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EXHIBIT 10.6.1
TRANSPORTATION SERVICES AGREEMENT
DATED JULY 1, 1998
BY AND BETWEEN
USX CORPORATION - U. S. STEEL GROUP
AND
USS/KOBE STEEL COMPANY
ON THE ONE HAND
AND
USS GREAT LAKES FLEET, INC.
ON THE OTHER HAND
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TRANSPORTATION SERVICES AGREEMENT
BY AND BETWEEN
USX CORPORATION - U. S. STEEL GROUP
AND
USS/KOBE STEEL COMPANY
ON THE ONE HAND
AND
USS GREAT LAKES FLEET, INC.
ON THE OTHER HAND
INDEX
Article Title Page
------- ----- ----
1 TERM 2
2 TRANSPORTATION 2
3 SHIPPING SEASON 6
4 DECLARATION OF QUANTITIES 8
5 LOADING AND DISCHARGING OBLIGATIONS 11
6 LOADING AND DISCHARGING 12
7 FREIGHT AND RATES 13
8 SCOPE OF ACTIVITIES 14
9 FUEL COST ADJUSTMENT 15
10 EXTENDED SEASON FREIGHT SURCHARGE 16
11 AUDIT 17
12 LIENS 18
13 LIBERTIES 19
14 FORCE MAJEURE 19
15 LIMITATION OF THE CARRIER'S LIABILITY 21
16 GENERAL AVERAGE 22
17 BILLS OF LADING 23
18 MEDIATION 23
19 ARBITRATION 24
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Article Title Page
------- ----- ----
20 NOTICES 26
21 CHOICE OF LAW 27
22 INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES 27
23 ENTIRETY OF AGREEMENT; AMENDMENTS 28
24 ASSIGNMENT 28
25 RELATIONSHIP OF PARTIES 00
00 XXXXXXXX 00
00 MUTUAL RELEASE 29
LIST OF EXHIBITS:
Exhibit A Ports of Loading and Discharge
Exhibit B Vessels Owned and/or Leased by GLF
Exhibit C Base Affreightment Rates for 1998 and 1999 Shipping Seasons
Exhibit D Calculation of Fuel Cost Adjustment
Exhibit E Form of Xxxx of Lading
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TRANSPORTATION AGREEMENT
THIS AGREEMENT made and concluded this 21st day of December, 1998 but
effective the 1st day of July, 1998, by and between USX CORPORATION - U. S.
STEEL GROUP, a Delaware corporation with an office at 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 (hereinafter referred to as "USS")and
USS/KOBE STEEL COMPANY, an Ohio general partnership with an office at 0000 Xxxx
00xx Xxxxxx, Xxxxxx, Xxxx 00000 (hereinafter referred to as "USS/KOBE") each
referred to herein as a "SHIPPER" or collectively as "SHIPPERS," party of the
first part, on the one hand, and USS GREAT LAKES FLEET, INC., a Delaware
corporation with an office at 000 Xxxxxxx Xxxxxxxx, Xxxxxx, Xxxxxxxxx 00000-0000
(hereinafter referred to as "CARRIER"), party of the second part.
W I T N E S S E T H:
WHEREAS, CARRIER owns and operates a fleet of vessels for the
transportation of various dry bulk commodities on the Great Lakes; and
WHEREAS, SHIPPERS desire to have CARRIER provide certain vessel
transportation services originating on the Great Lakes required by SHIPPERS for
domestically sourced iron ore, iron pellets, taconite ore used for blast furnace
trim, and limestone (excluding and excepting both the taconite ore used for
blast
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furnace trim and the limestone that are purchased by USS/KOBE on a delivered
basis) (hereinafter "COMMODITIES") and other dry bulk commodities which the
parties may agree to include within this agreement; and
WHEREAS, CARRIER is willing to provide said transportation services to
SHIPPERS.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth the parties hereto, intending to be legally bound, agree
as follows:
1. TERM.
This Agreement shall be effective on July 1, 1998 and shall
remain in effect until March 15, 2005 (2004 SHIPPING SEASON).
2. TRANSPORTATION.
For purposes of this Agreement, the term "DECLARED TONNAGE"
means the total tons of COMMODITIES forecasted for shipment on the Great Lakes
in SHIPPERS' Official Annual Business Plan as of November 30 of the prior
calendar year ("BUSINESS PLAN") (as reflected in the USS Raw Materials Balance
Sheets which shall include the latest information available from USS/KOBE) for
consumption, purchase, exchange or use by SHIPPERS during the SHIPPING SEASON.
