Exhibit 10.13
April 19, 2002
FGI, LLC
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Re: Agreement to Operate Asphalt Modifying Equipment
Gentlemen:
This letter, when accepted in the space provided below, shall evidence the
agreement entered into this date between FGI, LLC ("FGI") and Crown Asphalt
Products Company ("Crown") for the placement and operation by Crown of certain
tanks and equipment at the FGI facility in Grand Island, Nebraska ("Grand Island
Terminal") under the terms and conditions set forth below.
1. FGI has a lease with Hall County Airport Authority ("HCAA") for the
Grand Island Terminal located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. HCAA has advised Crown that it may place and operate
tanks and equipment for modified asphalt production at the Grand Island
Terminal subject to Crown paying a user fee to HCAA. FGI hereby grants
Crown the right to place tanks and equipment at the Grand Island
Terminal. A description of the tanks and equipment is attached hereto
as Exhibit A.
2. The term of this agreement will commence as of the date hereof and
terminate no later than October 31, 2002; provided, however the parties
may agree subject to the terms of the user fee agreement with HCAA to
extend the term on a month-to-month basis.
3. Crown will enter into a user fee agreement with HCAA evidencing HCAA's
approval of Crown's use of the property under terms and conditions
acceptable to Crown, HCAA and FGI. Crown will provide FGI with a copy
of the HCAA User Fee Agreement.
4. Crown will conduct all operations at the Grand Island Terminal in
accordance with the terms and conditions of the Facility Access
Agreement attached hereto as Exhibit B, and the user fee agreement with
HCAA.
5. Frontier Oil & Refining Company ("Frontier") will sell and transfer
asphalt from the FGI tanks at the Grand Island Terminal to Crown's
tanks and equipment. Asphalt sales shall be in accordance with the
Asphalt Sales Contract between Frontier and Crown attached hereto as
Exhibit C. Crown will blend polymer and other additives with the
asphalt through Crown's equipment into a finished asphalt product to
fulfill contracts between Crown and certain third party contractors.
FGI will allow Crown to use the scale for weigh-in and weigh-out of the
tanker truck transporting the finished product from the Grand Island
Terminal. The service fee for use of the truck scale shall be $7.00 per
truckload.
6. During the term of this agreement Crown, and its agents or designees,
will be granted access to the Grand Island Terminal during normal
terminal hours of operation or as mutually agreed with FGI, for its
operations subject to the terms and conditions of the Facility Access
Agreement. At no time whatsoever, will Crown's operations be allowed to
interfere with FGI's operations.
7. Crown will indemnify and hold harmless FGI, Frontier, and Consolidated
Oil & Transportation, Inc. ("Consolidated"), from and against any
liability or damages and all costs and expenses associated with the
location, installation and operation of the tanks and equipment as
provided for in the Facility Access Agreement. FGI, Frontier, and
Consolidated will not be responsible for the operations or products
produced and sold by Crown. Crown will pay all costs associated with
the installation and removal of the tanks and equipment referenced in
Exhibit A. Crown will pay all costs associated with site reclamation
required after removal of Crown's equipment.
8. Crown will indemnify and hold harmless FGI, Frontier, and Consolidated
from and against any costs resulting from any spill by Crown or
violation of any environmental regulation by Crown as provided for in
the Facility Access Agreement.
If the foregoing terms and conditions meet with your approval please so indicate
by executing in the space provided below and returning one fully executed copy
to the letterhead address.
Sincerely,
/s/ ▇▇▇ ▇▇▇▇▇▇
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President
Agreed to and accepted this 19 day of April, 2002.
FGI, LLC Frontier Oil and Refining Company
By /s/ unreadable By /s/ unreadable
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Its President Its Manager Asphalt Sales
Exhibit A
to the Letter Agreement dated April 10, 2002
Tanks and Equipment Description
Nine 500-barrel tanks with heat coils and tank side mixers
High shear polymer mill skid complete with pumps, electrical and polymer
introduction system
Piping manifold and all electrical starters and switch gear to operate equipment
2MM BTU hot oil heating system and heat trace
Truck loading rack (including pump and electrical)
Lab equipment necessary for product testing
Mobile trailer for office and lab testing
Exhibit B
to the Letter Agreement dated April 19, 2002
Facility Access Agreement
This facility Access Agreement ("Agreement") is entered into this 19 day of
April, 2002, by and between FGI, L.L.C., a Colorado limited liability company
("Company") and Crown Asphalt Products Company, a Utah corporation,
("Licensee").
