Form of
Exhibit
10.10
Form
of
This
LPG
Transportation Agreement (“Agreement”),
is
made and entered into this ___
day
of
_________ 2006 (the “Effective
Date”),
by
and between Rio
Vista Operating Partnership, L.P.,
a
Delaware limited partnership (“Rio”)
and
Penn
Octane International, LLC, a
Delaware limited liability company (“International”)
(collectively “Carrier”),
and
TransMontaigne
Product Services Inc.,
a
Delaware corporation (“Shipper”).
Carrier and Shipper are sometimes hereinafter referred to individually as a
“Party” and collectively as the “Parties”.
RECITALS:
A. Carrier
owns the Carrier System as defined below. Carrier and Shipper entered into
a
Purchase and Sale Agreement, dated August 15, 2005, as amended and restated
on
August
15,
2006
(“Purchase
Agreement”),
pursuant to which Shipper purchased certain Brownsville Terminal Assets (as
defined in the Purchase Agreement).
B.
Shipper
requires Carrier to ship LPG from the Brownsville Terminal Site to the Mexican
Terminal Site using the Carrier System and have Carrier cause its wholly owned
subsidiaries, Termatsal S. de X.X. de C.V. (“Termatsal”),
and
Penn Octane de Mexico,
S.
de X.X.
de C.V.
(“POM”)
and
its affiliate, Tergas, S. de X.X. de C.V. (“Tergas”),
of
which each Termatsal, POM and Tergas are
limited
liability companies
duly
incorporated and existing under the laws of Mexico all
of which
Carrier controls, to transport on the Mexican portion of the Carrier System
and
deliver the LPG to designated customers of Shipper or PMI at the Mexican
Terminal Site.
C.
This
Agreement, being a condition to the closing pursuant to the Purchase Agreement,
requires that Carrier will provide LPG transportation and delivery services
to
Shipper pursuant to the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the undertakings of each Party to the other
Party
contained in this Agreement, the Parties agree as follows:
ARTICLE
1
DEFINITIONS
AND INTERPRETATION
1.1 Definitions. In
this
Agreement, including the schedules attached hereto, the following terms shall
have the meanings assigned to them below:
“Additional
Rate”
has
the
meaning given in Section 3.1.
“Affiliate”
means,
in reference to a Person, any other Person which directly or indirectly controls
or is controlled by the first Person or is directly or indirectly controlled
by
a Person which also directly or indirectly controls the first Person, excepting
from the foregoing TransMontaigne Partners L.P. or any of its affiliates. For
the purposes of this definition, a Person shall be deemed to control another
Person if the first Person controls the other Person in fact, whether by
ownership of shares of a corporation, by contract, by being the sole general
partner of a limited partnership or otherwise.
“Applicable
Laws”
means
all laws and statutes (including regulations enacted thereunder), judgments
and
orders of courts of competent jurisdiction, regulations and orders issued by
Governmental Authorities applicable to (i) the ownership, operation,
maintenance, improvement, and use of the Carrier System and (ii) the Parties’
performance of their respective obligations hereunder.
“Arbitration
Notice”
has
the
meaning indicated in Section 9.5.
"ASTM"
shall
mean the American Society for Testing and Materials.
“Brownsville
Terminal Site”
means
the plot of land, and associated equipment and improvements, which is leased
by
Shipper from the Brownsville Navigation District, where LPG is stored and is
located on Brownsville Navigation District Lease No. 2823, dated October 5,
1993, as amended.
“Carrier”
is
defined in the preamble of this Agreement.
“Carrier
System”
means
Carrier’s Owned Pipelines and the Mexican Terminal Site, as such pipelines and
terminal facilities exist on the Service Commencement Date.
“Contract
Year”
means
a
twelve (12) Month period commencing on and including the Service Commencement
Date and each consecutive twelve (12) Month period thereafter, for the Term
of
this Agreement.
“Compliance
Procedures”
has
the
meaning given in Section 4.3.1.
“Day”
means
the twenty-four (24) hour period (as adjusted for daylight savings time)
commencing at 12:00 a.m., local time, on one calendar day, and ending at 12:00
a.m., local time, on the next calendar day.
“Delivery
Point”
means
the outlet flange of the loading racks located in the Mexican Terminal Site
at
which Carrier will cause Tergas
to make
redeliveries of LPG, for the account of Shipper, to the customer designees
of
PMI or other designees of Shipper.
“Dispute”
has
the
meaning indicated in Section 9.1.
“Dispute
Notice”
has
the
meaning indicated in Section 9.2.
“Environmental
Laws”
means
any Applicable Law or Order relating to protection of the environment,
including, persons or the public welfare from actual or potential exposure
(or
the effects of exposure) to any actual or potential Release or regarding the
manufacture, processing, production, gathering, transportation, generation,
use,
treatment, or storage of any Hazardous Materials.
“Effective
Date”
is
defined in the preamble of this Agreement.
“FERC”
means
the Federal Energy Regulatory Commission.
“Force
Majeure Event”
is
defined in Section 6.11.
"Gallon(s)"
shall
mean one (1) U.S. standard gallon of two hundred and thirty one (231) cubic
inches at sixty degrees Fahrenheit (60F).
“Good
Industry Practice”
means
the practices and methods, normally employed by a prudent operator of a
petroleum products pipeline in the U.S. as well as in accordance with (i)
applicable American Petroleum Institute (API) standards; (ii) applicable U.S.
Department of Transportation (“DOT”) rules and regulations, including DOT Part
195; and ASME Code B.31.4. Consistent with the foregoing, Good Industry Practice
shall include compliance with Applicable Laws and the easements and other
property rights related to the Carrier System, as well as practices recommended
by Governmental Authorities having jurisdiction over the Carrier System or
by
relevant industry advisory bodies or organizations.
“Governmental
Authority”
means
any court, tribunal, arbitrator, authority, agency, commission, official, or
other instrumentality of the United States, Mexico,
or
any
state or political subdivision thereof, and including any governmental,
quasi-governmental, or non-governmental body administering, regulating, or
having jurisdiction over the transportation of LPG and other petrochemical
products, including, without limitation, the FERC.
"GPA"
shall
mean the Gas Processors Association.
“Hazardous
Materials”
means
any substance, whether solid, liquid, gaseous, or any combination of the
foregoing or any other substance not expressly mentioned herein: (a) that is
listed, defined, or regulated as a “hazardous material,” “hazardous waste,”
“solid waste,” “hazardous substance,” “toxic substance,” “contaminant,” or
“pollutant” or otherwise classified as hazardous or toxic, in or pursuant to any
Environmental Laws or otherwise prohibited, limited or regulated under any
Environmental Laws; (b) that is or contains asbestos, polychlorinated biphenyls,
radon, urea formaldehyde foam insulation, or explosive or radioactive materials,
and (c) that is or contains petroleum hydrocarbons, petroleum products, natural
gas, crude oil, or any components, fractions, or derivatives
thereof.
