Dated as of September 29,
2005
WHEELING-PITTSBURGH STEEL
CORPORATION
MOUNTAIN STATE CARBON,
LLC
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Page
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ARTICLE I
PURCHASES AND SALES OF COKE
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1
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Purchases and
Sales Prior to January 1, 2007
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1
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Purchases and
Sales After December 31, 2006
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2
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Notice of Coke
Sales to Non-Affiliates
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2
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Turn-Down
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2
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Quality of
Coke
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3
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Absolute
Obligation
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3
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No Use
Restriction
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3
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Coke
Breeze
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3
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Nut
Coke
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3
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ARTICLE
II TRANSFER PRICE; MARKET PRICE; PAYMENT
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4
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Transfer
Price
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4
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Breaches or
Termination of the Coke Supply Agreements
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4
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Market
Price
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5
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Invoices
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5
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Terms of
Payment
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5
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Currency
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5
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Taxes
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5
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Failure to
Pay
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5
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ARTICLE
III DELIVERY; TITLE
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6
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Delivery
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6
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Point of
Delivery
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6
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Weights
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6
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Title and Risk
of Loss
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6
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Provisions
Applicable to Delivery
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6
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES
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7
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Joint
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7
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Company’s
Representation
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7
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ARTICLE V
REPRESENTATIVE; LIMITATION OF LIABILITY
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7
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Nomination of
Representative
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7
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LIMITATION OF
LIABILITY
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8
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ARTICLE
VI FORCE MAJEURE; EMERGENCY
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8
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Force
Majeure
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8
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Emergency
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8
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Accommodation
During a Force Majeure or Emergency
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8
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ARTICLE
VII AUDIT REVIEW
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9
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Audits
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9
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Frequency of
Audits
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9
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Scheduling
Audits
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9
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ARTICLE
VIII TERMINATION; SURVIVAL
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9
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Term
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9
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Termination
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9
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Survival
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9
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ARTICLE
IX DEFINITIONS
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10
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Definitions
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10
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Construction
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11
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ARTICLE X
GENERAL
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12
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Governing
Law
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12
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Nature of
Relationship; Agency
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12
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Due
Notice
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12
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Headings
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13
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Counterparts
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13
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No Third Party
Rights
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13
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Assignment;
Successors
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13
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Entire
Agreement; Amendment
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14
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Severability
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14
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Confidentiality
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14
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Dispute
Resolution
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14
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Consideration
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14
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The LLC
Agreement Controls Conflicts
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14
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[Certain
Schedules have been omitted and will be furnished upon
request.]
This is a Coke
Supply Agreement dated and effective as of September 29, 2005, by
and between WHEELING-PITTSBURGH STEEL CORPORATION , a
Delaware corporation ( “WPSC” ), and MOUNTAIN
STATE CARBON, LLC , a Delaware limited liability company (the
“Company” ).
SNA CARBON,
LLC , a Delaware limited liability company (
“SCL” ), and WPSC have formed the Company to own
and refurbish WPSC’s coke batteries and manufacture and sell
the coke produced by those batteries for their respective benefit.
In connection with the formation, WPSC is contributing some cash
and its Coke Facilities to the Company, while SCL is contributing
cash. Pursuant to the terms of the Company’s Amended and
Restated Limited Liability Company Agreement dated the date hereof,
as it may be amended from time to time (the “LLC
Agreement” ), each of WPSC and SCL has also committed to
contribute additional cash to the Company for the purposes of
operating and maintaining the Coke Facilities and refurbishing the
coke batteries.
The Company
desires to enter into a coke supply agreement with each of WPSC and
SCL to ensure that it has a steady stream of revenue to support its
operations. As such, the Company has agreed to sell coke to WPSC,
and WPSC has agreed to purchase coke from the Company, on the terms
and subject to the conditions set forth in this Agreement, all as
contemplated by the LLC Agreement.
This is the WPSC
Coke Supply Agreement to which the LLC Agreement makes reference.
SCL is simultaneously entering into two coke supply agreements.
