EX-10.5 7 d489751dex105.htm EX-10.5 ANACORTES MARINE TERMINAL OPERATING AGREEMENT
Exhibit 10.5
ANACORTES MARINE TERMINAL OPERATING AGREEMENT
This ANACORTES MARINE TERMINAL OPERATING AGREEMENT (the “Agreement”) is dated as of the Commencement Date (defined below in Section 1), by and between Tesoro Logistics Operations LLC, a Delaware limited liability company (“Operator”), and for purposes of Section 22(a) only, Tesoro Logistics GP, LLC, a Delaware limited liability company (the “General Partner”), and Andeavor Logistics LP, a Delaware limited partnership (the “Partnership”), on the one hand, and Tesoro Refining & Marketing Company LLC, a Delaware limited liability company (“TRMC”), on the other hand.
RECITALS
WHEREAS, TRMC is the current tenant under that certain Aquatic Lands Lease No. 20-A121165, dated August 21, 2004 (the “Master Lease”), between TRMC and the State of Washington, acting through the Department of Natural Resources (“Master Landlord”), covering the property in Skagit County, Washington, described in Exhibit A to the Master Lease (the “Anacortes Marine Terminal”);
WHEREAS, the current term of the Master Lease expires August 31, 2034;
WHEREAS, TRMC desires for Operator to provide the services set forth herein relating to the operation of the Anacortes Marine Terminal for the remainder of the term of the Master Lease; and
WHEREAS, Operator is willing to provide such services to TRMC;
NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties (as defined below) to this Agreement hereby agree as follows:
SECTION 1 DEFINITIONS
Capitalized terms used throughout this Agreement shall have the meanings set forth below, unless otherwise specifically defined herein.
“Andeavor” has the meaning set forth in the definition of “Contribution Agreement.”
“Agreement” has the meaning set forth in the Preamble.
“Ancillary Facilities” means all wharves, personnel, spill response equipment, emergency response equipment, fire pumps, fire extinguishers, fire monitors, Self-Contained Breathing Apparatus, toxic gas monitoring equipment, winches, loading arms, hoses, drains, pipes, valves, manifolds, pumps, meters, and all other related equipment and facilities that support the infrastructure required to deliver TRMC’s Product between a Marine Vessel and the Refinery facilities, including the pipeline interconnection between the Anacortes Marine Terminal and the Refinery facilities, which is being used to provide services to the Anacortes Marine Terminal.
“API” means the American Petroleum Institute.
“Applicable Law” means any applicable statute, law, regulation, ordinance, rule, determination, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, requirement, or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect.
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“ASTM” means the American Society for Testing and Materials.
“Anacortes Marine Terminal” has the meaning set forth in the Recitals.
“Barrel” means a volume equal to 42 U.S. gallons of 231 cubic inches each, at 60 degrees Fahrenheit under one atmosphere of pressure.
“Base Fee” means the per Barrel throughput fees at the Anacortes Marine Terminal as set forth on a Terminal Service Order multiplied by the actual throughput by TRMC across the Anacortes Marine Terminal for the particular Month.
“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York, New York are open for the general transaction of business.
“Claims” has the meaning set forth in Section 19(a).
“Commencement Date” means November 8, 2017.
“Confidential Information” means all confidential, proprietary or non-public information of a Party, whether set forth in writing, orally or in any other manner, including all non-public information and material of such Party (and of companies with which such Party has entered into confidentiality agreements) that another Party obtains knowledge of or access to, including non-public information regarding products, processes, business strategies and plans, customer lists, research and development programs, computer programs, hardware configuration information, technical drawings, algorithms, know-how, formulas, processes, ideas, inventions (whether patentable or not), trade secrets, schematics and other technical, business, marketing and product development plans, revenues, expenses, earnings projections, forecasts, strategies, and other non-public business, technological, and financial information.
“Contaminated Product” means Product that has one or more of the following characteristics: (a) contains foreign substances not inherent or naturally occurring in Product; and/or (b) fails to meet Operator’s minimum specifications.
“Contribution Agreement” means that certain Contribution, Conveyance and Assumption Agreement, dated November 8, 2017, by and among Andeavor, a Delaware corporation (“Andeavor”), TRMC, the General Partner, the Partnership and Operator.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.
“Current Leasehold Improvements” means the leasehold improvements located at the Anacortes Marine Terminal and used in connection with the operation of the Anacortes Marine Terminal, including, without limitation, the items identified on Exhibit 2 attached hereto
“Force Majeure” means events or circumstances, whether foreseeable or not, not reasonably within the control of Operator and which, by the exercise of due diligence, Operator is unable to prevent or overcome, that prevent or limit performance of Operator’s obligations, including: acts of God, strikes, lockouts or other industrial disturbances, wars, riots, fires, floods, storms, orders of Governmental Authorities, explosions, terrorist acts, breakage, accident to machinery, equipment, storage tanks or lines of pipe, and inability to obtain or unavoidable delays in obtaining material or equipment and similar events.
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“General Partner” has the meaning set forth in the Preamble.
“Governmental Authority” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body, port authority or other authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.
“Gross Standard Volume” means the total volume of all petroleum liquids and sediment and water, excluding free water, corrected by the appropriate volume correction factor for the observed temperature and API gravity, relative density, or density to a standard temperature such as 60 degrees Fahrenheit and also corrected by the applicable pressure correction factor and meter factor.
“Major Project Costs” means those actual capital expenditures (whether capitalized or expensed by Operator for accounting or tax purposes) for major, non-recurring projects involving a substantial change to the Anacortes Marine Terminal after the Commencement Date, (1) applicable to the ownership or operation of the Anacortes Marine Terminal and (2) attributable to Regulatory Obligations, including, without limitation, those set forth in Section 2.3 of the Master Lease, and/or similar regulatory or environmental operating expenses or capital expenses as a result of action by a Governmental Authority.
“Marine Vessel” means any ocean tanker, ocean barge, river barge or other vessel.
“Master Landlord” has the meaning set forth in the Recitals.
“Master Lease” has the meaning set forth in the Recitals.
“Minimum Marine Throughput Volume” means an aggregate volume of 1,882,183 Barrels of Products per Month throughput across the Anacortes Marine Terminal; provided, however, that the Minimum Marine Throughput Commitment for any partial calendar month during the Term of this Agreement shall be prorated in accordance with the ratio of the number of days in such Month to the total number of days in such Month.
“Month” means the period commencing on the Commencement Date and ending on the last day of that calendar month and each successive calendar month thereafter.
“MTVF” means a Monthly fee calculated by multiplying the Minimum Marine Throughput Volume by the per Barrel throughput fees at the Anacortes Marine Terminal as set forth on a Terminal Service Order.
“Omnibus Agreement” means that certain Fourth Amended and Restated Omnibus Agreement, dated as of October 30, 2017, by and among Andeavor, TRMC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, the General Partner and the Partnership, as such agreement (and the schedules thereto) may be amended, supplemented or restated from time to time.
“Operator” has the meaning set forth in the Preamble.
