TERMINALLING AND STORAGE AGREEMENT by and between SEMMATERIALS, L.P., (“Customer”) and SEMMATERIALS ENERGY PARTNERS, L.L.C. (“Owner”) effective as of
EXHIBIT 10.7
TERMINALLING
AND STORAGE AGREEMENT
by
and between
SEMMATERIALS,
L.P.,
(“Customer”)
and
SEMMATERIALS
ENERGY PARTNERS, L.L.C.
(“Owner”)
effective
as of
11:59
PM CDT March 31, 2009
|
Section
1.
|
Definitions
|
1
|
|
Section
2.
|
Services,
Statements, Invoices, Documents and Records
|
4
|
|
Section
3.
|
Fees,
Charges and Taxes
|
5
|
|
Section
4.
|
Operations,
Receipts and Deliveries
|
6
|
|
Section
5.
|
Product
Quality Standards and Requirements
|
8
|
|
Section
6.
|
Title
and Custody of Product
|
9
|
|
Section
7.
|
Limitation
of Liability and Damages
|
9
|
|
Section
8.
|
Product
Measurement
|
10
|
|
Section
9.
|
Product
Loss and Product Gain
|
10
|
|
Section
10.
|
Force
Majeure
|
11
|
|
Section
11.
|
Inspection
of and Access to the Storage Tanks
|
11
|
|
Section
12.
|
Assignment
|
12
|
|
Section
13.
|
Notice
|
12
|
|
Section
14.
|
Compliance
with Law and Safety
|
12
|
|
Section
15.
|
Term
and Termination
|
12
|
|
Section
16.
|
Insurance
|
13
|
|
Section
17.
|
[Reserved]
|
14
|
|
Section
18.
|
Indemnity
|
14
|
|
Section
19.
|
Miscellaneous
|
15
|
ATTACHMENT
A
ATTACHMENT
B
ATTACHMENT
C
TERMINALLING AND STORAGE
AGREEMENT
This
Terminalling and Storage Agreement (the “Agreement”)
is entered into on April 7, 2009, to be effective as of 11:59 PM CDT March 31,
2009 (the “Effective
Date”), and is made by and between SemMaterials Energy Partners, L.L.C.,
a Delaware limited liability company (“Owner”),
and SemMaterials, L.P., an Oklahoma limited liability company (“Customer”,
each of Owner and Customer sometimes referred to individually as “Party” and
collectively as the “Parties”).
R
E C I T A L S
WHEREAS,
Owner owns and operates certain asphalt cement and residual fuel storage
terminals; and
WHEREAS,
Owner desires to provide terminalling and storage services to Customer for
Customer’s asphalt cement and residual fuel inventory and Customer desires to
receive said services at such storage terminals on the terms and conditions set
forth herein.
NOW
THEREFORE, in consideration of the mutual promises contained in this Agreement,
the Parties agree to the following terms and conditions.
Section
1. Definitions.
In this
Agreement, unless the context requires otherwise, the terms defined in the
preamble have the meanings indicated and the following terms will have the
meanings indicated below:
“Affiliate”
means, in relation to a Party, any Person that (i) directly or indirectly
controls such Party, (ii) is directly or indirectly controlled by such Party or
(iii) is directly or indirectly controlled by a Person that directly or
indirectly controls such Party. For this purpose, “control” of any
entity or Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of any Person,
whether through the ownership of a majority of equity interests or voting power
or control in fact of the entity or Person or otherwise. For purposes
of this Agreement, Owner and its affiliates shall not be deemed to be Affiliates
of Customer and its affiliates.
“Applicable
Law” means (i) any law, statute, regulation, code, ordinance, license,
decision, order, writ, injunction, decision, directive, judgment, policy, or
decree of any Governmental Authority and any judicial or administrative
interpretations thereof, (ii) any agreement, concession or arrangement with any
Governmental Authority and (iii) any license, permit or compliance requirement
by any Governmental Authority, in each case applicable to either Party and as
amended or modified from time to time.
“Bankruptcy
Cases” means the chapter 11 cases commenced by SemGroup, L.P. and certain
of its direct and indirect subsidiaries on July 22, 2008, jointly administered
under Case No. 08-11525 (BLS).
“Bankruptcy
Court” means the United States Bankruptcy Court for the District of
Delaware or any other court having jurisdiction over the Bankruptcy Cases from
time to time.
“Barrel”
means forty-two (42) Gallons.
“Business
Day” means each calendar day, excluding Saturdays, Sundays, or other
holidays observed by Owner.
“Code”
means title 11 of the United States Code, as amended.
“Existing Asphalt
Inventory” means any of SemMaterials’ or its Affiliates’ asphalt cement,
residual fuel oil or other product or inventory that is owned on its own behalf
or held on behalf of third parties and that is stored in the Terminals or
Storage Tanks as of the Effective Date. For the purposes of clarity,
Existing Asphalt Inventory does not include any tank bottoms.
“Force
Majeure” means (i) strikes, lockouts or other industrial disputes or
disturbances, (ii) acts of the public enemy or of belligerents, hostilities or
other disorders, wars (declared or undeclared), blockades, thefts,
insurrections, riots, civil disturbances or sabotage, (iii) acts of nature,
landslides, severe lightning, earthquakes, fires, tornadoes, hurricanes, storms,
and warnings for any of the foregoing which may necessitate the precautionary
shut-down of pipelines, trucks, docks, loading and unloading facilities storage
tanks or other related facilities, floods, washouts, freezing of machinery,
equipment, or lines of pipe, inclement weather that necessitates extraordinary
measures and expense to construct facilities or maintain operations, tidal
waves, perils of the sea and other adverse weather conditions or unusual or
abnormal conditions of the sea or other water, (iv) arrests and restraints of,
or other interference or restrictions imposed by, governments (either federal,
state, civil or military and whether legal or de facto or purporting to act
under some constitutions, decree, law or otherwise), necessity for compliance
with any court order, or any law, statute, ordinance, regulation, or order
promulgated by a Governmental Authority having or asserting jurisdiction,
embargoes or export or import restrictions, expropriation, requisition,
confiscation or nationalization or (v) epidemics or quarantine, explosions,
breakage or accidents to equipment, machinery, plants, facilities or lines of
pipe, electric power shortages, breakdown or injury of trucks or vessels or any
other causes, whether of the kind enumerated above or otherwise, which were not
reasonably foreseeable, and which are not within the control of the Party
claiming suspension of its obligations under this Agreement pursuant to Section 10 and
which by the exercise of reasonable due diligence such Party is unable to
prevent or overcome. Such term will likewise include, in those
instances where either Party is required to obtain servitudes, rights-of-way,
grants, permits, or licenses to enable such Party to fulfill its obligations
under this Agreement, the inability of such Party to acquire, or delays on the
part of such Party in acquiring, at reasonable cost and after the exercise of
reasonable diligence, such servitudes, rights-of-way grants, permits or
licenses, and in those instances where either Party is required to furnish
materials and supplies for the purpose of constructing or maintaining facilities
to enable such Party to fulfill its obligations under this Agreement, the
inability of such Party to acquire, or delays on the part of such Party in
acquiring, at reasonable cost and after the exercise of reasonable diligence,
such materials and supplies. If Owner is claiming a suspension of its
obligations under this Agreement pursuant to Section 10, any
of the above listed events or circumstances will constitute a Force Majeure upon
the first occurrence of the event or circumstance. If Customer is
claiming a suspension of its obligations under this Agreement, an event or
circumstance will not constitute a Force Majeure unless and until it has
occurred and continues for thirty (30) consecutive days.