Under the first coke supply agreement, SCL is purchasing coke from
WPSC from May 1, 2005 through and including December 31,
2005 (the “WPSC/SCL Coke Supply Agreement” ).
Under the second coke supply agreement, SCL is purchasing coke from
the Company commencing on January 1, 2006 with different
delivery obligations.
Certain
capitalized terms used in this Agreement are defined in
Article IX below. Such defined terms are integral to
this Agreement.
WPSC and the
Company hereby agree as set forth in this Agreement.
ARTICLE I
Purchases and Sales of
Coke
1.1
Purchases and Sales Prior to January 1,
2007.
a. Purchase and Sale Obligations. For the period
between May 1, 2005 and December 31, 2006, the Company
shall sell to WPSC, and WPSC shall purchase and take delivery from
the Company of, coke at the Transfer Price in the quantities set
forth in Schedule A. The Company shall use its
commercially reasonable efforts to produce such coke at the Coke
Batteries. Notwithstanding the foregoing, if the Company does not
produce 612,660 tons of coke for the period between May 1,
2005 and December 31, 2005, then the quantity of coke that the
Company shall sell to WPSC under this Section 1.1 shall
be reduced by an amount equal to
100% of the
Company’s total coke production shortfall for such period,
allocated weekly on the basis of production levels. If the Company
does not produce 955,000 tons of coke for calendar year 2006, then
the quantity of coke that the Company shall sell to WPSC under this
Section 1.1(a) shall be reduced by an amount equal to 50% of
the Company’s total coke production shortfall for such
period, allocated weekly on the basis of production levels.
Notwithstanding the foregoing, WPSC shall not be required to
purchase from the Company that amount of coke that it is required
to deliver to SCL pursuant to the terms of the WPSC/SCL Coke Supply
Agreement if and to the extent that SCL has breached or terminated
the WPSC/SCL Coke Supply Agreement. The rights and obligations of
the parties hereto to purchase and sell coke under this clauses
(a) may be reduced or increased, as the case may be, in
accordance with Section 3.10(i) of the LLC Agreement, which
provision shall take priority over this clause (a).
b. Excess Coke for SCL in 2005. If, and to the extent
that, SCL purchases 250,000 tons of coke from WPSC pursuant to the
WPSC/SCL Coke Supply Agreement for the period between May 1,
2005 and December 31, 2005, WPSC shall have the right, at the
direction of SCL, to purchase from the Company for SCL’s
benefit any coke produced by the Company in excess of 650,000 tons
at the higher of (i) Market Price less 5% and (ii) the
Transfer Price.
c. Excess Coke for WPSC in 2005 and 2006. If, and to
the extent that, SCL has determined that it does not desire to
purchase any coke produced by the Company in excess of 612,660 tons
pursuant to the terms of the WPSC/SCL Coke Supply Agreement for the
period between May 1, 2005 and December 31, 2005 or any coke
produced by the Company in excess of 955,000 tons pursuant to the
SCL Coke Supply Agreement for the calendar year 2006, as
applicable, WPSC shall have the right, but not the obligation, to
purchase from the Company such excess coke at the higher of
(i) Market Price less 5% and (ii) the Transfer
Price.
1.2
Purchases and Sales After December 31, 2006. Except as
provided in Section 1.3 , at all times after
December 31, 2006, and prior to the expiration of the Term,
the Company shall sell to WPSC, and WPSC shall purchase and take
delivery from the Company of, that percentage of the coke produced
at the Coke Batteries that is equal to 50% of the Company’s
total production of coke, allocated on a weekly basis. The rights
and obligations of the parties hereto to purchase and sell coke
under this Section may be reduced or increased, as the case may be,
in accordance with Section 3.10(i) of the LLC Agreement, which
provision shall take priority over this section.
1.3 Notice
of Coke Sales to Non-Affiliates . If, after
December 31, 2006, WPSC desires to sell to non-Affiliate third
parties coke that it has purchased from the Company, WPSC shall
inform SCL of its intent to do so.
