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Air Products and Chemicals, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000-0000
Telephone (000) 000-0000
Amendment No. 1
This Amendment Number 1 (the "Amendment") is made as of the 30th day of
January 2004 by and between Air Products and Chemicals, Inc. ("Buyer"), and
Xxxxx Helium Company, LLC ("Seller").
Whereas, Buyer and Seller are parties to that Contract for Sale and
Purchase of Liquid Helium as Amended and Restated dated as of 1 January 1999
(the "Original Contract"), under which Seller is obligated to sell to Buyer, and
Buyer is obligated to purchase from Seller, all liquid helium processed at
Seller's Facility (as defined in the Original Contract)(capitalized terms used
in this letter agreement but not defined herein shall have the meanings given
them in the Original Contract); and
Whereas, Seller is currently contemplating upgrades and repairs to Seller's
Facility, which repairs and upgrades, if undertaken, would be provided by Buyer
under a separate contract for the compensation rates stated therein; and
Whereas, the parties now desire to make certain amendment to the Original
Contract to provide for the sale of crude helium by Seller to Buyer, to amend
the price re-openers, to facilitate payments for said repairs and upgrades to
Seller's Facility, and make certain other changes.
Now Therefore, in consideration of the mutual promises of the parties set
forth below and for other for good and valuable consideration, the receipt of
which is hereby acknowledged, Buyer and Seller, intending to be legally bound,
hereby agree as follows:
1. Amendments to Original Agreement. The Original Agreement is hereby amended as
follows:
(a) Article 1 is hereby amended to add the following definitions are added in
the correct alphabetical location:
"Capacity Limitation Crude" means crude helium owned by Seller in
excess of that, which can be refined at Seller's Facility as set forth
in the Original Agreement Article 2.3 as the capacity limitation.
"Facility Services Agreement" means the contract entered into by
Seller and Buyer under which Buyer, during calendar year 2004,
provides various upgrade and upgrade parts and services for Seller's
Facility for a fee.
"Facility Services Fee" means the total amount payable by Seller
to Buyer under the Facility Services Agreement, whether for fees,
expenses or otherwise.
"Xxxxx Crude" means, collectively, the Capacity Limitation Crude
and the Outage Crude and Shutdown Crude, if any.
"Outage Crude" means crude helium owned by Seller that would
typically be refined at Seller's Facility pursuant to Article 2 but
cannot be due to Seller's Facility's undergoing upgrades and repairs,
including the Upgrades.
"Reimbursement Period" means the period of time in which Seller
is required to reimburse Buyer for the Facility Service Fee, as set
forth in Section 5.8.
"Shutdown Crude" is defined in Section 4.3.1.
"Upgrades" meaning the improvements and repairs that are to be
made to Seller's Facility in calendar year 2004 under separate
contract between Seller, as purchaser, and Buyer, as provider, of the
upgrade and repair services."
(b) Article 4 is hereby amended to add the following new Sections to the end of
such Article:
"4.3 Crude Helium Sales. Xxxxx hereby agrees to sell to APCI, and APCI
hereby agrees to purchase from Xxxxx, for the applicable Crude Helium
Price set forth in Section 5.7, all Outage Crude and all Capacity
Limitation Crude. All Outage Crude sold hereunder shall constitute
"Sales Volumes" for purposes hereof. All deliveries of Xxxxx Crude
shall be FOB the BLM System or if the BLM System is unavailable, into
Buyer's tube trailer at Seller's Facility. Seller will provide Buyer,
through the BLM System, 1.02 units of Crude Helium for each unit of
Liquid Helium delivered into Buyer's container from Xxxxx Crude.
4.3.1 If Seller at any time shuts down and does not restart Seller's
Facility, Buyer shall be entitled to purchase Crude Helium from Seller
in amounts equivalent to that required to produce 160 MMcf per year of
Liquid Helium (the "Shutdown Crude"). The purchase price for Shutdown
Crude will equal the following:
Up to and including 70 MMcf (Tier I volume) [***]
-------
Greater than 70 MMcf (Tier II volume) [***]
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The Parties' obligations with respect to Capacity Limitation Crude
shall not be affected by this Section 4.3.1, and shall continue as set
forth in Section 4.1
4.4 Security for Facility Services Fee Payment and Crude Helium Sales
To secure Seller's obligations to Buyer hereunder, Seller hereby
grants a continuing security interest to Buyer in all Crude Helium
Seller purchases under contract from any seller of natural gas that
contains Helium, whether or not such Helium is to be processed, and if
so, whether or not by Seller or by another processor. Seller shall
execute all documents, UCC filings and other instruments and shall
make all filings necessary or appropriate to make, perfect and
continue this security interest."