2
“Gallon”
means a U.S. gallon of 231 cubic inches corrected to 60 degrees
Fahrenheit.
“Governmental
Authority” means any foreign or U.S. federal, state, regional, local or
municipal governmental body, agency, instrumentality, board, bureau, commission,
department, authority or entity established or controlled by a government or
subdivision thereof, including any legislative, administrative or judicial body,
or any person purporting to act therefor.
“Indemnified
Party” has the meaning assigned to such term in Section 18.1.
“Indemnifying
Party” has the meaning assigned to such term in Section 18.1.
“Independent
Inspector” means a licensed Person who performs sampling, quality
analysis and quantity determination of the Product received or
delivered.
“Interest
Rate” means the one-month London Interbank Offered Rate.
“Inventory
Schedule” has the meaning assigned to such term in Section
2.6.
“Liability”
means any obligation, liability, charge, deficiency, assessment, interest,
penalty, judgment, award, cost or expense of any kind (including reasonable
attorneys’ fees, other fees, court costs and other
disbursements). The term also includes any liability that directly or
indirectly arises out of or is related to any claim, proceeding, judgment,
settlement or judicial or administrative order made or commenced by any third
party or Governmental Authority.
“Month”
means a calendar month.
“Product”
means each of the products described in Attachment “C”
which are owned by or for the account of the Customer.
“Product
Loss” means any loss of Product occurring as a result of any
contamination, adulteration, mislabeling, misidentification or other loss of or
damage to Product caused by the failure of the Owner to use reasonable industry
procedures in the handling, testing or storage of Product, provided Product Loss
shall not include the result of loss of or damage to Product (i) associated with
circumstances involving Force Majeure, (ii) caused by the act or omission of
Customer, (iii) due to normal Product evaporation, shrinkage, clingage, (iv)
Product measurement inaccuracies within tolerance acceptable under current
industry practices or (v) any other loss for any reason whatsoever, provided
such loss does not exceed one-half of one percent (0.5%) of Customer’s Product
then in the custody of Owner.
“Storage
Tanks” those asphalt cement and residual fuel storage tanks located at
the Terminals and used to provide the terminalling and storage services to
Customer pursuant to this Agreement.
“Tank Bottom
Schedule” has the meaning indicated in Section
2.7.
3
“Temporary
Event” has the meaning assigned to such term in Section 4.1.
“Term” has
the meaning indicated in Section
15.1.
“Terminals”
has the meaning indicated in Attachment “A”
and Attachment “B”.
“Third
Party” means any entity other than Owner, Customer or their
Affiliates.
“Third Party
Claim” has the meaning assigned to such term in Section 18.3.
“Ton” means
a U.S. short ton of 2,000 pounds.
“Week”
means a calendar week.
Section
2. Services, Statements,
Invoices, Documents and Records.
2.1 Owner
will provide to or for Customer the following storage and terminalling services
related to the receipt of Product at the Terminals and to the storage,
terminalling and delivery of Product into and out of the Storage Tanks
(collectively, the “Services”):
(a) Receive
and unload all Product delivered by Customer to the Terminals from time to time
during the term of this Agreement;
(b) Move the
off-loaded Product described in Section 2.1(a)
and load such Product into the Storage Tanks;
(c) Store and
terminal the off-loaded Product;
(d) Move
Product among Storage Tanks at a particular location as reasonably requested by
Customer;
(e) Provide
all pumping and heating necessary for proper performance of each of the
foregoing services, including heating facilities adequate to maintain the
temperature of Product as requested by Customer;
(f) Take
samples of Product from various delivering vessels before unloading,
representing a composition of quality for the lot delivered, as reasonably
requested by Customer;
(g) Prepare
all tank or vessel gauging reports, bills of lading and other receiving papers
and deliver copies thereof to Customer at such times and places as it may
reasonably request;
(h) Keep
records and accounts and make reports relating to Product received in storage
and withdrawn from storage; and
(i) Present
all required terminal documents and invoices to Customer which are suitably
detailed for payment.
4
2.2 The
Services will be performed in a manner consistent with the prior operating
practices of the Terminals and Storage Tanks and in compliance with Applicable
Law. Owner may adapt its performance of the Services in order to be
consistent with industry practices, in order to meet the requirements of health
and safety laws, rules and regulations and in order to achieve the efficient
utilization of the Terminals and Storage Tanks.
2.3 Within
twenty-five (25) days following the end of each Month during the Term of this
Agreement, Owner will submit to Customer statements recording the volume of
Customer’s Product received into the Terminals and delivered from the Storage
Tanks during such previous Month calculated in accordance with the terms hereof
together with an invoice for amounts due under this Agreement for Services
provided during such Month.
2.4 Except as
provided below in this paragraph, each Party will maintain a true and correct
set of records pertaining to its performance of this Agreement and will retain
copies of all such records for a period of not less than two (2) years following
termination or cancellation of this Agreement. Upon reasonable prior
notice, a Party or its authorized representative may at its sole cost, during
the Term of this Agreement and thereafter during the aforesaid two year period,
inspect such records of the other Party during normal business hours at the
other Party’s place of business. Unless a Party has taken written
exception to a statement or invoice within six (6) Months following the end of
the year in which the statement or invoice is delivered, the statement or
invoice shall be conclusively presumed to be true and correct.
2.5 Owner
shall have no liability for not having available capacity in the Terminals for
Customer’s Product; provided, that Owner shall provide available capacity in any
Storage Tank containing Product.