1.4
Turn-Down. If WPSC’s steel-making operation in
Steubenville, Ohio is not producing an adequate amount of steel to
consume all of the coke to be provided by the Company under this
Agreement, WPSC shall have the right, upon providing prior written
notice to the Company, to instruct the Company to turn-down
production of coke at the Coke Facilities. The Company shall
cooperate in turning down production in an orderly manner
consistent with and to the extent that it can safely comply with
existing environmental regulations and contract commitments and
giving appropriate consideration to the impact on coke quality and
the life of the Coke Batteries. WPSC shall promptly reimburse SCL
for any increase in its Contract Price
2
and Transfer
Price under each of the WPSC/SCL Coke Supply Agreement or the SCL
Coke Supply Agreement, respectively, resulting from any turn-down
requested by WPSC. A turn-down initiated by WPSC shall have no
effect on the Company’s obligations to deliver coke to WPSC
for the benefit of SCL under the WPSC/SCL Coke Supply Agreement or
SCL under the SCL Coke Supply Agreement. Notwithstanding the
foregoing, at SCL’s election, the Company shall continue to
operate above the turn down level at the direction of SCL and sell
such excess coke to SCL at the same price that WPSC would have paid
for such coke.
1.5 Quality
of Coke. The coke delivered to WPSC shall meet the quality
specifications set forth on Schedule B measured on a
daily average basis (subject to the additional covenant contained
in Schedule B ); provided, however, if WPSC
chooses to accept any coke delivered to WPSC pursuant to this
Agreement that does not meet such specifications, then such
acceptance shall be deemed to be a waiver by WPSC of any remedies
that WPSC may have hereunder with respect to the failure of such
coke to meet such specifications. Rejection shall be WPSC’s
sole remedy if the coke tendered hereunder does not meet the
specifications set forth on Schedule B. The costs and
expenses associated with the rejection of coke under this
Section 1.5 , including loading and unloading costs,
shall be borne by the Company.
1.6
Absolute Obligation. Except as set forth in
Sections 1.4 and 1.5, prior to the expiration of
the Term, the obligation of WPSC to accept coke tendered for
delivery by the Company and to pay for such coke (whether or not
WPSC shall actually take delivery of such coke) at the prices and
on the other terms set forth herein and to make the other payments
specified herein is absolute and unconditional without regard to
(a) the validity, regularity or enforceability of this
Agreement or the LLC Agreement, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) that
may at any time be available to or be asserted by WPSC against the
Company in connection with this Agreement or (c) any other
circumstance whatsoever that constitutes, or might be construed to
constitute, an equitable or legal discharge of WPSC from its
obligations under this Agreement. Except as provided in
Section 8.2 of this Agreement, WPSC hereby waives, to
the extent permitted by applicable law, any and all rights that it
may now have or which at any time hereafter may be conferred on it,
by statute or otherwise, to terminate, cancel or rescind this
Agreement.
1.7 No Use
Restriction. WPSC may consume, sell, transfer or otherwise
dispose of the coke purchased pursuant to this Agreement without
restriction.
1.8 Coke
Breeze. Notwithstanding anything to the contrary contained
in this Agreement, the Company shall not have any obligation to
sell to WPSC, and WPSC shall not have any obligation to purchase
from the Company, coke breeze.
1.9 Nut
Coke. For the period between May 1, 2005 and
December 31, 2005, WPSC shall have the obligation to purchase
from the Company for SCL’s benefit that amount of Nut Coke
that is proportionate to total Nut Coke production as SCL’s
purchases of coke are to total coke production during the same
period, at the Transfer Price. In addition, during the Term, WPSC
shall have the obligation to purchase from the Company that amount
of Nut Coke that is proportionate to total Nut Coke production as
WPSC’s purchases of coke for its own consumption hereunder
are to total coke production during the same period, at the
Transfer Price.
