EXHIBIT 10.8
PRODUCT STORAGE AGREEMENT
ARCADIA STORAGE FACILITY
THIS PRODUCT STORAGE AGREEMENT is entered into as of the 1st day of
November, 2002 ("Effective Date") by and between XXXXXX UNDERGROUND STORAGE,
INC. ("LESSOR"), and XXXXXX OPERATING PARTNERSHIP L.P., ("CUSTOMER"). The
parties agree to the following:
WITNESSETH
1. PRODUCT STORAGE. For and in consideration of the rates and fees to
be paid by CUSTOMER to LESSOR as provided herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
LESSOR hereby agrees to lease storage space at its underground storage facility
situated in Arcadia, Louisiana, for the storage of up to, but not to exceed, the
maximum quantity of propane specification product ("Product") set forth in
Exhibit "A" which is attached hereto and made a part hereof (the "Lease
Volume"). LESSOR represents and warrants that it has full right, power and
authority to extend and deliver the storage services described in this
Agreement. Each of the parties hereto represents and warrants that it has full
power and authority to make, enter and perform its obligations under this
Agreement.
2. Definitions. For the purpose of this Agreement, the following terms
and expressions shall have the following meanings:
'AFFILIATE' means, of any Person, a Person Controlling,
Controlled by or under common Control with, directly or indirectly,
through one or more intermediaries, such Person. Any Person shall be
deemed to be an Affiliate of any specified Person if such Person owns
50% or more of the voting securities of the specified Person, if the
specified Person owns fifty percent (500/o) or more of the voting
securities of such Person, or if fifty percent (50~/o) or more of the
voting securities of the specified Person and such Person are under
common Control.
"AGREEMENT" shall mean this Product Storage Agreement.
"BARREL" shall mean forty-two (42) U. 5. Gallons.
"BASE RATE" shall have the meaning specified in Section 12
hereinafter.
"BUSINESS DAY" shall mean a Day on which Federal Reserve
member banks in Houston, Texas are open for business.
"CONTROL" of a non-natural Person means the power, directly
or indirectly, to (i) elect, appoint or cause the election or
appointment of at least a majority of the members of the board of
directors of such Person (or if such Person is a noncorporate Person,
Persons having similar powers), or (ii) direct or cause the direction
of the management and policies of such Person, in
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either case through beneficial ownership of the capital stock (or
similar ownership interests) of such Person or otherwise.
"DAY OR DAILY" shall mean a twenty-four (24) hour period
commencing 12:01 a.m. local clock time, and extending until 12:00
midnight local clock time.
"EFFECTIVE DATE" shall mean the date on which CUSTOMER may
begin to store Products under this Agreement as set forth in Exhibit
"A".
"FACILITIES" shall mean the underground storage facilities
owned by LESSOR, at Arcadia, Louisiana, including, but not limited to,
all storage caverns, related surface and subsurface equipment, and
loading and unloading terminals.
"FORCE MAJEURE" shall have the meaning specified in Section 18
hereinafter.
"GALLON" shall mean one U.S. Gallon, which is the unit of
volume used for the purpose of measurement of liquid. One (1) U.S.
liquid Gallon contains two hundred thirty-one (231) cubic inches when
the liquid is at a temperature of sixty degrees Fahrenheit (600F) and
at the Vapor pressure of the liquid being measured.
"LEASE VOLUME" shall have the meaning specified in Section 1
above.
"MONTH" or "MONTHLY" shall mean a period commencing at 12:01
a.m. local clock time on the first Day of a calendar Month and
extending until 12:00 midnight local clock time on the last Day of the
calendar Month.
"OFFSPEC PRODUCT" shall have the meaning specified in Section
4 hereinafter.
"PERSON" means any individual, corporation, partnership,
limited partnership, limited liability partnership, limited liability
company (whether domestic or foreign), joint venture, association,
joint-stock company, trust, estate, custodian, trustee, executor,
administrator, nominee, entity in a representative capacity,
unincorporated, organization, or governmental agency or authority.
"RECEIVING PIPELINE" shall have the meaning specified in
Section 5 hereinafter.
"STORAGE RATE" shall have the meaning specified in Section
11(a).
"YEAR" or "YEARLY" shall mean a period of 365 consecutive
Days', provided, however that any Year which contains the date of
February 29 shall consist of 366 consecutive Days.
3. TERM. The term of this agreement shall commence on the Effective
Date and shall terminate as specified in Exhibit "A". Unless a new storage
agreement is entered into or this agreement is renewed, at the expiration or
termination of this Agreement, CUSTOMER shall remove all Products stored
hereunder
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on or before the last Day of the term of this Agreement subject to the payment
of all accrued storage fees and other charges hereunder and LESSOR's lien as set
forth herein. In the event CUSTOMER fails to remove its Products at the
expiration of the term of this Agreement, LESSOR shall have the right to sell
all or any portion of such Products on terms and at such prices as LESSOR, in
its sole discretion, deems appropriate under the then existing circumstances. If
LESSOR sells all or a portion of CUSTOMER's Products under the terms of this
Section 3, within sixty (60) Days of its receipt of the proceeds derived from
the sale of such Products, LESSOR shall remit same to CUSTOMER less (i) all of
LESSOR'S costs and expenses associated with any such sales, (ii) a sales
commission equal to five percent (5%) of the gross proceeds of such sales, and
(iii) any fees then due and owing by CUSTOMER to LESSOR.
