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EXHIBIT 10.9
CONTRACT OF AFFREIGHTMENT
AGREEMENT dated May 31, 2001, between Amerada Xxxx Corporation, a
Delaware corporation, having an office at 1185 Avenue of the Americas, Xxx Xxxx,
Xxx Xxxx, 00000 (herein "Hess") and LEEVAC Marine, Inc., a Louisiana corporation
having an office at 000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000
(herein "Owner" or "LMI").
RECITALS:
X. Xxxx will employ the services of vessels, tugs and barges for the
transportation of liquid petroleum products in bulk from and to various
coastal and inland waterway locations in the northeastern United
States;
B. Owner is willing to furnish the services of vessels, tugs and barges as
may be required by Hess from time to time subject to the terms and
conditions set forth herein.
THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1 - SCOPE OF WORK
A. 1. Subject to the limitations set forth herein, Owner will
transport liquid petroleum products in bulk from and to
various coastal and inland waterway locations in the
northeastern United States that have historically been
serviced by any of Hygrade Operators, Inc., Red Star Towing
and Transportation Company and Sheridan Towing, as per
Schedule A, as requested by Hess, through the use of Provided
Vessels (as defined in Article 3B). Owner will furnish such
service to Hess under the terms in this Agreement. Except as
otherwise provided in this Agreement, Hess will be obligated
to use Owner's services for Xxxx'x waterway transport
requirements in the northeastern United States for the term of
this Agreement. If, subject to Article 1H, at any time Owner
is unable to meet Xxxx'x requirements, under the terms of this
Agreement, Hess may procure transportation services elsewhere,
subject to a good faith effort to pursue such services at a
commercially reasonable rate, and Owner will be responsible
for any excess costs above the rates in Schedule A for such
procured transportation services, for up to the [Confidential
material omitted and filed separately with the Commission]
barrels maximum per month; provided that no more than
[Confidential material omitted and filed separately with the
Commission] barrels per month shall be dirty barrels.
2. Except in the circumstances provided in Article 1A3 below, if
Hess requests transportation of barrels above the
[Confidential material omitted and filed separately with the
Commission] monthly maximum (or the [Confidential material
omitted and filed separately with the Commission] dirty barrel
maximum, as applicable), Owner will use
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commercially reasonable efforts, subject to Article 1H, to
move Hess barrels in vessels owned by Owner, its parent or any
affiliate and not otherwise committed at the Schedule A rates.
If such owned vessels are not available, above the
[Confidential material omitted and filed separately with the
Commission] monthly maximum (or the dirty barrel maximum, as
applicable), Owner will use commercially reasonable efforts to
charter third-party vessels at market rates and on such other
terms and conditions as are reasonably satisfactory to Hess
and pass the cost through to Hess. If, above the [Confidential
material omitted and filed separately with the Commission]
monthly maximum (or the dirty barrel maximum, as applicable),
Owner is unable to charter third party vessels, or such
vessels are either not available at market rates or not
acceptable to Hess, it shall not constitute a breach of this
Agreement or be counted against Owner for purposes of Article
47A or B. In such event, Hess may procure transportation
services elsewhere for such volumes in excess of the monthly
maximum. Hess will pay in a timely fashion all invoices of any
Provided Vessel chartered in by Owner to move Hess barrels
upon receipt of the relevant invoice in accordance with
Article 43 and the parties will use their best efforts to
reconcile such payments and credit the proper party (Hess or
Owner) at the end of each month consistent with the interest
otherwise expressed in this Article 1A2 and in Article 1A1.
above.
3. Hess will provide Owner with 60 days' written notice of any
permanent new transportation needs that exceed the
[Confidential material omitted and filed separately with the
Commission] barrels monthly (or the dirty barrel maximum, as
applicable). Owner will, within 30 days following receipt of
such notice provide Hess with a preliminary indication of
Owner's intentions with respect to transporting Xxxx'x
additional need and prior to the end of the 60-day notice
period, prepare and deliver a written proposal to Hess
concerning a means acceptable to Owner to satisfy Xxxx'x new
transportation needs or a notice that, despite commercially
reasonable efforts, it is unable to make such a proposal.
Within 30 days following receipt of Owner's proposal, Hess
shall advise Owner in writing of its acceptance or rejection
of the proposal. If accepted, Owner will implement the
proposal in accordance with its terms. If rejected, Hess may
procure transportation services elsewhere for such new needs.
If, despite commercially reasonable efforts, Owner is not able
to provide such a proposal to Hess or Hess rejects the
proposal, it shall not constitute a breach of this Agreement
or be counted against Owner for purposes of Article 47A or X.
X. Xxxx commits to a [Confidential material omitted and filed separately
with the Commission] barrel minimum annual volume for each Contract
Year.
If Hess fails to ship the minimum annual volume for each Contract Year
and the failure to ship is not excused by force majeure or by the
inability of Owner to furnish necessary vessels to fulfill its
obligations, Hess will pay to Owner the deficiency in the number of
barrels that Hess has failed to ship multiplied by the
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factor of [Confidential material omitted and filed separately with the
Commission] per barrel ("Deficiency Payment"). Those barrels
constituting uncontested, paid Dead Freight will be included in the
minimum annual volume as if those barrels had been shipped by Hess.
Payment of the Deficiency Payment for each Contract Year will be
reconciled and paid within 30 days following the end of such Contract
Year.
X. Xxxx will be entitled to an offset against any Deficiency Payment due
for an applicable Contract Year in the manner set forth below in this
paragraph. To the extent Owner, as a result of increased availability
of its owned vessels due to Xxxx'x shortfall in transported volumes,
transports in such Contract Year, barrels in the northeastern United
States for third parties that were not the result of commercial
arrangements existing prior to the time of the decline in transported
Hess volumes that resulted in or contributed to Xxxx'x shortfall
("Third Party Volume"), Hess will be entitled to offset the Deficiency
Payment by an amount calculated by multiplying $[Confidential material
omitted and filed separately with the Commission] times the number
determined by subtracting (i) the aggregate of barrels transported for
Hess in the northeastern United States in such Contract Year ("Hess
Volume") from (ii) the aggregate of Hess Volume in such Contract Year
plus Third Party Volume; provided that the number used for purposes of
this clause (ii) will not exceed [Confidential material omitted and
filed separately with the Commission] barrels.
Example 1: [Confidential material omitted and filed separately with the
Commission]
Example 2: [Confidential material omitted and filed separately with the
Commission]
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D. 1. In the event of a significant change in business due to an
unforeseen event or interruption in business of Hess (for
example, a sale or closing of assets constituting all or a
substantial portion of a business operation such as retail
locations, a terminal or a refinery), Hess will have the
option to permanently reduce the required annual minimum
barrels to the extent attributable to the event or
interruption for the remainder of the term of this Agreement.
2. Hess will be required to give Owner a ninety (90) day written
notice of its intent to permanently reduce the minimum barrels
under this Agreement, and in such event, Hess will pay to
Owner the Adjustment Fee. Such a notice of reduction, once
delivered to Owner, shall be irrevocable. Payment of the
Adjustment Fee shall be made as follows: [Confidential
material omitted and filed separately with the Commission]%
of the Adjustment Fee on the 90th day following written
notice, [Confidential material omitted and filed separately
with the Commission]% of the Adjustment Fee on the same day
of each of the third, sixth and ninth months following the
90th day.
3. The Adjustment Fee shall be defined as $[Confidential material
omitted and filed separately with the Commission] per
day times the days remaining under this Agreement following
the effective date of the reduction in the minimum, times the
percentage reduction (calculated to one decimal place) in the
minimum annual barrels provided for in this Agreement.
4. In the event of a permanent reduction in minimums as
contemplated in this Article 1D, the monthly maximum volumes
provided for in this Agreement shall be reduced by the same
percentage that the minimums are reduced.
E. Owner will make all reasonable efforts to safely navigate in ice and
break ice, if necessary. Owner will be compensated for this in
accordance with Schedule X. Xxxx will pay Owner an ice charge equal to
the hourly rate in Schedule B, over
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and above the freight rate, for each hour that a tug and barge unit is
operating in ice or is stuck in ice. If Owner requires the services of
an assist tug, its costs, as stipulated on Schedule B when breaking
ice, will be paid by Hess. All invoices for ice charges are payable in
full upon receipt and shall be submitted together with copies of ice
logs from each Provided Vessel invoiced, duly signed by the Master of
the Provided Vessel. In addition, a copy of the United States Coast
Guard's (USCG) daily Ice Report will be provided by Owner when
available.
