SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996 Commission File Number 33-98522
GREAT LAKES CARBON CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3637043
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
110 East 59th Street, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 527-3002
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
10% Senior Secured Notes due 2006
(Title of Class)
Indicate by check mark whether the registrant (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (ii) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of regulation S-K is not contained herein and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of Form 10-K or any amendment
to this Form 10-K. [X]
As of March 21, 1997, the registrant had outstanding 100,000 shares of
its Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
None
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EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Exhibit Page
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10.7A Petroleum Coke Sales Agreement between Copetro S.A.
and YPF S.A.* (Amending Exhibit 10.7 previously filed)
10.9 Coke Supply Agreement between the Company and
Exxon Company, U.S.A.*
- ------------------
*The Company has amended its requst for confidential treatment with respect to
this Exhibit.
<PAGE>
SIGNATURES
Pursuant to the requirements of Rule 12b-15 of the Securities Exchange
Act of 1934, the registrant has duly caused this annual report to be signed on
its behalf by the undersigned thereunto duly authorized.
GREAT LAKES CARBON
CORPORATION
By: /s/JAMES D. MCKENZIE
-------------------------------
James D. McKenzie
President and Chief Executive Officer
(Principal Executive Officer)
<PAGE>
Exhibit 10.7A
-------------
Messrs.
COPETRO S.A.
Attn: Juan Carlos Fronza
Leandro N. Alem 822, 11th Floor,
1001 Capital Federal
- --------------------
We call your attention in reference to the conversations held between Y.P.F.
S.A. (from now on "YPF"), with address at Av. Pte. Roque Saenz Pena 777 -
Capital Federal, and COPETRO S.A. (from now on "COPETRO"), with address at
Leandro N. Alem 822, 11th Floor - Capital Federal, related to the petroleum
coke supply tied to the construction of the 2nd kiln at your plant in
Ensenada.
In such regard, the current Note summarizes the agreement between COPETRO and
YPF in what it concerns to the Addenda, related to the Petroleum Coke Supply
Contract celebrated between COPETRO and Yacimientos Carboniferos Fiscales
Empresa del Estado, on October 24, 1989 (from now on, "the Contract") being
approved by Resolution Nr. 181 of the Secretariat of Energy on December 20,
1989; and handed over to YPF as far as obligations and rights of YCF through
agreement dated March 23, 1992, as stated by Resolution S.H. and M. Nr. 19/92
and Agreement Bill YPF - COPETRO, of March 6 1995, from now on "Agreement
Bill".
ARTICLE ONE: As of the starting up of the "Second Kiln", which is mentioned
in Article 2 of the present addenda, YPF is obliged to sell and deliver to
COPETRO who is obliged to buy, receive and pay to YPF, petroleum coke in the
quantities and conditons specified below:
(i) CONFIDENTIAL INFORMATION OMITTED under the conditions of "take or pay"
on COPETRO's behalf, that must comply with the Technical Specifications
established in "Annex A" of this Addenda. The value of the properties there
shown will be the rolling average value applied on the total quantities of
petroleum coke delivered by YPF to COPETRO during the last thirty (30) days.
(ii) CONFIDENTIAL INFORMATION OMITTED under the following conditions:
(ii.a) If YPF has CONFIDENTIAL INFORMATION OMITTED of petroleum coke,
excluding the product from the first cut of the drums (fines), from its
production at the La Plata Refinery, COPETRO will take the total amount of
said quantity whatever its specifications may be and the price will be
negotiated between both Parties quarterly. If both Parties have not reached
an agreement on the price for the following quarter, they are relieved from
their obligations agreed in this point, for such quarter.
<PAGE>
(ii.b) If YPF excluding the product from the first cut of the drums (fines),
has a smaller amount than CONFIDENTAIL INFORMATION OMITTED not have any
quantity at all of petroleum coke from its La Plata Refinery, COPETRO
will take the total amount of petroleum coke available in said Refinery
whatever its specifications may be, and YPF will complete the balance up to
CONFIDENTIAL INFORMATION OMITTED of petroleum coke from its Lujan de Cuyo
Refinery, whatever its specifications may be. The price of the petroleum
coke delivered to COPETRO will be negotiated quarterly. If both Parties have
not reached an agreement on the price for the following quarter, they are
relieved from their obligations agreed in this point, for such quarter.
(ii.c) In these 2 cases, prior to YPF delivering to COPETRO any of the
petroleum coke from its Lujan de Cuyo Refinery, COPETRO must have taken the
total amount of the petroleum coke available at the La Plata Refinery. YPF
commits to make its best effort for these quantities to meet the technical
specs set in the Annex A of this Addenda.
(iii) "In the event that YPF, after allocating the quantities that - up to a
maximum of CONFIDENTIAL INFORMATION OMITTED in 1999 and up to a maximum of
CONFIDENTIAL INFORMATION OMITTED in the year 2000 and onwards to the end of
the duration of the present Addenda - needs to fulfill its commitments with
3rd parties, should consider disposing of additional production of petroleum
coke, YPF will communicate to COPETRO the possibility of delivering up to a
maximum of CONFIDENTIAL INFORMATION OMITTED additional quantities to the ones
set in the above paragraphs (i) and (ii) on which COPETRO will enjoy an
absolute priority. Such communication will be given by YPF to COPETRO with a
lead time no less than 180 days of the starting of the calendar year in
question. COPETRO must notify YPF, within 15 days of receiving said
communication, if it will take the quantity offered by YPF or a lower quan-
tity. The quantities offered by YPF and accepted by COPETRO in the terms of
this paragraph (iii), will also be taken by COPETRO in the "take or pay"
condition. YPF commits to make its best effort for the additional quantities
dealing in this paragraph (iii) to meet the technical specs set in the Annex
A of this Addenda.
ARTICLE TWO: The above mentioned clause will be in effect subject to the
following conditions:
(i) that COPETRO starts the construction of the Second Calcining Kiln at its
Plant located in Ensenada, Province of Buenos Aires (from now on the "Second
Kiln") within the six months as from the subscription date of this Addenda,
and
(ii) that the Start Up of the Second Kiln takes place within the two years as
from the starting date of its construction, having COPETRO to notify YPF in a
certified manner with no less than one hundred and eighty (180) days prior to
the start up of the Second Kiln.
<PAGE>
ARTICLE THREE: Both parties acknowledge that the quantities committed in
Article ONE of this Addenda are additional to the quantities mentioned in
point 3.01 of the Contract. At the same time, as from the date this Addenda
is in effect, the quantities set in the relevant point of the Contract, must
comply with the Technical Specifications of the Annex A of this Addenda.
ARTICLE FOUR:
4.1 The price of the quantities of petroleum coke mentioned in Article 1 of
this Addenda is set by clauses VIII and IX of the Contract, increased by
CONFIDENTIAL INFORMATION OMITTED United States Dollars with CONFIDENTIAL
INFORMATION OMITTED per MT (US$ CONFIDENTIAL INFORMATION OMITTED /MT).
4.2 As of December 20, 2004 the price of petroleum coke committed in the
Contract, will be set by clauses VIII and IX of the Contract, increased by
CONFIDENTIAL INFORMATION OMITTED United States Dollars per MT (US$
CONFIDENTIAL INFORMATION OMITTED /MT).
ARTICLE FIVE: In the event that COPETRO foresees it will not be able to comply
with the conditions mentioned in Article 2 (i) within the periods there
mentioned, unless Force Majoure reasons, the following Procedure will apply:
5.1 With no less than 60 days prior to the maturity mentioned in Article 2(i)
COPETRO will notify YPF of the impossibility of complying with such time
limit, requesting an extension.
5.2 When notifying YPF of the impossibility of complying with the time limit
mentioned in Article 2(i) and when requesting an extension, COPETRO will be
able to choose whether to:
a) Express reasons for the delay.
b) Not express reasons for the delay.
5.3 If COPETRO choose to express the reasons for the delay, YPF can, within
the period of 5 (five) days of receiving said notification as per Clause 5.1,
accept or turn down the request expressing their reasons for turning it down.
If YPF should accept the reasons, the period established in Article 2(i) will
be automatically extended at its maturity for thirty (30) days, and once that
time is up Clause 5.6 will apply.
<PAGE>
If YPF turns down the request, the period established in Article 2(i) will
remain the same falling due in six (6) months as from the date of subscription
of the present Addenda.
