Big West of California, LLC A FLYING J INC Company
Big
West of California,
LLC
A
FLYING
J INC Company
0000
Xxxxxxx Xxxxx Xxxxx, Xxxxx Xxxx 00000 Phone
000-000-0000
Contract:
# P-148-0106
November
14, 2005
Xxxxx
Petroleum Company
Attn:
Xxx
Xxxxx
0000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx,
XX 00000
This
Agreement is made between Xxxxx Petroleum Company, hereinafter referred to
as
“Seller”, and Big West of California, LLC, hereinafter referred to as “Buyer”,
whereby Seller agrees to sell and deliver and Buyer agrees to purchase and
receive crude oil under the terms and conditions set forth on Attachment
A,
attached hereto and which is hereby made a part of this Agreement.
Please
execute and return one copy of this Agreement if it meets with your
approval.
Xxxxx
Petroleum Company Big
West
of California, LLC
By:
/s/Xxxxxxx Xxxxxxxx By:
/s/
Xxxx Xxxxxxx
Xxxxxxx
Xxxxxxxx
Xxxx
Xxxxxxx
Executive
Vice President
Executive Vice-President
Date:
November 21, 2005 Date:
November 17, 2005
Attachment
A
Big
West
Contract # P-148-0106
November
14, 2005
1.
TERM
Commencing
on February 1, 2006 and continuing through January 31, 2010. At Xxxxx Petroleum
Company’s (“Xxxxx”) exclusive option, Xxxxx may extend this Agreement for an
additional one year by providing written notice to Big West of California,
LLC
(“Buyer”) at least sixty (60) days prior to January 31, 2010.
2.
QUANTITY AND QUALITY:
100%
of
crude oil as produced from the locations listed below. Buyer understands
that
crude oil volumes produced may fluctuate significantly over the term of this
Agreement. Nothing in this Agreement shall obligate Seller to produce any
particular volume of crude oil or to produce any crude oil at all from any
of
the properties or for Seller to own any of the listed properties.
3.
LOCATION-BOPD, PRICE, DELIVERY AND TITLE:
South
Midway Sunset - Currently approximately 11,700 BOPD
Price:
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Buyer
will pay the higher of 1) the monthly calendar average including
weekends
for NYMEX light sweet crude LESS $7.99 or 2) the monthly average
posted
price of Chevron, ExxonMobil, Union 76 and Shell Trading (STUSCO)
for
Midway Sunset crude oil PLUS a premium of $1.50 per barrel. Either
price
to be gravity adjusted from 13 degrees. For pricing purposes, all
deliveries shall be deemed to have been delivered in equal daily
quantities during each calendar
month.
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FOB:
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Into
connecting carriers per mutually agreeable meters. Seller will
use its
commercially reasonable best efforts to cause the crude oil to
be
delivered through one or more common carrier pipelines located
at Seller’s
South Midway Sunset central facility as such pipeline(s) may be
specified
from time to time by Buyer. Buyer is responsible to make any and
all
arrangements at its expense for the use of these common carrier
pipelines
or any other pipelines that may become available. Due to disruptions
or
down time of the designated pipeline(s), Buyer will take immediate
action
to ship the crude oil through available alternative pipelines or
such
other actions as needed in order to maintain Seller’s safe inventory
levels but, in the event Buyer is not able to achieve immediate
reasonably
acceptable alternatives, then, during times of excess inventory,
Seller
reserves the right in its discretion to put the oil through alternative
means and Seller shall provide Buyer prompt notice of such election
by
Seller.
|
North
Midway Sunset - Currently approximately 1,000 BOPD
Price:
|
Buyer
will pay the higher of 1) the monthly calendar average including
weekends
for NYMEX light sweet crude LESS $7.99 or 2) the monthly average
posted
price of Chevron, ExxonMobil, Union 76 and Shell Trading (STUSCO)
for
Midway Sunset crude oil PLUS a premium of $1.50 per barrel. Either
price
to be gravity adjusted from 13 degrees. For pricing purposes, all
deliveries shall be deemed to have been delivered in equal daily
quantities during each calendar
month.
|
FOB: Into
connecting carriers per mutually agreeable meters.
