BARGE DOCK AGREEMENT
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THIS AGREEMENT, made as of the 28th day of July, 2000 by and between
BORDEN CHEMICAL, INC., a Delaware corporation with an office and place of
business at 180 East Broad Street, Columbus, Ohio 43215, (hereinafter referred
to as "BCI"), and BORDEN CHEMICALS AND PLASTICS OPERATING LIMITED PARTNERSHIP, a
Delaware limited partnership with an office and place of business at Highway 73
& 30, Geismar, Louisiana 70734 (hereinafter referred to as "BCP").
WHEREAS, BCI, on the date hereof, pursuant to a Conveyance and Transfer
Agreement between BCP and BCI dated June 27, 2000 (the "Conveyance Agreement"),
acquired from BCP, and intends to operate, barge dock facilities situated on the
left descending bank of the Mississippi River, near the Town of Geismar in
Ascension Parish, Louisiana (hereinafter referred to as "Dock Facilities"); and
WHEREAS, the Dock Facilities are currently capable of handling the loading
and discharge of liquid cargoes from river barges; and
WHEREAS, BCI is willing to provide BCP with dock capacity at the Dock
Facilities upon the terms and in the manner hereinafter expressed,
NOW THEREFORE, in consideration of the payments hereinafter specified and
of the covenants hereinafter contained, it is mutually agreed as follows:
1. Cargoes.
Beginning on the date BCI assumes responsibility for the operation of the
Dock Facilities in accordance with that certain Transition Services Agreement of
even date herewith between BCI and BCP ("Commencement Date"), and continuing
throughout the term hereof:
(a) BCI shall operate the Dock Facilities and BCP's existing ethylene
dichloride ("EDC") pipeline, which is six (6) inches in diameter, for the
unloading of EDC; and
(b) unless BCI exercises its Option (as defined in the Conveyance
Agreement), BCI shall operate the Dock Facilities and the existing methanol
pipelines for the loading of methanol until BCP advises BCI that it is
permanently ceasing operation of the Optioned Assets (as defined in the
Conveyance Agreement) for the production of methanol or until BCP has
ceased the operation of the Optioned Assets for the production of methanol
for twelve (12) consecutive months, whichever occurs first.
Beginning on the Commencement Date, BCP shall also be entitled to have BCI
operate the Dock Facilities and the existing ammonia pipelines for the loading
of ammonia until the earlier of (i) ninety (90) days after the shutdown of BCP's
ammonia plant or (ii) December 31, 2000.
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EDC, methanol and ammonia, loaded or unloaded for BCP in accordance with
this Agreement, are hereinafter referred to as "Cargoes." No Cargoes other than
EDC (and, during the respective periods indicated above, methanol and ammonia)
shall be handled under this Agreement without BCI's prior written approval. The
maximum number of barges carrying EDC Cargoes that will be accepted at the Dock
Facility per month will be ten (10).
No unloading shall occur unless BCP has supplied hazard information to BCI,
as provided in Section 10 below.
2. EDC Equipment.
BCP shall install, at its expense, any and all valves, pipes, hoses and
pumps that may be required to handle its EDC (the "EDC Equipment"). Title to
all of said EDC Equipment shall remain in BCP, and BCP shall have the right to
remove said property at the termination of this Agreement or, at its option, may
abandon said property and leave same on the premises unless, within thirty (30)
days after the termination of this Agreement, BCI requests removal of same. If
BCP does not promptly remove same upon request, BCI may remove and dispose of it
at BCP's expense.
All EDC Equipment installed by BCP shall be engineered to comply with
all applicable federal, state, and local environmental statutes, regulations and
ordinances, including, but not limited to, the Clean Air Act, as amended. In
addition, BCP shall have a continuing obligation to comply with any future
environmental requirements. BCP shall annually inspect its pipeline and other
property located on BCI's property and submit an annual report to BCI attesting
to its integrity.
