ANHYDROUS AMMONIA SALES AGREEMENT
Exhibit 10.49
ANHYDROUS
THIS
ANHYDROUS AMMONIA SALES AGREEMENT (this "Agreement") is entered into on this
3rd
day of December, 2008, and made effective January 1, 2009 (the
"Effective Date"), between XXXX NITROGEN INTERNATIONAL SÀRL, a Switzerland
corporation, with a branch office located at Grand Cayman, Cayman Islands,
B.W.I. (hereinafter "Seller") and EL DORADO CHEMICAL COMPANY, an Oklahoma
corporation, with principal offices at 00 X. Xxxxxxxxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx 00000 (hereinafter "Buyer"). Seller and Buyer are sometimes
collectively referred to herein as the "Parties" and individually referred to
herein as a "Party".
WITNESSETH:
WHEREAS,
as specified in this Agreement, Buyer and Seller desire to enter into an
anhydrous ammonia sales agreement under which Seller agrees to supply to Buyer,
and Buyer agrees to purchase from Seller, 100% of its Product Requirements (as
defined below) and
WHEREAS,
Seller's intent is to supply Buyer's Product Requirements primarily by pipeline
deliveries and supply Buyer's Railcar Product Requirements (as defined below)
either by railcar or pipeline.
NOW
THEREFORE, in consideration of the mutual promises herein contained, the receipt
and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
I. DEFINITIONS
Whenever
used in this Agreement, the following terms shall have the following respective
meanings:
A.
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"Adder"
shall have the same meaning assigned to that term in Article VI, Section
B.
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B.
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"Affiliate"
means, with respect to any Person, any other Person directly or indirectly
controlling or controlled by, or under direct or indirect common control
with such Person.
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PORTIONS
OF THIS DOCUMENT HAVE BEEN OMITTED FROM THIS PUBLIC FILING PURSUANT TO A REQUEST
BY THE COMPANY FOR CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE
COMMISSION. THE OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH
THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION FOR PURPOSES OF SUCH
REQUEST.
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For purposes of this
definition, the term "control" (including the correlative terms
"controlled by" and "under the common control of"), as used with respect
to any Person, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such
Person, through the ownership of voting securities, by contract or
otherwise.
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C.
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"Ammonia
Pipeline" shall mean the anhydrous ammonia pipeline currently owned by
NuStar Pipeline Operating Partnership,
L.P.
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D.
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"Ammonia
Pipeline Tariff" means the Ammonia Pipeline's current tariff for
interstate movement of anhydrous ammonia, as amended from time to
time.
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E.
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"Ammonia
Pipeline Transportation Charge" shall have the same meaning assigned to
that term in Article VI, Section C.
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F.
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"Buyer
Facility" shall mean Buyer's chemical production facility located at El
Dorado, Arkansas, as presently
configured.
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G.
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"
*****" shall mean
the ***** per
metric ton of the weekly price range published under the heading "Ammonia
Price Indications, Delivered prices, US Gulf/Tampa, - Tampa" in Fertecon Ammonia Report
("Fertecon") and (ii) the
***** per metric ton of the weekly
price range published under the heading "Ammonia c+f Tampa" in the FMB Weekly Fertilizer Report
("FMB") for the week Product is delivered by pipeline to Buyer or
shipped by railcar to Buyer. For example, if Product is delivered to Buyer
by the Ammonia Pipeline during the week from Monday, December 15, 2003
through Sunday, December 21, 2003,
the ***** published in the December 18,
2003 issue of Fertecon
and the December 18, 2003 issue of FMB shall apply. The
Parties acknowledge that currently, both Fertecon and FMB publish a price
range for Tampa/US Gulf prices and a Tampa only price. The Tampa only
price, as set forth above, shall be used to calculate
the ***** .
If either publication or the price contained in such publication that is
necessary to calculate
the ***** is
not published far a particular week for any reason, then the publication
or price,
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***** INDICATES INFORMATION IN THIS DOCUMENT WHICH HAS BEEN
OMITTED FROM THIS PUBLIC FILING PURSUANT TO A REQUEST BY THE COMPANY FOR
CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE COMMISSION. THE
OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
SECURITIES AND EXCHANGE COMMISSION FOR PURPOSES OF SUCH
REQUEST.
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as applicable, from
the previous week shall be used to calculate the *****. Examples of how
***** is calculated are set forth on Exhibit
1.
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H.
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"Delivery
Point" shall mean: (i) for pipeline deliveries, the discharge side of the
Ammonia Pipeline's Product meter located at Buyer's Facility, or (ii) for
rail or truck deliveries, the point at Buyer's Facility where the truck or
rail cars enter Buyer's Facility, or (iii) an alternate delivery point
along the Ammonia Pipeline; provided that Buyer gives Seller at least
forty-five (45) days written notice prior to the date it wishes to begin
delivery at such alternate delivery
point.
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I.
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"KNC
Facility" shall mean any of the anhydrous ammonia production facilities
owned by Seller’s affiliate, Xxxx Nitrogen
Company.
