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[Note: Asterisks denote material omitted that has been separately filed with the
SEC pursuant to a request for confidential treatment.]
Exhibit 10.39
MONT BELVIEU STORAGE CAPACITY
PURCHASE AGREEMENT
BY AND BETWEEN
EOTT ENERGY LIQUIDS, L.P.
AND
ENRON GAS LIQUIDS, INC.
DATED JUNE 29, 2001
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This Mont Belvieu Storage Capacity Purchase Agreement dated as of June 29, 2001
(this "Agreement"), is made between EOTT ENERGY LIQUIDS, L.P., a Delaware
limited partnership ("Seller"), and ENRON GAS LIQUIDS, INC., a Delaware
corporation ("Buyer"). In connection herewith and as part of an integrated
transaction, the Seller and the Buyer have entered into the Toll Conversion
Agreement (as defined below). Seller and Buyer may hereinafter be referred to
collectively as the "Parties" and individually as a "Party."
ARTICLE 1
DEFINITIONS
1.1 Definitions. Except as otherwise indicated by the context, all
capitalized terms used in this Agreement have the meanings hereinafter set forth
in Appendix I hereto.
1.2 Division, Headings and Index. The division of this Agreement into
articles, sections, and subsections, and the insertion of headings and any table
of contents or index, if any, are for convenience of reference only, and shall
not affect the construction or interpretation hereof.
1.3 Industry Usage. Words, phrases, or expressions which are not
defined herein and which, in the usage or custom of the business of the
transportation, storage, distribution, or sale of Products have an accepted
meaning, shall have that meaning.
1.4 Extended Meaning. Unless the context otherwise requires, words
implying the singular include the plural and vice versa, and words implying
gender include all genders. The words "herein", and "hereunder" and words of
similar nature refer to the entirety of this Agreement, including any Exhibits,
Schedules, and appendices incorporated into this Agreement, and not only to the
section in which such use occurs.
ARTICLE 2
PURCHASE OF STORAGE AND SERVICES
2.1 Storage. Seller hereby (a) sells to Buyer the Allotted Storage
Capacity associated with each Storage Well on a Firm Basis and the ancillary
rights to the Storage Facilities in connection therewith, including all existing
transportation and handling capacity associated with the Storage Pipeline
System, (b) grants to Buyer a right to acquire all or any part of the Additional
Allotted Storage Capacity (incurring only Excess Throughput Fees, if any, if
such right is exercised) prior to making all or any part of such Additional
Allotted Storage Capacity available to third parties, and (c) throughout the
Term, agrees to provide all storage, transportation, handling, maintenance and
other operational services in connection with the foregoing as provided herein
in accordance with customary industry practice and as historically provided at
the Storage Facilities for the twenty-four (24) Month period prior to the date
hereof. The storage space and the related services shall include (i) the
injection of Products owned by Buyer or with respect to which Buyer has legal
custody under agreements with third parties up to the Maximum Daily Injection
Quantity for each of the Storage Xxxxx and (ii) the withdrawal and
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delivery of Products owned by Buyer or with respect to which Buyer has legal
custody under agreements with third parties up to the Maximum Daily Withdrawal
Quantity for each of the Storage Xxxxx.
2.2 Receipt and Delivery. In connection with such sale, Seller shall
from time-to-time and adhering to the Nomination Procedures receive Products for
storage from Buyer at the Receipt Point(s) for injection into the Storage Xxxxx;
provided, that Seller shall not be obligated to receive from Buyer any quantity
of Products for injection which (a) would cause Buyer's Product Storage Account
to exceed the Available Storage Capacity for each Storage Well or (b) is at a
rate greater than the rate contemplated by the Maximum Daily Injection Quantity.
Seller shall from time-to-time and adhering to the Nomination Procedures deliver
Products to Buyer at the Delivery Point(s); provided, that Seller shall not be
obligated to deliver to Buyer any quantity of Product that is at a rate greater
than the rate contemplated by the Maximum Daily Withdrawal Quantity. In
connection with the foregoing, Seller agrees (y) to return to Buyer in
accordance with the terms and conditions of this Agreement all Products
delivered into storage hereunder and (z) in connection with the removal of all
Product from any Storage Well, to deliver to Buyer all product in such Storage
Well, notwithstanding that volumes recorded in the Product Storage Account may
be less than the volume of product in such Storage Well (or to deliver Buyer's
ratable share of such product in such Storage Well if a third party has
contracted with Seller and stored product in such Storage Well).
ARTICLE 3
FEES
Buyer agrees to pay to Seller (i) the Storage Purchase Fee, (ii) the
Throughput Fee, (iii) the Excess Throughput Fee, if any, and (iv) any additional
fees provided for in Section 3.4, all as determined and paid as provided in this
Article 3.
3.1 Storage Purchase Fee. For each Contract Year, Buyer agrees to pay
Seller the fee for such Contract Year as set forth on Schedule 3.1 for the
Product storage capacity purchased pursuant to this Agreement ("Storage Purchase
Fee"), which shall be payable in equal monthly installments in accordance with
the provisions of Article 11 (Billing and Payment) hereof. In the event that
Buyer from time to time exercises its right to acquire all or any portion of the
Additional Allotted Storage Capacity, no additional charge or fee shall be
imposed pursuant to this Section 3.1, except as set forth in Section 3.6.
3.2 Throughput Fee. For each Contract Year, Buyer agrees to pay Seller
the fee for such Contract Year as set forth on Schedule 3.1 for the Product
movements within the Storage Pipeline System pursuant to this Agreement
("Throughput Fee"), which shall be payable in equal monthly installments in
accordance with the provisions of Article 11 (Billing and Payment) hereof. In
the event that Buyer from time to time exercises its right to acquire all or any
portion of the Additional Allotted Storage Capacity, no additional charge or fee
shall be imposed, except as may be incurred pursuant to Section 3.3, except as
set forth in Section 3.6.
3.3 Excess Throughput Fee. Within thirty (30) days after the end of
each quarter of each Contract Year, Seller shall notify Buyer in writing of the
Quarterly Excess Barge Throughput,
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Quarterly Excess Pipeline Throughput, Quarterly Excess Rail Throughput, and
Quarterly Excess Truck Throughput, each with respect to such quarter of such
Contract Year and the corresponding Quarterly Excess Throughput Fee for such
quarter of such Contract Year. Reasonable documentation evidencing such
quantities of quarterly excess throughput shall be provided to Buyer by Seller
within such period following the end of such quarter within such Contract Year.
Within thirty (30) days after notice from Seller of such quantities of quarterly
excess throughput for such quarter, Buyer shall pay Seller an amount equal to
the Quarterly Excess Throughput Fee. Within thirty (30) days after the end of
each Contract Year, Seller shall determine, and notify Buyer with respect to,
the Excess Barge Throughput, Excess Pipeline Throughput, Excess Rail Throughput,
and Excess Truck Throughput for such Contract Year and the corresponding Excess
Throughput Fee for such Contract Year. To the extent that the Excess Throughput
Fee for any Contract Year does not equal the sum of the Quarterly Excess
Throughput Fee for each such quarter of such Contract Year (such difference in
fees, the "Fee Difference'"), the Party possessing the Fee Difference promptly
shall pay such Fee Difference to the other Party.
3.4 Additional Fees. In addition to those fees set forth in Sections
3.1, 3.2 and 3.3, Buyer shall pay Seller a mutually agreed upon fee taking into
account industry standards and practices and how such standards and practices
are applicable to the Storage Facilities for any service requested by Buyer
unless the Parties' negotiation and determination of the Storage Fee and/or
Throughput Fee as provided herein included such service. Buyer shall have no
obligation to pay any other amounts, costs or fees in connection with the
Storage Facilities or for any services related thereto except as set forth in
this Article 3.
3.5 Fees for Loading and Unloading. Seller shall pay to Buyer the
following amounts within ten (10) Business Days of Seller's receipt of notice of
such applicable charge or fee from the Buyer:
(a) any and all demurrage, laytime and other charges incurred
by Buyer as a result of Seller's failure to load methyl tertiary butyl
ether and other products owned by or under the legal custody of Buyer
into barges or other transport vessels, tank cars or trucks at the
Storage Facilities, at rates not less than the applicable rate listed
for each such product set forth on Schedule 3.5 unless a lower rate is
otherwise required by the barge, vessel, tank car or truck operator, as
applicable; and
(b) any and all demurrage and laytime fees or other charges of
the same nature caused by Seller's failure to promptly unload methanol
(at a rate less than 3000 barrels per hour) from transport barges or
other vessels upon arrival at the Storage Facilities.
3.6 Additional Storage Capacity. At such time after the date of this
Agreement as any of the storage xxxxx or any portion thereof identified in
Exhibit B-2 are developed and placed into commercial operation by Seller, such
Storage Well(s) will be included in this Agreement and the fees established in
Sections 3.1 and 3.2 shall be adjusted as negotiated by the Parties for the
increased volume of storage capacity purchased, and Schedule 3.1 and Exhibits A
and B hereto shall be revised accordingly to include any new storage xxxxx and
to include such additional storage capacity as Allotted Storage Capacity and
Additional Storage Capacity hereunder. All
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changes required pursuant to this Section 3.6 shall be reduced to writing,
signed by the Parties and attached as one or more amendments to this Agreement.
ARTICLE 4
NOMINATIONS
4.1 General. As commercially reasonable, Seller shall make available a
dispatcher who shall be authorized (subject to Seller's operating requirements
pertaining to the Storage Facilities) (i) to accept nominations from Buyer
respecting quantities of Products that Buyer desires to tender for injection
into the Storage Xxxxx or to withdraw therefrom or to transport on the Storage
Pipeline System in accordance with this Agreement and (ii) to furnish to Buyer
any operating information which may affect the quantities of Products to be
tendered for injection by or withdrawn for or transported for Buyer.