Whenever possible, Owner will notify Hess prior to commencing any
voyage where ice charges and delays are anticipated. Upon receipt of
such information, Hess may elect to direct the Provided Vessel to
another terminal or port. In such event and if the Provided Vessel is
already in transit, then Hess will pay Owner any deviation costs
resulting from the change in destination.
F. For the stub period commencing June 1, 2001, the minimum volumes shall
be [Confidential material omitted and filed separately with the
Commission], and for purposes of the stub period in 2006, the
minimum volumes shall be the average actual volumes for such stub
period over the prior 3 years.
G. Owner will coordinate the provision of barge services to Hess in the
southeastern United States in exchange for a commission equal to
[Confidential material omitted and filed separately with the
Commission]% of the freight charges paid by Hess for such barges
coordinated by Owner. Owner and Hess agree to establish procedures for
the nomination of such barges. Freight charges through December 31,
2001, will be according to the currently existing rate schedule with
Vane Brothers shown on Schedule C attached hereto, and thereafter
freight charges will be at generally prevailing area rates until such
time, if any, as Hess and Vane Brothers or another transportation
provider shall negotiate a new schedule of freight charges. Owner's
responsibility extends solely to using reasonable commercial efforts to
coordinate the barge services and manage the logistics thereof, and
Owner will not be responsible for the actual provision of barge
services or be liable or penalized in any way if such barge services
are not provided. Within 30 days after December 31 of each year of this
contract, Hess shall have the right to discontinue the services
provided by Owner under this Article 1G, provided Hess provides Owner
with written notice within such 30-day period.
H. It is Owner's policy not to haul dirty barrels on single-hull vessels.
Owner will only transport dirty barrels on double bottomed or double
hulled vessels. In no event will Hess require Owner to use any vessel
owned by Owner in contravention of this policy. Owner has time
chartered the barge "New Jersey" from Xxxxx at a rate of $[Confidential
material omitted and filed separately with the Commission]/day
for a one-year period beginning on or around July 1, 2001 to transport
Hess dirty barrels. Notwithstanding anything to the contrary contained
in this Agreement, Hess will be responsible for the costs of such time
charter (or any time charter of an agreed substitute vessel); it being
understood that Owner agrees to reimburse Hess at the time charter rate
for any days the "New Jersey" (or an agreed upon substitute vessel) is
used for non-Hess moves. If, at any time, Hess requires the transport
of dirty barrels from any Hess-owned inner berth and Owner has no
double bottomed or doubled hulled
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vessels available and provided the "New Jersey" (or any agreed upon
substitute vessel) is moving barrels for Hess' account at that time,
Owner will use commercially reasonable efforts to charter appropriate
third-party vessels at market rates and on such other terms and
conditions as are reasonably satisfactory to Hess and pass the cost
through to Hess. If Owner is unable to charter third-party vessels for
such inner berth moves, or such vessels are either not available at
market rates or not acceptable to Hess, provided the "New Jersey" (or
any agreed upon substitute vessel) is moving barrels for Hess' account
at that time, it shall not constitute a breach of this Agreement or be
counted against Owner for purposes of Article 47A or B.
ARTICLE 2 - PERIOD OF AGREEMENT
The original term of this Agreement will be from the effective date of this
Agreement through March 31, 2006. The parties agree to negotiate in good faith
to reach acceptable terms and conditions to extend the Agreement past the end of
its term by September 30, 2005. If no agreement is reached by such date, each
party will be relieved of any further obligation regarding any extension of this
Agreement.
ARTICLE 3 - DEFINITIONS
A. "Cargo" means clean or dirty petroleum products, maximum of (3) grades,
within a vessel's natural segregations with grades defined as including
specific grades of gasoline as separate grades. Additional grades may
be carried with single valve segregation with some line admixture.
B "vessel" means any barge or tow, whichever is appropriate. The term
"tow" means any combination of tugs and barges with the ability to
function as a single unit. "Provided Vessel" means a vessel, owned or
chartered by Owner, or its parent or other affiliate, and provided for
service under this Agreement.
C. "Terminal" or "Port" means any refinery, terminal or vessel delivering
product to or receiving product from Provided Vessels under this
Agreement.
D. "All Fast" means that the vessel is safely secured to the dock and that
there is unrestricted access to the vessel, including the gangway being
down and secured.
E. "Dead Freight" means a charge at the rate specified in Schedule A on
the difference between actual volume loaded and minimum volume ordered
when actual volume is less than minimum volume ordered.
F. "Contract Year" means (i) the period of time between the effective date
of this Agreement and December 31, 2001; (ii) each period of time
between January 1
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and December 31 for the years 2002, 2003, 2004, and 2005; and (iii) the
period of time between January 1, 2006 and March 31, 2006.
G. "Master" means any of the master of the vessel, the captain of the
vessel or the Owner.
H. "Dirty barrels" means Nos. 4, 5 or 6 oil, vacuum gas oil, slurry and
Algerian resid.
ARTICLE 4 - VAPOR PRESSURE
Owner will not be required and shall have no obligation under this Agreement to
carry or ship Cargo which has a vapor pressure exceeding [Confidential material
omitted and filed separately with the Commission] pounds at [Confidential
material omitted and filed separately with the Commission] degrees Fahrenheit as
determined by the Xxxx Method.
ARTICLE 5 - SEAWORTHINESS
Owner warrants that at the commencement of loading (i) each Provided Vessel will
be seaworthy, properly manned, equipped and supplied for the voyage, (ii) the
cargo tanks, pipelines, and valves of each Provided Vessel will be suitable for
the Cargo, and (iii) the pumps and heating coils, if any, of each Provided
Vessel will be in good working condition. Owner will, as far as these conditions
can be obtained with the exercise of due diligence, further maintain such
condition and will use best efforts in the loading, stowage, custody, care and
delivery of the Cargo. Owner will provide sufficient towing power including
assisting tugs to handle properly and safely any Provided Vessel(s) while both
in loaded and light conditions. Owner will use best efforts to maintain the
seaworthiness of all Provided Vessels throughout the voyage and Owner and the
Provided Vessels will be in compliance with all local, state and federal laws,
ordinances and regulations at all times.
ARTICLE 6 - CARGO TANK INSPECTION
Hess or its representative may, before loading, inspect all cargo tanks of each
Provided Vessel. Prior to inspection, all Provided Vessel pipeline and manifold
valves will be opened in a manner that allows compatible products to collect in
single segregated compartments. Owner will inform Hess of prior cargo and the
associated general specifications of Cargo(es) last carried by the applicable
Provided Vessel. If any tank is found to be unfit for the Cargo by reason of
contamination, Hess or its representative may refuse to load Cargo into such
tank and the Cargo capacity of the tank will not be included in the Provided
Vessel's minimum Cargo. Hess or its representative's failure to inspect will not
relieve Owner of any liability for Cargo loss or contamination due to Owner's
failure to make the Provided Vessel seaworthy, suitable for the Cargo or free of
contamination. No such inspection by Hess or its representative will relieve
Owner of any of its obligations under this Agreement.
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ARTICLE 7 - VESSEL CONNECTION CONSTRUCTION
All flanges, fittings, spool pieces and reducers must be of steel construction.
ARTICLE 8 - SAFE BERTH, SHIFTING
A. The loading and discharging berths will be such Terminal, wharf, craft
or other place alongside a Provided Vessel, designated by Hess and
accessible and ready when the Provided Vessel arrives and at which the
Provided Vessel can lie safely afloat (within the specified maximum
drafts and the specified minimum water depths) free of all wharfage and
dockage dues. All charges at the Terminals for duties, tugs and pilots
and mooring masters will be borne by Owner. All charges at the
Terminals for line handling, booming and tax on services for Cargo
Transfers will be borne by Hess. Hess will not be deemed to warrant the
safety of any channel, fairway, anchorage or other waterway used in
approaching the designated berth. Hess will not be liable for:
1. Any loss, damage, injury, or delay to any Provided Vessel
resulting from the use of such waterways;
2. Any damage to Provided Vessels at Xxxx'x facility or any other
such facility designated by Hess when such damage is caused by
other vessels passing in the waterway unless such damage is a
result of improperly maintained Hess facilities.
Hess will comply with all applicable federal, state and local laws and
regulations relating to safe berthing.