2.6 On the
date hereof, Customer has provided to Owner a schedule (the “Inventory
Schedule”) listing (i) the Terminals or Storage Tanks containing Product
and (ii) a reasonable estimation of the date that all Product will be removed
from such Terminal or Storage Tank, as applicable. Customer shall
update the Inventory Schedule each Week during the Term.
2.7 On the
date hereof, Customer has provided to Owner a schedule listing the Terminals or
Storage Tanks containing tank bottoms (the “Tank Bottom
Schedule”) and such schedule shall indicate whether Customer intends to
retain or transfer such tank bottoms to Owner in accordance with Section
4.5. Customer shall update the Tank Bottom Schedule each week
during the Term to reflect (i) the date on which all Product was removed from
such Terminals or Storage Tanks, (ii) the amount of any tank bottoms remaining
in such Terminals or Storage Tanks and (iii) whether such Customer intends to
retain or transfer such tank bottoms to Owner in accordance with Section
4.5.
Section
3. Fees, Charges, Taxes,
Disputed Amounts.
3.1 Customer
will pay Owner the fees, rates and charges set forth in Attachment “A”
with respect to the Services. All such payments, as well as any taxes
and other amounts to which Owner is entitled under this Agreement, shall be paid
in accordance with the terms and conditions set forth in this
Agreement.
5
3.2 All fees
and charges reflected in Owner’s invoices are due and payable within fifteen
(15) Business Days of the receipt of Owner’s invoice. Payment must be
made by electronic wire transfer of same day available federal funds to Owner’s
account and bank, both as indicated on Owner’s invoice. Invoices may
be sent by electronic mail and telephone facsimile. If Customer
disputes any portion of an invoice, Customer must pay the undisputed portion of
the invoice. Overdue amounts or disputed amounts that are resolved in
favor of the Owner will accrue interest at the Interest Rate from the date that
payment is due until paid in full and Customer will pay all of Owner’s
reasonable, out-of-pocket costs (including reasonable attorney’s fees and court
costs) of collecting past due payments and late payment charges, whether or not
suit is brought, provided, however, that the
Parties will share the costs of a Referee in accordance with Section
3.4. If overdue amounts or disputed amounts are resolved in
favor of the Customer, Owner will pay all of Customer’s reasonable,
out-of-pocket costs (including reasonable attorney’s fees and courts costs) of
defending itself, provided, however, that the
Parties will share the costs of a Referee in accordance with Section
3.4.
3.3 Customer
will pay any and all taxes, fees or other charges and assessments imposed on the
Services, including sales or other excise taxes on the storage and throughput
services. Customer will also pay any ad valorem or property ownership
taxes, if any, on Customer’s Product located at the Terminals or in the Storage
Tanks and Customer’s other property, if any. Owner shall be
responsible for and pay all other applicable taxes levied upon Owner, including
its own income and franchise taxes and any property and ad valorem taxes levied
on the Terminals and Storage Tanks and Asphalt Transferred Assets.
3.4 If
Customer disputes the amount reflected in any statement or invoice delivered
pursuant to Section
2.3 or this Section 3 of this
Agreement, then Customer may, within thirty (30) days after receipt of such
statement or invoice, deliver a written notice to Owner (the “Dispute
Notice”) setting forth the items in dispute in reasonable detail (the
“Disputed
Items”). During the thirty (30) day period following delivery
of the Dispute Notice (the “Resolution
Period”), the Parties will use their commercially reasonable efforts to
reach agreement on the Disputed Items set forth in the Dispute
Notice. If the Parties are unable to reach an agreement during the
Resolution Period, then they will appoint a mutually acceptable independent
party to review the Dispute Notice and determine the final amount of the
Disputed Items. If the Parties are unable to agree on a single
independent party within fifteen (15) days after the end of the Resolution
Period, then the Parties will each appoint one (1) independent party, who will
jointly select a third independent party (singly or collectively, the “Referee”),
within thirty (30) days after the end of the Resolution Period. The
Referee shall deliver its determination to the Parties within thirty (30) days
from the date of its engagement. The Referee’s report shall be final
and binding upon the Parties. The cost of the Referee’s engagement
and report shall be shared fifty percent (50%) by Owner and fifty percent (50%)
by Customer.
Section
4. Operations, Receipts and
Deliveries.
4.1 Receipts
and deliveries of Product will be handled within the normal business hours of
the Terminals. Owner may, without Customer’s approval, make temporary
changes in business hours or temporarily close any Terminal or Storage Tank
because of an extraordinary event which does not last longer than five (5) days
(a “Temporary
Event”). Owner will notify Customer of such Temporary Event in
advance, or as soon after implementation as is practicable but in no event later
than twenty-four (24) hours after the commencement of a Temporary
Event. Except as required pursuant to Section 15 or 18 of this Agreement,
Owner will not be responsible for the payment of any costs incurred by Customer
or its transportation carrier for any delay in receiving or delivering Product
or any other costs or fees.
6
4.2 Customer
must arrange for and pay all Third Party costs related to the delivery of
Customer’s Product to the Terminals and from the Storage Tanks. Owner
is not responsible for such Third Party costs. Unless otherwise
provided by Owner in writing, Customer must provide notice reasonably acceptable
to Owner containing all necessary instructions, including without limitation,
the identity and quantity and any other specifications of the Product and the
tentative date of delivery to the Terminals (the “Scheduling
Notice”). Each Scheduling Notice delivered hereunder by
Customer for deliveries of Product to a Terminal shall be sent to those
individuals that Owner has specified to Owner to receive such Scheduling Notice
for the applicable Terminal with respect to such Product delivery.
4.3 Owner
will deliver to Customer, or to such Third Parties as Customer may direct, the
Product held by Owner in the Storage Tanks for the account of
Customer. Customer is responsible for providing to Owner
documentation required to authorize deliveries for or on its behalf from the
Storage Tanks.
4.4 Owner
will provide the Services to Customer only with respect to
Product. Customer will have access to the Terminals and Storage Tanks
for other products only with prior written notice to and consent by
Owner. Any other product approved by Owner will then become part of
“Product” as defined in this Agreement. If a special method of
providing the Services is required for Product, then Customer must notify Owner
in sufficient time to enable Owner to consider whether, in Owner’s sole
discretion, it will accept the proposed changes in the method of delivering the
Services and to take the necessary preparatory measures if it agrees with such
changes. Absent such notice and absent Owner’s written approval with
respect to changes in the Product or the method of delivering the Services,
Owner will not be liable for losses or damage incurred during the terminalling
and storage of Product (except for losses and damages resulting from Product
Loss), nor will Owner be obligated to provide such special
Service. It is understood that the cost of any additional or special
equipment required by Customer or of alterations made necessary by the nature of
Product will be for the account of Customer, and Customer will be responsible
for the expense of any necessary cleaning and restoration to their previous
condition of the Terminals and Storage Tanks, including, without limitation,
pumps, and loading facilities, unless otherwise explicitly stated in this
Agreement. All fixtures, equipment and appurtenances attached to the
Storage Tanks will be installed by the Owner and will remain the property of
Owner.