4. PRODUCT SPECIFICATIONS.
(a) All deliveries of Products by CUSTOMER hereunder shall
meet LESSOR specifications for the type of Products stored, as such
specifications may change from time to time, the most current of which
are set forth in Exhibit "B" attached hereto and made a part hereof.
LESSOR or its designee reserves the right to perform an analysis of
CUSTOMER's Products prior to accepting same for storage, but assumes no
responsibility for doing so, and may refuse to accept delivery of such
Products if it is contaminated or otherwise fails to conform with the
applicable specifications ("0ffspec Product"). If LESSOR accepts into
storage Offspec Product delivered by or on behalf of CUSTOMER, CUSTOMER
shall reimburse LESSOR for the reasonable costs and expenses incurred
in handling such Offspec Product. CUSTOMER shall be bound by the
testing results obtained from analysis of CUSTOMER's Products, if any,
performed by or on behalf of LESSOR.
(b) CUSTOMER AGREES TO AND DOES INDEMNIFY FULLY AND HOLD
HARMLESS LESSOR AND ITS PARENTS, SUBSIDIARIES AND AFFILIATES AND ITS
AND THEIR AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES,
SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL LIABILITIES,
LOSSES, DAMAGES, DEMANDS, CLAIMS, PENALTIES, FINES, ACTIONS, SUITS,
LEGAL, ADMINISTRATIVE OR ARBITRATION OR ALTERNATIVE DISPUTE RESOLUTION
PROCEEDINGS, JUDGMENTS, ORDERS, DIRECTIVES, INJUNCTIONS, DECREES OR
AWARDS OF ANY JURISDICTION, COSTS AND EXPENSES (INCLUDING, BUT NOT
LIMITED TO, ATTORNEYS' FEES AND RELATED COSTS) ARISING OUT OF OR IN ANY
MANNER RELATED TO CUSTOMER DELIVERING OR CAUSING TO BE DELIVERED INTO
LESSOR'S FACILITIES ANY OFFSPEC PRODUCTS.
5. PRODUCT DELIVERY AND REDELIVERIES.
(a) LESSOR will not accept delivery of Propane that has been odorized.
CUSTOMER represents that it shall not tender for delivery and storage Propane
that has been odorized.
(b) Products redelivered to CUSTOMER out of LESSOR'S Facilities will
only be made on the request of CUSTOMER's designated representative or duly
authorized agent. LESSOR will not recognize sales, assignments or transfers of
title to Products while in storage unless made in a manner approved by LESSOR in
advance and then only to another person or entity that has entered into a valid
storage
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agreement with LESSOR. Products redelivered by LESSOR hereunder shall be
redelivered into any common carrier pipeline currently connected to LESSOR'S
Facilities or into tank trucks. LESSOR'S redelivery of Products to CUSTOMER
shall be subject to operating conditions, rates of delivery, delivery pressures,
scheduling, etc. of the pipeline in which CUSTOMER requests Products be
delivered into (the "Receiving Pipeline"). Custody of the Products delivered or
redelivered hereunder shall be deemed to be transferred at the pipeline
connection of the Receiving Pipeline, or the loading flange if loaded into tank
trucks, as applicable. CUSTOMER shall use its best efforts to give LESSOR
reasonable notice of deliveries or withdrawals of Products. LESSOR shall not be
required to receive or redeliver Products unless it has been given at least
fifteen (15) Days advance written notice of such Products delivery or
redelivery, but always subject to the physical capabilities of LESSOR'S
Facilities and other customers scheduled redeliveries. Measurement of Products
delivered or redelivered hereunder shall take place as near to the points of
delivery or redelivery as practicable to LESSOR and shall be made by LESSOR or
its designee in accordance with LESSOR'S or its designee's standard measurement
procedures and shall conform to good measurement practices in the industry. All
measurements made by LESSOR or its designee shall be binding on the parties
hereto unless proven to be in error. CUSTOMER shall have the right to witness
all such measurements. If deliveries of Products for storage are made by
CUSTOMER through the use of tank cars or trucks, LESSOR shall have the right to
prorate tank car or truck shipments in proportion to the Lease Volume for which
each CUSTOMER has contracted, if deemed necessary by LESSOR in its sole
discretion. Tank trucks will be handled on a first in first out basis. All tank
trucks shall be suitable for loading and unloading at LESSOR'S Facilities and
shall be certified as such by CUSTOMER as provided in Section 6 hereinafter.