(c) Article 5 is hereby amended by adding the following Sections to the end of
such Article:
"5.7 Crude Helium Price.
5.7.1 The purchase price payable by Buyer for Outage Crude shall equal
the following:
Price Period of Plant Outage for APCI Conducted Work
----------------------------------------------------------------
[***] During Weeks 1-8
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[***] During Weeks 9-12
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[***] From and After Week 13
-----
The metric for defining the applicable tier pricing window shall be
Buyer's repair work completion exclusively on the helium
purifier/liquefier cold box. Outage Crude shall be additive to the
Refined Helium volumes and contribute in the calculation of APCI's
volume obligations for tier pricing adjustments.
5.7.2 The purchase price for Capacity Limitation Crude shall equal
[***], which price shall be escalated [***] each year; provided,
however, that the price for Capacity Limitation Crude shall be subject
to renegotiation effective 1 January 2009 and on each five (5)-year
anniversary thereof, upon Notice by either Party to the other, given
not later than fifteen (15) months prior to the 1 January on which the
new price is to take effect. If the Parties are unable to reach
agreement prior to the 1 October immediately preceding the date on
which the new price is to take effect, after having conducted
good-faith negotiations with respect to the modification of the
then-current price of Capacity Limitation Crude, either Party shall
have the right to terminate the provisions of this Agreement that
address the sale of Capacity Limitation Crude by Seller to Buyer, but
such termination shall not affect any other provision, or terminate
any other obligation, of this Agreement.
5.8 Facility Services Fee Payment. If the Parties have entered into
the Facility Services Agreement and Seller elects to make payment of
the Facility Services Fee by delivery of Helium to Buyer, Buyer agrees
to accept payment thereunder in accordance with the following
schedule:
Facility Services Fee Reimbursement Period
[********] No longer than six (6) months
[********] No longer than twelve (12) months
[********] No longer than eighteen (18) months
[********] Parties to discuss
Buyer shall receive a reimbursement payment or credit equivalent to [***]
purchased by Buyer hereunder until all amounts owed by Seller to Buyer
under the Facility Services Agreement have been paid to Buyer. Seller shall
elect to handle the credit by (i) deducting the amount of the credit from
the invoice presented to Buyer or (ii) making a cash payment within fifteen
(15) days of the end of each month for which the credit is due of the
amount of the credit calculated for such month. Seller may, at any time,
elect to make a lump sum cash payment for the full, unpaid portion of the
Facility Services Fee, at which point Buyer's credit under this Section 5.8
would end; provided however, that if for any reason such lump sum payment
was required to be returned to Seller or another person, Buyer would have
the right to restart the credit to recoup the Facility Services Fee.
Further, in the event that Seller is constrained from processing feedstock
volumes through no fault of its own, which precludes it from meeting its
payment obligations within the prescribed timeframe, Seller and Buyer shall
meet and negotiate in good faith a mutually acceptable payment program to
address any payment shortfalls. During such good faith negotiation, Seller
shall not be subject to claims of breach or default; provided, however the
negotiations shall not extend beyond forty-five (45) days."
(d) Section 5.6 is hereby amended to extend the dates "1 January 2009" and "1
January 2014," and each related Notice and negotiation date previous thereto, by
an amount of time equal to the Reimbursement Period.
2. Confirmation. Except as expressly set forth herein, all of the terms and
conditions of the Original Agreement shall remain unchanged and continue to be
in full force and effect and are hereby ratified and confirmed by Seller and
Buyer.
3. Counterparts. This Amendment may be executed in any number of counterparts,
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
4. Governing Law. This Amendment, both as to interpretation and performance,
shall be governed by the laws of the State of Colorado without giving effect to
its conflict of law provisions.
IN WITNESS WHEREOF, Seller and Buyer have caused this Amendment to be
executed as of the date first set forth above.
Xxxxx Helium Company, LLC Air Products and Chemicals, Inc.
By Xxxxxxxxx Energy Corporation
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxx X Xxxxxx
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Name: Xxxxxx Xxxxxxxx Name: W A Xxxxxx
Title: Chief Operating Officer Title: Vice President - Americas