“Inspector”
means
an independent inspector that will be appointed by the mutual agreement between
Shipper, PMI and Carrier.
“LPG”
means
the liquefied petroleum gas product conforming to the
Specifications.
“LPG
Variance”
has
the
meaning provided in Section 6.5.
“Mediation
Notice”
has
the
meaning indicated in Section 9.4.
“Mexican
Terminal Site”
means
the plot of land and associated equipment,
LPG
tankage
and
improvements owned by Tergas, where the LPG or other petroleum products are
stored, which is located at Carretera Sendero Nacional Xx. 0, xxxxxxxxxx
Xxxxxxxxx Xx Xxxxxx-Xxxxx Xxxxxx Xx. 3.4 desviacion brecha 22 s/n (a 500
metros), Ejido La Xxxxxx, X.X. 00000, Xxxxxxxxx, Xxxxxxxxxx,
Xxxxxx.
“Month”
means
the period beginning with 12:00 a.m., local time, on the first Day of each
calendar month and ending at 12:00 a.m., local time, on the first calendar
Day
of the next month.
“Order”
means
any order, judgment, injunction, ruling, or decree of any U.S. court or other
Governmental Authority.
“Owned
Pipelines”
means
the approximately 23-mile 6-inch and 8-inch pipelines and associated equipment
and improvements connecting the Brownsville Terminal Site to the Mexican
Terminal Site
“Parties”
and
“Party”
are
defined in the preamble of this Agreement.
“Person”
means
an individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture
or
other business entity, or a government or any political subdivision or agency
thereof.
"PGPB"
shall
mean Pemex-Gas y Petroquimica Basica.
“PMI”
means
P.M.I. Trading Limited, a corporation organized under the Laws of Ireland,
having the administration of its business and place of address in Mexico City,
Mexico.
“PMI
Contract”
means
the Matamoros LPG Mix Purchase and Sales Agreement, dated April 28, 2006, by
and
between Rio and PMI, for the purchase of LPG for the period through March 31,
2007.
“Purchase
Agreement”
has
the
meaning given in the Recitals.
“Receipt
Point”
means
the point at which LPG will be received by Carrier from or for the account
of
Shipper hereunder, which point shall be defined as the outlet flange which
connects Shipper’s Brownsville Terminal Site with the Carrier’s
System.
“Release”
means
any releasing, depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping or disposing.
“Service
Commencement Date”
is
defined in Section 2.2.
“Specifications”
means
the specifications for LPG set out in Section 5.1 of this
Agreement.
“Tergas”
has
the
meaning given in the Recitals.
“Termatsal”
has
the
meaning given in the Recitals.
“Term”
has
the
meaning given in Section 2.1.
“Transportation
Rate”
means:
(i) the rate set forth in Section 3.1, (ii) a rate mandated by Applicable Law
with respect to transportation within the United States, or (iii) any other
rates agreed to in writing by the Parties.
1.2 Severability. If
any
Article, Section, subsection or other provision of this Agreement is deemed
to
be or becomes void, illegal, invalid or unenforceable, then, to the extent
of
such voidability, illegality, invalidity or unenforceability, such provision
or
part thereof shall be considered ineffective and separate and severable from
the
balance of this Agreement and such provision shall not invalidate, affect or
impair the remaining provisions of this Agreement and any such void, illegal,
invalid, or unenforceable provision or part thereof shall be replaced with
a
mutually agreed new provision which will allow the Parties to restore the
economic equilibrium
of the Parties as agreed in the prior arrangement in a legally valid and
effective manner; provided, however, that a Party may terminate this Agreement
if that Party suffers material detriment as a result of such voidance,
illegality, invalidity or unenforceability and the Parties
have not been able to mutually agree on alternate or substitute contractual
provisions to address said material detriment and restore economic equilibrium
by not later than ninety (90) days after the effective date of such
event.
1.3 Interpretation
of this Agreement. In
interpreting this Agreement, the following rules of construction shall be
followed:
1.3.1 the
headings of Articles and Sections are for convenience only and shall not be
taken into account in the interpretation of this Agreement;
1.3.2 unless
otherwise specified, a reference to an Article, Section, Subsection or Paragraph
is a reference to an article, section, subsection or paragraph of this
Agreement;
1.3.3 words
importing the singular include the plural and vice versa; words importing the
masculine gender include the feminine and vice versa;
1.3.4 “herein,”
“hereto,” “hereof,” and similar expressions refer to this Agreement;
and
1.3.5 “include,”
“including,” “included,” and similar expressions shall be interpreted as if such
expressions were followed with the phrase “without limitation.”
ARTICLE
2
TERM
AND TERMINATION
2.1 Term. The
term
of this Agreement shall, unless terminated under the provisions of Section
1.2.,
commence on the Effective Date and remain in full force and effect for the
term
of the PMI Contract, as extended from time to time thereafter.
2.2 Service
Commencement Date. Carrier
shall be required to commence performance under this Agreement with respect
to
the receipt, transportation and terminal delivery of Shipper’s LPG as soon as
commercially practicable after the Effective Date.
ARTICLE
3
TRANSPORTATION
RATE AND REGULATION
3.1 Transportation
Rate.
3.1.1 Shipper
shall pay Carrier the
rate
described in Exhibit “A”
for
movements of Shipper’s LPG from the Receipt Point through the Delivery Point,
which rate shall be inclusive of all fees for transportation, truck weighing,
mercaptan
injection, testing and inventory control (the “Transportation
Rate”).
3.1.2 To
the
extent that Carrier (i) is requested to carry LPG volumes in excess of the
King
Ranch Plant production (ii) has to construct any additional facilities or (iii)
is requested to perform services which are in addition to the services being
performed and compensated for under the Transportation Rate, then the Parties
will mutually agree upon a rate per Gallon to be charged by Carrier (the
“Additional
Rate”).
If
the Parties cannot reach an agreement with respect to the Additional Rate,
then
the matter shall be resolved pursuant to the procedures set out in Article
9
herein.
3.2 Delivery
Expense Reimbursement.
3.2.1 Shipper
acknowledges that Carrier and its Affiliates will incur certain
expenses in
providing services to PMI or PGPB, which
expenses include telephone, telefax, cleaning and secretarial services.
The
Parties agree that such expenses are not intended to be borne by Carrier or
its
Affiliates, as their expense, under the Transportation Rate. Therefore, Shipper
agrees to pay Carrier the additional
amount
of
$2,500.00 per month during the Term
of this
Agreement to cover such
services and expenses, as reimbursed to Shipper by PMI. Any
extraordinary services
and expenses
will be
mutually agreed upon by the Parties beforehand.