B. At Xxxx'x owned or operated Terminals, Hess will furnish Provided
Vessels with a berth(s) in order of their arrival, as determined by
receipt of Notice of Readiness ("NOR"). Hess or its representative has
the right to require a Provided Vessel to shift berth from one safe
berth to another safe berth. When such shifting is done for the
convenience of Hess or its representative, Hess will pay all pilot,
tug, and port expenses incurred in shifting the Provided Vessel, and
the time consumed on account of such shifting will count as used
laytime. When the shifting is required due to the fault or condition of
a Provided Vessel, Owner will pay all expenses incurred in shifting the
Provided Vessel, and time consumed on account of such shifting will not
count as used laytime, or demurrage if the Provided Vessel is on
demurrage.
X. Xxxx or its representative has the right to instruct the Provided
Vessel to vacate its berth if it appears that the Provided Vessel will
not, because of disability or any other cause on the part of the
Provided Vessel, be able to complete loading or discharge of Cargo
within the "allowed laytime"; provided that the Provided Vessel will
not be required to vacate a berth unless that berth is needed to
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accommodate another vessel. In such instance, laytime will be
calculated in accordance with Article 17E. The Provided Vessel, after
tendering NOR to recommence loading or discharging, will be reberthed
in order of its original arrival as determined by the original
confirmed receipt of each Provided Vessel or other vessel NOR and
laytime will resume upon the Provided Vessel's reberthing. If the
Provided Vessel does not vacate the berth within four (4) hours
following such instructions, Owner will reimburse Hess, upon demand and
receipt of proper supporting documents, for any demurrage claims Hess
may be required to pay third parties, which reimbursement by Owner to
Hess for the first six hours following the initial four hour period is
limited to the demurrage rate on the Provided Vessel and thereafter is
limited to the demurrage rate Hess is required to pay to such third
parties.
D. If the Master of the Provided Vessel determines that a stand-by tug is
required for assistance, and such tug assistance is not required by the
Terminal or wharf, all resulting charges for such tug assistance will
be for Owner's account. There are currently no standby tugs required in
New York Harbor except when loaded barges are at anchorage. In such
instance or instances charges for standby tugs will be to Hess'
account.
ARTICLE 9 - PUMPING IN AND OUT
Cargo will be pumped into the cargo tanks of the Provided Vessel by Hess (or its
supplier) at its expense but at its risk and peril only to the point where the
Provided Vessel's hoses are attached to the shipper's lines or if such Provided
Vessel's hoses are not used, then to the permanent hose connections on the
Provided Vessel receiving the Cargo. Loading will be done as quickly as the
Provided Vessel can safely receive the Cargo and within the shore constraints.
Cargo will be pumped out of the cargo tanks by Owner at its expense but at its
risk and peril only to the point where the Provided Vessel's hoses are connected
to the receiver's lines, or if the Provided Vessel's hoses are not used, then to
the permanent hose connections on the Provided Vessel discharging the Cargo. If
Hess or receiver requires any of the Cargo to be heated before discharge from a
Provided Vessel fitted with heating coils, steam will be furnished by Hess or
its designee at Xxxx'x expense unless the Provided Vessel is equipped with its
own heating plant.
Owner warrants that each Provided Vessel is capable of discharging its full
Cargo by maintaining pressure of [Confidential material omitted and filed
separately with the Commission] psi at the Provided Vessel's manifold or
within the time specified in Schedule "B," providing shore facilities permit. If
the Provided Vessel does not maintain the warranted discharge rate or pressure,
the time used discharging in excess of allowed time will not count as used
laytime, or as demurrage if the Provided Vessel is on demurrage provided the
Provided Vessel's failure to comply with the foregoing warranty was not caused
by factors onshore beyond the control of the Provided Vessel.
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ARTICLE 10 - FREIGHT AND TAXES
X. Xxxx or its authorized representative will furnish Owner, free of cost,
copies of Loading Certificates. Freight will be paid on intake
quantity, as determined in Article 12.
B. Freight will be earned and payable to Owner under the terms of this
Agreement at the rate specified in Schedule A for specific routes and
movements, without discount, when Cargo is loaded based on the quantity
loaded as determined in Article 12 at the loading location as shown by
the Provided Vessel's gauges at load port adjusted by the Provided
Vessel's experience factor for the previous five independently
inspected loadings (VEF) which determination may be verified by an
Independent Certified Petroleum Inspector at Hess' option and expense.
In the absence of such Provided Vessel's gauge information, the
relevant shore tank gauges as recorded by the associated facility will
be used. If shore tank gauges are unavailable, freight will be payable
based on an Independent Certified Petroleum Inspector's Report of such
quantity.
C. Moves not specified in Schedule A will be determined with reference to
the rates and terms as set out in Schedules A and B.
D. Unless otherwise specified and to the extent not prohibited by law,
dues, taxes and other charges upon the Provided Vessel (excluding those
assessed on the quantity of Cargo loaded or discharged or on the
freight) will be paid by Owner and dues, taxes and other charges on the
Cargo will be paid by Hess. Hess will be responsible for any charges
for the use of any place(s) arranged by Hess solely for the purpose of
loading or discharging cargo. However, Owner will be responsible for
charges for any such place(s) when used solely for purposes of the
Provided Vessel, such as, but not limited to, awaiting Owner's orders,
tank cleaning, repairs, before, during or after loading or discharging.
If the parties enter into a Use Agreement for Xxxx'x Brooklyn, New
York, facility, Owner's tugs and/or barges (without gas bottoms) will
be able to lay up at Pier 2.
E. The rates stipulated in Schedules A and B will be fixed for the first
Contract Year, with an escalation of [Confidential material omitted and
filed separately with the Commission]% in each of the second through
sixth Contract Years, to be applied to the then current rates per
Schedules A and B.
F. If the operating costs of the Provided Vessels increase or decrease due
to the imposition of new taxes or the increase or decrease in existing
taxes and fees (exclusive of income taxes); or due to changes in the
rules and regulations for the xxxxxxx and operation of the tow; then
the affected party will have the right to a corresponding increase or
decrease in Schedule A rates which will directly reflect such increased
or decreased costs. The affected party will present its request to the
other party in writing together with a detailed line-by-line accounting
of its operating costs, if applicable, together with supporting
documentation for the new or increased or decreased taxes, fees and/or
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operating costs and other such documentation as the other party may
reasonably request. Hess will have the right to an independent audit of
the books and accounts of Owner relating to the expense of Owner to
which an increase in Schedule A and B rates is sought. If the Parties
agree, the adjustment of Schedule A and B rates will become effective
on an agreed date. If the parties cannot agree, the matter may be
resolved as set forth in Article 41.
G. Dead Freight shall be payable by Hess on the same terms and conditions
as though actually transported.
ARTICLE 11 - FUEL PRICE
Freight rates per barrel as specified in Article 10 are based upon a fuel price
of $[Confidential material omitted and filed separately with the Commission] per
gallon. The rates will be increased or decreased weekly based on the previous
week ending's posting for Mobil Marine Diesel dockside fuel prices at IMTT
Bayonne. There will be no adjustment to the per barrel freight rates in Article
10 if the above-referenced price is between $[Confidential material omitted and
filed separately with the Commission] and $[Confidential material omitted and
filed separately with the Commission] per gallon. Above $[Confidential material
omitted and filed separately with the Commission] per gallon, for every
$[Confidential material omitted and filed separately with the Commission] per
gallon (or part thereof) increase in the contract fuel price, there will be a
[Confidential material omitted and filed separately with the Commission]%
increase in the per barrel freight rate. Below $[Confidential material omitted
and filed separately with the Commission] per gallon, for every $[Confidential
material omitted and filed separately with the Commission] per gallon decrease
in the contract fuel price (or part thereof), there will be a [Confidential
material omitted and filed separately with the Commission]% decrease in the per
barrel freight rate. In connection with transportation under this Agreement on
third-party vessels chartered by Owner for transportation services below the
monthly maximum (or the dirty barrel maximum, as applicable), Owner shall be
entitled to pass through to Hess fuel charges from such third party vessels in
excess of $[Confidential material omitted and filed separately with the
Commission] per gallon for the first [Confidential material omitted and filed
separately with the Commission] barrels so moved each month.