Placerita
- Currently approximately 3,000 BOPD
Price:
|
Buyer
will pay the higher of 1) the monthly calendar average including
weekends
for NYMEX light sweet crude LESS $8.74 or 2) the monthly average
posted
price of Chevron, ExxonMobil, Union 76 and Shell Trading (STUSCO)
for
Midway Sunset crude oil PLUS a premium of $0.75 per barrel. Either
price
to be gravity adjusted from 13 degrees. For pricing purposes, all
deliveries shall be deemed to have been delivered in equal daily
quantities during each calendar
month.
|
FOB: Placerita
shipping meters into designated truck carriers.
Poso
Creek Field, XxXxx Area - Currently approximately 500 BOPD
Price:
|
Buyer
will pay the higher of 1) the monthly calendar average including
weekends
for NYMEX light sweet crude LESS $7.99 or 2) the monthly average
posted
price of Chevron, ExxonMobil, Union 76 and Shell Trading (STUSCO)
for
Midway Sunset crude oil PLUS a premium of $1.50 per barrel. Either
price
to be gravity adjusted from 13 degrees. For pricing purposes, all
deliveries shall be deemed to have been delivered in equal daily
quantities during each calendar
month.
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FOB: Poso
Creek tank gauges into designated truck carriers.
West
Xxxxxxxx Field - M4 Pool Area - Currently approximately 40 BOPD
Price:
|
Buyer
will pay the higher of 1) the monthly calendar average including
weekends
for NYMEX light sweet crude LESS $8.74 or 2) the monthly average
posted
price of Chevron, ExxonMobil, Union 76 and Shell Trading (STUSCO)
for
Buena Vista crude oil PLUS a premium of $0.75 per barrel. Either
price to
be gravity adjusted from 26 degrees. For pricing purposes, all
deliveries
shall be deemed to have been delivered in equal daily quantities
during
each calendar month.
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FOB:
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Xxxxxxxx
tank gauges into designated truck
carriers.
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In
the
event any one of the described posters of crude oil ceases to make such
postings, the average posted price shall be determined by averaging the postings
of the remaining described posters.
4.
PAYMENT & TAXES:
Payment
due on the twentieth (20th) of the month following the month of delivery.
If the
20th
falls on
a banking holiday Friday or Saturday, the payment will be made on the last
preceding business day. If the payment date falls on a Sunday or a banking
holiday Monday, payment will be made on the following business day.
Payment
will be made for 100% of the proceeds including all taxes by wire transfer
using
the following instructions:
Xxxxx
Petroleum Company
Xxxxx
Fargo Bank
ABA
000000000
Account
#4296915481
Buyer
shall be liable for and shall remit to the proper government authorities
any
current, new or additional federal, state, municipal or other regulatory
body’s
taxes, inspection fees, transfer taxes or fees, occupation taxes or other
like
assessments or charges that may be applicable to liquid hydrocarbons after
the
point of delivery and Buyer shall be responsible for remittance of any such
tax
to the appropriate governmental authority.
Seller
shall indemnify, defend and hold harmless Buyer from any liability, cost
or
expense caused by any breach of Seller’s warranty set forth in Paragraph B of
the GP, as amended.
5.
INVOICING:
All
invoices and correspondence shall be mailed to the following
address:
Big
West
of California, LLC
Attn:
Crude Oil Accounting
0000
Xxxxxxx Xxxxx Xxxxx
Xxxxx,
Xxxx 00000
6.
SPECIAL PROVISIONS:
Seller
may add new production, acquired through acquisitions, at the same terms
for
similar quality of crude and locations as the crude oil covered under this
Agreement, subject to adjustments for gravity, quality and transportation
differentials. Such new production may not exceed 5,000 BOPD, cumulative
over
all locations without the mutual consent of both parties.
7.
OTHER TERMS AND CONDITIONS:
a. The
terms
stated in the ConocoPhillips General Provisions for Domestic Crude Oil
Agreements effective January 1, 1993 (“GP”), attached hereto as Exhibit A and
incorporated herein by reference, will be used to the extent that they are
not
in conflict with any of the terms in this Attachment A, provided,
however:
1)
|
The
fourth sentence of Paragraph A of the GP shall be changed to read
as
follows: “The crude oil delivered hereunder shall be merchantable and
acceptable in the applicable common or segregated stream of the
carriers
involved, but not to exceed 3% S&W (merchantable liquid hydrocarbons
are defined as unrefined liquid hydrocarbons which are suitable
for normal
refinery processing, meet specifications of delivering carriers
and are
free of foreign contaminant chemicals including, but not limited
to,
chlorinated and oxygenated
hydrocarbons).”
