Exhibit 10.11
[LETTERHEAD]
TO: ABLE OIL CO.
ATTN: XXX XXXXXXXXXX
CC: MIECO INC - LONG BEACH
MIECO INC - NEWARK
FROM: MIECO INC.
FAX NBR: 000-000-0000
CONTRACT NUMBER: 80896
DATE: MAY 19, 1998
WE ARE PLEASED TO CONFIRM A SALE AGREEMENT REACHED MAY 11, 1998 BETWEEN MIECO
INC,. HEREIN AFTER CALLED "SELLER" AND ABLE OIL CO., HEREINAFTER CALLED
"BUYER" UNDER THE FOLLOWING TERMS AND CONDITIONS. IN ANY FUTURE
CORRESPONDENCE CONCERNING THIS AGREEMENT, PLEASE REFER TO MIECO CONTRACT
NUMBER ABOVE.
SELLER: MIECO INC. (MIECO)
FOUR GREENSPOINT PLAZA
00000 XXXXXXXXXX XX, XXXXX 0000
XXXXXXX, XX 00000
BUYER: ABLE OIL CO.
000 XXXXX 00 XXXX
XXXXXXXX, XX 00000
PRODUCT:
NO. 2 HEATING OIL MEETING NYMEX GRADE SUMMER SPECIFICATIONS.
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QUANTITY:
APPROXIMATELY: 12,000 BARRELS ADJUSTED TO 60 DEGREES F.
LOCATION:
FOR ABLE OIL TERMINAL, ROCKAWAY NJ
DELIVERY TIMING: DURING MAY AND JUNE , 1998 AS MUTUALLY SCHEDULED.
SALES SCHEDULE: BUYER AGREES TO PURCHASE PRODUCT ACCORDING TO THE FOLLOWING
SCHEDULE.
MONTH BARRELS
------ -------
NOV '98 1,000
DEC '98 3,000
JAN '99 4,000
FEB '99 4,000
------
12,000
PRICE:
THE PURCHASE PRICE FOR DELIVERED BASIS BUYER'S TERMINALS LISTED IN THE
DELIVERY CLAUSE HEREIN SHALL BE SET WHEN BUYER NOTIFIES MIECO BY PHONE ON A
BUSINESS DAY DURING NORMAL NYMEX TRADING HOURS (9:50AM - 3:10PM) TO PURCHASE,
IN MINIMUM 1,000 BARREL INCREMENTS, THE DELIVERY MONTH NYMEX HEATING OIL
CONTRACT PRIOR TO ITS EXPIRATION WILL BE USED. THIS PRICE MINUS THE
DIFFERENTIAL OF USD .0200 PER GALLON SHALL BE THE ESTABLISHED PRICE FOR THIS
CONTRACT FOR ALL BARRELS DELIVERED IN ACCORDANCE WITH THE SCHEDULE BELOW.
BUYER HAS THE OPTION TO PURCHASE AND LIFT BARRELS PRIOR TO THE DELIVERY MONTH
LISTED BELOW, PROVIDED THAT THE QUANTITIES, AS BROKEN DOWN BELOW, ARE PRICED
BASED ON THE CORRESPONDING NYMEX DELIVERY MONTH LISTED BELOW, AND THAT THE
PRODUCT IS AVAILABLE.
PRICING/SALES SCHEDULE:
DELIVERY NYMEX CONTRACT FIXED
MONTH PRICING MONTH DIFF/$GAL QUANTITY (BBLS)
----- ------------- --------- ---------------
NOV '98 NOV '98 -.0200 1,000
DEC '98 DEC '98 -.0200 3,000
JAN '99 JAN '99 -.0200 4,000
FEB '99 FEB '99 -.0200 4,000
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BUYER HAS THE OPTION TO SET PRICES BEYOND THE CURRENT DELIVERY MONTH SUBJECT
TO THE MAXIMUM EXPOSURE HEREUNDER. IF, ON A MARK-TO-MARKET BASIS, SELLER'S
TOTAL EXPOSURE ON THE FORWARD-PRICED BARRELS PLUS ACCOUNTS RECEIVABLE EXCEEDS
THE CREDIT LIMIT BUYER SHALL, WITHIN TWO (2) BUSINESS DAYS OF XXXXX'S WRITTEN
REQUEST, EITHER PREPAY, OPEN AN IRREVOCABLE LETTER OF CREDIT ACCEPTABLE TO
SELLER OR DEPOSIT WITH MIECO SUCH COLLATERAL AS MIECO MAY REQUEST AS SECURITY
FOR THE PAYMENT OF AMOUNTS DUE OR THAT MAY BECOME DUE BY BUYER TO MIECO UNDER
THIS AGREEMENT.