ARTICLE 12 - QUANTITY DETERMINATION
In the event that shore tank figures are used as the basis for quantity
determination, the quantity loaded and discharged will be determined by properly
calibrated meters or, if none, by manual gauging of shore tanks before and after
delivery. Shore tanks will not be gauged for custody transfer when the floating
roof is in the critical zone. If a shore tank becomes active after the opening
gauge and prior to the closing gauges, thereby necessitating measurement
adjustments, the volume delivered will be based on the most accurate
measurements available as determined by the inspector in consultation with
receiving facility personnel. These measurements will recognize receiving tank
gauges, other tank or custody transfer meters or volume measurements of the
Provided Vessel before and after Cargo transfer adjusted by VEF. All such
Provided Vessels' gauges, cargo temperatures and samples will be obtained
manually through open hatches where the practice is not prohibited by the
Terminal or local, state or federal regulations. The quantity delivered will be
reported in barrels (42 U.S. gallons of 231 cubic inches) corrected to 60
degrees Fahrenheit in accordance with the American Petroleum Institute ("API")
Manual of Petroleum Measurement Standards or similar standards.
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A. Delivery by Shore Tank to Provided Vessel:
Free water as determined by water cuts of the shore tank will be
deducted from the total observed volume in the shore tank prior to
applying temperature correction factors.
B. Delivery by Provided Vessel to Shore Tank:
Total volume received by shore tank corrected to 60 degrees Fahrenheit
will be reduced by the amount of free water delivered by the Provided
Vessel as determined from water cuts of each Provided Vessel tank.
C. Delivery by Ship to Provided Vessel:
Total volume received by the Provided Vessel based on the Provided
Vessel's gauges, adjusted for VEF, corrected to 60 degrees Fahrenheit,
will be reduced by the amount of free water on the barge prior to
loading and as determined by an independent public xxxxxx.
All metering, meter proving, gauging, sampling, temperature measurement,
analysis and calculation procedures will be in accordance with the latest
applicable chapters of the API Manual of Petroleum Measurements Standards or
similar standard in effect at the designated receiving facility.
Each party, at its expense, may have a representative present to witness the
measurements and tests required in this Agreement.
ARTICLE 13 - NOMINATION AND ETA
A. Advance Scheduling Information:
Each week, Hess will provide to Owner a nonbinding schedule of expected
barge movement needs for the following week.
B. Nomination Procedure:
Hess will order transportation by giving Owner notice (Nomination
Order) specifying the following:
1. [Confidential material omitted and filed separately with the
Commission], Hess will advise preliminary loading and
discharging locations and approximate quantity and grade of
Cargo to be loaded.
2. [Confidential material omitted and filed separately with the
Commission] hours prior to loading, Hess will fix a 24-hour
window loading range, with the expected time of loading, with
firm advice on
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loading/discharging locations and approximate quantity and
grade of Cargo to be loaded.
3. [Confidential material omitted and filed separately with the
Commission] before the beginning of the window loading range,
Hess will designate time, berth and final loading orders and
approximate quantity and grade of Cargo to be loaded.
4. At any time, Hess may request transportation outside of the
nominating procedure. Owner will use its reasonable commercial
efforts to provide this transportation, but failure to meet
nominating window for this transportation will not count
against Owner under Article 47A or B, will not constitute a
breach of this Agreement and the Cargo to be transported will
not be included in the calculation of the minimum annual
volume requirements unless and until the Cargo is transported
by Owner.
Within twenty-four hours of receipt of the Nomination Order, Owner will
identify to Hess the Provided Vessel(s) designated to be provided and
their last three (3) cargoes.
Owner may, at its option at any time prior to loading, substitute
another vessel for the previously designated Provided Vessel subject to
the acceptance of such substitute vessel by Hess.
C. ETA Clause:
The Owner will notify the Terminal of the arrival time of each vessel
nominated as a Provided Vessel not less than once during each
[Confidential material omitted and filed separately with the
Commission] period commencing concurrently when NOR is tendered at the
final port(s) of call on the previous voyage but not more than
[Confidential material omitted and filed separately with the
Commission] prior to the estimated time of arrival ("ETA"). The Owner
will confirm or amend the ETA approximately [Confidential material
omitted and filed separately with the Commission] prior to the arrival
time of the Provided Vessel designated to be provided. The Owner will
notify the Terminal no less than [Confidential material omitted and
filed separately with the Commission] before such Provided Vessel's
arrival.
D. Voyage Cancellation
1. If Hess cancels a voyage due to failure on the part of Owner
to provide the Provided Vessel designated to be provided at
the time agreed upon in the Nomination Order, Hess will not be
obligated to pay any cancellation fee or demurrage to Owner.
2. If Hess cancels a voyage prior to [Confidential material
omitted and filed separately with the Commission] prior to the
Provided Vessel designated to be provided tendering its
NOR/Notice of Arrival ("NOA"), Hess will not be obligated to
pay any cancellation fee to Owner.
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3. If Hess cancels a voyage within the [Confidential material
omitted and filed separately with the Commission] and
[Confidential material omitted and filed separately with the
Commission] period of Owner's nominated date and time of
loading, Hess will be obligated to pay a cancellation fee to
Owner in an amount of [Confidential material omitted and filed
separately with the Commission] day of [Confidential material
omitted and filed separately with the Commission] demurrage
for the nominated vessel at the demurrage rate specified in
Schedule B of this Agreement.
4. If Hess cancels a voyage within the [Confidential material
omitted and filed separately with the Commission] period of
Owner's nominated date and time of loading, Hess will be
obligated to pay a cancellation fee to Owner in an amount of
[Confidential material omitted and filed separately with the
Commission] demurrage for the nominated vessel at the
demurrage rate specified in Schedule B of this Agreement.
5. If the nominated vessel has not given an NOR or NOA, as
applicable, to load or if the nominated vessel is not suitable
for loading by the designated time, Hess will have the right
to cancel the voyage. Otherwise, the Nomination Order will
remain in effect.
ARTICLE 14 - NOTICE
A. The Terminal may be notified by radio, letter, telephone,
telecopy/rapifax or electronic mail of the ETA of each Provided Vessel
designated to be provided not [Confidential material omitted and filed
separately with the Commission] prior to such Provided Vessel's
expected arrival date. The Terminal will be further notified of
scheduled arrival [Confidential material omitted and filed separately
with the Commission] and [Confidential material omitted and filed
separately with the Commission] in advance of arrival. After the
[Confidential material omitted and filed separately with the
Commission] notice, the Terminal will be immediately notified when a
scheduled arrival time changes by more than [Confidential material
omitted and filed separately with the Commission]. Failure to adhere to
these ETA notices will result in laytime commencing when such Provided
Vessel is made All Fast at the designated berth. The Provided Vessel's
log or any other form mutually agreed to by Hess and Owner shall serve
as official record of NOA, detailing the date, time and name of Xxxx'x
representative who was notified.
B. The Provided Vessel will be required to promptly respond to any
Terminal preberthing questions.
C. No later than [Confidential material omitted and filed separately with
the Commission], the original ETA will be confirmed by Owner and Hess,
or if necessary, the nominated date, time and the Provided Vessel
designated to be provided may be amended with the concurrence of both
parties.
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ARTICLE 15 - VESSEL CLEARANCE
At the time the Terminal is first notified of the Provided Vessel designated to
be provided and its last three cargoes, the Terminal will have the right to
refuse acceptance of such Provided Vessel if in the facility's reasonable
opinion such Provided Vessel is unacceptable. The acceptance or rejection of the
nominated vessel by Hess will be confirmed to the Owner within [Confidential
material omitted and filed separately with the Commission] after the receipt of
Nomination Order. The acceptance of a Provided Vessel designated to be provided
will not constitute a continuing acceptance of such Provided Vessel for any
subsequent loading or discharge.
ARTICLE 16 - NOTICE OF READINESS (NOR)/NOTICE OF ARRIVAL (NOA)
After the Provided Vessel designated to be provided has arrived at the customary
anchorage or other place of waiting and is otherwise ready to receive or
discharge Cargo, including having received all clearances and required approvals
from local, state or federal agencies, the Owner or his agent will cause NOR/NOA
of the Provided Vessel designated to be provided to be tendered to the Terminal
by letter, telegraph, telex or telecopy, rapifax, wireless, radio telephone or
telephone. The notice will not be given until after the Provided Vessel
designated to be provided has received all port clearances. The Terminal will
attempt to berth the Provided Vessel designated to be provided on an equal basis
with all other vessels arriving at the port to load or discharge in order of
rotation determined by receipt of NOR by the Terminal. The NOR/NOA will not
constitute an agreement to alter the nominated or scheduled time of the Provided
Vessel designated to be provided.
ARTICLE 17 - LAYTIME
A. As detailed below, total laytime will consist of laytime allowed to
provide berth (as set forth in Article 17B1 below) and to prepare for
loading or unloading, plus the time allowed for loading or unloading,
day or night, Saturdays, Sundays and holidays not excepted.
