EXHIBIT 10.14
MARINE TRANSPORTATION AGREEMENT
THIS MARINE TRANSPORTATION AGREEMENT (this "Agreement") is executed this 27th
day of October, 2003, by and between ▇▇▇▇▇▇ Operating Partnership L.P., a
Delaware limited partnership ("Owner"), and Cross Oil Refining & Marketing,
Inc., a Delaware corporation ("Charterer"), in order to evidence the agreement
of such parties with respect to Owner's provision of bulk crude oil and/or
finished oil products marine transportation services on board its marine vessels
under the following terms and conditions.
1. TERM; TERMINATION The initial term of this Agreement shall be
for 5 years (the "Initial Term") commencing
on the date first set forth above (the
"Commencement Date") and ending on the 5th
anniversary of the Commencement Date. This
Agreement will automatically renew for two
successive 5 year terms (each a "Renewal
Term", and together with the Initial Term,
the "Term"), unless Charterer elects not to
renew this Agreement by providing Owner with
written notice of such election 180 days
prior to the expiration of the Initial Term
or Renewal Term, as applicable, at which
point this Agreement will automatically
terminate.
Within 30 days of the end of the Initial
Term, and within 30 days of the end of each
Renewal Term, both parties hereto shall have
the right renegotiate the day rate specified
below for the use of the Vessels
(hereinafter defined). If no such agreement
on such day rate is reached by such parties
by the commencement of a Renewal Term, this
Agreement shall automatically terminate.
Either party hereto shall have the right to
terminate this Agreement in the event of a
breach by the other party of its obligations
hereunder, subject to 10 days prior written
notice of such breach given by the
non-breaching party to the breaching party
and the opportunity for such breaching party
to cure such breach during such 10 day
period.
This Agreement shall automatically terminate
upon the termination of that certain Crude
Oil Sale Agreement of even date herewith
among Charterer, ▇▇▇▇▇ Petroleum Company and
▇▇▇▇▇▇ Resource Management Corporation.
Upon any such termination, this Agreement
shall thereafter have no further force or
effect except as to already accrued rights
and obligations, which shall continue until
satisfied.
2. GENERAL TERMS During the Term, Charterer agrees that Owner
will be the sole and exclusive provider of
marine transportation services for bulk
crude oil and/or finished oil products owned
by Charterer or owned by others and in
transit for sale to Charterer at its
Smackover, Arkansas oil refinery so long as
Owner has the required equipment available;
provided, however, that Owner acknowledges
that Charterer has a contractual obligation
to provide its current marine transportation
supplier with 30 days advance notification
of Charterer's cancellation of its
contractual arrangement with such supplier,
which notice is being delivered by Charterer
to such supplier on the Commencement Date.
During the Term, Owner agrees to make three
of its vessels that are suited for the
transportation of bulk crude oil and/or
finished oil products available for
Charterer's transportation needs at all
times,
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subject in the case of one such vessel to
the offhire provisions hereinafter set forth
(any such vessel referred to herein as a
"Vessel" and collectively as the "Vessels").
It is further understood that from time to
time Charterer may request that one or more
of the Vessels be an epoxy-lined barge that
may be sufficiently cleaned for lube oil
service, which Owner agrees to provide
subject to availability.
Charterer will be required to utilize and
pay for two of the Vessels on a full time
basis (the "Full Time Vessels"). As to the
third Vessel, Charterer shall provide Owner
with Charterer's projected needs for such
Vessel for a minimum of one month in advance
of its intended use (the "Flex Time
Vessel"). However, if Charterer gives Owner
at least 10 days prior written notice of a
change in Charterer's projected use of the
Flex Time Vessel, then the Flex Time Vessel
will be deemed offhire during the period of
time specified in such notice, with such
offhire period commencing at the time that
the Flex Time Vessel returns to its home
port in Houston, Texas. During such offhire
period, Charterer will not be charged for
the use of the Flex Time Vessel. In
connection with its use of any Vessel,
Charterer will follow Owner's normal
scheduling, loading and offloading protocols
established from time to time, subject to
Owner's obligations set forth in this
Agreement.