Any quantity of Propane taken by CUSTOMER in excess of CUSTOMER's
Propane storage balance will be considered as an unauthorized withdrawal of
Propane. CUSTOMER shall have five (5) days from unauthorized withdrawal to
restock the excess amount withdrawn. When LESSOR determines a CUSTOMER has
withdrawn unauthorized volumes, CUSTOMER will be prevented from further
withdrawals. Withdrawal privileges will be reinstated only after the CUSTOMER
re-stocks the excess withdrawal or paid for the excess withdrawal and CUSTOMER
has physical volumes in place to withdraw.
6. PRORATION. LESSOR shall exercise its best efforts to withdraw and
deliver on any one-day the total of each CUSTOMER's requests for such day. If,
however, all of the withdrawal requests exceed the total volume which can
withdraw from storage and deliver, the Propane deliverable on each day shall be
prorated. Proration of withdrawals down the pipeline and proration of
withdrawals by transport truck will be handled as two separate allocations.
(a) Proration will be determined based on daily activity.
Should proration become necessary, the customer will be notified
twenty-four (24) hours in advance by phone and/or FAX.
(b) Proration will be based on the CUSTOMER's throughput
during the previous twelve (12) months as a percentage of the total
throughput. This percentage will then be applied to the total daily
output capacity of the transport truck withdrawal facilities or the
pipeline withdrawal facilities.
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7. TRANSPORTATION EQUIPMENT. CUSTOMER agrees that all trucks used by
CUSTOMER and third party carriers on CUSTOMER's behalf to make deliveries or
withdrawals at the Facilities shall meet or exceed all federal, state and
municipal safety, operating and insurance requirements and further agrees to
certify same and to provide copies of all government approvals to LESSOR or its
designee before the trucks will be accepted at LESSOR'S Facilities. CUSTOMER and
all third party carriers acting on behalf of CUSTOMER shall have executed a
Terminal Access Agreement before they will be allowed to enter the Facilities.
8. STENCHING. LESSOR will odorize or cause to be odorized all shipments
of propane out of storage by tank truck in accordance with standard industry
practice (currently 1.5 pounds ethyl mercaptan per 10,000 Gallons), or as
required by governmental agencies having proper jurisdiction, and will odorize
shipments of other Products if requested in writing by CUSTOMER to do so.
CUSTOMER agrees to pay LESSOR for providing this odorization service the fees
set forth in Exhibit "A". CUSTOMER ACCEPTS ALL RESPONSIBILITY FOR IMPROPER
AMOUNTS OF MALODORANT SUBSEQUENT TO SHIPMENT, THE DISSIPATION OF MALODORANT OR
THE INTRODUCTION OF THE PROPER MALODORANT AND, WHERE LESSOR OR ITS DESIGNEE
PROVIDES DOCUMENTATION OF THE ODORIZATION REQUIRED BY THIS AGREEMENT, CUSTOMER
AGREES TO DEFEND, INDEMNIFY AND HOLD LESSOR AND ITS PARENTS, SUBSIDIARIES AND
AFFILIATES AND ITS AND THEIR AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS AND ASSIGNS HARMLESS FROM ANY AND ALL LIABILITIES,
LOSSES, DAMAGES, DEMANDS, CLAIMS, PENALTIES, FINES, ACTIONS, SUITS, LEGAL,
ADMINISTRATIVE OR ARBITRATION OR ALTERNATIVE DISPUTE RESOLUTION PROCEEDINGS,
JUDGMENTS, ORDERS, DIRECTIVES, INJUNCTIONS, DECREES OR AWARDS OF ANY
JURISDICTION, COSTS AND EXPENSES (INCLUDING ATTORNEY'S FEES AND ANY COST OR
EXPENSE OF INCIDENT INVESTIGATION) OR ANY LIABILITY ARISING FROM ANY CLAIMS OF
WHATEVER KIND DUE TO INJURIES OR DAMAGES WHICH OCCUR AFTER DELIVERY TO CUSTOMER
AND ARISE IN CONNECTION WITH CUSTOMER'S OR ITS CUSTOMER'S TRANSPORTATION,
STORAGE, USE, HANDLING, OR RESALE OF PRODUCTS COVERED HEREUNDER. THIS
INDEMNIFICATION OBLIGATION INCLUDES AMONG ANY OTHER CLAIMS, THOSE COMPRISING
LACK OF OR INADEQUATE WARNING MATERIALS, IMPROPER AMOUNTS, USE OR TYPE OF
ODORANT, "ODORANT FADING," LACK OF WARNING ON SUPPLEMENTAL WARNING SYSTEMS (SUCH
AS GAS DETECTORS) AND IMPROPER TRAINING OR MONITORING OF CUSTOMER'S WARNING
AND/OR TRAINING PROGRAMS. CUSTOMER'S INDEMNITY OBLIGATION SHALL BE APPLICABLE
EVEN IF SUCH DAMAGES ARE DETERMINED TO HAVE BEEN PARTLY CAUSED BY THE FAULT OF
LESSOR OR IF LIABILITY WITHOUT FAULT IS IMPOSED ON LESSOR, THE ONLY EXCEPTION TO
SUCH OBLIGATION BEING WHERE THE FAULT OF LESSOR IS DETERMINED TO BE THE SOLE
CAUSE OF SUCH DAMAGES.