4.2 Procedures. At any time during the Term and unless otherwise
provided herein, Buyer shall give Seller its nomination for injections or
withdrawals or transportation orally, in writing, or via electronic bulletin
board or other electronic means in a form prescribed by the Seller from
time-to-time, transmitted to Seller in accordance with Article 15 (Notices)
hereof and subject to Article 2 (Purchase of Storage and Services) hereof. Such
nominations shall be made by Buyer based on information provided to Buyer by
Seller on a routine basis setting forth the quantity of available storage in
each Storage Well based on the Allotted Storage Capacity (and any Additional
Allotted Storage Capacity) of each Storage Well. The procedures set forth in
Sections 4.2 and 4.3 below shall be referred to in this Agreement as the
"Nomination Procedures". All nominations are subject to confirmation by the
Transporting Pipeline on which the nomination is made and in accordance with
such Transporting Pipeline's nomination procedures. Nominations will be based on
the number of Barrels provided by Buyer. Seller shall promptly acknowledge
receipt of Buyer's nomination and confirm same in accordance with Article 15
(Notices) hereof. Oral nominations by Buyer shall be confirmed in writing by
Seller within 2 Days of Seller's receipt of such oral nomination. A nomination
given and confirmed in accordance with the foregoing shall be binding upon the
Parties.
4.3 Nomination Form Terms. A nomination is intended to include:
(a) Name of purchaser or shipper;
(b) Contact person for purchaser or shipper (Name and Phone
No.);
(c) Effective date and time;
(d) Downstream and/or upstream Transporting Pipeline;
(e) Contact person for such downstream and/or upstream
Transporting Pipeline identified by name and phone number;
(f) Delivery or Receipt Point on such downstream and/or
upstream Transporting Pipeline;
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(g) Number of Barrels and/or Gallons; and
(h) the Product nominated.
If nominations do not include all of the aforementioned information or if
nominations are not made in the form reasonably prescribed by Seller from
time-to-time, Seller shall nevertheless accept such nomination and shall advise
Buyer of such non-conforming elements so that Buyer may correct its procedures.
Requests for changes in flow rate must be made by written nomination in
accordance with the foregoing Nomination Procedures.
4.4 Modification of Nomination Procedures. Written modifications of the
Nomination Procedures set forth in this Article 4 (Nominations) shall be made by
the Parties from time to time so that they shall comply with or take full
commercial advantage of newly enacted regulatory requirements or then prevailing
Transporting Pipeline standards, as contemplated by the terms and provisions of
this Agreement.
ARTICLE 5
RECEIPT AND DELIVERY POINTS, TITLE, RISK OF LOSS
5.1 Receipt Point. The Receipt Points for all Products tendered by
Buyer to Seller for storage hereunder shall be as set forth on Exhibit C.
5.2 Delivery Point. The Delivery Points for all Products delivered by
Seller to Buyer out of storage shall be as set forth on Exhibit C.
5.3 Interconnections. Upon thirty (30) Business Days prior written
notice to Seller and subject to specifications provided to Buyer by Seller and
applicable safety and operational requirements (including interfacing pressures
at such interconnection so as not to adversely affect operating pressures of the
subject pipeline), Buyer shall have the right to construct and initiate
interconnections on the Storage Pipeline System and to designate such
interconnections as Receipt Points and/or Delivery Points, provided Buyer shall
have complied with applicable laws and regulations and obtained all necessary
consents from third parties, including consents and authority under applicable
rights of way and easements. Such construction and initiation of
interconnections shall include but not be limited to meters, meter stations and
piping related thereto, and all costs associated with such additional
interconnections shall be borne by Buyer. All such additional interconnections
shall be owned by Buyer.
5.4 Title. Buyer represents and warrants to Seller that Buyer has and
will have title to or legal custody of all Products delivered to Seller
hereunder, that Buyer has the authority to deliver such Products to Seller, and
that such Products are and will be free from any and all liens, charges, adverse
claims, and encumbrances against Buyer other than purchase money liens and
customary liens granted by Buyer in connection with financings of Buyer's
operations, assets or properties. In addition to any other rights, remedies, or
indemnities herein contained, Buyer shall indemnify, defend, and hold harmless
Seller from and against any and all suits, actions, claims, demands, damages,
costs, losses, and expense, including reasonable attorney's fees and related
expenses arising from or out of any adverse third party claims to or against
such Products or any
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interest therein or in the value thereof. Seller acknowledges that Buyer owns
and has title to all volumes of Line Pack Product. Title to and/or legal custody
of the Products in storage and of the Line Pack Product shall at all times be
and remain in Buyer.
5.5 Risk of Loss. Notwithstanding Seller's obligation in Section 2.2 to
return and deliver Products to Buyer, Seller shall be responsible for the loss
of Product only when and to the extent that such loss is caused by the
negligence or willful misconduct of Seller, its employees or agents.
ARTICLE 6
QUALITY AND PRESSURE
6.1 Quality. The specifications of each Product from time-to-time
delivered by Buyer at the Receipt Point(s) and redelivered by Seller at the
Delivery Point(s) shall comply with the minimum standards then specified in the
transportation tariff of any Transporting Pipeline through which a Product is to
be transported. Without negation of the foregoing quality requirements, Buyer
agrees that the Products shall not be corrosive or contain contaminants that
will be deleterious to the integrity of the applicable Storage Well, the
wellhead assembly, the products injection pump, and all piping and
appurtenances. Buyer and Seller recognize that the Products may contain
moisture, and Seller shall use its commercially reasonable efforts to insure
that the Products withdrawn for the account of Buyer from the Storage Xxxxx will
at all times meet or exceed the quality specifications for the receiving
pipeline.
6.2 Pressure. Buyer shall deliver such Product at a pressure sufficient
to overcome the operating pressure existing from time-to-time in the applicable
Storage Well at such point(s). Seller shall deliver such Product to or for the
account of Buyer at the pressure available from time-to-time in the applicable
Storage Well at such point(s). Seller agrees at a minimum to maintain the
operating pressures for the Storage Xxxxx and the Storage Pipeline Systems in
accordance with customary industry practices and in a manner necessary to
perform its obligations under this Agreement. Without limiting the foregoing,
Buyer will arrange for delivery of Product at the Delivery Points and redelivery
of Products at the Receipt Points at minimum and maximum pressures consistent
with the historical operating practices at the Storage Facilities but in no
event shall such pressure exceed the maximum operating pressure for the
Transporting Pipeline.
ARTICLE 7
MEASUREMENT
7.1 Unit of Measure. The unit of volume for measurement of all
quantities of Product hereunder shall be one Barrel. Atmospheric pressure shall
be assumed to be 15.025 pounds per square inch absolute at the Receipt Point(s)
and Delivery Point(s) irrespective of the actual atmospheric pressure at such
points from time-to-time. Adjustment shall be made for flowing temperature and
specific gravity as determined from instruments located at the Receipt Point(s)
and Delivery Point(s). Receipt and delivery meters will serve as the primary
means for Product measurement.
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7.2 Temperature Measurement. The flowing temperature of Product being
metered shall be determined continuously during periods of flow by means of a
recording thermometer of standard make, and the arithmetic average of the
temperature recorded during periods of flow only shall be deemed the Product
temperature. Temperature so determined shall be used in computing the quantities
of Product delivered or tendered hereunder.
7.3 Other Measurement. The specific gravity, gross heating value, and
degree of saturation by water vapor of the Product delivered or tendered
hereunder shall be determined by using an on-line Product chromatograph or by
such other method as Seller may determine in a commercially reasonable manner.
The values so determined shall be used in computing the volumes of Product
delivered or tendered hereunder.
7.4 Maintenance and Operation of Measurement Equipment. Seller shall
operate and maintain or cause to be operated and maintained existing and future
measuring facilities to measure the quantity and quality of Products delivered
or tendered hereunder at the Receipt Point(s) and Delivery Point(s).
7.5 Meter Testing. No less frequently than required by prudent
operating practices and as is customary in the industry, Seller at its expense,
will test and calibrate all meters and metering equipment to be used to confirm
quality, delivery, receipt and pressure of Product at each Receipt Point and
Delivery Point (hereinafter collectively called the "Metering Equipment").
Seller will provide Buyer with written notice so that Buyer will have ample
opportunity to have its representatives present during such calibrations and
tests. At any time requested by Buyer, Seller will test the Metering Equipment
in the presence of Buyer's representatives and, if the Metering Equipment is
found on such test to be accurate, Buyer will pay Seller the cost and expense of
such test, but, if found on such test to be inaccurate, then the cost and
expense of such test and of correcting the inaccuracy in the Metering Equipment
will be borne by Seller. If, on any test of the Metering Equipment, its
inaccuracy is not in excess of one quarter of one percent (.25%), the Metering
Equipment will be considered accurate.
ARTICLE 8
OPERATIONS
8.1 Buyer Obligations. Buyer shall be responsible for the
transportation of Product to the Receipt Point(s) and from the Delivery
Point(s), including without limitation, securing and maintaining all necessary
transportation services with Transporting Pipelines, complying with all
reporting requirements and payment obligations arising in respect of Product
transportation, and securing and maintaining all required permits and
authorizations required for Buyer's operations, except as otherwise provided
herein. Throughout the Term, Buyer shall be responsible for maintaining
sufficient quantity of Line Pack Product in the Storage Pipeline System to allow
the Seller to perform its obligations of injection and withdrawal of Product
from the Storage Xxxxx in accordance herewith. In the performance of its
obligations hereunder, Buyer shall at all times act in Good Faith.
8.2 Seller Obligations. Seller's obligations under Article 2 shall be
subject to Seller's scheduling and customary operational restrictions. Seller
agrees to own, operate and maintain
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the Storage Facilities in compliance with prudent industry practice and in
compliance, in all material respects, with the rules and regulations established
by the Texas Railroad Commission ("Railroad Commission") and other governmental
authorities having jurisdiction over the operations, services and facilities
which are integral to the performance of Seller's obligations under this
Agreement (including all permitting and licensing requirements). At its expense,
Buyer shall be entitled to inspect Seller's operations and facilities at any
time during normal business hours. In the performance of its obligations
hereunder, Seller shall at all times act in Good Faith.