5.4 If COPETRO decides not to give any reasons for the delay as per period
established in Article 2(i) the maturity will be automatically extended for
fifteen (15) days, and then the conditions established in Clause 5.6 will
apply.
5.5 In all cases where COPETRO requests and gets an extension, it will be
granted only once and will not be renewed.
5.6 Once the original time limits are up -- if an extension has not been
requsted or granted, and/or time limit not be automatically extended according
to the conditions in Clause 5.4 -- or having fallen due the extensions granted,
if COPETRO has not started the construction of the Second Kiln, YPF will have
the right, unless Force Majoure reasons, to rescind the present Addenda
without implying any responsibility to either Party.
ARTICLE SIX: In the event that COPETRO does not comply with the conditions
mentioned in Article 2(ii) within the periods there mentioned, unless Force
Majoure reasons, the following Procedure will apply:
6.1 Having the time limit mentioned in Article 2(ii) expired, COPETRO will be
subject to the conditions of "take or pay" during the period of two (2) months
following the date of maturity and up to CONFIDENTIAL INFORMATION OMITTED
maximum.
6.2 Having the time limit established in Clause 6.1 expired, YPF will be able
to rescind the present Addenda and claim compensation for damages and losses
caused by COPETRO's nonfulfillment.
ARTICLE SEVEN: Both Parties agree to extend the duration of the present
Contract (including this Addenda) CONFIDENTIAL INFORMATION OMITTED, therefore
annulling the automatic renewal considered in clause 4.02 of Article 4 of the
Contract. The present extensions will be annulled if COPETRO does not comply
with the conditions mentioned in Article 2 of the present Addenda. If COPETRO
does not comply with this condition, the Contract will remain valid, as orig-
inally agreed in all its terms and the current Addenda will have no validity
whatsoever, except for its Article 6.
ARTICLE EIGHT: So as to improve the reception of petroleum coke mentioned in
clause 3.01 of Article 3 of the Contract, the additional quantities mentioned
in this Addenda and those allocated to YPF's exports in the tems outlined in
clauses 10.01 and 10.2 of Article X of the Contract and in the Agreement Bill,
COPETRO will increase the capacity of the railyard, work which has already
started, and that will be completed prior to the start-up of the Second Kiln.
<PAGE>
ARTICLE NINE:
9.1 Should the petroleum coke purchased by COPETRO in the terms of the
Contract and of this Addenda cannot, for Force Majoure reasons, be destined
for calcining at the Plant in Ensenada, COPETRO will notify YPF in writing
within 96 hours of such event, and give it another destination with previous
agreement and consent in writing by YPF, who cannot deny it without any
justified reason. No response from YPF within 7 working days will be consid-
ered an approval.
9.2 Both Parties agree in case of Force Majoure reasons, that COPETRO is freed
from its obligation of receiving and acquiring new supplies of product, and
YPF is relieved to sell and deliver any quantity of petroleum coke until the
situation and its consequences are overcome.
9.3 The Party that having a Force Majoure situation fails to notify such event
within 96 hours, will lose its right to do so.
9.4 COPETRO must calcine all the petroleum coke received, except in the case
of Force Majoure, according to the procedure outlined previously, or in the
case it requested and obtained a written approval from YPF to export it for
its calcination abroad. For such purpose, request must be made with 90 days
lead time. YPF will respond within 5 working days of receiving such request,
which cannot be denied without any justified reason. No response from YPF
will be considered an approval.
10. All points not modified in this Addenda, remain the same as the terms and
conditions mentioned in the Contract and in the Agreement Bill.
<PAGE>
ANNEX A
TECHNICAL SPECIFICATIONS
Rolling average value
of last 30 days -
including the day of
the delivery being
considered - of the
Maximum Value for total quantities
Total Daily Quan received in said
Received period Norm
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Volatile matter,
% in weight,
dry basis CONFIDENTIAL INFORMATION OMITTED ASTM-D 4421
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Ashes at 950o C
% in weight,
dry basis " " " ASTM-D 4422
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Sulphur
(% in weight) " " " ASTM-D 3177
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Vanadium (ppm,
dry basis) " " " ASTM-D 5056
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Nickel (ppm,
dry basis) " " " ASTM-D 5056
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Iron (ppm, dry
basis) " " " ASTM-D 5056
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Silicon (ppm,
dry basis) " " " ASTM-D 5056
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Sodium (ppm,
dry basis) " " " ASTM-D 2795
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Calcium (ppm,
dry basis " " " ASTM-D 5056
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Hardgrove Index " " " ASTM-D 5003
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<PAGE>
Rolling average value
of last 30 days -
including the day of
the delivery being
considered - of the
Minimum value for total quantities
total daily quantity received in said
received period
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Sizing % retained
in mesh 6,3 mm CONFIDENTIAL INFORMATION OMITTED
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NO SHOT COKE
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* If the average value of Vanadium (V) is higher than CONFIDENTIAL INFORMATION
OMITTED, but lower than CONFIDENTIAL INFORMATION OMITTED, then the sum of
Calcium (Ca) + Sodium (Na) must be lower than CONFIDENTIAL INFORMATION OMITTED
The offer outlined in this Note will be valie for 3 days. If within such
period YPF does not receive an objection to the same and COPETRO takes
petroleum coke in the terms of the original contract, as amended by this Note,
the offer will be considered accepted and this Note will be fully valid.
Yours truly,
EXHIBIT 10.7A
-------------
Buenos Aires, 28 November 1996
Sres. COPETRO S.A.
Atn. Juan Carlos Fronza
Leandro N. Alem 822 - Piso 11
1001 - Capital Federal
Nos dirigimos a Ud. en relacion a las conversaciones mantenidas entre YPF S.A.
(en adelante "YPF"), con domicillio en Av. Pte. Roque Saenz Pena 777 de la
Capital Federal, y Copetro S.A. (en lo sucesivo "COPETRO"), con domicillio en
Leandro N. Alem 822, Piso 11, Capital Federal, con relacion a la provision de
carbon de petroleo con motivo de la construccion del 2 horno de calcinacion en
su planta de Ensenada.
En particular, la presente Nota resume lo accordado entre Copetro e YPF en lo
que se refiere a la Addenda (la "Addenda") referida al Contrato de Compra de
Carbon de Petroleo celebrado entre COPETRO y Yacimientos Carboniferos Fiscales
Empresa del Estado con fecha 24 de octubre de 1989(en adelante "el Contrato"),
que fuera aprobado por Resolucion de la Secretaria de Energia de la Nacion
N 181 del 20 de diciembre de 1989; que fuera cedido a YPF en lo que hace a las
obligaciones y derechos de YCF mediante cnvenio del 23 de marzo de 1992,
homologado por Resolucion S.H. y M. N 19/92, y al Acta-acuerdo YPF - COPETRO,
celebrada el 6 de marzo de 1995, en adelante "el Acta Acuerdo".
ARTICULO PRIMERO: A partir de la puesta en marcha del "Segundo Horno" al que
se hace mencion en el Articulo SEGUNDO de la presente, YPF se obliga a vender
y entregar a COPETRO, y esta a comprar, recibir de y pagar a YPF, carbon de
petroleo en las cantidades y condiciones que seguidamente se detallan:
(i) CONFIDENTIAL INFORMATION OMITTED en condicion "take or pay" por parte de
COPETRO, que deberan cumplir con las Especificaciones Tecnicas de Calidad que
se establecen en el Anexo A de esta Addenda. El valor de las propiedades alli
senaladas sera el valor promedio movil aplicado sobre las cantidades totales
de carbon de petroleo entregadas por YPF a Copetro durante los ultimos treinta
(30) dias.
<PAGE>
(ii) en las siguientes condiciones: CONFIDENTIAL INFORMATION OMITTED
(ii).a) Si YPF dispusiese de CONFIDENTIAL INFORMATION OMITTED de carbon de
petroleo, provenientes exclusivamente de la produccion de su Refineria
La Plata y excluido el producto proveniente de la perforacion de la
camara (finos), COPETRO tomara la totalidad de dicha cantidad en las
condiciones de calidad en las que las mismas se encontrasen. El precio
por la cantidad de carbon de petroleo que se entregase en estas
condiciones sera negociado entre las Partes trimestralmente. Si las
Partes no hubiesen llegado a un acuerdo sobre el precio para el
trimestre entrante, las Partes quedaran liberadas de las obligaciones
pactadas en este Punto por el trimestre para el cual no se hubiese
acordado el precio. Con relacion a los trimestres posteriores, las
Partes negociaran oportunamente el precio que regira para los mismos.