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J.
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"KNC
Terminal" shall mean Xxxx Nitrogen Company’s anhydrous ammonia terminal at
Taft, Louisiana, capable of receiving ammonia by vessels, loading and
shipping ammonia in a barge, and re-injecting ammonia into the Ammonia
Pipeline.
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K.
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"Month"
shall mean a calendar month.
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L.
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"Performance
Assurance" means collateral in the form of either cash, letter(s) of
credit, or other security acceptable to Seller in its sole
discretion.
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M.
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"Person"
means any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, unincorporated organization, business, syndicate, sole
proprietorship, association, organization, other entity or governmental
body.
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N.
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"Price"
shall be described in Article VI, Section A
hereof.
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O.
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"Product"
shall mean commercial anhydrous ammonia provided hereunder having the
following specifications:
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Ammonia
(NH3)
Content:
99.5% minimum, by weight %
Water: 0.2%
minimum to 0.5% maximum, by weight %
***** INDICATES INFORMATION
IN THIS DOCUMENT WHICH HAS BEEN OMITTED FROM THIS PUBLIC FILING PURSUANT TO A
REQUEST BY THE COMPANY FOR CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE
COMMISSION. THE OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH
THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION FOR PURPOSES OF SUCH
REQUEST.
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Oil:
5 ppm maximum, by weight
P.
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"Product
Requirements" shall mean total Product purchased by Buyer for Buyer's
account for further processing at Buyer's Facility, as adjusted to
accommodate Buyer's Railcar Product Requirements. Currently, the Product
Requirements during a calendar year at Buyer's Facility are approximately
165,000 to 175,000 short tons, which includes approximately 45,000 short
tons currently used by Buyer to manufacture finished product on behalf of
Orica USA Inc., but is exclusive of any tolling arrangements by Buyer with
third parties. Product Requirements shall not include approximately 45,000
additional short tons of anhydrous ammonia annually, for production of
finished product for Orica USA Inc. The 45,000 additional short tons
referenced above shall be excluded from the Product Requirements during
the Term of this Agreement, unless Buyer requests and Seller elects, at
Seller's sole option, to include such quantity in the Product
Requirements. Provided that Buyer has given Seller at least sixty (60)
days prior written notice, Product Requirements shall not include Product
supplied to Buyer's Facility which shall be produced by Buyer or an
Affiliate of Buyer and physically delivered to Buyer's
Facility.
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Q.
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"Seller"
shall mean Seller.
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R.
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"short
ton" shall mean 2,000 pounds.
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S.
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"Taxes"
shall have the same meaning assigned to that term in Article IX
hereof.
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T.
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"Total
Credit Exposure" shall mean the sum of the (i) outstanding invoice(s) for
Product delivered from Seller to Buyer, (ii) the estimated invoice for
Product delivered to Buyer but not yet invoiced by Seller, and (iii) the
estimated invoice amount for Product that shall be delivered from Seller
to Buyer until the payment due date of the oldest outstanding invoice,
less the amount of any Performance
Assurance.
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II. TERM
A.
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Term. The term
of this Agreement (the "Term") shall commence at 12:01 a.m. central time
on January 1, 2009 and shall terminate at 11:59 p.m. on December 31,
2010,
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("OriginalTermination
Date") unless otherwise terminated earlier in accordance with this
Agreement or extended pursuant to Section B
below.
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B.
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Renewal. At the
Original Termination Date, this Agreement may be extended for a one (1)
year period (commencing on January 1st
and ending on December 31st)
upon the written agreement of both Seller and Buyer made no later than
November 1st
of the then current year. Notwithstanding the foregoing, neither Party
shall be obligated to renew this
Agreement.
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III. QUANTITY
A.
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Quantity.
During the Term, Buyer shall purchase from Seller one hundred percent
(100%) of its Product Requirements for Buyer's Facility. However, in the
event Buyer installs railcar unloading capabilities at Buyer's Facility,
then Buyer shall have the option to purchase up to twelve percent (12%) of
Buyer's Product Requirements during a calendar year from a third party
("Railcar Product Requirements"); provided, such Railcar Product
Requirements must be delivered to Buyer's Facility by railcar; and
provided further, Buyer gives Seller the right of first refusal to match
any bona fide third party railcar delivered price. Buyer shall provide
Seller with a written copy of such third party offer. In the event Seller
determines to meet the price for any Railcar Product Requirements to
Buyer's Facility within two (2) business days after its receipt of a
written copy of the third party offer, Seller shall have the option to
deliver the Railcar Product Requirements to Buyer's Facility either by
railcar or pipeline. In addition, if Buyer installs railcar unloading
capabilities at Buyer's Facility, then Seller may request, from time to
time, that Buyer take delivery of a specified quantity of Buyer's Product
Requirements by railcar, instead of delivery by pipeline, during each
calendar year; provided Seller gives Buyer thirty (30) days written notice
that Seller wants to deliver Product by railcar. Buyer shall make
reasonable commercial efforts to accommodate Seller's request as stated
above; however, it shall be Buyer's option to grant such
request.