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During each SHIPPING SEASON and absent consent of CARRIER,
SHIPPERS may ship via third parties other than CARRIER no more than the
following percentages of the DECLARED TONNAGE set forth in SHIPPERS' BUSINESS
PLAN ("THIRD PARTY TONNAGE"):
SHIPPING THIRD-PARTY
SEASON TONNAGE
------ -----------
1998 600,000 GT*
1999 10%
2000 10%
2001 10%
2002 10%
2003 15%
2004 15%
*Given that this Agreement begins July 1, 1998, THIRD PARTY TONNAGE for 1998
SHIPPING SEASON will be expressed as and limited to 600,000 GT of pellets to
Lorain.
That portion of the DECLARED TONNAGE set forth in SHIPPERS' BUSINESS PLAN which
exceeds THIRD PARTY TONNAGE during the SHIPPING SEASON ("CARRIER'S TONNAGE")
shall be offered to CARRIER for transportation between the ports listed in
Exhibit A and such other ports as may be agreed upon ("PORTS"). The term
"CARRIER'S TONNAGE" does not include USS tonnage sold to or exchanged to third
parties where USS does not control the transportation of such tonnage under the
terms of sale or exchange, but does include all tonnage purchased by or
exchanged to USS. In those sales to and exchanges to third parties where USS
does not control the transportation of tonnage, USS shall use reasonable efforts
to induce the third party to utilize services of CARRIER for transportation of
all such tonnage.
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SHIPPERS shall make tonnage available to CARRIER for
transportation at dockside in monthly quantities sufficient to meet the INITIAL
FORECAST or any UPDATED FORECAST in such manner reasonably calculated to
maximize use of CARRIER'S vessels, and to permit CARRIER to transport all
CARRIER'S tonnage during the SHIPPING SEASON, SHIPPERS giving due consideration
to CARRIER'S available capacity of Class I and Class II vessels listed on
Exhibit B (including CARRIER'S ability to charter) and seasonal weather
conditions as well as the maximum monthly quantities established in Article
4(c). Except as provided in Articles 4(e) and 4(f) of this Agreement if, during
any SHIPPING SEASON, SHIPPERS ship via third parties other than CARRIER any
amount in excess of THIRD PARTY TONNAGE without first offering those tons to
CARRIER for transportation, then SHIPPERS shall pay CARRIER LIQUIDATED DAMAGES
of one dollar and ninety-six cents ($1.96 NT), as escalated in accordance with
the following paragraph of this Article 2 for every net ton of THIRD PARTY
TONNAGE so shipped, payable no later than fifteen (15) days from receipt of
invoice at the end of the SHIPPING SEASON.
If during the Term of this Agreement, SHIPPERS, for any reason
other than force majeure, fail to meet any of the volume commitments set forth
in Section 2 hereof for any given SHIPPING SEASON other than the final SHIPPING
SEASON of the Term, shippers may, in lieu of paying LIQUIDATED DAMAGES, make up
the deficit volume during the immediately succeeding SHIPPING SEASON
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by shipping such deficit volume plus an additional 10% of the deficit volume via
CARRIER, in addition to shipping its annual volume commitment for such
succeeding SHIPPING SEASON. If any portion of the deficit volume plus an
additional 10% of the deficit volume has not been shipped by the end of the
immediately succeeding SHIPPING SEASON, SHIPPERS shall pay the LIQUIDATED
DAMAGES (as then escalated) for such portion no later than thirty (30) days
after the end of such immediately succeeding SHIPPING SEASON.
LIQUIDATED DAMAGES shall be adjusted annually to be effective
January 1, 2000 and each January 1 thereafter up or down by the amount of the
cumulative percentage change between the October 1998 Producers Price Index, All
Commodities Unadjusted, published by the Bureau of Labor Statistics, U.S.
Department of Labor (PPI-U) and the most recent October PPI-U. If the PPI-U is
not available, then another Index mutually agreed to by the parties shall be
used. LIQUIDATED DAMAGES as adjusted shall never fall below the initial charges
of $1.96 NT.
In each SHIPPING SEASON, CARRIER shall use all reasonable
efforts to provide suitable and sufficient vessel capacity owned, leased or
chartered by CARRIER required to transport CARRIER'S TONNAGE, provided that a
nominated vessel may enter, depart and lie in all of said PORTS always safely
afloat. CARRIER shall make the vessels listed on Exhibit B,
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attached hereto and made a part hereof, available for transportation of
CARRIER'S TONNAGE and may charter vessel capacity to transport CARRIER'S
TONNAGE.
It is anticipated and intended (a) that SHIPPERS will advise
CARRIER of their requirements for transportation on the Great Lakes of dry bulk
materials other than COMMODITIES and for transportation on the Great Lakes
between Great Lakes ports other than those listed on Exhibit A; (b) that if
CARRIER can provide said services, CARRIER will propose competitive rates and
(c) that if mutual agreement is reached on all points, said requirements will be
tendered and transported pursuant to the provisions of this Agreement.