(ii).b) Si YPF, habiendo excluido el producto proveniente de la perforacion de
la camara (finos), dispusiese en la Refineria La Plata de una cantidad
menor a CONFIDENTIAL INFORMATION OMITTED no dispusiese de cantidad
alguna de carbon de petroleo en dicha Refineria, COPETRO tomara la
totalidad del carbon de petroleo disponible en la Refineria La Plata
en las condiciones de calidad en las que el mismo se encontrase,
comprometiendose YPF a entregar el remanente hasta completar la
cantidad de CONFIDENTIAL INFORMATION OMITTED con carbon de petroleo
proveniente de su Refineria Lujan de Cuyo, en las condiciones de
calidad en las que el mismo se encontrase. El precio por las cantidad
de carbon de petroleo que se entregase a COPETRO en estas condiciones
sera negociado entre las Partes trimestralmente. Si las Partes no
hubiesen llegado a un acuredo sobre el precio para el trimestre
entrante, las Partes quedaran liberadas de las obligaciones pactadas
en este Punto por el trimestre para el cual no se hubiese acordado el
precio. Con relacion a los trimstres posteriores, las Partes
negociaran oportunamente el precio que regira para los mismos.
<PAGE>
(ii).c) En los casos en los Puntos 1(ii)a) y 1(ii)b) anteriores, antes de que
YPF entregue a COPETRO cualquier cantidad de carbon de petroleo
proveniente de su Refineria Lujan de Cuyo, esta debera haber tomado
la totalidad de las cantidades de carbon de petroleo disponibles en
Refineria La Plata. YPF se compromete a realizar sus mejores esfuerzos
para que estas cantidades alcancen las Especificaciones Tecnicas de
Calidad indicades en el Anexo A de esta Addenda.
(iii) en el caso que, luego que YPF asignare las cantidades que - hasta un
maximo de CONFIDENTIAL INFORMATION OMITTED en el ano 1999 y hasta un maximo
de CONFIDENTIAL INFORMATION OMITTED en el ano 2000 y posteriores hasta la
finalizacion del plazo de vigencia de la presente Addenda - necesitare para
dar cumplimiento a los compromisos contractuales contraidos con terceros (las
que, predominantemente, seran cumplidas desde Refineria Lujan de Cuyo), YPF
previera disponer de produccion adicional de carbon de petroleo, YPF
comunicara a COPETRO la posibilidad de entregarle - hasta un maximo de
CONFIDENTIAL INFORMATION OMITTED - cantidades adicionales a las establecidas
en los parrafos (i) y (ii) precedentes sobre las cuales COPETRO tendra
prioridad absoluta de compra. Dicha comunicacion debera ser cursada por YPF
a COPETRO con una antelacion no inferior a ciento ochenta (180) dias corridos
al inicio del ano calendario del que se tratare. COPETRO debera notificar a
YPF, dentro de los quince (15) dias corridos de recibida la comunicacion
precedentemente referida, si adquirira la cantidad ofrecida por YPF, o uno
cantidad menor. Las cantidades ofrecidas por YPF y aceptadas por COPETRO en
los terminos de este Parrafo (iii), tambien seran adquiridas por COPETRO en
condicion "take or pay". YPF se compromete a realizar sus mejores esfuerzos
para que las cantidades adicionales de las que trata este Parrafo (iii)
alcancen las Especificaciones Tecnicas de Calidad indicadas en el Anexo A de
esta Addenda.
ARTICULO SEGUNDO: La vigencia de las obligaciones convenidas en el ARTICULO
PRIMERO queda sujeta al cumplimiento de las siguientes condiciones:
(i) que COPETRO comience la construccion del Segundo Horno de Calcinacion
en su Planta situada en la localidad de Ensenada, Provincia de Buenos Aires
(en adelante "Segundo Horno") dentro de los seis (6) messes contados desde la
fecha de suscripcion de la presente Addenda; y
<PAGE>
(ii) que la Puesta en Marcha del Segundo Horno tenga lugar dentro de los dos
anos desde la fecha de inicio de su construccion, debiendo COPETRO notificar
fehacientemente a YPF la precitada Puesta en Marcha del Segundo Horno con una
antelacion no inferior a ciento ochenta (180) dias.
ARTICULO TERCERO: Ambas partes dejan expresa constancia de que las cantidades
comprometidas en el articulo PRIMERO de la presente Addenda seran adicionales
a las previstas en el punto 3.01 del Contrato. A su vez, a partir de la fecha
de entrada en vigencia de esta Addenda, las cantidades establecidas en el
referido punto del Contrato deberan cumplir con las Especificaciones Tecnicas
de Calidad acordadas en el Anexo A de la presente.
ARTICULO CUARTO:
4.1 El precio de las cantidades de carbon de petroleo senaladas en el articulo
1, de esta Addenda sera determinado de conformidad con los arts. VIII y IX
del Contrado, incrementado en razon de CONFIDENTIAL INFORMATION OMITTED
jolares estadounidenses con CONFIDENTIAL INFORMATION OMITTED por tonelada
metrica.
4.2 A partir del CONFIDENTIAL INFORMATION OMITTED el precio del carbon de
petroleo comprometido en el CONTRATO sera determinado de conformidad con los
articulos VIII y IX del Contrato, incrementado en razon de CONFIDENTIAL INFOR-
MATION OMITTED dolares estadounidenses por tonelada metrica CONFIDENTIAL
INFORMATION OMITTED TM).
ARTICULO QUINTO: En caso que COPETRO previere no poder cumplir con la
condicion prevista en el ARTICULO SEGUNDO (i) precedente dentro de los plazos
alli estipulados, por razones ajenas a Caso Fortuito y/o Fuerza Major y que
tempoco se originasen en dolo o culpa de COPETRO, se procedera de acuerdo al
siguiente Procedimiento:
5.1 Con una antelacion no inferior a 60 (sesenta) dias corridos al vencimiento
del plazo previsto en el Articulo SEGUNDO, Punto (i), COPETRO notificara
fehacientemente a YPF la imposibilidad de cumplir con dicho plazo, solicitando
el otorgamiento de una prorroga al mismo;
<PAGE>
5.2 Al notificar a YPF sobre la imposibilidad de cumplir con el plazo del
Articulo SEGUNDO Punto (i) y solicitar su prorroga, COPETRO podra optar por:
a) Expresar la causal de la demora;
b) No expresar la causal del la demora.
5.3 Si COPETRO optase por expresar la causal de la demora, YPF podra, dentro
del plazo de 5 (cinco) dias corridos de recibida la notificacion fehaciente
mencionada en el Punto 5.1, aceptar o rechazar la razon invocada expresando el
fundamento en caso de que la solicitud fuera rechazada;
Si YPF aceptase la razon invocada, el plazo establecido en el Articulo
SEGUNDO (i) sera automaticamente prorrogado a su vencimiento por treinta (30)
dias corridos, vencidos los cuales se aplicara lo establecido en el Punto 5.6
siguiente.
Si YPF rechazase, con expresion de fundamento, la razon invocada, el plazo
establecido en el Articulo SEGUNDO (i) permanecera tal como fuera pactado,
venciendo, en consecuencia, a los seis (6) messes contados desde la fecha de
suscripcion de la presente Addenda.
5.4 Si COPETRO optase por no expresar la causal de la demora, el plazo
establecido en el Articulo SEGUNDO (i) se prorrogara automaticamente a su
vencimiento por quince (15) dias corridos, vencidos los cuales se aplicara lo
establecido en el Punto 5.6 siguiente.
5.5 En cualquiera de los casos en los que COPETRO solicitara y le fuera
concedida una prorroga, la misma sera concedida por unica vez y sera
improrrogable.
5.6 Vencidos los plazos originales - si no se hubiere solicitado y concedido
su prorroga y/o no se hubiese producido su prorroga automatica de acuerdo con
el Punto 5.4 - o vencidos los plazos de las prorrogas respectivas, so COPETRO
no hubiere comenzado con la construccion del Segundo Horno, YPF estara
facultado, a su sola opcion y de no mediar razones de Fuerza Major, a
rescindir la presente Addenda sin que ello acarree responsabilidad alguna para
ninguna de las PARTES.