3.2.2 For
the
Term of this Agreement and subject to his continued employment by Carrier,
Shipper shall pay Carrier the additional amount of $7,500 per month for the
services provided by Xxxxxxx Xxxxxxx for the mutual benefit of both
Parties.
3.3 Regulation. The
Parties recognize that the interstate or foreign transportation of LPG on the
portion of Carrier’s System located in the United States is subject to the
Interstate Commerce Act and common carrier regulation by the FERC or any
successor regulatory agency having jurisdiction. Carrier shall comply with
all
Applicable Laws respecting the provision of service by Carrier hereunder. The
Parties agree to exercise their commercially reasonable efforts with all due
diligence to support the justness and reasonableness, and continuance, without
alteration, of the Transportation Rate specified herein and all other service
terms and provisions of this Agreement, in any and all proceedings before any
Governmental Authority in which any such provisions are subject to regulatory
review.
ARTICLE
4
TRANSPORTATION
QUANTITY; DELIVERY; RECEIPT
4.1 Transportation
Quantity. Subject
to the terms of this Agreement, (a) Carrier shall accept at the Receipt Point,
transport, store and redeliver at the Delivery Point LPG owned or controlled
by
Shipper and (b) the LPG tendered shall be accepted and redelivered by Carrier
at
the times and in quantities as directed from time to time by Shipper or
Shipper’s designee in accordance with this Agreement.
Shipper
acknowledges the Carrier System is a flowing system with limited storage
capacity of not more than 48 hours.
4.2 Product
Dedication. Shipper
commits to exclusively transport on the Carrier System, pursuant to the terms
of
this Agreement, all quantities of LPG which it owns or controls and which
Shipper or
its
Affiliates (including TransMontaigne Partners L.P.) is
required to deliver to the Delivery Point pursuant to the PMI
Contract
or to
north eastern Mexico including, without limitation, the geographic region served
by the Pipeline Assets or the Matamoros Terminal Site;
provided, however, that neither Party shall be obligated by the foregoing to
either build or pay for any additional facilities that are required to connect
LPG sources or markets to Carrier’s System not connected thereto as of the
Service Commencement Date nor increase the throughput capacity of the Carrier
System. Should Shipper obtain a payment, penalty payment, or “take or pay”
payment from PMI related to the PMI’s failure purchase the contractually
required amount of LPG from Shipper, then any such payment recovered by Shipper
shall be divided between Shipper and Carrier as both Parties shall mutually
agree
in good
faith.
If the
Parties cannot agree upon a mutually acceptable division of such payment, then
the matter shall be resolved pursuant to the procedures set out in Article
9
herein.
4.3 Product
Quantity Inspection. The
Inspector shall determine the quantity of LPG to
be
delivered at the Delivery Point
as
provided in this Section and his findings shall be binding in the absence of
fraud, bad faith or gross error.
4.3.1. Each
empty tank truck shall be weighed on the platform scale at the Delivery Point,
or an alternative independent platform scale mutually acceptable to the Parties.
Once LPG is completely loaded onto the tank trucks, such tank truck will be
weighed at the same platform scale upon its departure. The weight obtained
by
the differential between these two measurements shall be converted into volume
in Gallons and corrected at 60oF
in
accordance with the latest version of the ASTM procedures (“Compliance
Procedures”),
through the determination of the specific gravity through a gas chromatograph
provided by Shipper or by the Inspector. The Inspector shall take samples at
the
Delivery Point (at the Micromotion measurement device installed at the Delivery
Point) for every 50,000 Gallons received at the Delivery Point. The gas
chromatograph utilized shall be calibrated in accordance with the latest ASTM
and GPA procedures.
4.3.2. The
terminal platform scale at the Delivery Point will be tested and adjusted for
accuracy at least once every sixty (60) Days. Carrier will be required to comply
with the calibration and certification procedures adopted by Mexican authorities
in accordance with Official Standards (NOM-010-SCFI-1994 (1999)). PMI’s
representatives and the
Inspector
may witness the calibration and certification procedures. Shipper or Carrier
shall provide PMI via fax a copy of the above-mentioned certificates. If the
terminal platform scale at the Delivery Point is used or any claim is received
by Shipper from PGPB, Shipper
and PMI
reserves the right to execute evaluation procedures on a random basis sending
tank trucks to an independent scale to test the accuracy of such scale and
recover damages from Carrier for any discrepancy found.
4.3.3. If
the
terminal platform scale at the Delivery Point is not suitable for the service
due to non-compliance with the above-mentioned Official Standards and an
independent platform scale is used, the Parties will share equally the cost
of
weighing the tank trucks before and after loading,
4.3.4. If
at any
time the platform scales at the Delivery Point are replaced, such new scales
shall be used to weigh all tank trucks receiving LPG at the Delivery Point,
and
shall be operated and maintained in accordance with the above provisions.
4.3.5. Until
such time as the measuring facilities at the Receipt Point and the Delivery
Point are installed and calibrated pursuant to Section 6.3 and 6.4, for customs
and inventory-management purposes, LPG pumped through Carrier’s System from the
Receipt Point to the Delivery Point shall be measured on a daily basis at the
Micromotion measurement device installed at the Delivery Point. Readings by
such
device shall be registered by the Inspector, Mexican authorities, PGPB's customs
broker, PMI's representative and Shipper's or Carrier’s representatives. A
reading of the quantity of LPG pumped will be calculated on the basis of the
differential between the readings taken at 00:00 hrs. and the reading taken
the
previous Day at 00:00 hrs., converted to volume in Gallons and corrected at
60oF,
through the determination of the specific gravity by samples taken at the
Delivery Point (at the Micromotion measurement device installed at the Delivery
Point) for every 50,000 Gallons received at the Delivery Point through the
gas
chromatograph.
4.3.6. Additionally,
for verification and customs purposes, LPG pumped through Carrier’s System from
the Receipt Point to the Delivery Point shall be measured on a weekly basis
every Monday at the Micromotion measurement device installed at the Delivery
Point. Readings by such device shall be witnessed by the Inspector, Mexican
authorities, PGPB's customs broker, PMI's representative and Shipper's or
Carrier’s representatives. A reading of the quantity of LPG pumped will be
calculated on the basis of the differential between the current reading and
the
reading taken the previous Monday at the same time converted to volume in
Gallons and corrected at 60oF,
through the determination of the specific gravity by samples taken at the
Delivery Point (at the Micromotion measurement device installed at the Delivery
Point) for every 50,000 Gallons received at the Delivery Point during the
immediate preceding five (5) Days through the gas chromatograph. The Inspector
shall take line samples and shall test the batch pumped at the time of the
readings.
4.3.7. Carrier
and
Shipper shall
not
and will not be required to verify or monitor the (i) qualifications or
competence of any drivers of any tank trucks receiving LPG at the Delivery
Point
or (ii) the qualification or condition of any tank trucks receiving LPG at
the
Delivery Point.
