EXHIBIT 10.7
CONTRACT FOR MARINE TRANSPORTATION
Xxxxxx Operating Partnership L.P. (hereinafter called "Owner") agrees to provide
transportation services to Xxxxxx Resource Management Corporation and its
affiliates (hereinafter called "Charterer") in bulk on board its marine vessels,
under the following terms and conditions:
1.TERM This agreement shall have a three-year
term, commencing on November 1, 2002 (the
"Commencement Date"). Thereafter, the
agreement shall automatically renew for
successive one-year periods unless either
party terminates this agreement by providing
written notice of such termination to the
other party at least 30 days prior to the
expiration of the then-applicable term.
2. VESSELS SUBJECT TO
THIS CONTRACT 1) M/V Xxxx Xxxxx,
2) M/V Xxxx Xxxxx,
3) M/V Xxxx Xxxxxxx,
4) M/V Xxxxxx Challenger, and
5) barges associated with such vessels
(collectively, such vessels and
barges are referred to herein as the
"Vessels").
The Vessels shall be operated and equipped
in compliance with applicable Coast Guard
regulations.
3. SPOT CONTRACTS Owner and Charterer agree that the
Charterer's use of the Vessels under this
agreement will be on a spot-contract basis
and based on the then-availability of the
Vessels. Each individual use of a vessel
shall be evidenced by a written agreement
between the parties, which agreement will
contain the following information:
1) The origination (load) and
destination (discharge) ports.
2) The cargo to be transported.
3) The volume to be transported.
4) The shipping rate or rates.
5) The term of the contract.
4. RATES The parties agree that the rates and
related terms charged by Owner to Charterer
under any individual spot contract will be
on then-applicable market terms.
5. MINIMUM USE Charterer agrees that for the initial
three-year term of this agreement, it will
execute enough spot contracts under this
agreement so that owner receives the "Base
Revenue Amount" (as such term is defined
below) under this agreement during each
12-month period following the Commencement
Date. The term "Base Revenue Amount" means
the difference of $5,600,000 minus all
"Freight Revenue" (as defined below)
received from third parties during the
applicable 12-month period. The term
"Freight Revenue" means any revenue
generated from the sale of any services
using the vessels, including revenues
relating to freight charges, demurrage,
charter hire, heating charges, fleeting
charges, insurance surcharges, tanking
cleaning charges, tankerman fees, port or
harbor charges and similar charges. If Owner
does not receive the Base Revenue Amount for
any such 12-month
period, Charterer agrees to pay Owner any
deficiency within 30 days following the
applicable anniversary of the Commencement
Date.
6. BARGE COVERAGE
TERMS The "Barge Coverage Terms" attached hereto
as Exhibit A to apply to this contract and
are hereby incorporated herein by reference.
XXXXXX OPERATING PARTNERSHIP X.X. XXXXXX RESOURCE MANAGEMENT CORPORATION
By: Xxxxxx Operating GP LLC, its general
partner
By: Xxxxxx Resource LLC, its sole member
By: Xxxxxx Resource Management
Corporation, its sole member
By: /s/ Xxxxx X. Xxxxxx, III By: /s/ Xxxxx X. Xxxxxx, III
Its: President Its: President
Xxxxx X. Xxxxxx, III Xxxxx X. Xxxxxx, III
BARGE COVERAGE TERMS
RIDER TO BE MADE A PART OF THE
CONTRACT FOR MARINE TRANSPORTATION DATED [o]
BETWEEN OWNER AND CHARTERER.
1. OFFHIRE. The Vessel shall be declared offhire in the event of any
delay in performance due to the inability to deliver full services as the result
of medical emergencies, groundings outside the channel markers, maintenance,
inspections, mechanical failures and breakdowns or time spent waiting on crew
readiness. During offhire periods all charges for the Vessel, including boat and
barges, shall cease. The Vessel shall not be considered offhire in the event of
navigational delays, including locking and docking, groundings within the
channel markers, or delays due to weather.
2. INVOICING & PAYMENT. Owner shall receive payment for service
rendered with thirty (30) day invoice. All other rebillable items, including,
but not limited to, shifting invoices, fleeting invoices, shore tanker man
charges, fresh air apparatus rental and the like shall be due net upon receipt
and payable to Owner's designated bank.
3. DEMISE OF CHARTER. The Master of a Vessel, although appointed by and
in the employ of the Owner and subject to the Owner's direction and control,
shall observe the orders of the Charterer in connection with the Charterer's
agencies, arrangements, and employment of the Vessel's services hereunder.