B. Commencement Of Laytime
1. Laytime for Provided Vessels designated to be provided
tendering NOR within the nominated/scheduled time will
commence after receipt of NOR or upon such Provided Vessel
being All Fast to the berth, whichever occurs first.
2. If a Provided Vessel arrives before the latest accepted
scheduled time, used laytime will not commence until the
scheduled time, unless the Terminal elects to accept the
Provided Vessel earlier, in which case used laytime will begin
after the Provided Vessel has been made All Fast.
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3. If the Provided Vessel arrives after the original scheduled
time or agreed upon rescheduled time, laytime will commence
after the Provided Vessel is secured to the dock and been made
All Fast. Further, the Terminal may discontinue
loading/discharging and order the Provided Vessel out of berth
prior to completion of loading/discharging, without liability,
so as to meet the Terminal's obligations to accommodate
another vessel; provided that such Provided Vessel shall be
entitled on a first priority basis to the next available
berth. All costs and expenses for such shifting Provided
Vessel in and out of berth will be for Xxxx'x account. At its
election, Hess may order the Provided Vessel to depart the
Terminal where it is taking on barrels with less than the
originally nominated quantity of barrels for delivery, in
which event Hess shall remain responsible for payment of the
applicable Dead Freight. Further, Hess may order the Provided
Vessel to depart the Terminal where it is deliverying barrels
with a quantity of barrels remaining on board that it was
scheduled to deliver at such Terminal, in which event the
further transportation of such barrels remaining on board
other than for transportation to a berth for loading purposes
shall be subject to freight charges on the same terms and
conditions as any other barrels transported hereunder.
C. The amount of laytime to load or discharge from Provided Vessels will
be as specified in Schedule B.
D. When discharging, the Provided Vessel will maintain:
1. A pressure of [Confidential material omitted and filed
separately with the Commission] psi at the Provided Vessel's
rail, provided the Terminal is capable of receiving at that
pressure; or
2. A rate sufficient to allow the Provided Vessel to discharge
completely within the allowed laytime per Schedule "B" less
two hours, assuming the Terminal is capable of receiving at
such rate.
E. Time consumed due to any of the following will not count as used
laytime:
1. Any delay in the Provided Vessel reaching or departing the
berth (including weather delays) caused by any reason or
condition not reasonably within the Terminal's control.
2. Any delay, unless ordered by a regulatory authority, on an
inward passage including, but not limited to, awaiting
daylight, tide, tugs or pilot, time used on lightering
operations, and moving from an anchorage or other waiting
place, until the Provided Vessel is All Fast.
2. Any delay due to the Provided Vessel's condition or breakdown,
or other causes attributable to the Provided Vessel, or
failure to maintain agreed pumping rates or discharge
pressure, or inability of the Provided Vessel's facilities to
load or discharge Cargo within the allowed laytime.
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3. Any delay due to prohibition of loading or discharging at any
time by Owner or operator of the Provided Vessel or by the
port authorities unless the prohibition is caused by the
Terminal's failure to comply with applicable laws and
regulations.
4. Any delay due to bunkering or provisioning of the Provided
Vessel.
5. Any delay due to discharging or shifting of slops, ballast or
contaminated Cargo of the Provided Vessel or for any other
purpose of the Provided Vessel.
6. Any delay due to the Provided Vessel's incompatibility with
the configuration of the berthing, or other port facilities,
including time consumed in making up connections to remedy any
incompatibility.
7. Any delay due to pollution or threat thereof caused by any
defect in the Provided Vessel or any act or omission to act by
the Master or crew of the Provided Vessel.
8. Any delay due to the Provided Vessel's violation of the
operating or safety regulations of the Terminal, noncompliance
with federal or state laws or U.S. Coast Guard or other
applicable regulations, or failure to obtain or maintain
required certification.
9. Any delay caused by strike, lockout, stoppage or restraint of
labor of Master, Officers or crew of the Provided Vessel or of
tugboats or pilots.
10. Any delay due to the Provided Vessel not being capable of
discharging the entire Cargo within the allotted laytime or
maintaining the applicable discharge rate while maintaining
[Confidential material omitted and filed separately with the
Commission] psi at the ship's rail provided shore facilities
are capable of receiving at that pressure. Time used for
pumping beyond the allowed laytime will not count as used
laytime unless the Provided Vessel has maintained
[Confidential material omitted and filed separately with the
Commission] psi at ship's rail or maintained the applicable
discharge rate (except during stripping operations) as
specified in Schedule B of this Agreement.
11. Any delay due to the Provided Vessel awaiting U.S. Coast
Guard, Customs and/or Immigration clearance(s) and pratique,
if applicable.
F. Used laytime will cease upon disconnection of hoses after all Cargo has
been loaded or discharged and the Provided Vessel has been released by
the Terminal. The Provided Vessel will vacate its berth expeditiously
consistent with safe operating practices (unless permission to remain
is expressly granted by the Terminal or refinery). When the Provided
Vessel has completed loading or discharging, time awaiting arrival of
towboat or any other delay of departure of the Provided Vessel in
excess of [Confidential material omitted and filed separately with the
Commission] following notice of the request
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therefor, unless caused by fault or negligence of Hess, will be for
Owner's account. Any delays caused by Owner or the Provided Vessel in
completing, loading or discharging and expeditiously (not in excess of
[Confidential material omitted and filed separately with the
Commission] following notice of the request therefor) vacating the
berth which results in Hess incurring third party demurrage and
additional expenses will be for Owner's account. Hess will notify Owner
when it becomes aware that demurrage may be incurred.
G. Laytime Reversibility. The total laytime will be the sum of the laytime
allowed at loading Terminal and discharging Terminal.
ARTICLE 18 - SHORE RELEASE CLAUSE
Time spent awaiting the release of the Provided Vessel by shore authorities or
Cargo inspector after disconnection of hoses will count as used laytime or
demurrage if the Provided Vessel is on demurrage.
ARTICLE 19 - DEMURRAGE
A. Demurrage, if any, will be at the agreed rates provided in Schedule B
of this Agreement for the Provided Vessel and will be invoiced on a per
voyage basis independent of freight earned. Any dispute relative to
demurrage as invoiced will not delay the payment of freight earned as
invoiced under this Agreement.
X. Xxxx will pay demurrage per running hour and pro rata for a part
thereof, at the applicable rate specified in Schedule B of this
Agreement for all time that used laytime exceeds the allowed laytime.
If, however, demurrage is incurred at ports of loading or discharge by
reason of fire, explosion, weather, strike, lockout, stoppage, or
restraint of labor in or about any Terminal or refinery, owned or
controlled supplier or receiver of the Cargo, the rate of demurrage
will be reduced [Confidential material omitted and filed separately
with the Commission] of the amount per running hour or pro rata for
part of any hour for demurrage so incurred. Hess will not be liable for
demurrage for delay caused by strike, lockout, stoppage or restraint of
labor of the Master, officers and crew of the Provided Vessel or pilots
or any other act or condition within Owner's or the Provided Vessel's
control.
C. If loading or discharging is terminated prematurely as the result of a
force majeure situation used laytime will cease at the time the
incident causing the termination of the operation commences.
D. Demurrage claims must be accompanied by such supporting data as may be
reasonably requested; e.g. copies of the Provided Vessel's port log
signed by the Master, copy of any pump readings, copy of the charter
party agreement (if applicable), NOR, laytime statement, copy of
carrier's paid invoice (if applicable), or any other agreed form, etc.
Neither party subject to this Agreement will be obligated to pay
demurrage in excess of the total demurrage amount actually
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incurred. All claims must be made within [Confidential material omitted
and filed separately with the Commission] from the date of the
completion of loading or discharge, as applicable, of the Cargo in
question. Demurrage claims not received within the [Confidential
material omitted and filed separately with the Commission] time frame
will be deemed to have been waived.
E. Tug demurrage is not applicable in [Confidential material omitted and
filed separately with the Commission]. [Confidential material omitted
and filed separately with the Commission] is defined as bounded by the
[Confidential material omitted and filed separately with the
Commission] on the north, [Confidential material omitted and filed
separately with the Commission] on the east and [Confidential material
omitted and filed separately with the Commission] on the south.
F. Demurrage charges will be based upon the size of the Provided Vessel as
set forth in Schedule B.
ARTICLE 20 - SPECIFIC PORTS AND PLACES
Subject to any changes in U.S. law that would otherwise permit Owner to transit
through Cuba, Owner represents and warrants for each voyage, that the Provided
Vessel has not called on Cuba in the previous 180 days.
