LIQUIFIED PETROLEUM GAS CONTRACT
THIS IS A CONTRACT effective July 1, 1996, between
SHELL OIL COMPANY, P.O. Box 576, Houston, TX 77001 ("Shell"), and
EMPIRE GAS CORPORATION ("Buyer").
1. TERM. This Contract shall be in effect for a term
beginning on July 1, 1996, and ending on June 30, 1997.
2. PRODUCTS-QUANTITIES-QUALITY. Reference Exhibits A and
B attached herewith.
2.2 Quality - Warranty Disclaimer. The Product shall
meet Shell's own specifications in effect at the time of
delivery; but SHELL OTHERWISE MAKES NO WARRANTIES OF QUALITY,
MERCHANTABILITY OR FITNESS AS TO THE PRODUCT, AND NONE SHALL BE
IMPLIED.
2.3 Excess Quantities. Shell's sale and delivery
during any month or more of any product than the quantity
specified in the Schedule for that month, whether resulting from
Shell's voluntary act, Shell's compliance with any allocation or
other legal requirement, or any other cause, shall not be deemed
to increase or otherwise amend such specified contract quantity
as to any future month unless expressly so agreed in writing by
Shell and Buyer.
2.4 Quantity Limitation. Shell may, at its option,
after the initial three months of the term, limit the quantity of
any Product to be supplied in any month to a quantity which is
the same percentage of contract quantity for that month as the
average percentage of contract quantities actually delivered
during the last preceding three months.
3. PRICES.
3.1 Definitions. Reference Exhibits A and B attached
herewith.
3.2 Payments. Buyer shall pay for the Product
delivered on such terms as Shell shall prescribe, any of which
may be altered or revoked by Shell at any time by notice to Buyer
(which may be given by telephone or regular mail). Payment shall
be deemed made when received by Shell.
4. DELIVERIES.
4.1 Places. Reference Exhibits A and B attached
herewith.
4.2 Buyer's Orders. Buyer's orders and shipping
instructions shall be given to Shell in such manner as Shell
shall designate by telephone or regular mail from time to time.
4.3 Destination Deliveries. All deliveries of Product
at Buyer's destination(s) shall be made by any means of
transportation, at such times and in any delivery equipment Shell
may select. Buyer shall not divert any delivery equipment from
its destination originally invoiced by Shell without Shell's
prior consent. Buyer shall provide facilities for unloading and
shall pay all of the carrier's demurrage and miscellaneous
charges. Buyer shall also be responsible for any additional
transportation expense and/or terminal charge for unloading
returned Product if Buyer fails for any reason other than Shell's
fault to accept all or any part of the delivery. Delivery in
tank cars at any plant of Buyer shall mean delivery at the
railroad siding designated by Buyer or, absent such designation,
the railroad delivery point nearest such plant.
4.4 Measurements. Quantities of Product delivered
shall be determined (a) if into or by transport truck, be meters,
scale weight, or certified calibration, at Shell's option, (b) if
into or by tank car, by official capacity table, or (c) if into
pipeline, by the pipeline meters. Every quantity, however
determined, shall be corrected to a temperature of 60 F in
accordance with Table 24 of the ASTM-IP Petroleum Measurement
Tables in effect at the time of determination.
4.5 Rail Cars. Each rail car in which Shell ships
Product during the period of this contract shall be deemed in the
possession and care of the Buyer when such car is delivered to
Buyer's various Florida Sidings, destinations by the delivering
railroad. With respect to any rail cars used by Shell delivering
Product to the Buyer's destination: Buyer shall mail bills of
lading for empty tank cars to Shell immediately upon unloading,
shall pay all the railroad carrier's demurrage and miscellaneous
charges, and shall pay Shell the detention charges for delays in
unloading for each full or fractional calendar day during which
any car remains in the Buyer's possession beyond the free time
specified below:
CAR CAPACITY FREE TIME DAILY RATE
30,000 5 Days $50.00
4.5.1 Damage to Rail Cars. If any car is damaged in any
respect or defective when it enters Buyer's possession, Buyer
shall promptly give written notice thereof to Shell by letter,
telegram or facsimile and also to an authorized agent of the
delivering railroad. Buyer shall not undertake any repair of or
other work on the car without the prior written approval of
Shell. When possession of any car is surrendered by the Buyer,
it shall be in as good a condition as when received by Buyer,
excepting only reasonable wear and tear, and damage or
destruction not arising out of any negligence or otherwise
wrongful act of the Buyer or any agent of the Buyer.