9. LOSS ALLOWANCE. Due to normal operating losses which occur in
receiving Products for storage, storing such Products and redelivering Products
out of storage, CUSTOMER'S withdrawals from storage shall be limited to the
percent of the Products delivered to LESSOR hereunder specified in Exhibit "A".
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10. TRANSPORTATION COSTS TO AND FROM STORAGE. All transportation
charges and other expenses incurred in connection with (i) CUSTOMER's delivery
of Products to LESSOR'S Facility for storage and (ii) CUSTOMER's receipt of
Products from storage shall be paid by CUSTOMER directly to such transporter.
11. STORAGE AND HANDLING CHARGES.
(a) CUSTOMER shall pay LESSOR the Storage Rate as set forth
in Exhibit "A", without regard as to whether any Products have actually
been or will be delivered by CUSTOMER to LESSOR for storage hereunder.
CUSTOMER shall also pay LESSOR Monthly the other rates, fees and
charges set forth in Exhibit "A", including, but not limited to,
Throughput Charges and Redelivery Fees, if any.
(b) If at the end of any Month (i) the volume of a particular
Product stored by CUSTOMER exceeds the storage volume of such Product
allocated for that Month as designated by CUSTOMER as provided herein
(the initial allocation of which is set forth in Exhibit "A", and/or
(ii) the total volume of all Products stored by CUSTOMER exceeds the
Lease Volume, CUSTOMER shall pay to LESSOR the Excess Storage Fee as
set forth in Exhibit "A".
(c) If at the expiration or termination of this Agreement
CUSTOMER continues to have Products in storage (which the parties
expressly do not contemplate and LESSOR in no way condones) which was
delivered into storage under the terms of this agreement, then CUSTOMER
shall pay to LESSOR an Excess Storage Fee as set forth in Exhibit "A"
each Month thereafter based on the highest balance of all Products held
in storage at any time during such Month. LESSOR'S acceptance of funds
pursuant to this Section shall (i) in no way be construed as a renewal
of this Agreement, provided, however, CUSTOMER shall continue to be
bound by all terms and conditions of this Agreement as long as any of
CUSTOMER'S Products remains in storage or (ii) in no way effect
LESSOR'S rights to sell CUSTOMER'S Products as provided for in Section
3 above and any other rights that CUSTOMER may have.
(d) Nothing in this Section 11 shall be construed to create
an obligation on LESSOR to accept more Products into storage in excess
of the Lease Volume. At any time there is an unauthorized excess
balance, LESSOR may by telephone notice to CUSTOMER require CUSTOMER to
remove such excess balance within three Business Days and if any excess
balance remains at the end of such period, then CUSTOMER shall
reimburse LESSOR for any costs or liabilities incurred by LESSOR as a
result thereof.
12. INVOICING AND PAYMENTS. Each Month during the term of this
Agreement, LESSOR shall invoice CUSTOMER for all amounts owed by CUSTOMER to
LESSOR hereunder and CUSTOMER shall pay to LESSOR the amounts due no later than
ten (10) Days after CUSTOMER'S receipt of invoice therefore. If the Day on which
any payment is due is not a Business Day, then the relevant payment shall be due
upon the immediately preceding Business Day, except if such payment due date is
a Sunday or Monday, then the relevant payment shall be due upon the immediately
succeeding Business Day. Any amounts which remain due and owing after the due
date shall bear interest thereon at a per annum rate of
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interest equal to the lower of the "Prime Rate" of interest as quoted from time
to time by the Wall Street Journal or its successor, plus two percent, or the
maximum lawful rate of interest (the "Base Rate"). If a good faith dispute
arises as to the amount payable in any statement, the amount not in dispute
shall be paid. If CUSTOMER elects to withhold any payment otherwise due as a
consequence of a good faith dispute, CUSTOMER shall provide LESSOR with written
notice of its reasons for withholding payment. The parties hereto agree to use
all reasonable efforts to resolve any such disputes in a timely manner. If it is
subsequently determine, whether by mutual agreement of the parties or otherwise,
that CUSTOMER is required to pay all or any portion of the disputed amounts to
LESSOR, in addition to paying over such amounts, CUSTOMER also shall pay
interest accrued on such amounts at the Base Rate from the original due date
until paid in full.
13. LIEN FOR UNPAID CHARGES. CUSTOMER hereby grants unto LESSOR a lien
against any Products of CUSTOMER remaining in storage at any time for any unpaid
amounts, excluding any unpaid amounts disputed in good faith, which may be owing
by CUSTOMER to LESSOR hereunder. LESSOR specifically reserves the right to
refuse to redeliver Products stored by CUSTOMER at any time that there remains
any amounts due and owing by CUSTOMER to LESSOR according to the terms hereof
except to the extent such amounts are being disputed in good faith by CUSTOMER.