ARTICLE 21 - STATEMENT OF FACTS
Owner will instruct any port agent to release port information to Hess on
request and to forward to Hess copies of the Statement of Facts and NOR as soon
as possible after the Provided Vessel has completed loading or discharge at the
port. No port agents will be required at Hess-owned or operated Terminals.
ARTICLE 22 - CARGO RETENTION
A. IN-TRANSIT LOSS: Owner will not be liable for: (i) nonpumpable cargo
not caused by the fault or neglect of Owner, the Provided Vessel, its
Masters, Officers, or Crew and (ii) in-transit losses of less than
[Confidential material omitted and filed separately with the
Commission]% on clean cargoes and [Confidential material omitted and
filed separately with the Commission]% on dirty cargoes carried, not
caused by the fault or neglect of Owner, the Provided Vessel, its
Masters, Officers, or Crew. The determination of any losses that may
occur will be based on the agreed barge ullage or innage
measurement/gauging at the loading or discharge ports as they may
apply.
B. If any Cargo remains on board any Provided Vessel upon completion of
discharge, Hess will have the right to deduct from freight payable to
Owner or to invoice Owner separately an amount according to the FOB
port loading value of the Cargo, plus freight, provided an independent
surveyor requested by Hess and appointed by Hess, subject to Owner's
reasonable approval, certifies that all such Cargo is liquid and
free-flowing and can be reached by the Provided Vessel's pumps and
pipes. If such later certification is the case, the time and cost of
the survey will be for Owner's account. In all other cases, such time
and
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expense will be for Xxxx'x account. Prior to the inspection for Cargo
remaining on board (ROB), all pipeline and manifold valves of the
Provided Vessel will be opened in a manner that allows compatible
products to collect in single segregated compartments. Owner will not
be responsible for any loss or damage arising from inherent defect,
quality or vice of the Cargo, nor will Owner be responsible for normal
and ordinary variation in measured quantity of Cargo up to
[Confidential material omitted and filed separately with the
Commission]% on clean cargoes and [Confidential material omitted and
filed separately with the Commission]% on dirty cargoes.
ARTICLE 23 - REPRESENTATIVE CLAUSE
Owner will permit Hess representatives aboard any Provided Vessel at loading and
discharging port(s) to inspect the Provided Vessel or monitor cargo operations.
However, the Master and officers of the Provided Vessel will at all times be
responsible for cargo operations.
ARTICLE 24 - QUARANTINE/FUMIGATION
Time lost at any port due to quarantine will not count against laytime or for
demurrage unless such quarantine was in force at the time when the port was
nominated by Hess.
ARTICLE 25 - TANK CLEANING
Owners will exercise due diligence to ensure that the Provided Vessel presents
for loading with its tanks, pumps and pipelines properly cleaned (subject to the
last sentence of this Article 25) consistent with industry practice to the
satisfaction of any inspector appointed by or on behalf of Hess and ready for
loading the Cargo. Any time used to clean tanks, pumps and pipelines to an
independent inspector's satisfaction will not count as laytime or, if the
Provided Vessel is on demurrage, as demurrage and will, together with any costs
incurred in the foregoing operations, be for Owner's account. If Hess requires a
barge to be changed from dirty to clean service or from clean to dirty service,
the cost of cleaning will be for Xxxx'x account. Hess will continue to permit
the loading of No. 2 Oil and No. 2 Diesel over gas bottoms to the extent
permitted by law for so long as Hess determines in its reasonable judgment that
such practice does not result in an unsafe or unhealthy work environment;
provided further, that if Hess makes a determination that such practice can not
continue for such reasons, Owner shall have the right to recover additional
costs related to such change in practice to the extent permitted under the
procedures set forth in Article 10F.
ARTICLE 26 - INERT GAS SYSTEM
All Provided Vessels that are equipped with an inert gas system will keep the
system operable at all times during berthing, while at berth and during
unberthing. The Master
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of such a Provided Vessel will provide the Terminal with a signed declaration
that the Provided Vessel's inert gas system is operational and that the cargo
and slop tanks are inerted. The Master of the Provided Vessel will immediately
notify the Terminal if the inert gas system becomes inoperable or if such a
Provided Vessel is unable to maintain a positive pressure and/or oxygen content
at or below [Confidential material omitted and filed separately with the
Commission] percent by volume in the cargo and slop tanks. In addition, such a
Provided Vessel will comply with any Terminal guidelines on inert gas systems.
None of the Provided Vessels currently has inert gas systems.
ARTICLE 27 - CLOSED CARGO OPERATIONS
Owners undertake that any Provided Vessel so fitted for closed cargo operations
complies with, and will be operated for the duration of this Agreement in
accordance with the recommendations regarding closed loading and closed
discharging operations as set out in the 1996 Edition of ISGOTT as amended.
If the Provided Vessel has closed sampling equipment, the equipment will be
used, when appropriate, during this Agreement.
ARTICLE 28 - WHARF DAMAGE
Owner assumes full responsibility for any damage sustained by wharves, berths,
or docks owned or maintained by Terminal arising out of the negligent or
improper operation of the Provided Vessel, or of any other waterborne craft
owned or operated by Owner or being operated by subcontractors of Owner. Owner
will defend and indemnify Hess and the Terminal for any claims, losses, costs or
expense, incurred by or asserted against Hess or the Terminal for all wharf,
berth or dock damages to the extent caused by the negligent or improper
operation of the Provided Vessel or by such Provided Vessel's unseaworthiness.
ARTICLE 29 - AGENCY
Owner will appoint, instruct and pay for any agents of a Provided Vessel at all
loading and discharging ports and for custom house and other business relating
to any such Provided Vessel.
ARTICLE 30 - ASSIST TUGS
All pilotage and assist tugs, except those assist tugs required by any Terminal,
will be for Owner's account. Hess does not require assist tugs at its
facilities.
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ARTICLE 31 - INDEMNIFICATION
Hess will have no obligation or liability for the control, maintenance and
operation of the Provided Vessels in the performance of this Agreement; Owner
will defend and indemnify (collectively referred to as "Indemnity") Hess, its
partners, managers, officers, employees and agents against all suits, actions,
claims, expenses, demands and damages, losses or other liabilities (including
reasonable attorney's fees and court costs) (collectively referred to as
"Liability"), arising from, based upon or relating to such operation,
maintenance and control of the Provided Vessels and from Owner's nonperformance
or breach of its obligations hereunder; provided, however, the Indemnity will
not be provided to the extent the Liability arises from the negligence or
willful misconduct of Hess. Owner's indemnification obligations are subject to
the limitations set forth in the first sentence of the final paragraph of
Article 36B.
Hess will not be responsible for any admixture and for any leakage,
contamination or deterioration incurred on a Provided Vessel as a result of:
A. A material or structural defect in the Provided Vessel at the inception
of or during the voyage.
B. Error or fault of the Master, mariners or other servants of Owner
during loading, care, and/or discharge of the Cargo.
ARTICLE 32 - INSURANCE
Owner will maintain, at its sole cost, and will require any subcharters it may
engage to maintain, at all times while performing under this Agreement, in
addition to other customary insurance, the insurance coverage set forth below
with companies satisfactory to Hess with full policy limits applying, but not
less than as required herein. A certificate evidencing these coverages providing
a 30-day written notice of cancellation will be delivered to Hess prior to
commencement of this Agreement.
X. Xxxx and Machinery and War Risk Insurance in an amount of not less than
the market value of each Provided Vessel as determined by an agreed
upon broker, owned or chartered and used in performing work or
rendering services hereunder. Such insurance will be endorsed to
include navigation limits sufficient to cover all locations and
collision and towers liability with the sistership clause unamended.
B. Owners Protection and Indemnity Insurance as defined and available in
the current Rules of the International Group of P&I Clubs with limits
of not less than $100,000,000.
C. Owners Pollution Liability Insurance in the amount of not less than
$1,000,000,000 placed with a P&I Club which is a member of the
International Group of P&I Clubs.
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ARTICLE 33 - POLLUTION PREVENTION AND RESPONSIBILITY
A. When an escape or discharge of product occurs from the Terminal, the
Terminal will take whatever measures are reasonably necessary to clean
up the spill or discharge and to mitigate any pollution damage. If the
Terminal does not take adequate measures to clean up and mitigate
damage, then the Provided Vessel may, at its option and upon written
notice to Terminal, undertake such measures as are reasonable and
necessary under the circumstances; and all such reasonably necessary
measures so taken will be for the account of Terminal unless, as
provided in paragraph B hereof, the spill or discharge is the fault of
the Provided Vessel or the Provided Vessel's personnel. The Terminal
will comply with and cooperate with all authorized Agencies involved in
the remediation of any pollution incident.