“Operator Group” has the meaning set forth in Section 19(b).
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“OSCPRR” means the Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation, dated September 16, 2016, between, among other parties, Operator and TRMC, as such agreement may be amended, supplemented or restated from time-to-time.
“Partnership” has the meaning set forth in the Preamble.
“Party” or “Parties” means that each of Operator and TRMC is a “Party” and collectively are the “Parties” to this Agreement.
“Person” means any individual, partnership, limited partnership, joint venture, corporation, limited liability company, limited liability partnership, trust, unincorporated organization or Governmental Authority or any department or agency thereof.
“Product” or “Products” means crude oil, gasoline, gasoline blend components, diesel, distillate, distillate blend components, jet/aviation fuel, aromatics, LPGs, fuel oil, syncrude, cut back resid, cutter stock, gas oil and/or other commodities specified in this Agreement or otherwise mutually agreed upon by the Parties.
“Receiving Party Personnel” has the meaning set forth in Section 26(d).
“Refinery” means TRMC’s refinery located near Anacortes in Skagit County, Washington, including without limitation, tanks owned and operated by Operator to provide services to TRMC under separate agreements.
“Regulatory Obligations” means standards, regulations, permits or conditions required by a Governmental Authority.
“Related Agreements” means the Anacortes II Storage Services Agreement, the Anacortes Manifest Rail Terminalling Services Agreement, and the Transportation Services Agreement (Anacortes Short Haul Pipelines) entered into by the Parties hereto concurrently herewith.
“Secondment Agreement” shall mean the First Amended and Restated Secondment and Logistics Services Agreement dated as of October 30, 2017, and related service orders, as such agreement (and the schedules thereto) may be amended, supplemented or restated from time-to-time.
“Services” has the meaning set forth in Section 13(a).
“Shortfall Credit” has the meaning set forth in Section 9(b).
“Term” has the meaning set forth in Section 4.
“Terminal Service Order” has the meaning set forth in Section 9(a).
“Termination Date” has the meaning set forth in Section 3.
“TRMC” has the meaning set forth in the Preamble.
“TRMC Group” has the meaning set forth in Section 19(a).
“TRMC Insurance Group” has the meaning set forth in Section 23(b).
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“Waste” means any (a) spent or remnant commercial chemical products, previously of beneficial use, or other inherently waste-like material; and/or (b) oily ballast water, oily bilge water, sludge, and/or cargo residue by a Marine Vessel transferring Product into or out of the Anacortes Marine Terminal. Residual Product that retains a beneficial use, including recycling, oil recovery and re-refining, is not Waste unless it is destined for disposal.
SECTION 2 GENERAL UNDERTAKINGS
Subject to the terms and conditions of the Master Lease, the terms and conditions of this Agreement, the rules and procedures for the Anacortes Marine Terminal (if any) set forth in Terminal Service Orders, and all Applicable Law, Operator shall operate, manage and maintain the Anacortes Marine Terminal on behalf of TRMC during the Term. TRMC represents and warrants to the Operator that as of the Commencement Date the Anacortes Marine Terminal is in good working condition, suitable for the purposes for which it is being used in accordance with accepted industry standards and Applicable Law.
SECTION 3 TERMINATION DATE
The “Termination Date” will be August 31, 2034, or any earlier date on which the Master Lease may be terminated or cancelled for any reason.
SECTION 4 TERM
The term of this Agreement shall be for the period commencing on the Commencement Date and ending on the Termination Date (the “Term”).
SECTION 5 OPERATION OF ANACORTES MARINE TERMINAL DURING THE TERM
(a) Operator Covenants. During the Term, Operator covenants as follows:
(i) General Partner, on behalf of Operator, will provide necessary personnel, equipment and other services for the operation, management and maintenance of the Anacortes Marine Terminal in accordance with the terms of the Master Lease, any other third party use agreements, and this Agreement.
(ii) Operator will reimburse TRMC for:
(1) all rentals paid under the Master Lease;
(2) any and all repairs and maintenance costs and capital expenditures for the Anacortes Marine Terminal, including without limitation all such obligations under the Master Lease (other than those scheduled prior to the Commencement Date and covered under the Omnibus Agreement); provided that Operator shall not be required to reimburse TRMC for the amount of any insurance proceeds received by TRMC pursuant to any casualty insurance carried by or for the benefit of TRMC with regard to the Anacortes Marine Terminal; and
(3) without duplication of any amounts reimbursed or paid under the other sections of this Agreement, the Omnibus Agreement or the Secondment Agreement, any and all taxes, fees, charges, insurance premiums, assessments or spill planning and/or response costs (except those costs for oil spill response services provided by the Marine Preservation Association and Marine Spill Response Corporation related to obligations for oil spill prevention response, as provided in the OSCPRR).
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(iii) Operator will indemnify TRMC against any other Claims, liabilities or losses that TRMC incurs in its status as lessee under the Master Lease during the Term.
(iv) Operator will not enter into any other third party contracts for use of the Anacortes Marine Terminal without prior consent of TRMC.
(b) TRMC Covenants. During the Term, TRMC covenants as follows:
(i) as partial compensation for the services provided hereunder, TRMC agrees to pay Operator the higher of the Base Fee or the MTVF.
(ii) TRMC will file on a timely basis all notices, reports or other filings necessary or required for the continuing operation of the Anacortes Marine Terminal to be filed with or reported to any Governmental Authority.
(ii) TRMC will file on a timely basis all complete and correct applications or other documents necessary to maintain, renew or extend any permit, variance or any other approval required by any Governmental Authority necessary or required for the continuing operation of the Anacortes Marine Terminal.
(c) Availability. During any Month that the Anacortes Marine Terminal is not available to receive any of TRMC’s Marine Vessels on a day in which TRMC’s Marine Vessel is scheduled to have access to the Anacortes Marine Terminal, for any reason other than TRMC’s actions or inactions, including without limitation, Operator’s actions or inactions or a Force Majeure affecting the Anacortes Marine Terminal or the Ancillary Facilities, and such unavailability prevents TRMC from throughputting the Minimum Marine Throughput Volume, the Minimum Marine Throughput Volume (and resulting MTVF) for such Month will be reduced as follows: the Minimum Marine Throughput Volume will be proportionally reduced in proportion to the number of days in such Month when TRMC’s Marine Vessels were prevented from having access to the Anacortes Marine Terminal as a result of the Anacortes Marine Terminal being unavailable.
SECTION 6 REGULATORY OBLIGATION COST REIMBURSEMENTS
TRMC shall promptly pay or reimburse Operator for any newly imposed taxes, levies, royalties, assessments, licenses, fees, charges, surcharges and sums due of any nature whatsoever (other than income taxes, gross receipt taxes and similar taxes) by any Governmental Authority that Operator incurs on TRMC’s behalf for the services provided by Operator under this Agreement or any Terminal Service Order. If Operator is required to pay any of the foregoing, TRMC shall promptly reimburse Operator in accordance with the payment terms set forth in this Agreement. Any such newly imposed taxes or regulatory fees as provided for in this Section 6 shall be specified in an applicable Terminal Service Order.