3. SHIPPING SEASON.
(a) For purposes of this Agreement, a SHIPPING SEASON is that
period extending from March 16 of one year through March 15 of the succeeding
year or such shorter period commencing March 16 or later that is determined by
the official seasonal opening and closing of navigating routes required for the
transportation in question. A SHIPPING SEASON consists of an "EARLY SEASON" that
starts at the commencement of the SHIPPING SEASON and lasts until April 7; a
"REGULAR SEASON" that starts on April 8 and extends through December 19 and an
"EXTENDED SEASON" that starts on December 20 and extends to the end of the
SHIPPING SEASON. Each SHIPPING SEASON shall be designated by the year in which
it commences, e.g., 1998 SHIPPING SEASON commences March 16, 1998.
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(b) CARRIER shall not be required to provide service hereunder
during the EARLY SEASON, if CARRIER determines, in its sole discretion, that
weather conditions are not conducive to effective and efficient operations
during all or any portion of such period, provided however, SHIPPERS may require
CARRIER to commence providing service hereunder during the EARLY SEASON if (1)
SHIPPERS agree to pay EXTENDED SEASON surcharges as set forth in Article 10; or
(2) if two of the three major fleets operating on the Great Lakes (i.e. American
Steamship, Oglebay Norton and/or Interlake) commence operations prior to April 8
from Head-of-the-Lakes PORTS to lower lake PORTS, in which case EXTENDED SEASON
surcharges shall not be applicable to that portion of the EARLY SEASON during
which two of the three major fleets operate. Any forecasted CARRIER'S TONNAGE
not transported by CARRIER during the EARLY SEASON due to CARRIER's decision not
to provide service shall be deferred for shipment by CARRIER to such times
during the balance of the SHIPPING SEASON as mutually designated by CARRIER and
SHIPPERS.
(c) CARRIER shall provide service hereunder during the
EXTENDED SEASON, without assessing EXTENDED SEASON surcharges, as long as
CARRIER, in its sole discretion, determines that weather conditions permit
effective and efficient operations. If CARRIER decides to cease operations
during any
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EXTENDED SEASON, it shall provide SHIPPERS not less than five days advance
notice of such cessation. SHIPPERS shall have the right to require CARRIER to
provide service after the date specified in such notice, but EXTENDED SEASON
surcharges, as set forth in Article 10, shall apply to any vessels loaded after
expiration of the 5-day period. Once notified of CARRIER'S intent to cease
EXTENDED SEASON operations, SHIPPERS shall also have the right to utilize the
vessel capacity of third parties still operating during the EXTENDED SEASON, and
any DECLARED TONNAGE transported by such third parties during the EXTENDED
SEASON shall be excluded from LIQUIDATED DAMAGES.
4. DECLARATION OF QUANTITIES.
SHIPPERS' INITIAL FORECAST and any UPDATED FORECAST shall
contain a monthly distribution of CARRIER'S TONNAGE which, when considering
CARRIER'S available vessel capacity (including CARRIER'S ability to charter) and
seasonal weather conditions, is reasonably calculated to permit CARRIER to
transport during the SHIPPING SEASON all tonnage that SHIPPERS must make
available to the CARRIER under this Agreement.
(a) On or before November 30 of each year, SHIPPERS shall
provide CARRIER with their BUSINESS PLAN showing the amounts of DECLARED
TONNAGE, THIRD PARTY TONNAGE, and CARRIER'S TONNAGE that SHIPPERS intend to
transport under this Agreement, each detailed by COMMODITIES and loading and
discharging PORTS
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for the succeeding SHIPPING SEASON. On or before February 15 of each year
SHIPPERS shall provide an initial written forecast ("INITIAL FORECAST") to
CARRIER detailing by COMMODITIES and loading and discharging PORTS their
requirements for transportation of CARRIER'S TONNAGE and THIRD-PARTY TONNAGE by
month and showing their distribution for each month of the SHIPPING SEASON
including tonnage SHIPPERS intend to transport during the EARLY SEASON and
EXTENDED SEASON. SHIPPERS and CARRIER shall confer and attempt to agree upon a
mutually acceptable distribution.
(b) At least 10 days prior to the beginning of each month of
the SHIPPING SEASON, SHIPPERS shall provide an updated written forecast
("UPDATED FORECAST") setting forth CARRIER'S TONNAGE and THIRD-PARTY TONNAGE
detailed by COMMODITIES and loading and discharging PORTS that they will require
to be transported during each remaining month of the SHIPPING SEASON, including
tonnage they will require to be transported during the EXTENDED SEASON.
(c) The maximum amount of tonnage which SHIPPER may require to
be transported by CARRIER in any given month is as follows:
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Vessel Capacity in (Gross)
--------------------------
Tons Per Month (000's)
-------------------------------------
Class I# Class II*
-------- ---------
March (25 through 31) 210 --
April 875 240
May 1,040 315
June 1,040 315
July 1,040 315
August 1,040 315
September 1,040 315
October 1,040 315
November 875 240
December (through 20th) 640 130
#Two Harbors to Xxxx. Two Harbors to Conneaut is 90% of these figures.