4.6 Title. Title to any Product delivered shall pass
to Buyer when it enters any equipment or facility (including any
pipeline) provided by or for the account of Buyer to receive the
same, or is otherwise placed in Buyer's possession, at a place of
delivery hereunder.
5. SHELL'S IDENTIFICATIONS. This Contract does not grant
to Buyer any right to use Shell's trademarks, brand names,
service marks or color schemes in connection with the
identification, advertising, sale, transportation use or other
disposition of the Product purchased hereunder, or to represent
to Buyer's customers (actual or prospective) or to the public
generally that the Product was purchased from Shell.
6. ASSIGNABILITY. Neither this Contract nor any claim
against Shell arising directly or indirectly out of or in
connection with this Contract shall be assignable by Buyer or by
operation of law without the prior written consent of Shell. Any
assignment made in violation of this article shall be null and
void.
7. TAXES AND CHARGES. Buyer shall pay any tax, duty, fee
or other governmental charge, or any other public or private fee,
charge or assessment now or hereafter levied on the product
delivered hereunder, or on any of its constituent materials, or
on Shell, or required to be paid or collected by Shell, by reason
of the purchase, receipt, importation or manufacture of such
Product or constituent materials by Shell, or levied on or
incurred in connection with or incidental to the sale,
transportation, storage, delivery or use of the Product, insofar
as the same is not expressly included in the prices hereunder.
8. INDEMNITY - CLAIMS.
8.1 Indemnity. Buyer shall defend, indemnify and hold
harmless Shell, its directors, employees and agents, to the
fullest extent permitted by law, against all claims, suits,
liabilities, judgments, losses and expenses (including attorneys'
fees and other costs of litigation) arising out of any
bodily/personal injury, disease or death of persons (including
Buyer or Buyer's employees) or damage to property (including
Buyer's) caused by or happening in connection with Buyer's
receipt, loading, transportation, unloading, storage, handling,
sale, use or other disposition of the Product sold hereunder, or
other activity of buyer relating to the Product, except to the
extent caused (a) by the negligence or fault of Shell, its
directors, employees or agents, or (b) by defects in the Product
not caused or contributed to by any negligence or fault of Buyer
or Buyer's employees, agents, or contractors. In addition,
Buyer shall defend, indemnify and hold harmless Shell, it-a
directors, employees and agents, against all consequences
resulting from Buyer's failure to comply with all laws, rules and
regulations relating to environmental protection. Shell shall
have the right, but not the duty, to participate in the defense
of any claim or litigation with attorneys of Shell's selection
without relieving Buyer of any obligations hereunder. Buyer
has the obligation and duty to immediately notify Shell in
writing of any claim made against Buyer or Shell in connection
with the use, receipt, handling, loading, transportation,
storage, sale or other disposition of the Product. Buyer's
obligations hereunder shall survive any termination of this
Contract.
8.2 Claims. Shell shall have no liability to Buyer
for any defect in quality or shortage in quantity of the Product
delivered unless (a) Buyer gives Shell notice of Buyer's claim
within five days after delivery of such product, or in the case
of any latent defect in quality, within five days after Buyer's
discovery of such defect but in no event later than 30 days after
delivery of such Product; (b) Shell is given reasonable
opportunity to inspect the Product and to take and test samples
thereof, and (c) in case of delivery by tank car, the claim, if
for anything other than latent defect in quality, is allowed by
Shell before the Product is unloaded from the tank car and, if
for shortage in quantity, is for an amount in excess of 2% of the
quantity shown on the bill of lading. In any event, Shell shall
not be liable for any such claim in excess of the purchase price
of the Product or for any consequential commercial damages.
