Exhibit 10.2
STORAGE THROUGHPUT AGREEMENT BETWEEN THE COMPANY AND
UNION OIL COMPANY OF CALIFORNIA, DATED JUNE 4, 1999
STORAGE/THROUGHPUT AGREEMENT
This Agreement made and entered into by and between Able Oil Company hereinafter
refereed to as "Able Oil" and,
Name: Union Oil Company of California d.b.a. UNOCAL
Hereinafter referred to as "Customer"
WHERAS, Customer desires to enter into this Agreement hereinafter referred to as
"Agreement" under which Able Oil will provide storage, load and unload petroleum
products for Customer as hereinafter provided.
NOW, THEREFORE, it is hereby agreed by and between Able Oil and Customer hereto
as follows:
TERMS OF AGREEMENT: Beginning Date: June 4, 1999
Ending Date: June 4, 2000
2. APPROXIMATE VOLUME: Approximately 12,000 Barrels of No.
2 heating oil NYMEX summer grade
specifications.
3. LOCATION: Able Oil Company
000 Xxxxx 00 Xxxx
Xxxxxxxx, XX 00000
4. PRODUCT: No. 2 heating oil NYMEX summer grade
5. THROUGHPUT CHARGE ($/GAL): $.0060 for any volume sold out of
tankage to any party other than Able
Oil. Payable upon movement of the
product from storage.
6. MOVEMENTS: Movements into and out of
Able Oil will be by Exchange,
Pipeline, tank truck, tank car,
and/or storage transfer or barge.
7. PARTIES ADDRESS INFORMATION: Union Oil Company of California
00000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxx 00000
8. DEFINITIONS: In this Agreement, the following
words will have the meaning herein
set forth:
"Product" will mean No. 2 heating oil NYMEX grade summer specifications.
"Barrel" will mean forty-two (42) US gallons
"Terminal" or Terminal premises will mean Able Oil Terminals located at the
various locations listed in paragraph 3 which include land, storage tanks,
truck loading racks, pipes, offices - and related facilities, together with
modifications or additions thereto.
Throughput Services will mean the acceptance of Product tendered by Customer at
the Terminal for the account of Customer, interim storage of the product,
and re-delivery of Product via Customer's designated receiving equipment
for the account of Customer, (as specified in paragraph 6) together with
all necessary recordkeeping.
9. SERVICES AND FACILITIES: Able Oil, at its own expense, will maintain and
make such repairs as are necessary to keep the Terminal in operating condition
and in compliance with all applicable laws and ordinances.
10. OPERATIONS:
10.1 Able Oil, shall use its best efforts to accommodate and arrange
delivery of product to and from storage on a first-come first-served
basis with advance nomination schedules arranged through Customer with
Able Oil on behalf of the owner or charterer of such vessel/barge
and/or common
carrier pipeline.
10.2 Customer understands and agrees that a positive inventory position will
be maintained on every Product held in storage.
10.3 Able Oil agrees to hold customer's inventory for the Customer's
account. Able Oil will not draw upon the Customer's inventory unless
advanced notification and mutually agreeable terms are negotiated between
the Customer and Able Oil in writing.
10.4 Upon written request and instructions provided by Customer, Able Oil
will transfer Inventory held in storage for its Customer to another party
maintaining a storage account with Able Oil.
11. QUANTITY:
11.1 The quantity of Product received into storage at the terminal shall be
determined as follows: If by book transfer, quantity is determined as
mutually agreed between parties. If by pipeline, the quantity received
into storage shall be determined by pipeline meter tickets
adjusted to 60 degrees F at inventory Terminal Locations.
If by barge, quantity determined on shore tank receipt at
discharge inventory Terminal adj. To 60 degrees F.
If via exchange agreement FOB loading trucks rack meter tickets
at Motiva Newark loadport, as mutually agreed to apply as
inventory total barrels at Able Oil Terminal, New Jersey
adjust to 60 degrees Fahrenheit.
11.2 The quality of Product delivered from the Terminal storage will be as
follows: Deliveries into Customer designated trucks will be determined
by truck rack meter reading. Otherwise all deliveries from Customer's
account will be stock transferred to in 1,000 bbls increments.