3. Scheduling; Efficient Operations.
BCI shall make reasonable efforts to operate the Dock Facilities to achieve
maximum capacity and efficiency. BCP shall exert reasonable efforts to furnish
BCI advance shipping schedules for the purpose of enabling BCI to make efficient
use of the Dock Facilities. Both parties will cooperate and provide aid to the
other to ensure effective loading and unloading of Cargoes. To this end, the
parties agree as follows:
(a) BCI and BCP shall develop and jointly maintain a rolling two month
forecast of anticipated barge traffic at the Dock Facility. Both parties
will have the ability to access this forecast. BCI will input scheduling
information provided by BCP and will update the forecast and scheduling
information at least once a week. This forecast is intended to serve as a
tool for efficient Barge Dock operations and not as formal notification of
barge arrivals.
(b) BCI agrees that up to four (4) shipments of EDC per month will be
given priority as follows:
(i) if BCP gives BCI not less than 48 hours advance notice of the
anticipated arrival time of a nominated barge, BCI guarantees that BCI
will make the Dock Facilities available to allow the shipment to dock
at the Dock Facility at any time
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within two (2) hours before or after the anticipated arrival time
specified in the notice; and
(ii) if BCP's EDC shipment arrives outside the two (2) hour
window in subparagraph (i), BCI agrees to use reasonable efforts
(which, subject to Subsection (d), shall not include the
discontinuation of any loading or unloading of cargoes or the
incurrence of demurrage or other costs or expenses) to allow the EDC
shipment to dock at the Dock Facility and unload as soon as possible
after its arrival.
BCP agrees that barges carrying EDC Cargoes other than "off-spec" or
"wet" Cargoes will unload at a minimum rate of 150 tons per hour.
(c) BCP agrees to give BCI reasonable advance notice of all Cargoes
(in addition to the 48-hour notice referred to above), and BCI agrees to
use its reasonable efforts to load or unload such Cargoes in an efficient
and timely manner. Subject to Subsection (d) below, such Cargoes and
cargoes unloaded for BCI's own account or for third parties will generally
be loaded on a first come, first served basis. "Off-spec" or "wet" EDC
shall not be granted priority pursuant to Subsection (b) and while it shall
be scheduled according to normal first-come, first-served scheduling, if
the unloading of any such barge shall not be completed within six (6)
hours, such unloading may be discontinued to accommodate other scheduled
barge traffic. BCI shall be entitled to schedule barge traffic following
such six-hour time frame and such EDC unloading shall be resumed as dock
availability permits. Any costs or expenses resulting from such
interruption shall be borne by BCP.
(d) If either BCI or BCP declares a commercial emergency and requests
a barge be granted priority access to the Dock Facility, the other party
will grant the party declaring the emergency prompt access to the Dock
Facility and, if necessary, will discontinue loading or unloading its
cargoes; provided however, that the party declaring the emergency will
reimburse the other party for any and all costs and expenses incurred by it
that are directly and proximately attributable to the granting of such
priority.
(e) If both BCI and BCP declare commercial emergencies simultaneously,
they will use good faith efforts to resolve the emergencies, with the
relative costs thereof to be borne by each in an equitable manner.
(f) If BCI grants any third party rights to use the Dock Facilities
for other than the handling of methanol for BCI's plants, BCI covenants and
agrees that its contracts with such third parties will guarantee BCP the
priority provided in (b) above for 4 shipments per month and equal
entitlements to that enjoyed hereunder for BCP's remaining six (6) barges
per month in scheduling use of the Dock Facilities.
(g) Due to limitations on loading and unloading facilities, demurrage
and other charges on scheduled barges may occur. Except for the situations
described in Subsections (b) and (d) above, demurrage or other charges
(including, without limitation, repositioning and towing and placement
charges) shall be borne by the party for whose account such barge
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was scheduled. In the event the loading or unloading of a docked barge
(including a barge granted priority pursuant to Subsection (b)) is delayed
or interrupted as a result of defective or noncompliant Cargoes, failed
cargo inspections or similar matters, the party for whose account such
barge was docked shall be responsible for all demurrage charges and other
costs and expenses incurred by either party resulting from such delay or
interruption.