SECTION 7 MAJOR PROJECT COSTS
TRMC shall be responsible for Major Project Costs associated with the Anacortes Marine Terminal during the Term of this Agreement and shall reimburse Operator for any Major Project Costs incurred by Operator with respect to the Anacortes Marine Terminal.
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SECTION 8 REPRESENTATIONS AND WARRANTIES
TRMC represents and warrants to the Operator as follows:
(a) The Current Leasehold Improvements are in good working condition, suitable for the purposes for which they are being used in accordance with accepted industry standards and all applicable laws and regulations.
(b) TRMC has title to the Current Leasehold Improvements, free and clear of all liens and encumbrances of any kind or nature, other than the Permitted Liens (as defined in the Contribution Agreement). TRMC has title to the Current Leasehold Improvements that is sufficient to operate the Current Leasehold Improvements in accordance with their intended and historical use, subject to all recorded matters and all physical conditions in existence.
SECTION 9 TERMINAL SERVICE ORDERS; PAYMENTS
(a) Description. Operator and TRMC shall enter into one or more terminal service orders for the Anacortes Marine Terminal substantially in the form attached hereto as Exhibit 1 (each, a “Terminal Service Order”). Upon a request by TRMC pursuant to this Agreement or as deemed necessary or appropriate by Operator in connection with the services to be delivered pursuant hereto, Operator shall generate a Terminal Service Order to set forth the specific terms and conditions for providing the applicable services described therein and the applicable fees to be charged for such services. No Terminal Service Order shall be effective until fully executed by both Operator and TRMC. Items available for inclusion on a Terminal Service Order include, but are not limited to:
(i) any rules and procedures for the Anacortes Marine Terminal referenced in Section 2;
(ii) the per Barrel throughput fees at the Anacortes Marine Terminal;
(iii) any reimbursement pursuant to Section 6;
(iv) the specifics of operations as referenced in Sections 14 and 27; and
(v) any other services as may be agreed.
(b) Monthly Shortfall Credit. If the Base Fee is less than the MTVF, then TRMC shall receive a “Shortfall Credit” equal to such difference.
(c) Monthly Reconciliation. Actual volumes of Barrels throughput across the Anacortes Marine Terminal are to be determined Monthly, based upon Marine Vessel deliveries and Marine Vessel receipts during that Month and credited towards the Minimum Marine Throughput Volume in such Month. A Marine Vessel’s cargo will apply to the Month in which loading and unloading is completed, provided that if a cargo is unable to be loaded or unloaded in the Month in which loading or unloading was scheduled due to the failure of Operator to perform as scheduled, then the Parties shall negotiate in good faith to determine the appropriate Month in which to credit receipt of such cargo. The Shortfall Credit shall be credited as follows:
(i) The dollar amount of any Shortfall Credit included in the Monthly invoice will be posted as a credit to TRMC’s account and may be applied against amounts owed by TRMC for volumes in excess of the Minimum Marine Throughput Volume during any of the succeeding three (3) Months; and
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(ii) Any portion of the Shortfall Credit that is not used by TRMC during the succeeding three (3) Months will expire at the end of said three (3) Month period relating to the respective credit and be reset to zero.
(d) Invoices. Operator shall invoice TRMC on a Monthly basis and TRMC shall pay all amounts due under this Agreement and any Terminal Service Order no later than ten (10) calendar days after TRMC’s receipt of Operator’s invoices. Any past due payments owed by either Party shall accrue interest, payable on demand, at the lesser of (i) the rate of interest announced publicly by JPMorgan Chase Bank, in New York, New York, as JPMorgan Chase Bank’s prime rate (which Parties acknowledge and agree is announced by such bank and used by the Parties for reference purposes only and may not represent the lowest or best rate available to any of the customers of such bank or the Parties), plus four percent (4%), and (ii) the highest rate of interest (if any) permitted by Applicable Law, from the due date of the payment through the actual date of payment.
(e) Disputed Amounts. If TRMC reasonably disputes any amount invoiced by Operator, TRMC shall pay the amount of the invoice when due and provide Operator with written notice stating the nature of the dispute prior to thirty (30) days after the due date of the invoice. TRMC and Operator shall use reasonable commercial diligence to resolve disputes in a timely manner through the dispute resolution procedures provide for herein. All portions of the disputed amount determined to be owed TRMC shall be refunded to TRMC within ten (10) days of the dispute resolution.
(f) Fee Increases. Any fees of a fixed amount set forth in this Agreement and any Terminal Service Order shall be increased on July 1 of each year of the Term, commencing on July 1, 2018, by a percentage equal to the greater of zero or the positive change, if any, in the CPI-U (All Urban Consumers) for the prior calendar year, as reported by the Bureau of Labor Statistics, and rounded to the nearest one-tenth (1/10) of one percent (1%).
(g) Conflict between Agreement and Terminal Service Order. In case of any conflict between the terms of this Agreement and the terms of any Terminal Service Order, the terms of the applicable Terminal Service Order shall govern.
SECTION 10 PRODUCT SPECIFICATIONS
(a) Product Quality.
(i) Product Testing. Upon request, TRMC shall provide Operator a laboratory report for each Product delivery by TRMC or TRMC’s supplier. Operator will not be obligated to receive Contaminated Product for throughput across the Anacortes Marine Terminal, nor will Operator be obligated to accept Product that fails to meet the quality specifications set forth in the arrival notice.
(ii) Off-Spec/Contaminated Product. Operator may, without prejudice to any other remedy available to Operator, reject and return Contaminated Product to TRMC, even after delivery to Operator at the Anacortes Marine Terminal. TRMC at its sole cost and expense shall be responsible for all damages of any kind, in addition to commodity or Waste removal and cleaning costs for connecting pipelines or third party tankage, resulting from the introduction of Contaminated Product. TRMC shall remove and replace any Contaminated Product or reimburse Operator for any and all expenses incurred in removing and/or replacing any such Contaminated Product received.
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(b) Product Warranty. TRMC warrants to Operator that all Products tendered by or for the account of TRMC for throughput across the Anacortes Marine Terminal will conform to Operator’s minimum specifications for such Product and the most recently available and commonly accepted assay and any applicable API or ASTM standards. Operator may rely upon the specifications and representations of TRMC as to Product quality.
(c) Material Safety Data Sheet. TRMC will provide Operator with a Material Safety Data Sheet and any other information required by any federal, state, or local authority for all Products throughput across the Anacortes Marine Terminal. TRMC shall provide its customers with the appropriate information on all Products throughput across the Anacortes Marine Terminal.
(d) Quality Analysis. Operator will not perform any Product quality analysis on behalf of TRMC unless TRMC so requests in writing. Any such quality analyses, including any costs for independent inspectors appointed by TRMC, are for TRMC’s account. In the absence of fraud or manifest error, any quality determination performed by Operator hereunder shall be binding on both Parties. TRMC or its designated independent inspector may observe Operator in any measurement or sampling.
