EXHIBIT 10.75
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") dated as of December 31, 1998, is
between US Liquids of Texas, Inc., a Texas corporation ("USLT"), and MESA
PROCESSING, INC., a Texas corporation ("MESA").
WITNESSETH:
WHEREAS, USLT is in the business of collecting, transporting and
processing fats and oils at various facilities;
WHEREAS, on the date hereof, MESA has acquired certain of the assets of
USLT relating to the marketing of yellow and xxxxx grease products; and
WHEREAS, MESA desires to purchase and USLT desires to sell to MESA all of
the yellow and xxxxx grease products processed by USLT, or its affiliates, in
accordance with the terms and provision set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, and for other good and valuable, the receipt and sufficiency
of which are hereby acknowledged for all purposes, MESA and USLT hereby agree as
follows.
1. SALE AND PURCHASE OF PRODUCTS
USLT shall, and shall cause its affiliates to, sell and MESA shall purchase
yellow grease products ("Yellow Grease") and xxxxx grease products ("Xxxxx
Grease") meeting the specifications (the "Specifications") attached hereto as
EXHIBIT I (the "Products").
USLT further grants MESA a right of first purchase with respect to all Products
it produces at any USLT Facilities which do not conform to the Specifications.
Unless the parties have otherwise mutually agreed, prior to any sale by USLT of
Products which do not meet the Specifications, USLT shall provide MESA with at
least 72 hours prior notice of the availability of such non-conforming Products
for sale and the terms of such proposed sale. If MESA desires to purchase such
non-conforming Products, it shall promptly notify USLT of such intent to
purchase and shall consummate such purchase and take delivery in accordance with
the terms hereof.
2. TERM
The initial term of this Agreement shall commence on the date hereof and
extend for a period of one year; PROVIDED, HOWEVER, that the Agreement shall
automatically be extended after the initial term for up to four consecutive
additional periods of twelve months each unless (i) MESA shall give written
notice at least 90 days prior to the expiration of the then current term of
its intent to terminate this Agreement, or (ii) the agreement shall be
earlier terminated as otherwise provided herein.
3. QUANTITY
USLT will supply and MESA shall purchase from USLT all Products produced at any
processing facilities of USLT or its affiliates (the "Facilities") in accordance
with the terms hereof. MESA acknowledges that USLT cannot guarantee the
availability of any absolute quantity of Product for purchase by MESA hereunder
during any month during the term hereof. To the extent USLT produces Yellow
Grease and Xxxxx Grease products during the term hereof, USLT will use
reasonable efforts to produce Products that meet the Specifications.
4. DELIVERY AND TRANSPORTATION
MESA agrees to diligently take delivery of Products from the Facilities in such
a manner and at such times that the aggregate supply of either yellow grease or
xxxxx grease Products stored by USLT at any such Facility shall not exceed
150,000 pounds of such type of Product at any single Facility. In the event that
any of the Facilities at any time during the term hereof experiences supply of
either type of Product in excess of such volumes, Seller shall notify MESA of
such excess supply, which notice may be verbal with a confirmation faxed to
MESA, and MESA shall promptly dispatch railcars or tank trucks to take delivery
of such excess Products. If MESA has not taken delivery of the excess products
within 48 hours from the time of notification, USLT may sell or otherwise
dispose of any excess Products in any reasonable manner. MESA shall be
responsible for payment to USLT of the reasonable difference, if any, between
the sale price for such Products sold by USLT and the amount USLT would have
received if sold to and delivery taken by MESA as provided in this Agreement
plus all actual costs and expenses incurred by USLT in connection with such sale
or disposal, including without limitation, all shipping, insurance, taxes,
disposal fees and other costs. Any such amount due and owing from MESA will be
included in the next or subsequent USLT invoice to MESA.
USLT shall deliver Products hereunder, FOB the relevant Facility, into railcars
or tank trailers supplied by MESA. All deliveries of Product into tank trailers
shall be documented by weight tickets and bills of lading prepared by USLT. All
deliveries of Products into rail cars shall be documented by weight tickets
obtained by MESA from a third party weigh station located not more than 100
miles from the relevant Facility. MESA shall, within 48 hours of the time MESA
receives a third party rail weight ticket, provide to USLT a copy of the third
party rail weight ticket. In the event USLT does not receive a copy of such
third party rail weight ticket within five days from the date of delivery, USLT
may invoice MESA based upon the maximum load capacity of the type of railcar to
which delivery was made assuming 7.4 lbs per gallon of Product, which invoice
shall be adjusted (by issuance of a credit to MESA) to reflect the actual amount
delivered if MESA delivers a third party rail weight ticket for such shipment to
USLT within 21 days of the date of delivery.
In the event MESA may reasonably request delivery to railcars from a facility
that can not accomodate rail traffic, MESA shall designate by written order to
USLT, at least 48 hours prior to the required delivery, the location of a rail
spur within 25 miles of the relevant facility and the quantity, grade and time
for delivery. USLT shall deliver or arrange for the delivery of the ordered
Products to such railcars and shall include the actual cost reasonably incurred
by USLT for such delivery in its invoice for such Products. USLT shall not be
obligated to remain at the designated delivery site for more than two hours from
the delivery time designated in the notice.