4. BCI's Obligations.
BCI shall furnish and be responsible for the operation of the Dock
Facilities and the following costs pertaining thereto:
(a) all labor and supervision on a 24-hour-per-day, 7-day-per-week
schedule;
(b) utility requirements for power, water, and lights;
(c) other utilities, within reason and if readily available;
(d) fire protection water supply; and
(e) all maintenance of Dock Facilities and pipelines and loading and
unloading facilities located thereon, whether owned by BCI or BCP, in good
condition and repair; provided, however, that:
(i) BCI shall not be obligated to add any capital improvements to
the Dock Facilities except such as are reasonably required to enable
BCI to fulfill its obligations under this Agreement; and
(ii) BCI's obligation to maintain BCP-owned loading and unloading
equipment or facilities shall be limited to normal day-to-day
mechanical maintenance; unusual, large scope maintenance projects on
BCP equipment or facilities, such as complete or partial replacement of
hoses and valves or cyclical repainting, shall be done by BCI at BCP's
expense, subject to the prior agreement of BCP as to the basis and
amount of the charges therefor.
BCI shall conduct operations hereunder in accordance with good industry
practices.
BCI shall not be required to furnish tugs for the placement of Cargoes.
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5. Dual Unloading.
BCI and BCP agree to work together, and use their respective reasonable
best efforts, to secure all necessary permissions from the U. S. Coast Guard to
load and/or unload two (2) barges simultaneously at the Dock Facility. If BCI
is permitted to load and/or unload two (2) barges simultaneously at the Dock
Facility, BCP and BCI will negotiate in good faith regarding the terms,
conditions and costs on which the maximum number of barges carrying EDC Cargoes
that will be accepted at the Dock Facility per month may be increased to up to
twenty (20). BCI shall decide in its sole discretion, however, whether to
accept such higher maximum.
6. Insurance.
BCI shall provide insurance coverage for the Dock Facilities and all
related facilities and appurtenances owned by it, whether located on its
property or on BCP's property. BCP shall provide insurance coverage for the EDC
Equipment and related facilities owned by it, whether located on its property or
BCI's property.
BCI shall provide such insurance coverage for cargoes handled at the Dock
Facilities (other than Cargoes) as is reasonable and customary. BCP shall
provide such insurance coverage for Cargoes as is reasonable and customary.
Each party hereto shall have and maintain Worker's Compensation insurance
in compliance with the laws of the State of Louisiana, and Employer's Liability
insurance with a minimum limit of $500,000.
Each party shall provide the other party with satisfactory evidence of
General Liability insurance coverage with a combined bodily injury and property
damage single limit of no less than $5,000,000.00. Each party hereto agrees to
release and waive, and hereby releases and waives, all rights of subrogation
against the other possessed by its insurers to the extent permitted under its
policies of insurance.
BCI or BCP may self insure, at its election, any of its obligations under
this Section 6.
7. Liability and Indemnification. Except as set forth in Section 9:
(a) BCI will be responsible for, and will indemnify and hold BCP
harmless from and against, the entirety of any and all losses, expenses
(including reasonable attorney's, accountant's and expert's fees and
expenses), damages, indictments, fines, penalties, actions and other
liabilities (collectively, "Losses") arising out of:
(i) damage to the Dock Facilities (except to the extent caused by
the gross negligence of BCP, its employees or agents, with respect to
which BCP shall indemnify and hold BCI harmless);
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(ii) injury to or death of any BCI employee (except any injury or
death arising from or caused by the gross negligence of BCP, its
employees or agents, with respect to which BCP shall indemnify and hold
BCI harmless); and
(iii) damage to property of third parties or for injury to or
death of third persons arising out of operations hereunder, including
but not limited to those arising under federal, state or local
environmental laws, rules or regulations, to the extent caused by the
negligence of BCI, its employees or agents.