SECTION 11 PRODUCT QUANTITY
The quantity of product received from or loaded to TRMC’s Marine Vessels shall be based on Gross Standard Volume using the applicable API and ASTM or equivalent standards for Marine Vessel movements by the following (in order of preference), subject to Operator’s reasonable discretion to choose an alternative method: (a) by meters, (b) by static shore tank gauges of the tank or otherwise, (c) by inspector certificates, or (d) by a mutually agreeable method. The custody transfer quantity shall be determined by vessel gauges or bills of lading only when mutually agreed to by TRMC and Operator. TRMC shall provide Operator with all reasonable documentation with respect to the volumes throughput across the Anacortes Marine Terminal, including but not limited to, inspection reports, meter tickets or other similar documentation within three (3) Business Days of completion of Marine Vessel discharge.
SECTION 12 WASTE AND HAZARDOUS MATERIALS
(a) Storage, Handling and Disposal of Waste. Operator and TRMC will comply with Applicable Law regarding the storage and handling of Product and the disposal of any Waste. TRMC shall pay or reimburse Operator for removal from the Anacortes Marine Terminal and Ancillary Facilities of any Waste or residuals, including all costs associated with any liabilities arising from such Waste or residual. During such removal, the fees and charges set forth in this Agreement will remain in effect. Unless stated otherwise herein, Operator shall be responsible for any fines, penalties, claims, violations, or similar obligations related to Operator’s operation of the Anacortes Marine Terminal and Ancillary Facilities.
(b) Waste Discharge from Marine Vessels. Operator will not accept Waste from Marine Vessels that discharge cargoes at the Anacortes Marine Terminal. If Waste is tendered from Marine Vessels as required by any MARPOL Annex, similar regulations, Applicable Law, or the United States Coast Guard, TRMC agrees to arrange, or authorize a representative of the Marine Vessel to arrange on the Marine Vessel’s or on TRMC’s behalf, for disposal of all such Waste using third-party services approved by Operator, such approval not to be unreasonably withheld, conditioned or delayed. If TRMC or its authorized representative refuses to arrange for the removal of such Waste, Operator will arrange for the removal and disposal of such Waste, and TRMC shall reimburse Operator for the cost of receiving, handling, storing, and shipping such Waste and shall pay for appropriate treatment, storage and disposal of such Waste in compliance with Applicable Law.
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(c) Hazardous Materials—Reporting. Operator will report its handling of all hazardous materials for TRMC as required by Applicable Law. TRMC will accurately and properly represent the nature of all such materials to Operator. TRMC agrees to reimburse Operator for any reasonable, direct charges that Operator may be required to pay for the handling of Product, excluding penalties, fines or excess charges resulting from material errors or omissions in Operator’s reporting as required by Applicable Law.
SECTION 13 SERVICES; HOURS; VOLUME GAINS AND LOSSES
(a) Services. Operator shall throughput and handle TRMC’s Products across the Anacortes Marine Terminal, make all tie-ups and connections at the Anacortes Marine Terminal (excluding all connection and disconnection of cargo hoses or loading arms at a Marine Vessel’s manifold), provide regulatory compliance reporting that Operator is required to perform as the Anacortes Marine Terminal operator, and provide such other services set forth in this Agreement (the “Services”). Operator will timely provide TRMC with a copy of any regulatory compliance report filed by Operator regarding TRMC’s Product upon request by TRMC. Operator will provide the labor and supervision necessary to perform the Services contemplated by this Agreement, and Operator will provide and maintain the equipment necessary to perform the Services contemplated by this Agreement. Operator will maintain the Anacortes Marine Terminal according to the Master Lease and good industry practice and will use reasonable care in performing the Services consistent with customary industry practices. TRMC personnel shall make all other Marine Vessel connections to the Anacortes Marine Terminal, chicksans or hoses.
(b) Existing Contractors. Operator may continue to utilize labor, equipment, materials and supplies provided by contractors under their existing service agreements with TRMC to perform work to be performed by Operator hereunder, without the requirement that such existing contracts be amended, assigned or replaced. Such contracts with TRMC may continue to cover the work to be provided by Operator hereunder, as provided under Section 4(a) of the Secondment Agreement, and Operator shall be responsible for the costs and expenses of such work performed by such contractors pursuant to those provisions of the Secondment Agreement.
(c) Hours. Subject to the terms and conditions of the rules and procedures for the Anacortes Marine Terminal (if any) set forth in Terminal Service Orders, the Anacortes Marine Terminal will be available on 24/7/365 basis, as needed.
(d) Volume Gains and Losses. Subject to Section 18(b), Operator shall have no obligation to measure volume gains and losses and shall have no liability whatsoever for normal course physical losses that may result from the transportation of the Products across the Anacortes Marine Terminal, except if such losses are caused by the negligence or willful misconduct of Operator. TRMC will bear any volume gains and losses that may result from the transportation of the Products across the Anacortes Marine Terminal.
SECTION 14 OPERATIONS
Operator shall operate the Anacortes Marine Terminal in accordance with past practices and the applicable provisions of a Terminal Service Order with respect to the Anacortes Marine Terminal.
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SECTION 15 RESERVED
SECTION 16 RESERVED
SECTION 17 COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS
(a) Customer Certification. Customer certifies that none of the Products covered by this Agreement were derived from crude petroleum, petrochemical, or gas which was produced or withdrawn from storage in violation of any federal, state or other governmental law, nor in violation of any rule or regulation promulgated by any governmental agency having jurisdiction in the premises.
(b) Compliance with Applicable Law. The Parties are entering into this Agreement in reliance upon and shall comply in all material respects with all Applicable Law which directly or indirectly affects the Products throughput hereunder, or any receipt, throughput delivery, transportation, handling or storage of Products hereunder or the ownership, operation or condition of the Anacortes Marine Terminal. Each Party shall be responsible for compliance with all Applicable Law associated with such Party’s respective performance hereunder and the operation of such Party’s facilities. Without limiting TRMC’s reimbursement obligations under Section 6, in the event any action or obligation imposed upon a Party under this Agreement shall at any time be in conflict with any requirement of Applicable Law, then this Agreement shall immediately be modified to conform the action or obligation so adversely affected to the requirements of the Applicable Law, and all other provisions of this Agreement shall remain effective.
(c) Material Change in Applicable Law. Without limiting TRMC’s reimbursement obligations under Section 6, if during the Term, any new Applicable Law becomes effective or any existing Applicable Law or its interpretation is materially changed, which change is not addressed by another provision of this Agreement or a Terminal Service Order and which has a material adverse economic impact upon a Party, either Party, acting in good faith, shall have the option to request renegotiation of the relevant provisions of this Agreement or a Terminal Service Order with respect to future performance. The Parties shall then meet to negotiate in good faith amendments to this Agreement or an applicable Terminal Service Order that will conform to the new Applicable Law while preserving the Parties’ economic, operational, commercial and competitive arrangements in accordance with the understandings set forth herein.