Both
Parties acknowledge that it is the responsibility of
PMI to
verify that all its designees who accept delivery of LPG at the Delivery Point
shall be fully in conformance with all Mexican laws and regulations and that
Carrier shall not be required to provide this service.
ARTICLE
5
QUALITY
SPECIFICATIONS
5.1 Receipt
Point Specifications. All
LPG
delivered
by
Shipper at the Receipt Point and all LPG delivered by Carrier at the Delivery
Point must meet the quality specifications required for delivery of LPG to
PMI
under the terms of the PMI Contract (“Specifications”).
5.2 Enforcement
of Specifications. No
LPG
will be delivered by Shipper at the Receipt Point for transportation hereunder
unless its kind and quality meets the applicable Specifications. Shipper shall
be required, at Carrier’s reasonable request, to furnish Carrier with certified
laboratory results that show that the composition of the LPG to be transported
in Carrier’s System meets the Specifications. Carrier reserves the right to
sample or test any such shipment prior to acceptance or during receipt and,
in
the event of a variance between Shipper’s certificate and the results of
Carrier’s test, the latter shall prevail. All costs associated with Carrier’s
testing shall be for the account of Carrier.
5.3 Product
Quality Inspection. All
LPG
shall be monitored to ensure compliance with the Specifications. Determination
of quality shall follow the procedures set forth in the Compliance Procedures.
A
sample of LPG will be drawn in accordance with the Compliance Procedures prior
to delivery. A gas chromatography analysis shall be performed by Carrier on
the
sample in accordance with the ASTM D-2163 method to assess the sample’s
compliance with the Specifications. The gas chromatograph utilized shall be
calibrated in accordance with the latest ASTM and GPA procedures.
ARTICLE
6
OPERATIONAL
MATTERS
6.1 Deliveries. Shipper
shall furnish a written nomination to Carrier at least ten (10) days prior
to
the Month in which Shipper desires transportation and terminal services
hereunder, which date can be amended at any time by Shipper or its designee.
Such written nomination shall specify the quantity of the LPG.
6.2 Minimum
Injection Rate at Receipt Point. Shipper
shall deliver the LPG
for
transportation at an
injection rate necessary to maintain Carrier’s
normal
operating pressures of
no
less than 300 psi.
6.3 Receipt
Measurement Facilities. Shipper
shall install, at its sole cost and expense, a custody control flow meter at
the
Receipt Point, and, at its option, at the inlet
flange at the Mexican Terminal Site,
which
meters, absent fraud or manifest error, will measure the volume of LPG that
is
injected into Carrier’s System or delivered to the inlet
flange at the Mexican Terminal Site.
6.4 Measurement.
6.4.1
General
A. Unit
of Measurement: The
unit of measurement
of the LPG stream shall be a Gallon.
B. Delivery
Pressure: The
measurement station
located at the Receipt Point shall be capable of measuring the volume of LPG
delivered hereunder at pressures up to 500 psi or
at
such other pressure(s) as the Parties may mutually agree.
C. Flow
Metering: Each
measurement station
shall be operated, tested, and maintained and the mass of hydrocarbon streams
calculated in accordance with standard industry practices.
D. Receipt
Point: Receipt
of LPG shall be
at Shipper’s meter station at the Receipt Point.
E. Flow
Meter Calibration: All
calibrations,
adjustments, and calculations shall be adjusted to Standard Conditions. Standard
Conditions shall mean 60 degrees Fahrenheit and 14.696 psia. All flow
measurement will be made utilizing temperature and pressure at flowing line
conditions.
F. Check
Meters: Carrier,
or its
representative, may at its option and expense, install and maintain check
measurement equipment which shall not interfere with the use of Shipper’s
measurement equipment at the Receipt Point.
G. Access
to Equipment: Carrier,
or its
representative, shall have access at all reasonable times to the equipment
of
Shipper’s measurement station, but the calibrating and adjusting thereof shall
be done solely by the employees, agents, representatives or designees of
Shipper. Similarly, Shipper shall have access at all reasonable times to the
equipment of Carrier’s check meter measurement stations, but the calibrating and
adjusting thereof shall be done solely by the employees, agents or
representatives or designees of Carrier.
H. Meter
Ticket: A
meter ticket will be
generated for the Receipt Point each Day and a copy will be promptly provided
to
Carrier. The billing period is from 00:00 hours on the first Day of each Month
to 00:00 hours on the first day of the following Month.
I. Review
of Measurement Data: Shipper’s
and Carrier’s
personnel shall exchange measurement data on a timely basis in order to detect
measurement discrepancies as they arise. In the event that Shipper’s and
Carrier’s measurement differ more than one (1.0%) percent for two (2) or more
Days in succession, both metering facilities will be examined and calibrated
to
determine whether or not either or both metering facilities are conforming
to
good measurement practice and/or operation.
J.
Flow
Meter Calibration Frequency: On
a scheduled Day of
each Month, or at other mutually agreeable intervals, Shipper or Shipper’s
designee shall test and verify the accuracy of its measurement equipment in
accordance with the appropriate industry standards. Shipper or its designee
shall give Carrier notice of the date and time of each test sufficiently in
advance (but no less than 48 hours in advance) to permit Carrier to have a
representative present to witness such test result. The calibration records
of
Shipper’s or Carrier’s measurement equipment shall be made available for review
by either Party.
K Certification
of Test Equipment: The
certification and
calibration records of either Party’s applicable test equipment shall be
maintained and made available for review by the other Party.
L. Special
Tests: Either
Party may request
a special test of any measurement equipment of the other Party at its sole
cost
and expense. In such event, the Parties shall cooperate to secure prompt
verification of accuracy of said equipment.
6.4.2
Meter
Calibration
A. Meter
Calibrations: The
meter instrumentation
and chart recorders (if applicable) shall be calibrated and inspected at the
beginning of the delivery of the LPG at a minimum of every ninety (90) days
thereafter. Necessary repairs to or replacement of the metering equipment shall
be made when the equipment does not meet the required standards provided in
the
latest addition of the appropriate industry manual.
B. Errors
less than 0.25%: If
the meter calibration
deviates less than or equal to +
0.25%
from one scheduled calibration to the next, the effective date of the new factor
shall be the date of the calibration and shall remain in effect until the next
calibration.
C. Errors
equal to or more than 0.25% and less than 0.50%: If
the meter calibration
deviation is equal to or more than +
0.25%,
but less than +
0.50%,
then the effective date of the factor shall be the date on which an event
occurred which is known to have changed the factor, or if such date is not
known, then the effective date is determined as defined in Section 6.4.3.
D. Errors
equal to or more than 0.50%: Any
deviation equal to or
greater than +0.50%
is
not acceptable, and immediate steps shall be taken to effect the required
maintenance or repairs.