4.5 Upon a
change in the Product to be terminalled and stored during the Term of this
Agreement, or upon termination of this Agreement, or upon the election by
Customer to remove all Product from a Terminal or Storage Tank, Customer shall
remove all Product from the Terminals and Storage Tanks. Customer
shall have a reasonable amount of time to remove all Product from the Terminals
and Storage Tanks. All fees, rates and charges under this Agreement
shall continue to apply to any such Terminal or Storage Tank until all Product
is removed from the applicable Terminal or Storage Tank. Customer
agrees to (i) reimburse Owner for the actual costs of such removal, which shall
include the expense of any necessary cleaning and restoration to their previous
condition of the Terminals and Storage Tanks, plus a ten percent (10%)
administrative fee, (ii) pay for (A) the cost of such removal and (B) upon
removal, the expense of any necessary cleaning and restoration to their previous
condition of the Terminals and Storage Tanks at its sole cost and expense, or
(iii) transfer any and all tank bottoms owned by Customer at any such Terminal
or Storage Tank to Owner and Customer will no longer be liable for any such
removal.
7
4.6 If any
Governmental Authority requires installation of any improvement, alteration or
addition to any Terminal or Storage Tank for purposes of compliance with
Applicable Law. Owner will not be required to make any improvements,
alterations or additions to the Terminals or the Storage Tanks in such
circumstance. If Owner chooses not to pay for such improvement,
alteration or addition, Owner may direct the affected Product to a mutually
acceptable Storage Tank at the same Terminal, another Terminal or at other
facilities owned by Owner or its Affiliates. If Owner does not direct
the Product to mutually acceptable alternate facilities, either Party may
terminate this Agreement as to the Services provided at the affected Terminals
and/or Storage Tanks from this Agreement, by giving the other Party notice of
its intention no later than thirty (30) days after Owner’s election not to make
such improvement.
4.7 Owner
will keep Customer’s Product separate from the product of other customers
(“Segregated
Service”). Customer will be responsible for providing all tank
bottoms. Customer will retain ownership of all of the tank bottoms it
provides, except as provided in Section
4.5.
Section
5. Product Quality Standards
and Requirements.
5.1 Customer
warrants to Owner that all Product tendered by or for the account of Customer
for receipt into the Terminals and Storage Tanks will conform to the
specifications for such Product set forth in Attachment “C”,
attached to this Agreement and included in it for all purposes by this
reference, and will comply with industry standards and all Applicable
Law. Owner may rely upon the specifications and representations of
Customer, if any, set forth in the Scheduling Notice described in Section 4.2 as
to Product quality. Owner will not be obligated to receive Product
into the Terminals and Storage Tanks that is contaminated or that otherwise
fails to meet the specifications set forth on Attachment “C”,
nor will Owner be obligated to accept Product that fails to meet Product grade,
if any, set forth in the Scheduling Notice. Should Owner remove or
dispose of or otherwise treat the Product for any water or other material or
contaminants in or associated with the Product at any time, Customer shall pay
or reimburse all costs and expense associated with such removal, disposal or
treatment.
5.2 The
quality of Product tendered into the Terminals and Storage Tanks for Customer’s
account may be verified either by Customer’s laboratory analysis, or by an
Independent Inspector’s analysis indicating that the Product so tendered meets
minimum Product specifications, if any, set forth in the Scheduling
Notice. Such analysis may be conducted on a periodic basis in
accordance with a quality compliance program implemented by Customer, which
program shall be subject to the approval of Owner, which approval shall not be
unreasonably withheld. All costs associated with such compliance
program shall be borne by Customer. Upon reasonable notice to
Customer, Owner, at its expense, may sample any Product tendered to Owner for
Customer’s account for the purpose of confirming the accuracy of the
analysis.
8
5.3 Customer
may at all reasonable times and without unreasonable disruption to
Owner’s operations conduct appropriate tests to determine whether Product meets
the applicable specifications set forth in the Scheduling
Notice. Owner will be liable to Customer by reason of contamination
of Product occurring at the Terminals or in the Storage Tanks that causes the
Product to fail to meet specifications, but only to the extent such
contamination involves a Product Loss. In all other cases, Customer
shall indemnify Owner for any Liability incurred by Owner to parties who
purchase Product from Customer.
Section
6. Title and Custody of
Product.
6.1 Title to
the Product will remain with Customer at all times subject to any lien in favor
of Owner created under Applicable Law. Owner will assume custody of
the Product beginning when such Product passes the flange connection between the
rail car, barge, ship, or vehicle and Owner’s receiving hose at the Terminals
and custody will pass back to Customer at the time such Product passes the
outlet flange of each Storage Tank.
6.2 Owner
shall indemnify Customer for damages, losses, or injury caused by Owner’s gross
negligence or intentional misconduct. Owner shall otherwise have no
responsibility for any loss, damage or injury to persons or property (including
the Product) arising out of possession or use of the Product, except to the
extent that such loss, damage or injury involves a Product
Loss. Customer shall indemnify Owner for any Liability incurred by
Owner to Third Parties arising out of Owner’s possession or use of the Product
for which Owner is not liable under this paragraph and for any Liability to
Third Parties arising out of or pertaining to the Product before its delivery by
Customer to the Terminals and after its receipt by Customer from the Storage
Tanks.
Section
7. Limitation of Liability and
Damages.
7.1 The
maximum Liability of Owner for Product Loss will not exceed, and is strictly
limited to, the market value of the Product at the time of the Product Loss,
plus the costs and expenses actually, reasonably and necessarily incurred by
Customer or Customer’s immediate purchaser in damage to equipment into which
such Product was delivered from the Storage Tanks, plus any fines and penalties
actually levied or imposed by anyone including federal, state or local
governments against Customer or Customer’s immediate purchaser by reason of such
fault on Owner’s part. Owner may, in lieu of payment for Product,
replace such Product with Product of like grade and quality.