SECTION 18 LIMITATION OF LIABILITY
(a) Waiver of Consequential and Other Damages. IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS OR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, ARISING FROM THE BREACH, DEFAULT, STRICT LIABILITY, OR THE NEGLIGENT ACTS, ERRORS, OR OMISSIONS OF SUCH PARTY WHILE PERFORMING ITS OBLIGATIONS UNDER THIS AGREEMENT, EXCEPT WITH RESPECT TO INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ACTUALLY AWARDED TO A THIRD PARTY OR ASSESSED BY A GOVERNMENTAL AUTHORITY AND FOR WHICH A PARTY IS PROPERLY ENTITLED TO INDEMNIFICATION FROM THE OTHER PARTY PURSUANT TO THE EXPRESS PROVISIONS OF THIS AGREEMENT.
(b) Claims and Liability for Lost Product. Operator shall not be liable to TRMC for lost or damaged Product unless (i) Operator would be responsible under Section 13(d) and (ii) TRMC notifies Operator in writing within ninety (90) days of the report of any incident or the date TRMC learns of any such loss or damage to the Product. Operator’s maximum liability to TRMC for any lost or damaged
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Product shall be limited to (i) the lesser of (1) the replacement value of the Product at the time of the incident based upon the price as posted by Platts or similar publication for similar Product in the same locality, and if no other similar Product is in the locality, then in the state, or (2) the actual cost paid for the Product by TRMC (copies of TRMC’s invoices of cost paid must be provided), less (ii) the salvage value, if any, of the damaged Product.
(c) Demurrage. Operator assumes no liability for demurrage (whether related to marine movements or otherwise), except if such demurrage is the result of Operator’s gross negligence or willful misconduct or except as provided in an applicable Terminal Service Order.
(d) No Guarantees or Warranties. Except as expressly provided in this Agreement, neither TRMC nor Operator makes any guarantees or warranties of any kind, expressed or implied. Operator specifically disclaims all implied warranties of any kind or nature, including any implied warranty of merchantability and/or any implied warranty of fitness for a particular purpose.
SECTION 19 INDEMNIFICATION
(a) Duty to Indemnify TRMC Group. Notwithstanding anything to the contrary in this Agreement or any Terminal Service Order, Operator SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS TRMC, its affiliates and their respective officers, directors, employees, agents, successors, and assigns (excluding any member of the Operator Group) (collectively, the “TRMC Group”) from and against all claims, suits, causes of action, demands, losses, liabilities, damages, costs, expenses, fees (including, but not limited to, reasonable attorney’s fees), and court costs (collectively, “Claims”), inclusive of Claims made by third parties, arising from or relating to any injury to or death of persons and/or damage, loss, or injury to any property (excluding Product) TO THE EXTENT OF THE PERCENTAGE OR PROPORTION OF DETERMINED FAULT ARISING FROM THE BREACH, DEFAULT, STRICT LIABILITY, WILLFUL MISCONDUCT OR THE NEGLIGENT ACTS, ERRORS, OR OMISSIONS OF OPERATOR OR ANY MEMBER OF THE OPERATOR GROUP (AS DEFINED BELOW) WHILE PERFORMING OPERATOR’S OBLIGATIONS UNDER THIS AGREEMENT.
(b) Duty to Indemnify Operator Group. Notwithstanding anything to the contrary in this Agreement or any Terminal Service Order, TRMC SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS General Partner, the Partnership, their subsidiaries and their respective officers, directors, members, managers, employees, agents, successors, and assigns (collectively the “Operator Group”) from and against all Claims, inclusive of Claims made by third parties, arising from or relating to any injury to or death of persons and/or damage, loss, or injury to any property (excluding Product) TO THE EXTENT OF THE PERCENTAGE OR PROPORTION OF DETERMINED FAULT ARISING FROM THE BREACH, DEFAULT, STRICT LIABILITY, WILLFUL MISCONDUCT OR THE NEGLIGENT ACTS, ERRORS, OR OMISSIONS OF TRMC OR ANY MEMBER OF THE TRMC GROUP WHILE USING THE ANACORTES MARINE TERMINAL AND/OR TO THE EXTENT OF THE PERCENTAGE OR PROPORTION OF DETERMINED FAULT ARISING FROM THE BREACH, DEFAULT, STRICT LIABILITY, WILLFUL MISCONDUCT OR THE NEGLIGENT ACTS, ERRORS, OR OMISSIONS OF TRMC OR ANY MEMBER OF THE TRMC GROUP WHILE PERFORMING TRMC’S OBLIGATIONS UNDER THIS AGREEMENT.
(c) Failure to Maintain Required Coverages. In the event that (a) TRMC does not maintain, or does not cause the TRMC Insurance Group members to maintain, the insurance coverages required by Section 23 of this Agreement or (b) TRMC fails to include Operator as an additional insured on all policies of insurance required by Section 23 of this Agreement, then TRMC shall hold harmless and indemnify Operator against all Claims that otherwise would have been insured.
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(d) Written Claim. Neither Party shall be obligated to indemnify the other Party or be liable to the other Party unless a written claim for indemnity is delivered to the other Party within ninety (90) days after the date that a Claim is reported or discovered, whichever is earlier.
(e) No Limitation. Except as expressly provided otherwise in this Agreement, the scope of these indemnity provisions may not be altered, restricted, limited, or changed by any other provision of this Agreement. The indemnity obligations of the Parties as set out in this Section 19 are independent of any insurance requirements as set out in Section 23, and such indemnity obligations shall not be lessened or extinguished by reason of a Party’s failure to obtain the required insurance coverages or by any defenses asserted by a Party’s insurers.
(f) Mutual and Express Acknowledgement. THE INDEMNIFICATION PROVISIONS PROVIDED FOR IN THIS AGREEMENT HAVE BEEN EXPRESSLY NEGOTIATED IN EVERY DETAIL, ARE INTENDED TO BE GIVEN FULL AND LITERAL EFFECT, AND SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, OBLIGATIONS, CLAIMS, JUDGMENTS, LOSSES, COSTS, EXPENSES OR DAMAGES IN QUESTION ARISE OR AROSE SOLELY OR IN PART FROM THE GROSS, ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, WILLFUL MISCONDUCT OR OTHER FAULT OF ANY INDEMNIFIED PARTY. EACH PARTY ACKNOWLEDGES THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND CONSTITUTES CONSPICUOUS NOTICE. NOTICE IN THIS CONSPICUOUS NOTICE IS NOT INTENDED TO PROVIDE OR ALTER THE RIGHTS AND OBLIGATIONS OF THE PARTIES, ALL OF WHICH ARE SPECIFIED ELSEWHERE IN THIS AGREEMENT.
(g) Survival. These indemnity obligations shall survive the termination of this Agreement until all applicable statutes of limitation have run regarding any Claims that could be made with respect to the activities contemplated by this Agreement.
(h) Third Party Indemnification. If any Party has the rights to indemnification from a third party, the indemnifying party under this Agreement shall have the right of subrogation with respect to any amounts received from such third-party indemnification claim.