<PAGE>
ARTICULO SEXTO: En caso que COPETRO no cumpliere con la condicion prevista en
el Articluo SEGUNDO, Punto 2 (ii), precedente dentro del plazo alli estipulado,
por cualquier razon ajena a Caso Fortuito y/o Fuerza Mayor, se procedera de
acuerdo al siguiente Procedimiento:
6.1 Vencido el plazo previsto en el Articulo Segundo Punto 2 (ii), COPETRO
estara sujeto a la condicion take or pay durante el plazo de dos (2) meses
contados a partir de dicho vencimiento y hasta un maximo de CONFIDENTIAL
INFORMATION OMITTED
6.2 Vencido el plazo establecido en el Punto 6.1, YPF podra dar por rescindida
la presente Addenda y reclamar la indemnizacion de todos los danos y perjuicios
ocasionados por el incumplimiento de COPETRO.
ARTICULO SEPTIMO: Las partes acuerdan ampliar el plazo de duracion del
Contrato (comprensivo de la presente Addenda), hasta el CONFIDENTIAL INFOR-
MATION OMITTED Dejase sin efecto la renovacion automatica prevista en la
clausula 4.02 del Articulo IV del Contrato. La presente ampliacion del plazo
quedara sin efecto si COPETRO no cumpliese con la condicion prevista en el
Articulo SEGUNDO de la presente. Si COPETRO no cumpliese con esta condicion
y sin perjuicio de las estipulaciones establecidas en el Articulo SEXTO de la
presente, seguira vigente el CONTRATO tal cual el mismo se pactara
originalmente, quedando sin efecto alguno la presente Addenda.
ARTICULO OCTAVO: A fin de mejorar las condiciones de recepcion de la cantidad
de carbon de petroleo establecida en el punto 3.01 del Articulo III del
Contrato, de las cantidades adicionales previstas en la presente ADDENDA, y de
aquellas destinadas a exportacion por YPF en los terminos establecidos en los
puntos 10.01 y 10.02 del Articulo X del Contrato y en el Acta-Acuerdo, COPETRO
ampliara la capacidad de la playa de vias, trabajos que se encuentran en
ejecucion, y que deberan finalizarse antes de la Puesta en Marcha del
Segundo Horno.
ARTICULO NOVENO:
9.1 En caso que el carbon de petroleo adquirido por COPETRO bajo las
condiciones del Contrato y de esta Addenda no pueda, por razones fundadas en
Caso Fortuito y/o Fuerza Mayor - de conformidad con la definicion establecida
en el articulo 514 y concordantes del Codigo Civil - notificadas fehaaciente-
mente como tales a YPF dentro de las noventa y seis (96) horas de ocurrido el
hecho configurative de Caso Fortuito o Fuerza Mayor, ser destinado a su
<PAGE>
calcinacion en la Planta de Ensenada, COPETRO podra brindarle un destino a la
calcinacion, previo acuerdo expreso y por escrito de YPF, el que no sera
denegado irrazonablemente, y el que debera ser emitido dentro de los 7 (siete)
dias habiles contados a partir de la notificacion fehaciente antes mencionada.
Si YPF no se expidiese en el plazo antes previsto, la autorizacion se tendra
por otorgada.
9.2 Las PARTES dejan establecido que la sola notificacion de qualquiera de
ellas de haberse configurado una situacion de Caso Fortuito o Fuerza Mayor que
impida a dicha Parte el desarrollar sus tareas, importara la inmediata
suspension de la obligacion de COPETRO de recibir y adquirir nuevos
suministros de dicho producto, y la obligacion de PYF de vender y entregar
cualquier cantidad de carbon de petroleo, hasta tanto la situacion alegada y
sus consecuencias puedan ser superadas.
9.3 Si la PARTE afectada por el Caso Fortuito y/o Fuerza Major no notificase
el hecho configurative dentro de las noventa y seis (96) horas de ocurrido el
hecho configurative de Caso Fortuito y/o Fuerza Mayor, caducara su derecho a
invocar dicho hecho configurativo.
9.4 COPETRO debera calciner todo el carbon de petroleo recibido, salvo que
invocase Caso Fortuito of Fuerza Mayor, de acuerdo al procedimiento aqui
establecido; o que solicitase a y obtuviese de YPF uno autorizacion previa,
expresa y por escrito a traves de la cual YPF le facultase a exportar dicho
carbon de petroleo exclusivamente para su calcinacion en el exterior. A tal
efecto COPETRO debera solicitar la autorizacion de YPF con una antelacion no
inferior a noventa (90) dias de la fecha del embarque. YPF se expedira dentro
de los cinco (5) dias habiles de recibida la solicitud, no pudiendo denegar la
autorizacion en forma irrazonable. Si YPF no se expidiera dentro del plaza
previsto, la autorizacion se entendera comp concedida.
ARTICULO DECIMO: En todo aquello que no haya sido modificado por la presente
Addenda, conservaran plena vigencia las condiciones establecidas en el
Contrato y en el Acta-Acuerdo.
<PAGE>
ANEXO A
ESPECIFICACIONES TECNICAS
Valor movil
promedio de
los ultimos
30 dias -
incluyendo
aquel en el que
se efectua la
Valor entrega de la
maximo que se tratase -
para la de las
cantidad cantides
diaria diarias totales
total recibidas en Norma de
recibida dicho lapso medicion
- --------------------------------------------------------------------------
Materias CONFIDENTIAL INFORMATION OMITTED ASTM-D 4421
volatiles %
en peso, en
base seca
- --------------------------------------------------------------------------
Cenizas a " " " ASTM-D 4422
950oC % en
peso, base
seca
- --------------------------------------------------------------------------
Azufre (% en " " " ASTM-D 3177
peso
- --------------------------------------------------------------------------
Vanadio " " " ASTM-D 5056
(ppm base
seca)
- --------------------------------------------------------------------------
Niquel (ppm " " " ASTM-D 5056
base seca)
- --------------------------------------------------------------------------
Hierro (ppm " " " ASTM-D 5056
base seca)
- --------------------------------------------------------------------------
Silicio (ppm " " " ASTM-D 5056
base seca)
- --------------------------------------------------------------------------
Sodio (ppm " " " ASTM-D 2795
base seca)
- --------------------------------------------------------------------------
Calcio (ppm " " " ASTM-D 5056
base seca)
- --------------------------------------------------------------------------
Indice de " " " ASTM-D 5003
Hardgrove
- --------------------------------------------------------------------------
Valor movil
minimo
promedio de
los ultimos
30 dias -
incluyendo
aquel en el que
se efectua la
entrega de la
Valor que se tratase -
minimo de las
para la cantidades
diaria diarias totales
total recibidas en
recibida dicho lapso
- --------------------------------------------------------------------------
Granulometria, CONFIDENTIAL INFORMATION OMITTED
% retenido en
malla de 6.3 mm
- --------------------------------------------------------------------------
SHOT SUELTO: NO CONTIENE
- --------------------------------------------------------------------------
* Si el valor promedio correspondiente a Vanadio (V) superara las
CONFIDENTIAL INFORMATION OMITTED, pero no superase las CONFIDENTIAL INFOR-
MATION OMITTED entonces la suma promedio de calcio (Ca) + sodio (Na) debera
ser inferior a CONFIDENTIAL INFORMATION OMITTED.
<PAGE>
La oferta contenida en esta Nota tendra una vigencia de 3 (tres) dias. Si
dentro de dicho plazo YPF no recibiese un rechazo expreso de la misma y
COPETRO recibiese Carbon de Petroleo en los terminos del contrato original,
segun el mismo fue modificado por la presente, la oferta se tendra por
aceptada, y la presente plenamente vigente.
Sin otro particular, lo saludamos atentamente.
/s/Enrique Pourteau
- -----------------------------------
Vicepresidente de Industrializacion
y Comercializacion
EXHIBIT 10.9
------------
COKE SUPPLY AGREEMENT
---------------------
THIS CONTRACT made and entered into as of January 1, 1997, between EXXON
COMPANY, U.S.A. (a division of Exxon Corporation), a New Jersey corporation,
hereinafter called "Seller," and Great Lakes Carbon Corporation, hereinafter
called "Buyer";
ARTICLE I - TERM
----------------
This contract shall be effective for the period January 1, 1997, through
December 31, 1999 provided, however, this contract shall be subject to earlier
termination in accordance with provisions therefore contained in Articles V,
VIII, XIII, and XIV, respectively.