NOTHING IN THIS CLAUSE OR ELSEWHERE IN THIS AGREEMENT SHALL BE CONSTRUED AS
CREATING A DEMISE OF THE VESSEL TO CHARTERER OR AS VESTING CHARTERER WITH ANY
CONTROL OVER THE PHYSICAL OPERATION OR NAVIGATION OF THE VESSEL.
4. POLLUTION PREVENTION. Owner will in the case of an escape or
discharge of oil or other product or threat of escape or discharge of oil or
other product from the Vessel into navigable waters of the United States in
which the Vessel is operating (whether or not caused by Vessel's negligence),
promptly undertake such measures as are reasonably necessary which may be
required by applicable laws, rules and regulations to prevent pollution damage
from thereby arising and to mitigate any such damage. If an escape of discharge
of oil or other product occurs from the Vessel into the navigable waters of the
United States or when an escape or discharge of oil or other products from the
Vessel causes or threatens to cause pollution damage, or when there is the
threat of an escape or discharge of oil (i.e., a grave and imminent danger of
the escape or discharge of oil which, if it occurred, would create a serious
danger of pollution damage), Charterer may at option, and upon notice to Owner
and on the conditions set forth herein below, undertake such measures as are
reasonably necessary to prevent or mitigate resulting pollution damages, unless
Owner promptly undertakes same. Charterer shall keep Owner advised of the
measure intended to be taken by it. Any of the aforementioned measures actually
taken by the Charterer shall be at Owner's expense (except to the extent that
such escape or discharge was caused or contributed to by Charterer). Provided
that if Owner believes that such measures should not be undertaken or should be
discontinued, Owner may so notify Charterer and thereafter Charterer, if it
elects to continue said cleanup measures, shall do so at its own risk and
expense.
5. INDEMNITY. Owner covenants and agrees to fully defend, protect,
indemnify and hold harmless Charterer, its employees and agents from and against
each and every claim, demand or cause of action and any liability, cost, expense
(including, but not limited to, reasonable attorney's fees and expenses incurred
in the defense of Charterer), damage or loss in connection therewith, which may
be made or asserted by Owner, or Owner's employees or agents, subcontractors, or
any third parties including, but not limited to Charterer's agents, servants or
employees on account of personal injury or death or property damage to the
extent of Owner's negligence.
Charterer covenants and agrees to fully defend, protect, indemnify and hold
harmless, Owner, its employees and agents from and against each and every claim,
demand or cause of action and any liability, cost, expense (including, but not
limited to, reasonable attorney's fees and expenses incurred in the defense of
Owner), damage or loss in connection therewith, which may be made or asserted by
Charterer or Charterer's employees or agents, subcontractors, or any third
parties including, but not limited to Owner's
agents, servants or employees on account of personal injury or death or property
damage to the extent of Charterer's negligence.
6. ARBITRATION. Each party will select their own arbitrator. Then the
two arbitrators will select a third arbitrator. In the event these two
arbitrators cannot agree on a third arbitrator then a state district judge in
Xxxxx County, TX will select the third arbitrator.
7. INSURANCE: Subject to availability to pollution bonds at
commercially acceptable rates and certificates of financial responsibility from
underwriters, during the period of this agreement, Owner shall make all
reasonable attempts to comply with all financial capability, responsibility,
security or like laws, regulations and/or requirements of whatsoever kind
relating to the Vessels with respect to oil and/or other pollution damage
applicable to the Vessel entering, leaving, remaining at or passing through any
ports or places or waters in the performance of this agreement. Subject as
aforesaid, Owner at its sole risk and expense shall make all reasonable attempts
to arrange by bond, insurance or otherwise and obtain all such certificates or
other documentary evidence and take all such other action, as may be necessary,
to satisfy such laws, regulations and/or other requirements. Owner warrants that
they have in place at the Commencement Date coverage for oil pollution of U.S.
$500,000,000.
Hull and Protection and Indemnity coverage shall be carried with first class
underwriter by Owner for Owner's account, with Charterer named as additional
assure. Owner shall also carry, at Owner's expense, American Club, or other
water pollution coverage, as required by law.
8. COMPLIANCE: Upon delivery, Owner warrants that the Vessel will be in
compliance with all applicable government regulations.
9. CHARTERER'S REPRESENTATIVES: Charterer's representatives may board
the Vessel at any convenient place to observe cargo-handling operations, to
inspect logs and certificates, and to confirm that Owner is fulfilling its
obligations under this agreement.