(b) BCP will be responsible for, and will indemnify and hold BCI
harmless from and against, the entirety of any Losses arising out of:
(i) damage to the EDC Equipment, pipelines and related facilities
owned by BCP (except to the extent caused by the gross negligence of
BCI, its employees or agents, with respect to which BCI shall indemnify
and hold BCP harmless);
(ii) injury to or death of any BCP employee (except any injury or
death arising from or caused by the gross negligence of BCI its
employees or agents, with respect to which BCI shall indemnify and hold
BCP harmless); and
(iii) damage to property of third parties or for injury to or
death of third persons arising out of operations hereunder, including
but not limited to those arising under federal, state or local
environmental laws, rules or regulations, to the extent caused by the
negligence of BCP, its employees or agents.
8. Taxes.
BCI shall be responsible for payment of all payroll taxes or contributions
payable under the Federal Insurance Contributions Act, the Federal Unemployment
Tax Act, and under applicable State Unemployment Insurance or Compensation Laws
and any amendments to these laws, measured by wages paid by BCI to its employees
and to the employees of any contractor of BCI with respect to employment of said
employees in the operation of the Dock Facilities and the services to be
performed hereunder.
BCI shall pay taxes on its cargoes and on the Barge Facilities and related
facilities and appurtenances owned by it, whether located on its property or on
BCP's property. BCP shall pay all taxes on its Cargoes and on the EDC Equipment
and related facilities owned by it, whether located on its property or on BCI's
property.
Any sales, use or excise tax imposed on the services provided hereunder by
federal, state or local government authorities will be itemized on BCI's
invoices and paid by BCP to BCI.
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9. Liability for Loss of Cargoes.
BCI shall provide properly trained personnel to work on the Dock Facilities
in accordance with U.S. Coast Guard regulations; provided, however, BCI assumes
no liability for loss of Cargoes or for contamination thereof and BCP agrees to
hold BCI harmless for such loss or contamination regardless of cause.
In the event that Cargoes are lost during handling due to pipeline,
equipment, hose, vessel or any other failure, and such Cargoes spill onto the
Mississippi River levee or battery or into the waters of the Mississippi River,
then:
(a) BCP shall indemnify and hold BCI harmless from any and all
Losses, including, but not limited to, those arising out of damage to
property of third parties or for injury or death of third parties and those
arising under federal, state or local environmental laws, rules or
regulations, except to the extent caused by the gross negligence of BCI,
its employees or agents; and
(b) BCI shall indemnify and hold BCP harmless from any and all
Losses, including, but not limited, to those arising out of damage to
property of third parties or for injury or death of third parties and those
arising under federal, state or local environmental laws, rules or
regulations, to the extent caused by the gross negligence of BCI, its
employees or agents.
In the event that cargoes handled at the Dock Facilities (other than
Cargoes) are lost, and such shipments spill onto the Mississippi River levee or
battery or into the waters of the Mississippi River, BCI shall indemnify and
hold BCP harmless from any and all Losses resulting therefrom, except to the
extent caused by the gross negligence of BCP, its employees or agents, with
respect to which BCP shall indemnify and hold BCI harmless.
All reportable spills and emissions will be reported by BCP to the
appropriate state and federal agencies as required. BCP shall be obligated to
comply with all Superfund Amendments and Reauthorization Act (SARA), Title III,
toxic release reporting requirements.
Should any rules or regulations effect a change in loading procedures for
EDC Cargoes or require permits from any governmental agency, BCP shall be
responsible for all additional costs incurred and/or for obtaining such permits,
provided, however, if BCP decides it does not want to incur such costs or obtain
such permits, BCP may forthwith terminate this Agreement insofar as the affected
Cargoes are concerned, provided further, that BCP promptly notifies BCI of BCP's
decision and reimburses BCI for the cost of removing any affected pipelines or
related facilities from BCI's property. BCP shall provide BCI with copies of all
permits.