BUYER IS REQUIRED TO PURCHASE AT LEAST THE MINIMUM MONTHLY QUANTITIES LISTED
ABOVE. THEREFORE, ANY BARRELS NOT PREVIOUSLY PRICED AND INVOICED WILL BE
PRICED ON THE SETTLEMENT PRICE ON THE LAST TRADING DAY AT THE EXPIRATION OF
THE RELEVANT DELIVERY MONTH CONTRACT ON THE NEW YORK MERCANTILE EXCHANGE
PLUS THE FIXED DIFFERENTIAL.
ROLLING OPTION:
UNPURCHASED BARRELS MAY BE ROLLED TO THE FOLLOWING MONTH. A TIME VALUE OF MONEY
CHARGE OF $.0045 PER GALLON PLUS THE GAIN OR LOSS ON THE NYMEX ROLL WILL BE
ADDED TO THE DIFFERENTIAL.
DELIVERY:
F.O.B. DELIVERED INTO BUYER'S STOCK INVENTORY AT ABLE OIL TERMINAL IN
ROCKAWAY NJ PER THE SCHEDULE SHOWN, IN THE PRICE CLAUSE HEREIN. PRIOR TO SALE
PRODUCT WILL BE STORED UNDER THE TERMS OF THE THROUGHPUT/STORAGE AGREEMENT
BETWEEN ABLE OIL AND MIECO.
UPON COMPLETION OF DELIVERY OF MIECO'S PRODUCT INTO BUYERS STORAGE TERMINAL
PER THE TERMS OF THE ABOVE REFERENCED THROUGHPUT/STORAGE AGREEMENT, THE
VOLUMES DELIVERED INTO THE TERMINAL WILL BE CONFIRMED IN WRITING BY TELEX OR
TELECOPY BY SELLER TO BUYER AND THIS CONFIRMATION WILL SERVE TO IDENTIFY THE
QUANTITIES SOLD UNDER THE TERMS OF THIS SALES AGREEMENT.
INSPECTION:
LOADING RACK METER TICKET AT AMOCO CARTERET NJ TRUCK RACK TO ABLE OIL TRUCKS.
TITLE:
TITLE TO THE OIL DELIVERED HEREUNDER SHALL PASS TO BUYER ON EFFECTIVE DATE OF
THE IN-TANK STOCK TRANSFER RELEASE.
ALL PRODUCT VOLUMES DELIVERED INTO BUYERS TERMINAL AND TO BE PURCHASED BY
BUYER BASED ON AS DETERMINED BY RACK METER TICKET AND ADJUSTED TO 60
DEGREES F.
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PAYMENT:
AS PER PREPAYMENT TERMS. PAYMENT DUE PRIOR TO RELEASE OF PRODUCT.
FOR VOLUMES BEING PRICED IN THE CURRENT DELIVERY MONTH:
WITHIN ONE (1) WORKING DAY OF THE TIME PRODUCT IS PRICED, SELLER WILL TELEFAX
INVOICE TO BUYER. PAYMENT IS DUE IN U.S. DOLLARS PROMPT UPON RECEIPT OF
INVOICE.
FOR VOLUMES PRICED IN PREVIOUS MONTHS:
ON THE FIRST WORKING DAY OF THE DELIVERY MONTH, SELLER WILL INVOICE
PRE-PRICED BARRELS WITH PAYMENT DUE PROMPT UPON RECEIPT OF INVOICE.
FOR ANY MISCELLANEOUS CHARGES, OTHER THAN PRODUCT INVOICES, PAYMENT SHALL BE
PAID PROMPT UPON RECEIPT OF INVOICE.