RECITALS
WHEREAS, the Company is the lessee of certain real property known as the Grand
Island Terminal located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
68801("Property") and has agreed to grant a license to Licensee to enter upon
the Property during the term of this Agreement to: (i) place tanks and other
equipment on the property; (ii) operate the tanks and equipment to manufacture
modified asphalt products; and (iii) conduct certain other related activities,
upon the terms and conditions hereinafter set forth (the "License"),
WHEREAS, Licensee requests permission to enter upon the Property to conduct
certain activities,
NOW THEREFORE, in consideration of the foregoing, the mutual promises,
covenants, conditions and agreements hereinafter set forth and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Grant of License. During the Term (as defined in Section 8 below) of this
Agreement, the Company agrees to allow Licensee, its agents, employees, officers
and other representatives to enter the property at Licensee's sole risk and
expense and solely for the purpose of the installation and operation of the
tanks and equipment to manufacture modified asphalt products.
2. Compliance with Laws, Lease Agreement and Permits. Licensee at its own cost
and expense, promptly and fully comply with laws, ordinances and requirements of
all governmental authorities having jurisdiction with respect to its activities
under this Agreement. Licensee shall comply with all provisions of that Lease
Agreement. ("Lease Agreement") by and between the Company and the Hall County
Airport Authority ("HCAA") which are applicable to the Company, including, by
way of example only and without limitation, those provisions in the Lease
Agreement relating to lessee compliance with laws and FAA regulations.
Additionally, Licensee shall, at no cost or expense to the Company, be
responsible for obtaining any and all governmental permits and approvals, which
may be necessary for it to conduct activities under this Agreement.
3. Liens and Claims. Licensee will not permit any mechanic's, materialman's or
other similar liens or claims to stand against the Property for labor materials
furnished in connection with any work caused to be performed by Licensee upon
the Property. Within Fifteen (15) days of delivery by the Company to Licensee of
written notice of any such lien or claim, Licensee shall have the lien or claim
released at its sole cost and expense.
4. Indemnification. Licensee shall release, protect, defend, indemnify, and hold
the Company, its members and affiliated companies and their respective officers,
directors, agents, members and employees (collectively the "Affiliates"), free
and harmless from any and all claims, liability, damages, demands, costs and
causes of action of all kinds, including but not limited to claims arising from
the death or injury of any person or persons, including employees of Licensee,
or from damage or destruction of any property, including environmental damage,
caused by or in connection with the exercise of the License granted hereunder or
by the entry or use of the Property by Licensee of its affiliated companies, or
their officers, directors, agents, servants, employees, invitees or guests, or
by any contractor or subcontractor employed by Licensee, or by the agents,
servants employees, invitees or guests of any such contractor or subcontractor,
except to the extent such liabilities are caused by the sole negligence or
willful misconduct of the Company. In the event the indemnity hereunder exceeds
that permitted by applicable law, such indemnity shall be construed so as to
preserve the maximum indemnity permitted thereby. This indemnity shall survive
the termination of this Agreement.
5. Approval of HCAA. Licensee shall, at its sole cost and expense, obtain any
approval or consent required under the Lease Agreement or by the HCAA and shall
provide the Company with evidence thereof prior to the installation of the tanks
and equipment hereunder. Such consent shall include a waiver by HCAA of any
right to additional rent from the Company by reasons of the activities provided
under this Agreement or Licensee shall agree to indemnify the Company for any
such amounts demanded of the Company by HCAA.
6. Taxes and Fees. Licensee shall reimburse Company for, or shall pay, any ad
valorem, personal property, sales, use or other tax resulting from the use or
operation of the Company's Property hereunder or that may be levied on the
personal property of Licensee that is stored thereon, together with any license,
registration or similar fees.