11.3 All quantity determination herein will be corrected to sixty (60)
degree Fahrenheit based on a US gallon of 231 cubic inches and 42
gallons to the barrel, in accordance with the latest supplement or
amendment to ASTM-IP petroleum measurement tables (ASTM designated D
1250) Table 6(b). All quantity determinations for barge receipts shall
be made basis static shore tanks.
12. TERMINAL LOSSES/BALANCES:
12.1 Able Oil agrees to guarantee Customer that all barrels received in
storage under Paragraph 11.1 will be available to customer at all
times. Customer will experience no gains or losses.
13. QUALITY:
13.1 The quality of Products received into Commingled storage by Able Oil
for Customer's account will meet or exceed Able Oil's minimum product
specifications for such Products. Product quality will be verified by
Independent inspectors analysis prior to discharge into Able Oil
Terminals.
13.2 Customer may request a sample of Product held in storage at the
Terminal during normal business hours to satisfy themselves that the
Product specifications existing on receipt by Able Oil are maintained.
If such a sample indicates the presence of Product which does not meet
or exceed such product specification, the Terminal Manager is to be
informed immediately. If the presence in storage of off-specification
Product is determined, Customer's account will be credited with a like
amount of on specification Product at Able Oil's sole expense. Upon
delivery of Product to Customer's account, all Product samplings of
such delivered Product will be final and in compliance with all
applicable Product specifications.
13.3 If any of Customer's product delivered to the facility does not meet
the specifications, then Able Oil shall promptly notify Customer
before permitting any of Customer's product to be placed in the tanks.
If Able Oil fails to test the Customer's product or permits any of
Customer's product that does not meet the specifications to be
commingled with other products in the tanks, then Customer shall bear
no responsibility for, and Able Oil will hold Customer harmless from
any claims that result from the commingling of Customer's Products
with other products.
13.4 Able Oil, according to normal terminal operating procedures will make
very effort to assure that its lines are packed before receiving
Customer's product into tankage.
14. TITLE & CUSTODY:
14.1 Title to Customer's Product stored at Able Oil Terminal shall remain in
Customer's name. 14.2 Able Oil will be deemed to have custody of Product
delivered by Customer at the time it passes
through the flange connection between the delivery line and Able Oil
delivery line. Delivery of such Product by Able Oil to Customer for
its account will occur when: (I) In all deliveries, Able Oil shall be
responsible for received Product until such Products have passed the
terminal's receiving Pipeline flange.
15. CERTIFICATIONS:
15.1 Customer certifies that none of the Products covered by this agreement
was produced or withdrawn from storage in violation of any federal,
state, or other governmental law, or in violation of any rule,
regulation, or other promulgated by any governmental agency having, or
presuming to have, jurisdiction.
15.2 Customer certifies that the Product covered by this Agreement complies
with all applicable Product quality or composition specifications
established by any federal, state, or local authority.
15.3 Customer will indemnify, defend, and hold harmless Able Oil from any
claims, penalties, or liabilities imposed by any governmental agency
having jurisdiction for the failure of any Customer Product,
designated truck, barge, or vessel to comply with any applicable
governmental rule or regulation.
16. TAXES:
All taxes, fees, and dues, now or hereafter imposed by federal, state, or
local governments, in respect to or measures by the producers delivered
hereunder or the manufacture, storage, delivery, receipt, exchange or
inspection thereof, shall be for the account of Customer. Parties each
respectively warrant that they are properly licensed to buy/sell this
product in the state of title transfer exempt of tax, and if required shall
furnish the proper federal and state license and/or registration number to
the requesting party.
17. INDEMNITY:
Each party shall defend and indemnify the other party against all claims,
demands or liabilities (including reasonable attorney's fees) from any
cause whatsoever, for the injury or the death of any and all persons of the
damage to any property caused by or arising out of or connected in any
manner with the performance of each party's obligations under this
Agreement, except for such claims, demands or liabilities that result from
the active negligence of the other.
18. ASSIGNABILITY:
18.1 This Agreement will be binding upon and shall inure to the benefit of
the successors and assigns of the party hereto. Neither party will
assign its interest in this Agreement without prior written consent of
the other.
18.2 Any attempted assignment prohibited by Paragraph 18.1 above will be
void and without effect. This Agreement will not become an asset in
any bankruptcy or receivership proceedings.