8.3 Permits. Seller shall obtain such permits and licenses as may be
required by the Railroad Commission and/or any other governmental agency or
regulatory authority having jurisdiction over the storage operations or the
facilities or equipment employed therein. Seller shall at all times, during the
term of this Agreement, use reasonable best efforts to maintain its equipment
used in connection with its facilities in compliance with all applicable rules
and regulations of the Railroad Commission or any other governmental agency
which may, from time to time, have jurisdiction over such equipment, provided,
however, that in the event that Seller is unable to acquire permission,
forbearance or consent of the Railroad Commission or other regulatory authority,
to maintain, conduct and operate such facilities as contemplated by this
Agreement as a whole, but not merely in part, or having once obtained such
permission, forbearance or consent, the same should later be withdrawn by any
such regulatory authority, or if any material change in laws or governmental
regulations, or interpretations thereof, or administrative or judicial
determinations shall be adopted or promulgated which would require an
expenditure greater than $5,000,000 by Seller, then in that event, Seller shall
immediately notify Buyer of such regulatory action and such required
expenditure, and the Parties shall mutually (a) agree upon allocation of the
cost of such expenditure to the Buyer (such allocation in a manner acceptable to
the Buyer) and (b) make all necessary modifications to this Agreement, if any,
to implement such allocated cost. In the event the Parties cannot agree upon the
amount and manner of such allocation within thirty (30) Business Days of
Seller's notice to Buyer of such required regulatory action and required
expenditure, Buyer may terminate this Agreement by providing prior written
notice of such date of termination at least 90 Days prior to termination or such
lesser time that Seller may operate lawfully without incurring the cost of
expenditure, and no further fees or charges shall be due hereunder (except as
Section 9.3 may apply) and no termination fee shall be payable by Buyer.
ARTICLE 9
TERM AND TERMINATION
9.1 General. This Agreement shall be effective as of the Effective
Date, subject to the satisfaction of the conditions precedent in Section 9.2,
and shall continue in full force and effect until the Termination Date.
9.2 Conditions to Effectiveness of the Agreement. The obligations of
each Party under this Agreement shall be subject to the conditions precedent
that the Buyer Guaranty and the Seller Guaranty shall have been fully executed
and delivered to the beneficiary of such guaranty.
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9.3 End of Term Matters. If, upon termination of this Agreement
pursuant to terms set forth herein (other than a termination due to an event of
Force Majeure in accordance with Section 14.8), any volume of Product delivered
by Buyer hereunder remains in the Storage Xxxxx, then the term of this Agreement
shall be extended for the number of Days as designated by Seller to allow Buyer
to withdraw from storage such remaining Product at rates and conditions of
delivery reasonably determined by Seller taking into account the applicable
terms of this Agreement and commercial and market conditions at the time,
provided however that such extended term may not exceed the first ninety (90)
day period following the Termination Date during which the Storage Facilities
are operational to allow Buyer to withdraw its Product under normal operating
conditions. In addition to any applicable Excess Throughput Fee provided for in
Article 3, Buyer shall pay Seller each Month, or portion thereof, during any
extension of the Term a fee of $[*****] per Barrel in lieu of any Storage
Purchase Fee and Throughput Fee (the "Extended Term Storage Purchase Fee"). If
any of Buyer's Product shall remain in storage after expiration of the extended
term or if Buyer fails to pay the Extended Term Storage Purchase Fee to Seller
within 10 Days of receipt of Seller's invoice therefor, then Seller, acting as
Buyer's duly authorized agent, shall have the right, but not the obligation, to
dispose of all or any portion of such Product on behalf of Buyer in a
commercially reasonable manner and on commercially reasonable terms and
conditions. Buyer's execution of this Agreement shall constitute its appointment
of Seller as its agent for the limited purpose set forth in the previous
sentence. Volumes of Line Pack Product in the Storage Pipeline System provided
by Buyer pursuant to Section 8.1 shall be, at the Buyer's discretion, (y)
withdrawn from the Storage Pipeline System and delivered by Seller to Buyer or
(z) sold to Seller at a price mutually agreed upon by the Parties.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
As a material inducement to the agreement of the other Party to enter
into this Agreement, each Party, with respect to itself, hereby represents and
warrants to the other Party as follows:
(a) There are no suits, proceedings, judgments, rulings, or
orders by or before any court or any governmental authority to which it
is a party or is otherwise bound that materially and adversely affect
its ability to perform this Agreement or, to its knowledge, the rights
of the other Party under this Agreement;
(b) It is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation, and is
duly qualified to conduct its business in each jurisdiction in which it
is required to be so qualified, and it has the legal right, power, and
authority to execute and deliver this Agreement and to perform its
obligations under this Agreement, and all regulatory authorizations
have been maintained as necessary for it to legally perform its
obligations hereunder;
(c) Entering into this Agreement and performing its
obligations hereunder are within its corporate or partnership powers,
have been duly authorized by all necessary corporate or partnership
action on its part, and do not and will not violate any provision
-------------
[*****] Indicates that material has been omitted and confidential treatment
requested therefore. All such material has been filed separately with
the Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934.
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of law or any rule, regulation, order, writ, judgment, decree, or other
determination presently in effect applicable to it or to its charter
and other governing documents;
(d) This Agreement constitutes a legal, valid, and binding act
and obligation of it, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, and other
laws affecting creditors' rights generally, and with regard to
equitable remedies, to the discretion of the court before which
proceedings to obtain such remedies may be pending;
(e) There are no bankruptcy, insolvency, reorganization,
receivership, or other arrangement proceedings pending or being
contemplated by it, or to its knowledge, threatened against it; and
(f) It is not in a disparate bargaining position with the
other Party.
ARTICLE 11
BILLING, PAYMENT AND EVENTS OF DEFAULT
11.1 Billing. Seller shall on or before the 12th Day of each Month,
submit to Buyer a statement showing the following information with regard to the
storage capacity and related services provided in the prior Month:
(a) the amounts due for the Month from Buyer for fees assessed
in accordance with Article 3;
(b) the number of Barrels of each Product received by Seller
from Buyer at the Receipt Point(s) during the Month for each Storage
Well;
(c) the number of Barrels of Product delivered by Seller to or
on behalf of Buyer at the Delivery Point(s) during the Month from each
Storage Well;
(d) the number of Barrels of each Product comprising the
Buyer's Product Storage Account at the beginning and at the end of the
Month;
(e) the amount of any adjustment applicable to any Month prior
to the Billing Month; and
(f) the amount payable by Buyer to Seller hereunder, and for
any taxes or other charges that are payable by Buyer pursuant to
Article 12 but that have been paid by Seller.
11.2 Payment. Buyer shall pay, or cause to be paid, to Seller to an
account to be designated in writing by Seller from time to time, the amount
shown as due in the statement described in Section 11.1 above, on or before the
fifth day (or first Business Day following such fifth day if such day does not
fall on a Business Day) of the subsequent Month of such statement.
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11.3 Interest. In addition to all other remedies available to Seller,
should Buyer fail to pay any amount due Seller when the same is due, interest
thereon shall accrue at the Interest Rate, from the date when such amount is due
until the same is paid.
11.4 Events of Default. An event of default ("Event of Default") with
respect to a Party (the "Defaulting Party") shall mean any of the following: (i)
the failure of Defaulting Party to pay when due any required payment under this
Agreement and such failure is not remedied within 5 days after written notice
thereof; (ii) the failure of the Defaulting Party to comply with its other
respective obligations under this Agreement and such failure continues uncured
for 30 days (10 days, however, with respect to Seller's obligation to receive
and deliver Products hereunder) after written notice thereof; (iii) the
Defaulting Party shall be subject to a Bankruptcy Proceeding; (iv) any
representation or warranty made by a Party under this Agreement shall prove to
be untrue or misleading in any material respect when made or repeated or deemed
to have been made or repeated; (v) with respect to Seller, the Seller Guarantor
shall give notice to revoke or revoke the Seller Guaranty or challenge the
Seller Guaranty, the Seller Guaranty shall cease to be in full force and effect,
the Seller Guarantor shall breach its obligations under the Seller Guaranty, the
Seller Guarantor shall be subject to a Bankruptcy Proceeding, or any
representation or warranty made by the Seller Guarantor in the Seller Guaranty
shall prove to be untrue or misleading in any material respect when made or
repeated or deemed to have been made or repeated; (vi) with respect to Buyer,
the Buyer Guarantor shall give notice to revoke or revoke the Buyer Guaranty or
challenge the Buyer Guaranty, the Buyer Guaranty shall cease to be in full force
and effect, the Buyer Guarantor shall breach its obligations under the Buyer
Guaranty, the Buyer Guarantor shall be subject to a Bankruptcy Proceeding, or
any representation or warranty made by the Buyer Guarantor in the Buyer Guaranty
shall prove to be untrue or misleading in any material respect when made or
repeated or deemed to have been made or repeated; (vii) with respect to Seller,
any default, event of default, termination event, or other similar condition or
event (however described) shall occur or exist under any Transaction Agreement
(as such term is defined in the Toll Conversion Agreement) with respect to
Seller or the Seller Guarantor provided that any applicable grace or cure
periods have expired, or (viii) with respect to Buyer, any default, event of
default, termination event, or other similar condition or event (however
described) shall occur or exist under any such Transaction Agreement with
respect to Buyer or Buyer Guarantor, provided that any applicable grace or cure
periods have expired.
Upon the occurrence and during the continuation of an Event of Default
as to the Defaulting Party, the other Party (the "Non-Defaulting Party") may, in
its sole discretion, (a) accelerate and liquidate the Parties' respective
obligations under this Agreement by establishing, and notifying the Defaulting
Party of, an early termination date (which shall be no earlier than the date of
such notice) on which this Agreement shall terminate ("Early Termination Date"),
(b) withhold any payments due to the Defaulting Party until such Event of
Default is cured, or (c) set off against any amounts due to the Defaulting Party
any or all amounts which the Defaulting Party owes to the Non-Defaulting Party
(without prejudice and in addition to any right of setoff, combination of
accounts, lien, or other right to which the Non-Defaulting Party is at any time
otherwise entitled (whether by operation of law, contract, or otherwise)). If
notice of an Early Termination Date is given under this Section 11.4, the Early
Termination Date will occur on the designated date, whether or not the relevant
Event(s) of Default is then continuing. Any rights of
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a Non-Defaulting Party under this Section 11.4 shall be in addition to such
Non-Defaulting Party's other rights under this Agreement, at law or in equity.
11.5 Accounting Adjustment of Billing Errors. If the Parties discover
any overcharge as a result of Metering Equipment inaccuracy or otherwise and the
invoice therefor has been paid, the Party which received the overpayment shall
pay to the other within thirty (30) Days after the final determination thereof,
the amount which it was overpaid; provided, however, that no retroactive
adjustment shall be made beyond a period of twenty-four (24) Months following
the date of such overpayment unless such retroactive adjustment is made
necessary by measurement or allocation adjustments instigated by the
Transporting Pipeline, in which case, such twenty-four (24) Month limitation
shall not apply.