Without prejudice to any other remedies that LESSOR may have at law, in equity
and/or pursuant to the terms and provisions hereof, LESSOR may enforce the lien
granted herein by public or private sale of any or all of CUSTOMER's Products
remaining in storage and at any time or place and on any terms which LESSOR, in
its sole discretion, deems commercially reasonable after giving CUSTOMER not
less than five (5) Days notice of such sale.
14. TITLE TO STORED PRODUCT. It is understood and agreed that (i) title
to the Products stored hereunder shall remain in CUSTOMER, subject to being
commingled with like Products belonging to LESSOR and/or other parties, which
CUSTOMER hereby grants unto LESSOR the right to do so, and ii) Products
redelivered to CUSTOMER by LESSOR may not be identical Products delivered by
CUSTOMER into LESSOR'S Facilities, but shall be considered as fungible goods
meeting the same quality specifications. With respect to Products in storage
pursuant to this agreement, it is specifically agreed as follows:
(a) In the event there should be any loss of Products (other
than normal operating losses) from LESSOR Facilities and such loss is
not attributable to the failure of LESSOR or its designee to exercise
that degree of care as would be exercised by a reasonably careful
Person under like circumstances, then CUSTOMER shall be prorated by
LESSOR on the basis of the ratio of CUSTOMER's stored Products to the
total volumes of like stored Products in such Facilities, including
those volumes owned by CUSTOMER and LESSOR.
(b) In the event there should be a loss from storage and it
is ultimately determined that such loss was solely attributable to
LESSOR'S or its designee's failure to exercise that degree of care as
would be exercised by a reasonably careful Person under like
circumstances, then, subject to the provisions of Section 16
hereinafter, it is agreed that LESSOR shall have the option, in its
sole discretion, to replace CUSTOMER's lost volumes with like Products
or to pay CUSTOMER the fair market value of such lost Products at the
time of the loss.
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15. TAXES. CUSTOMER shall be responsible for the payment of any and all
ad valorem or other taxes or assessments levied or assessed on and attributable
to CUSTOMER's Products in storage pursuant to this agreement, provided however,
that LESSOR shall have the right, but not the obligation, to pay such taxes on
behalf of CUSTOMER (but at a like rate no greater than that paid by LESSOR on
its own like Products in storage) and CUSTOMER agrees to reimburse LESSOR for
any such taxes paid by LESSOR within ten (10) Days from the date of LESSOR'S
invoice therefore.
16. LIMITATION OF LIABILITY.
(a) LESSOR shall not be liable to CUSTOMER for any loss of or
injury to the Products stored by CUSTOMER, however caused, unless such
loss or injury directly results from the failure of LESSOR or its
designee to exercise that degree of care as would be exercised by a
reasonably careful man under like circumstances. If any such loss or
injury could not have been avoided through the exercise of such care as
a reasonably careful man would exercise under like circumstances,
LESSOR shall not be liable for such loss or injury.
(b) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, LESSOR SHALL NOT BE RESPONSIBLE FOR ANY PRODUCT LOSSES OR
DAMAGES TO THE PRODUCT OR FOR ANY CLAIMS UNDER ANY INDEMNITY
OBLIGATIONS THAT LESSOR MAY HAVE AS SET FORTH IN THIS AGREEMENT IN
EXCESS OF THE STORAGE FEES AND RATES PAID BY CUSTOMER TO LESSOR AS
PROVIDED HEREIN, IT BEING UNDERSTOOD AND AGREED THAT SUCH FEES ARE
BASED ON A PER UNIT CHARGE AND, ACCORDINGLY, FOR THE PURPOSE OF THIS
AGREEMENT, SATISFY ALL REQUIREMENTS OF THE UNIFORM COMMERCIAL CODE AND
OTHER SIMILAR LAWS FOR LIMITATION OF LIABILITY. THE FOREGOING SHALL
APPLY WHETHER OR NOT SUCH CLAIMS ARE FOUNDED IN WHOLE OR IN PART UPON
THE NEGLIGENCE OF LESSOR OR IF LIABILITY WITHOUT FAULT IS IMPOSED ON
LESSOR. LESSOR SHALL NOT BE RESPONSIBLE FOR OBTAINING INSURANCE TO
COVER THE PRODUCTS STORED HEREUNDER.