Risk of loss and title to Product (or other non-conforming grease products
purchased by MESA) shall pass to MESA upon loading into such rail cars or tank
trailers. Once loaded into railcars or tank trailers, MESA shall be responsible
for all costs, obligations and liabilities associated with transportation of
Product.
5. PRICE
MESA shall pay to USLT the following prices for Products purchased during any
calendar month during the term of this Agreement:
YELLOW GREASE: The weighted average1 of the average daily
price reported for (Yellow) grease for the New
York, Chicago, Gulf and Los Angeles markets as
published in each edition of FATS AND OILS
BULLETIN by Xxxxxxxx Publishing Co. during the
immediately preceding month.
XXXXX GREASE: The weighted average1 of the price quotes for
Chicago (Xxxxx) grease as published in each
edition of FATS AND OILS BULLETIN by Xxxxxxxx
Publishing Co. during the immediately preceding
month.
(1) For purposes of the foregoing, such average daily prices shall be
weighted for the number of days that such pricing remains applicable (i.e.
the number of days during such calendar month that such published pricing
quotes remain as the most current published prices until superceded by a
new published price).
In the event MESA purchases Yellow Grease or Xxxxx Grease from any facility
operated by a third party within 100 miles of any of the Facilities, and such
price per pound exceeds the applicable price per pound for Yellow Grease or
Xxxxx Grease, as the case may be, during such applicable month as set forth in
this Section 5, MESA agrees to pay an equal price to USLT for all quantities of
Yellow Grease or Xxxxx Grease, as the case may be, produced by and purchased
from USLT by MESA during such month. Notwithstanding the foregoing, MESA shall
not be obligated to pay such greater price for quantities of Yellow Grease in
any month in which the quantity of Xxxxx Grease produced by USLT at the
Facilities exceeds the quantity of Yellow Grease produced by USLT at the
Facilities.
Any purchases of nonconforming grease products shall be pursuant to mutually
agreed upon pricing and terms.
USLT shall invoice MESA on a shipment by shipment basis for Product purchased
hereunder. Such invoices shall intially, through August 31, 1999, be due and
payable within sixty days of receipt by MESA from USLT of its invoice.
Thereafter, such invoices shall be due and payable within forty-five days of
receipt by Mesa.
6. NOTICES
All notices under this Agreement shall be deemed to be properly given with the
postmarked date governing when (i) sent by U.S. Mail, with postage prepaid, AND
(ii) sent by facsimile transmission, both addressed as follows:
If to MESA: MESA PROCESSING, INC.
X.X. Xxx 0000
Xx. Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx, President
FAX: (000) 000-0000
If to USLT: US LIQUIDS OF TEXAS, INC.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx, Vice President
FAX: (000) 000-0000
7. CONFIDENTIALITY.
The parties agree that during the term of this Agreement and for two years
following the termination of this Agreement, any information of a confidential
or proprietary nature which is disclosed by any party hereunder to the other
party or which relates in any way to the activities undertaken by the parties
under this Agreement shall be held in confidence for the exclusive use and
benefit of the parties. The parties shall not divulge or communicate to any
person or entity or exploit for any purpose whatever any confidential
information disclosed to it by another party, or any confidential information
obtained or produced in relation to this Agreement. This prohibition will not
prevent the disclosure of confidential information to (1) directors, officers,
employees or advisers engaged by any of the parties in connection with the
foregoing who are bound to maintain the confidentiality of such confidential
information, (2) a judicial, governmental or other authority having
jurisdiction, or (3) a recognized stock exchange in accordance with its
requirements. Information will not be deemed confidential for these purposes if
such information (i) is available to the public other than as a result of
disclosure by one of the parties to this Agreement, (ii) was or is available
from another source which did not receive such information either directly or
indirectly from a party to this Agreement, (iii) was already known to the party
at the time the information was provided to such party, or (iv) is independently
developed or acquired without being in breach of any obligation hereunder. In
addition, subject to the terms of this Section 7, each party may use any
confidential information jointly developed under this Agreement for its own
internal purposes.
The contents and timing for any press releases and formal announcements
regarding any of the matters provided for in this Agreement shall require the
prior written approval of each of the parties, which approval shall not be
unreasonably withheld. Notwithstanding the above, nothing herein shall prevent a
party from issuing press releases and formal announcements that such party
reasonably believes are required by law or the rules of any recognized stock
exchange;
provided, however, that unless such party determines that it is required to
immediately issue a release or announcement, such party shall inform the other
thereof beforehand and further provided that any party will be entitled to
require that its name be withheld from such press release or public
announcement.