SHOULD BUYER LIFT ANY PRODUCT PRIOR TO REACHING PRICE AGREEMENT WITH SELLER,
IT WILL BE CONSIDERED BREACH OF CONTRACT AND ALL FUNDS DUE HEREUNDER SHALL
BECOME IMMEDIATELY DUE AND PAYABLE.
PAYMENT WITHOUT DEDUCTION, OFFSET, OR COUNTERCLAIM, IS TO BE MADE BY
TELEGRAPHIC TRANSFER, FREE OF ALL CHARGES IN ORDER THAT XXXXXX'S ACCOUNT IS
CREDITED IN SAME DAY (USABLE) FUNDS TO:
PAYMENT INSTRUCTIONS: BANK OF AMERICA NT & SA
CONCORD, CA
ABA NBR: 000-000-000
FOR CREDIT TO MIECO INC.
A/C NBR 12573-54052
CREDIT:
BUYER TO SATISFY MIECO'S CREDIT REQUIREMENTS AS PER PRICE CLAUSE ABOVE. BUYER
TO HAVE OPEN CREDIT UNLESS NOTIFIED BY SELLER UPON XXXXX'S CREDIT DEPARTMENTS
REVIEW THAT BUYER SHALL EITHER PREPAY OR ESTABLISH A LETTER OF CREDIT
ACCEPTABLE TO SELLER.
FORCE MAJEURE:
SELLER SHALL NOT BE OBLIGATED TO DELIVER OR BUYER OBLIGATED TO RECEIVE
PRODUCT HEREUNDER WHEN, WHILE AND TO THE EXTENT THAT SELLER IS PREVENTED FROM
OBTAINING OR MAKING DELIVERIES OR BUYER IS PREVENTED FROM RECEIVING IT IN THE
CUSTOMARY MANNER, DUE TO EVENTS CAUSED BY ACTS OF GOD; FIRES, STRIKES, OR
OTHER LABOR DISTURBANCES; WAR; DECLARED OR UNDECLARED, EMBARGOES; PERILS OF
THE SEA; ACCIDENT; ACTS, REQUESTS OR ORDERS OF CIVIL OR MILITARY AUTHORITIES;
OR ANY CAUSE WHATSOEVER BEYOND THE CONTROL OF SELLER OR BUYER, WHETHER OR NOT
SIMILAR TO THE CAUSES HEREIN SPECIFIED.
WHERE THE SHIPMENT IS BY PIPELINE, SELLER SHALL ALSO HAVE THE SAME RIGHTS
UNDER FORCE MAJEURE AS GRANTED TO THE PIPELINE CARRIER BY THE RELEVANT
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TARIFF, IF ANY. IN ANY EVENT, IF THE GOODS ARE LOST IN-TRANSIT, SELLER SHALL
BE ENTITLED TO ALLOCATE THE VOLUME REMAINING AMONG ALL CUSTOMERS ON A
PRO-RATA BASIS.
NOTWITHSTANDING THE FOREGOING PROVISIONS, BUYER SHALL NOT BE RELIEVED OF
ANY OBLIGATION TO MAKE PAYMENTS, IN U.S. DOLLARS, FOR THE OIL/PRODUCT
DELIVERED HEREUNDER OR ANY OTHER PAYMENT OBLIGATIONS ALREADY INCURRED.
ARBITRATION:
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. ANY CLAIM OR CONTROVERSY BETWEEN THE PARTIES HERETO
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH THEREOF SHALL BE
SETTLED BY ARBITRATION IN THE CITY OR NEW YORK IN ACCORDANCE WITH U.S.
ARBITRATION ACT OR FAILING FEDERAL JURISDICTION, THE LAWS OF THE STATE OF NEW
YORK, BEFORE ONE NEUTRAL ARBITRATOR WHO SHALL BE A PRACTICING ATTORNEY
MUTUALLY APPPOINTED BY THE PARTIES, OR FAILING AGREEMENT, BY ANY COURT OF
COMPETENT JURISDICTION. THE ARBITRATION AWARD SHALL BE FINAL AND BINDING, AND
MAY INCLUDE COSTS, INCLUDING REASONABLE ATTORNEY FEES. JUDGMENT UPON ANY
AWARD MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION.