3
ARTICLE II
Transfer Price; Market
Price; Payment
a. Transfer Price Inclusions. Except as otherwise
provided in this Agreement, during such time as WPSC holds at least
a 50% Non-Voting Capital Stock Interest, the purchase price to be
paid by WPSC to the Company for the coke purchased hereunder shall
be the Transfer Price. Except as otherwise provided in this
Agreement, during such time as WPSC holds less than a 50%
Non-Voting Capital Stock Interest, the purchase price for that
amount of coke purchased hereunder that is proportionate to two
times WPSC’s Non-Voting Capital Stock Interest shall be at
the Transfer Price and the purchase price for the remainder of coke
purchased hereunder shall be at the higher of (i) Market Price less
5% and (ii) the Transfer Price. The Transfer Price paid by
WPSC hereunder together with the Transfer Price paid by SCL under
the SCL Coke Supply Agreement for all coke supplied under both such
Coke Supply Agreements is intended to cover the Company’s
total costs and expenses of managing, operating and maintaining the
Coke Facilities. As such, “Transfer Price” means
(a) all of the Company’s operating and administrative
costs and expenses, including depreciation and amortization, but
excluding the capital and expense components of refurbishment
expenditures, plus (b) 5%, minus (c) all revenues
received by the Company from the sale of coke, coal tars, coke
breeze, Nut Coke and chemicals to third parties and all revenues
received from WPSC for coke oven gasses and steam, allocated per
ton among the Company’s production of coke on a weekly basis.
Without limiting the foregoing, the Transfer Price shall include
all of the Company’s: (i) raw materials cost (including
coal and other supplies); (ii) manufacturing costs;
(iii) overhead; (iv) insurance; (v) governmental
impositions; (vi) hourly and salaried labor costs;
(vii) charges to be paid by the Company under the Management
Agreement and Operating Agreement; (viii) costs and expenses
incurred by the Company identified in the retained responsibility
provisions contemplated by Schedule B to each of the
Management Agreement and the Operating Agreement; and
(ix) costs relating to loading any coke, immediately after it
is produced, into rail cars provided by WPSC.
b. Transfer Price Exclusions. Notwithstanding the
foregoing, the Transfer Price shall not include, and WPSC shall be
solely responsible for, all costs and expenses (including any
deterioration to the coke) relating to barge loading, stocking,
de-stocking, screening or loading coke, except for costs described
in Section 2.1(a)(ix) . The Transfer Price also shall
not include any costs, fees, disbursements or other expenditures
relating to environmental conditions existing prior to the date of
this Agreement. The costs, fees, disbursements or other
expenditures relating to such corrective actions shall be subject
to the terms of the LLC Agreement.
2.2
Breaches or Termination of the Coke Supply
Agreements.
a. No Increase in Transfer Price. WPSC’s
Transfer Price shall not increase as a result of a breach or the
termination of the WPSC/SCL Coke Supply Agreement or the SCL Coke
Supply Agreement (where such breach or termination is due to
default by SCL or the Managers elected by SCL). As such, if either
the WPSC/SCL Coke Supply Agreement or the SCL Coke Supply Agreement
is breached or terminated prior to the termination of
this
4
Agreement
(where such breach or termination is due to default by SCL or the
Managers elected by SCL), WPSC’s Transfer Price shall not
increase, and the Transfer Price shall be calculated as if the
WPSC/SCL Coke Supply Agreement and the SCL Coke Supply Agreement
were in effect and the parties thereto were complying with the
terms thereof.
b. WPSC’s Purchase Right. If, and to the extent
that, SCL does not purchase the amount of coke required to be
purchased by it under either the WPSC/SCL Coke Supply Agreement or
the SCL Coke Supply Agreement, then WPSC shall have the right, but
not the obligation, to purchase any or all of such coke from the
Company at the same price that SCL would have paid for such
coke.
c. Assignment of WPSC/SCL Coke Supply Agreement. If
the WPSC/SCL Coke Supply Agreement terminates for any reason, then
WPSC shall have the right, but not the obligation, to assign all of
its rights and obligations under the WPSC/SCL Coke Supply Agreement
to the Company. The Company shall assume any such rights and
obligations so assigned by WPSC.