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B.
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No Resale.
Buyer shall use the Product delivered to Buyer for processing at Buyer's
Facility only, and shall not resell, transfer, exchange, or otherwise
assign Product without
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first
obtaining the prior written consent of Seller, which consent may be
granted or withheld by Seller in its sole
discretion.
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C.
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Measurement.
The quantity of Product delivered hereunder to Buyer by the Ammonia
Pipeline shall be governed by the weights and measures taken by meters
owned by the Ammonia Pipeline at the Delivery Point pursuant to the
Ammonia Pipeline Tariff. For truck or rail deliveries, the quantity of
Product delivered to Buyer shall be governed by the weights and measures
taken as the trucks or rail cars are loaded at the KNC Facility, KNC
Terminal, alternative Seller supply sources, or at an alternative third
party supply source and as stated on the xxxx of lading. The foregoing
measurements of said quantities shall be final and conclusive, unless
proven to be in error.
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IV. QUALITY
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All
Product delivered hereunder shall conform to the specifications set forth
in Article I, Section O. All claims by Buyer that any Product delivered
hereunder does not conform to the specifications set forth in Article I,
Section O, shall be made in writing and sent within thirty (30) days after
Seller's delivery of such Product to the Delivery Point. Failure to give
written notice of such claim within the specified time shall constitute an
unqualified acceptance of the Product and a waiver by Buyer of all claims
with respect thereto.
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V. WARRANTIES
A.
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As
its exclusive warranties, Seller warrants to Buyer that, at the Delivery
Point: (i) the Product shall conform to the specifications specifically
set forth in Article I, Section O and (ii) title to the Product shall be
free from any security interest, lien, or encumbrance. EXCEPT AS
SPECIFICALLY SET FORTH IN THE PRECEDING SENTENCE, (I) BUYER ACKNOWLEDGES
AND AGREES THAT XXXX NITROGEN, AND ITS RESPECTIVE AFFILIATES HAVE NOT
MADE, DO NOT MAKE, AND EXPRESSLY DISCLAIM ANY WARRANTIES, REPRESENTATIONS,
COVENANTS, OR GUARANTEES, EITHER EXPRESS OR IMPLIED, WHETHER ARISING BY
OPERATION OF LAW OR OTHERWISE, AS TO THE MERCHANTABILITY, QUANTITY,
CONDITION, OR QUALITY OF THE PRODUCT OR ITS SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR USE AND (II) THE PRODUCT IS SOLD "AS
IS".
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B.
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Seller's
liability, and Buyer's exclusive remedy, for any cause of action arising
out of or related to the breach of the warranty above, is, at Buyer's
option, limited to (i) replacement of the non-conforming Product at the
Delivery Point or (ii) a refund to Buyer of the portion of the Price
allocable to such non conforming Product. IN NO EVENT WILL SELLER'S
CUMULATIVE LIABILITY UNDER THE AGREEMENT EXCEED THE TOTAL SALES PRICE OF
THE PRODUCT OR THE COST OF SUBSTITUTE PRODUCT, WHETHER ARISING UNDER
WARRANTY, GUARANTEE, CONTRACT, NEGLIGENCE, STRICT LIABILITY,
INDEMNIFICATION, FAILURE OF ESSENTIAL PURPOSE OR ANY OTHER CAUSE OR
COMBINATION OF CAUSES WHATSOEVER. WITHOUT LIMITATION ON THE FOREGOING,
UNDER NO CIRCUMSTANCES SHALL EITHER XXXX NITROGEN OR BUYER BE LIABLE OR
HAVE ANY RESPONSIBILITY TO THE OTHER OR ANY OTHER THIRD PARTY FOR ANY
INDIRECT, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES,
INCLUDING, WITHOUT LIMITATION, LOST EARNINGS, LOST PROFITS, OR BUSINESS
INTERRUPTION.
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VI. PRICE
A.
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Price. Except
as set forth below, for each short ton of Product sold to Buyer hereunder,
Seller shall charge, and Buyer shall pay to Seller, the following
Price:
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Price
per short ton = *****.
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However,
in the event Seller agrees to sell any of Buyer's Railcar Product
Requirements as set forth in Article III, Section A, then the Price- for
each short ton of Product sold to Buyer as Railcar Product Requirements
shall be as determined in accordance with Article III, Section A and
documented in writing between the Parties. The Price shall be determined
on
a ***** basis.
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B.
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Adder. Adder
shall equal ***** per short
ton. However, if the Ammonia Pipeline Transportation Charge is
modified as set forth in Section VI C. of this Agreement, the Parties
agree to modify the Adder as set forth in Section VI
C.
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C.
