EXHIBIT 10.6
THROUGHPUT AGREEMENT
THIS THROUGHPUT AGREEMENT (the "Agreement") is made and
entered into as of the of November 1, 2002 (the "Effective Date"), by and
between XXXXXX GAS SALES LLC (the "Owner"), and Xxxxxx Operating Partnership
L.P. (the "Customer").
WITNESSETH:
WHEREAS, the Owner owns a liquefied petroleum gas ("LPG")
truck loading and unloading and pipeline distribution terminal facility located
at Mont Belvieu, Texas (the "Terminal Facility"); and
WHEREAS, the Customer is in the LPG products ("Products")
distribution business; and
WHEREAS, it is the desire of the Owner and the Customer that
the Customer be provided with sole access to and use of the Terminal Facility,
all on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the Owner and the Customer agree that the Owner
shall provide the Customer with sole access to and use of the Terminal Facility,
on the terms and conditions hereinafter provided:
1. TERM OF AGREEMENT. The term of this Agreement shall begin
on the Effective Date and shall end on the third anniversary of the Effective
Date. Thereafter, the term shall automatically renew from year to year, unless
either party gives written notice at least thirty (30) days prior to the
expiration of the applicable term.
2. OWNER'S DUTIES. In consideration of the compensation
provided in Section 3 hereof, the Owner shall provide Customer with sole access
to and use of the Terminal Facility.
3. OWNER'S COMPENSATION.
(a) For the sole access to and use of the Terminal
Facility, the Owner shall receive total compensation of $400,000 per
year ("Annual Compensation") subject to adjustment as set forth in
subsection (b) below. The Customer shall remit payment for 1/12 of the
Annual Compensation each month payable on the last day of the month.
(b) The Annual Compensation shall remain as stated in
subsection (a) until the first anniversary of the Effective Date.
Thereafter, the Annual Compensation shall be adjusted annually (both
upward and downward as hereinafter provided) by a factor equal to the
increase or decrease, as the case may be, in the Consumer Price Index.
The adjustment shall be calculated annually in November of each year,
commencing in
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November, 2003. The adjustment shall be calculated as follows: the
Annual Fee in effect shall be multiplied by a factor equal to the
amount of the increase or decrease, as the case may be, in the Consumer
Price Index for the immediately preceding month of October, over the
Consumer Price Index for October of the preceding year. For purposes
hereof, the term "Consumer Price Index" shall mean the "Consumer Price
Index for Urban Wage Earners and Clerical Workers (1967=100)" specified
for "All Items. United States" compiled by the Bureau of Labor
Statistics of the United States Department of Labor (the "Index"). In
event the Index shall be converted to a different standard reference
base or otherwise revised, the determination of the percentage change
shall be made with the use of such conversion factor, formula or table
for converting the Index as may be published by the Bureau of Labor
Statistics or, if said Bureau shall not publish the same, then as shall
be reasonably determined by the parties.
4. TITLE TO PRODUCT. Title to all of the Product received,
stored and handled at the Terminal Facility shall remain at all times in the
name of the Customer. The Customer agrees not to deliver for storage at the
Terminal Facility any Product which may not be lawfully stored on the premises
of the Terminal Facility or any Product injurious to the premises or facilities,
or which would render the facilities unfit, after cleaning, for the proper
storage of similar products, or Products.
5. ASSIGNMENT. Neither party shall assign this Agreement
without the express written consent of the other party.
6. FACILITY, TANK AND EQUIPMENT CONDITION. The Owner shall, at
its sole cost and expense, provide and maintain all handling and storage
equipment and facilities necessary to the performance of its services hereunder
in compliance with prevailing industry standards and all applicable Laws (as
such term is defined in Section 7 below) as they may exist from time to time.
7. CUSTOMERS COMPLIANCE WITH LAWS. In the conduct of its
business on the premises of the Terminal Facility, the Customer shall comply in
all material respects with all federal, state and local laws, ordinances,
decrees, orders, regulations, permits or other requirements having the force of
law (the "Laws").
8. ENTIRE AGREEMENT AND AMENDMENT. This Agreement shall
constitute the entire agreement concerning the subject hereof between the
parties superseding all previous agreements, negotiations and representations
made prior or contemporaneous to the date hereof. This Agreement shall be
modified or amended only by written agreement executed by both parties hereto.
9. CONTROLLING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
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EXECUTED as of the date first set forth above.
XXXXXX GAS SALES LLC
By: Xxxxxx Resource Management Corporation
Its Sole Member
By: /s/ Xxxxx X. Xxxxxx, III
Name: Xxxxx X. Xxxxxx, III
Title: President
XXXXXX OPERATING PARTNERSHIP L.P.
By: XXXXXX OPERATING GP LLC
Its General Partner
By: Xxxxxx Resource LLC
Its Sole Member
By: Xxxxxx Resource Management Corporation
Its Sole Member
By: /s/ Xxxxx X. Xxxxxx, III
Name: Xxxxx X. Xxxxxx, III
Title: President
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