11.6 Audit Rights. Each Party (which may act through its
representatives) has the right, at its sole expense during normal working hours
and upon reasonable advance notice, to have the Storage Xxxxx measured and to
examine the records of the other Party to the extent reasonably necessary to
verify the accuracy of any statement, charge, or computation made pursuant to
this Agreement. If requested, a Party shall provide to the other Party all
inventory, storage, transportation, withdrawal, injection and other operational
reports and all statements for the two-year period preceding the audit date
evidencing the quantities of Products stored or transported within the Storage
Facilities, including all reports indicating unused storage capacity in each of
the Storage Xxxxx. If any such examination reveals any inaccuracy in any
statement or report provided to Buyer, the necessary adjustments in such
statements and the payments thereof will be promptly made and shall bear
interest calculated at the Interest Rate from the date the overpayment or
underpayment was made until paid; provided, however, that no adjustment for any
statement or payment will be made unless objection to the accuracy thereof was
made prior to the lapse of two years from the rendition thereof; and provided
further, that for the purpose of such statement and payment objections, this
Section will survive any termination of this Agreement.
11.7 Credit Support. If at any time the Seller Guarantor has an
Unacceptable Credit Rating or no Credit Rating, then within five (5) days after
the occurrence of such circumstance and as long as such circumstance shall
exist, at Buyer's request, Seller shall cause to be issued and maintained for
the benefit of Buyer an irrevocable letter of credit in an amount reasonably
requested by Buyer not to exceed $[*****], having an effective period of one
year and automatically renewable at the end of each one year period until the
end of the term of this Agreement, issued by a bank reasonably acceptable to the
Buyer, and otherwise having terms and conditions reasonably acceptable to Buyer.
The letter of credit may be drawn upon by Buyer if Seller fails to pay any
amount owed to Buyer hereunder. In the event the letter of credit is drawn to
satisfy any of Seller's obligations, Seller shall promptly, but in no event more
than five (5) days following the date that the letter of credit is drawn,
restore the letter of credit to its original amount. The letter of credit may be
drawn upon in part or in full by Buyer if Seller fails to maintain the letter of
credit as required or Seller fails to renew the letter of credit at least twenty
(20) days prior to its expiration, in which case Buyer may hold the proceeds
thereof for application from time to time for the obligations of Seller under
this Agreement until the letter of credit is restored, in each case without
limiting Seller's obligation to maintain the letter of credit as required or any
Event of Default applicable thereto.
-------------
[*****] Indicates that material has been omitted and confidential treatment
requested therefore. All such material has been filed separately with
the Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934.
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If at any time the Buyer Guarantor has an Unacceptable Buyer Credit
Rating or no Credit Rating, then within five (5) days after the occurrence of
such circumstance and as long as such circumstance shall exist, at Seller's
request, Buyer shall cause to be issued and maintained for the benefit of Seller
an irrevocable letter of credit in an amount reasonably requested by Seller
having an effective period of one year, issued by a bank reasonably acceptable
to Seller, and otherwise having terms and conditions reasonably acceptable to
Seller. The letter of credit may be drawn upon by Seller if Buyer fails to pay
any amount owed to Seller hereunder. In the event the letter of credit is drawn
to satisfy any of Buyer's obligations, Buyer shall promptly, but in no event
more than five (5) days following the date that the letter of credit is drawn,
restore the letter of credit to its original amount. The letter of credit may be
drawn upon in part or in full by Seller if Buyer fails to maintain the letter of
credit as required or Buyer fails to renew the letter of credit at least twenty
(20) days prior to its expiration, in which case Seller may hold the proceeds
thereof for application from time to time for the obligations of Buyer under
this Agreement until the letter of credit is restored, in each case without
limiting Buyer's obligation to maintain the letter of credit as required or any
Event of Default applicable thereto.
ARTICLE 12
TAXES
All taxes, duties, and similar governmental charges (other than income and
franchise taxes) related to this Agreement, the Storage Facilities, and the
storage of Products hereunder shall be paid by Seller; provided, that Buyer
agrees to render, negotiate, and pay directly to the taxing authorities all ad
valorem taxes assessed on Buyer's Products and Line Pack Product owned by Buyer.
Each Party shall be responsible for the payment of income and franchise taxes
imposed on it. Seller shall invoice Buyer for any taxes paid by Seller but for
which Buyer is responsible hereunder in accordance with Section 11.1, and Buyer
shall pay such amounts in accordance with such section. Seller shall pay to
Buyer any amounts paid by Buyer for taxes for which Seller is responsible
hereunder within ten (10) Business Days of Seller's receipt of notice of such
applicable amounts from Buyer.
ARTICLE 13
INSURANCE, LIABILITY
13.1 Insurance. Each Party shall be responsible for providing its own
insurance coverage with respect to the Products (in the case of Buyer) and the
Storage Facilities (in the case of Seller) consistent with prudent industry
practice.
13.2 Seller Liability. Subject to the provisions of Article 14 and
Section 13.3 hereof, Seller shall be liable for and agrees to indemnify, defend
and save Buyer harmless from and against all claims, demands, suits, actions,
debts, accounts, damages, costs, losses, liabilities, and expenses of any kind
and however made or incurred, arising out of any misrepresentation by Seller,
the failure by Seller to perform any covenant, obligation or requirement under
this Agreement or the negligent or willful acts or omissions of Seller;
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL SELLER BE LIABLE TO BUYER FOR ANY
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL CLAIMS OF ANY CHARACTER,
INCLUDING WITHOUT LIMITATION, LOSS OF USE, LOST PROFITS OR
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REVENUES (OTHER THAN LOST PROFITS SUFFERED BY BUYER AND RELATED COSTS INCURRED
BY BUYER TO PHYSICALLY REPLACE PRODUCT NOT DELIVERED BY SELLER HEREUNDER AND FOR
WHICH SELLER HAS AN OBLIGATION TO DELIVER HEREUNDER), COST OF CAPITAL,
CANCELLATION OF PERMITS, OR TERMINATION OF CONTRACTS, ADDITIONAL OUT-OF-POCKET
EXPENSES INCURRED BY BUYER, TORT OR CONTRACT CLAIMS OTHER THAN CONTRACT CLAIMS
ARISING OUT OF THIS AGREEMENT, CONSEQUENTIAL PROPERTY DAMAGES SUFFERED BY BUYER,
AND IRRESPECTIVE OF WHETHER CLAIMS FOR SUCH DAMAGES ARE BASED UPON CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE.
13.3 Buyer Liability. Subject to the provisions of Article 14 and
Section 13.2, Buyer shall be liable for and agrees to indemnify and save Seller
harmless from and against any and all claims, demands, suits, actions, debts,
accounts, damages, costs, losses, liabilities, and expenses of any kind and
however, made or incurred, arising out of any misrepresentation by Buyer, the
failure by Buyer to perform any covenant, obligation or requirement under this
Agreement or the negligent or willful acts or omissions of Buyer; PROVIDED,
HOWEVER, THAT IN NO EVENT SHALL BUYER BE LIABLE TO SELLER FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, OR CONSEQUENTIAL CLAIMS OF ANY CHARACTER INCLUDING WITHOUT
LIMITATION, LOSS OF USE, LOST PROFITS OR REVENUES, COST OF CAPITAL, CANCELLATION
OF PERMITS, OR TERMINATION OF CONTRACTS, ADDITIONAL OUT-OF-POCKET EXPENSES
INCURRED BY SELLER, TORT OR CONTRACT CLAIMS OTHER THAN CONTRACT CLAIMS ARISING
OUT OF THIS AGREEMENT, CONSEQUENTIAL PROPERTY DAMAGES SUFFERED BY SELLER, AND
IRRESPECTIVE OF WHETHER CLAIMS FOR SUCH DAMAGES ARE BASED UPON CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE.
ARTICLE 14
FORCE MAJEURE
14.1 Definition. An event of "Force Majeure" shall mean a restraint on
Seller's performance of one or more of its obligations under this Agreement
("Obligation" or "Obligations") resulting from a cause not within the control of
Seller (including, but not limited to, acts of God, acts of negligence or
willful misconduct of third parties, whether or not under the control, contract,
or supervision of Seller) and which, by the exercise of generally acceptable
industry standards, the Seller was unable to prevent.
14.2 Suspension. If, due to an event of Force Majeure, Seller is unable
to perform any Obligation in whole or in part, it shall be entitled, unless
otherwise provided to the contrary in this Agreement, to claim suspension of
that Obligation to the extent of and for the duration of the event of Force
Majeure; provided, however, that Seller gives written notice to Buyer, setting
out the details of such Force Majeure event and its expected duration (if known)
as soon as reasonably possible after the commencement of the event of Force
Majeure.
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14.3 Mitigation. When Seller has claimed suspension of an Obligation
under Section 14.2, Seller shall be relieved of its commitment to perform that
Obligation to the extent and for the period that the event of Force Majeure
restrains Seller's performance of that Obligation, provided, however, that:
(a) Seller effects those measures that are commercially
reasonable under the circumstances to mitigate the cause of and effect
of Force Majeure;
(b) Seller recommences performance of such Obligation to the
extent reasonably possible during the cessation of and upon the
conclusion of the event of Force Majeure; and
(c) as soon as reasonably possible after the conclusion of the
event of Force Majeure, Seller gives notice to Buyer of the date of
such conclusion.
14.4 Labor Disputes. Notwithstanding any other provision hereof, the
settlement of a strike, lockout, or other industrial disturbance shall be
entirely within the discretion of the Seller.
14.5 Dependent Obligations. If pursuant to the provisions of Section
14.2, an Obligation of Seller is suspended in whole or in part, the obligations
of Buyer shall also be suspended if and to the extent that such obligations of
Buyer hereunder are dependent upon or are a consequence of the performance of
that suspended Obligation of Seller; provided, however, such obligations shall
not be suspended as to either Party's payment obligations with respect to
amounts accrued hereunder prior to the event of Force Majeure.