(c) CUSTOMER AGREES TO DEFEND, INDEMNIFY AND HOLD LESSOR AND
ITS AFFILIATES AND ITS AND THEIR RESPECTIVE AGENTS, OFFICERS,
DIRECTORS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS HARMLESS
FROM AND AGAINST ANY AND ALL CLAIMS WHICH ARISE IN CONNECTION WITH
CUSTOMER'S TRANSPORTATION, STORAGE, USE, OR HANDLING OF PRODUCTS AFTER
DELIVERY OF CUSTODY, POSSESSION AND CONTROL OF SUCH PRODUCT TO
CUSTOMER. CUSTOMER'S INDEMNITY OBLIGATION HEREUNDER SHALL BE APPLICABLE
EVEN IF SUCH CLAIMS ARE DETERMINED TO HAVE BEEN PARTLY CAUSED BY THE
NEGLIGENCE OF LESSOR OR IF LIABILITY WITHOUT FAULT IS IMPOSED ON
LESSOR, THE ONLY EXCEPTION TO SUCH OBLIGATION BEING WHERE THE
NEGLIGENCE OF LESSOR IS DETERMINED TO BE THE SOLE CAUSE OF SUCH CLAIMS.
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(d) FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY
OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT, SUCH EXPRESS
REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY
HEREUNDER, AND THE OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN
SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES ARE WAIVED. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE
OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY,
EXCLUDING LOST PROFITS, AND SUCH DIRECT ACTUAL DAMAGES SHALL BE THE
SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND ALL OTHER REMEDIES OR DAMAGES
ARE WAIVED. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY
UNDER ANY PROVISION OF THIS AGREEMENT FOR CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES IN TORT, CONTRACT OR
OTHERWISE.
17. NOTICE OF CLAIM AND FILING OF SUIT. Claims by CUSTOMER and all
other persons claiming, by, through or under CUSTOMER, must be presented in
writing to LESSOR within a reasonable time, and in no event later than sixty
(60) Days after (i) CUSTOMER's Product is redelivered or removed from LESSOR'S
Facilities or (ii) CUSTOMER is notified by LESSOR that loss of or injury to
Products has occurred, whichever is shorter. No action may be maintained by
CUSTOMER and any other persons claiming by, through or under CUSTOMER, against
LESSOR for loss of or injury to Products stored in LESSOR'S Facilities unless a
written claim therefore is received by LESSOR within the time periods set forth
herein and such action is commenced within twenty-four (24) Months after (a)
CUSTOMER's Products is redelivered or removed from LESSOR'S Facilities or (b)
CUSTOMER is notified by LESSOR that loss of or injury to Products has occurred
whichever is shorter. In the situation where LESSOR notifies CUSTOMER of a loss
or, injury to Products, the time limits for making written claims and the
maintaining of actions after notice, as set forth herein, begin on the date such
notice is sent by LESSOR.
18. FORCE MAJEURE. In the event either party is rendered unable, wholly
or in part, by Force Majeure to carry out its obligations under this Agreement,
it is agreed that upon such party's giving notice and reasonably full
particulars of such Force Majeure in writing to the other party after the
occurrence of the cause relied on, then the obligations (except for the
obligation to pay money due hereunder) of the party giving such notice, so far
as and to the extent that they are affected by such Force Majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period, and such cause shall so far as possible be remedied with all reasonable
dispatch. The term "Force Majeure" as used herein shall mean acts of God,
strikes, lockouts, or other industrial disturbances, acts of the public enemy,
wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, tornadoes, hurricanes, or storms, tornado, hurricane, or
storm warnings which in any party's reasonable judgment require the
precautionary shutdown of a facility, floods, washouts, arrests or restraints of
the government, either federal or state, civil or military, civil disturbances,
explosions, sabotage, breakage, or accident to equipment, machinery or lines of
pipe, freezing of machinery, equipment or lines of pipe, electric power
shortages, inability of any party to obtain necessary permits and/or permissions
due to existing or future rules, orders, laws or governmental authorities (both
federal, state and local), or any other causes, whether of the kind herein
enumerated or otherwise, which were not reasonably foreseeable, and which are
not within the control of the party claiming suspension and which such party is
unable to overcome by the
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exercise of due diligence. The term "Force Majeure" shall also include those
instances in which either party hereto is delayed in acquiring, at reasonable
cost and after the exercise of reasonable diligence, (i) materials and supplies
required for the purpose of constructing and maintaining facilities, when such
party is obligated to do so for the performance of its obligations under this
Agreement, or (ii) permits or permission from any governmental agency required
for the purpose of (a) constructing and maintaining such facilities or (b)
acquiring materials or supplies required for such purpose. It is understood and
agreed that the settlement of strikes or lockouts shall be entirely within the
discretion of the party having the difficulty, and that the above requirement
that any Force Majeure shall be remedied with all reasonable dispatch shall not
require the settlement of strikes or lockouts by acceding to the demands of
opposing Parties when such course is inadvisable in the discretion of the party
having difficulty.
19. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. Notwithstanding the foregoing, CUSTOMER shall not assign or
sublet this Agreement in whole or in part without the express written consent of
LESSOR; provided, however, LESSOR shall have the right to assign this Agreement
to any of its Affiliates, and to any future owner or owners of the Facilities
without the necessity of obtaining from CUSTOMER any consent thereto. Further
provided, however, CUSTOMER shall have the right to assign this Agreement to any
of its Affiliates, but any such assignment shall in no way relieve or release
CUSTOMER from any obligations hereunder whether accrued before or after any such
assignment.