6.4.3
Volume
Corrections
If,
upon
calibration tests, the meter does not meet the applicable requirements, then
any
previous recording of such equipment shall be corrected for any period that
is
known or agreed upon. In case the period is not known or agreed upon, such
correction shall apply to one-half (½) the total mass measured since the date of
the last calibration. However, this correction shall not exceed sixteen (16)
Days.
6.4.4
Correction
of Errors
Measuring
equipment found to be registering inaccurately or out of service shall be
adjusted to read accurately and/or placed in service immediately. For any error
not known or agreed upon for the period in which the meter was inaccurate or
out
of service, the volume of the stream shall be estimated by use of any of the
following or other methods which shall be mutually agreed upon by the
Parties:
(i)
In
the
event that only one of the metering facilities is found to have had a
significant defect in performance, the other measuring facility will be the
agreed upon billing basis for that billing period, or
(ii) If
it is
determined that both of the measuring installations experienced significant
defects in performance, billing for the period in question shall be based upon
such data as Shipper and Carrier shall find mutually acceptable.
6.5 Overages
and Shortages. At
the
end of each Month, Carrier will calculate and Shipper shall confirm the
difference, if any, between the volume of LPG delivered by Shipper at the
Receipt Point and the volume of LPG delivered by Carrier to Shipper’s designated
customer
together
with the amount of inventory held at the Matamoros Terminal (the “LPG
Variance”).
If the
LPG Variance results in a shortage of more than one (1.0%) percent, Carrier
will
reimburse Shipper for the shortage of volume outside measurement tolerance
in
accordance with Section 6.12
quarterly.
If the
LPG Variance results in an overage of more than one (1.0%) percent, then
such volume
shall be the property of Carrier. These procedures shall be in addition to,
and
not in lieu of, any other provisions of this Agreement requiring Carrier to
account to Shipper for all volumes delivered hereunder, but in no event shall
the foregoing procedure result in Carrier accounting to Shipper more than once
for the same volume.
6.6 LPG
Involved in Litigation. When
any
LPG delivered
by Shipper to Carrier
for
transportation is involved in litigation, disputed ownership or encumbrance
by
lien or charge of any kind, Shipper shall so advise Carrier in writing. Carrier
may refuse to accept receipt of such LPG unless Shipper provides an indemnity
bond or other form of financial undertaking to reasonably protect Carrier
against any and all loss associated with such disputed title. Shipper shall
indemnify Carrier against any and all loss or damages suffered by Carrier
associated with such disputed ownership.
6.7 Delivery
at Destination. The
LPG will
be delivered, for the account of Shipper, to the designated customers of
PMI,
PGPB,
or others.
6.8 Scheduling
and Special Transit Conditions. For
each
Month, Carrier will establish a sequence for transporting LPG and will schedule
the approximate time when LPG tendered for shipment will be received by Carrier
at the Receipt Point and delivered by Carrier at the Delivery Point. Carrier
will inform Shipper of the time within each Month when the LPG will be received
from Shipper at the Receipt Point. Carrier will also then inform Shipper of
the
approximate time within each Month when the LPG will be re-delivered to
Shipper’s consignee at the Delivery Point.
6.9 Payment
of Transportation and Other Charges. Transportation
charges will be computed and paid
by
Shipper
at the
applicable Transportation Rate on the quantity of delivered LPG as determined
pursuant to Section 6.19. Shipper shall be responsible for all charges
applicable to the particular shipment
of
LPG.
6.10
Liability
of Parties. AS
A
CONDITION TO CARRIER’S ACCEPTANCE OF LPG UNDER THIS AGREEMENT, EACH PARTY AGREES
TO HOLD HARMLESS, INDEMNIFY AND DEFEND THE OTHER PARTY AGAINST CLAIMS OR ACTIONS
FOR INJURY OR DEATH OF ANY AND ALL PERSONS AND FOR DAMAGE TO PROPERTY OF THE
OTHER PARTY OR ANY THIRD PARTY RESULTING FROM OR ARISING OUT OF (1) ANY BREACH
OF OR FAILURE BY THE PARTY OR ITS AGENTS, EMPLOYEES OR REPRESENTATIVES TO ADHERE
TO ANY PROVISION OF THIS AGREEMENT; OR (2) THE NEGLIGENT ACT(S) OR FAILURE(S)
TO
ACT OF THE PARTY OR ITS AGENTS, EMPLOYEES OR REPRESENTATIVES IN CONNECTION
WITH
ITS HANDLING OF LPG. NOTWITHSTANDING THE FOREGOING, (I) CARRIER SHALL NOT
INDEMNIFY SHIPPER WITH RESPECT TO LOSSES ARISING FORM SHIPPER’S ACTS OR
OMISSIONS AND (II) SHIPPER SHALL NOT INDEMNIFY CARRIER WITH RESPECT TO LOSSES
ARISING FROM CARRIER ’S ACTS OR OMISSIONS.
6.11
Force
Majeure Events. Neither
Party shall be liable hereunder for any failure to perform its obligations
(other than the obligation to pay amounts due hereunder and to indemnify) or
for
any loss, damage, or delay caused by acts of God, war, natural disasters
(including, but not limited to, epidemics, landslides, lightning, earthquakes,
fires, storms, or floods), act of the public enemy, terrorism, quarantine,
the
authority of law, strikes, lockouts of employees, explosions, breakage or
accident to machinery or pipe, riots, civil disorder, requisition or necessity
of any Governmental Authority, default by the other Party or its agents,
employees or representatives, or, whether similar or dissimilar to the
foregoing, from any cause not reasonably within the control of the affected
Party and which such Party was not able to reasonably anticipate and avoid
(each
of the foregoing events or occurrences, a “Force
Majeure Event”).
If
there is a strike or lockout, the affected Party is not required to resolve
the
labor dispute by acceding to the demands of employees if this is inadvisable
in
the sole discretion of that Party. A Party claiming a Force Majeure Event shall
be obligated to give prompt written notice of such event to the other Party
and
to use reasonable commercial efforts to overcome such Force Majeure Event as
soon as possible. The foregoing shall apply (i) in the case of Shipper, to
any
deliverer of Shipper’s LPG before and at the Receipt Point, or to any receiver
thereof at and after the Delivery Point and (ii) in the case of Carrier, to
Shipper with respect to its operation of Brownsville Terminal Site or to any
deliverer of Shipper’s LPG before and at the Receipt Point or to any receiver
thereof at and after the Delivery Point.
6.12
Carrier
Liability for LPG Losses. As
between the Parties, Carrier accepts custody, control and responsibility for
LPG
accepted for shipment hereunder at the Receipt Point; provided, however, that
Carrier shall have no responsibility or liability with respect to the operation
of the Brownsville Terminal Site operated by Shipper. On a quarterly basis,
if
there is an LPG loss for which Carrier is liable, as calculated under Section
6.5, Carrier will compensate Shipper for such loss in United States currency
based upon the price as defined in the PMI Contract.