SECTION 20 DEFAULT
(a) A Party shall be in default under this Agreement if:
(i) the Party breaches any provision of this Agreement, a Terminal Service Order or any of the Related Agreements, which breach has a material adverse effect on the other Party, and such breach is not excused by Force Majeure or cured within fifteen (15) Business Days after notice thereof (which notice shall describe such breach in reasonable detail) is received by such Party (unless such failure is not commercially reasonably capable of being cured in such fifteen (15) Business Day period in which case such Party shall have commenced remedial action to cure such breach and shall continue to diligently and timely pursue the completion of such remedial action after such notice); or
(ii) the Party (1) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Applicable Law, or has any such petition filed or commenced against it, (2) makes an assignment or any general arrangement for the benefit of creditors, (3) otherwise becomes bankrupt or insolvent (however evidenced) or (4) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets.
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(b) If either of the Parties is in default as described above, then (i) if TRMC is in default, Operator may or (ii) if Operator is in default, TRMC may: (1) terminate this Agreement upon notice to the defaulting Party; (2) withhold any payments due to the defaulting Party under this Agreement and any Terminal Service Order; and/or (3) pursue any other remedy at law or in equity.
(c) Obligation to Cure Breach. If a Party breaches any provision of this Agreement, a Terminal Service Order or a Related Agreement, which breach does not have a material adverse effect on the other Party, the breaching Party shall still have the obligation to cure such breach.
(d) Cumulative Nature of Remedies. The remedies of TRMC and Operator provided for in this Agreement shall not be exclusive, but shall be cumulative and shall be in addition to all other remedies at law or in equity.
XXXXXXX 00 XXXXX XXXXXXX
If a Party is unable to perform or is delayed in performing, in whole 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 at the Anacortes Marine Terminal or the Ancillary Facilities, then that Party shall promptly notify the other Party of the event of Force Majeure with reasonably full particulars and timing of such event. Such Party also shall promptly notify the other Party when the event of Force Majeure terminates or no longer adversely affects its ability to perform under this Agreement or any Terminal Service Order. The obligations of the Party giving notice, so far as they are affected by the event of Force Majeure, shall be suspended during, but not longer than, the continuance of the Force Majeure event. The affected Party must act with commercially reasonable diligence to resume performance, but it shall not be required to expend funds to settle strikes, lockouts or other labor difficulty. A Party’s inability economically to perform its obligations hereunder does not constitute an event of Force Majeure. If Operator is excused from providing services due to an event of Force Majeure, other than any fees that are already due and payable hereunder, any other fees incurred by TRMC during the event of Force Majeure shall be excused or proportionately reduced, as appropriate, for so long as Operator’s performance is so excused due to the event of Force Majeure. In the event the Anacortes Marine Terminal or any part thereof is destroyed or damaged to such extent as to make them unusable, then the Parties shall consult and, subject to the terms and provisions of the Master Lease, may elect whether or not to repair, replace, or rebuild. An event of Force Majeure shall not extend the term of this Agreement. If an event of Force Majeure materially affects either Party’s performance under this Agreement and exists with respect to the Anacortes Marine Terminal or the Ancillary Facilities for twelve (12) Months, then either Party shall have the right to terminate this Agreement without further costs or obligation to the other Party.
SECTION 22 ASSIGNMENT
(a) As of the Commencement Date, the General Partner shall assign all of its rights and obligations under this Agreement to the Partnership. The Partnership shall immediately assign its rights and obligations hereunder to Operator. Upon such assignment to Operator, Operator shall have all of the respective rights and obligations set forth herein during the Term of this Agreement. (Nothing in this Section 22(a) shall affect Operator’s covenants set forth in Section 5(a)(i) of this Agreement.)
(b) TRMC shall not transfer, assign, or convey its interests hereunder, in whole or in part, to a third party without the written consent of the Operator, which consent shall not be unreasonably withheld. Operator may assign its interest hereunder without consent from TRMC to any subsidiary or
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affiliated company. Operator shall be permitted to make a collateral assignment of this Agreement solely to secure working capital financing for Operator. TRMC may assign its interest hereunder without consent from Operator to any subsidiary or affiliated company or any purchaser of the Refinery, provided that such purchaser meets acceptable credit standards to be determined in Operator’s commercially reasonable discretion. A Party making a permitted assignment shall notify the other Party in writing at least ten (10) days prior to the effective date of such assignment.
SECTION 23 INSURANCE
(a) Insurance Required by Operator. Operator shall be required to carry at least the minimum level of insurance required pursuant to the Master Lease, except for casualty insurance with regard to the Anacortes Marine Terminal which shall remain the sole responsibility of TRMC.
(b) Insurance Required by TRMC. TRMC shall obtain at its sole cost and expense and shall carry and maintain in full force and effect, and cause its carriers, contractors, agents and representatives (collectively the “TRMC Insurance Group”) to obtain and maintain, insurance coverages with insurance companies rated not less than A-, IX by A.M. Best or otherwise reasonably satisfactory to Operator of the following types and amounts:
(i) Workers’ Compensation. Workers’ Compensation Insurance for statutory limits and in accordance with the Applicable Laws of the state(s) where the work or operations under this Agreement are to be performed, including, without limitation, the U.S. Xxxxxxxxx and Harbor Workers’ Compensation Act as well as the Outer Continental Shelf Lands Act with Volunteer Compensation for marine operations to include transportation, wages, maintenance and cure, and Xxxxx Act Coverage where required;
(ii) Employer’s Liability. Employer’s Liability Insurance (including, where applicable, maritime employer liability coverage and/or coverage for liabilities under the U.S. Xxxxxxxxx and Harbor Workers’ Act and the Xxxxx Act), in the following minimum limits:
(1) Bodily injury by accident – $1,000,000 per accident;
(2) Bodily injury by disease – $1,000,000 each employee; and
(3) Bodily injury by disease – $1,000,000 policy limit.
(iii) Commercial Automobile. Commercial Automobile Liability Insurance covering each vehicle whether owned, non-owned, hired, operated, or used by TRMC and/or any member of the TRMC Insurance Group while in, on or adjacent to the Anacortes Marine Terminal, with a combined single limit of not less than one million dollars ($1,000,000) for bodily injury and property damage as to any one accident, including an MCS-90 endorsement.
(iv) Commercial General Liability. Commercial General Liability Insurance including coverages for contractual liability, third-party personal injury liability, and sudden and accidental pollution, with limits of not less than one million dollars ($1,000,000) per occurrence.
(v) Excess Liability. Excess Liability Insurance in excess of the insurance coverages required at Sections 23(b)(ii), (iii) and (iv) above, with a limit of not less than twenty-four million dollars ($24,000,000) per occurrence.