7. Insurance. During the Term of this Agreement, Licensee, before entering the
Property and at its own expense, shall procure and maintain policies of
liability insurance, issued by insurance companies duly qualified or licensed to
issue policies of insurance reasonably acceptable to the Company, which are
primary as to any other existing, valid and collectible insurance insuring
Licensee against loss or liability caused by or in connection with the exercise
of the License by Licensee, its agents, servants, employees, invitees, guests,
contractors or subcontractors, in amounts not less than:
a. General Comprehensive Contractual Liability, with a combined
single limit of FIVE MILLION DOLLARS ($5,000,000) each
occurrence, FIVE MILLION DOLARS ($5,000,000) aggregate, for
Bodily Injury and Property Damage, including Personal injury.
b. Comprehensive Automobile Liability insurance or Business Auto
Policy covering all owned, hired or otherwise operated
non-owned vehicles, with a minimum combined single limit of
ONE MILLION DOLLARS ($1,000,000) each occurrence for Bodily
Injury and Property Damage.
Licensee shall deliver to the Company a certificate evidencing the policies and
that coverage will not be cancelled or materially changed prior to thirty (30)
days' advance written notice to the Company. Subrogation against the Company and
the Affiliates shall be waived as respects of all the insurance policies set
forth above (including without limitation policies of any subcontractor). The
insurance required hereunder in no way limits or restricts the Indemnification
under section 4, nor is the insurance to be carried limited by Section 4, nor by
any limitation placed on the indemnity as a matter of law. Any deductible amount
is the responsibility of Licensee.
In addition, Licensee assumes all risk of loss for any damage to or loss of the
tanks and equipment provided hereunder and the Company shall have no
responsibility or obligation relating to such property whatsoever.
8. Termination. This License shall commence as of the date hereof and shall
terminate on October 31, 2002 (the "Term"), provided however the parties may
agree subject to the terms of the user fee agreement with HCAA agree to extend
the Term on a month to month basis. In addition to the foregoing, the Company
shall have the right to terminate this Agreement if Licensee fails to cure any
breach hereunder within fifteen (15) business days following receipt by Licensee
of written notice of such breach delivered by the Company. Immediately following
Licensee's receipt of written notice of such termination, Licensee shall, at its
sole risk, cost and expense: (i) remove any tanks or equipment which Licensee or
its agents may have caused to be placed upon the Property, and (ii) restore the
Property to its condition existing prior to the date of the commencement of this
License, to the extent which Licensee or its agents may have caused modification
to or changes upon the Property.
9. Notices. Any notices hereunder shall be in writing and shall be deemed given
when personally delivered, or three (3) days after sent by registered or
certified mail, return receipt requested, or by recognized overnight carrier,
postage or charges prepaid, or by facsimile machine, with transmission and
receipt acknowledged in writing, and addressed to the party for whom intended at
such party's address herein specified, or at such other address as such party
may have substituted therefore by proper notice to the other.
Notices to the Company shall be sent to:
FGI, LLC Frontier Oil & Refining Company
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And to Licensee at:
Crown Asphalt Products Company
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10. Invalidity. The invalidity or enforceability of any one or more provisions
of this Agreement shall not affect the validity or enforceability of the
remaining portions of this Agreement.
11. Assignment. This Agreement shall be personal to Licensee and its affiliated
companies, and Licensee shall not assign its interests to third parties other
than affiliated companies hereunder without first obtaining written approval
from the Company, which approval may be withheld in the Company's sole
discretion. Subject to the foregoing provision, this Agreement shall inure to
the benefit of, and be binding upon, the parties and their successors and
assigns during the Term hereof.
12. Interpretation. This Agreement shall be construed pursuant to the laws of
the State of Nebraska. The captions and headings contained herein are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
13. Integration. This Agreement, the letter agreement dated April 19, 2002 and
the Asphalt Sales Contract shall constitute the sole agreement between the
parties with respect to the matters described herein.
14. No Partnership of Agency. The parties hereto agree that nothing contained
herein shall be construed as creating the relationship of principal and agent,
of partnership, of joint venture and/or employer or employee.
15. Counterparts. This Agreement may be executed in several counterparts and all
counterparts so executed shall constitute one Agreement binding on the parties
hereto.
16. Waivers and Amendments. Any waiver of any term or condition of this
Agreement, or any amendment or supplementation of this Agreement, shall be
effective only if in writing. A waiver of any breach or failure to enforce any
of the terms or conditions of this Agreement shall not in any way affect, limit
or waive a party's rights hereunder at any time to enforce strict compliance
thereafter with every term or condition of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
FGI, LLC Crown Asphalt Products Company
By /s/ unreadable By /s/ ▇▇▇ ▇▇▇▇▇▇
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Its President Its President
Frontier Oil & Refining Company
By /s/ unreadable
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Its Manager Asphalt Sales