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Ammonia Pipeline
Transportation Charge. The Ammonia Pipeline Transportation Charge
per short ton shall be a flat rate of ***** per short ton from Xxxx,
Louisiana or Sterlington, Louisiana to the Delivery Point for pipeline
deliveries. In the event
the **** is
increased
above ***** ,
then the Ammonia Pipeline Transportation Charge for both injection points
shall be changed to the revised Ammonia Pipeline Tariff rate as published
for ***** . Notwithstanding
the foregoing, starting January 1, 2009, for the first increase of the
Ammonia Pipeline Transportation Charge in each calendar year of the Term,
Seller will, up to a maximum
of ***** per
short ton, decrease the amount of the Adder per short ton by an amount
equal to *****. For
any other increases of the Ammonia Pipeline Charge in the same calendar
year, the Adder shall not be
changed.
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***** INDICATES INFORMATION
IN THIS DOCUMENT WHICH HAS BEEN OMITTED FROM THIS PUBLIC FILING PURSUANT TO A
REQUEST BY THE COMPANY FOR CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE
COMMISSION. THE OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH
THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION FOR PURPOSES OF SUCH
REQUEST.
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D.
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Market Publications
and Prices. If either (a) Fertecon or FMB or (b) the price
contained in such publication that is necessary to calculate
the ***** is
not published for three (3) consecutive weeks, then Seller and Buyer shall
meet in person, negotiate, and agree on a substitute publication or price,
as applicable, within thirty (30) days of such event. During such thirty
(30) day period, the publication or price that is published, as
applicable, shall solely be used to calculate the Price hereunder. For
example, if FMB
was not published for three (3) consecutive weeks in March 2005,
then Fertecon
would solely be used to calculate the
*****.
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E.
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Demurrage.
Railcars shall be allowed ten (10) days of free time from the earlier of
constructive or actual placement of the railcar at Buyer's Facility until
being released by Buyer to the railroad. In the event Buyer is unable to
obtain actual placement of railcars within a reasonable period of time
after constructive placement due to issues beyond Buyer's control, then
Seller shall adjust the free time allowed provided Buyer has notified
Seller of this delay within three (3) business days of the delay. Any
excess time shall be billed at $50.00 per car per
day.
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VII. CREDIT,
SECURITY AND PAYMENT TERMS
A.
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If
Seller provides Buyer a line of credit to facilitate purchases under this
Agreement, such credit line may be amended, decreased or terminated at any
time at the sole discretion of Xxxx by providing notice to
Buyer. Upon written notice of Seller’s election to decrease or
terminate Buyer’s credit line, Buyer may terminate this
Agreement. Buyer’s failure to give written notice to Xxxx of
the termination of this Agreement within thirty (30) days from the date of
such notice shall constitute an unqualified acceptance of such reduction
or termination and a waiver by Buyer of the right to terminate this
Agreement In addition to any other rights or remedies to which
Seller may be entitled at law or in equity, in the event that Seller
determines, in its sole discretion, that (a) the creditworthiness or
future performance of Buyer is impaired or unsatisfactory, Seller may (i)
immediately suspend deliveries of all Product; (ii) require prepayment by
wire transfer at least two (2) business days prior to a scheduled shipment
of Product; or (iii) require Performance Assurance at least three (3)
business days prior to a scheduled shipment of
Product.
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***** INDICATES
INFORMATION IN THIS DOCUMENT WHICH HAS BEEN OMITTED FROM THIS PUBLIC FILING
PURSUANT TO A REQUEST BY THE COMPANY FOR CONFIDENTIAL TREATMENT BY THE
SECURITIES AND EXCHANGE COMMISSION. THE OMITTED INFORMATION HAS BEEN
FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION
FOR PURPOSES OF SUCH REQUEST.
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B.
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Seller
shall prepare and fax to Buyer a weekly invoice by Tuesday of every week
during the Month in an amount equal to the Price per short ton based on
the previous Friday's Price multiplied by the short tons delivered to
Buyer during the period from the previous Monday through Sunday based on
the meter reading at the Delivery Point provided by Buyer to Seller every
Monday. In the event, Seller agrees to sell to Buyer any of Buyer's
Railcar Product Requirements as set forth in Article III, Section A, then
Seller shall prepare and fax to Buyer a weekly invoice by Tuesday of such
week, in an amount equal to the Price per short ton as determined in
accordance with Article VI, Section A multiplied by the short tons shipped
by Seller to Buyer during the period from the previous Monday through
Sunday based an the xxxx of lading quantity for such railcar shipments
during the week. In the event Seller supplies to Buyer both Product
Requirements and Railcar Product Requirements during any given week, then
Seller shall prepare and fax Buyer two (2) separate invoices. Any Product
returned to Seller in a railcar shall be deemed abandoned by Buyer and
Buyer shall not receive any credit, payment, or other consideration for
any abandoned Product, unless Buyer has provided written notification to
Seller that Product in excess of three (3) short tons may remain in the
railcar due to operational issues at Buyer's
Facility.
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C.