7.2 EXCEPT
FOR THE PARTIES’ INDEMNIFICATION OBLIGATIONS WITH RESPECT TO CLAIMS OF THIRD
PARTIES, THE PARTIES’ LIABILITY FOR DAMAGES HEREUNDER IS LIMITED TO DIRECT,
ACTUAL DAMAGES ONLY, AND NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR SPECIFIC
PERFORMANCE, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, OR SPECIAL,
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, IN TORT,
CONTRACT OR OTHERWISE, OF ANY KIND, ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THE PERFORMANCE, THE SUSPENSION OF PERFORMANCE, THE FAILURE TO PERFORM, OR THE
TERMINATION OF THIS AGREEMENT. EACH PARTY ACKNOWLEDGES ITS DUTY TO
MITIGATE DAMAGES HEREUNDER.
9
Section
8. Product
Measurement.
8.1 Quantities
of Product delivered to the Terminals and redelivered from the Storage Tanks
shall be determined for deliveries and receipts by truck, rail, ship and barge
volumes and shall be measured by one of the following methods: meter,
scale weights, bills of lading, barge and ship gauges or terminal tank
gauges. Absent fraud or manifest error, the quantities of Product in
the Storage Tanks at any time will be determined from inventory records of
receipts and deliveries. Unless indicated otherwise, quantity
determinations will be based on a Barrel or Ton of Product and shall be
determined in accordance with the latest established API/ASTM standards for the
method of delivery. Gauging of Product received, delivered and in
storage will be taken jointly by representatives of the Parties; provided, that,
after reasonable advance notice, if Customer does not have representatives
present for gauging, Owner’s gauging will be conclusive, absent fraud or
manifest error. Customer may use an Independent Inspector at its own
expense.
8.2 Storage
Tank meters and gauges will be calibrated periodically and after each completion
of a repair or replacement of a meter. Such repairs and replacements
shall be at Owner’s expense. Such calibration shall be in accordance
with the latest applicable API/ASTM standards. If a meter or gauge is
determined by either Party to be defective or inoperative, such Party shall
immediately notify the other Party, and it will be the responsibility of the
Owner to promptly make repairs or replacements. In the event that
Product was received into Storage Tanks having a faulty meter or gauge, the
Parties will determine the correct volume of Product received. If the
Parties are unable to determine and agree on the correct volume of Product
received, they will appoint a mutually acceptable Independent Inspector to
determine the correct quantity, and the findings of the Independent Inspector
shall be final and binding on the Parties except for fraud or manifest
error. The Parties shall share equally the cost of the Independent
Inspector under this Section 8.2.
Section
9. Product Loss and Product
Gain.
9.1 During
such time as Owner has custody of the Product pursuant to Section 6, Owner
will indemnify Customer against, and is responsible for, any Product Loss that
occurs while the Product is located at the Terminals or remains in the Storage
Tanks. In the event of the foregoing Product Losses, the total
Barrels of net Product Loss each Month will be determined and will be replaced
by Owner with Product of like grade and quality as that tendered by Customer to
Owner or Owner will reimburse Customer the cost of such Product on the
determination date thereof.
9.2 Each
Month, Owner will use the measurement procedures set out in Section 8 to
determine the net gain or loss of Product in the Storage Tanks, excluding any
loss resulting in Product Loss. Owner shall not be liable for any net
loss (other than Product Loss) and may retain any net gain during the Term of
this Agreement.
10
Section
10. Force
Majeure.
10.1 If either
Party is unable to perform or is delayed in performing, wholly or in part, its
obligations under this Agreement, other than the obligation to pay funds when
due, as a result of an event of Force Majeure, that Party may be excused from
such performance by giving the other Party prompt written notice of any event
that is or could become an event of Force Majeure with reasonably full
particulars thereof. The obligations of the Party giving notice, so
far as such obligations are affected by the event of Force Majeure, will be
suspended during, but not longer than, the continuance of the event of Force
Majeure beginning with the time that the event first occurs. The
affected Party must act with commercially reasonable diligence to overcome or
remedy the event of Force Majeure and resume performance as quickly as
possible. Once the event of Force Majeure is remedied, the affected
Party shall notify the other Party that the event of Force Majeure no longer
affects such obligations. If Owner is excused from providing service
pursuant to this Agreement due to an event of Force Majeure, the fees hereunder,
not already due and payable, that are directly affected by such Force Majeure
event will be excused or proportionately reduced, on a daily basis, for so long
as the Owner’s performance is excused due to the event of Force
Majeure.
10.2 The
requirement that any Force Majeure event be remedied with all reasonable
diligence shall not require the settlement of strikes, lockouts, or other labor
difficulty by the Party claiming excuse due to an event of Force Majeure
contrary to its wishes.
10.3 If either
Party is rendered unable to perform by reason of an event of Force Majeure for a
period in excess of one (1) Month, then either Party may terminate this
Agreement with respect to the portion of the Terminals and the Storage Tanks
affected by such Force Majeure event upon written notice to the other
Party.
Section
11. Inspection of and Access to
the Storage Tanks.
11.1 Customer
shall have the right during Owner’s normal business hours and after reasonable
notice to Owner so as not to disrupt the operations of the Terminals or the
Storage Tanks or Owner’s other operations (i) to make periodic operational
inspections of the Terminals and Storage Tanks, (ii) to conduct audits of any
pertinent books and records, including those related to receipts, deliveries and
inventories of Product, and (iii) to conduct physical verifications of the
amount of Product delivered to the Terminals and stored in the Storage
Tanks. Customer’s right and that of its authorized representatives to
inspect the Terminals and Storage Tanks will be exercised by Customer in a way
that will not interfere with or diminish Owner’s control over or its operation
of the Terminals or Storage Tanks and will be subject to reasonable rules and
regulations promulgated by Owner.
11.2 Customer
acknowledges that any grant of the right of access to the Terminals and Storage
Tanks under this Agreement or under any document related to this Agreement is a
grant of a license only and shall convey no interest in or to the Terminals or
Storage Tanks or any part of it, and may be withdrawn by Owner at its discretion
at any time.
11
Section
12. Assignment.
No Party
hereto may assign this Agreement, in whole or in part, except with the prior
written approval of each other Party, which approval shall not be unreasonably
withheld, delayed or conditioned; provided, however, that a Party
may assign, without the prior written consent of each other Party, this
Agreement or their respective rights and obligations hereunder, in whole or in
part, to an Affiliate or any purchaser of or successor to all or substantially
all of the asphalt assets or business of such Party; provided, further that Customer
has pledged, and may continue to pledge, its ownership interest in the Product
for the benefit of its creditors to the extent permitted by Applicable
Law. This Agreement shall inure to the benefit of, and shall be
binding upon, the Parties and their respective permitted successors and assigns,
including with respect to Customer, any reorganized debtor entity appointed
pursuant to the plan of reorganization of Customer.