10. Hazard Information.
BCP shall provide BCI with all Materials Safety Data Sheets prescribed by
OSHA and relating to the safe and efficient handling of Cargoes by BCI.
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11. Fees.
BCP shall pay BCI an annual fee of $50,000 for the use of the Dock
Facilities plus an additional fee (the "Throughput Fee") of $1.50 per ton of
Cargo (loaded or unloaded) for BCP at the Dock Facility. The Throughput Fee
shall be adjusted as of October 1, 2001 and annually thereafter, by an amount
equal to the percentage increase, if any, in the hourly rate of pay for a barge
dock operating technician (whether employed by BCI or a third party having a pay
scale escalating reasonably within industry norms), compared to the rate of pay
for the same classification of BCI or such third party, as the case may be, as
of October 1, 2000, or the last annual adjustment date, as the case may be.
The annual fee shall be payable in advance beginning on the date hereof and
thereafter on each anniversary of such date.
BCI shall invoice BCP monthly for the Throughput Fee for Cargoes handled
during the previous month. Each invoice shall be payable in full within thirty
(30) days of the invoice date. BCP shall furnish evidence to BCI of the tonnage
of the Cargoes handled. For billing purposes, any movement of Cargoes shall be
deemed to have been completed as of the same date it was commenced.
12. Audit.
BCP shall have the right, not more than once each year, to have all books
and records pertaining to any fees or charges assessed by BCI hereunder audited
by an independent accounting firm selected and paid for by BCP. Such accounting
firm will maintain the confidentiality of books and records being audited and
shall either verify the correctness of the fees and charges assessed hereunder,
or advise the parties of the composite adjustments required to correct any
discrepancies for the period being audited.
BCP shall have the right at any time, upon reasonable prior notice, to
audit the Barge Dock operation in order to assess whether operations are being
conducted in accordance with the terms in this Agreement. In the event BCP
identifies any inadequacies in operation, it shall promptly notify BCI. BCI
shall, within thirty (30) days of receipt of any such notice, cure any
operational inadequacy identified by BCP or notify BCP that it believes its
operations are in compliance with the terms of this Agreement.
13. Term.
The term of this Agreement shall commence as of the date hereof and
continue for an initial term of ten (10) years. Notwithstanding the foregoing,
BCP shall be entitled to terminate this Agreement at any time during the initial
term upon not less than three hundred sixty (360) days advance written notice to
BCI should it find that it has no further need for use of the Dock Facilities.
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Following the initial term, this Agreement shall be automatically extended
on a year to year basis, unless and until either:
(a) BCI gives BCP not less than twenty-four (24) months advance
written notice of termination (which notice may be given at any time
commencing with the 24th month prior to the end of the initial term); or
(b) BCP gives BCI not less than three hundred sixty (360) days
advance written notice of termination.
In the event this Agreement is terminated by BCI, or by BCP after a refusal
by BCI to increase the maximum number of barges carrying EDC Cargoes pursuant to
Section 5 hereof, and in the further event that it is necessary for BCP to
obtain easements or rights of way across BCI's property in order to procure EDC,
then BCI agrees that it will grant such easements or rights of way to BCP along
mutually agreed, reasonably convenient routes.
14. Force Majeure.
No party hereto shall be deemed in default with respect to any of the
terms, covenants and conditions of this Agreement which are to be performed, to
the extent that the party's failure to timely perform the same is caused
directly or indirectly by any strike, lockout, labor trouble, civil disorder,
injunction, restrictive governmental laws or regulations, riots, insurrections,
fire, sabotage, explosion, war, acts of God, inability to obtain raw materials
or electric power, equipment outage or loss of equipment beyond the reasonable
control of the non-performing party or any other cause beyond the reasonable
control of the non-performing party. Such party shall promptly notify the other
party of the occurrence of such event and shall use its reasonable best efforts
to remedy such event as soon as practicable; provided that the settlement of any
strike, lockout or labor trouble shall be within the sole discretion of the
affected party. If any force majeure event affects only part of BCI's capacity
to provide services hereunder, then BCI shall allocate the available capacity of
the Dock Facilities between its own requirements and its contractual commitments
hereunder in a fair and equitable manner. If either party is prevented from
performing for any of the foregoing reasons, it shall cooperate with the other
party's efforts to obtain an alternate source of service, including granting all
reasonable and necessary easements or servitudes.
