EX-10.14 20 d349756dex1014.htm PREFERRED SUPPLIER AGREEMENT CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE...
Exhibit 10.14
CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
This Preferred Supplier Agreement (this “Agreement”) is entered into effective as of the 10 day of February, 2012 (the “Effective Date”), by and between ChemRock Technologies, L.L.C., a Texas limited liability company with a principal business office in Lafayette, Louisiana (“ChemRock”), and Green Field Energy Services, Inc., a Delaware corporation with a principal business office in Lafayette, Louisiana (“Green Field”), who are sometimes also referred to, each individually, as a “party,” and collectively, as the “parties” to this Agreement.
ChemRock is in the business of developing, manufacturing, blending, and selling chemicals used in various applications, including without limitation applications used in the exploration and production of oil and gas, and in industrial markets.
Green Field is in the business of, among other things, providing pumping services, field services, and the sales and supply of chemicals to oil and gas production operators and oil and gas service companies.
ChemRock and Green Field have agreed that ChemRock will be Green Field’s preferred supplier for the stimulation and well fracture chemical products (or categories of products) listed on Schedule A, attached to and made a part of this Agreement (the “Products”), on the terms and conditions set forth below.
Agreement
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
2.4 Conformity of Products. Green Field will have the right to reject any Products that do not conform to the quality specifications and requirements provided by ChemRock, and acknowledged by Green Field, by notifying ChemRock in writing within thirty (30) days after Green Field receives the Products. If Green Field does not notify ChemRock that is has rejected a Product within thirty (30) days after Green Field receives the Product, then the Product will be presumed and deemed to be acceptable to Green Field.
3. Obligations of Green Field
3.1 ChemRock as Preferred Supplier. Green Field agrees to purchase Products (as identified in Schedule A of this Agreement) from ChemRock which may be required by Green Field to service its customers in the Territory. As its preferred supplier, it is Green Field’s intent to utilize ChemRock as its primary supplier for all stimulation chemicals, however, Green Field reserves the right to purchase similar or identical products from other suppliers based on, among other things, pricing, product availability, logistics, and Green Field customer requirements. Green Field will use its commercially reasonable efforts to purchase at least [***] of its annual Product requirement from ChemRock.
3.2 Facilitation of Orders. Green Field will use its good faith, reasonable efforts to provide ChemRock with the volumes, quantities, and specifications for Products to be supplied by ChemRock to Green Field immediately upon Green Field’s receipt of an order from its customer or upon Green Field’s determination of its need for Products for future activities, in order to facilitate ChemRock’s ability to provide the Products at competitive prices and in a timely manner. Further, Green Field will assist ChemRock in connection with each of its orders by arranging for and coordinating: (i) the pickup of the Products by Green Field at the Delivery Points; (ii) review of project specifications with Green Field’s customers to determine the proper product applications; and (iii) delivery of Products to the shipping port provided that all shipping and delivery costs of Products from the Delivery Point to the shipping port will be borne by Green Field.
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
2
4. Pricing, Specifications, Payments, and Related Terms
4.1 Pricing, Updates. ChemRock recognizes Green Field’s need for timely, updated price information from ChemRock in order to properly quote prices to its customers. ChemRock will use commercially reasonable efforts to provide weekly updates for any price changes from its suppliers, and no longer than bi-monthly updates, with Product prices designated on price sheets as f.o.b. ChemRock stock point, or delivered to Green Field Delivery Locations. ChemRock will communicate all prices to Green Field in writing to the designated Green Field representative whom will be identified to ChemRock from time to time by Green Field in writing. Notwithstanding the terms in this 4.1, ChemRock may experience sudden cost increases for Product it supplies to Green Field without adequate prior notification from its supplier. In these cases cost increases will cause ChemRock to increase prices to Green Field. In all such instances of inadequate cost increase notification ChemRock will provide Green Field with documentation of any cost increases as may be provided to ChemRock by its suppliers.
4.1.1 Pricing, Calculation. ChemRock’s prices to Green Field are based upon a “cost-plus” price calculation method rather than a “competition-based” pricing method. In the cost-plus method, ChemRock will disclose its cost of materials to Green Field and calculate prices to Green Field using a cost plus 5% calculation. Prices will be designated on price sheet as f.o.b. stock point, or delivered to Green Field location.