Section
13. Notice.
Any
notice required under this Agreement must be in writing and will be deemed
received when actually received and delivered by (i) United States mail,
certified or registered, return receipt requested, (ii) confirmed overnight
courier service, or (iii) confirmed facsimile transmission properly addressed or
transmitted to the address of the Party indicated in Attachment “A”
or to such other address or facsimile number as one Party shall provide to the
other Party in accordance with this provision. Unless provided
otherwise herein, all statements, payments and other documents to be delivered
pursuant to this Agreement shall also be delivered to the address of the Party
indicated in Attachment “A”.
Section
14. Compliance with Law and
Safety.
14.1 Customer
warrants that the Product tendered by it has been and will be produced,
transported and handled in full compliance with all Applicable
Law. Owner warrants that the services provided by it under this
Agreement are and will be in full compliance with all Applicable
Law. Each Party also warrants that it may lawfully receive and handle
the Product, and it will furnish to the other Party any evidence required to
provide compliance with Applicable Law and to file with applicable Governmental
Authorities reports evidencing such compliance with Applicable Law.
14.2 Customer
will furnish Owner with information (including material safety data sheets)
concerning the safety and health aspects of the Product terminalled or stored
under this Agreement. Owner will communicate such information to all
persons who may be exposed to or may handle such Product, including without
limitation, Owner’s agents and contractors.
Section
15. Term and
Termination.
15.1 The term
of this Agreement (the “Term”)
begins on the Effective Date and ends October 31, 2009. At the end of
the Term, this Agreement may be extended for one (1) Month by mutual agreement
of the Parties.
15.2 A Party
may terminate this Agreement during the Term under the following
circumstances:
12
(a) Either
Party fails to pay any sum owed by it to the other Party under this Agreement
within fifteen (15) Business Days of the Delivery to the defaulting Party of a
notice of default; provided, however that neither
Party shall have a right to terminate this Agreement under this Section 15.2(a) with
respect to any Disputed Items that remain outstanding in accordance with Section 3.4 of this
Agreement.
(b) The
Parties may terminate this Agreement by execution of a written agreement signed
by authorized representatives of both Parties, in which event the termination
shall be effective on the date specified in such agreement.
(c) Either
Party may terminate this Agreement in the event of a material breach of this
Agreement (other than for failure of payment to which Section 15.2(a) shall
apply) by the other Party, its employees, agents or servants upon not less than
thirty (30) days prior written notice to such non-defaulting Party unless such
breach has been cured within fifteen (15) days from receipt by the defaulting
Party of such notice.
(d) Either
Party may terminate this Agreement, in its entirety or with respect to a portion
of the Terminals or Storage Tanks only, in accordance with the provisions of
Sections 4.6 or
10.3 of this
Agreement.
15.3 Each
Party’s obligations to perform its obligations under this Agreement shall end as
of the effective date of its termination in accordance with this Agreement;
provided, however, that each
Party shall remain liable to the other hereunder with respect to (a) any
obligations accruing under this Agreement prior to the effective date of such
termination, including any indemnification obligations provided hereunder or (b)
as otherwise provided in this Agreement. Notwithstanding anything in
this Agreement to the contrary, Sections 6.2, 7, 15.3,
18 and 19 shall survive the
expiration or termination of this Agreement. If the Customer is not
then in default, Customer shall be entitled to remove its Existing Asphalt
Inventory from the Storage Tanks at any time. In the event that
Customer is unable to remove its Existing Asphalt Inventory in the ordinary
course of business, then Owner will replace the Existing Asphalt Inventory with
Product of like grade and quality as that originally tendered by Customer to
Owner that is immediately removable or Owner will reimburse Customer the cost of
such Existing Asphalt Inventory on the date of such attempted
removal.
Section
16. Insurance.
16.1 Workers’ Compensation
Insurance. At all times during the term of this Agreement,
each Party shall carry and maintain in force, workers’ compensation insurance,
with policy limits equal to or greater than the statutory requirements of the
states in which the Storage Tanks are located and employers’ liability insurance
with policy limits equal to or greater than $10,000,000 for each accident,
$10,000,000 for each employee and $10,000,000 as to each disease. In
the event either Party leases employees, then lessee Party shall cause lessor
Party to carry workers’ compensation and/or employer’s liability insurance at
the levels set forth above.
16.2 General Liability
Insurance. At all times during the term of this Agreement,
each Party shall carry and maintain in force, comprehensive general liability
insurance, with a minimum $10,000,000 combined single limit. The
Owner’s commercial general liability insurance shall include coverage for
Product Loss for Product in the care, custody and control of Owner and shall
cover “sudden and accidental pollution” events.
13
16.3 Automobile and Truck
Insurance. At all times during the term of this agreement,
each Party shall carry and maintain in force, commercial automobile liability
insurance with a minimum $10,000,000 combined single limit per occurrence for
owned, hired and non-owned automotive equipment. If work is to be
performed by either Party involving hauling Product subject to section 29 and 30
of the Motor Carrier Act of 1980, then coverage shall include broadened
pollution coverage using ISO endorsement CA-99-48 Broadened Pollution
Coverage – Truckers, or an endorsement that offers similar or greater
coverage.
16.4 Customer’s Product
Insurance. Insurance on Customer’s Product, if any, that may
be desired by Customer, shall be carried by Customer at Customer’s
expense.
16.5 Miscellaneous Insurance
Provisions.
(a) The above
stipulated levels of insurance coverage may be satisfied through primary
insurance or a combination of primary and excess or umbrella liability
insurance.
(b) Either
Party may elect to self-insure for or elect deductibles to the coverages
required by this Section 16; provided, however, that except
as provided in this Section 16.5(b), a
Party must seek the consent of the other Party for any self-insurance or
deductible in excess of $250,000, which consent shall not be unreasonably
withheld, conditioned or delayed; provided, further, that each
Party may elect to self-insure for or elect deductibles up to and including
$1,000,000 without the consent of the other Party for any coverage relating to
“sudden and accidental pollution” events.
(c) The mere
purchase and existence of insurance coverage shall not reduce or release either
Party from any liabilities incurred or assumed under this
Agreement.
(d) All
insurance required hereunder shall be maintained with responsible, solvent and
reputable insurance companies with an A.M. Best rating of A-IX or better and
qualified to do business in the State of Oklahoma.