15. Condemnation.
In the event all or substantially all of the Dock Facilities are taken for
public or quasi-public use by any power or authority having the right to take
the same by condemnation, eminent domain, or otherwise, this Agreement shall
terminate as of the date title shall vest in the taking body and the parties
hereto shall be released of and from all obligations and liabilities to each
other accruing hereunder.
In the event a portion of the Dock Facilities is taken for public or quasi-
public use by any power or authority having the right to take the same by
condemnation, eminent domain, or
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otherwise, BCI shall allocate the available capacity of the Dock Facilities
between its own requirements and its contractual commitments hereunder in a fair
and equitable manner.
In the event of such taking, the parties hereto shall each be entitled to
claim and have paid to them for their respective use and benefit a proportional
part, as their interests may appear, of the amount awarded as compensation for
the Dock Facilities so taken.
16. Notices.
All notices required or permitted to be given hereunder shall be deemed
given if either delivered personally to BCI or BCP or if deposited in the United
States mail, in a sealed envelope with first class postage thereon prepaid,
addressed to BCI or to BCP at their respective addresses given hereinabove or to
such other address as the parties may direct by notice given as hereinabove
provided.
17. Assignment; Subcontracting.
BCP may assign all, or any portion, of its rights or obligations hereunder
to a purchaser of the Optioned Assets or of the EDC Equipment. Neither this
Agreement nor any rights or obligations of BCP hereunder may be assigned to any
person, other than a purchaser of the Optioned Assets or of the EDC Equipment,
without the prior written consent of BCI, such consent not to be unreasonably
withheld, and any such attempted assignment without such consent shall be void.
The term "BCP" shall include any successor or permitted assign of BCP and, in
the event of a partial assignment, may include both BCP and such successor or
assign.
Neither this Agreement nor any rights or obligations of BCI hereunder may
be assigned to any person without the prior written consent of BCP, such consent
not to be unreasonably withheld, and any such attempted assignment without such
consent shall be void provided that BCI shall have the right to assign its
rights and obligations to any purchaser of BCI's Formaldehyde plant in Geismer,
Louisiana.
All the conditions, limitations, and agreements herein contained, and all
the obligations herein assumed, shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties hereto.
BCI shall have the right to engage an independent contractor for the
operation of the Dock Facilities and/or the performance of any or all of BCI's
duties hereunder with the prior written consent of BCP, which consent shall not
unreasonably be withheld. In such event, BCI shall remain subject to BCP for
the satisfactory performance of its obligations hereunder. It is understood and
agreed that BCP may withhold its consent unless such contractor agrees to
indemnify and hold BCP harmless from any and all Losses resulting from the
negligence of such contractor. For purposes of this Agreement, the negligence
of any such contractor shall not be attributed to BCI.
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18. Entire Agreement.
This Agreement constitutes the entire understanding between the parties
with respect to the operation and use of the Dock Facilities and supersedes all
previous understandings, agreements, communications and representations, whether
written or oral, concerning the subject matter to which this Agreement relates.
19. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Louisiana without giving effect to the choice of laws
principles thereof, and may not be superseded, amended or modified except by
written agreement between the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BORDEN CHEMICALS & PLASTICS
OPERATING LIMITED PARTNERSHIP
BORDEN CHEMICAL, INC. By: BCP Management, Inc., General Partner
By:______________________ By:___________________________
Title:___________________ Title:________________________
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