ARTICLE II - DEFINITIONS
------------------------
1. "Coke" shall mean green delayed sponge coke of the quality hereinafter
specified produced at Seller's Baton Rouge Refinery.
2. Metric Ton = 2204.62234 pounds.
3. Wet short tons (WST) shall mean 2000 pounds of Coke and contained moisture.
4. Dry short tons (DST) shall mean 2000 pounds of dry Coke, with the dry
weight of the Coke determined as provided hereinafter.
5. "Terminal" shall mean Seller's Refinery coke terminal that is located west
of Seller's Baton Rouge refinery and which shall receive, crush, sample
and load Coke onto barges on the Mississippi River.
6. "Contract Year" shall mean a calendar year beginning January 1 and ending
December 31.
<PAGE>
ARTICLE III - QUANTITIES
------------------------
A.
Subject to the allocation provisions in Article X hereof and to the provisions
of Article III.B below, Seller agrees to sell and Buyer agrees to purchase
approximately CONFIDENTIAL INFORMATION OMITTED per year (to be supplied by
approximately CONFIDENTIAL INFORMATION OMITTED per month) of Seller's Baton
Rouge Coke production having the qualities as set forth in Article IV.
At least three working days prior to the beginning of each month of delivery,
Seller will provide a best estimate forecast of Coke quantity and quality
production for each coker at the Baton Rouge Refinery.
B.
The parties acknowledge that periodically Seller's Baton Rouge Refinery oper-
ations may yield Coke having properties different than those set forth in
Article IV. In such event, notwithstanding any provision herein to the
contrary, Buyer has no obligation to purchase the affected Coke production;
provided, however, Seller may offer and Buyer may elect to purchase such
affected Coke production in accordance with the terms of this Agreement,
including, but not limited to Article V Price. If Seller offers such affected
Coke production and Buyer elects to purchase, such purchase shall not be
included in the allocation shown in Article III.A.
C.
Determination of the quantity of Coke shipped to Buyer by Seller for billing
purposes shall be made in accordance with the procedures as outlined in
Article VII.
<PAGE>
ARTICLE IV - QUALITY
--------------------
The parties acknowledge that the quality of Coke produced by Seller at its
Baton Rouge Refinery may vary from time to time depending on Seller's refinery
operations. Buyer and Seller agree that no provision in this Agreement shall
be construed to require Seller to produce and sell Coke having specified
qualities or to operate its refinery in a manner to produce Coke having any
specified qualities; however, Seller shall endeavor to use, in its sole
discretion, best efforts to make operational decisions to maximize the quality
of the Coke produced at its Baton Rouge Refinery, without making any implied
or expressed warranty as to the qualities of Coke produced. Seller expects to
produce and deliver Coke that does not exceed the following maximum qualities:
Max. on Dry Coke
--------------------------------------
Sulfur CONFIDENTIAL Wt. %
Volatiles " Wt. %
Ash " Wt. %
Vanadium " ppm
Nickel " ppm
Vanadium & Nickel " ppm
Silicon " ppm
Iron " ppm
Calcium " ppm
Sodium " ppm
Shot "
HGI* "
--------------------------------------
* Typical range, not analyzed by Seller
Analysis of Coke quality produced shall be performed in accordance with
Appendix A.
<PAGE>
ARTICLE V - PRICE
-----------------
All Coke shall be purchased F.O.B. barge at Seller's Baton Rouge Terminal.
Buyer shall pay a purchase price for Coke that adjusts based on certain qual-
ities of Coke actually delivered. The purchase price shall be determined as
follows:
1. The base purchase price for Coke containing CONFIDENTIAL INFORMAITON
OMITTED and CONFIDENTIAL INFORMATION OMITTED shall be the Quarterly Base
Purchase Price (QBPP) per dry short ton as determined below, calculated
for the applicable quarter in which the Coke is delivered:
A. 1Q97 QBPP = CONFIDENTIAL INFORMATION OMITTED Subsequent QBPPs shall be
determined as follows:
QBPP = CONFIDENTIAL INFORMATION OMITTED
EXAMPLE: CONFIDENTIAL INFORMATION OMITTED
*Note: CONFIDENTIAL INFORMATION OMITTED
B. Pace E-1 used to calculate the above QBPP as set forth in Section 1.A.
above for any delivery quarter shall be compared to Pace F for the same
delivery quarter. If the difference between the applicable Pace E-1
and Pace F for a delivery quarter varies by more than plus or minus
CONFIDENTIAL INFORMATION OMITTED of the Pace E-1 used to calculate the
QBPP for that delivery quarter, the QBPP for that quarter shall be re-
calculated, substituting Pace F for Pace E-1 in the QBPP formula. The
difference between the original QBPP and the revised QBPP for that
quarter as set forth in this Section 1.B. shall be added to or sub-
tracted from the QBPP for the next delivery quarter.
C. Definitions for Article V price calculations:
Pace E = Representative Green Coke Blend for Gulf Coast Calciners as
reported in Table E-2 of the Pace Petroleum Coke Quarterly. EX: 4Q96
will be reported in the 4Q96 report which is expected to be published
by Pace in the 1Q97.
<PAGE>
Pace E-1 = The most recently published monthly average estimate of
Gulf Coast Anode Grade Calcined Coke Export Prices as reported in
Table 1 of the monthly update of the Pace Petroleum Coke Quarterly.
EX: February 1997 will be reported in the February 1997 monthly update
which is expected to be published by Pace in March 1997.
Pace F = Actual weighted average of calcined petroleum coke exports
for Customs Districts New Orleans and Port Arthur as reported in Table
F of the Pace Petroleum Coke Quarterly. Actual Delivery Quarter infor-
mation will be reported by Pace in the quarter following delivery.
EX: 4Q96 data will be reported in the 1Q97 report which is expected to
be published by Pace in the 2Q97.
D. Notwithstanding any provision herein to the contrary, Seller shall
have the right to withhold up to CONFIDENTIAL INFORMATION OMITTED per
month of shot free Coke for the purpose of making spot sales.
2. Quality Adjustments:
With respect to the actual delivery prices, what the Buyer pays will vary
according to the following:
CONFIDENTIAL - To reflect the quality of actual Coke delivered, for coke
with CONFIDENTIAL content greater than CONFIDENTIAL the purchase price
shall be decreased by CONFIDENTIAL of the applicable QBPP for each 0.1 wt%
increase in the CONFIDENTIAL content above CONFIDENTIAL and increased by
CONFIDENTIAL of the applicable QBPP for each 0.1 wt. % decrease in the
CONFIDENTIAL content below CONFIDENTIAL (Ex CONFIDENTIAL in 1Q97 equals
an increase of CONFIDENTIAL.
For Coke with CONFIDENTIAL content less than CONFIDENTIAL the purchase
price shall be increased by an additional CONFIDENTIAL for each 0.1 wt. %
decrease in CONFIDENTIAL content below CONFIDENTIAL. The quality adjust-
ments for less than CONFIDENTIAL are cululative. All values for
CONFIDENTIAL percent are expressed to the nearest 0.1 wt. % in accordance
with ASTM procedures E-29-90 shown in 2.E. below, and the price adjustment
shall be rounded to the nearest $0.01/DST. (Ex: CONFIDENTIAL 1Q97 equals
an increase of CONFIDENTIAL.
B. CONFIDENTIAL - To reflect the quality of actual Coke delivered, the
purchase price shall be decreased by CONFIDENTIAL of the applicable QBPP
for each 0.1 wt. % increase in the content above CONFIDENTIAL and increased
by CONFIDENTIAL of the applicable QBPP for each 0.1 wt. % decrease in the
CONFIDENTIAL content below CONFIDENTIAL. All values for CONFIDENTIAL
percent are expressed to the nearest 0.1 wt. % in accordance with ASTM
procedures E-29-90 shown in 2.E. below, and the price adjustment shall be
rounded to the nearest $0.01/DST. (Ex: CONFIDENTIAL in 1Q97 equals an
increase of CONFIDENTIAL.
