Document:

exv10w13

 

Exhibit 10.13

Amendment #1

     This First Amendment (the “Amendment”) to the Supply Agreement ( the “Supply
Agreement”) dated as of June 2, 2003 to be effective August 1, 2003 between Voestalpine Tubulars
GmbH & Co KG and Grant Prideco, Inc. is entered on this 30th day of November 2003 to be made
effective the 1st day of October, 2003 (effective for purchase orders placed on or after
October 1, 2003).

WHEREAS, the parties entered into the above referenced Supply Agreement; and

WHEREAS, the parties now desire to amend paragraphs 4.1, 4.3 and 6.2 of the Supply Agreement as
follows.

NOW THEREFORE, for good and valuable consideration, which is hereby acknowledged, the parties
agree to amend the Supply Agreement as follows:

	 	1.  	Paragraph 4.1 (sentence on line 11 and 12 only): The sentence on line 11 and
12 of Paragraph 4.1 of the Supply Agreement shall be replaced in full with the following
sentence:

“The Purchase Price is calculated on the basis of DES Houston full liner terms
in accordance with Incoterms 2000.”

	 	2.  	Paragraph 4.3: Paragraph 4.3 of the Supply Agreement shall be replaced in full
with the following paragraph 4.3:

“4.3 Invoices will be submitted by Seller to Purchaser. Invoices will reference Purchaser’s
purchase order number and will contain such other information as Purchaser may reasonably request.
Purchaser shall effect payment within sixty (60) calendar days after notice of readiness (or
delivery order). Purchaser shall pay interest on overdue invoice payments that are not contested
as provided in Section 3.3 from the due date up to the actual date of payment at the rate
determined to be three percent (3%) per annum above the six months EURIBOR.”

	 	3.  	Paragraph 6.2: Paragraph 6.2 of the Supply Agreement shall be replaced in full
with the following paragraph 6.2:

“6.2 Delivery is DES Houston full liner terms in accordance with Incoterms 2000.
Purchaser may also request, as specified in any particular purchase order, that the delivery
destination of the Material be a location other than Houston, for the calculation for the Purchase
Price, Section 4.1 of this Supply Agreement shall apply.”

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     This amendment #1 is signed to be made effective October 1, 2003.

Voestalpine Tubulars GmbH & Co KG

	 	 	 	 	 	 	 
	By

	 	/s/ Hubert Wastl
	 	 	 	/s/ Hillka Witt
	

	 	 
	 	 	 	 
	

	 	Hubert Wastl
	 	 	 	Hilkka Witt
	

	 	 	 	Managing Directors	 	 

	 	 	 	 	 
	Grant Prideco, Inc.	 	 
	 
	 	 	 	 
	By

	 	/s/ Dan Latham	 	 
	

	 	

	 	 
	

	 	Dan Latham, President	 	 
	

	 	Drilling Products & Services	 	 

2exv10w14

 

Exhibit 10.14

Amendment #2

     This Second Amendment (the “Amendment #2”) to the Supply Agreement dated as of June 2,
2003 to be effective August 1, 2003 (the “Supply Agreement”) between Voestalpine Tubulars GmbH & Co
KG and Grant Prideco, Inc. is entered on this ___day of January 2005 to be made effective as of
April 1, 2004.

WHEREAS, the parties entered into the above referenced Supply Agreement; and

WHEREAS, the parties entered into Amendment #1 dated November 30, 2003 to be effective October 1,
2003 (hereinafter “Amendment #1); and

WHEREAS, the parties now desire to amend certain paragraphs of the Supply Agreement as set forth
in this Amendment #2; and

NOW THEREFORE, for good and valuable consideration, which is hereby acknowledged, the parties
agree to amend the Supply Agreement as follows:

	1.  	Capitalized Terms: The capitalized terms herein shall have the meaning set forth in
the Supply Agreement.

	2.  	Paragraph 2.4 Forecast: Add new Paragraph 2.4 to the Supply Agreement. The new
Paragraph 2.4 shall read as follows:
	 
	   	“2.4 On or before December 31st of each calendar year Purchaser shall provide Seller
with an estimate of its forecasted Green Pipe needs for the upcoming calendar year. Seller shall
be committed to provide the forecasted Green Pipe needs so long as such amounts are at or below
the amounts set forth in paragraph 2.3. Purchaser will use commercially reasonable efforts to
provide Seller with an accurate forecast however, both parties agree that the forecast is to be
treated as an estimate only. If Purchaser’s actual Green Pipe needs exceeds the estimate,
Seller will use its reasonable best efforts to supply the amount of Green Pipe exceeding the
forecast up to the amounts set forth is paragraph 2.3. If Purchaser’s actual
Green Pipe needs are below its forecasted needs, then Purchaser shall be subject to the
penalties set forth in paragraph 13.1 should the Purchaser’s actual Green Pipe purchases fall
below the minimum averages set forth therein.