*Two Harbors to Lorain in Class II vessels.
SHIPPERS will designate and may prioritize monthly tonnage for
movement during the month and CARRIER will use reasonable efforts to move such
tonnage and to give priority to any portion designated as a priority shipment by
SHIPPERS.
(d) The INITIAL FORECAST shall be superseded by any UPDATED
FORECAST agreed upon by CARRIER and SHIPPERS. An UPDATED FORECAST shall be
superseded by any subsequent UPDATED FORECAST agreed upon by CARRIER and
SHIPPERS.
(e) If SHIPPERS' requirements during any SHIPPING SEASON
exceed the DECLARED TONNAGE set forth in SHIPPERS' BUSINESS PLAN ("EXCESS
DECLARED TONNAGE"), such EXCESS DECLARED TONNAGE shall be offered to, and, if
accepted, shall be transported by, CARRIER in accordance with the terms of this
Agreement. CARRIER will use reasonable efforts to arrange
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charter to supplement its capacity for movement of any EXCESS DECLARED TONNAGE,
contingent upon SHIPPERS right to approve any charter rates that exceed
CARRIERS' rates. Any portion of EXCESS DECLARED TONNAGE not accepted by CARRIER
for transportation may be shipped via third parties other than CARRIER and will
not be subject to LIQUIDATED DAMAGES.
(f) If during any month of a SHIPPING SEASON, CARRIER fails to
transport the amount of tonnage made available to it by SHIPPERS for shipment
and accepted by CARRIER for transportation, then SHIPPERS shall defer such
amount for shipment by CARRIER during the balance of the SHIPPING SEASON, as set
forth in subsequent UPDATED FORECASTS. If CARRIER does not agree it will be able
to transport such tonnage, SHIPPERS may ship such amount via third parties other
than CARRIER and such tonnage offered to and transported by third parties will
not be subject to LIQUIDATED DAMAGES.
5. LOADING AND DISCHARGING OBLIGATIONS.
SHIPPERS shall specify the Great Lakes loading PORT and
discharging PORT for each cargo, shall provide a berth at each port for the
nominated vessel, and shall make all arrangements for delivery of the cargo to
the loading PORT. Loading of COMMODITIES aboard CARRIER'S vessels shall be
accomplished by the SHIPPERS under the supervision of the Master of the vessel.
Each shipment shall be a minimum cargo size as set forth in Exhibit C.
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CARRIER shall transport each cargo from one safe berth at
loading PORT to one safe berth at discharging PORT and will deliver COMMODITIES
to SHIPPERS or to SHIPPERS' designee free end of boom ex-self-unloader. Without
limiting the duties and responsibilities of CARRIER hereunder, CARRIER will:
a. Comply with specifications and procedures required
of vessels loading or discharging COMMODITIES at the
designated PORTS and facilities and be responsible for all
charges imposed upon vessels loading or discharging at such
PORTS and facilities.
b. Prepare and issue all bills of lading, if any, and
other documents, notices and reports required in connection
with the transportation and discharge of COMMODITIES. Weights
of cargoes shall be determined according to established
practice at the various PORTS of loading or in such other
manner as shall be mutually agreed upon, but in any case shall
reflect actual weight to a degree reasonably practical.
6. LOADING AND DISCHARGING.
SHIPPERS shall load each entire cargo and shall accept
deliveries from self-unloading vessels day and night, Saturdays, Sundays and
holidays included. SHIPPERS shall diligently act to have facilities for the
loading and receipt of cargoes available and in good operating order upon the
arrival of any vessels and to load and receive cargo with all reasonable
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dispatch. CARRIER shall also diligently act to cause facilities for the loading
and receipt of cargoes that are owned or controlled by companies affiliated with
CARRIER to be available and in good operating order upon the arrival of any
vessels and to load and receive cargo with all reasonable dispatch.
7. FREIGHT AND RATES.
Freight shall be based on xxxx of lading weights and shall be
paid at the rates required by this Article 7, as adjusted for changes in the
price of fuel pursuant to Article 9. Freight shall be earned by CARRIER as the
cargo is loaded and shall be due and payable by SHIPPERS within fifteen (15)
days of receipt of billing, cargo and/or vessel lost or not lost. Affreightment
rates and related Benchmark Fuel Price for the 1998 and 1999 SHIPPING SEASONS
are set forth in Exhibit C attached hereto and made a part hereof.