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2)
|
the
second paragraph of Paragraph B of the GP shall be changed to read
as
follows: “Seller further warrants the crude oil delivered shall be
merchantable.”
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3)
|
the
parties do not agree to comply with the specific laws, orders or
regulations identified in Paragraph C of the GP unless such party
is
otherwise subject to such laws, orders or
regulations.
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4)
|
in
the first sentence of Paragraph E of the GP the phrase “acts in
furtherance of the International Energy Program,” shall be deleted. The
following shall be added at the end of the first paragraph of Paragraph
E:
“Notwithstanding the foregoing, in the event that Buyer’s refining
facilities are shut in for Force Majeure, Buyer shall be obligated
to
trade the crude oil and to locate any alternative markets for a
period of
60 (sixty) days following the date of written notice to Seller
of such
shut-in (“Force Majeure Shut In Period”). The parties acknowledge that
there is no associated purchase/sale, or exchange of crude oil,
related to
this Agreement.”
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5)
|
in
the last paragraph of Paragraph F of the GP the reference to Xxxxxx
Guaranty Trust Company of New York shall be deleted and Xxxxx Fargo
Bank -
San Francisco shall be substituted.
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6)
|
Buyer
and Seller agree that, based upon the guarantees provided in connection
with this Agreement, Paragraph G of the GP is hereby deleted in
its
entirety.
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7)
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Paragraph
H (1) of the GP shall be amended to read as follows: “H. Termination: (1)
Right to Terminate. If a party to this Agreement (a) becomes the
subject
of bankruptcy or other insolvency proceedings, or proceedings for
the
appointment of a receiver, trustee or similar official, (b) becomes
generally unable to pay its debts as they become due, (c) makes
a general
assignment for the benefit of creditors, (d) if Buyer defaults
in the
payment of any funds due under this Agreement, or (e) if Buyer
fails to
accept and purchase any crude oil delivered by Seller under this
Agreement, then the other party to this Agreement (the “Terminating
Party”) may terminate this Agreement by giving written notice of
termination. Such a termination shall be deemed to be effective
immediately prior to any of the events described in clauses (a),
(b) or
(c) of this Section H(1) and, in the case of termination for reasons
described in clauses (d) or (e) immediately upon the Buyer’s receipt of
Seller’s notice of termination. If this Agreement is associated with a
separate agreement contemplating a corresponding purchase or sale
of crude
oil, all related agreements shall be deemed to be terminated at
the same
time as this Agreement is terminated. All of the references to
Liquidating
Party in this Paragraph H shall be substituted by Terminating Party.
Upon
termination, the parties shall have no further rights or obligations
with
respect to this Agreement, except for the payment of the amount(s)
(the
‘Settlement Amount’ or ‘Settlement Amounts’) determined as provided in
Paragraph(3) of this Section.”
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8)
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The
following sentence shall be added to Paragraph H (3) of the GP:
“In the
event of a contract termination, the Settlement Amount shall be
calculated
using the estimated contract quantity of crude oil multiplied by
the
remainder of the term of this Agreement except as such Settlement
Amount
may be limited by the provisions of Paragraph H (8).” Paragraph H (3)
shall be amended by adding to the end of the first sentence thereof
the
following: ”discounted to present value at the time of payment using a
discount rate equal to the interest rate determined under Paragraph
F.”
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9)
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Paragraph
H (8) shall be added to the GP to read as follows: “(8) Force Majeure
Termination. If the Buyer terminates this Agreement as a result
of a Force
Majeure causing a shut in of its refining facilities, as provided
for in
Paragraph E, as amended, then Buyer shall be obligated to pay any
and all
Settlement Amounts for the Commodity Transactions provided for
herein for
a period of 12 months following the Force Majeure Shut In
Period.”
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10) the
governing law set forth in Paragraph M of the GP shall be California
law.
11)
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Paragraph
Q of the GP is modified to read as follows: “Entirety of Agreement. The
Agreement between Seller and Buyer consists of that certain letter
agreement dated November 14, 2005 to which is attached Attachment
A and
these General Provisions as described in Paragraph 7(a) of Attachment
A as
modified which all together contain the Entire Agreement of the
parties;
there are no other promises, representations or warranties. Any
modification of any of the referenced documents shall only be by
written
instrument. Any conflict between the General Provisions and Attachment
A
shall be resolved in favor of Attachment A. The section headings
are for
convenience only and shall not limit or change the subject matter
of this
Agreement.”