14.6 Demand Charges. It is expressly understood and agreed that if and
for so long as Seller is unable due to an event of Force Majeure to fully
perform its Obligations for a period of ten (10) consecutive Days in response to
a nomination for injection or withdrawal of Product properly made by Buyer
hereunder, then for so long as and to the extent that Seller is so restrained,
the Storage Purchase Fee and the Throughput Fee payable by Buyer shall be
reduced proportionately.
14.7 Exclusions. Seller shall not be entitled to the benefit of the
provisions of Force Majeure hereunder if any or all of the following
circumstances prevail: (i) the failure resulting in an event of Force Majeure
was caused by the gross negligence or willful misconduct of Seller; (ii) the
failure was caused or extended by Seller where Seller failed to remedy the event
by making all reasonable efforts (short of litigation, if such remedy would
require litigation); or (iii) the failure was caused by lack of funds.
14.8 Force Majeure Termination. If a Force Majeure shall continue for 6
Months and, as a result of such Force Majeure, Buyer is precluded from
delivering and/or withdrawing a volume of Product greater than 50% of Buyer's
Allotted Storage Capacity, Buyer shall have the right to terminate this
Agreement upon ten (10) days prior written notice to Seller. Upon the effective
date of such termination, no further fees or charges shall be due hereunder and
no termination fee shall be payable. Seller shall deliver to Buyer all Products
of Buyer held in the Storage Xxxxx as soon as prudent operating conditions allow
and at no cost or charge to Buyer.
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ARTICLE 15
NOTICES
All notices, requests, statements, or payments under this Agreement
shall be made to the addresses specified set forth below. Unless expressly
provided otherwise, notices shall be in writing and delivered by letter,
facsimile, or other documentary form. Notice by facsimile or hand delivery shall
be deemed to have been received by the close of the Business Day on which it was
transmitted or hand delivered (unless transmitted or hand delivered after the
close of the Business Day, in which case it shall be deemed received at the
close of the next Business Day). Notice by overnight mail or overnight courier
shall be deemed to have been received one Business Day after it was sent. A
Party may change its address by providing notice thereof in accordance with this
Section.
If to Buyer:
Enron Gas Liquids, Inc.
Attention: Operations Manager
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Enron Global Markets LLC
Attention: Vice President & General Counsel
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Fax: 000-000-0000
If to Seller:
EOTT Energy Liquids, L.P.
Attention: Vice President & General Counsel
By courier: 0000 X. Xxx Xxxxxxx Xxxxxxx X., Xxxxx 000
Xxxxxxx, Xxxxx 00000
By mail: X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
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ARTICLE 16
MISCELLANEOUS
16.1 Assignment. The rights and obligations of either Party under this
Agreement may be assigned and delegated only with the prior written consent of
the other Party. No delegation of obligations hereunder shall be effective
unless the entity assuming the obligations agrees in writing to be bound by the
terms and conditions hereof. Notwithstanding the foregoing, (a) the rights and
obligations of Buyer under this Agreement may be assigned and delegated to any
subsidiary, Affiliate, or entity directly or indirectly controlled by or under
the direction or management of or formed for the purposes of a financing
transaction by a subsidiary or Affiliate of Enron Corp. or to any entity
purchasing all or substantially all of the assets of the Seller, in each case
without the prior written consent of the Seller, provided, however, that the
obligations of Buyer shall be not be released unless the entity assuming the
obligations has the financial capacity to perform under this Agreement or such
assignee provides a guaranty by a financially responsible party upon
substantially the same terms and conditions as the Buyer Guaranty and (b) the
rights and obligations of Seller under this Agreement may be assigned and
delegated to any wholly owned subsidiary of the Seller or the Seller Guarantor,
in either case without the prior written consent of the Buyer. All covenants,
terms, conditions, and provisions of this Agreement shall be binding upon the
Parties hereto and shall extend to and be binding upon the successors and
permitted assigns of the Parties hereto. Without assigning any rights and
obligations hereunder, Buyer shall have the right to contract with third parties
for the sale and purchase of all or any portion of the storage capacity
purchased and sold hereunder.
16.2 Arbitration. ANY AND ALL DISPUTES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, INCLUDING ANY QUESTION REGARDING ITS EXISTENCE, VALIDITY,
OR TERMINATION, SHALL BE RESOLVED BY BINDING ARBITRATION GOVERNED BY THE FEDERAL
ARBITRATION ACT AND CONDUCTED IN ACCORDANCE WITH THE AMERICAN ARBITRATION
ASSOCIATION COMMERCIAL ARBITRATION RULES ("RULES"), WHICH RULES ARE DEEMED TO BE
INCORPORATED BY REFERENCE INTO THIS CLAUSE. THE NUMBER OF ARBITRATORS SHALL BE
THREE, EACH PARTY HAVING THE RIGHT TO APPOINT ONE ARBITRATOR, WHO SHALL TOGETHER
APPOINT A THIRD NEUTRAL ARBITRATOR WITH AT LEAST FIVE YEARS EXPERIENCE IN THE
INDUSTRY WITHIN 30 DAYS IN ACCORDANCE WITH THE RULES. THE LOCATION OF
ARBITRATION HEARINGS SHALL ALTERNATE BETWEEN THE OFFICES OF BUYER AND SELLER,
THE FIRST BEING HELD AT SELLER'S OFFICES. THE PARTIES HEREBY EXPRESSLY WAIVE ANY
RIGHT OF APPEAL TO ANY COURT. THERE WILL BE NO WRITTEN TRANSCRIPT OR RECORD OF
THE ARBITRATION PROCEEDING. THE ARBITRATORS WILL ONLY MAKE THEIR AWARD AND WILL
NOT RENDER A WRITTEN OPINION EXPLAINING THEIR AWARD. IT IS EXPRESSLY AGREED THAT
THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD ATTORNEY'S FEES (EXCEPT FOR
LEGAL COSTS EXPRESSLY PROVIDED FOR HEREIN), OR CONSEQUENTIAL, SPECIAL, INDIRECT,
TREBLE, EXEMPLARY OR
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PUNITIVE DAMAGES OF ANY TYPE, THE PARTIES HEREBY WAIVING THEIR RIGHTS, IF ANY,
TO RECOVER ATTORNEY'S FEES (EXCEPT FOR LEGAL COSTS EXPRESSLY PROVIDED FOR
HEREIN) AND CONSEQUENTIAL, SPECIAL, INDIRECT, TREBLE, EXEMPLARY AND PUNITIVE
DAMAGES WITH RESPECT TO THIS AGREEMENT. ALL OF THE ARBITRATORS' ORDERS AND
DECISIONS MAY BE ENFORCEABLE IN, AND JUDGMENT UPON ANY AWARD RENDERED IN THE
ARBITRATION PROCEEDING MAY BE CONFIRMED AND ENTERED BY ANY COURT HAVING PROPER
JURISDICTION. THE PARTIES AGREE THAT ALL ARBITRATION PROCEEDINGS CONDUCTED
HEREUNDER AND THE DECISION OF THE ARBITRATORS SHALL BE KEPT CONFIDENTIAL AND NOT
DISCLOSED, EXCEPT TO A PARTY'S AFFILIATES, ACCOUNTANTS, AND LAWYERS AND AS
REQUIRED BY LAW.
16.3 Choice of Law. This Agreement shall be governed by, and construed,
enforced, and performed in accordance with Texas law without regard to its
principles on conflicts of law which would select another law.
16.4 Entire Agreement; Amendments; Interpretation. This Agreement
including the Exhibits hereto constitute the entire agreement between the
Parties relating to the subject matter contemplated by this Agreement and
supersedes any prior or contemporaneous agreements or representations affecting
the same subject matter. No amendment, modification, or change to this Agreement
shall be enforceable unless reduced to a writing executed by the Party against
whom such amendment, modification, or change is sought to be enforced. The
Parties acknowledge that each Party and its counsel have reviewed and revised
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting Party shall not be used in
interpretation of this Agreement.
16.5 Counterparts; Severability; Survival. This Agreement may be
executed in several counterparts, each of which is an original and all of which
constitute one and the same instrument. Except as may otherwise be stated
herein, any provision or Section hereof that is declared or rendered unlawful by
any applicable court of law or regulatory agency, or deemed unlawful because of
a statutory change, will not otherwise affect the lawful obligations that arise
under this Agreement. If any provision of this Agreement is declared unlawful,
the Parties will promptly renegotiate to restore this Agreement as near as
possible to its original intent and effect. All indemnities and audit rights
shall survive the termination of this Agreement in full for a period of two
years.
16.6 Non-Waiver; Duty to Mitigate; No Partnership or Third Party
Beneficiaries. No waiver by any Party of any its rights with respect to the
other Party or with respect to any matter or default arising in connection with
this Agreement shall be construed as a waiver of any subsequent right, matter,
or default whether of a like kind or different nature. Any waiver shall be in
writing signed by the waiving Party. Each Party agrees that it has a duty to
mitigate damages. Except as provided in Section 9.3, nothing contained in this
Agreement shall be construed or constitute any Party as the employee, agent,
partner, joint venturer, or contractor of any other Party. This Agreement is
made and entered into for the sole protection and legal benefit of the Parties,
and their permitted successors and assigns, and no other person shall be a
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direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement.
16.7 Further Assurances. Each of the Parties to this Agreement shall
provide such data and information, execute and deliver such further documents
and instruments, give such further assurances and perform such acts as may be
reasonably required by the other Party to this Agreement in order to carry out
the purposes, intentions, and provisions of this Agreement.
[Signature Page to Follow]
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[Note: Asterisks denote material omitted that has been separately filed with the
SEC pursuant to a request for confidential treatment.]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in multiple originals as of the first date written above.
BUYER
ENRON GAS LIQUIDS, INC.
By: /s/ XXXX XXXXXX
--------------------------------------
Name: Xxxx Xxxxxx
------------------------------------
Title: Vice President
-----------------------------------
SELLER
EOTT ENERGY LIQUIDS, L.P.
By: EOTT ENERGY GENERAL PARTNER, L.L.C.,
its General Partner
By: /s/ XXXX X. XXXXX
--------------------------------------
Name: Xxxx X. Xxxxx
------------------------------------
Title: President & COO
-----------------------------------
22
APPENDIX I
DEFINITIONS
"ADDITIONAL ALLOTTED STORAGE CAPACITY" means with respect to each
Storage Well the volume of storage capacity set forth in the corresponding
column on Exhibit B-1 hereto.