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Twenty-one
(21) days after the invoice date, Buyer shall pay the full amount of each
invoice by wire transfer of immediately available funds to such account as
Seller designates in writing. If the payment due date is a Saturday,
Sunday, or holiday where banks are authorized to be closed, Buyer shall
make such payment on the business day next succeeding such due date.
Interest shall be charged on all past due amounts owed by Buyer hereunder
at an interest rate equal to the lesser of 12% per annum and the maximum
rate permitted by law, from the payment due date until paid in full (the
"Default Rate"). Buyer agrees to accept as originals facsimile copies of
invoices from Seller.
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D.
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For
invoices prepared and faxed to Buyer by Seller, Buyer shall wire transfer
funds to Seller’s designated bank account in London as designated on
Seller’s invoice. The current wiring instructions for payment to Seller
are as follows:
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Xxxx
Nitrogen International Sàrl
XX Xxxxxx
Xxxxx London
Account
#00000000 USD
SWIFT:
CHASGB2L
VIII. DELIVERY
A.
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Notices. No
later than the 1st
calendar day of the Month immediately prior to the Month of delivery of
Product, Buyer shall notify Seller in writing of the amount of short tons
and method of delivery that Buyer wishes to receive for such Month of
delivery. Buyer shall promptly notify Seller in writing of any known or
anticipated changes that will not permit Buyer to receive the monthly
quantity of Product.
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B.
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Title and Risk of
Loss. Seller shall deliver the Product hereunder to Buyer at the
Delivery Point. Title and risk of loss of Product shall pass from Seller
to Buyer and delivery shall occur when the Product passes the Delivery
Point. Prior to delivery and transfer of title and risk of loss of the
Product to Buyer, Seller agrees to be responsible for any damages or
injury arising in connection with the Product. At and after delivery and
transfer of title and risk of loss of the Product to Buyer, Buyer agrees
to be responsible for any damages or injury arising in connection with the
Product.
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C.
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Shipper of
Record. Xxxx Nitrogen Company shall ship Product for Seller on the
Ammonia Pipeline to Buyer at Buyer’s Facility and Xxxx Nitrogen Company
will be the shipper of record.
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IX. TAXES
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Buyer
shall pay all material taxes, assessments, duties, fees, levies,
penalties, licenses or charges imposed by any government authority
("Taxes") which may now or hereafter be imposed on or with respect to the
Product at or after title and risk of loss passes to Buyer. If Seller is
required to remit or pay Taxes that are Buyer's responsibility hereunder,
Buyer shall reimburse Seller for such Taxes within ten (10) days of
receipt of written notice hereunder. As the Buyer is assessed Taxes, both
Parties agree to mutually work together to mitigate any
assessment.
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X. FORCE
MAJEURE
A.
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Neither
Seller nor Buyer shall be liable for any failure or delay in performance
under this Agreement (except for the obligation to make money payments due
hereunder for Product already purchased) due to a Force Majeure event. A
"Force Majeure" event shall mean any event which may be due in whole or in
part to any contingency, delay, failure, cause or other occurrence of any
nature beyond a Party's reasonable control, which (i) physically prevents
Seller from transporting or delivering the Product to or from the (a) KNC
Terminal or (b) the Ammonia Pipeline, or (ii) which physically prevents
Buyer from receiving or using Product at Buyer's Facility. Examples of
Force Majeure events shall include, but not be limited to, the following:
(a) physical events such as acts of God, disease, plague, landslides,
lightning, earthquakes, fires, storms such as hurricanes or tornados, or
explosions; (b) acts of others such as terrorist attacks, riots, sabotage,
insurrections or wars; (c) breakage or accident to critical machinery or
critical equipment; and (d) material allocation or material curtailment of
natural gas or electricity, in either case under (c) or (d), rendering a
Party incapable of satisfying its obligations under this Agreement (except
for the obligation to make money payments due hereunder for Product
already purchased) for more than fifteen (15) consecutive days or twenty
(20) days in any thirty (30) day
period.
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B.
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The
term "Force Majeure" shall not include (i) an event caused by a Party's
sole negligence or willful misconduct; (ii) Seller's ability to sell, or
Buyer's ability to purchase from a third party, Product at a price more
advantageous than the Price; (iii) Buyer's loss of markets for products
produced at Buyer's Facility; (iv) shutdown of KNC's Terminal or Buyer's
Facility for reasons other than a Force Majeure event; and (v) routine or
scheduled maintenance at KNC's Terminal or Buyer's
Facility.
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C.
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If
a Force Majeure event occurs, the declaring Party may exercise its right
under this Article X by giving timely notice thereof to the other Party
setting forth with reasonable particularity the nature of the Force
Majeure event. The declaring Party shall only be excused from performance
hereunder during the duration of, and only to the extent of, the Force
Majeure event. Under no circumstance shall (i) Seller be obligated to cure
any deficiencies in deliveries of Product caused by Force Majeure or (ii)
Buyer be obligated to cure any deficiencies in Product purchased caused by
Force Majeure. Further, neither Seller nor Buyer (except as set forth in
Article X, Section D below) shall be obligated to take any action which
would result in increasing such Party's performance costs under this
Agreement beyond the costs which it would have incurred in the absence of
such Force Majeure event. The declaring Party shall give the other Party
prompt notice of when the Force Majeure event
ends.