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b. In
the
event of any claim, dispute or controversy arising out of or relating to
this
Agreement, including an action for declaratory relief, the prevailing party
in
such action or proceeding shall be entitled to recover its court costs and
reasonable out-of-pocket expenses not limited to taxable costs, including
but
not limited to phone calls, photocopies, expert witness, travel, etc., and
reasonable attorneys’ fees to be fixed by the court. Such recovery shall include
court costs, out-of-pocket expenses and attorneys’ fees on appeal, if any. The
court shall determine who is the “prevailing party,” whether or not the dispute
or controversy proceeds to final judgment. If either party is reasonably
required to incur such out-of-pocket expenses and attorneys’ fees as a result of
any claim arising out of or concerning this Agreement or any right or obligation
derived hereunder, then the prevailing party shall be entitled to recover
such
reasonable out-of-pocket expenses and attorneys’ fees whether or not an action
is filed.
8. PARENTS
GUARANTY:
As
a
material condition to this Agreement, Buyer shall concurrently deliver to
Seller
a mutually agreeable continuing guaranty of Big West Oil, LLC, and a mutually
agreeable continuing guaranty of Flying J Inc.
EXHIBIT
A
TO
ATTACHMENT A
TO
NOVEMBER 3, 2005 CRUDE OIL PURCHASE AGREEMENT
(JANUARY
1, 1993 CONOCO GENERAL PROVISIONS FOR
DOMESTIC
CRUDE OIL AGREEMENTS)
GENERAL
PROVISIONS
DOMESTIC
CRUDE OIL AGREEMENTS
A. Measurement
and Tests:
All
measurements hereunder shall be made from static tank gauges on 100 percent
tank
table basis or by positive displacement meters. All measurements and tests
shall
be made in accordance with the latest ASTM or ASME-API (Petroleum PD Meter
Code)
published methods then in effect, whichever apply. Volume and gravity shall
be
adjusted to 60 degrees Fahrenheit by the use of Table 6A and 5A of the Petroleum
Measurement Tables ASTM Designation D1250 in their latest revision. The crude
oil delivered hereunder shall be marketable and acceptable in the applicable
common or segregated stream of the carriers involved but not to exceed 1%
S&W. Full deduction for all free water and S&W content shall be made
according to the API/ASTM Standard Method then in effect. Either party shall
have the right to have a representative witness all gauges, tests and
measurements. In the absence of the other party's representative, such gauges,
tests and measurements shall be deemed to be correct.
B. Warranty:
The
Seller warrants good title to all crude oil delivered hereunder and warrants
that such crude oil shall be free from all royalties, liens, encumbrances
and
all applicable foreign, federal, state and local taxes.
Seller
further warrants that the crude oil delivered shall not be contaminated by
chemicals foreign to virgin crude oil including, but not limited to chlorinated
and/or oxygenated hydrocarbons and lead. Buyer shall have the right, without
prejudice to any other remedy available to Buyer, to reject and return to
Seller
any quantities of crude oil which are found to be so contaminated, even after
delivery to Buyer.
C. Rules
and Regulations:
The
terms, provisions and activities undertaken pursuant to this Agreement shall
be
subject to all applicable laws, orders and regulations of all governmental
authorities. If at any time a provision hereof violates any such applicable
laws, orders or regulations, such provision shall be voided and the remainder
of
the Agreement shall continue in full force and effect unless terminated by
either party upon giving written notice to the other party hereto. If
applicable, the parties hereto agree to comply with all provisions (as amended)
of the Equal Opportunity Clause prescribed in 41 C.F.R. 60-1.4; the Affirmative
Action Clause for disabled veterans and veterans of the Vietnam Era prescribed
in 41 C.F.R. 60-250.4; the Affirmative Action Clause for Handicapped Workers
prescribed in 41 C.F.R. 60-741.4; 48 C.F.R. Chapter 1 Subpart 19.7 regarding
Small Business and Small Disadvantaged Business Concerns; 48 C.F.R. Chapter
1
Subpart 20.3 regarding Utilization of Labor Surplus Area Concerns; Executive
Order 12138 and regulations thereunder regarding subcontracts to women-owned
business concerns; Affirmative Action Compliance Program (41 C.F.R. 60-1.40);
annually file SF-100 Employer Information Report (41 C.F.R. 60-1.7); 41 C.F.R.