20. NO COMMISSIONS, FEES OR REBATES. No director, employee or agent of
either party shall give or receive any commission, fee, rebate gift or
entertainment of significant cost or value in connection with this Agreement.
Any representative or representative(s) authorized by either party may audit the
applicable records of the other party for the purpose of determining whether
there has been compliance with this Section.
21. SEVERABILITY. This Agreement and the operations hereunder shall be
subject to the valid and applicable federal and state laws and the valid and
applicable orders, laws, local ordinances, rules, and regulations of any local,
state or federal authority having jurisdiction, but nothing contained herein
shall be construed as a waiver of any right to question or contest any such
order, laws, rules, or regulations in any forum having jurisdiction in the
premises. If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under the present or future laws effective during the term of this
Agreement, (i) such provision will be fully severable, (ii) this Agreement will
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part of this Agreement, and (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision, there will be added automatically as a part of this
Agreement a provision similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and as may be legal, valid, and
enforceable. If a provision of this Agreement is or becomes illegal, invalid, or
unenforceable in any jurisdiction, the foregoing event shall not affect the
validity or enforceability in that jurisdiction of any other provision of this
Agreement nor the validity or enforceability in other jurisdictions of that or
any other provision of this Agreement.
22. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
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PARTIES ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED,
ENFORCED, AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS
THE SAME MAY BE AMENDED FROM TIME TO TIME, WITHOUT GIVING EFFECT TO ANY CHOICE
OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
23. AUTHORIZATION. CUSTOMER hereby authorizes LESSOR to release its
identity as a leased storage customer, who is interested in participating in
in-well activity.
24. ENTIRE AGREEMENT WAIVER. This Agreement, including, without
limitation, all exhibits hereto, integrates the entire understanding between the
Parties with respect to the subject matter covered and supersedes all prior
understandings, drafts, discussions, or statements, whether oral or in writing,
expressed or implied, dealing with the same subject matter. This Agreement may
not be amended or modified in any manner except by a written document signed by
both parties that expressly amends this Agreement. No waiver by either party
hereto of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver unless expressly provided. No
waiver shall be effective unless made in writing and signed by the party to be
charged with such wavier.
25. SETOFFS AND COUNTERCLAIMS. Except as otherwise provided herein,
each party hereto reserves to itself all rights, set-offs, counterclaims, and
other remedies and/or defenses which it is or may be entitled to arising from or
out of this Agreement or as otherwise provided by law.
26. NO PARTNERSHIP, ASSOCIATION, ETC. Nothing contained in this
Agreement shall be construed to create an association, trust, partnership, or
joint venture or impose a trust or partnership duty, obligation, or liability on
or with regard to either party.
27. EXHIBITS. All Exhibits attached hereto are incorporated herein by
reference as fully as though contained in the body hereof. If any provision of
any Exhibit conflicts with the terms and provisions hereof, the provisions of
this Agreement shall prevail.
28. PRINCIPLES OR CONSTRUCTION AND INTERPRETATION. In construing this
Agreement, the following principles shall be followed:
(a) no consideration shall be given to the fact or presumption
that one Party had a greater or lesser hand in drafting this Agreement;
(b) examples shall not be construed to limit, expressly or by
implication, the matter they illustrate;
(c) the word "includes" and its syntactical variants mean
"includes, but is not limited to" and corresponding syntactical variant
expressions; and
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(d) the plural shall be deemed to include the singular and
vice versa, as applicable.
29. NOTICE. Any notice or other communication provided for in this
Agreement or any notice which either party may desire to give to the other shall
be in writing and shall be deemed to have been properly given if and when sent
by facsimile transmission, delivered by hand, or if sent by mail, upon deposit
in the United States mail, either U.S. Express Mail, registered mail or
certified mail, with all postage fully prepaid, or if sent by courier, by
delivery to a bonded courier with charges paid in accordance with the customary
arrangements established by such courier, in each case addressed to the parties
at the following addresses:
If to LESSOR:
XXXXXX UNDERGROUND STORAGE, INC.
X.X. XXX 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to CUSTOMER:
XXXXXX OPERATING PARTNERSHIP L.P.
X.X. XXX 000
Xxxxxxx, XX 00000-0000
Attn: Xxx X. Xxxx
Phone: (000)000-0000
Fax: (000)000-0000
or at such other address as either party shall designate by written notice to
the other. A notice sent by facsimile shall be deemed to have been received by
the close of the Business Day following the Day on which it was transmitted and
confirmed by transmission report or such earlier time as confirmed orally or in
writing by the receiving party. Notice by U.S. Mail, whether by U.S. Express
Mail, registered mail or certified mail, or by overnight courier shall be deemed
to have been received by the close of the second Business Day after the Day upon
which it was sent, or such earlier time as is confirmed orally or in writing by
the receiving party. Any party may change its address or facsimile number by
giving notice of such change in accordance herewith.