<PAGE>
C. CONFIDENTIAL - To reflect the quality of actual Coke delivered, the
purchase price shall be decreased by CONFIDENTIAL of the applicable QBPP
for each 10 ppm increase in the CONFIDENTIAL content above CONFIDENTIAL
and increased by CONFIDENTIAL of the applicable QBPP for each 10 ppm
decrease in the CONFIDENTIAL content below CONFIDENTIAL. All values for
CONFIDENTIAL content are expressed to the nearest 10 ppm in accordance
with ASTM procedures E-29-90 shown in 2.E. below, and the price adjustment
shall be rounded to the nearest $0.01/DST. (Ex: CONFIDENTIAL 1Q97 equals
a decrease of CONFIDENTIAL.
D. The final price will be the sum of the QBPP and the three quality adjust-
ments shown above.
E. ASTM Test Result Rounding Procedures (E-29-90)
1. If the last digit is >5, round up.
2. If the last digit is <5, round down.
3. If the last digit is 5:
A. If the digit before the 5 is even, round down.
B. If the digit before the 5 is odd, round up.
3. Other:
If, during the term of this Agreement (a) Pace should fail to publish any
referenced price for purposes of the preceding formulas in Article V-1.
through V-2. or (b) the pricing formula as described in ARticle V-1. and
V-2. should result in a price for Coke that either party deems to be
sufficiently misaligned with market conditions as to warrant a price
change to reflect a fair market price, either party may request a change
in the pricing basis for this Agreement. The party requesting the change
shall notify the other party in writing, and Buyer and Seller shall meet
or teleconference within sixty days following the giving of the Change
Notification to discuss the pricing basis. If, within ninety (90) days
following the receipt of the Change Notification, the parties do not reach
a mutual agreement on what constitutes a fair and reasonable pricing basis,
this Agreement will terminate on the ninety-first (91) day following the
receipt of the Change Notification. During the period from the receipt of
the Change Notification until the later of the conclusion of the pricing
basis re-negotiation or Agreement termination, (a) Buyer will continue to
pay for Coke in accordance with Article V or (b) if Pace has ceased to
publish any referenced price for the applicable formula price determina-
tion, Buyer will pay provisionally in accordance with Article V until a
revised pricing formula is negotiated and such revised pricing formula
shall be retroactive to the delivery quarter for which Pace ceased pub-
lishing Pace E, Pace E-1 and/or Pace F data as described in Article V.
<PAGE>
Seller shall invoice Buyer (by AUTOFAX) for each Coke delivery to the
following billing address:
Great Lakes Carbon Corporation
Attn: Accounts Payable
16945 Northchase Drive, Suite 2200
Houston, TX 77060
Fax: (281) 775-4744
Buyer shall pay the invoiced amounT via Electronic Funds Transfer (EFT).
Payment shall be due on the tenth day after date of the invoice.
ARTICLE VI - DELIVERY
---------------------
1. Coke delivered hereunder to Buyer shall be loaded by Seller into barges
provided by Seller.
2. Title and risk of loss to the Coke delivered under this Agreement shall
pass from Seller to Buyer when the barge is released to Buyer.
3. From the time of title transfer, Buyer shall be responsible for all barge
transportation charges, as applicable, including demurrage, in route to
Buyer's destination.
4. Seller shall be responsible for cleanliness inspection and approval of
barges prior to loading.
ARTICLE VII - MEASUREMENTS
--------------------------
BARGES
A. The quantity of Coke loaded aboard barges shall be determined by a quali-
fied independent inspector, selected by Seller. Cost of said inspection
will be shared equally between Seller and Buyer. The moisture content, as
determined in accordance with Appendix A, will be deducted from the wet
Coke weight to determine dry weight of Coke delivered to the barge.
B. Seller shall cause the Terminal operator to take a composite Coke sample
from each barge. The sample will be split by Seller's laboratory and a
portion of at least one gallon will be made available to Buyer. Seller
will analyze its sample for moisture, sulfur, volaties, ash and metals
in accordance with the procedures in Appendix A. In the event Seller
elects to have an independent laboratory analyze Seller's sample, the
independent laboratory's analysis charges shall be split 50/50 between
Buyer and Seller. Invoicing will be based on the analysis of Seller's
sample. Both parties shall retain composite samples for a period of three
months.
<PAGE>
C. Seller will arrange for the duplicate laboratory composite sample to be
sent to Buyer from Seller's courier's office (currently Metro Delivery).
Buyer will be responsible for selecting a courier for delivery from Baton
Rouge to Buyer's Plant and payment of courier's fee.
D. In case of any quality dispute, if the difference between Buyer's and
Seller's analysis exceeds the variance shown below, an analysis shall be
performed by a qualified independent inspector, agreed to by both parties,
using the same ASTM procedures as outlined in Appendix A, with costs to be
shared 50/50. The sample to be used shall be Seller's retained sample. A
quality discrepancy shall be deemed to exist if the sample analysis between
Buyer and Seller differs by more than any of the qualities listed below:
MAX. LAB
QUALITY UNITS VARIANCE
------- ----- --------
Sulfur wt.% 0.30
Volatiles wt.% 0.80
Ash wt.% 0.08
Vanadium ppm 40
Nickel ppm 50
Silicon ppm 60
Iron ppm 60
Calcium ppm 40
Sodium ppm 60
In the event of a quality dispute, Buyer's acceptance of the Coke and/or
Coke pricing for qualities of Coke delivered will then be based on the
average of the two analytical results that are the closest together; i.e.,
the average of the two closest results reported by Seller, Buyer and inde-
pendent lab. Both parties agree to review the allowable Max Lab Variance
at six month intervals.
ARTICLE VIII - TAXES
--------------------
A. It is agreed that any duty, tax, gross receipts tax, sales or use tax,
environmental fees or otherwise (but exclusive of taxes based on net
income) which Seller may be required to collect or pay under any munici-
pal, state, federal or other laws now in effect with respect to the manu-
facture, sale, inspection, transportation, storage, delivery or use of the
Coke covered by this Agreement shall be added to the price to be paid by
the Buyer. With respect to any sales or use taxes due and owing, Seller
agrees to delete such taxes provided that Buyer supplies Seller with a
properly completed resale or exemption certificate.
<PAGE>
B. With respect to any newly enacted taxes or fees, as enumerated above, that
become effective after the date of this Agreement:
(1) Seller shall give Buyer written notice of any such addition or
increase and following receipt of such notice, Buyer may refuse by written
reply to Seller within thirty days to pay such increse or addition. Seller
shall then, by notice in writing given to Buyer within thirty days after
receipt of Buyer's reply, advise Buyer whether or not Seller elects to pay
the same without reimbursement from Buyer, and if Seller then elects not to
pay aforesaid increases and additions without reimbursement from Buyer,
Seller may terminate this Agreement immediately upon giving written notice
to Buyer as to Coke remaining undelivered.
(2) Buyer agrees to reimburse Seller for any such taxes and Seller agrees
to assign any right to refund or protest to Buyer should Buyer wish to con-
test such newly enacted taxes or fees; or,
(3) Seller may, at Buyer's written request, pay such taxes or fes under
protest and to take all actions necessary to contest the validity,
applicability or any other like challenge with respect to the amount or
application of any such taxes or fees and may institute actions necessary
to recover said payments solely at Buyer's expense and through counsel
designated by Buyer.
ARTICLE IX - INSPECTION CLAIMS AND LIABILITY
--------------------------------------------
A. Any claim for defect or variance in quality or shortage of quantity shall
be made, and Seller shall be notified and given an opportunity to inspect,
within ten days after (1) product(s) reach their destination, in the event
Seller's analysis survey and inspection results were provided to Buyer
before product(s) reached their destination or (2) Buyer receives Seller's
analysis survey and inspection results, in the event Buyer receives same
after delivery of products to their destination. Notwithstanding the
preceeding sentence, in the event Buyer fails to unload and inspect Coke
within ten days after the product reached its destination, Buyer may reject
the product if it contains shot; provided, however, in the event Buyer
rejects Coke, containing shot outside of the time period specified in the
previous sentence, Buyer shall pay and be responsible for all barge
demurrage and transportation costs accruing between the date the product
reached its destination and the date of product rejection. Subject to the
previous sentence, failure of Buyer to observe this provision or any action
by Buyer which impedes identification of an alleged defect shall operate as
a waiver of Buyer's rights to make any such claim; provided, however, that
such failure or action shall not operate as a waiver of Buyer's right to
make claims for bodily injury or property damage. In the event of a claim
for defect or variance in quality, Seller shall provide the results of an
independent lab analysis, in accordance with ARticle VII.D., within ten
days of notification of the quality claim by Buyer, if Seller fails to
provide Buyer with the independent lab analysis within ten days of the
claim notification, Buyer's analysis shall be determinative of quality for
purposes of acceptance of the Coke and pricing for the quality of Coke
delivered.