60-1.8 prohibiting segregated facilities; and the Fair Labor Standards Act
of
1938 as amended, all of which are incorporated in this Agreement by reference.
D. Hazard
Communication: Seller
shall provide its Material Safety Data Sheet ("MSDS") to Buyer. Buyer
acknowledges the hazards and risks in handling and using crude oil. Buyer
shall
read the MSDS and advise its employees, its affiliates, and third parties,
who
may purchase or come into contact with such crude oil, about the hazards
of
crude oil, as well as the precautionary procedures for handling said crude
oil,
which are set forth in such MSDS and any supplementary MSDS or written
warning(s) which Seller may provide to Buyer from time to time.
E. Force
Majeure: Except
for payment due hereunder, either party hereto shall be relieved from liability
for failure to perform hereunder for the duration and to the extent such
failure
is occasioned by war, riots, insurrections, fire, explosions, sabotage, strikes,
and other labor or industrial disturbances, acts of God or the elements,
governmental laws, regulations, or requests, acts in furtherance of the
International Energy Program, disruption or breakdown of production or
transportation facilities, delays of pipeline carrier in receiving and
delivering crude oil tendered, or by any other cause, whether similar or
not,
reasonably beyond the control of such party. Any such failures to perform
shall
be remedied with all reasonable dispatch, but neither party shall be required
to
supply substitute quantities from other sources of supply. Failure to perform
due to events of Force Majeure shall not extend the terms of this Agreement.
Notwithstanding
the above, and in the event that the Agreement is an associated purchase/sale,
or exchange of crude oil, the parties shall have the rights and obligations
described below in the circumstances described below:
(1) If,
because of Force Majeure, the party declaring Force Majeure (the "Declaring
Party") is unable to deliver part or all of the quantity of crude oil which
the
Declaring Party is obligated to deliver under the Agreement or associated
contract, the other party (the "Exchange Partner") shall have the right but
not
the obligation to reduce its deliveries of crude oil under the same Agreement
or
associated contract by an amount not to exceed the number of barrels of crude
oil that the Declaring Party fails to deliver.
(2) If,
because of Force Majeure, the Declaring Party is unable to take delivery
of part
or all of the quantity of crude oil to be delivered by the Exchange Partner
under the Agreement or associated contract, the Exchange Partner shall have
the
right but not the obligation to reduce its receipts of crude oil under the
same
Agreement or associated contract by an amount not to exceed the number of
barrels of crude oil that the Declaring Party fails to take delivery of.
F. Payment:
Unless
otherwise specified in the Special Provisions of this Agreement, Buyer agrees
to
make payment against Seller's invoice for the crude oil purchased hereunder
to a
bank designated by Seller in U.S. dollars by telegraphic transfer in immediately
available funds. Unless otherwise specified in the Special Provisions of
this
Agreement, payment will be due on or before the 20th of the month following
the
month of delivery. If payment due date is on a Saturday or New York bank
holiday
other than Monday, payment shall be due on the preceding New York banking
day.
If payment due date is on a Sunday or a Monday New York bank holiday, payment
shall be due on the succeeding New York banking day.
Payment
shall be deemed to be made on the date good funds are credited to Seller's
account at Seller's designated bank.
In
the
event that Buyer fails to make any payment when due, Seller shall have the
right
to charge interest on the amount of the overdue payment at a per annum rate
which shall be two percentage points higher than the published prime lending
rate of Xxxxxx Guaranty Trust Company of New York on the date payment was
due,
but not to exceed the maximum rate permitted by law.
G. Financial
Responsibility:
Notwithstanding anything to the contrary in this Agreement, should Seller
reasonably believe it necessary to assure payment, Seller may at any time
require, by written notice to Buyer, advance cash payment or satisfactory
security in the form of a Letter or Letters of Credit at Buyer's expense
in a
form and from a bank acceptable to Seller to cover any or all deliveries
of
crude oil. If Buyer does not provide the Letter of Credit on or before the
date
specified in Seller's notice under this section, Seller or Buyer may terminate
this Agreement forthwith. However, if a Letter of Credit is required under
the
Special Provisions of this Agreement and Buyer does not provide same, then
Seller only may terminate this Agreement forthwith. In no event shall Seller
be
obligated to schedule or complete delivery of the crude oil until said Letter
of
Credit is found acceptable to Seller. Each party may offset any payments
or
deliveries due to the other party under this or any other agreement between
the
parties.