Section
17. [Reserved].
Section
18. Indemnity.
18.1 Indemnity. Subject
to Section 7, each
Party (the “Indemnifying
Party”) shall indemnify and hold the other Party, its Affiliates, and
their employees, directors, officers, representatives, agents and contractors
(collectively, the “Indemnified
Party”) harmless from and against any and all Liabilities arising from
the Indemnifying Party’s (i) breach of this Agreement, (ii) gross negligence or
willful misconduct of it, its Affiliates and their employees, directors,
officers, representatives, agents or contractors in connection with the
performance of such Party’s obligations under this Agreement, or (iii) failure
to comply with Applicable Law with respect to the sale, transportation, storage,
handling or disposal of the Product, unless and to such extent that such
Liability results from the Indemnified Party’s breach of this Agreement, gross
negligence or willful misconduct, or failure to comply with Applicable
Law.
14
18.2 No Third Party
Rights. The Parties’ obligations to defend, indemnify and hold
each other harmless under the terms of this Agreement shall not vest any rights
in or be enforceable by any Third Party, whether a Governmental Authority or
private entity, nor shall they be considered an admission of liability or
responsibility for any purposes other than those enumerated in this
Agreement. The terms of this Agreement are enforceable only by the
Parties and their permitted successors and assigns, and no Third Party,
including a member of Owner, shall have a separate right to enforce any
provision of this Agreement, or to compel any Party to comply with the terms of
this Agreement.
18.3 Notice. The
Indemnified Party shall notify the Indemnifying Party as soon as practicable
after receiving notice of any claim or proceeding brought against it that might
give rise to an indemnity claim under this Agreement (a “Third Party
Claim”) and shall furnish to the Indemnifying Party the complete details
within its knowledge. Any delay or failure by the Indemnified Party
to give notice to the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations except to the extent, if any, that the Indemnifying
Party shall have been materially prejudiced by reason of such delay or
failure.
18.4 Claims. The
Indemnifying Party shall have the right to assume the defense, at its own
expense and by its own counsel, of any Third Party Claim; provided, however,
that such counsel is reasonably acceptable to the Indemnified
Party. Notwithstanding the Indemnifying Party’s appointment of
counsel to represent an Indemnified Party, the Indemnified Party shall have the
right to employ separate counsel reasonably acceptable to the Indemnifying
Party, and the Indemnifying Party shall bear the reasonable fees, costs and
expenses of such separate counsel if in the Indemnified Party’s reasonable
judgment (i) the use of counsel chosen by the Indemnifying Party to represent
the Indemnified Party would present such counsel with a conflict of interest or
defenses that are available to the Indemnified Party that are not available to
the Indemnifying Party or (ii) the Indemnifying Party shall not have employed
counsel to represent the Indemnified Party within a reasonable time after notice
of the institution of such Third Party Claim. If requested by the
Indemnifying Party, the Indemnified Party agrees to reasonably cooperate with
the Indemnifying Party and its counsel in contesting any claim or proceeding
that the Indemnifying Party defends, including, if appropriate, making any
counterclaim or cross-complaint. All reasonably incurred costs and
expenses incurred in connection with the Indemnified Party’s cooperation shall
be borne by the Indemnifying Party.
18.5 Settlement. No
Third Party Claim may be settled or compromised by (i) the Indemnified Party
without the consent of the Indemnifying Party or (ii) by the Indemnifying Party
without the consent of the Indemnified Party.
Section
19. Miscellaneous.
19.1 Headings. The
headings of the sections and subsections of this Agreement are for convenience
only and shall not be used in the interpretation of this Agreement.
15
19.2 Amendment or
Waiver. This Agreement may not be amended, modified or waived
except by written instrument executed by officers or duly authorized
representatives of the respective Parties. The Parties hereby
acknowledge and agree that a material amendment to this Agreement requires the
approval of the Bankruptcy Court prior to the effective date of the plan of
reorganization in the Bankruptcy Cases. No waiver or failure of
enforcement by any Party of any default by any other Party in the performance of
any provision, condition or requirement herein shall be deemed to be a waiver
of, or in any manner a release of the defaulting Party from, performance of any
other provision, condition or requirement herein, nor deemed to be a waiver of,
or in any manner a release of the defaulting Party from, future performance of
the same provision, condition or requirement; nor shall any delay or omission of
any non-defaulting Party to exercise any right hereunder in any manner impair
the exercise of any such right or any like right accruing to it
thereafter.
19.3 Severability. Any
provision of this Agreement that is prohibited or not enforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective only to the extent
of the prohibition or lack of enforceability without invalidating the remaining
provisions of this Agreement, or affect the validity or enforceability of those
provisions in another jurisdiction or the validity or enforceability of this
Agreement as a whole.
19.4 Entire Agreement and
Conflict with Attachments. This Agreement (including
Attachments) contains the entire and exclusive agreement between the Parties
with respect to the subject matter hereof, and there are no other promises,
representations, or warranties affecting it. The terms of this
Agreement may not be contradicted, explained or supplanted by any usage of
trade, course of dealing or course of performance and any other representation,
promise, statement or warranty made by either Party or their agents that differs
in any way from the terms contained herein will be given no force or
effect. In the case of any conflict between the body of this
Agreement and any of its Attachments, the terms contained in the Attachments
will govern.
19.5 Governing
Law. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE
GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN ACCORDANCE WITH, THE
APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE AND THE INTERNAL LAWS OF THE STATE
OF OKLAHOMA (WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE
THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).
19.6 Jurisdiction.
(a) Without
limiting any Party’s right to appeal any Order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of
this Agreement and to decide any claims or disputes which may arise or result
from, or be connected hereby, and (ii) any and all Actions related to the
foregoing shall be filed and maintained only in the Bankruptcy Court, and the
Parties hereby consent to and submit to the jurisdiction and venue of the
Bankruptcy Court and shall receive notices at such locations as indicated in
Section 13;
provided, however, that if a
plan of reorganization has become effective in the Bankruptcy Cases, the Parties
agree to unconditionally and irrevocably submit to the exclusive jurisdiction of
the federal or state courts in Oklahoma City, Oklahoma for the resolution of any
such claim or dispute.
16
(b) The
Parties hereby unconditionally and irrevocably waive, to the fullest extent
permitted by Applicable Law, any objection which they may now or hereafter have
to the laying of venue or any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby brought in any court
specified in paragraph (a) above, or any defense of inconvenient forum of the
maintenance of such dispute. Each of the Parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(c) Each of
the Parties hereto consents to process being served by any Party to this
Agreement in any suit, Action or proceeding by the mailing of a copy thereof in
accordance with the provisions of Section
13(i).