"AFFILIATE" means, in relation to any Party or entity, any entity
controlled, directly or indirectly, by such Party or entity, by a subsidiary of
such Party or entity, or by such Party's or entity, or by such Party's or
entity's parent. For this purpose, "control" of any entity or Party means
ownership of a majority of the voting power of such entity or Party.
"AGREEMENT" has the meaning in the preamble hereto.
"ALLOTTED STORAGE CAPACITY" means with respect to each Storage Well the
volume of storage capacity set forth in the corresponding column on Exhibit B-1
hereto.
"ANCILLARY PIPELINES" means (i) the three pipelines extending from the
Storage Xxxxx to the MTBE Plant for transportation of ethane, normal butane,
natural gasoline and isobutane and (ii) the two pipelines extending south out of
the MTBE Plant for transportation of ethane, natural gasoline, iso-butane, and
propane/propylene mix.
"AVAILABLE STORAGE CAPACITY" means with respect to each Storage Well
the volume of storage capacity set forth in the corresponding column on Exhibit
B-1 hereto.
"BANKRUPTCY PROCEEDING" means with respect to a Party or entity, such
Party or entity (i) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as they
become due; (iii) makes a general assignment, arrangement or composition with or
for the benefit of its creditors; (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or liquidation; (v) has a
resolution passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes
subject to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian, or other similar official for it or
for all or substantially all its assets; (vii) has a secured party take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration, or other legal process levied, enforced, or sued on
or against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed, or
restrained, in each case within thirty (30) days thereafter; (viii) causes or is
subject to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
(i) to (vii) (inclusive); or (ix) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts.
Definitions-22
23
"BARREL" means 42 Gallons.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, or a
holiday on which national banking associations in the state of Texas are closed.
"BUYER GUARANTOR" means Enron Corp.
"BUYER GUARANTY" means the Guaranty dated as of June 29, 2001, made by
Buyer Guarantor in favor of the Seller guaranteeing the obligations of Buyer
under this Agreement and the Toll Conversion Agreement.
"CONTRACT YEAR" means each twelve month period during the Term which
begins on the Effective Date or an anniversary date of the Effective Date, as
applicable.
"DAY" means a period of 24 consecutive hours commencing at 8:00 a.m.,
local time.
"DEFAULTING PARTY" has the meaning set forth in Section 11.4.
"DELIVERY POINT(s)" means the points on the Storage Pipeline System
specified in Section 5.2 at which Seller shall tender Product withdrawn from the
Storage Xxxxx to Buyer.
"EARLY TERMINATION DATE" has the meaning set forth in Section 11.4.
"EFFECTIVE DATE" means the date of this Agreement.
"EVENT OF DEFAULT" has the meaning set forth in Section 11.4.
"EXCESS BARGE THROUGHPUT" means, for each Contract Year, the number of
Gallons by which (a) the sum of the quantity of (i) Products received into the
Storage Facilities by barge and (ii) Products delivered from the Storage
Facilities by barge at Buyer's request pursuant to this Agreement exceeds (b)
383,250,000 Gallons for such Contract Year.
"EXCESS BARGE THROUGHPUT FEE" means the fee, if any, equal to the
product of $.0075 per Gallon and the Excess Barge Throughput for barge receipts
and deliveries.
"EXCESS PIPELINE THROUGHPUT" means, for each Contract Year, the number
of Barrels by which (a) the sum of the quantity of (i) Products received into
the Storage Facilities through pipelines and (ii) Products delivered from the
Storage Facilities through pipelines at Buyer's request pursuant to this
Agreement exceeds (b) 40,000,000 Barrels for such Contract Year.
"EXCESS PIPELINE THROUGHPUT FEE" means the fee, if any, equal to the
product of $.02 per Barrel and the Excess Pipeline Throughput for pipeline
receipts and deliveries.
"EXCESS RAIL THROUGHPUT" means, for each Contract Year, the number of
Gallons by which (a) the sum of the quantity of (i) Products received into the
Storage Facilities by rail and (ii) Products delivered from the Storage
Facilities by rail at Buyer's request pursuant to this Agreement exceeds (b)
1,533,000 Gallons for such Contract Year.
Definitions-23
24
"EXCESS RAIL THROUGHPUT FEE" means the fee, if any, equal to the
product of $.005 per Gallon and the Excess Rail Throughput for rail receipts and
deliveries.
"EXCESS THROUGHPUT FEE" means the sum of the Excess Barge Throughput
Fee, Excess Pipeline Throughput Fee, Excess Rail Throughput Fee, and Excess
Truck Throughput Fee.
"EXCESS TRUCK THROUGHPUT" means, for each Contract Year, the number of
Gallons by which (a) the sum of the quantity of (i) Products received into the
Storage Facilities by truck and (ii) Products delivered from the Storage
Facilities by truck at Buyer's request pursuant to this Agreement exceeds (b)
15,330,000 Gallons for such Contract Year.
"EXCESS TRUCK THROUGHPUT FEE" means the fee, if any, equal to the
product of $.0075 per Gallon and the Excess Truck Throughput for truck receipts
and deliveries.
"EXTENDED TERM STORAGE PURCHASE FEE" has the meaning set forth in
Section 9.3 above.
"FIRM BASIS" means that injections and withdrawals of Product into or
out of the Storage Xxxxx during the term of this Agreement shall not be subject
to interruption, curtailment or suspension by Seller for any reason other than
Force Majeure and as otherwise provided in this Agreement.
"GALLON" means one (1) U.S. gallon.
"GOOD FAITH" means honesty in fact and the observance of reasonable
commercial standards of fair dealing in the trade.
"INTEREST RATE" means, for any date, the per annum rate of interest
equal to the prime lending rate as may from time to time be published in the
Wall Street Journal under "Money Rates" plus two percent (2.00%); provided the
Interest Rate shall never exceed the maximum rate allowed by applicable law.
"LINE PACK PRODUCT" means volumes of product maintained in the Storage
Pipeline System at all times in order to maintain pressure and uninterrupted
flow for transportation of Product through the Storage Pipeline System.
"MAXIMUM DAILY INJECTION QUANTITY" means the aggregate maximum quantity
of Product that Buyer may nominate and deliver and Seller shall receive at the
Receipt Point(s) for injection into the Storage Facilities each Day at constant
hourly rates of flow over the course of such Day consistent with (i) the overall
capacity of the Storage Facilities, (ii) the capacity of each Storage Well and
(iii) customary industry practice and historical operating practices at the
Storage Facilities.
"MAXIMUM DAILY WITHDRAWAL QUANTITY" means the aggregate maximum
quantity of Product that Buyer may nominate and that Seller will withdraw from
the Storage Facilities and tender to Buyer at the Delivery Point(s) each Day at
constant hourly rates of flow over the course of such Day consistent with (i)
the overall capacity of the Storage Facilities, (ii) the capacity of
Definitions-24
25
each Storage Well and (iii) customary industry practice and historical operating
practices at the Storage Facilities.
"METERING EQUIPMENT" has the meaning set forth in Section 7.5.
"MONTH" means a period of one calendar Month commencing at 8:00 a.m.,
local time, on the first Day of a calendar Month and ending at 8:00 a.m. on the
first Day of the following calendar Month.
"MTBE PLANT" means Seller's facility adjacent to the Houston Ship
Channel in XxXxxxx and Xxxxxx'x Point, Texas.
"NOMINATION PROCEDURES" has the meaning set forth in Article 4 above.
"NON-DEFAULTING PARTY" has the meaning set forth in Section 11.4.
"OBLIGATION has the meaning set forth in Section 14 above.
"PARTY" OR "PARTIES" refers to the parties to this Agreement,
individually and collectively as the context indicates.
"PRODUCT" OR "PRODUCTS", as applicable, means ethane, propane,
normal-butane, iso-butane, natural gasoline, propylene, other liquified
petroleum gas mixtures and brine meeting the specifications as set forth on
Exhibit D hereto for such product.
"PRODUCT STORAGE ACCOUNT" means the quantity of each Product in each
Storage Well designated for Buyer's account.
"QUARTERLY EXCESS BARGE THROUGHPUT" means, for each quarter for each
Contract Year, the number of Gallons by which the (a) the sum of the quantity of
(i) Products received by barge into the Storage Facilities and (ii) Products
delivered by barge from the Storage Facilities at Buyer's request pursuant to
this Agreement exceeds (b) 95,812,500 Gallons for such quarter of such Contract
Year.
"QUARTERLY EXCESS BARGE THROUGHPUT FEE" means the fee, if any, equal to
the product of $.0075 per Gallon and the Quarterly Excess Barge Throughput for
barge receipts and deliveries.
"QUARTERLY EXCESS PIPELINE THROUGHPUT" means, for each quarter of each
Contract Year, the number of Barrels by which the (a) the sum of the quantity of
(i) Products received through pipelines into the Storage Facilities and (ii)
Products delivered through pipelines from the Storage Facilities at Buyer's
request pursuant to this Agreement exceeds (b) 10,000,000 Barrels for such
quarter of such Contract Year.
"QUARTERLY EXCESS PIPELINE THROUGHPUT FEE" means the fee, if any, equal
to the product of $.02 per Barrel and the Quarterly Excess Pipeline Throughput
for pipeline receipts and deliveries.
Definitions-25
26
"QUARTERLY EXCESS RAIL THROUGHPUT" means, for each quarter for each
Contract Year, the number of Gallons by which the (a) the sum of the quantity of
(i) Products received by rail into the Storage Facilities and (ii) Products
delivered by rail from the Storage Facilities at Buyer's request pursuant to
this Agreement exceeds (b) 383,250 Gallons for such quarter of such Contract
Year.
"QUARTERLY EXCESS RAIL THROUGHPUT FEE" means the fee, if any, equal to
the product of $.005 per Gallon and the Quarterly Excess Rail Throughput for
rail receipts and deliveries.
"QUARTERLY EXCESS THROUGHPUT FEE" means the sum of the Quarterly Excess
Barge Throughput Fee, Quarterly Excess Pipeline Throughput Fee, Quarterly Excess
Rail Throughput Fee, and Quarterly Excess Truck Throughput Fee.