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D.
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Notwithstanding
any other provision of this Agreement, if the Ammonia Pipeline is
interrupted or curtailed due to a Force Majeure event which prevents or
delays Seller from making all or a portion of the required deliveries of
Product hereunder, Seller shall use commercially reasonable efforts to
arrange, at Buyer's cost and expense, rail or trucking transportation
service from an alternative supply source to Buyer's Facility. Ammonia
Pipeline allocation shall not constitute a Force Majeure event; provided,
however, that a mechanical breakdown or any interruption of the Ammonia
Pipeline may constitute a Force Majeure event. For the duration of the
Force Majeure event, if (i) Seller's deliveries of Product to Buyer are
impeded due to a Force Majeure event, or
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(ii) the Ammonia
Pipeline is allocated or curtailed, Seller shall have the right to
apportion deliveries on a pro-rata basis (based up Seller's sales
commitments or contracts) among Buyer, Seller's present and future
customers (including regular customers not then under contract), and
Seller or its Affiliates. Notwithstanding any other provision of this
Agreement, Seller shall not be required to (a) cause ammonia production at
the KNC Facility to resume or (b) to purchase Product from a third party,
in either case, to remove a Force Majeure
event.
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XI. DEFAULT
AND REMEDIES
A.
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Defaults by
Buyer. Upon the occurrence of any of the following events: (i)
Seller shall not have received any payment due from Buyer hereunder by the
date such payment is due under this Agreement, and such failure shall
remain uncured for a period of two (2) business days after written notice
thereof, (ii) the failure of Buyer to perform any other obligation in this
Agreement and such failure is not excused or cured within five (5)
business days after written notice thereof; (iii) the occurrence of a
Bankruptcy Event with respect to Buyer or its Affiliates; or (iv) the
failure by any Performance Assurance provider of Buyer to perform any
obligation of such Performance Assurance provider under any document
executed and delivered in connection herewith, and such failure shall
remain uncured for a period of three (3) business days after written
notice thereof; then Seller, in its sole discretion and without prior
notice to Buyer, may do any one or more of the following: (a) suspend
performance under the Agreement; (b) terminate the Agreement, whereby any
and all obligations of Buyer, including payments due, will, at the option
of Seller, become immediately due and payable; and/or (c) Set-off against
any amount that Seller owes to Buyer under this Agreement. If Seller
suspends performance and withholds delivery of the Product as permitted
above, it may sell the Product to a third party and deduct from the
proceeds of such sale the purchase price and all reasonable costs
resulting from Buyer's default as identified above, including, without
limitation, all costs associated with the transportation, storage, and
sale of the Product. The foregoing rights, which shall include, but not be
limited to, specific performance,
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14
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shall be cumulative
and alternative and in addition to any other rights or remedies to which
Seller may be entitled at law or in equity. In addition, Seller shall be
entitled to recover from Buyer all court costs, attorneys' fees and
expenses incurred by Seller in connection with Buyer's default, and
interest on past due amounts at the Default Rate. "Set-off" means set-off,
offset, combination of accounts, netting of dollar amounts of monetary
obligations, right of retention or withholding or similar right to which
Seller is entitled (whether arising under this Agreement, applicable law,
or in equity) that is exercised by Seller. "Bankruptcy Event" means the
occurrence of any of the following events with respect to a Person: (i)
filing of a petition or otherwise commencing, authorizing or acquiescing
in the commencement of a proceeding or cause of action under any
bankruptcy, insolvency, reorganization or similar law, or if any such
petition is filed or commenced against it; (ii) making of an assignment or
any general arrangement for the benefit of creditors; (iii) having a
bankruptcy petition filed against it and such petition is not withdrawn or
dismissed within sixty (60) days after such filing; (iv) otherwise
becoming bankrupt or insolvent (however evidenced); (v) having a
liquidator, administrator, custodian, receiver, trustee, conservator or
similar official appointed with respect to it or any substantial portion
of its property or assets; or (vi) being generally unable to pay its debts
as they fall due.
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B.
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Defaults by
Seller. Upon the occurrence of any of the following events: (i) the
failure of Seller to perform any obligation in this Agreement and such
failure is not excused or cured within ten (10) days after written notice
thereof, provided, however, that Seller shall have an additional ten (10)
day period (commencing immediately upon the expiration of the initial ten
(10) day period) to cure such failure if Seller commences curative action
within such ten (10) day period and proceeds diligently and in good faith
thereafter to cure such failure until completion or (ii) a Bankruptcy
Event with respect to Seller, then Buyer, in its sole discretion and
without limitation, may terminate this Agreement, and Buyer's remedies
shall be cumulative and alternative and in addition to any other rights or
remedies to which Buyer may be entitled at law or in equity. Subject to
Article V, Section C, if Buyer is the prevailing party in any action,
litigation, or lawsuit against Seller for its default hereunder, Buyer
shall be entitled to recover from Seller all court costs, attorneys' fees
and expenses incurred by Buyer in connection with
Seller's
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default hereunder,
and interest on past due amounts at the Default Rate. In addition to the
foregoing, if. (i) Seller fails to perform a material obligation in this
Agreement and (ii) Buyer notifies it in writing of such failure, then only
while such failure remains uncured, Buyer may purchase Product from
another Person and Buyer's Product Requirements shall be reduced by the
amount of Product Buyer purchased from such other
Person.