Affreightment rates and related Benchmark Fuel Price for the
Year 2000 SHIPPING SEASON and each succeeding SHIPPING SEASON shall be agreed
upon annually before the beginning of the SHIPPING SEASON through good faith
negotiations conducted by CARRIER and SHIPPERS commencing in November of the
prior year. The affreightment rates negotiated by the parties shall be
competitive with affreightment rates offered for transportation services of
sizable magnitude by major competitors of CARRIER who are capable of providing
such services on a sustained basis, as indicated by the financial health and
operational capabilities of said competitors, as well as other
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indicators of ability. The parties acknowledge as of the effective date of this
Agreement the major competitors of CARRIER are American Steamship Company, The
Interlake Steamship Company, and Oglebay Norton Company. If an agreement has not
been reached on affreightment rates by January 1, the dispute may be referred to
the dispute resolution procedures in accordance with the provisions of Articles
18 and 19 herein.
If an agreement has not been reached by March 15, the dispute
will be referred to arbitration and appropriate competitive rates for the
pertinent SHIPPING SEASON shall be determined through those procedures. In all
cases, the preceding year's rates will be used in the interim until agreement is
reached or appropriate competitive rates are determined through the dispute
resolution procedures set forth in Articles 18 and 19 herein. Any interim rates
shall be revised retroactively to the rates agreed upon by the parties or
determined by the arbitration procedures set forth in Article 19. Any balance
due charges owed to CARRIER or refunds owed to SHIPPERS, shall be paid within
thirty (30) days of the date new rates are agreed upon or established.
8. SCOPE OF ACTIVITIES.
Unless otherwise mutually agreed, in the event CARRIER should
undertake movements (other than charters to other transportation companies) of
iron ore, pellets or stone in sizable quantities (quantities in any SHIPPING
SEASON in excess
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of 1.5% of CARRIER'S TONNAGE of iron ore, pellets or stone, for said SHIPPING
SEASON) which are destined for end use in blast furnaces other than SHIPPERS'
and/or by pellet producers other than USS, then the rates, terms and conditions
applicable to said services shall not be more favorable to such other shippers
than would be the rates, terms and conditions hereunder. If such services are
being provided by CARRIER on a basis more favorable to such other shippers than
the rates, terms and conditions then in effect under this Agreement, the rates,
terms and conditions for a like amount of similar service provided hereunder
shall be modified so that they are comparable to the rates, terms and conditions
provided to such other shipper.
9. FUEL COST ADJUSTMENT.
The BASE AFFREIGHTMENT RATES set forth on Exhibit C are based
on the weighted average price of fuels including any handling and delivery costs
where applicable of $0.4213 per gallon (Benchmark Fuel Price). Following each
month during a SHIPPING SEASON, CARRIER shall determine the value of the Fuel
Cost Adjustment. The Fuel Cost Adjustment is the difference between the
Benchmark Fuel Price and the CARRIER's actual weighted average cost for fuel
purchases during such month multiplied by the number of gallons consumed during
voyages hereunder which commenced during such month. Determination of the Fuel
Cost Adjustment is illustrated by the following formula:
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[ ($0.4213) ] Total Gallons
Fuel Cost [Actual Weighted Benchmark ] Consumed
Adjustment = Average Fuel Cost - Fuel Price ] x During Month
[Per Gallon Per Gallon ] for SHIPPER's cargo
CARRIER and SHIPPERS will share equally in the Fuel Cost Adjustment such that if
the Fuel Cost Adjustment is a positive amount, SHIPPERS shall pay fifty percent
(50%) of the Fuel Cost Adjustment within thirty (30) days of receipt of notice
of the determination. CARRIER shall supply supporting documentation for
calculation and determination of the charges. If the value of the Fuel Cost
Adjustment is a negative amount, CARRIER shall issue a credit to SHIPPERS within
thirty (30) days of the determination representing fifty percent (50%) of the
Fuel Cost Adjustment. It is the intent of the parties, that CARRIER and SHIPPERS
share in the risks of rising or the benefit of declining fuel prices through the
Fuel Cost Adjustment Procedure. An example of the application of the Fuel Cost
Adjustment Procedure set forth in Exhibit D.
10. EXTENDED SEASON FREIGHT SURCHARGE.
The applicable affreightment rate surcharge and fuel cost
adjustment will be assessed pursuant to the provisions of Article 3 for all
tonnage carried on voyages identified in Article 3 as requiring an EXTENDED
SEASON freight surcharge when the number of hours actually used in completing
said voyage exceeds the number of hours set forth below by using the following
table and formulas:
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ORIGIN DESTINATION ALLOWED HOURS
------ ----------- -------------
Two Harbors/Silver Bay Xxxx 148.0
Duluth Xxxx 149.5
Xxxxxxxxx Xxxx 112.0
Escanaba Xxxx 76.0
Two Harbors/Silver Bay Lorain 159.0
Duluth Lorain 160.5
Marquette Lorain 120.0
Escanaba Lorain 107.0
Two Harbors/Silver Bay Conneaut 161.0
Duluth Conneaut 162.5
Marquette Conneaut 126.5
Escanaba Conneaut 114.0
Xxxxxx City/Cedarville All Ports 76.8
EXTENDED SEASON [ Actual Voyage Hours - 1.00 ] x 0.71 (Freight Rate) x Number of
Surcharge ------------------- Tons on the
for a Voyage = [ Allowed Hours Voyage
SHIPPERS shall also be surcharged for and reimburse CARRIER for the expenses of
any ice breaker or special tug service required for the navigation of a voyage
any part of which occurs during the EXTENDED SEASON. For purpose of this Article
10 a voyage shall be deemed to commence upon departure of the nominated vessel
from the port of discharging its prior cargo and shall terminate upon completion
of discharging the cargo hereunder.