If
a
party to this Agreement (the "Defaulting Party") should (1) become the subject
of bankruptcy or other insolvency proceedings, or proceedings for the
appointment of a receiver, trustee, or similar official, (2) become generally
unable to pay its debts as they become due, or (3) make a general assignment
for
the benefit of creditors, the other party to this Agreement may withhold
shipments without notice.
H. Liquidation:
(1) Right
to
Liquidate. At any time after the occurrence of one or more of the events
described in the third paragraph of Section G, Financial Responsibility,
the
other party to the Agreement (the "Liquidating Party") shall have the right,
at
its sole discretion, to liquidate this Agreement by terminating this Agreement.
Upon termination, the parties shall have no further rights or obligations
with
respect to this Agreement, except for the payment of the amount(s) (the
"Settlement Amount" or "Settlement Amounts") determined as provided in Paragraph
(3) of this section.
(2) Multiple
Deliveries. If this Agreement provides for multiple deliveries of one or
more
types of crude oil in the same or different delivery months, or for the purchase
or exchange of crude oil by the parties, all deliveries under this Agreement
to
the same party at the same delivery location during a particular delivery
month
shall be considered a single commodity transaction ("Commodity Transaction")
for
the purpose of determining the Settlement Amount(s). If the Liquidating Party
elects to liquidate this Agreement, the Liquidating Party must terminate
all
Commodity Transactions under this Agreement.
(3) Settlement
Amount. With respect to each terminated Commodity Transaction, the Settlement
Amount shall be equal to the contract quantity of crude oil, multiplied by
the
difference between the contract price per barrel specified in this Agreement
(the "Contract Price") and the market price per barrel of crude oil on the
date
the Liquidating Party terminates this Agreement (the "Market Price"). If
the
Market Price exceeds the Contract Price in a Commodity Transaction, the selling
party shall pay the Settlement Amount to the buying party. If the Market
Price
is less than the Contract Price in a Commodity Transaction, the buying party
shall pay the Settlement Amount to the selling party. If the Market Price
is
equal to the Contract Price in a Commodity Transaction, no Settlement Amount
shall be due.
(4) Termination
Date. For the purpose of determining the Settlement Amount, the date on which
the Liquidating Party terminates this Agreement shall be deemed to be (a)
the
date on which the Liquidating Party sends written notice of termination to
the
Defaulting Party, if such notice of termination is sent by telex or facsimile
transaction; or (b) the date on which the Defaulting Party receives written
notice of termination from the Liquidating Party, if such notice of termination
is given by United States mail or a private mail delivery service.
(5) Market
Price. Unless otherwise provided in this Agreement, the Market Price of crude
oil sold or exchanged under this Agreement shall be the price for crude oil
for
the delivery month specified in this Agreement and at the delivery location
that
corresponds to the delivery location specified in this Agreement, as reported
in
Xxxxx'x Oilgram Price Report ("Xxxxx'x") for the date on which the Liquidating
Party terminates this Agreement. If Xxxxx'x reports a range of prices for
crude
oil on that date, the Market Price shall be the arithmetic average of the
high
and low prices reported by Xxxxx'x. If Xxxxx'x does not report prices for
the
crude oil being sold under this Agreement, the Liquidating Party shall determine
the Market Price of such crude oil in a commercially reasonable manner, unless
otherwise provided in this Agreement.
(6) Payment
of Settlement Amount. Any Settlement Amount due upon termination of this
Agreement shall be paid in immediately available funds within two business
days
after the Liquidating Party terminates this Agreement. However, if this
Agreement provides for more than one Commodity Transaction, or if Settlement
Amounts are due under other agreements terminated by the Liquidating Party,
the
Settlement Amounts due to each party for such Commodity Transactions and/or
agreements shall be aggregated. The party owing the net amount after such
aggregation shall pay such net amount to the other party in immediately
available funds within two business days after the date on which the Liquidating
Party terminates this Agreement.
(7) Miscellaneous.
This section shall not limit the rights and remedies available to the
Liquidating Party by law or under other provisions of this Agreement. The
parties hereby acknowledge that this Agreement constitutes a forward contract
for purposes of Section 556 of the U.S. Bankruptcy Code.
I. Equal
Daily Deliveries: For
pricing purposes only, unless otherwise specified in the Special Provisions,
all
crude oil delivered hereunder during any calendar month shall be considered
to
have been delivered in equal daily quantities during such month.