"QUARTERLY EXCESS TRUCK THROUGHPUT" means, for each quarter for each
Contract Year, the number of Gallons by which the (a) the sum of the quantity of
(i) Products received by truck into the Storage Facilities and (ii) Products
delivered by truck from the Storage Facilities at Buyer's request pursuant to
this Agreement exceeds (b) 3,832,500 Gallons for such quarter of such Contract
Year.
"QUARTERLY EXCESS TRUCK THROUGHPUT FEE" means the fee, if any, equal to
the product of $.0075 per Gallon and the Quarterly Excess Truck Throughput for
truck receipts and deliveries.
"RECEIPT POINT(s)" means the points on the Storage Pipeline System
specified in Section 5.1 at which Seller shall receive Product from Buyer for
injection into the Storage Xxxxx.
"SELLER GUARANTOR" means EOTT Energy Operating Limited Partnership.
"SELLER GUARANTY" means the Guaranty dated as of June 29, 2001, made by
the Seller Guarantor in favor of Buyer guaranteeing the obligations of Seller
under this Agreement and the Toll Conversion Agreement.
"STORAGE FACILITIES" means the Storage Xxxxx and the Storage Pipeline
Systems.
"STORAGE PIPELINE SYSTEM" means the pipeline system, including the
Ancillary Pipelines and all loading and unloading facilities for trucks, tank
cars, barges and other vessels, for transporting Product interconnecting the
Storage Xxxxx, the Transporting Pipelines, the MTBE Plant, and as otherwise
delineated in Exhibit A, together with all associated equipment.
"STORAGE PURCHASE FEE" means the annual fee as defined and determined
pursuant to Section 3.1 hereof.
"STORAGE XXXXX" means the ten (10) storage xxxxx and related facilities
owned and operated by Seller, together with the associated compressors,
dehydrators and other surface equipment (hereinafter the "Surface Facilities"),
all located in Mont Belvieu, Texas. As those additional storage xxxxx listed in
Exhibit B-2 are brought online at Seller's facilities associated with the
Storage Facilities and become available for storage of Product, such storage
xxxxx will
Definitions-26
27
be included as Storage Xxxxx. Each Storage Well shall include, but not be
limited to the following:
(i) A products storage well consisting of an existing brine
well which is designed for LPG storage service and capable of providing
storage capacity not less than the storage capacity for such Storage
Well listed in Exhibit A hereto. Each such facility shall have ample
capacity to deliver fresh water and/or brine to the respective Storage
Well and to withdraw brine from the Storage Well.
(ii) Necessary wellhead valves and an industry standard
emergency shutdown system.
(iii) All brine and fresh water handling facilities.
(iv) A fire protection system.
(v) A products injection pump.
(vi) Miscellaneous pipe, fittings, and accessories to
connect the pump station to the wellhead.
(vii) Measurement facilities.
(viii) A liquids chromatograph.
"TERM" means the period of time beginning on the Effective Date and
ending on the Termination Date.
"TERMINATION DATE" means the first to occur of (i) termination of this
Agreement in accordance with Sections 8.3, or 14.8, (ii) the Early Termination
Date and (iii) June 29, 2011.
"THROUGHPUT FEE" means the annual fee as defined and determined
pursuant to Section 3.2 hereof.
"TRANSPORTING PIPELINE" means the pipeline that (a) delivers Product to
the Receipt Point(s) for injection into the Storage Facilities for storage
and/or (b) accepts Product withdrawn from the Storage Facilities at the Delivery
Point(s), in accordance with this Agreement.
"TOLL CONVERSION AGREEMENT" means the Toll Conversion Agreement dated
June 29, 2001, by and between the Seller and the Buyer executed in connection
herewith.
"UNACCEPTABLE SELLER CREDIT RATING" means a Credit Rating of B+ or
lower by Standard & Poor's and Bal or lower by Xxxxx'x.
"UNACCEPTABLE BUYER CREDIT RATING" means a Credit Rating of BB+ or
lower by Standard & Poor's and Bal or lower by Xxxxx'x.
Definitions-27
28
"YEAR" means a period of 365 consecutive Days, or 366 consecutive days
if the intervening period contains a February 29, with the first Year commencing
at 8:00 a.m. local time on the Effective Date, and with each subsequent Year
commencing at 8:00 a.m. local time on the anniversary thereof.
Definitions-28
29
EXHIBIT A
DESCRIPTION OF STORAGE PIPELINE SYSTEM
The following along with associated equipment shall comprise the Storage
Pipeline System:
MTBE Plant
The MTBE Plant is located in Xxxxxx'x Point, Texas, which is
approximately thirty miles east of Houston, Texas. The MTBE Plant consists of
(i) a dehydrogenation unit (the "Oleflex Unit"), (ii) a MTBE unit (the "MTBE
Unit", and together with the Oleflex Unit the "Units"), (iii) a butane
isomerization unit and (iv) various product handling facilities.
Mont Belvieu
The Mont Belvieu facility is a natural gas liquids storage facility
located at Mont Belvieu, Chamber's County, Texas, which is approximately sixteen
miles from the MTBE Plant. The Mont Belvieu facility consists of ten active
xxxxx with a total capacity of nine million barrels. These facilities are
connected by pipeline directly to the MTBE Plant and a variety of other end
users throughout the Texas/Louisiana Gulf Coast region.
The Grid System
The Grid System a pipeline system used for the transportation of
natural gas liquids and other products from the Mont Belvieu Facility to the
MTBE Plant, to other pipelines, as well as to refineries owned by Amoco Corp.,
Marathon Oil Co., Phibro Energy U.S.A. and Shell Oil Co.
Dock
The dock is located at Barbours Cut, adjacent to the Houston Container Port at
the entrance of the Houston Ship Channel. The dock can provide a loading berth
for barges up to 400 feet in length, 120 feet in beam and 15 feet in molded
draft.
30
EXHIBIT B-1
ITEMIZED INFORMATION FOR STORAGE XXXXX
----------------------------------------------------------------------------------------------
Additional
Available Allotted Allotted
Storage Storage Storage Storage
Well Product Capacity Capacity Capacity
----------------------------------------------------------------------------------------------
1 Y-Grade 721,200 576,960 36,060
2 BG Iso 660,000 528,000 33,000
3 Ethane 1,328,610 1,062,888 66,431
4 Butylene 1,014,279 811,423 50,714
5 Normal 1,115,619 892,495 55,781
Butane
6 Gasoline 1,392,000 1,113,600 69,600
7 SG Iso 1,570,000 1,256,000 78,500
8 Gasoline 1,850,000 1,480,000 92,500
9 Gasoline 1,330,000 1,064,000 66,500
10 Normal 1,708,175 1,366,540 85,409
Butane
----------------------------------------------------------------------------------------------
o ALL QUANTITIES LISTED ABOVE IN BARRELS.
31
EXHIBIT B-2
ITEMIZED INFORMATION FOR ADDITIONAL STORAGE XXXXX
--------------------------------------------------------------------------------------
Available Allotted Additional Allotted
Storage Storage Storage
Storage Well Product Capacity Capacity Capacity
--------------------------------------------------------------------------------------
11 N/A 812,264 81,227 609,198
12 N/A 659,215 65,922 494,412
13 N/A 860,498 86,050 645,374
--------------------------------------------------------------------------------------
o ALL QUANTITIES LISTED ABOVE IN BARRELS.
32
EXHIBIT C
RECEIPT AND DELIVERY POINTS
DISTRIBUTION LINES:
LINE LINE SIZE METER NUMBER METER SIZE USUAL SERVICE CUSTODY TRANSFER
--------------------------------------------------------------------------------------------------------
1A 6" 1AA & 1AB 2" & 3" Normal Butane At Xxxxxxxx
0X 0" 0X 0" Xxxxxxxx Xx Customer
Depends on
1C 6" 1C 4" Utility Direction of Flow (1)
Depends on
1D 6" 1D 4" Utility Direction of Flow (1)
1E 6" 1E 3" Gasoline At Storage Facility
1F 6" 1FA & 1FB 3" & 4" Gasoline At Customer
Depends on
1G 8" 1GA & 1GB 4" & 4" Utility Direction of Flow (1)
CROSS CHANNEL LINES:
METER
LINE LINE SIZE METER SIZE SERVICE CUSTODY
--------------------------------------------------------------------------------------------------------
Line 1 6" & 8" L1 4" Ethane At Xxxxxx'x Point
Xxxx Line 6" & 8" Xxxx P/L Meter 4" Y-Grade At Storage Facility
Line 8 6" & 8" L8A & L8B 4" Butanes At Storage Facility
Line 9 8" L9A & L9B 4" Utility At Storage Facility
XXXXXX'X POINT LINES:
METER
LINE LINE SIZE METER SIZE SERVICE CUSTODY
--------------------------------------------------------------------------------------------------------
Line 2 6" Manifold Meter 2 1/2" Ethane At Xxxxxx'x Point
Line 3 6" Manifold Meter 3" Gasoline At Xxxxxx'x Point
Line 6 6"
Texas City Meter 3" Utility Meter's In Texas City
Dock 1 12" Manifold Meter 4" Methonal At Xxxxxx'x Point
Dock 2 12" Manifold Meter 4" Methonal At Xxxxxx'x Point
Dock 3 8" Manifold Meter 4" Utility At Xxxxxx'x Point
Dock 4 12" Manifold Meter 4" Gasoline At Xxxxxx'x Point
Dock 5 12" Manifold Meter 6" MTBE At Xxxxxx'x Point
Dock 6 12" Manifold Meter 6" MTBE At Xxxxxx'x Point
Dock 7 8" Manifold Meter 4" Iso-Butane At Xxxxxx'x Point
(1) If Storage Facility is receiving material, custody will transfer at shippers
meter. If Storage Facility is shipping material, custody will transfer at
Xxxxxxx Facility meter.
33
EXHIBIT - D
PRODUCT SPECIFICATION - ETHANE
Method-Latest Rev.
Composition, Liquid Volume %
Methane 3.0% Max.
Ethane 95.0% Min. ASTM D-2163
Propane 5.0% Max.
Butanes & Heavier None
Carbon Dioxide and other non-hydrocarbons, ppm wt. 1,000 Max.
Total Sulphur, ppm, wt 15 Max. ASTM D-2784
Corrosion, Copper Strip, Max No.1* ASTM D-1838
Free Water None
* This method may not accurately determine the corrosivity of the liquefied
petroleum gas if the sample contains corrosion inhibitors or other chemicals
which diminish the corrosivity of the sample to the copper strip. Therefore,
the addition of such compounds for the sole purpose of biasing the test is
prohibited.