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XII. RIGHTS
NOT WAIVED
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The
waiver by either Party of any default of this Agreement by another Party
shall not be deemed to be a waiver of any successive or other default of
this Agreement. Each and every right, power and remedy may be excused from
time to time and so often and in such order as may be deemed expedient by
the Party, and the exercise of any such right, power or remedy shall not
be deemed a waiver of the right to exercise at the same time or
thereafter, any other right, power or
remedy.
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Xlll. NOTICES
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Any
notices, requests or other communications required or permitted by any
provision of this Agreement shall be in writing and shall be deemed
delivered if delivered by hand, facsimile, national overnight courier
service, or mailed by U.S. Postal Service, postage prepaid, by registered
or certified mail, as follows:
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If to
Seller:
Xxxx
Nitrogen International Sàrl
X.X. Xxx
00000 XX0-0000
Xxxxx
Xxxxxx, Cayman Islands, B.W.I.
Attention:
Xxxxxx Xxxx, Managing Director
Fax:
(000) 000-0000
16
With copy
to Xxxx Nitrogen Company:
Xxxx
Nitrogen Company
0000 Xxxx
00xx Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxx 00000
Attention: Xxxx
Xxxx
Director
Industrial Ammonia Sales & Product Planning
Fax:
(000) 000-0000
If to
Buyer:
El Dorado
Chemical Company
00 X.
Xxxxxxxxxxxx
Xxxxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Xxxx X. Xxxxxx
Fax:
(000) 000-0000
With copy
to:
El Dorado
Chemical Company
16 5.
Pennsylvania
Xxxxxxxx
Xxxx, Xxxxxxxx 00000
Attn:
Xxxxx Xxxxx, General Counsel
Fax:
(000)000-0000
Any Party
may change the address to which notices are given by mailing written notice
thereof to the other Party as provided above.
XIV. ASSIGNMENT
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No
Party shall assign or delegate, or permit by assignment or delegation, by
operation of law or otherwise, any of its rights and obligations under
this Agreement to any Person without first obtaining the prior written
consent of the other Parties, which consent shall not be unreasonably
withheld, conditioned, delayed or denied. Notwithstanding the foregoing,
each Party shall be allowed to assign this Agreement to an Affiliate upon
providing written notice to the other Parties, provided no such transfer
shall operate to relieve the transferring Party of its obligations
hereunder. Any assignment or delegation, or attempted assignment or
delegation, in violation of this Article XIV shall be null and void, shall
be considered a material breach of this Agreement, and shall permit the
other Parties, in addition to any other rights which it may hereunder or
at law or in equity, to
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17
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terminate
this Agreement and exercise any remedies available to the non-breaching
Party hereunder or at law or in
equity.
|
XV. ENTIRE
AGREEMENT; AMENDMENT
|
This
greement shall supersede all prior negotiations, discussions, and dealings
concerning the subject matter hereof, and shall constitute the entire
agreement between Seller and Buyer concerning the subject matter
hereof. No Party shall claim any amendment, modification or release of any
provisions hereof unless the same is in writing and such writing: (i)
specifically refers to this Agreement; (ii) specifically identifies the
term amended; and (iii) is signed by duly authorized representatives of
Seller and Buyer.
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XVI CONFIDENTIALITY
|
Except
(i) as may be agreed to in writing on a case by case basis, (ii) for
communications between Buyer and Orica USA, Inc., (iii) as may be
necessary to perform its obligations herein, or (iv) as required by law,
both Parties shall maintain in confidence a!1 information concerning costs
and price to be disclosed in connection with the other's performance under
this Agreement. Such information shall be disclosed to no one other than
officers and other employees who need to know the same in connection with
performance under this Agreement, and such officers and other employees
shall be advised of the confidential nature of such information, or when
disclosure is required by law. The Parties shall take all proper
precautions to prevent such information from being acquired by any
unauthorized person or entity.