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(c) Required Insurance for TRMC’s Marine Carriers. TRMC shall cause all marine carriers who will access the Anacortes Marine Terminal on its behalf to maintain insurance coverage as set forth below:
(i) Hull & Machinery. Hull and Machinery Insurance to the greater of the full market value or mortgage value of each vessel and her equipment used in performing services hereunder. Such insurance shall be endorsed to include navigation limits sufficient to cover all work locations and collision and tower’s liability with the Sistership Clause unamended.
(ii) Protection & Indemnity. Protection and Indemnity Insurance provided through any combination of (1) full entry with a Protection and Indemnity Club; and/or (2) policy(ies) with a commercial insurance company(ies) or underwriters syndicate(s) with terms no less broad than those customarily carried by similar marine carriers with a limit of not less than one billion dollars ($1,000,000,000). Such Protection and Indemnity insurance shall include coverage for injury to or death of master, mates, and crew; tower’s liability; excess collision liability; cargo legal liability; pollution liability; and contractual liability.
(iii) Certificate of Financial Responsibility (Water Pollution). Marine carriers are required to provide to Operator a current and valid Certificate of Financial Responsibility (Water Pollution) for its vessel(s) and as required by a Terminal Service Order prior to arrival at the Anacortes Marine Terminal. Evidence of all required insurance coverages for marine carriers must be received by Operator’s marine scheduler before approval to berth at the Anacortes Marine Terminal will be granted or before authorization to enter the Anacortes Marine Terminal area will be given, whichever is earlier.
(d) Certificates of Insurance; Endorsements. Excluding insurance for TRMC’s marine carriers, TRMC shall cause the Operator Group (as defined above) to be named as an additional insured on all policies of insurance secured by TRMC and the members of the TRMC Group in accordance with this Agreement. TRMC shall furnish Operator with certificates of insurance evidencing this coverage. All policies shall be endorsed to provide that no material change or cancellation of the coverage shall occur until Operator has received thirty (30) days written notice. TRMC hereby waives, and shall cause its insurers and those of the TRMC Insurance Group to also waive any right of subrogation that they may have against the Operator or the Operator Group. All insurance coverage required hereunder shall be primary to, and not in excess of or contributory with, any insurance that may be maintained by Operator.
(e) Self-Insurance. Subject to Operator’s review and approval, which will not be unreasonably withheld, TRMC may self-insure the Commercial General Liability Insurance requirements set forth in Section 23(b)(iv). Operator reserves the right, at Operator’s discretion, to periodically review TRMC’s financial means to meet the TRMC Insurance Group insurance requirements included herein by self-insurance. If Operator reasonably determines that TRMC cannot meet the insurance obligations included herein by self-insurance, Operator may require TRMC to obtain and maintain insurance coverages for requirements as provided in this Section 23 with insurance companies rated not less than A-, IX by A.M. Best or otherwise reasonably satisfactory to Operator. The self-insurance shall protect the indemnified parties in the same manner and to the same extent as they would have been protected had the policy or policies not been self-insured, contained a self-insured retention or deductible.
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SECTION 24 NOTICE
All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) Business Days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) Business Day after deposit therewith prepaid; or (d) if by e-mail, one Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:
If to TRMC, to:
Tesoro Refining & Marketing Company LLC
00000 Xxxxxxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: General Counsel
If to Operator, to:
Tesoro Logistics Operations LLC
00000 Xxxxxxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
For legal notices:
Attention: General Counsel
For all other notices and communications:
Attention: Xxx X. Xxxxxxxx, Senior Vice President, Logistics
phone: (000) 000-0000
email: Xxx.X.Xxxxxxxx@xxxxxxxx.xxx
or to such other address or to such other Person as either Party will have last designated by notice to the other Party.
SECTION 25 REPORTS AND AUDIT
Each Party and its duly authorized agents and/or representatives shall have reasonable access to the accounting records and other documents maintained by the other Party which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term and for a period of up to three (3) years after termination of this Agreement. Claims as to shortage in quantity or defects in quality shall be made by written notice within ninety (90) days after the delivery in question or shall be deemed to have been waived.
SECTION 26 CONFIDENTIAL INFORMATION
(a) Confidential Information and Exceptions Thereto. Each Party shall use reasonable efforts to retain the other Parties’ Confidential Information in confidence and not disclose the same to any third party nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 26. Each Party further agrees to take the same care with the other Party’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care. Excepted from these obligations of confidence and non-use is that information which:
(i) is available, or becomes available, to the general public without fault of the receiving Party;
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(ii) was in the possession of the receiving Party on a non-confidential basis prior to receipt of the same from the disclosing Party (it being understood, for the avoidance of doubt, that this exception shall not apply to information of Operator that was in the possession of TRMC or any of its affiliates as a result of their ownership or operation of the Anacortes Marine Terminal prior to the Commencement Date);
(iii) is obtained by the receiving Party without an obligation of confidence from a third party who is rightfully in possession of such information and, to the receiving Party’s knowledge, is under no obligation of confidentiality to the disclosing Party; or
(iv) is independently developed by the receiving Party without reference to or use of the disclosing Party’s Confidential Information.
For the purpose of this Section 26, a specific item of Confidential Information shall not be deemed to be within the foregoing exceptions merely because it is embraced by, or underlies, more general information in the public domain or in the possession of the receiving Party.
(b) Required Disclosure. Notwithstanding Section 26(a) above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, or is required to disclose by the listing standards of any applicable securities exchange, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall cooperate with the disclosing Party in allowing the disclosing Party to obtain such protective order or other relief.
(c) Return of Confidential Information. Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures and policies; provided, however, that any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 26, and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law.
(d) Receiving Party Personnel. The receiving Party will limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the “Receiving Party Personnel”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party will be made aware of the confidentiality provision of this Agreement, and will be required to abide by the terms thereof. Any third party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereof shall be required to sign a written agreement pursuant to which such Receiving Party Personnel agree to be bound by the provisions of this Agreement, which written agreement will expressly state that it is enforceable against such Receiving Party Personnel by the disclosing Party.
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(e) Survival. The provisions of this Section 26 shall survive the termination of this Agreement for two (2) years.
SECTION 27 SAFE BERTH
Operator shall exercise due diligence to provide a berth which the nominated Marine Vessels accepted by the Operator can safely reach and leave and at which the Marine Vessel can lie, load, and discharge always safely afloat; provided however, Operator makes no representation or warranty regarding the safety of any channel, anchorage or other waterway used in approaching or departing from the designated berth; provided, however, that Operator shall ensure that TRMC and any of TRMC’s accepted Marine Vessels are immediately notified of any changes in water depth that affect the stated draft maximum at mean lower low water as set forth in an applicable Terminal Service Order.
SECTION 28 MISCELLANEOUS
(a) Modification; Waiver. This Agreement and any Terminal Service Order may be amended or modified only by a written instrument executed by the Parties. Any of the terms and conditions of this Agreement or any Terminal Service Ordert may be waived in writing at any time by the Party entitled to the benefits thereof. No waiver of any of the terms and conditions of this Agreement or any Terminal Service Order will be effective unless in writing signed by a duly authorized individual on behalf of the Party against which the waiver is sought to be enforced. No waiver of any term or condition or of any breach of this Agreement or any Terminal Service Order will be deemed or will constitute a waiver of any other term or condition or of any later breach (whether or not similar), nor will such waiver constitute a continuing waiver unless otherwise expressly provided.