4.2 Billing and Payments. ChemRock will invoice Green Field for all Products purchased by Green Field when ChemRock delivers the Products to the Delivery Points for pickup by Green Field, unless a separate agreement in writing provides for a partial pre-payment or full pre-payment. Green Field will pay ChemRock the amounts due on each invoice in full within thirty (30) business days after the date of each invoice. Any payments not in paid in full within a forty-five (45) day period will bear interest at an annual rate of one and a half (1.5%) percent until paid in full.
5.2 Extensions of Term. Subject to earlier termination as set forth below, following the Initial Term End Date set forth in Section 5.1, the term of this Agreement will be automatically extended for successive terms, consisting of twelve (12) months each (the “Extension Terms”), unless either ChemRock or Green Field gives the other party written notice of an election not to extend the term of this Agreement beyond the Initial Term End Date, or beyond an Extension Term, at least sixty (60) days before the end of the then-current term.
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
3
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
4
representatives, or agents, or (ii) was available to Receiving Party from a source other than Providing Party, on a non-confidential basis, provided that such source is not, and was not, bound by a confidentiality agreement or obligation with Providing Party, or (iii) has been independently developed by Receiving Party without violation of any of Receiving Party’s obligations to Providing Party, provided that in any of the foregoing cases, before using in any manner inconsistent with the terms of this Agreement any information regarding Providing Party that Receiving Party believes is not included in the Protected Information, Receiving Party must first advise Providing Party of the nature of the information and the reasons why Receiving Party believes the information is not subject to the limitations on use set forth in this Agreement.
7.2 By ChemRock. ChemRock will indemnify, defend, and hold Green Field and its members, owners, officers, directors, employees, and agents and their respective successors and assigns harmless from and against all damages actually suffered, incurred, or realized by Green Field caused by, arising out of, or resulting from: (i) any misrepresentation, breach of warranty, or breach or default of any covenant or agreement made or undertaken by ChemRock in this Agreement; and (ii) injuries or damages to any person or entity or the property of any person or entity, but only to the extent that the injuries or damages are proved to have been directly caused by or resulting from a breach by ChemRock of the limited warranties set forth in Section 2.3, above. These obligations will survive the termination of this Agreement.
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
5
Except as otherwise provided in this Agreement, if any dispute arises under this Agreement, it will be settled by binding arbitration in accordance with the provisions of this Section 8. Arbitration proceedings will be conducted in Lafayette, Louisiana before a single arbitrator selected by the parties using the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect, but the matter will not be submitted to AAA for administration. In the event of a conflict between this provision and the Commercial Arbitration Rules of the American Arbitration Association, this provision will govern. Any party may compel arbitration by giving notice to the other parties. If the parties cannot agree on the identity of a single arbitrator within 15 days after delivery of the arbitration notice, each of them will appoint one arbitrator and the party-appointed arbitrators will appoint, within ten days of the appointment of the last to be appointed, an arbitrator, who will serve as the sole arbitrator. If a party fails to timely appoint an arbitrator, that party will be deemed to have waived its right to appoint an arbitrator and the arbitrator will be appointed by the arbitrators appointed by the other parties. If the party-appointed arbitrators fail to appoint the sole arbitrator within the time provided, then the sole arbitrator will be appointed by the chief judge of the 15th Judicial District Court in Lafayette, Louisiana sitting at the time. No arbitrator (including the arbitrators who may be appointed by the parties in the dispute) will be related to or affiliated with, or have represented in a legal capacity, any party. The arbitrator will establish a schedule for the proceedings that will include a discovery period not to exceed 60 days, and will issue a final decision in writing. The arbitrator will have full authority to render any ruling in law or in equity, including without limitation, equitable remedies and specific performance of any obligation under this Agreement. The decision of the arbitrator will be final and binding on the parties and may be enforced in any court having jurisdiction. Each party will advance an equal share of the arbitrator’s fees and the administrative fees of arbitration. But the arbitrator will award to the prevailing party or parties all of the prevailing party or parties’ costs and attorney fees.
The parties acknowledge that a breach of or a default under any of the terms and conditions of this Agreement may, in some cases, result in irreparable harm, and in such case, any remedies that the parties may have at law may be insufficient. Accordingly, the parties agree that in the case of a breach or default that could cause irreparable harm, nothing contained in this Section 8 will deny the aggrieved party of the right to seek injunctive relief in any court having jurisdiction.