<PAGE>
BUYER ASSUMES ALL RISKS OF LOSSES THAT RESULT FROM THE USE OF THE COKE
PURCHASED HEREUNDER WHETHER USED SINGLY OR IN COMBINATION WITH OTHER SUB-
STANCES OR IN ANY PROCESS PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL
RELIEVE SELLER OF ANY RESPONSIBILITY FOR BODILY INJURY (INCLUDING DEATH)
AND PROPERTY DAMAGE RESULTING FROM BREACH OF THE WARRANTIES CONTAINED
HEREIN OR FROM SELLER'S NEGLIGENCE. SELLER SHALL NOT BE LIABLE, WHETHER
AS TO GOODS DELIVERED OR FOR NON-DELIVERY OF GOODS, FOR ANY EXEMPLARY OR
SPECIAL DAMAGES, OR FOR CONSEQUENTIAL DAMAGES EXCEPT FOR THOSE DAMAGES FOR
BODILY INJURY (INCLUDING DEATH) OR PROPERTY DAMAGE WHICH PROXIMATELY RESULT
FROM BREACH OF THE WARRANTIES CONTAINED HEREIN OR FROM SELLER'S SOLE
NEGLIGENCE OR FROM SELLER'S RESPECTIVE SHARE OF JOINT NEGLIGENCE.
B. EACH PARTY TO THIS CONTRACT SHALL INDEMNIFY, DEFEND AND HOLD THE OTHER
HARMLESS FROM CLAIMS, DEMANDS AND CAUSES OF ACTION ASSERTED AGAINST THE
OTHER BY ANY OTHER PERSON (INCLUDING WITHOUT LIMITATION EMPLOYEES OF
EITHER PARTY) FOR PERSONAL INJURY OR DEATH, OR FOR LOSS OF OR DAMAGE TO
PROPERTY, RESULTING FROM THE WILLFUL OR NEGLIGENT ACTS OR OMISSIONS OF THE
INDEMNIFYING PARTY. WHERE PERSONAL INJURY, DEATH, OR LOSS OF OR DAMAGE TO
PROPERTY IS THE RESULT OF THE JOINT NEGLIGENCE OR MSICONDUCT OF THE PARTIES
HERETO, THE PARTIES EXPRESSLY AGREE TO INDEMNIFY EACH OTHER IN PROPORTION
TO THEIR RESPECTIVE SHARE OF SUCH JOINT NEGLIGENCE OR MISCONDUCT.
ARTICLE X - FAILURE TO PERFORM
------------------------------
A. Any delays in or failure to perform by either Seller or Buyer shall not
constitute default hereunder or give rise to any claims for damages if
and to the extent that such delay or failure is caused by occurrences
beyond the reasonable control of the party affected (and in the case of
Seller, occurrences affecting a supplier or suppliers of Seller), includ-
ing but not limited to, acts of God or the public enemy; expropriation or
confiscation of facilities; compliance with any governmental allocation,
functional divestiture law or rationing program or any other regulation,
rule, order or request of any governmental authority (whether valid or
invalid and whether similar or disimilar to those above named), acts of
war, rebellin or sabotage or damage resulting therefrom; embargoes or
other import or export restructions; reduction of transportation capacity;
reduction in refining capacity; breakdown or temporary disruption of
Seller's Baton Rouge Refinery operations; accidental breakdown of trans-
<PAGE>
portation facilities; inability to obtain necessary industrial supplies,
energy or equipment; fires, floods, explosions, accidents or breakdowns;
riots or strikes or other concerted acts of workers, whether direct or
indirect; or any other causes whether or not of the same class or kind as
those specifically above named which are not within the reasonable control
of the party affected and which, by the exercise of reasonable diligence,
said party is unable to prevent or provide against. In the event of such
delay or failure, the party affected will give notice and full particulars
in writing to the other party as soon as possible. In the event of such
delay or failure, Seller shall not be obligated to purchase or obtain other
Coke of the kind deliverable hereunder, or crude petroleum from which such
Coke is derived. Neither party hereto shall be required to settle strikes,
differences with workers or government claims by acceding to any demands
when in the discretion of the party whose performance is interfered with,
it would be inadvisable to accede to such demands.
B. If, for any reason whatsoever, whether within the control of Seller or not,
Seller's supplies of Coke of the kind deliverable hereunder out of the
Baton Rouge refinery are inadequate to meet its contract obligations to
customers for such Coke, or if Seller determines, in its sole discretion,
in consideration of raw material availability or refining conditions that
it is appropriate to impose a plan of allocation, the obligation of Seller
under this Agreement shall be reduced as Seller may determine as a part of
a plan for allocation to its customers consistently applied on a pro rata
basis. Seller, in its sole discretion, shall determine the Coke quality,
quantity, and loading schedule available to its customers and, to the
extent possible, will make such determinations after giving consideration
to all customers' needs and preferences. In any allocation of Coke
production, Seller's allocation plan shall include the following:
1. Seller's "customers" for Coke of the kind deliverable hereunder shall
mean (i) purchasers pursuant to current contracts and (ii) new purchasers
to whom Seller determines to commence selling at its sole option. The new
customers to whom volumes may be offered would be limited to those to whom
a denial could be construed as condoning questionable trade practices such
as restraint of trade.
2. In the event Seller imposes an allocation as a result of or directly
arising out of compliance with any governmental allocation, functional
divestiture law or rationing program or any other rule or request of any
governmental authority, "customers" defined in Article X.B.1. above shall
also include purchasers to who Seller commences selling as a result of such
governmental action. Seller shall have the right to give preference in any
allocation as described in the preceding sentence to those customers whose
needs (including resellers who sell for similar needs) are related to (i)
protection of life or health, (ii) production and transportation of food
and energy, (iii) mass transportation customers, and (iv) national defense.
3. Seller's allocation plans shall be applied after making provisions for
its own requirements for Coke of the kind deliverable hereunder for
exploring for, producing, manufacturing and transporting all forms of
energy, petroleum, petrochemical, mining, and energy products. In the
context of this subsection, "Seller" shall include Exxon Corporation and
all of its divisions, subsidiaries, and affiliates whether wholly or
partially controlled and whether domestic or foreign.
<PAGE>
C. Seller shall be under no obligation to make deliveries hereunder at any
time when in its sole judgment it has reason to believe that the making of
such delivery would be likely to cause strikes to be called against it or
cause its properties to be picketed.
D. Neither Buyer or Seller shall be required to make up performance
omitted on account of any of the causes set forth in Article X.
ARTICLE XI - MODIFICATION, WAIVER, ASSIGNMENT & TERMINATION
-----------------------------------------------------------
This Agreement may be modified or rescinded only by a writing signed by both
parties or their duly authorized agents.
No waiver by either party of any breach of any of the covenants or conditions
herein contained to be performed by the other party shall be construed as a
waiver of any succeeding breach of the same or any other covenant or condition.
This Agreement is not assignable or tansferable by either party without the
prior written consent of the other, which consent shall not be unreasonably
withheld.
This Agreement terminates and supercedes any prior agreement between the
parties hereto, covering the purchase and sale of Coke ecept for rights and
obligations with respect to Coke delivered under any such prior agreement.
ARTICLE XII - NOTICES
---------------------
Any notice required to be given under Articles X, XIII and XVII of this
Agreement and any notice regarding any actual or alleged breach of this
Agreement shall be sent by certified or registered U.S. Mail, return receipt
requested, to the addresses set forth below or to such other addresses as
either party may notify the other of in writing. Such notices shall be
deemed to have been given on the date received by the other party.
To Exxon at: To Buyer at:
----------- -----------
Exxon Company, U.S.A. Great Lakes Carbon Corporation
Attn: Industry Fuels Manager Attn: Vice President - Raw Materials
P.O. Box 2180 16945 Northchase Drive, Suite 2200
Houston, TX 77001 Houston, TX 77060
<PAGE>
All other written notices required to be given or contemplated hereunder shall
be either personally delivered or sent by U.S. Mail, facsimile transmission,
telex, or telegram to the addresses set forth below or to such other addresses
as either party may notify the other of in writing.