11. AUDIT.
SHIPPERS AND CARRIER shall each have the right to audit the
other's records insofar as necessary to ensure compliance with all of the terms
and conditions of this
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Agreement. Such audits shall be performed by an internal or external auditor,
provided however, that the party being audited shall have the right to require
that any audit be conducted by a mutually agreeable independent auditor and that
the details of the information examined in such audit be kept confidential from
the party requesting the audit, except to the extent necessary to resolve any
controversy that is pursued in good faith. The first $20,000 of cumulative total
audit expense annually incurred for audit services required by any party to be
performed by independent auditors shall be shared equally by the parties.
Thereafter, such audit expense shall be borne by the party requesting the audit.
12. LIENS.
CARRIER shall have a lien on cargo shipped pursuant to this
Agreement for any and all freight, expenses, charges, indemnity or other monies
due to the CARRIER hereunder with respect to such cargo or any part thereof. If
a vessel is under charter to the CARRIER, then the CARRIER shall defend,
indemnify and hold the SHIPPERS harmless from any lien on cargo exercised by the
owner or chartered owner of the vessel arising from the failure of the CARRIER
to discharge its obligations under such charter.
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13. LIBERTIES.
Any vessel provided or intended to be provided hereunder shall
have liberty to bunker en route, to call at any ports in any order for any
reasonable purpose, to tow or assist vessels in all situations, and to deviate
for the purpose of saving life or property. Such vessel shall have the liberty
to comply with any directions or recommendations, whether as to departure,
arrival, routes, ports of call, stoppages, destinations, loading, discharging or
otherwise, given by any governmental authority or by any person or body acting
or purporting to act as or with the authority of any government. If in complying
with such directions or recommendations anything is done or is not done, it
shall not be deemed a deviation.
If a vessel puts into any port in distress or there is an
interruption of the voyage, CARRIER shall immediately notify SHIPPERS of same.
SHIPPERS may name an agent at such port to whom the cargo shall be consigned, if
it is to be discharged at such port. CARRIER shall likewise immediately notify
SHIPPERS if cargo or any part thereof must be jettisoned.
14. FORCE MAJEURE.
Neither CARRIER nor SHIPPERS, nor any vessel provided
hereunder, nor the Master, owner or chartered owner of any such vessel shall be
liable for damage, injury, delay, or breach of this Agreement resulting from any
condition of force majeure, except as otherwise provided in this Agreement.
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Force majeure shall be deemed to exist, if for any reason
beyond the control of the party declaring force majeure, performance hereunder
is rendered impossible or the Master, owner or chartered owner of the vessel
considers it unsafe, imprudent or unlawful to proceed to or reach or enter the
loading or discharging port without undue delay or expense whether or not such
condition is a temporary one. The term "force majeure" shall include, but is not
limited to, the following: act or state of war or warlike operations; civil
commotion, revolution, insurrection or riots; government requisition, embargo,
allocation, control or other restrictions; seizure under legal process;
governmental directions or recommendations; the operation of international law;
strikes, lock-outs, work stoppages, labor shortages, or other labor disruptions
of any nature; act of God; perils of the sea or other waters; accidents or
casualties whether or not involving a vessel hereunder which limit the efficient
operation of such vessel; ice or frost; fire on land or water; weather
conditions; act, neglect or default of the Master, mariner, pilot or the
servants of the shipowner or vessel operator; equipment failure; accident,
break-down or damage to any vessel provided or intended to be provided pursuant
to this Agreement, unless resulting from unseaworthiness caused by want of due
diligence on the part of CARRIER, owner or chartered owner of the vessel.
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Notwithstanding the occurrence of a condition of force
majeure, both CARRIER and SHIPPERS shall perform such of their duties and
obligations hereunder as conditions will reasonably permit. The party whose
performance is affected by any such occurrence shall promptly notify the other
party thereof, giving reasonable particulars regarding its commencement, nature
and expected duration, and shall take all reasonable steps to mitigate and
terminate said condition.
If a condition of force majeure occurs, CARRIER and SHIPPERS
shall, after consultation when possible, act to mitigate the cost impact of such
occurrences to their mutual best interests, provided however, no party to this
Agreement shall be obligated to settle any strike, lockout, work stoppage, or
labor dispute, except as such party deems advisable in its sole discretion.