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XVII. ARTICLE
AND SECTION HEADINGS
|
Article
and section headings are for the convenience of the Parties and are not
considered parts of this Agreement, it being stipulated that any headings
in conflict with the substantive provisions of this Agreement shall have
no force and effect.
|
XVIII. GOVERNING
LAW; NO JURY TRIAL
|
The
Agreement and its execution, performance, interpretation, construction and
enforcement shall be governed by the law, both procedural and substantive,
of the State of
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Kansas,
without regard to its conflicts of law rules. No course of dealing,
course of performance, or usage of trade shall be considered in the
interpretation or enforcement of this Agreement. Any action or proceeding
between Seller and Buyer relating to this Agreement shall be commenced and
maintained exclusively in the State of Kansas or in the Federal courts
governing Kansas, and each Party submits itself unconditionally and
irrevocably to the personal jurisdiction of such courts. EACH PARTY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, CLAIM OR
PROCEEDING RELATING TO THIS
AGREEMENT.
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XIX. SEVERABILITY
|
The
provisions of this Agreement are severable and, if any provisions are
determined to be void or unenforceable in whole or in part, the remaining
provisions shall remain unaffected and shall be binding and enforceable in
accordance with the terms hereof.
|
XX. MISCELLANEOUS
A.
|
Additional Rules of Interpretation and
Construction.
|
1.
|
No Construction Against Draftsman. No implications or inferences
shall be drawn from the deletion of or addition to the terms of previous
drafts of this Agreement. Seller and Buyer acknowledge that each has had
the opportunity to participate in the preparation of this Agreement and,
therefore, in the event of any ambiguity in, or controversy with respect
to the meaning of, any term or provision contained in this Agreement, no
presumption or inference shall be drawn against any Party in the
interpretation of this Agreement by reason of the participation by such
Party or its attorneys in the preparation of this
Agreement.
|
2.
|
Gender. Words of any gender in this Agreement shall include
the other gender, and words in the singular number shall include the
plural, when the context requires.
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19
3.
|
Days. The term "days", as used herein, shall mean actual days
occurring, including, Saturdays, Sundays and national holidays. The term
"business days" shall mean days other than Saturdays, Sundays and national
holidays.
|
4.
|
Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
executed counterparts together shall constitute one
agreement.
|
B.
|
Binding Effect. Without
limitation of the foregoing, this Agreement shall inure to the benefit of
and be binding upon Seller and Buyer, including their respective
successors and assigns.
|
C.
|
Brokers. Any
commissions, fees and expenses in connection with any broker or agent
retained by Seller shall be the sole responsibility of Seller. Any
commissions, fees and expenses in connection with any broker or agent
retained by Buyer shall be the sole responsibility of
Buyer.
|
D.
|
Independent
Contractors. Seller and Buyer are independent contractors only
and are not partners, master/servant, principaUagent or involved herein as
parties to any other similar legal relationship with respect to the
transactions contemplated under this Agreement or otherwise, and no
fiduciary, trust, or advisor relationship, nor any other relationship
imposing vicarious liability shall exist between the parties under this
Agreement or otherwise at law.
|
E.
|
No Third Party Beneficiaries.
This Agreement is solely for the benefit of, and shall inure to the
benefit of, Buyer and Seller, and shall not otherwise be deemed to confer
upon or give to any third party any right, claim, cause of action or other
interest herein.
|
F.
|
Survival of Terms and Conditions.
This Agreement, and all covenants, promises, agreements,
conditions, warranties, representations and understandings contained
herein, or contained in any modification, change or amendment of this
Agreement pursuant to Article XV hereof, shall survive the termination or
expiration of the term of this Agreement for purposes of enforcement of
rights occurring prior to such termination or
expiration.
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20
IN
WITNESS WHEREOF, the Parties have executed this Agreement to be effective on the
Effective Date by their respective officers thereunto duly
authorized.
XXXX
NITROGEN INTERNATIONAL SÀRL
By: _____________________________
Title: ____________________________
EL
DORADO CHEMICAL COMPANY
By: /s/ Xxxx X. Xxxxxx
Title: Vice President
21
EXHIBIT
1
Examples
of how the ***** is calculated in Article I, Section G is as
follows:
|
FMB Weekly Fertilizer Report |
|
Fertecon Ammonia
Report
|
FMB
Weekly Fertilizer Report
|
|||
***** | ***** | ||||
Publication Date | ***** | ***** | ***** | ||
December 4, 2003 | ***** | ***** | ***** | ***** | |
December 11, 2003 | ***** | ***** | ***** | ***** | |
December 18, 2003 | ***** | ***** | ***** | ***** | |
December 25, 2003 | ***** | ***** | |||
Delivery Dates | Publication Date Used | ***** | |
December 1 to 7, 2003 | December 4, 2003 | ***** | |
December 8 to 14, 2003 | December 11, 2003 | ***** | |
December 15 to 21, 2003 | December 18, 2003 | ***** | |
December 22 to 28, 2003 | December 18, 2003 | ***** |
All
prices in the above example are stated as a dollar ($) per metric ton
price.
***** INDICATES INFORMATION IN THIS DOCUMENT
WHICH HAS BEEN OMITTED FROM THIS PUBLIC FILING PURSUANT TO A REQUEST BY THE
COMPANY FOR CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE
COMMISSION. THE OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH
THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION FOR PURPOSES OF SUCH
REQUEST.
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