8. WARRANTIES; REMEDIES; LIMITATION OF LIABILITY.
USLT hereby warrants to MESA (i) that it will convey to MESA good title to all
Products (and nonconforming grease products) purchased hereunder, free and clear
of all liens, encumbrances and security interests, and (ii) that all Product
will conform to the Specifications. EXCEPT AS SET FORTH ABOVE IN THIS SECTION,
USLT MAKES NO OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, WITH RESPECT TO PRODUCT
SOLD HEREUNDER.
If USLT breaches the foregoing warranty with regard to any Product purchased
hereunder, USLT's sole liability and MESA's sole remedy shall be as follows:
USLT shall, at its sole expense, (i) replace the non-conforming Product with
Product conforming to such warranty; or, at MESA's option, (ii) refund the
purchase price.
USLT shall also reimburse MESA for any reasonable costs incurred by MESA, less
any proceeds received by MESA, to return, store, transport or dispose of
non-conforming goods. USLT shall, however, have no liability to MESA under this
paragraph if MESA fails to notify USLT of such non-conformity (i) within 10 days
after date of delivery or (ii) if the non-conformity is not reasonably
discoverable within that time period, then within 10 days after the date on
which the non-conformity was or should have been discovered.
IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT FOR INCIDENTAL,
SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES FOR ITS FAILURE TO HAVE PERFORMED ANY
OBLIGATION UNDERTAKEN OR IMPOSED UNDER THIS AGREEMENT.
9. TERMINATION.
In case either party shall breach this Agreement by failing to comply with any
of the terms and conditions hereof, then the other party shall give notice in
writing specifying the breach complained of, and if the same not be remedied
within 10 days from the time such notice is given, this Agreement may be
canceled by the non-breaching party.
10. FORCE MAJEURE.
Neither party shall be liable under this Agreement for delays or other
non-performance caused by any unusual occurrence beyond the party's reasonable
control, including, but not limited to, war, fire, strikes or other labor
troubles, unforeseeable breakage of equipment, accidents beyond the control of
either party, acts of God, and unforeseeable actions of governmental authority,
laws, rules and/or regulations. Upon the occurrence of an event of force
majeure, the party affected thereby shall give prompt notice to the other party
of such and shall thereafter undertake all commercially reasonable efforts to
remedy and/or mitigate the event of force majeure. In the event of an event of
force majeure declared by either party, the term of this Agreement shall be
extended automatically for a period equal in length to the period of the force
majeure.
11. RELATIONSHIP OF THE PARTIES.
Nothing in this Agreement shall be construed or implied to create a joint
venture, partnership, agency or other fiduciary or other relationship between
USLT and MESA. The sole relationship between the parties hereto is that of
vendor and vendee.
Each party reserves the exclusive right to exercise complete control over and/or
direction of its employees, agents, representatives and subcontractors in
connection with this Agreement and the work to be performed hereunder. Neither
party shall have any authority to employ any person as employee, agent,
representative, or subcontractor for or on behalf of the other party for any
purpose.
Neither party shall make any representations on behalf of the other party, nor
shall either party assume or create any obligation, expressed or implied, on
behalf of the other party.
12. RESTRICTION ON CERTAIN INTERNATIONAL SALES.
MESA agrees that under no circumstances will it knowingly divulge any of the
information obtained under this Agreement or transfer any Products marketed
under this Agreement to national persons or entities of the following nations,
nor will it permit or authorize the transfer or shipment, direct or indirect, of
any Products to these nations: the Democratic Peoples' Republic of Korea
(sometimes referred to as North Korea), Cuba, Libya, Iraq or Iran.
13. INDEMNIFICATION.
Each party shall be responsible for and indemnify the other party against all
losses, claims, expenses or damages suffered by the other party that result in
any way from any accident, injury, or damage either to person or property or
from death of any persons by reason of any act or omission on its part and
related to the subject matter of this Agreement.
14. GOVERNING LAW.
This contract shall be governed by and construed in accordance with the laws of
the State of Texas.
15. ASSIGNMENT.
Neither MESA nor USLT shall assign this contract or any rights hereunder other
than to a corporate affiliate or successor to essentially the entire relevant
line of business without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
16. NON-WAIVER.
Failure of USLT or MESA to exercise any rights under this Agreement upon one
occasion shall not waive USLT's or MESA's right to exercise the same on another
occasion.
17. COMPLETE AGREEMENT; AMENDMENT.
This Agreement constitutes the complete and entire agreement between the parties
hereto, and supersedes any previous communications, representations or
agreements, whether verbal or written, with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate as of this 31st day of December, 1998.
US LIQUIDS OF TEXAS, INC.
By:____________________________________
Xxxx Xxxxxx, Vice President
MESA PROCESSING, INC.
By:____________________________________
Xxxxxx X. Xxxxxxx, President
EXHIBIT I
YELLOW GREASE
Free Fatty Acids o 15%
Moisture, Impurities and Unsaponifiable o 2%
XXXXX GREASE
Free Fatty Acids o 85%
Moisture, Impurities o 2%
Unsaponifiable o 3%