JURISDICTION:
EACH PARTY EXPRESSLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK, USA AND THE FEDERAL COURTS SITUATED IN NEW YORK AND
TO SERVICE OF PROCESS BY CERTIFIED MAIL.
TAXES:
ALL TAXES, FEES, AND DUES (EXCEPT FOR NEW YORK STATE SPILL TAX), NOW OR
HEREAFTER IMPOSED BY FEDERAL, STATE OR LOCAL GOVERNMENTS, IN RESPECT TO OR
MEASURED BY THE PRODUCTS DELIVERED HEREUNDER OR THE MANUFACTURE, STORAGE,
DELIVERY, RECEIPT, EXCHANGE OR INSPECTION THEREOF, SHALL BE FOR THE ACCOUNT
OF BUYER. UPON RECEIPT OF INOVICE THEREOF, BUYER SHALL REIMBURSE SELLER FOR
ANY SUCH TAXES, FEES OR DUES LEGALLY REQUIRED TO BE PAID. EACH PARTY
RESPECTIVELY WARRANTS THAT HE IS PROPERLY LICENSED TO BUYER/SELL THIS PRODUCT
IN THE STATE OF TITLE TRANSFER EXEMPT OF TAX AND, IF REQUIRED, SHALL FURNISH A
VALID FEDERAL AND STATE LICENSE AND/OR REGISTRATION NUMBER TO THE
REQUESTING PARTY.
IF THIS TRANSACTION RESULTS IN PAYMENT OF NEW YORK, CONNECTICUT, OR NEW
JERSEY GROSS RECEIPT TAXES OR ANY OTHER STATE TAXES BY SUPPLIER, THEN THESE
TAXES SHALL APPEAR AS A SEPARATE LINE ITEM ON THE INVOICE AND WILL BE DUE AND
PAYABLE TO SUPPLIER IN ACCORDANCE WITH THE PAYMENT TERMS OF THIS CONTRACT.
LIQUIDATION CLAUSE:
WITHOUT LIMITING ANY OTHER RIGHTS THAT MAY BE AVAILABLE TO THE LIQUIDATING
PARTY, IN THE EVENT THAT A PARTY HERETO (THE DEFAULTING PARTY) SHALL (A)
BECOME BANKRUPT OR INSOLVENT. HOWEVER EVIDENCED, OR (B) FILE A PETITION OR
OTHERWISE COMMENCE A PROCEEDING UNDER ANY BANKRUPTCY, INSOLVENCY OR SIMILAR
LAW, OR HAVE ANY SUCH PETITION FILED OR PROCEEDING COMMENCED
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AGAINST IT , OR (C) HAVE A LIQUIDATOR, ADMINISTRATOR, RECEIVER OR TRUSTEE
APPOINTED WITH RESPECT TO IT OR ANY SUBSTANTIAL PORTION OF ITS PROPERTY OR
ASSETS OR, (D) FAIL TO GIVE ADEQUATE SECURITY FOR, OR ASSURANCES OF ITS
ABILITY TO PERFORM, ITS OBLIGATIONS - THEN IN ANY SUCH EVENT THE PERFORMING
PARTY SHALL HAVE THE RIGHT TO LIQUIDATE ANY OR ALL FORWARD CONTRACTS WHEN
OUTSTANDING AT ANY TIME OR FROM TIME TO TIME THEREAFTER BY DECLARING ANY AND
ALL SUCH CONTRACTS TERMINATED (WHEREUPON THEY SHALL AUTOMATICALLY BE
TERMINATED, EXCEPT FOR THE PAYMENT OBLIGATION REFERRED TO BELOW), CALCULATING
THE DIFFERENCE, IF ANY, BETWEEN THE PRICE SPECIFIED THEREIN AND THE MARKET
PRICE FOR RELEVANT COMMODITY (AS DETERMINED BY THE LIQUIDATING PARTY IN A
COMMERCIALLY REASONABLE MANNER AT A TIME OR TIMES REASONABLY DETERMINED BY
THE LIQUIDATING PARTY), AND AGGREGATING OR NETTING SUCH MARKET DAMAGES TO A
SINGLE LIQUIDATED SETTLEMENT PAYMENT THAT WILL BE DUE AND PAYABLE UPON DEMAND
THEREOF. THE NON-PERFORMING PARTY SHALL INDEMNIFY AND HOLD THE PERFORMING
PARTY HARMLESS FROM ALL COSTS AND EXPENSES OF COLLECTION, INCLUDING
REASONABLE ATTORNEYS FEES, INCURRED IN THE EXERCISE OF ANY REMEDIES
HEREUNDER. THE PARTIES HERETO ACKNOWLEDGE THAT THIS CONTRACT CONSTITUTES A
FORWARD CONTRACT FOR PURPOSES OF SECTION 556 OF THE U.S.A. BANKRUPTCY CODE.