B. If an escape or discharge of product occurs from the Provided Vessel
and causes or threatens to cause pollution damage, the Provided Vessel
will promptly take whatever measures are necessary to prevent or
mitigate such damage. The Provided Vessel hereby authorizes the
Terminal, or its nominee at the Terminal's option, upon notice to the
Provided Vessel, to undertake such measures as are reasonably necessary
to prevent or mitigate the pollution damage. The Provided Vessel will
comply with and cooperate with all authorized governmental agencies
involved in the remediation of any pollution incident. The Terminal or
its nominee will keep the Provided Vessel advised of the nature and
results of any such measures taken, and if time permits, the nature of
the measures intended to be taken. Any of the above measures will be at
the Provided Vessel's expense with the right to deduct the costs
thereof from moneys as set forth in this Agreement (except to the
extent that such escape or discharge was caused by the Terminal),
provided that if the Provided Vessel reasonably determines such
measures should be discontinued, the Provided Vessel will so notify the
Terminal or its nominee and thereafter the Terminal or its nominee will
have no right to continue such measures at the Provided Vessel's
authority or expense. The preceding sentence will not affect any
liability of the Provided Vessel to the Terminal or third parties,
including but not limited to governments.
C. The Provided Vessel will comply with the U.S. Federal Water Pollution
Control Act, as amended, 33 U.S.C. Sec 1321 et seq., and will have
secured and will carry aboard the Provided Vessel a current U.S. Coast
Guard Certificate of Financial Responsibility (Water Pollution).
D. During the term of this Agreement, Owner warrants that Owner will
comply with all financial capability, responsibility, security or like
laws, regulations and other requirements with respect to oil, petroleum
products, or other pollution damage applicable to the Provided Vessel
emerging, leaving, remaining at or passing through any ports or places
or waters in the performance of the Agreement. Owner at its sole risk
and expense will make all arrangements by bond,
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insurance or otherwise and obtain all such certificates or other
documentary evidence and take all such other action, as may be
necessary, to satisfy such laws, regulations and other requirements.
Any delay resulting to the Provided Vessel will not count as used
laytime or for demurrage and will be at the risk and for the account of
the Owner.
ARTICLE 34 - ENVIRONMENTAL COMPLIANCE
Each Provided Vessel will comply with all applicable local, state, and federal
environmental laws, ordinances and regulations while berthed at the Terminal. If
a Provided Vessel fails to comply with such laws, ordinances and regulations,
the Provided Vessel will be required to leave the Terminal or cease operations.
Any Provided Vessel delay time caused by the Provided Vessel's failure to meet
such laws, ordinances and regulations will not count as used laytime, or
demurrage if the Provided Vessel is on demurrage.
ARTICLE 35 - U.S. COAST GUARD COMPLIANCE
Each Provided Vessel will comply with all applicable U.S. Coast Guard
regulations in effect as of the date of such Provided Vessel's berth: Any delay
resulting from a Provided Vessel's non-compliance will not count as used
laytime, or demurrage if the Provided Vessel is on demurrage.
ARTICLE 36 - BREACH
A. In addition to any breach provisions elsewhere in this Agreement, the
occurrence of any of the following events is a breach of this
Agreement:
1. Failure of Owner to proceed with or complete its services as
provided in this Agreement.
2. Failure of Hess to proceed with or complete its commitments as
provided in this Agreement.
3. Either party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization, rehabilitation
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law or shall make a
general assignment for the benefit of creditors, or shall take
any corporate action to authorize any of the foregoing, or an
involuntary case or proceeding shall be commenced against
either party seeking such relief.
4. [Confidential material omitted and filed separately with the
Commission]
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5. Owner fails to maintain the Provided Vessels that are owned by
Owner in operating condition or to make available supplies or
personnel that are reasonably required for Owner's performance
under this Agreement.
6. Breach of any warranty or representation of this Agreement
that has not been cured within a reasonable amount of time.
B. Upon the occurrence of any breach, if the breaching party has not cured
such breach within thirty days following receipt of notice of such
breach from the nonbreaching party and provided the nonbreaching party
is not itself in material breach and the notice is given prior to the
earlier of a cure of the breach or 10 days after such nonbreaching
party becomes aware of such breach, the nonbreaching party, in addition
to all remedies available to the nonbreaching party at law or equity:
1. May terminate this Agreement immediately by giving written
notice of termination to the other party, if the breach is
material; or
2. Shall take such action that is reasonably necessary to remedy
the breach or mitigate damages, including hiring another
transporter to perform any necessary services, subject to
having used good faith effort to obtain such services at
commercially reasonable rates.
In the event of a material breach by Owner which has not been cured, Hess must,
within thirty (30) days following the end of the cure period with respect to
such breach either terminate this Agreement or be deemed to have waived the
breach; provided, however, that termination for a breach other than as described
in the Article 36A4 or 36A5 shall not limit Xxxx'x rights to seek damages as
provided below.
If following a material breach by Owner, Hess, under the terms of this
Agreement, has elected to terminate (other than for a breach under Articles 36A4
or 36A5), or Hess has been deemed to have waived the breach but not terminated
the Agreement or in the event of a breach by Owner other than a material breach,
the maximum amount that may be recovered by Hess is an aggregate amount equal to
the additional costs which Hess incurs as a result of any action taken to remedy
the breach, including reimbursing Hess for any rates and charges of the
substitute transporter that are greater than those of Owner pursuant to this
Agreement, for a period of [Confidential material omitted and filed separately
with the Commission] days, subject to Hess having used good faith efforts to
obtain such substitute transportation at commercially reasonable rates.
With respect to the remedies available under this Agreement, including any
indemnification by Owner, the breaching party shall not be responsible for any
resulting indirect, incidental, consequential, exemplary, punitive or special
damages, including, without limitation, loss of profits or revenues, loss of use
of facilities, cost of capital, cost of substitute service except as otherwise
provided in this Agreement or downtime, whether or not the breaching party was
made aware of such damages or the possibility
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thereof. Further, with respect to breaches described in Articles 36A4 and 36A5,
Xxxx'x sole remedy shall be to terminate this Agreement.
ARTICLE 37 - COGSA AND TITLE TO CARGO:
Except as provided in Article 5. (Seaworthiness) herein, the Carriage of Goods
By Sea Act ("COGSA"), 46 U.S.C. Sections 1301-1315, as applied to common
carriage, is incorporated in this Agreement by reference. Cargo transported will
be in the Owner's care and custody from the time it passes into the Provided
Vessel's permanent manifold connection (or Owner furnished reducer or hose)
during loading, and until the time it passes out of the Provided Vessel's
permanent manifold connection (or Owner furnished reducer or hose) during
discharge.
ARTICLE 38 - FORCE MAJEURE
Neither any Provided Vessel, her Master, Owner, nor Hess, will be responsible
for any loss or damage to the Provided Vessel or cargo or for any delay to or
failure to discharge or deliver the Cargo or for any failure in performing
hereunder (except as provided in Article 33) arising or resulting from: act of
God; act of war; perils of the seas; act of public enemies, pirates or any
assailing thieves; arrest or restraint of princes, rulers or people, or seizure
under legal process provided bond is promptly furnished to release the Provided
Vessel or Cargo; subject to Article 46, strike or lockout or stoppage or
restraint of labor, either partial or general; riot or civil commotion or
similar want or occurrence beyond the control of the relevant party. Provided
Vessels will have liberty to sail with or without pilots, to tow or to be towed,
to go to the assistance of vessels in distress and to deviate for the purpose of
saving life or property or for landing any ill or injured person abroad.
ARTICLE 39 - SUBCHARTERING AND ASSIGNMENT
Hess may subcharter or assign this Agreement to any individual or company, but
Amerada Xxxx Corporation will always remain responsible for the fulfillment of
this Agreement. Owner may not assign this Agreement or Owner's obligations
hereunder without the written consent of Hess which will not be unreasonably
withheld provided that if Owner assigns this Agreement to an affiliate, Owner
shall remain responsible for the fulfillment of this Agreement.
ARTICLE 40 - APPLICABLE LAW
This agreement and all amendments, waivers and consents hereunder will be
governed by and construed in accordance with the internal laws of the state of
New York, without regard to conflict of laws principles.