6.13
Warranty
Disclaimer. Carrier
operates solely as a provider of transportation services and not as an owner,
manufacturer or seller of LPG. EXCEPT AS EXPRESSLY STATED HEREIN, EACH PARTY
EXPRESSLY DISCLAIMS ANY LIABILITY FOR ANY EXPRESSED OR IMPLIED WARRANTY FOR
LPG
TRANSPORTED HEREUNDER INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR
INTENDED USE.
6.14
Limitation
of Liability. NOTWITHSTANDING
ANY PROVISIONS OF THIS AGREEMENT THAT MIGHT OTHERWISE SAY OR SUGGEST THE
CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER, OR ITS AGENTS, EMPLOYEES
OR REPRESENTATIVES, FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE,
EXEMPLARY OR INDIRECT DAMAGES (INCLUDING LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES) BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY
PROVISION OR OTHERWISE, OR SIMILAR DAMAGES, EVEN IF SUCH DAMAGES ARE
FORSEEABLE.
6.15
Intentionally
deleted.
6.16
Claims,
Time for Filing. Claims
for loss or damage must be made in writing with Carrier within nine (9) months
after delivery of the LPG, or in case of an alleged failure by Carrier to make
delivery, then within one (1) year after the delivery was scheduled to occur.
Where claims for loss or damage are not timely filed thereon in accordance
with
this Section 6.16, the claims will not be paid and Carrier shall have no
liability associated directly or indirectly with the claims. In the event of
a
dispute, the matter shall be resolved pursuant to the procedures set out in
Article 9 herein.
6.17 Transportation
Inventory. Quantities
of LPG
accepted for transportation for redelivery to the Delivery Point will constitute
Shipper’s transportation inventory prior to delivery. Line fill will be owned by
Carrier. Upon termination of this Agreement, Carrier will, at its sole cost
and
expense, push the LPG line-fill remaining in the Carrier System back up the
Carrier System to Shipper’s facility located behind the Receipt Point, at which
point Shipper will become the owner of such line-fill.
6.18
Intentionally
Left Blank.
6.19
Billing,
Accounting, and Reporting.
6.19.1. Accounting
Statements. Carrier
shall render to
Shipper, on or about the fifteenth (15th) day and last day of each Month (i)
a
statement setting forth, with respect to all LPG received by Carrier during
the
preceding billing
period
at the
Receipt Point, the total quantity of said LPG, (ii) a statement setting forth,
with respect to all LPG redelivered to Shipper during the preceding billing
period
at the
Delivery Point, the total quantity of said LPG, and (iii) a statement setting
forth the transportation charge therefore and any other charges due Carrier
under this
Agreement. Carrier may initially xxxx on its best reasonably available estimates
if all actual information is not available at the time the statement is to
be
sent. Shipper agrees to make payment to Carrier within a ten (10) day period
following receipt of Carrier’s statement/invoice
for all
LPG delivered by Carrier to Shipper at the Delivery Point during the preceding
billing period
and any
other charges due Carrier under this
Agreement. The statement/invoice
presented by Carrier to Shipper will include, among other matters, the following
information: the period’s beginning inventory, all receipts of LPG by Carrier
during the period, all deliveries of LPG to Shipper’s designees during the
period and the period’s ending inventory.
6.19.2. Late
Payment. In
the event Shipper
fails to pay any amount due Carrier when the same is due,
the
unpaid balance shall bear interest from the due
date
until
the date when same is paid at a rate
equal to
the “prime rate” of interest published by Citibank, N.A. plus one percent
(1%).
6.19.3. Errors
and Disputes in Statements. In
the event an error is
discovered in the amount billed in any statement rendered by Carrier, such
error
shall be adjusted within thirty (30) days of the discovery of the error. In
the
event a dispute arises as to the amount payable in any statement rendered,
Shipper shall nevertheless pay the amount not in dispute to Carrier under the
statement rendered pending resolution of the dispute. Such payment shall not
be
deemed to be a waiver of the right by either Party to receive correct payment
or
to recoup any overpayment, as the case may be, together with interest calculated
in accordance with the resolution reached by the Parties and the matter shall
then be resolved pursuant to the procedures set out in Article 9
herein.
6.19.4. Examination
of Books and Records. Each
Party shall have the
right at reasonable hours to examine the books and records of the other Party
to
the extent necessary to verify the accuracy of any statement/invoice,
calculation or determination made pursuant to the provisions contained herein.
If any such examination shall reveal, or if either Party shall discover, any
error in its own or the other Party’s statements, calculations or
determinations, then proper adjustment and correction thereof shall be made
as
promptly as practicable thereafter.
6.20
Additional
Carrier Responsibilities. Carrier
shall provide in a manner consistent with “Good Industry Practices” all
personnel, materials, goods, and services necessary to receive at Receipt Point
and deliver to Shipper or Shipper’s designee at the Delivery Point LPG compliant
with Specifications and the applicable requirements of
Governmental
Authorities. Carrier will provide loading services at the Delivery Point seven
(7) Days per week, twenty-four (24) hours per Day. If the Parties determine
that
it is not necessary to have personnel 24 hours per Day based upon operational
experience developed on site, the hours of service shall be subject to
availability of PMI's representatives to dispatch LPG from the Delivery Point.
Carrier will also provide Shipper, in addition to the Inspector's report, with
a
daily activity report specifying the quantity (weight and volume) and quality
of
LPG delivered to PMI at the Delivery Point, as well as a daily receipt ticket,
documenting the measurement results obtained under Sections 4.3.5 and
4.3.6.
6.21
Spill
and Environmental Pollution. In
the
event of a release or spill of LPG from Carrier’s System, Carrier shall
immediately notify Shipper and Carrier
shall make a
determination if pipeline shipments should be interrupted.
6.21.1. If
any
LPG spill or other environmental polluting discharge occurs in connection with
or relating to any LPG after acceptance at Receipt Point but prior to delivery
of such LPG to the Delivery Point, all containment and clean-up operations
(including those required by any Governmental
Authority),
shall
be at Carrier’s expense.
6.21.2. If
such
spill or environmental polluting discharge occurs after delivery at the Delivery
Point, Shipper authorizes Carrier to commence containment or clean-up operations
on behalf of Shipper as deemed appropriate or necessary as may be required
by
any Governmental Authority. Carrier will notify Shipper and PMI immediately
of
such operations and PMI shall have the right to direct all containment and
clean-up operations.