	3.  	Paragraph 4.2(A) Surcharge: Add new Paragraph 4.2(A) to the Supply
Agreement. The new Paragraph 4.2 (A) shall read as follows:

“4.2(A) –

(1) For Green Pipes entering production April, May, and June of 2004 Purchaser agreed to
pay a temporary material adjustment of EURO 80/ metric ton. This charge applies only to
those Green Pipes scheduled on Annex 4.2 (A) (1) attached hereto and will
not apply to the Surcharge calculation in 4.2 (A) (2) below.

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(2) Subject to the 13,280 metric ton exemption further specified in 4.2 (A) (3) below, Green
Pipes entering production after July 1, 2004 will be subject to a new raw material surcharge
(a “Surcharge”). The Surcharge shall generally be calculated as follows and the
calculations will be used in accordance with Paragraph 4.2 (B) (below). For purposes of this
provision, Green Pipes entering production shall be considered to be “entering production”
when they begin the process at Seller’s facility of being transformed from raw material into
Green Pipes.

(a). The Seller’s actual cost for the following raw material as of April 2003 (the
“April 2003 Base Cost”) will be subtracted from the Seller’s actual cost for such
raw material for the applicable month. The actual raw material cost for each
chemistry of Green Pipe will be calculated by taking the average amount of raw
material in the particular chemistry of Green Pipe and multiplying that number times
the unit cost for the applicable raw material. The raw material that will be made a
part of this calculation will be (i) coke, (ii) alloying elements, (iii) iron ore,
and (iv) scrap.

(b). The difference derived from the calculation for each raw material in (a) above
(whether positive or negative) will be added together to establish a
subtotal. For clarity, this subtotal may be positive or negative.

(c). The subtotal established in (b) above, shall be divided by .88 (to account for
the average yield loss of 12%) to establish the yield loss adjusted subtotal.

(d). A scrap credit (derived in accordance with this paragraph) shall then be
subtracted from the yield loss adjusted subtotal established in (c) above to
establish the actual Surcharge. The Surcharge will be added to or subtracted from
the Purchase Price of the Green Pipes as established in paragraphs 4.1 and 4.2. The
scrap credit will be 9% of material processed multiplied by the scrap price. The 9%
is derived from an average yield loss of 12% minus 3% scale loss (which equals 9%).
If these components change over time, then the parties shall enter negotiations to
revise the scrap credit percent to the then current percentage.

A sample calculation of the Surcharge is provided as an example in Annex
4.2(A)(2)(d) attached to this Amendment #2.

(3). Notwithstanding the Surcharge specified in paragraph 4.2 (A) (2) above, Purchaser
shall be entitled to a 13,280 metric ton exemption from the Surcharge specified in 4.2 (A)
(2) above. To clarify, there will be no Surcharge on Green Tubes entering
production during July 2004 and thereafter, until after Seller has produced for Purchaser
13,280 metric tons of Green Tubes to Purchaser (with the starting date for production
beginning July 1, 2004), which Green Tubes are referenced in Annex 4.2(A)(3)
attached to this Amendment #2.

	4.  	Paragraph 4.2(B) Surcharge, Estimated Surcharge and True Up: Add new
Paragraph 4.2(B) to the Supply Agreement. The new Paragraph 4.2 (B) shall read as follows:

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“4.2 (B). Prior to the beginning of each calendar quarter, the parties will use estimated
raw material costs for (i) coke, (ii) alloying elements, (iii) iron ore, and (iv) scrap
(referenced in 4.2 (A) above) to establish an estimated Surcharge (further described below
and hereinafter referred to as “Estimated Surcharge”) for the quarter in question, and then
the parties will “true up” the Estimated Surcharge at the end of each month during the
quarter based on actual raw material costs for such month. The actual raw material costs
will be used to set the actual Surcharge for the month in question (further described below
and hereinafter referred to as “Actual Surcharge”). The Estimated Surcharge and the Actual
Surcharge will be calculated and used as follows:

(a). On a quarterly basis, at least six (6) weeks prior to the start of the calendar
quarter, Seller will provide a good faith estimate of the raw material pricing
differentials (from the April 2003 Base Cost) for the upcoming calendar quarter.
The Seller will then calculate the estimated Surcharge based on the calculation
described in 4.2(A). The Estimated Surcharge will then be used to adjust the
Purchase Price of the Green Pipe upward or downward as specified in 4.2(A) for the
applicable calendar quarter. From time to time during the calendar quarter, as more
accurate information becomes available, the parties may update the Estimated
Surcharge for the quarter to reflect better estimates. The goal being to make the
Estimated Surcharge as close to the Actual Surcharge as reasonably possible.