2.3 Market
Price. “Market Price” means (a) an
arm’s length offer for sale of coke of similar quantity,
quality and availability by reference to third party transactions
(taking into account any material and relevant factors), or
(b) if a price under clause (a) is not available, then
the average purchase price paid by WPSC for coke of similar
quantity, quality and availability for the ninety (90) day
period prior to the date of sale (excluding prices paid by WPSC to
the Company). The prices calculated in clause (b) above shall
include all transportation costs to WPSC’s receiving yard in
Follansbee, West Virginia, export licenses, duties, taxes, and
loading and unloading costs. There shall be deducted from prices
calculated in clause (b) above any costs that would be
incurred to transport coke from the Coke Facilities to WPSC’s
receiving yard in Follansbee, West Virginia.
2.4
Invoices. The Company shall render an invoice to WPSC each
week by the third working day of such week in relation to the coke
delivered to WPSC during the previous week.
2.5 Terms
of Payment. Terms of payment shall be net cash within
fifteen (15) days from the date of the Company’s
invoice.
2.6
Currency. All payments due hereunder shall be invoiced and
paid in immediately available U.S. dollars.
2.7
Taxes. Any tax (including any applicable value added tax)
or other governmental charge, or increase thereof, upon the
production, sale and/or shipment of the coke sold under this
Agreement (other than taxes based upon the Company’s net
income), whether by national, foreign, federal, state or municipal
authorities, imposed, or becoming effective, on or after the date
of this Agreement, shall be the sole responsibility of
WPSC.
2.8 Failure
to Pay. The Company shall have the right, but not the
obligation, to cease delivering coke to WPSC if WPSC fails to pay
the amounts due under this Article and does not cure such failure
within fifteen (15) calendar days after receiving written
notice of such failure. Such right may be exercised by the Company
only by delivery to WPSC of a writing that expressly contains the
exercise of such right by specific reference to this Section.
The
5
remedy of the
Company set forth in this Section shall be exercised solely by a
Manager elected by SCL at least three days prior to cessation of
delivery. When the default is cured, then deliveries shall resume.
WPSC shall nevertheless be responsible for and shall pay to the
Company the Transfer Price for any coke that is manufactured by the
Company, tendered to WPSC under this Agreement and not accepted by
WPSC for any reason other than non-conformance with
Section 1.5 hereof. Subject to Section 2.2
of the SCL Coke Supply Agreement, in an effort to mitigate damages,
the Company shall use commercially reasonable efforts to sell to
third parties any excess coke resulting as a consequence of the
Company’s election to ship a reduced amount of coke to
WPSC.
ARTICLE III
Delivery;
Title
3.1
Delivery. Subject to the provisions of this Agreement and
the LLC Agreement, the coke sold and purchased under this Agreement
shall be delivered in approximately equal weekly increments to the
extent that such is commercially practicable and does not adversely
affect either the Company or SCL. Except as otherwise provided in
this Agreement or the LLC Agreement, including changes in expected
production and certain changes in the ownership of the Membership
Interests of the Company, to the extent that the Company produces
955,000 tons of coke in 2006, the Company shall deliver to WPSC
approximately 62.83% of the coke produced at the Company in 2006 in
accordance with Schedule C attached hereto. The Company
shall use commercially reasonable efforts to cooperate with WPSC in
determining whether a more equal weekly distribution of coke
deliveries can be accommodated, so long as such does not adversely
affect either the Company or SCL. WPSC shall be responsible for
arranging transportation of coke from the Coke Facilities to
WPSC’s facility. If WPSC does not make transportation
arrangements, the Company shall make transportation arrangements
for WPSC’s account.
3.2 Point
of Delivery. The coke sold and purchased under this
Agreement shall be delivered by the Company to WPSC free on board
pushed into railroad cars provided by WPSC at the Company’s
Coke Facilities. The Company may pull such railroad cars to the
Ohio River rail bridge at the Company’s facility.
3.3
Weights. The coke sold and purchased under this Agreement
shall be weighed by the Company’s certified track scales.