10. OUTTURN: Any shortage in outturn (unless resulting from a condition
described in Force Majeure Clause above), in excess of one-half of one percent
(0.5%) in volume shall be for the account of Owner on an evaluation declared by
the Charterer at the time of discharging provided that Owner shall not be liable
for any shortage in outturn unless a comparison of barge ullage figures at
loading port and at discharge port established that a volume loss in excess of
one-half of one percent (0.5%) has actually occurred.
11. DRUG & ALCOHOL ABUSE POLICY: Owner warrants that it has a policy on
Drug and Alcohol Abuse applicable to the Vessel which meets and exceeds the
standards set forth by the U.S. Coast Guard. Owner further warrants that this
Policy will remain in effect during the term of this agreement and Owner shall
exercise diligence to ensure that Policy is complied with.
12. CONDITIONS OF EQUIPMENT: The Owner shall, before and at
commencement of each voyage, exercise due diligence to make the entire Vessel
seaworthy and in good operating condition, properly manned, equipped and
supplied for the voyage, and to make the pipes, pumps and coils tight, staunch,
strong and in every respect fit for the voyage, and to make the tanks and other
spaces in which cargo is to be carried fit and safe for its carriage and
preservation. Owner will provide, at the time of delivery and thereafter keep in
force during the period of this agreement, a valid and subsisting certificate or
other permit issued by the United States Coast Guard (or other governmental
bureau or department having jurisdiction thereof) approving the barges for the
transportation and carriage of inflammable liquids having a Xxxx Vapor Pressure
of less than fourteen (14) pounds per square inch. Owner warrants that the barge
is capable of discharging at a rate of twenty-five hundred (2,500) barrels per
hour or is able to maintain one hundred (100) PSI at the rail; otherwise, the
Vessel shall be considered off-hire for all excess pumping time.
13. WHARFAGE AND DOCKAGE: Owner's equipment shall be free of wharfage
and dockage charges at loading and discharging ports.
14. SUBLET: Charterer has the right to sublet the Vessel for third
party work and act as deponent owner; however, Charterer shall always remain
responsible for the fulfillment of this agreement in all its terms and
conditions.
15. GENERAL AVERAGE: Notwithstanding anything herein to the contrary,
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 Vessel
including her barge or barges, are not responsible by statute, contract, or
otherwise, the cargo and its barge, jointly and severally, shall contribute in
General Average to the payment of any sacrifices, losses or expenses of a
General Average nature that may be made or incurred, by a barge or its cargo,
and in a like manner, shall pay salvage and special charges incurred in respect
to the common safety of both cargo and its barge. If a salving vessel is owned
or operated by the Owner, salvage shall be paid for as fully as if the salving
vessels belong to strangers, General Average shall be adjusted, stated and
settled according to York-Antwerp Rules 1974, Excluding Rule XXII thereof, at
such port or place in the United States as may be selected by barge owners with
cargo owner's approval, and as to matters not provided for by the rules
mentioned, according to the laws and usages of the Port of New York.
16. FORCE MAJEURE: The Vessel, its captain and Owner shall not, unless
otherwise in this agreement expressly provided, be responsible for any loss or
damage arising or resulting from: any act, default or barratry of the captain,
pilots, mariners, or other servants of the Owner in the navigation or management
of the vessel; fire, unless caused by the personal design or neglect of the
Owner; collision, stranding or peril, danger or accident of navigable waters;
saving or attempting to save life or property; wastage in weight or bulk, or any
other loss or damage arising from inherent defect, quality or vice of the cargo;
any act or omission of the Charterer, Owner, shipper or consignee of the cargo,
their agents or representatives; insufficiency or inadequacy of marks;
explosion, bursting of boilers, breakage of shafts, or any latent defect in
hull, equipment or machinery; unseaworthiness of the Vessel unless caused by
want or due diligence on the part of the Owner to make the Vessel seaworthy or
to have it properly manned, equipped and supplied; or from any other cause of
whatsoever kind arising without the actual fault of privity of the Owner. And
neither the Vessel, its captain or Owner, nor the Charterer, shall, unless
otherwise in this agreement expressly provided, be responsible for any loss or
damage or delay or failure in performing hereunder arising or resulting from;
act of God, act of war; act of public enemies, pirates or assailing thieves;
acts of terrorism; arrest or restraint of princes, rulers of people, or seizure
under legal process provided bond is promptly furnished to release the Vessel or
cargo; strike or lockout or stoppage or restraint of labor from whatever cause,
either partial or general, or riot or civil commotion.