J. Exchange
Balancing:
If
volumes are exchanged, each party shall be responsible for maintaining the
exchange in balance on a month-to-month basis, as near as pipeline or other
transportation conditions will permit. In all events upon termination of
this
Agreement and after all monetary obligations under this Agreement have been
satisfied, any volume imbalance existing at the conclusion of this Agreement
of
less than 1,000 barrels will be declared in balance. Any volume imbalance
of
1,000 barrels or more, limited to the total contract volume, will be settled
by
the underdelivering party making delivery of the total volume imbalance in
accordance with the delivery provisions of this Agreement applicable to the
underdelivering party, unless mutually agreed to the contrary. The request
to
schedule all volume imbalances must be confirmed in writing by one party
or both
parties. Volume imbalances confirmed by the 20th of the month shall be delivered
during the calendar month after the volume imbalance is confirmed. Volume
imbalances confirmed after the 20th of the month shall be delivered during
the
second calendar month after the volume imbalance is confirmed.
K. Delivery,
Title, and Risk of Loss:
Delivery, title, and risk of loss of the crude oil delivered hereunder shall
pass from Seller to Buyer as follows: For
lease
delivery locations, delivery of the crude oil to the Buyer shall be effected
as
the crude oil passes the last permanent delivery flange and/or meter connecting
the Seller's lease/unit storage tanks or processing facilities to the Buyer's
carrier. Title to and risk of loss of the crude oil shall pass from Seller
to
Buyer at the point of delivery.
For
delivery locations other than lease/unit delivery locations, delivery of
the
crude oil to the Buyer shall be effected as the crude oil passes the last
permanent delivery flange and/or meter connecting the delivery facility
designated by the Seller to the Buyer's carrier. If delivery is by in-line
transfer, delivery of the crude oil to the Buyer shall be effected at the
particular pipeline facility designated in this Agreement. Title to and risk
of
loss of the crude oil shall pass from the Seller to the Buyer upon
delivery.
L. Term:
Unless
otherwise specified in the Special Provisions, delivery months begin at 7:00
a.m. on the first day of the calendar month and end at 7:00 a.m. on the first
day of the following calendar month.
M. Governing
Law:
This
Agreement and any disputes arising hereunder shall be governed by the laws
of
the State of Texas.
N. Necessary
Documents: Upon
request, each party agrees to furnish all substantiating documents incident
to
the transaction, including a Delivery Ticket for each volume delivered and
an
invoice for any month in which the sums are due.
O. Waiver:
No
waiver
by either party regarding the performance of the other party under any of
the
provisions of this Agreement shall be construed as a waiver of any subsequent
performance under the same or any other provisions.
P. Assignment:
Neither
party shall assign this Agreement or any rights hereunder without the written
consent of the other party unless such assignment is made to a person
controlling, controlled by or under common control of assignor, in which
event
assignor shall remain responsible for nonperformance.
Q. Entirety
of Agreement: The
Special Provisions and these General Provisions contain the entire Agreement
of
the parties; there are no other promises, representations or warranties.
Any
modification of this Agreement shall be by written instrument. Any conflict
between the Special Provisions and these General Provisions shall be resolved
in
favor of the Special Provisions. The section headings are for convenience
only
and shall not limit or change the subject matter of this Agreement.
R. Definitions:
When
used
in this Agreement, the terms listed below have the following
meanings:
"API"
means the American Petroleum Institute.
"ASME"
means the American Society of Mechanical Engineers.
"ASTM"
means the American Society for Testing Materials.
"Barrel"
means 42 U.S. gallons of 231 cubic inches per gallon corrected to 60 degrees
Fahrenheit.
"Carrier"
means a pipeline, barge, truck, or other suitable transporter of crude
oil.
"Crude
Oil" means crude oil or condensate, as appropriate.
"Day,"
"month," and "year" mean, respectively, calendar day, calendar month, and
calendar year, unless otherwise specified.
"Delivery
Ticket" means a shipping/loading document or documents stating the type and
quality of crude oil delivered, the volume delivered and method of measurement,
the corrected specific gravity, temperature, and S&W content.
"Invoice"
means a statement setting forth at least the following information: The date(s)
of delivery under the transaction; the location(s) of delivery; the volume(s);
price(s); the specific gravity and gravity adjustments to the price(s) (where
applicable); and the term(s) of payment.
"S&W"
means sediment and water.