These weights shall govern and shall be used by the Company in
invoicing the coke delivered hereunder. Such scales shall be
properly inspected and certified at intervals of not more than six
(6) months.
3.4 Title
and Risk of Loss. Title and all risk of loss, damage or
destruction with respect to the coke sold and purchased under this
Agreement shall pass to and be assumed by WPSC when delivery of
such coke has occurred in accordance with Section 3.2
of this Agreement.
3.5
Provisions Applicable to Delivery. The Company shall
cooperate with and provide assistance to WPSC when necessary or
appropriate and the Parties shall communicate with each other
regularly as necessary to schedule and expedite shipment. The
Company shall
6
load all rail
cars in accordance with all Legal Requirements and any reasonable
requirements of the carrier designated by WPSC.
ARTICLE IV
Representations and
Warranties
4.1
Joint. Each Party represents and warrants to the other
Party that:
a. Authority. It is duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation or organization. It has the power and authority to
enter into this Agreement and to perform its obligations
hereunder.
b. Authorization; Enforceability. This Agreement has
been duly executed and delivered by it and constitutes its legal,
valid and binding obligations, enforceable against it in accordance
with their respective terms. It has duly and validly authorized
this Agreement.
c. No Violations. The execution and delivery by it of
this Agreement shall not, directly or indirectly (with or without
notice or the lapse of time or both): (i) contravene, conflict
with, or result in a violation of any provision of its governing
documents or the resolutions adopted by its board or directors or
board of managers; (ii) contravene, conflict with, result in a
breach of, constitute a default or an event of default under, give
any person the right to consent, approve, terminate or revoke
(including the right to consent, approve, terminate or revoke upon
a change of control or deemed assignment), or give to any person
the right to cause any of the foregoing with respect to, any
material agreement or instrument to which it is a party or by which
any of its assets may be bound; or (iii) violate in any
material respect, or give any person the right to obtain any
material relief or exercise any material remedy under, any Legal
Requirement to which it is subject, or by which its assets may be
bound or affected, or give any person the right to challenge any of
the transactions contemplated by this Agreement. No person is
required to make, give or obtain any approvals or consents in
connection with the execution, delivery or performance by it of
this Agreement, except for those obtained.
4.2
Company’s Representation. The Company represents and
warrants to WPSC that the coke delivered under this agreement will
be of the quality identified in Section 1.5
.
EXCEPT FOR THE
COMPANY’S OBLIGATIONS UNDER THIS SECTION 4.2 , THESE
ARE THE ONLY REPRESENTATIONS OR WARRANTIES THAT THE COMPANY MAKES
AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES, UNDER STATUTE OR
ARISING OTHERWISE IN LAW FROM A COURSE OF DEALING OR USAGE OF
TRADE, INCLUDING WITHOUT LIMITATION, ANY OTHER WARRANTY OF
MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR
USE OR WARRANTY AGAINST INFRINGEMENT, ARE DISCLAIMED BY THE
COMPANY.
ARTICLE V
Representative;
Limitation of Liability
5.1
Nomination of Representative. Each Party shall nominate a
representative to act as the individual representing such Party in
respect of the matters covered by this Agreement
7
(each a
“Representative” ). A Party may at any time and
from time to time substitute its Representative by written notice
to the other Party.
5.2
LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY OR
THEIR RESPECTIVE EMPLOYEES, AGENTS, OFFICERS, DIRECTORS OR
AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL
DAMAGES OF ANY TYPE IN CONNECTION WITH THIS AGREEMENT, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT
FOR THOSE CONSEQUENTIAL DAMAGES OF PERSONS WHO ARE NOT AFFILIATES
OF WPSC, THE COMPANY OR SCL, ARISING OUT OF CLAIMS AGAINST THE
COMPANY OR WPSC BY SUCH PERSONS. “CONSEQUENTIAL
DAMAGES” MEANS INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY,
CONSEQUENTIAL (INCLUDING WITHOUT LIMITATION LOSS OF FUTURE PROFITS,
REVENUE OR INCOME, BUSINESS INTERRUPTION, AND LOSS OF BUSINESS
REPUTATION OR OPPORTUNITY), AND PUNITIVE DAMAGES.