15. LIMITATION OF THE CARRIER'S LIABILITY.
Transportation performed pursuant to this Agreement shall be
subject to the provision of the Carriage of Goods by Sea Act of the United
States, approved April 16, 1936, except to the extent modified by this
Agreement; nothing in this Agreement, however, shall be deemed a surrender by
CARRIER of any of its rights or immunities or an increase of any of its
responsibilities or liabilities under said Act or any other law applicable to
this Agreement. Owners and chartered owners of any vessels employed in the
service of SHIPPERS under this Agreement
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shall have all the rights, immunities and limitations of liability provided to
carriers by the Carriage of Goods by Sea Act of the United States. If the
operation of any term of this Agreement is repugnant to said Act to any extent,
such term shall be deemed void to that extent, but no further.
CARRIER may provide all or part of the transportation herein
contemplated by means of vessels chartered or to be chartered by CARRIER from
others. CARRIER shall be exempt from liability, however, for any delay or
failure of performance caused directly or indirectly by any condition beyond its
reasonable control which prevents or hinders it from chartering or keeping under
charter vessel tonnage suitable and sufficient for the transportation which the
CARRIER has undertaken to provide for SHIPPERS and other parties prior to
CARRIER'S becoming aware, or having reason to know, that it would be unable to
obtain or keep adequate vessel capacity under charter.
16. GENERAL AVERAGE.
In the event of accident, danger, damage or disaster before or
after the commencement of the voyage, resulting from any cause whatsoever,
whether due to negligence or not, for which, or for the consequences of which,
the CARRIER is not responsible, by statute, contract or otherwise, the goods,
shippers, consignees or owners of the goods shall contribute with the CARRIER in
general average to the payment of any sacrifices,
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losses or expenses of a general average nature that may be made or incurred and
shall pay salvage and special charges incurred in respect of the goods. If a
salving ship is owned or operated by the CARRIER, salvage shall be paid for as
fully as if such salving ship or ships belonged to strangers. This Article shall
apply only in circumstances where general average shall be applicable under this
Agreement.
17. BILLS OF LADING.
The transportation of cargo pursuant to this Agreement shall
be subject to the terms appearing in the "American Form 1942 Xxxx of Lading for
Bulk Cargoes Other than Grain and Seed" attached hereto as Exhibit E, the terms
of which are incorporated herein by this reference and which shall apply whether
or not said form is actually issued with regard to any given shipment. Should
there be any inconsistency between the terms so incorporated and the other terms
of this Agreement, this Agreement shall prevail.
18. MEDIATION.
At any time prior to the start of sworn testimony in
arbitration, provided under Article 19 of this Agreement, either party may
submit a dispute arising hereunder to non-binding mediation. The mediator shall
be selected by the parties from a panel of candidates provided by JAMS of
Pittsburgh, Pennsylvania or such other mediation service acceptable to the
parties. Neither submission of a dispute to a mediation nor conclusion of the
mediation process shall be a
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condition precedent to exercise of the arbitration remedy available to the
parties under this Agreement. If a dispute is submitted to mediation:
1) the parties shall mediate the dispute in good faith;
2) mediation shall occur in Allegheny County, Pennsylvania.
3) final decision makers for each party on any matter in dispute shall
personally attend all mediation sessions;
4) the mediator shall have complete control of the mediation timing and
process, provided however, that the mediation shall conclude no later
than fourteen (14) calendar days from the day of the initial meeting
between the mediator and the parties;
5) all agreements reached in mediation shall be reduced to writing before
concluding the mediation process;
6) the parties may jointly agree to have the mediator make a final and
binding decision;
7) no discovery will be taken during the mediation process;
8) the mediation process shall be confidential and each party shall have
the right to designate any information provided to the mediator as
"Confidential and Proprietary."