[SIGNATURES CONTINUED ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
Agreed to and Accepted
this 1st Day of November
of 2002.
XXXXXX UNDERGROUND STORAGE, INC.
By: /s/ Xxxxx X. Xxxxxx, III
Name: Xxxxx X. Xxxxxx, III
Title: President
XXXXXX OPERATING PARTNERSHIP L.P.
By: Xxxxxx Operating GP LLC
Its: General Partner
By: Xxxxxx Resource LLC
Its: Sole Member
By: Xxxxxx Resource Management
Corporation
Its: Sole Member
By: /s/ Xxxxx X. Xxxxxx, III
Name: Xxxxx X. Xxxxxx, III
Title: President
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EXHIBIT "A"
TO
PRODUCT STORAGE AGREEMENT
THIS PRODUCT STORAGE AGREEMENT, along with the General Terms and
Conditions set forth in the agreement to which this Exhibit is attached, shall
constitute our mutual agreement to lease space in facilities owned or controlled
by LESSOR.
1. CUSTOMER: Xxxxxx Operating Partnership L.P.
2. TERM: Three years from the date of this agreement, automatically renewable
from year to year, unless either party gives written notice at least thirty
(30) days prior to the expiration of the applicable term.
3. PRODUCTS: Propane and Butane
4. STORAGE FACILITY: Xxxxxx Underground, Arcadia, LA
5. LEASE VOLUMES: 300,000 barrels
6. STORAGE RATE: See Below
7. THROUGHPUT FEE: $.025 per gallon until the first anniversary of this agreement, and then
adjusted as set forth in Section 14 of this Exhibit A below. Applies only
to movements out of storage via truck or pipeline.
8. QUANTITY EXEMPT
FROM THROUGHPUT
FEE: None
9. EXCESS STORAGE FEE: N/A
10. RETURN PERCENTAGE: Based on volume received
PIPELINE: 100%
TRUCKS: 100%
11. RECEIPT FEES: None at Storage Facility. CUSTOMER shall pay any and all
PIPELINE: Pipeline tariff fees for own account.
TRUCKS: None
12. DELIVERY FEES
PIPELINE: $.025 per gallon per Throughput Fee referenced above.
TRUCKS: $.025 per gallon per Throughput Fee referenced above.
13. SCHEDULING: CUSTOMER shall be required to schedule all movements through
LESSOR or its designee's Product Movement Group. Delivery orders for
CUSTOMER's account will only be set up to cover Volumes that are
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physically in the storage account.
14. FEE ADJUSTMENTS After the first anniversary of this Agreement, the Throughput Fee shall be
adjusted annually (both upward and downward as hereinafter provided) by a
factor equal to the increase or decrease, as the case may be, in the Consumer
Price Index. The adjustment shall be calculated annually in [October] of each
year, commencing in October 2003 based on Consumer Price Index statistics for
the two preceding Septembers. The adjustment shall be calculated as follows:
The Throughput Fee in effect shall be multiplied by a factor equal to the
amount of the increase or decrease, as the case may be, in the Consumer Price
Index for the immediately preceding month of September, over the Consumer
Price Index for September of the preceding year. For purposes hereof, the
term "Consumer Price Index" shall mean the "Consumer Price Index for Urban
Wage Earners and Clerical Workers (1967=100)" specified for "All Items. United
States" compiled by the Bureau of Labor Statistics of the United States
Department of Labor (the "Index"). In event the Index shall be converted to a
different standard reference base or otherwise revised, the determination of
the percentage change shall be made with the use of such conversion factor,
formula or table for converting the Index as may be published by the Bureau of
Labor Statistics or, if said Bureau shall not publish the same, then as shall
be reasonably determined by the parties.
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EXHIBIT "B"
PRODUCT STORAGE AGREEMENT
SPECIFICATION
HD-5 PROPANE PRODUCT
Component or
Characteristic Allowable Test Method
-------------- --------- -----------
Propane 90% Liquid Volume, Minimum ASTM D-2163
Propylene 5% Liquid Volume, Maximum ASTM D-2163
Butanes & Heavier 2.5% Liquid Volume, Maximum ASTM D-2163
Total Sulfur 123 PPM, by weight, Maximum ASTM D-2784
Hydrogen Sulfide 2 PPM, by volume, Maximum ASTM D-2377
Moisture Pass ASTM D-2713
Residual Matter: .05 Maximum on 100 ML Evaporation ASTM D-2158
Pass Oil Stain Observation
Vapor Pressure Xxxx 208 PSIG, Maximum ASTM X-0000
Xxxxxx @ 100(Degrees)F
Volatile Reside -37(Degrees) Maximum ASTM D1837
Temperature @
95% Evaporation
Corrosion @ 100(Degrees)F No. 1 Copper Strip, Maximum ASTM D-1838
NOTE:
o ASTM test methods are latest revision
o LESSOR reserves the right to change specifications in order to meet
specifications in primary downstream markets
o If conflicting test method result exists, LESSOR result will prevail
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