(b). Within fifteen (15) working days of the end of each month (during the
applicable calendar quarter), using the formula in 4.2(A) above and Seller’s actual
raw material cost for the month in question, Seller will provide Purchaser with
Seller’s actual Surcharge (the “Actual Surcharge”) for that particular month.
Purchaser shall have the right to review and confirm the validity of the Actual
Surcharge and, once the Actual Surcharge is agreed upon by the parties, the amounts
owed between the parties for Green Tube purchases during the month will be “trued
up” as provided below.

(c). The parties will “true up” the amounts owed between them by adjusting pricing
for the Green Pipes prior to invoicing upwards or downwards to compensate the
parties on a Euro for Euro basis for amounts under estimated or over estimated for
orders placed using the Estimated Surcharge (after comparing the Estimated Surcharge
to the Actual Surcharge).”

	5.  	Paragraph 4.6: Add new Paragraph 4.6 to the Supply Agreement. The new Paragraph 4.6
shall read as follows:

“4.6. Purchaser, at is own expense, shall through its internal or outside auditors,
have the right, during normal business hours, to inspect the records (and make copies) of
Seller’s records relating the cost of the materials specified in 4.2(A) and (B) above, yield
loss and Seller’s performance hereunder. Purchaser’s right to audit Seller, pursuant to

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this paragraph shall continue throughout the term of this Agreement, any renewals thereof
and for a period of three (3) years following its ultimate termination.

	6.  	Paragraph 13.1 : Paragraph 13.1 of the Supply Agreement shall be replaced in full
with the following paragraph 13.1:

“13.1 Purchaser agrees to pay a penalty of EURO 43.60, for each metric ton to the extent
that Purchaser orders fall short of the Annual Minimum Purchase Obligation of Purchaser
required under Section 2.1 by more than fifteen percent (15%) based on a two (2) year
average for the first two years of the Supply Agreement and a two (2) year average for the
last two (2) years of the Supply Agreement (for clarification the Parties intend to take a
two (2) year average of Materials purchased by Purchaser during years 1 and 2
of the agreement and compare the average to 44,200 metric tons (i.e. 85% of the Annual
Minimum Purchase Obligations). If the average for that period is equal to or above 44,200
metric tons, no penalties shall be due. If the average for that period is below 44,200
metric tons then the penalty will be due in an amount equal to: [each metric ton the average
is below 44,200 metric tons x the period average (2 years) x the penalty (EURO
43.60)] shall apply for tonnage purchased under 44,200). The same calculation and averaging
will be calculated for the two (2) year period comprising years 3 and 4 of the agreement. It
shall not be considered to be a penalty under this Agreement for Purchaser to purchase
amounts in any two (2) year which average is less than the Annual Minimum Purchase
Obligation in section 2.1 but greater than 44,200 metric tons (specified above), as the
Annual Minimum Purchase Obligation is a purchase target but not a requirement. Purchaser
shall pay any penalties due under this paragraph 13.1 within 30 days following the end of
the period during which the penalties arose. For purposes on calculating the averages set
forth above, the parties will use the effective date of the Supply Agreement (instead of the
effective date of this Amendment #2) in determining years 1, 2, 3 and 4.”

	7.  	Paragraphs 13.2 and 13.3 : In Paragraphs 13.2 and 13.3 of the Supply Agreement, the
following change shall be made:

In each instance in paragraph 13.2 and 13.3 where “Annual Minimum Purchase Obligation(s)”
appears, replace “Annual Minimum Purchase Obligation(s)” with “44,200 metric tons”.

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This Amendment #2 is signed on the day stated above to be made effective the 1st day of April 2004.

Voestalpine Tubulars GmbH & Co KG

	 	 	 	 	 	 	 
	By

	 	/s/ Humbert Wastl
	 	 	 	/s/ Hillka Witt
	

	 	 
	 	 	 	 
	

	 	Hubert Wastl
	 	 	 	Hilkka Witt
	

	 	 	 	Managing Directors	 	 

	 	 	 	 	 
	Grant Prideco, Inc.	 	 
	 
	 	 	 	 
	By

	 	/s/ DR Black	 	 
	

	 	

	 	 
	

	 	DR Black, President	 	 
	

	 	Drilling Products & Services	 	 

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Annex 4.2 (A) (1)

[Schedule of Green Pipe with the 80 Euro Adjustment]

See Attached

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Annex 4.2(A)(2)(d)

Example of the Surcharge Calculation:

[See Attached]

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Annex 4.2 (A) (3)

[See Attached]

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