(b) Entire Agreement. This Agreement, together with the Exhibits and Terminal Service Orders and the other agreements executed or to be executed in connection with the transactions contemplated by the Contribution Agreement, constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the Parties in connection therewith. In the event of a conflict of provisions of this Agreement and the Omnibus Agreement, the provisions of the Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in this Agreement.
(c) Construction and Interpretation. In interpreting this Agreement, unless the context expressly requires otherwise, all of the following apply to the interpretation of this Agreement:
(i) Preparation of this Agreement has been a joint effort of the Parties and the resulting Agreement shall not be interpreted against one of the Parties as the drafting Party.
(ii) Plural and singular words each include the other.
(iii) Masculine, feminine and neutral genders each include the others.
(iv) The word “or” is not exclusive and includes “and/or.”
(v) The words “includes” and “including” are not limiting.
(vi) References to the Parties include their respective successors and permitted assignees.
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(vii) The headings in this Agreement are included for convenience and do not affect the construction or interpretation of any provision of, or the rights or obligations of a Party under, this Agreement.
(d) Governing Law; Jurisdiction. This Agreement shall be governed by the laws of the State of Texas without giving effect to its conflict of laws principles; provided that any issues or claims arising out of the terms and conditions of the Master Lease, or rules and regulations of the Washington Department of Natural Resources will be governed by the laws of the State of Washington. Each Party hereby irrevocably submits to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the United States District Court for the Western District of Texas, San Antonio Division, or if such federal court declines to exercise or does not have jurisdiction, in the District Court of Bexar County, Texas. The Parties expressly and irrevocably submit to the jurisdiction of said courts and irrevocably waive any objection which they may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this agreement brought in such courts, irrevocably waive any claim that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum and further irrevocably waive the right to object, with respect to such claim, action, suit or proceeding brought in any such court, that such court does not have jurisdiction over such Party. The Parties hereby irrevocably consent to the service of process by registered mail, postage prepaid, or by personal service within or without the State of Texas. Nothing contained herein shall affect the right to serve process in any manner permitted by law.
(e) Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.
(f) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(g) Independent Contractor. Operator’s relationship to TRMC hereunder shall be that of an independent contractor. Nothing in this Agreement shall be construed to make Operator or any of its employees, an agent, associate, joint venturer or partner of TRMC.
(h) No Public Use. Operator’s services hereunder shall not be deemed those of a public utility or common carrier. If any action is taken or threatened to declare these services a public use, then, upon notifying TRMC, Operator may restructure and restate this Agreement.
(i) No Bonded Services. Operator is not providing a U.S. Customs bonded warehouse service.
(j) No Third Party Beneficiaries. Except as expressly set forth herein, including as set forth in Section 19, it is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party.
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(k) WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY PERFORMANCE OF OR FAILURE TO PERFORM ANY OBLIGATION HEREUNDER.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement, effective as of the Commencement Date.
| TESORO LOGISTICS OPERATIONS LLC | ||
| By: | /S/ XXXXXX X. XXXXXX | |
| Xxxxxx X. Xxxxxx | ||
| President and Chief Financial Officer |
| Solely in respect of Section 22(a) only: | ||
| ANDEAVOR LOGISTICS LP | ||
| By: | TESORO LOGISTICS GP, LLC, | |
| its general partner | ||
| By: | /S/ XXXXXX X. XXXXXX | |
| Xxxxxx X. Xxxxxx | ||
| President and Chief Financial Officer |
| Solely in respect of Section 22(a) only: | ||
| TESORO LOGISTICS GP, LLC | ||
| By: | /S/ XXXXXX X. XXXXXX | |
| Xxxxxx X. Xxxxxx | ||
| President and Chief Financial Officer |
| TESORO REFINING & MARKETING COMPANY LLC | ||
| By: | /S/ XXXXXXX X. XXXX | |
| Xxxxxxx X. Xxxx | ||
| President |
Signature Page to Anacortes Marine Terminal Operating Agreement
EXHIBIT 1
FORM OF TERMINAL SERVICE ORDER
(ANACORTES MARINE TERMINAL [ ]- ___, 20__)
This Terminal Service Order is entered as of ______ ___, 20__, by and between Tesoro Refining & Marketing Company LLC, a Delaware limited liability company, and Tesoro Logistics Operations LLC, a Delaware limited liability company, pursuant to and in accordance with the terms of the Anacortes Marine Terminal Operating Agreement dated as of November 8, 2017, by and among such parties and Tesoro Logistics GP, LLC, a Delaware limited liability company, and Andeavor Logistics LP, a Delaware limited partnership (the “Agreement”).
Capitalized terms not otherwise defined herein shall have the meaning set forth in the Agreement.
Pursuant to Section 9 of the Agreement, the parties hereto agree to the following provisions:
[Insert applicable provisions:
| (i) | any rules and procedures for the Anacortes Marine Terminal referenced in Section 2; |
| (ii) | the per Barrel throughput fees at the Anacortes Marine Terminal; |
| (iii) | any reimbursement pursuant to Section 6; |
| (iv) | specifics of dock operations as referenced in Sections 14 and 27; and |
| (v) | any other services as may be agreed.] |
Except as set forth in this Terminal Service Order, the other terms of the Agreement shall continue in full force and effect and shall apply to the terms of this Terminal Service Order.
[Signature Page Follows]
Exhibit 1 –
Anacortes Marine Terminal Operating Agreement
IN WITNESS WHEREOF, the parties hereto have duly executed this Terminal Service Order as of the date first written above.
| TESORO LOGISTICS OPERATIONS LLC | TESORO REFINING & MARKETING COMPANY LLC | |||||||
| By: | By: | |||||||
Exhibit 1 –
Anacortes Marine Terminal Operating Agreement
EXHIBIT 2
CURRENT LEASEHOLD IMPROVEMENTS
All machinery and equipment, mobile or otherwise, systems and other tangible personal property owned and used by TRMC primarily in connection with leasing or operation of the Anacortes Marine Terminal, including (a) all production units, processing units and distillation systems, (b) all heating, lighting, and power systems, fire prevention and fire extinguishing systems, control systems, emergency warning and emergency preparedness systems and related assets, (c) all storage and other tanks, meters, pumps, engines, compressors, pipes, fittings, valves, connections, regulators, loading and unloading lines and racks, (d) all computers, servers, printers, computer hardware, wired or mobile telephones, on-site process control and automation systems, telecommunications assets, and other information-technology-related equipment that is used exclusively in connection with the Anacortes Marine Terminal and that is owned by TRMC or leased by TRMC, (e) all tools, (f) all furniture and furnishings, (g) all vehicles and (h) all other tangible personal property, in each case presently owned by TRMC, located in or on the Premises.
Exhibit 2 –
Anacortes Marine Terminal Operating Agreement