19.7 Counterparts. This
Agreement may be executed in any number of counterparts each of which, when so
executed and delivered (including by facsimile or electronic mail transmission),
will be deemed original but all of which together will constitute one and the
same instrument.
19.8 Further
Assurances. Subject to the terms and conditions of this
Agreement, each of the Parties hereto will use commercially reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary under applicable laws and regulations to consummate the
transactions contemplated by this Agreement.
19.9 No Third-Party
Beneficiaries. Except as provided in Section 18, nothing
contained in this Agreement, expressed or implied, is intended or shall be
construed to confer upon or give to any Person (including any limited partners
of SemGroup Energy Partners, L.P.) other than the Parties hereto and their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
19.10 No Strict
Construction. The Parties to this Agreement have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises with respect to this
Agreement, this Agreement shall be construed as if drafted jointly by the
Parties, and no presumption or burden of proof shall arise favoring or
disfavoring a Party by virtue of the authorship of any of the provisions of this
Agreement.
17
This
Agreement has been executed by the authorized representatives of each Party as
indicated below as of the date hereof to be effective as of the Effective
Date.
SemMaterials,
L.P.
By: SemOperating
G.P., L.L.C.
Its: General
Partner
By: /s/ Xxxxxxxx
Xxxxx
Name: Xxxxxxxx Xxxxx
Title: President
& CEO
SemMaterials
Energy Partners, L.L.C.
By: /s/ Xxxx X.
Xxxxxxxxx
Name: Xxxx X.
Xxxxxxxxx
Title: Chief
Financial Officer and Secretary
ATTACHMENT
“A”
|
1.
|
Customer
Notice and Billing Address
|
SemMaterials,
L.P.
Two
Xxxxxx Place
0000
Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxx,
Xxxxxxxx 00000
With a
copy to:
Weil,
Gotshal & Xxxxxx, LLP
Attn: Xxxxxxx
X. Xxxxxx, Esq.
000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000-0000
|
2.
|
Owner
Notice Address
|
SemMaterials
Energy Partners L.P.
Two
Xxxxxx Place
0000
Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxx,
Xxxxxxxx 00000
With a
copy to:
Xxxxx
Xxxxx L.L.P.
Attn: Xxxx
Xxxxxxx
0000 Xxxx
Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
|
3.
|
Fees
for Storage and Terminalling Services; Reimbursement of Energy
Costs
|
|
(a)
|
Storage Service Fees:
Customer is required to pay for storage services equal to $0.565
per Barrel per Month multiplied by the total shell capacity in Barrels for
each Storage Tank where Customer and its Affiliates have Product; provided
that if Customer removes all Product from a Storage Tank prior to the end
of the Month, then the Storage Service Fees shall be pro-rated for such
Month based on the number of calendar days storage was actually
used. The Storage Service Fees will be payable as outlined in
Section 3
of this Agreement.
|
|
(b)
|
Terminalling
Fees: “Throughput” means, for any period, the aggregate quantity of
Product moved through Owner’s Storage Tanks on behalf of Customer under
this Agreement and such quantity shall be calculated based upon the total
quantity of asphalt products shipped and/or sold by Customer from the
facilities where the Storage Tanks are located with such quantity of
asphalt products converted to base asphalt cement Tons based upon agreed
to formulas between Owner and Customer. Customer is required to
pay for throughput services at a charge of $9.25 per Ton; provided that no
fees will be payable for transfers of Product between Storage Tanks
located at the same or different Terminals. The Terminalling
Fees will be payable as outlined in Section 3 of
this Agreement.
|
|
(c)
|
Reimbursement of
Energy Costs:
|
Customer
shall reimburse Owner for all direct energy costs (e.g., electricity, natural
gas, steam) attributable to the services provided hereunder. Direct
energy costs will be based upon usage as determined by metering equipment that
serves the facility where the Storage Tanks are located. Energy costs
will be invoiced monthly for the prior month’s energy usage and will be
pro-rated as described in paragraph (a) above.
|
4.
|
Operating
Hours
|
Each
Terminal’s operating hours shall be its normal business hours in the ordinary
course of business and consistent with past practice.
|
5.
|
Terminals
|
Terminals
means (i) the asphalt cement and residual fuel storage Terminals of Owner as
listed in Attachment B
attached hereto, and as may be amended from time to time, and (ii) any asphalt
cement or residual fuel storage terminals as are subsequently acquired or
constructed by the Owner to replace such existing asphalt cement and residual
fuel storage terminals.
ATTACHMENT
“B”
Terminals
Ardmore,
OK
Austin,
TX
Bay City,
MI
Billings,
MT
Boise,
ID
Catoosa,
OK (Emulsion plt)
Catoosa,
OK (Port 33)
Chicago,
IL Marine Oil
Columbus,
OH
Denver C,
CO
Denver K,
CO
Dodge
City, KS
El
Dorado, KS
Ennis,
TX
Fontana,
CA
Garden
City, GA
Gloucester
City, NJ
Grand
Island, NE
Grand
Jct, CO
Halstead,
KS
Las
Vegas, NV
Lawton,
OK
Little
Rock, AR
Lubbock,
TX
Memphis
Emulsion, TN
Memphis
TN
Xxxxxxxx
City, NC
Muskogee,
OK
N. Salt
Lake City, UT
New
Madrid, MO
Newport
News, VA
Northumberland,
PA
Parsons,
TN
Pasco,
WA
Pekin,
IL
Port of
Catoosa, OK
Pueblo,
CO
Reading,
PA
Saginaw,
TX
Salina,
KS
Sedalia,
MO
Spokane
(Xxxxxxxx), WA
Spokane
(Valley), WA
St.
Louis, MO
Warsaw,
IN
Xxxxx
Cross, UT
ATTACHMENT
“C”
Asphalt
Cement meeting the following specifications: all viscosity and
penetration for graded paving, including, but not limited to, XX-0, XX-0, XX-00,
XX-00, XX-00, XX-00, AC-30, XX-00/00, XX-000, XX-000, XX-000 and all asphalt
emulsion base stock products and all tank bottoms related thereto.
Residual
Fuel oils meeting the following specifications: all residual fuel oil
products, including but not limited to, vacuum gas oil, carbon black oil, vacuum
tower bottoms, light cycle oils, FCC bottoms and flux and all tank bottoms
related thereto.