34
EXHIBIT - D
PRODUCT SPECIFICATION - HD 5 PROPANE
Method-Latest Rev.
Composition, Liquid Volume %
Propane 90.0 Min. ASTM D-2163
Propylene 5.0 Max.
Butane & Heavier 2.5 Max.
Specific Gravity @ 60(degree)F 0.500 Min. ASTM D-1657
0.510 Max.
Vapor Pressure @ 100(degree)F,Psig. 208 Max. ASTM D-1267-84
Volatile Residue:
Temperature at 95% evaporation, deg. F., Max. -37 degrees ASTM D-1837
Residue on Evaporation of 100 ml, Max. 0.05 Ml ASTM D-2158
Oil Stain Observation Pass * ASTM D-2158
Ammonia, ppm, wt. 1.0 Max. UOP-430
Carbonyl Sulfide, ppm, wt. 1.0 Max. UOP-212
Chlorides, ppm, wt. 15.0 Max
Corrosion, Copper Strip, Max. No. 1** ASTM D-1838
Total Sulphur, ppm, wt. 123 Max. ASTM D-2784
Free Water None
* An acceptable product shall not yield a persistent oil ring when 0.3 ml of
solvent residue mixture is added to filter paper in 0.1 increments and
examined in daylight after 2 minutes as described in ASTM D-2158.
** This method may not accurately determine the corrosivity of the liquefied
petroleum gas if the sample contains corrosion inhibitors or other chemicals
which diminish the corrosivity of the sample to the copper strip. Therefore,
the addition of such compounds for the sole purpose of biasing the test is
prohibited.
35
EXHIBIT - D
PRODUCT SPECIFICATION - ISO-BUTANE
Method-Latest Rev.
Composition, Liquid Volume %
Iso-Butane 96.0 Min. ASTM D-2163
Propane 3.0 Max.
Normal Butane & Heavier 4.0 Max.
Total Sulphur, ppm, wt. 140 Max. ASTM D-2784
Vapor Pressure, psig 70 Max. ASTM D-1267
Corrosion, Copper Strip, Max No. 1* ASTM D-1838
Volatile Residue
Temp. @ 95% Evaporation
Degree F., Max. +16 ASTM D-1837
Free Water None
* This method may not accurately determine the corrosivity of the liquefied
petroleum gas if the sample contains corrosion inhibitors or other chemicals
which diminish the corrosivity of the sample to the copper strip. Therefore,
the addition of such compounds for the sole purpose of biasing the test is
prohibited.
36
EXHIBIT - D
PRODUCT SPECIFICATION - NORMAL BUTANE
Method-Latest Rev.
Composition, Liquid Volume %
Normal Butane 95.0 Min. ASTM D-2163
Iso-Butane 3.0 Max. ASTM X-0000
Xxxxxxxx 2.0 Max. ASTM D-2163
Propane 2.0 Max. ASTM D-2163
Total Sulphur, ppm, wt. 140 Max. ASTM D-2784
Vapor Pressure, psig @ 100(degree)F 50 Max. ASTM D-1267
Corrosion, Copper Strip, Max No. 1* ASTM D-1838
Volatile Residue
Temp. @ 95% Evaporation
Degree F., Max. +36 ASTM D-1837
Free Water None
* This method may not accurately determine the corrosivity of the liquefied
petroleum gas if the sample contains corrosion inhibitors or other chemicals
which diminish the corrosivity of the sample to the copper strip. Therefore,
the addition of such compounds for the sole purpose of biasing the test is
prohibited.
37
EXHIBIT - D
PRODUCT SPECIFICATION
NORMAL BUTANE RECEIVED VIA PIPELINE
NORMAL
PRODUCT CHARACTERISTICS BUTANE TEST METHODS
----------------------- ------ ------------
COMPOSITION:
Liquid Volume %:
Normal Butane, Min. 94.0% ASTM D-2163
Propane and lighter, Max. 0.5%
Isobutane, Max. 6.0%
Pentanes, Max. 1.5%
Hexanes and heavier, Max. 0.05%
Total Olefins, Max. 0.35%
Isobutylene, Max. 0.02%
Butadiene and other diolefins, Max. 0.002%
Vapor Pressure @ 100 Degrees F, Max. 50 psig ASTM D-1267
Volatile Residue: Temp @ 95%
evaporation, Degrees F, Max. +36 ASTM D-1837
Corrosion, Copper Strip, Max. No. 1 ASTM D-1838
Free Water Content None
Total Oxygenates, ppm wt., Xxx. 00.0 XXX-000
(Xxxxxxxx, XX0, heavy alcohols, ethers, glycols)
Methanol, ppm wt., Max. 20.0
IPA and Heavier Alcohols, ppm wt., Max. 5.0
MTBE and Other Ethers, ppm wt., Max. 2.0
Other Oxygenates, ppm wt., Max. 5.0
Total Sulphur, ppm wt., Max. 140 ASTM D-2784
Fluorides, ppm wt., Max. 1.0 UOP-619
Fuel Bound Nitrogen, ppm wt., Max. 0.5 ASTM D-4629
Metals, ppb wt., Max. 15 UOP 834
UOP 906
NOTE: These specifications define only a basic purity for this product. The
product is to be free of any contaminates that might render the product
unsuitable for isomerization.
38
EXHIBIT - D
PRODUCT SPECIFICATION - NATURAL GASOLINE
Test Methods
Minimum Maximum Latest Revision
Xxxx Vapor Pressure @ 100(degree)F 13.5 psi ASTM D-323-82
Distillation End Point 375(degree)F ASTM D-216-77 (82)
Corrosiveness, Copper strip @ 100(degree)F No. 1 ASTM D-130-80 (MODIFIED)
Color, Saybolt minimum +25 ASTM D-156-82
Total Sulfur, wt. ppm, max. 1000 ASTM D-2622
Butanes and Lighter, LV% 3% ASTM D-2597
Reactive Sulfur Negative, "sweet" ASTM-4952-97 or GPA 1138
Free Water None
39
EXHIBIT - D
PRODUCT SPECIFICATION
NORMAL BUTANE RECEIVED VIA TRUCK/RAIL CARS
NORMAL
PRODUCT CHARACTERISTICS BUTANE TEST METHODS
----------------------- ------ ------------
COMPOSITION:
Liquid Volume %:
Normal Butane, Min. 94.0% ASTM D-2163
Propane and lighter, Max. 0.5%
Isobutane, Max. 6.0%
Pentanes, Max. 1.5%
Hexanes and heavier, Max. 0.05%
Total Olefins, Max. 0.35%
Isobutylene, Max. 0.02%
Butadiene and other diolefins, Max. 0.002%
Vapor Pressure @ 100 Degrees F, Max. 50 psig ASTM D-1267
Volatile Residue: Temp @ 95%
evaporation, Degrees F, Max. +36 ASTM D-1837
Corrosion, Copper Strip, Max. No. 1 ASTM D-1838
Free Water Content None
Total Oxygenates, ppm wt., Max. 1.0 UOP-845
(Methanol, CO2, heavy alcohols, ethers, glycols)
Total Sulphur, ppm wt., Xxx. 000 XXXX X-0000
Xxxxxxxxx, ppm wt., Max. 1.0 UOP-619
Fuel Bound Nitrogen, ppm wt., Max. 0.5 ASTM D-4629
Metals, ppb wt., Max. 15 UOP 834
UOP 906
NOTE: These specifications define only a basic purity for this product. The
product is to be free of any contaminates that might render the product
unsuitable for isomerization.
40
SCHEDULE 3.1
STORAGE PURCHASE FEE
DATE Rate Annual Volumes
---- ---- ---------------
Jul. 1, 2001 - Dec. 31, 2001 $[*****] 60,911,438
Jan. 1, 2002 - Dec. 31, 2002 $[*****] 121,822,877
Jan. 1, 2003 - Dec. 31, 2003 $[*****] 121,822,877
Jan. 1, 2004 - Dec. 31, 2004 $[*****] 121,822,877
Jan. 1, 2005 - Dec. 31, 2005 $[*****] 121,822,877
Jan. 1, 2006 - Dec. 31, 2006 $[*****] 121,822,877
Jan. 1, 2007 - Dec. 31, 2007 $[*****] 121,822,877
Jan. 1, 2008 - Dec. 31, 2008 $[*****] 121,822,877
Jan. 1, 2009 - Dec. 31, 2009 $[*****] 121,822,877
Jan. 1, 2010 - Dec. 31, 2010 $[*****] 121,822,877
Jan. 1, 2011 - June 30, 2011 $[*****] 60,911,438
THROUGHPUT FEE
Annual
Minimum
DATE Rate Volumes
---- -------- -------
Jul. 1, 2001 - Dec. 31, 2001 $0.2532 20,000,000
Jan. 1, 2002 - Dec. 31, 2002 $0.2434 40,000,000
Jan. 1, 2003 - Dec. 31, 2003 $0.2484 40,000,000
Jan. 1, 2004 - Dec. 31, 2004 $0.2534 40,000,000
Jan. 1, 2005 - Dec. 31, 2005 $0.2586 40,000,000
Jan. 1, 2006 - Dec. 31, 2006 $0.2638 40,000,000
Jan. 1, 2007 - Dec. 31, 2007 $0.2692 40,000,000
Jan. 1, 2008 - Dec. 31, 2008 $0.2748 40,000,000
Jan. 1, 2009 - Dec. 31, 2009 $0.2805 40,000,000
Jan. 1, 2010 - Dec. 31, 2010 $0.2863 40,000,000
Jan. 1, 2011 - June 30, 2011 $0.2927 20,000,000
o ALL QUANTITIES LISTED ABOVE IN BARRELS.
-------------
[*****] Indicates that material has been omitted and confidential treatment
requested therefore. All such material has been filed separately with
the Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934.
41
SCHEDULE 3.5
LOADING RATES PER VESSEL AND PRODUCT
MTBE Nat. Gasoline PP Mix
---- ------------- ------
Barge 3,000 2,300 N/A
Tank Car N/A 150 N/A
Truck 100 150 100
o ALL RATES LISTED ABOVE IN BARRELS PER HOUR