To Exxon at: To Buyer at:
----------- -----------
Exxon Company, U.S.A. Great Lakes Carbon Corporation
Attn: Industry Fuels Manager Attn: Vice President - Raw Materials
P.O. Box 2180 16945 Northchase Drive, Suite 2200
Houston, TX 77001 Houston, TX 77060
Fax: (713) 656-8091 Fax: (281) 775-4744
ARTICLE XIII - NEW OR CHANGED REGULATIONS
-----------------------------------------
The parties are entering into this Agreement in reliance on the regulations,
laws and arrangements with governments or governmental instrumentalities
(hereinafter called "Regulations") in effect on the date of execution by
Seller affecting the Coke sold hereunder insofar as said Regulations affect
Buyer, Seller or Seller's suppliers. If the effect of any changes in any
Regulations or of any new Regulations (1) is not covered by any other pro-
vision of this Agreement, and (2) in the affected party's judgment, any such
change has a significant and material effect upon the party (or if Seller,
upon Seller's suppliers), the affected party may request renegotiation of the
terms of this Agreement, to be completed within 60 days of written request
thereof, failing which the affected party shall have the right to terminate
this Agreement effective thirty days after the end of the said sixty-day
period.
Such right to request renegotiation or, upon failure to agree, to terminate,
shall without limitation also be available if Regulations undertake to regulate
the prices of Coke covered by this Agreement.
ARTICLE XIV - COMPLIANCE WITH LAWS AND REGULATIONS
--------------------------------------------------
EACH PARTY AGREES TO INDEMNIFY, DEFEND AND HOLD THE OTHER PARTY, ITS
SUCCESSORS AND ASSIGNS, HARMLESS AGAINST ALL LOSSES, CLAIMS, CAUSES OF ACTION,
PENALTIES AND LIABLILITIES ARISING OUT OF THE FIRST PARTY'S FAILURE TO COMPLY
WITH ALL APPLICABLE FEDERAL, STATE AND LOCAL LAWS, ORDINANCES, REGULATIONS,
RULES AND ORDERS, INCLUDING, BUT NOT LIMITED TO, THOSE GOVERNING POLLUTION,
AND SUCH FAILURE OF COMPLIANCE SHALL ENTITLE THE SECOND PARTY TO TERMINATE THIS
AGREEMENT IMMEDIATELY.
<PAGE>
ARTICLE XV - GOVERNING LAW
--------------------------
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO ANY PRINCIPLES OF CHOICE OF LAWS IN TEXAS OR IN ANY OTHER STATE.
ARTICLE XVI - EXPRESS WARRANTIES: EXCLUSION OF OTHER WARRANTIES
---------------------------------------------------------------
Seller warrants (i) that the Coke supplied hereunder will conform to the
promises and affirmations of fact made herein, (ii) that it will convey good
title to the Coke supplied hereunder, free of all liens, and (iii) that the
Coke supplied hereunder shall be of merchantable quality.
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
WARRANTIES, WHETHER WRITTEN, ORAL OR IMPLIED. THE IMPLIED WARRANTY OF
FITNESS FOR PARTICULAR PURPOSE IS EXPRESSLY EXCLUDED AND DISCLAIMED.
ARTICLE XVII - FINANCIAL RESPONSIBILITY
---------------------------------------
If, during the duration of this Agreement, in the sole judgment of Seller,
reasonable grounds arise for believing the financial responsibility of Buyer
has become impaired or unsatisfactory, advance cash payment or other adequate
assurance of performance shall be given by Buyer upon written demand by Seller,
and shipments may be withheld until such payment or assurance is received. If
such payment or assurance is not received within 15 days of demand, Seller may
terminate this Agreement at any time upon written notice. If there are
instituted by or against Buyer proceedings in bankruptcy or under any
insolvency law, Seller may terminate this Agreement at any time upon written
notice.
ARTICLE XVIII - BUSINESS PRACTICES
----------------------------------
Each party agrees:
(1) To comply with all laws and lawful regulations applicable to any activ-
ities carried out in the name of or on behalf of the other party under the
provisions of this Agreement and/or any amendments to it.
<PAGE>
(2) That all financial settlements, billing and reports rendered to the other
party as provided for in this Agreement and/or any amendments to it will to
the best of its knowledge and belief reflect properly the facts about all
activities and transactions related to this Agreement, which data may be relied
upon as being complete and accurate in any further recording and reporting
made by such other party for whatever purpose.
(3) To notify the other party promptly upon discovery of any instance where
the notifying party fails to comply with provision (1) above, or where the
notifying party has reason to believe data covered by (2) above is no longer
accurate and complete.
ARTICLE XIX - CONFLICT OF INTEREST
----------------------------------
Each party, in performing its obligations under this Agreement, shall establish
and maintain appropriate business standards, procedures, and controls,
including those necessary to avoid any real or apparent impropriety or adverse
impact on the interests of the other party. Each party shall review with
reasonable frequency during the term of this Agreement such business standards
and procedures including, without limitation, those related to the activities
of its employees and agents in their relations with the other party's
employees, agents, and representatives, and other third parties.
ARTICLE XX - AUDIT
------------------
Each party and its duly authorized representatives shall have the right to
witness custody transfer measurement procedures. In addition, each party
and its duly authorized representatives shall have access to the accounting
records and other documents maintained by the other party which relate to
materials being delivered to the other party under this Agreement, and shall
have the right to audit such records at any reasonable time or times within
three years after the termination of the Agreement.
ARTICLE XXI - DRAWBACK
----------------------
Seller and Buyer reserve the right to claim duty drawback resulting from duly
paid imported merchandise used in the manufacture of product delivered to
Buyer. When said product is exported, or used in the manufacture of a product
that is exported, Buyer will notify Seller promptly of its exportation. If
duty drawback is applicable under the laws and regulations of U.S. Customs,
Seller will prepare a mutually acceptable written agreement, detailing each
party's responsibilities, to be executed by both parties.
ARTICLE XXII - ENTIRE AGREEMENT
-------------------------------
This writing and its Appendices are intended by the parties to be the final
expression of their agreement and are also intended to be the complete and
exclusive statement of the terms of this Agreement. There are no oral under-
standings, repesentations or warranties affecting it.
In witness whereof, the parties hereto have duly caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
Exxon Company, U.S.A. Great Lakes Carbon Corporation
(a division of Exxon Corporation)
By:_____________________________ By:___________________________
Richard G. Oldham, Jr.
Title: Manager Industry Fuels Title:________________________
--------------------------
Date:___________________________ Date:_________________________
<PAGE>
APPENDIX A
----------
Sampling and Testing Procedure for Petroleum Coke
-------------------------------------------------
1. Sampling By Seller
Representative Coke samples shall be obtained. Sample increments shall be
regularly and systematically collated so that the gross sample will
proportionately represent the contents of the barge. Duplicate samples
shall be obtained upon request for the use of either party.
2. Sample Preparation By Seller
The gross sample shall be reduced by an acceptable method (quartering,
riffle, etc.) to obtain sufficient material for analysis.
3. Determination of Moisture, Volatile Matter and Ash By Seller
Except for moisture, laboratory testing of petroleum Coke shall be per-
formed using dry Coke samples. Moisture, volatile matter and ash shall be
tested according to ASTM 5142-90 or any subsequent ASTM approved procedure.
Procedure may be performed using automated analyzers such as MAC-400 or
equivalent.
4. Determination of Sulfur, Vanadium, Silicon, Iron, Calcium, Sodium and
Nickel Content by Seller
The analytical sample shall be crushed to pass a number 60 mesh sieve.
The sample shall be prepared by pressing a pellet with a suitable binder.
The sample pellet must be prepared with the same binder and pressing force
used to press standard pellets.
Sulfur shall be tested (analyzed) by LECO according to ASTM D 1552-90.
Vanadium, silicon, iron, calcium, sodium and nickel shall be analyzed by
X-ray fluorescence using the Siemens Model 303. Seller reserves the right
to develop ICP or A-A as reference procedures.
Buyer and Seller agree that the sampling and testing procedures set forth
in this Appendix A may be amended from time to time by mutual agreement of
the parties. Any such amendment shall be documented in writing, signed by
both parties.