6.21.3. All
costs
of containment and clean-up for any spill or environmental pollution will be
borne by the Party responsible for such spill or environmental pollution, and
such Party shall indemnify and hold harmless the other Party from any and all
expenses, claims, liabilities, damages, penalties, fines and other costs
(including, without limitation, attorney’s fees) resulting from or related to
such incident.
6.22
Terminal
Regulatory Compliance. Carrier
warrants and
covenants that the
Carrier System currently complies
with all
local, state and federal laws, rules or regulations applicable to the
Carrier System
including,
without
limitation, all such laws, rules or regulations concerning permits and insurance
required for owning, leasing, using
or
operating the Carrier System. Furthermore, Carrier warrants and covenants that
it will utilize reasonable efforts to remain in material compliance with such
laws, rules or regulations.
ARTICLE
7
INDEMNIFICATION
7.1 The
Carrier shall release, indemnify and hold harmless Shipper and its Affiliates
and its and their respective officers, directors, agents and employees, from
and
against any and all fines, penalties, assessments, claims, demands, damages,
loss and causes of action, including reasonable attorney's fees, resulting
from,
directly or indirectly, the Carrier’s failure to comply with its obligations
and
responsibilities included
in this Agreement or the violation or alleged violation of any
Applicable
Laws of
any Governmental Authorities, including, but not limited to, Environmental
Laws,
and for injury to or death of any persons or loss or damage to any property,
in
any way arising out of, in connection with, or incident to the negligence
willful
misconduct
or
omissions of Carrier or
its
Affiliates and its or their respective officers, directors, employees or agents
in connection
with
this
Agreement.
7.2 The
Shipper
shall release, indemnify and hold harmless
the
Carrier
and its Affiliates and its and their respective officers, directors, agents
and
employees, from and against any and all fines, penalties, assessments, claims,
demands, damages, loss and causes of action, including reasonable attorney's
fees, resulting from, directly or indirectly, Shipper’s failure to comply with
its obligations and responsibilities included in this Agreement or the violation
or alleged violation of any Applicable
Laws
of
any Governmental Authorities, including, but not limited to, Environmental
Laws,
and for injury to or death of any persons or loss or damage to any property,
in
any way arising out of, in connection with, or incident to the negligence,
willful misconduct or omissions of Shipper or its Affiliates and its or their
respective officers, directors, employees or agents in connection with
this
Agreement.
7.3 It
is not
the intention of the parties hereto to release from liability any third party
with which either the Carrier or Shipper may contract in connection with the
Carrier System or the services provided under this Agreement. The provisions
of
this Section are not made for the benefit of any person or entity other than
the
Parties, their Affiliates and their respective officers, directors, employees,
and agents.
ARTICLE
8
MISCELLANEOUS
8.1 Notices. All
notices and other communications given pursuant to or in connection with this
Agreement shall be given in writing and shall be personally delivered, mailed
by
U.S Mail, or sent by overnight courier service, or facsimile transmission (with
electronic confirmation of receipt) to the intended recipient at the address
specified below for such recipient or, as to either Party, at such other address
as shall be designated by such Party in a notice to the other Party. If
personally delivered to the address herein provided, a notice shall be deemed
to
have been received upon delivery or if delivered after regular business hours,
it shall be deemed to have been received on the following Day. If mailed by
U.S.
Mail to the address herein provided, a notice shall be deemed to have been
received three (3) Days after the mailing thereof, provided that a notice shall
not be effective if mailed during any period of mail service disruption. If
sent
by courier service, or facsimile transmission to the address herein provided,
a
notice shall be deemed to have been received on the first (1st) Day following
the Day it was dispatched.
|
Shipper:
|
TransMontaigne
Product Services Inc.
|
0000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Attention:
President
Facsimile
No. (000) 000-0000
|
Carrier:
|
Rio
Vista Operating Partnership L.P.
|
000
Xxxxxxx
Xxxx,
Xxxxx
0000
Xxxxxxx,
Xxxxx 00000
Attention:
President
Facsimile
No.: (000) 000-0000
With
a
copy (which shall not constitute effective notice) to:
Xxx
Xxxxxxxx
Penn
Octane Corporation
000
Xxxxxx Xxxxxx Xxx 000
Xx
Xxxxxxx, XX 00000
A
Party
shall be entitled to change its address for notice hereunder by providing the
other Party with not less than three (3) Days prior written notice of such
address change.
8.2 Assignment. No
Party
may assign, sell, exchange, transfer or otherwise dispose to any Person any
of
its rights, interests, powers or obligations under this Agreement, unless the
other Party consents in advance and in writing, which consent shall not be
unreasonably withheld; provided, however, no such consent shall be required
in
connection with the sale of all or substantially all of a Party’s LPG business
or in the case of any assignment to an Affiliate. The
foregoing does not apply to Shipper’s assignment of this Agreement to
TransMontaigne Partners L.P. If
such
an assignment occurs, this Agreement shall extend to and be binding upon the
successors and assigns of the Parties. Each Party shall have the right to pledge
its interest under this Agreement to a financial institution providing such
Party with financing.
8.3 Modification
and Waiver. No
amendment, change in, addition to, or waiver of the terms, provisions, or
conditions of this Agreement shall be effective or binding upon either Party
unless it is in writing and signed by duly authorized representatives of both
Parties. A waiver by a Party of any breach by the other Party of a provision
hereof by a Party shall not be binding upon the first Party unless such waiver
is in writing, and no such waiver or failure by either Party to insist upon
the
strict performance of any covenant, agreement, term or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof,
shall constitute a waiver of any prior or subsequent breach of such covenant,
agreement, term or condition.
8.4 Governing
Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF TEXAS EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT WOULD
OTHERWISE REFER CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE
SUBSTANTIVE LAW OF ANOTHER JURISDICTION.
8.5 Entire
Agreement. This
Agreement together with the Purchase Agreement and their appendices, constitutes
the entire Agreement between the Parties concerning the subject matter hereof
and supersedes all prior or contemporaneous discussions, negotiations,
representations, or agreements relating to the subject matter of the Agreement.
There are no representations, warranties, conditions or collateral agreements,
express or implied, relating to the subject matter of this Agreement, other
than
as contained in this Agreement.
8.6 Survival. All
provisions that may reasonably be interpreted as surviving the termination
or
non-renewal of this Agreement shall survive such termination or non-renewal,
including, but not limited to, the provisions relating to indemnification,
limitation of damages, waiver of warranty and of indirect damages, choice of
law, and right to audit.
8.7 Relationship
of the Parties. This
Agreement is not intended to and does not (i) create any relationship of
partnership, joint venture, agency, or employment or (ii) permit either Party
to
obligate the other Party. Each Party hereto is and shall remain an independent
contractor as to the other Party hereto in all respects and in the performance
of all work and activities under this Agreement. The detailed methods and manner
of conducting such work and activities by such Party shall be under the complete
control and direction of such Party unless modified by another provision of
this
Agreement. Nothing in this Agreement shall limit or be interpreted as
conflicting with the independent contractor status of such Party and its
subcontractors, but in the event of any such conflict, the provisions of this
Section 8.7 shall govern.