ASSIGNMENT:
NEITHER SELLER NOR BUYERS SHALL ASSIGN THE WHOLE OR ANY PART OF ITS RIGHTS
AND OBLIGATIONS HEREUNDER DIRECTLY OR INDIRECTLY WITHOUT PRIOR WRITTEN
CONSENT OF THE OTHER PARTY. ASSIGNOR REMAINS RESPONSIBLE FOR NON-PERFORMANCE.
OTHER:
- BUYER WILL GIVE MIECO A NO COST THROUGHPUT AGREEMENT AT INVENTORY TERMINAL
LOCATIONS.
- MIECO WILL FILE UCC-1'S FOR PRODUCT STORED AT INVENTORY TERMINALS.
- MIECO WILL SUPPLY BARRELS AT AMOCO, CARTERET NJ TRUCK RACK. ABLE OIL WILL
TRUCK PRODUCT TO ABLE TERMINAL, ROCKAWAY NJ. XXXXX AND ABLE WILL ENTER INTO
AN EXCHANGE AGREEMENT WHEREBY ABLE GIVES MIECO THE FOB LOAD QUANTITY/QUALITY
AT ABLE INVENTORY LOCATION THAT MIECO SUPPLIES AT AMOCO RACK.
- AT MIECO'S EXPENSE, INDEPENDENT INSPECTORS WILL BE ALLOWED TO GAUGE THE
INVENTORY AT ABLE OIL TERMINAL.
THERE ARE NO GUARANTEES OR WARRANTIES, EXPRESS OR IMPLIED, OF
MERCHANTABILITY, FITNESS, SUITABILITY OF THE OIL/PRODUCT FOR ANY PARTICULAR
PURPOSE, OR OTHERWISE, WHICH EXTEND BEYOND THE DESCRIPTION OF THE FACE
HEREOF. UNDER NO CONDITIONS SHALL ANY CLAIM BE MADE UNDER THIS CONTRACT FOR
PROSPECTIVE PROFITS OR SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES
RESULTING FROM A BREACH OF WARRANTY HEREIN. THE FOREGOING LIMITATIONS ON
DAMAGES SHALL NOT APPLY TO CLAIMS OF PROPERTY DAMAGE, DEATH, OR PERSONAL
INJURY.
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OUR COORDINATOR IS: XXXXXXX XXXX 000-000-0000
OUR FINANCIAL CONTACT IS: XXXXX XXXXX 000-000-0000
PLEASE SEND ALL CONTRACT FAXES TO CONTRACT ADMINISTRATOR:
XXXXXX XXXXX
FAX: 000-000-0000
THIS INSTRUMENT CONTAINS THE COMPLETE AGREEMENT OF BOTH PARTIES AND CANNOT
BE MODIFIED UNLESS IN WRITING. ANY OTHER AMENDMENTS RECEIVED SHALL BE DEEMED
PROPOSALS TO THIS CONTRACT UNLESS CONFIRMED IN WRITING BY SELLER.
ABLE OIL COMPANY MIECO INC.
BY: BY: /s/ Illegible
---------------------- ----------------
TITLE: TITLE: General Manager
------------------- ----------------
DATE: DATE: 5-27-1998
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