19. ARBITRATION.
All disputes arising under this Agreement shall be referred to
binding arbitration conducted expeditiously in accordance with CPR Rules for
Non-Administered Arbitration of Business Disputes ("CPR Rules") by a three
person panel of arbitrators, each party choosing one arbitrator and the two
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arbitrators so chosen selecting a third, neutral arbitrator. The failure or
inability of either party to choose an arbitrator or of the arbitrators chosen
by the parties to select a third neutral arbitrator shall be resolved in
accordance with the CPR Rules. Arbitration shall be conducted at a mutually
convenient location in Allegheny County, Pennsylvania or at such other location
as the parties may agree. The award in writing signed by any two of the
arbitrators shall be final and binding. Either party shall have the right to
seek, and the arbitrators shall determine, declaratory relief of the nature
generally set forth in the Uniform Declaratory Judgments Act (as in effect in
the Commonwealth of Pennsylvania and as the same may be amended from time to
time) including, but not limited to, questions of construction of this
Agreement, or a declaration of rights, status or other legal relations
hereunder. The arbitrators shall apply the substantive statutory and common law
of the Commonwealth of Pennsylvania to the dispute and the evidentiary laws of
the Commonwealth of Pennsylvania to the arbitration proceeding. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16,
and judgment upon the award entered by the arbitrators may be entered by any
court having jurisdiction thereof. The arbitrators shall not award damages in
excess of compensatory damages. The costs and expenses of the arbitration (other
than attorneys' fees, if any)
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shall be borne one-half by each party. The arbitrators shall be permitted to
review existing documents or records of any party to the extent that, in the
sole discretion of the neutral arbitrator, such documents and/or records are
deemed to be relevant and to the extent the parties are permitted by law or by
contract to convey such documents or records to the arbitrator. Either party
shall have the right to designate any information sought in discovery or
provided to the arbitrators at their request as confidential and/or proprietary
in which case the neutral arbitrator shall determine whether the information
sought shall be disclosed in discovery or, if such information is provided to
the arbitrators at their request, shall not convey such information to the other
party.
20. NOTICES.
All notices, communications and payments to SHIPPERS or
CARRIER pertaining to this Agreement shall be deemed sufficiently made if in
writing and delivered (i) in person to an office of the intended recipient, or
(ii) by registered or certified mail, return receipt requested; or (iii) by
overnight delivery service which provides proof of delivery; or (iv) by
telecopy, with a duplicate copy sent via first class mail, postage prepaid,
addressed as follows or to such other address as SHIPPERS or CARRIER shall
designate in writing:
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If to SHIPPERS:
USX Corporation-U. S. Steel Group
000 Xxxxx Xxxxxx - Xxxx 0000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Director - Raw Materials Planning,
Procurement and Distribution
Phone: 000-000-0000
Fax: 000-000-0000
USS/KOBE Steel Company
0000 Xxxx 00xx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Vice President-Finance and Administration
Phone: 000-000-0000
Fax: 000-000-0000
If to CARRIER:
USS Great Lakes Fleet, Inc.
000 Xxxxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx 00000-0000
Attention: Director of Marketing
Phone: 000-000-0000
Fax: 000-000-0000
21. CHOICE OF LAW.
To the extent the law of a state of the United States of
America will govern this Agreement, the law of the Commonwealth of Pennsylvania
shall apply, without regard to the principles therein pertaining to the
conflicts of laws.
22. INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES.
In no event shall either party be liable for any indirect,
special or consequential damages as a result of a breach of any provision of
this Agreement.
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23. ENTIRETY OF AGREEMENT; AMENDMENTS.
The Transportation Agreement between SHIPPERS and CARRIER
dated March 16, 1988, is superseded as of the effective date of this Agreement
and is of no further force and effect. This Agreement constitutes the entire
Agreement of the parties with respect to the subject matter hereof. No change,
modification or alteration of this Agreement shall be effective unless reduced
to writing and signed by the parties hereto. Waiver by either party of any
breach of this Agreement, shall not be construed as a waiver of any other
breach.
24. ASSIGNMENT.
Neither party to this Agreement shall assign or transfer this
Agreement or any interest herein, other than to the lenders providing financing
to Transtar, Inc. (which lenders will act through a single agent), without the
prior written consent of the other party, which consent shall not be
unreasonably withheld. Subject to the provisions of this Article 24, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns to the parties. Neither SHIPPER shall directly or indirectly sell,
transfer or otherwise dispose of all or a substantial portion of the assets of
the facilities served by CARRIER during the term of this Agreement to any party
which intends to operate these facilities for the production of steel or
steel-related products, unless the purchaser, acquiror or other transferee of
such facilities assumes, in a writing
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reasonably satisfactory to CARRIER, all of the rights and obligations set forth
in this Agreement.
25. RELATIONSHIP OF PARTIES.
The relationship between SHIPPERS and CARRIER under this
Agreement shall be that of independent contractors. Nothing contained in this
Agreement shall be deemed to constitute a relationship of agency, joint venture,
partnership, or any relationship other than that specified.
26. HEADINGS.
The headings in this Agreement are inserted for ease of
reference only and shall in no way be used to interpret any of the terms or the
intent of this Agreement.
27. MUTUAL RELEASE.
The parties fully release and discharge each other from all
claims, known and unknown, arising under the 1988 Agreement which either party
may have against the other party to this Agreement. This provision is not
intended to apply to personal injury or property damage claims that either party
may have against the other.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the day and year first above written.
USX CORPORATION - U. S. STEEL GROUP
By /s/ Xxxx X. Xxxxxxx
--------------------------------
Title: President
USS/KOBE STEEL COMPANY
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: President
USS GREAT LAKES FLEET INC.
By /s/ Xxxxxx X. Xxxxxx
--------------------------------
Title: President
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