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ARTICLE 41 - DISPUTE RESOLUTION
All unsettled disputes in amounts up to [Confidential material omitted and filed
separately with the Commission], excluding interest, attorney fees and court
costs, will be resolved through binding arbitration in Stamford, Connecticut in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association before a board of three persons, consisting of one arbitrator to be
appointed by Owner, one by Hess, and one by the two chosen. The decision of any
two of the three on any point will be final. The arbitrators may grant any
relief which they, or a majority of them, deem just and equitable and within the
scope of the agreement of the parties, including, specific performance. Awards
made under this clause may include costs including a reasonable allowance for
attorney's fees. Judgment upon the award may be entered in any court having
jurisdiction. A party ("claimant") having a claim in excess of [Confidential
material omitted and filed separately with the Commission], excluding interest,
attorney fees and court costs, may not cause binding arbitration without the
defending parties' consent but may elect to have the claim resolved through
litigation commenced in United States District Court in New York. If that Court
does not have jurisdiction, the litigation may be commenced in any U.S. state
court having jurisdiction.
ARTICLE 42 - DEMISE
Nothing herein contained will be construed as creating a demise of any of the
Provided Vessels to Hess.
ARTICLE 43 - INVOICING AND AUDIT
A. 1. Invoices for freight and other charges, except demurrage and ice
charges, will be payable net [Confidential material omitted and filed
separately with the Commission] business days after receipt, by wire
transfer, and demurrage and ice charges will be payable net
[Confidential material omitted and filed separately with the
Commission] days after receipt of invoice, with proper documentation,
by check or wire transfer.
2. Within 10 days after the end of each month, Owner shall provide Hess
with the information set forth on Exhibit I for the month most recently
ended. Hess will have 10 days to review such information and dispute,
in writing, any of the information as well as the rates charged by
Owner on any freight invoices. Owner and Hess will use their
commercially reasonable efforts to resolve any disputes within 30 days
of Hess' notice. Disputes not settled within such time period will be
subject to resolution under Article 41.
B. All sums that become due under this Agreement will be paid by Hess or
Owner, as the case may be, in accordance with the above after
submission of an itemized invoice to Hess or Owner, as the case may be.
If Hess or Owner, as the case may be, objects to any item contained in
any non-freight invoice, or to the sufficiency of the documents
submitted in support of any such item, Hess will provide Owner or Owner
will provide Hess, as the case may be, written
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explanation outlining disputed charges within 30 days of receipt of
invoice. Hess will pay Owner or Owner will pay Hess, as the case may
be, that portion of the invoice amount not in dispute, within the above
time. Any dispute not settled within 30 days will be subject to
resolution under Article 41.
ARTICLE 44 - DRUG AND ALCOHOL POLICY
Owner represents and warrants that it has a policy on drug and alcohol abuse
applicable to the Provided Vessels which meets or exceeds the standards
contained in the most current/revised edition of the Oil Companies International
Marine Forum Guidelines for the Control of Drugs and Alcohol Onboard Ship. Owner
further represents and warrants that its policy will remain in effect during the
term of this Agreement and that Owner will ensure compliance with the policy.
ARTICLE 45 - CLAIMS TIME XXX
Xxxx or Owner, as the case may be, will be discharged and released from all
liability for any claim for demurrage, deviation or detention which Hess or
Owner, as the case may be, may have under this Agreement unless a claim in
writing has been presented to Hess or Owner, as the case may be, together with
all supporting documentation, within forty-five (45) days of the completion of
discharge of the Cargo to which the claim applies.
ARTICLE 46 - LABOR AGREEMENT
[Confidential material omitted and filed separately with the Commission]
ARTICLE 47 - PERFORMANCE GUARANTIES
A. Nominated Orders. Owner warrants that, so long as this Agreement is in
effect, including during any cure periods, and subject to the
provisions governing monthly maximums set forth herein, a Provided
Vessel will arrive at the nominated loading port within the nominated
window. Failure to provide a Provided Vessel for the nominated time
will void the exclusivity of the Agreement for that move as follows:
1. Hess will have the right to secure a transporter on its own.
Provided Hess has used good faith efforts to obtain such
services at commercially reasonable rates, costs in excess of
the Schedule A rates will be reimbursed by Owner.
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B. Performance Test. Hess will have the right to terminate this Agreement
if Owner fails to perform within the nominated windows less than
[Confidential material omitted and filed separately with the
Commission]% of the nominations. Measurement of Owner's performance
under this section will not begin until ninety (90) days after the
commencement of this Agreement. Hess will review Owner's performance on
a quarterly basis. Any delays caused by Hess will not count against
Owner's performance.
C. Pollution Incidents. Any pollution incident aboard any Provided Vessels
as a result of Owner's actions or the condition of the Provided
Vessels, in excess of [Confidential material omitted and filed
separately with the Commission] over the initial term of this Agreement
or multiple incidents that total [Confidential material omitted and
filed separately with the Commission] or more will give Hess the option
to terminate the Agreement. If Hess does not give written notice of
termination of this Agreement to Owner within 30 days of its right to
terminate accruing, it will lose the right to terminate for any prior
incidents, and the accumulation of [Confidential material omitted and
filed separately with the Commission] for purposes of this provision
will reset to [Confidential material omitted and filed separately with
the Commission]. Any notice of termination will give Owner
[Confidential material omitted and filed separately with the
Commission] days' notice of termination.
D. Cargo Contaminations. If more than one (1) cargo contamination occurs
during any calendar quarter, as a result of Owner's actions or the
condition of the Provided Vessels, Hess will have the option, in
addition to recovering all costs associated with contaminations, to
count the contaminated volumes toward the minimums as provided in this
Agreement or terminate this Agreement.
E. Weather. Delays in reaching the nominated loading Terminal or arriving
at the discharge Terminal resulting from weather conditions that
prevent the safe movement of vessels in the affected area of the
northeastern United States or enroute to the discharge Terminal as
evidenced by the majority of tug and barge units in the affected area
of the northeastern United States remaining at berth or anchorage or by
direction of U.S. Coast Guard will not count against Owner's
performance obligations. Performance obligations in other areas of the
northeastern United States not then so affected by the weather will not
be subject to the preceding sentence.
ARTICLE 48 - MISCELLANEOUS
A. Entirety of Agreement. This Agreement, any exhibits, schedules or
attachments hereto and thereof supersede all prior agreements and
undertakings between the parties hereto relating to the subject matter
of this Agreement. No course of prior dealings between the parties or
their predecessors will be relevant to supplement or explain any terms
used herein.
B. Section Headings. The section and clause headings contained in this
Agreement are for reference purposes only and will not affect in any
way the meaning or interpretation of this Agreement.
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C. Severability. This Agreement is subject to all applicable federal and
state laws and nothing herein is intended to violate any such law. If
any clause or provisions of this Agreement is held to be invalid or
unenforceable by any court, the invalidity or unenforceability of such
clause or provisions will not affect the remaining provisions of this
Agreement and this Agreement will be construed and enforced as if such
invalid or unenforceable clause or provisions had not been contained in
this Agreement.
D. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all
of which together will constitute one instrument.
E. Independent Contractor. Owner is an independent contractor and has the
full power and authority to select the means, methods and manner of
performing the services herein set forth, including, subject to Article
39, having such work performed by other persons or business entities,
and is responsible to Hess only for the results contracted for.
F. Exceeding Maximums. Owner makes no representations or commitments in
this Agreement (except for the commitments set forth in Article IA2 and
IA3) with respect to third-party owned vessels used to transport
volumes for Hess in excess of the then current monthly maximum (or
dirty barrel maximum, as applicable) provided such third-party operator
has executed a master service agreement acceptable to Hess and Owner.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
LEEVAC MARINE, INC. AMERADA XXXX CORPORATION
By: /s/ XXXXXXXXX X. XXXXXXX By: /s/ X.X. XXXXXXXX
--------------------------- ---------------------------
Name: Xxxxxxxxx X. Xxxxxxx Name: X.X. Xxxxxxxx
------------------------- -------------------------
Its: CEO Its: Senior Vice President
-------------------------- --------------------------
Witness: /s/ XXXX X. XXXXXXXX Witness: /s/ ILLEGIBLE
---------------------- ----------------------
Date: May 31, 2001 Date: May 31, 2001
------------------------- -------------------------
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The undersigned hereby guarantees the obligations and performance of Owner under
this Agreement.
XXXXXXXX-LEEVAC MARINE
SERVICES, INC.
By: /s/ XXXXXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxxxxx X. Xxxxxxx
--------------------------
Its: CEO
---------------------------
Witness: /s/ Xxxxx X. Xxxx, Xx.
-----------------------
Date: May 31, 2001
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