3. RATE With respect to each Full Time Vessel,
Charterer agrees to pay to Owner for each
day during the Term, regardless of
Charterer's actual use thereof, a day rate
of $____ per vessel plus fuel, waterway fuel
taxes and wharfage/docking fees at Owner's
actual cost. With respect to the Flex Time
Vessel, Charterer agrees to pay to Owner for
each day such Vessel is utilized in service
for Charterer, a day rate of $____ plus
fuel, waterway fuel taxes and
wharfage/docking fees at Owner's actual
cost. Owner will invoice such day rates and
cost items to Charterer on a monthly basis
and Charterer will pay such invoiced amounts
within 30 days of invoice date.
4. ADDITIONAL TERMS The "Additional Terms" attached hereto as
Exhibit A shall be deemed to be incorporated
into this Agreement by this reference.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
▇▇▇▇▇▇ OPERATING PARTNERSHIP L.P.
By ▇▇▇▇▇▇ Operating GP LLC, Its General
Partner
By ▇▇▇▇▇▇ Midstream Partners L.P.,
Its Sole Member
By ▇▇▇▇▇▇ Midstream GP LLC, Its
General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
CROSS OIL REFINING & MARKETING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Chairman and CEO
--------------------------------
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EXHIBIT A
ADDITIONAL TERMS
These additional terms are deemed to be incorporated by reference into this
Agreement.
1. OFFHIRE. The applicable Vessel shall be declared offhire in
the event of any delay in performance due to the inability to deliver full
services as the result of medical emergencies, groundings outside the channel
markers, maintenance, inspections, mechanical failures and breakdowns or time
spent waiting on crew readiness. During offhire periods under this clause, all
charges for the applicable Vessel shall cease. The applicable Vessel shall not
be considered offhire in the event of navigational delays, including locking and
docking, groundings within the channel markers, or delays due to weather.
2. INVOICING & PAYMENT. All monthly Owner invoices to Charterer
for day rates and cost items will be paid by Charterer within 30 days of invoice
date in accordance with Owner's normal payment protocols, which will be
specified in the applicable invoice. Each monthly invoice shall be itemized to
include charges by applicable Vessel by day.
3. DEMISE OF CHARTER. The Master of an applicable Vessel,
although appointed by and in the employ of Owner and subject to Owner's
direction and control, shall observe the reasonable instructions of Charterer in
connection with Charterer's marine transportation needs under this Agreement;
PROVIDED, HOWEVER, THAT NOTHING IN THIS CLAUSE OR ELSEWHERE IN THIS AGREEMENT
SHALL BE CONSTRUED AS CREATING A DEMISE OF THE APPLICABLE VESSEL TO CHARTERER OR
AS VESTING CHARTERER WITH ANY CONTROL OVER THE PHYSICAL OPERATION OR NAVIGATION
OF THE APPLICABLE VESSEL.
4. POLLUTION PREVENTION. Owner will, in the case of an escape or
discharge of bulk crude oil and/or finished oil products or threat of escape or
discharge of same from the applicable Vessel into the navigable waters of the
United States, promptly undertake such measures as are reasonably necessary or
which may be required by applicable laws, rules and regulations to mitigate the
resultant pollution damage; provided, however, that Charterer may at its option,
and upon notice to Owner and on the conditions hereinafter set forth, undertake
such measures. Charterer shall keep Owner advised of any such measures to be
undertaken by it under such circumstances. Any of such measures actually
undertaken by Charterer shall be at Owner's expense (except to the extent that
such escape or discharge was caused or contributed to by Charterer). If Owner
believes that any such measures undertaken by Charterer should not be undertaken
or should be discontinued, Owner may so notify Charterer and thereafter
Charterer, if it elects to continue such measures, shall do so at its own risk
and expense.
5. INDEMNITY. Owner covenants and agrees to fully defend,
protect, indemnify and hold harmless Charterer and its affiliates from and
against each and every claim, demand, cause of action, liability, damage, cost
or expense (including, but not limited to, reasonable attorney's fees and
expenses incurred in the defense of Charterer), resulting from any damage to
property or injury or death to persons caused, directly or indirectly, by
Owner's acts or omissions in connection with Owner's provision of marine
transportation services hereunder, except to the extent caused, directly or
indirectly, by the acts or omissions of Charterer.