ARTICLE VI
Force Majeure;
Emergency
6.1 Force
Majeure. The failure or delay of the Company to perform any
obligation under this Agreement solely by reason of acts of God,
nature or the public enemy, terrorism, nuclear disaster, accidents,
explosions, fire, flood, river freeze-ups, failure or availability
of river locks, drought, perils of the sea, strikes, lockouts,
labor disputes, riots, sabotage, embargo, war (whether or not
declared and whether or not the United States is a participant),
civil insurrection, acts of violence, acts of government, federal,
state or municipal legal restriction or limitation or compliance
therewith, failure or delay of transportation (including railway
car and barge shortages), new or amended Legal Requirements,
contract disputes, failure of plants or facilities, failure of
equipment (including emergency outages of equipment or facilities
or to make repairs to avoid breakdowns thereof or damage thereto),
failures of suppliers, shortage of raw materials (including coal of
the type required to produce coke), supplies, equipment, fuel,
power, or other operational necessities, interruption or
curtailment of power supply, or any other circumstance of a similar
or different nature beyond the reasonable control of the Party
affected thereby ( “Force Majeure” ) shall not
be deemed to be a breach of this Agreement.
6.2
Emergency. The failure or delay of the Company to perform
any obligation under this Agreement solely by reason of an
Emergency shall not be deemed to be a breach of this
Agreement.
6.3
Accommodation During a Force Majeure or Emergency. During
the occurrence of a Force Majeure or an Emergency, WPSC may engage
a third party to provide coke that the Company is unable to
provide. Notwithstanding anything herein to the contrary, in the
case of a Force Majeure or an Emergency, the Parties shall take
immediate and diligent actions to prevent or minimize such
threatened damage, injury or loss or to counteract or otherwise
mitigate the effects of such Force Majeure or Emergency. In the
event of a Force Majeure or an Emergency, each Party shall notify
the other of the Force Majeure or Emergency as soon as practicable
following the occurrence thereof, which notice shall include
details with respect to any action being taken in response
thereto.
8
7.1
Audits. WPSC or its designee shall have the right to carry
out audit tasks of a financial nature to verify any and all amounts
paid or payable by WPSC to the Company. The Company shall make
available, at the Coke Facilities, to WPSC or its designee, and
WPSC or its designee shall have the right to review, all contracts,
books, records, and other documents relating to all costs paid or
incurred by the Company that comprise the Transfer Price. WPSC or
its designee shall also have the right to conduct a physical
inventory audit. The cost of any audit shall be borne by
WPSC.
7.2
Frequency of Audits. Audits, as identified in
Section 7.1, shall not be requested by WPSC more
frequently than once every year and no claim may be brought as to
any invoice more than eighteen (18) months after the date that
the invoice is rendered pursuant to Article II
.
7.3
Scheduling Audits. The scheduling and length of any audit
review shall be kept to a minimum so as to ensure as little
disturbance as possible. The audit review shall commence not later
than four (4) weeks after the Company’s receipt of the
audit notification from WPSC.
ARTICLE VIII
Termination;
Survival
8.1
Term. The term of this Agreement (the
“Term” ) shall commence on May 1, 2005 and
continue for the useful lives of the Coke Batteries, unless earlier
terminated under the unique circumstances identified in
Section 8.2 .
8.2
Termination. This Agreement may only be terminated as
follows:
a. the dissolution of the Company, as provided in the
LLC Agreement; or
b. by election of a Party if the other Party is in
breach of this Agreement and does not cure such breach within sixty
(60) days (but within fifteen (15) calendar days for a
breach involving the payment for coke) of receiving written notice
of such breach.