8.8 Third
Party Beneficiaries. This
Agreement is for the sole benefit of the Parties and their respective successors
and permitted assigns, and shall not inure to the benefit of any other Person
whomsoever, it being the intention of the Parties that no third Person shall
be
deemed a third party beneficiary of this Agreement.
8.9 Confidentiality. Carrier
shall faithfully observe all requirements of confidentiality imposed on it
as a
common carrier under Applicable Law. Neither Shipper nor Carrier shall disclose
any commercially sensitive terms or conditions of this Agreement without the
prior written consent of the other Party, except as required by law or
regulation.
8.10
Conspicuousness. THE
PARTIES AGREE THAT ANY PROVISION OF THIS AGREEMENT THAT IS SET FORTH IN THE
STYLE OF THIS SECTION 8.10 IS CONSPICUOUS.
8.11
Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, and all of which shall be deemed one and the same
Agreement.
ARTICLE
9
ALTERNATE
DISPUTE RESOLUTION
9.1 Covered
Disputes. Any
dispute, controversy or claim (whether sounding in contract, tort or otherwise)
arising out of or relating to this Agreement, including without limitation
the
meaning of its provisions, or the proper performance of any of its terms by
either Party, its breach, termination or invalidity (“Dispute”)
will
be resolved in accordance with the procedures specified in this paragraph,
which
will be the sole and exclusive procedure for the resolution of any such Dispute,
except that a Party, without prejudice to the following procedures, may file
a
complaint to seek preliminary injunctive or other provisional judicial relief,
if in its sole judgment, that action is necessary to avoid irreparable damage
or
to preserve the status quo. Despite that action the Parties will continue,
subject to Section 9.6 hereinbelow, to participate in good faith in the
procedures specified in this Section.
9.2 Initiation
of Procedures. Either
Party wishing to initiate the dispute resolution procedures set forth in this
paragraph with respect to a Dispute not resolved in the ordinary course of
business must give written notice of the Dispute to the other Party
(“Dispute
Notice”).
The
Dispute Notice will include (i) a statement of that Party’s position and a
summary of arguments supporting that position, and (ii) the name and title
of
the executive who will represent that Party, and of any other person who will
accompany the executive, in the negotiations under next subsection.
9.3 Negotiation
Between Executives. If
a
Party has given a Dispute Notice under the preceding subparagraph, the Parties
will attempt in good faith to resolve the Dispute within 45 calendar days of
the
notice by negotiation between executives who have authority to settle the
Dispute and who are at a higher level of management than the persons with direct
responsibility for administration of this Agreement or the matter in Dispute.
Within 15 calendar days after delivery of the Dispute Notice, the receiving
Party will submit to the other a written response. The response will include
(i)
a statement of that Party's position and a summary of arguments supporting
that
position, and (ii) the name and title of the executive who will represent that
Party and of any other person who will accompany the executive. Within 45
calendar days after delivery of the Dispute Notice, the executives of both
Parties will meet at a mutually acceptable time and place, and thereafter,
as
often as they reasonably deem necessary, to attempt to resolve the
Dispute.
9.4 Mediation. If
the
Dispute has not been resolved by negotiation under the preceding subsection
within 45 calendar days of the Dispute Notice, and only in such event, either
Party may initiate the mediation procedure of this subsection by giving written
notice to the other Party (“Mediation
Notice”).
The
Parties will endeavor to settle the Dispute by mediation within 90 calendar
days
of the Mediation Notice under the then current Center for Public Resources
("CPR") Model Mediation Procedure for Business Disputes. If the Parties have
not
agreed upon a mediator within seven calendar days after the Mediation Notice,
either Party may request CPR assistance in the selection of a mediator under
its
guidelines. The mediator will establish rules for an expedited discovery
procedure and will resolve all disputes with regard to discovery between the
Parties. If the mediator has not already done so during the mediation process,
at least seven calendar days before the end of the ninety day mediation period,
the mediator, if he or she believes that they are qualified to do so, will
provide to each Party a written summary of the mediator's conclusions regarding
the outcome of the Dispute if it is submitted to arbitration under the following
subsection.
9.5 Arbitration. If
the
Dispute has not been resolved by mediation under the preceding subsection within
90 calendar days of the Mediation Notice, and only in such event, either Party
may initiate the arbitration procedure of this subsection by giving written
notice to the other Party (“Arbitration
Notice”).
The
Dispute will be finally resolved by binding arbitration in accordance with
the
then current Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) by a single arbitrator, chosen by mutual agreement of both
Parties. If the Parties cannot select an arbitrator within 30 calendar days
of
the Arbitration Notice, the arbitrator will be selected by the AAA. The
arbitration will be governed by the United States Arbitration Act, 9 U.S.C.
Sec.
1-16, as amended (“the Act”), and to the extent not inconsistent with the Act,
the Texas arbitration statute. Judgment upon the award rendered by the
arbitrator may be entered by any court of any state having jurisdiction. The
statute of limitations of the State of Texas for the commencement of a lawsuit
will apply to the commencement of an arbitration under this Agreement, except
that no defenses will be available based upon the passage of time during any
negotiation or mediation called for by this Section. Each Party will assume
its
own costs of legal representation and expert witnesses and the Parties will
share equally the other costs of the arbitration. The arbitrator will award
pre-judgment interest in accordance with the law of Texas; however, the
arbitrator may not award punitive damages. The arbitration will take place
in
Houston, Texas.
9.6 Tolling
and Performance. Except
as
indicated in the preceding subsection with regard to the commencement of
arbitration, all applicable statutes of limitation and defenses based upon
the
passage of time will be tolled while the procedures specified in this paragraph
are pending. The Parties will take any action required to effectuate that
tolling. Each Party is required to continue to perform its obligations under
this Agreement pending final resolution of any Dispute, unless to do so would
be
impossible or impracticable under the circumstances.
The
Parties have executed this Agreement as of the Effective Date.
|
TRANSMONTAIGNE
PRODUCT SERVICES INC.
|
||
|
By:
|
||
|
Name:
Xxxxxxx X. Xxxxxx
|
||
|
Title:
President
|
||
|
RIO
VISTA OPERATING PARTNERSHIP, L.P.
|
||
|
By:
Rio Vista Operating GP LLC, general partner
|
||
|
By:
|
||
|
Name:
Xxxxxxx X. Xxxxxx
|
||
|
Title:
President
|
||
|
PENN
OCTANE INTERNATIONAL, LLC
|
||
|
By:
|
||
|
Name:
Xxx X. Xxxxxxxx
|
||
|
Title:
Manager
|
||