All notices, demands, or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient, or when sent to the recipient by fax (receipt confirmed), or by e-mail (receipt confirmed) or one business day after the date when sent to the recipient by reputable, express courier service (charges prepaid), or two business days after the date when mailed to the recipient by certified or registered mail return receipt requested and postage prepaid, and delivered or sent to the addresses, fax numbers, or e-mail addresses set forth below:
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
6
If to ChemRock: | ChemRock Technologies, L.L.C. |
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Director
Fax Number: (000) 000-0000
E-Mail: xxxxxxx@xxxxxxxxxxxx.xxx
If to Green Field: | Green Field Energy Services, L.L.C. |
0000 Xxxxxxxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Vice-President
Fax Number: (000) 000-0000
E-Mail: xxxxxx.xxxxxxx@xxxxxxxx.xxx
A party may change its address for notices by giving the other party written notice of the change in the manner for giving notices set forth above.
Neither this Agreement nor any right, interest, or obligation hereunder may be assigned or assignable by either party in whole or in part without the prior written consent of the other party, except (i) to a party’s parent, subsidiary, or affiliated company, or (ii) to an entity into which the party is merged or that otherwise acquires all or substantially all of the party’s assets. This provision will not be construed to prohibit ChemRock from assigning or transferring its rights to receive payments from Green Field under this Agreement to its bank or other financial institution. ChemRock will give Green Field prompt notice of any such assignment or transfer.
Neither party will be responsible for failure or delay due to causes beyond its control in performing under this Agreement, except for the obligation of a party to make payments hereunder. These causes will include, but not be restricted to, fire, storm, flood, earthquake, explosion, accident, acts of any public enemy, war, rebellion, insurrection, sabotage, terrorism, epidemic, quarantine restrictions, transportation embargoes, or failures or delay in transportation, fuel or energy shortages, power interruptions or failures, acts of God, acts, rules, regulations, orders or directives of any government or political subdivision, agency or instrumentally thereof, or the order of any court, regulatory, or arbitral body of competent jurisdiction. The non-performing party will give prompt written notice to the other party of the reason for its failure or inability to perform and the extent and expected duration of its inability to perform. Upon cessation of such situation, the non-performing party will resume performance hereunder.
12.1 Applicable Law. This Agreement will be governed by Louisiana law, without regard to its choice-of-law provisions.
12.2 Jurisdiction and Venue. Subject to the arbitration provision set forth above, each party agrees to submit to the personal jurisdiction and venue of the state and federal courts in Lafayette, Louisiana, and waives all questions of personal jurisdiction and venue, including, without limitation, the claim or defense that those courts constitute an inconvenient forum.
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
7
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
8
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
9
IN WITNESS WHEREOF, the parties have executed this Agreement on this 10th day of February, 2012.
WITNESSES: | CHEMROCK TECHNOLOGIES, L.L.C. | |||||
/s/ Xxxx X. Xxxxxxxxx | By: | /s/ Xxxxx X. Xxxxxx | ||||
Xxxxx X. Xxxxxx (type or print name) | ||||||
/s/ Xxxx X Xxxxxxxxxx | Its: Director |
IN WITNESS WHEREOF, the parties have executed this Agreement on this day of February, 2012.
WITNESSES: | GREEN FIELD ENERGY SERVICES, INC. | |||||
/s/ Xxxx X. Xxxxxxxxx | By: | /s/ Xxxxxx X. Xxxxxxx | ||||
Xxxxxx X. Xxxxxxx (type or print name) | ||||||
/s/ Xxxx X Xxxxxxxxxx | Its: Vice President |
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
10
Schedule A
List of Products
Product Group | Margin &/or Markup Unit | Comment | ||
Friction Reducers | [***] | |||
Gelling Agents | [***] | |||
Gel Crosslinkers | [***] | |||
Gel Breakers | [***] | |||
Scale Inhibitors | [***] | |||
Surfactants | [***] | |||
Buffers | [***] | |||
Corrosion Inhibitors | [***] | |||
Clay Stabilizers | [***] | |||
Iron Control Agents | [***] | |||
MicroEmulsions | [***] | |||
Gel Stabilizers | [***] | |||
Divert Agents / Fluid Loss Agents | [***] | |||
Foaming Agents | [***] | |||
Defoaming Agents | [***] | |||
Guar Gum Powder | [***] | * Supply lead time 45 days | ||
Guar Gum Slurry | [***] | * Supply lead time 60 days | ||
Paraffin Control | [***] | |||
Acid Inhibitors | [***] | |||
Biocides | [***] | |||
Non-Emulsifiers | [***] | |||
Flow Back Enhancers | [***] |
Note 1: Cost = cost of material to ChemRock less any freight, handling or additional overhead handling charges.
*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
11