Charterer covenants and agrees to fully defend, protect, indemnify and
hold harmless Owner and its affiliates from and against each and every claim,
demand, cause of action, liability, damage, cost or expense (including, but not
limited to, reasonable attorney's fees and expenses incurred in the defense of
Owner), resulting from any damage to property or injury or death to persons
caused, directly or indirectly, by Charterer's acts or omissions in connection
with Charterer's use of marine transportation services hereunder, except to the
extent caused, directly or indirectly, by the acts or omissions of Owner.
The foregoing indemnities shall expressly exclude any liability for
consequential, punitive, special or similar damages, including, without
limitation, lost profits.
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6. COMPLIANCE WITH LAW; INSURANCE: During the Term of this
Agreement, Owner shall comply in all material respects with applicable laws,
including, without limitation applicable environmental, health, safety and
financial responsibility laws, rules and regulations, applicable to the use of
the Vessel for bulk crude oil or finished lubricating products transportation.
Owner covenants that it will maintain at all times during the Term of this
Agreement insurance coverage for sudden and accidental pollution of
$500,000,000.
7. CHARTERER'S REPRESENTATIVES: Charterer's representatives may
board the applicable Vessel at any convenient place to observe cargo-handling
operations, to inspect logs and certificates, and to confirm that Owner is
fulfilling its obligations under this Agreement.
8. DRUG & ALCOHOL ABUSE POLICY: Owner warrants that it will
maintain and enforce at all times during the Term of this Agreement a drug and
alcohol abuse policy applicable to the applicable Vessel which complies in all
material respects with the minimum standards promulgated by the U.S. Coast
Guard.
9. CONDITION OF EQUIPMENT: Owner shall, before and at
commencement of each voyage by an applicable Vessel under this Agreement,
exercise commercially reasonable efforts to ensure that such Vessel is seaworthy
and in good operating condition, properly manned, equipped and supplied for the
voyage, to ensure that the pipes, pumps and coils tight, staunch, are in good
operating condition and fit for the voyage, and to ensure that the tanks and
other spaces in which bulk crude oil is to be carried are in good operating
condition and fit for the carriage and preservation of the same. Owner will
maintain at all times during the Term of this Agreement a valid and subsisting
certificate or other permit issued by the U.S. Coast Guard (or other
governmental bureau or department having jurisdiction) approving the applicable
Vessel for the transportation and carriage of inflammable liquids.
10. SUBLET: Charterer shall not be permitted to sublet the use of
the applicable Vessel to any third party.
11. FORCE MAJEURE: The applicable Vessel, its captain and Owner
shall not, unless otherwise in this Agreement expressly provided, be responsible
for any loss or damage arising or resulting from: any act, default or barratry
of the captain, pilots, mariners, or other servants of Owner in the navigation
or management of such Vessel; fire, unless caused by the personal design or
neglect of Owner; collision, stranding or peril, danger or accident of navigable
waters; saving or attempting to save life or property; wastage in weight or
bulk, or any other loss or damage arising from inherent defect, quality or vice
of the cargo; any act or omission of Charterer, Owner, any other shipper or any
consignee of the cargo, their agents or representatives; insufficiency or
inadequacy of marks; explosion, bursting of boilers, breakage of shafts, or any
latent defect in hull, equipment or machinery; unseaworthiness of such Vessel
unless caused by want or due diligence on the part of Owner to make such Vessel
seaworthy or to have it properly manned, equipped and supplied; or from any
other cause of whatsoever kind arising without the actual fault of Owner. And
neither the applicable Vessel, its captain or Owner, nor the Charterer, shall,
unless otherwise in this Agreement expressly provided, be responsible for any
loss or damage or delay or failure in performing hereunder arising or resulting
from; act of God, act of war; act of public enemies, pirates or assailing
thieves; acts of terrorism; arrest or restraint of princes, rulers of people, or
seizure under legal process provided bond is promptly furnished to release such
Vessel or cargo; strike or lockout or stoppage or restraint of labor from
whatever cause, either partial or general, or riot or civil commotion.
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