19. FORCE MAJEURE:
Neither party will be responsible for damages caused by delay or failure to
perform in whole in part thereunder, if such delay or failure is
attributable to storms, floods, or other act of God, strikes, differences
with workers, lockouts, riots, civil disorders, explosions, fires, acts of
compliance with requests or rules or regulations of my governmental
authority or conditions, sabotage, accidents, breakdowns, delay in
transportation or other cause beyond the control of the affected party
whether or not similar to those enumerated above all of which will be
considered events of force majeure. It is understood and agreed that the
settlement of strikes, lockouts, or differences with workers will be
entirely within the discretion of the party having the difficulty.
20. POLLUTION AVOIDANCE:
Able Oil hereby indemnifies Customer from and against all losses, claims,
or pollution accidents rising out of or resulting from all inherent defects
contained in any and all equipment or property owned or leased by Able Oil
or Able Oil agents as pertains to this Agreement.
21. WAIVER AND TERMINATION:
21.1 The following will be deemed Events of Default hereunder: Failure to
comply with any of the terms herein:
If either party, (I) files, or consents by answers or otherwise to
the filing against it of, any petition or case seeking relief
under any Federal, state or foreign bankruptcy, insolvency or
similar law (collectively, "Bankruptcy Laws":), (ii) makes a
general assignment for the benefits of its creditors, (iii)
applies for or consents to the appointment of a custodian,
receiver, trustee, conservator or other officer with similar
powers over it or over any substantial part of its property
("Custodian") or (iv) takes corporate action for the purpose of
any of the foregoing (v) is dissolved; (vi) becomes insolvent or
is unable or admits in writing its inability generally to pay
debts as they become due: (vii) or is unable to provide assurances
to the other party of its continued ability to perform; or
A court or governmental authority, agency, instrumentality or
official of competent jurisdiction enters or issues an order or
decree with respect to the defaulting party (I) appointing a
Custodian, (ii) constituting an order for relief under, or
approving a petition or case to take advantage of, any bankruptcy
Laws or (iii) ordering its dissolution, winding-up or liquidation;
or
21.2 In the Event of Default under 21.1 (a), the defaulting party will have
ten (10) days to cure the default following receipt of a "Notice of
Default" from the non-defaulting party. If the default is not cured
within said ten (10) days, the non-defaulting party will have the
right to terminate this Agreement effective thirty (30) days from
default date.
21.3 In the Event of Default other than 21.1 (a), the non-defaulting party
may take whatever action it deems necessary to secure its product.
21.4 In the event of termination by either party for any reason, or
expiration of this Agreement, Customer will remove all of its Product
and the Terminal on or before the effective date of termination or
expiration.
21.5 In the event of non-performance, breach of contract, insolvency or
bankruptcy by Able Oil, Customer shall have the right to terminate
this Agreement and secure and/or sell all Product in Able Oil Storage
in any manner whatsoever, including but no limited to rack sales, and
to seek any and all remedies and damages allowed by law.
22. INVENTORY CONTROL AND RECORDS:
Able Oil will maintain, during the term of this Agreement, books and
records that clearly show Customer's inventory at all times. Able Oil will
provide written reports to Customer on a monthly basis which set forth the
quantities, types, and locations of all Customer's physical inventory
stored on Able Oil premises. Able Oil will complete and deliver to Customer
copies of such records, including delivery tickets and inventory forms, as
are required for the proper accounting of Product handled under the terms
of this Agreement. Customer will have the right to audit, at its cost and
expense and during ordinary business hours, the accounting records and
other pertinent documents which relate to receipts, storage or delivery of
Customer's product handled under this Agreement and to take Physical
Inventory as may be required in Customer's opinion to verify the related
inventory records.
23. LAW OF GOVERN:
The laws of the State of Texas shall govern this contract and performance
thereunder, excluding its choice-of-law rules.
24. MODIFICATION:
This agreement may be modified by the parties only by an amendment in
writing to such effect.
25. WHOLE AGREEMENT:
This Agreement, including all attachments or amendments, embodies the whole
Agreement of the parties.
Accepted and Agreed to this _______, 19___
Able Oil Company Union Oil Company of California
By:_______________________________ By: ________________________________
Title:____________________________ Title: _____________________________
Date: ____________________________ Date:_______________________________
