austria shall be applicable and the language to
be used in the arbitral proceedings shall be English. The place of
arbitration shall be Vienna, Austria.
16. MISCELLANEOUS
16.1 Modifications of and amendments to this Supply Agreement shall be valid
and binding only if made in writing.
16.2 If any provision hereof becomes invalid, this shall not effect the
validity of the remaining provisions hereof.
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16.3 This Supply Agreement shall be governed by and construed according to
Austrian law. The application of the United Nations Convention on
Contracts for the International Sale of Goods is expressly excluded.
16.4 The termination of this Supply Agreement shall not release either Party
from any liability, obligation, or agreement which, pursuant to any
provision of this Supply Agreement, is to survive or be performed after
such expiration or termination.
16.5 This Supply Agreement has been made in the English language and has
been executed in two originals with Seller and Purchaser receiving one
each.
16.6 All notices, requests, consents and other communications hereunder
shall be made in writing and sent by registered or certified mail or by
any express mail service or courier service or by facsimile
transmission (with receipt confirmed) to the parties at the addresses
and numbers below:
If to Purchaser to:
Grant Prideco Inc.
0000 Xxxx Xxx Xxxx. Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: President
Telephone: 000-000-0000
Telecopier: 000-000-0000
With a copy to: General Counsel
If to Seller to:
VoestAlpine Tubulars GmbH & Co KG
XxxxxxxxxxXx 00
X-0000 Xxxxxxxx-Xxxxxx, Xxxxxxx
Attn: ______________________
Telephone:__________________
Telecopier:__________________
With a copy to:
___________________________
___________________________
___________________________
Attn: ______________________
Telephone:__________________
Telecopier:__________________
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16.7 The subject heading of this Supply Agreement are for the convenience of
the Parties and shall not be considered in any question of
interpretation or construction of this Supply Agreement.
IN WITNESS WHEREOF, the Parties have executed or caused to be executed this
Supply Agreement as of this 1st day of August, 2003.
GRANT PRIDECO, INC.
/s/ Xxx Xxxxxx
-----------------------------------
VOESTALPINE TUBULARS Gmbh & Co KG
_____________/s/ Illegible Authorized Signatory______________
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ANNEX A
Part 1
1.A) For drill pipe and casing specs, minimum quantity of 500 MT/item
GP 359
TCA G1-01 rev. C type 2
Price: Euro 605 / MT
Surcharge of 2.5% applies for lots of 250 - 499 MT
Surcharge of 4% applies for lots of 100 - 249 MT/size
1.B) For drill pipe and casing specs, minimum purchase of 250 MT/size.
Price for GP 348 rev. I Euro 641 / MT
Price for GP 347 rev. I Euro 634 / MT
Price for TCA 61-01 rev. C type 7 Euro 649 / MT
For lots of 100 - 249 MT/item a surcharge of 2.5% shall apply.
1.C) For tubing, minimum quantity of 250 MT/size.
Price for GP spec 359 Euro 605 / MT
Price for GP spec 347 Euro 634 / MT
Price for GP spec 348 Euro 641 / MT
For lots of 100 - 249 MT a surcharge of 2.5% shall apply.
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ANNEX B
GREEN TUBE LENGTH SUMMARY
DRILL PIPE
The wall thickness shown is for 95% RBW. Our new tolerance will be +1' / -1'
except where we had a VA maximum length that is designated with a (VA). Grant
Prideco and VA will agree to and confirm on the purchase order any non-standard
lengths that might be customer specified.
ITEM SIZE UPSET WALL AIM MIN / MAX
---- ----- ----- ---- ----- ----------------
1 2-3/8 H .296 31.13 30.13 / 32.13
2 2-7/8 H .382 31.38 30.38 / 32.38
3 3-1/2 EU .268 31.49 30.49 / 32.49
4 3-1/2 H .388 31.34 30.34 / 32.34
5 3-1/2 H .474 30.74 29.74 / 31.74
6 4 H .348 31.47 30.47 / 32.47
7 4 H .401 31.83 30.83 / 31.99 VA
8 4-1/2 H .356 31.60 30.60 / 32.60
9 4-1/2 H .454 32.01 31.01 / 32.15 VA
10 5 H .382 31.34 30.34 / 32.34
11 5 H .528 31.50 30.50 / 31.66 VA
12 5 EU .792 29.96 28.98 / 30.96
13 5-1/2 H .381 31.30 30.30 / 32.26 VA
14 5-1/2 H .438 31.55 30.55 / 32.55
15 5-1/2 H .792 29.86 28.86 / 30.64 VA
16 5-7/8 H .381 31.97 30.97 / 32.58 VA
17 5-7/8 H .438 30.91 29.91 / 31.72 VA
18 5-7/8 H .792 29.86 28.86 / 30.86
19 6-5/8 H .348 32.10 31.10 / 33.10
20 6-5/8 H .382 31.77 30.77 / 32.77
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