Any termination
of this Agreement shall not relieve either the Company or WPSC from
any liability for breach under this Agreement that may exist prior
to or as a result of the termination of this Agreement. Unless any
non-breaching party would otherwise be materially prejudiced, the
termination rights provided in clause (b) shall be suspended
if any Party in good faith challenges the allegation of breach
giving rise to the notice of termination due to such breach and
delivers a notice of dispute thereof under
Section 10.11 within thirty (30) days after
receiving notice of termination. Such suspension shall remain in
effect only so long as the parties are actively pursuing their
remedies in respect of such alleged breach under
Section 10.11 . Such suspension shall terminate if the
parties are no longer pursuing their remedies in respect of such
alleged breach under Section 10.11 , or if such alleged
breach is determined not to be a breach under
Section 10.11 .
8.3
Survival. The following Articles and Sections of this
Agreement shall survive any termination of this Agreement:
Article V (Representative; Limitation of Liability),
Article
9
VII (Audit
Review), Article VIII (Termination; Survival),
Section 10.1 (Governing Law), Section 10.3 (Due Notice),
Section 10.10 (Confidentiality) and Section 10.11 (Dispute
Resolution) . Notwithstanding the termination of this
Agreement, the other provisions of this Agreement shall be deemed
to survive, and the Parties shall continue to perform their
obligations under this Agreement, for so long as reasonably
necessary for the Parties to fulfill any outstanding obligations
created prior to the termination in reasonable reliance on this
Agreement and to otherwise facilitate a smooth end to the
relationship created hereunder.
9.1
Definitions. In addition to other terms defined elsewhere
in this Agreement, the following words have the following meanings
in this Agreement:
“Affiliate” means, when used with reference to a
specified person, any person who directly or indirectly, through
one or more intermediaries, owns or is owned by or is under common
ownership with the specified person, where such ownership means
holding more than fifty percent (50%) of any class of equity
securities of the specified person.
“Agreement” means this Coke Supply Agreement, as
it may be amended from time to time.
“Bundled
Interests” has the meaning set forth in the LLC
Agreement.
“Coke
Batteries” has the meaning set forth in the LLC
Agreement.
“Coke
Facilities” has the meaning set forth in the LLC
Agreement.
“Company” has the meaning set forth in the
Recitals.
“Consequential Damages” has the meaning set
forth in Section 5.2 .
“Due
Notice” has the meaning set forth in
Section 10.3 .
“Emergency” means (a) any situation that is
likely to impose an immediate threat of injury to any individual or
material damage or material economic loss to all or any part of the
Coke Facilities, or (b) any unexpected material interruption
in the production of coke.
“Force
Majeure” has the meaning set forth in
Section 6.1 .
“Legal
Requirement” means any applicable international,
multinational, national, foreign, federal, state, municipal, local
(or other political subdivision) or administrative law,
constitution, statute, code, ordinance, rule, regulation,
requirement, standard, policy or guidance having the force of law,
treaty, judgment or order of any kind or nature whatsoever
including any judgment or principle of common law.
“LLC
Agreement” has the meaning set forth in the
Recitals.
10
“Management Agreement” means that certain
Management Agreement between the Company and WPSC of even date
herewith.
“Manager” has the meaning set forth in the LLC
Agreement.
“Market
Price” has the meaning set forth in
Section 2.3 .
“Membership Interests” has the meaning set forth
in the LLC Agreement.
“Non-Voting Capital Stock Interests” has the
meaning set forth in the LLC Agreement.
“Nut
Coke” means coke otherwise meeting the quality
specifications in Schedule A and of a size equal to or
greater than 3/8 inch and less than 3/4 inch.
“Operating Agreement” means that certain
Operating Agreement between the Company and WPSC of even date
herewith.
“Party” means WPSC or the Company, individually,
and “Parties” means WPSC and the Company,
collectively.
“person” means and includes a natural person, a
corporation, an association, a partnership, a limited liability
company, a trust, a joint venture, an unincorporated organization,
a business, a governmental body or any other legal
entity.
“Representative” has the meaning set forth in
Section 5.1 .
“SCL” has the meaning set forth in the
Recitals.
“SCL
Coke Supply Agreement” means that certain Coke Supply
Agreement between SCL and the Company of even date
herewith.
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