Every initial notice of claim shall set forth fully the facts on
which the claim is based and shall be formally documented, in
writing, to Shell within 60 days after initial notice.
9. EXCUSES FOR NONPERFORMANCE. Either Shell or Buyer will
be excused from its obligations under this Contract (except
financial) to the extent that performance is delayed or prevented
by any circumstances reasonably beyond its control; or by fire,
explosion, mechanical breakdown, strikes or other labor trouble,
plant shutdown, riots or other civil disturbances, or voluntary
or involuntary compliance with any law, regulation or request of
any governmental authority; or by unavailability of or
interference with Shell's usual sources of the Product or crude
oils or other constituent materials, or the usual means of
transporting any of the same, or that Shell cannot reasonably
acquire access to railroad delivery equipment to deliver Product
at Buyer's designations). If, due to any of the foregoing
reasons, there should be a shortage of any Product from any
source, Shell will not be obligated to purchase supplies from any
other than its usual sources or to divert supplies in order to
perform this Contract and may apportion its available supplies
among its contract and non-contract customers and its own
internal uses in such manner as it finds fair and reasonable.
Quantities of Product consequentially undelivered will be
deducted from the applicable remaining quantity obligation unless
the parties agree otherwise in writing.
10. REMEDIES - WAIVER. In the event of Buyer's breach
of any provision of this Contract; or Buyer's default in payment
of any indebtedness to Shell, whether under this Contract or
otherwise; or initiation of any bankruptcy, insolvency,
receivership or other like proceeding by or against Buyer; or
Buyer's failure to comply with any federal, state or municipal
law, ordinance, regulation, order, license or permit relating to
the operations of Buyer in connection with the Product, Shell
shall have the right, in addition to any other rights or remedies
it may have, to suspend deliveries hereunder or to terminate this
Contract by giving Buyer notice. Shell's right to require strict
performance of Buyer's obligations hereunder shall not be
affected in any way by any previous waiver, forbearance, course
of dealing, or trade custom or usage.
11. NOTICES. Every notice hereunder (except when
otherwise specified and subject to any requirements of law) shall
be given by certified or registered letter, telegram, facsimile
(if Shell acknowledges receipt thereof) or telex and shall be
deemed given when the letter is deposited in the U.S. mail or the
telegram or telex or facsimile is dispatched, postage or charges
prepaid, and directed to Shell or Buyer (as the case may be) at
its address first herein specified, or at such other address as
either may have substituted by notice so given to the other.
12. ENTIRETY - RELEASE - EXECUTION. This Contract, as
of the beginning date of its term, contains the complete and
exclusive agreement of, and terminates all prior contracts
between Shell and Buyer concerning the Product, and Shell and
Buyer each release the other from all claims arising in
connection with any such prior contract including any railroad
lease agreements, excepting however, claims of Shell against
Buyer for indebtedness, reimbursement or indemnification.
Neither this Contract nor any subsequent agreement amending or
supplementing this Contract shall be binding on Shell unless and
until it has been signed for Shell by a duly authorized
representative, and commencement of performance hereunder or
under any such subsequent agreement shall not constitute a waiver
of this requirement.
EXECUTED on the date(s)
specified below.
EMPIRE GAS CORPORATION SHELL OIL COMPANY ("Shell")
("Buyer")
By: /s/ Kris Lindsey /s/ W.R. Davenport, Jr.
Kris Lindsey W. R. DAVENPORT, JR.
(Type or Print Name) (Type or Print Name)
Executive Vice President MANAGER NGL MARKETING &
(Title of Officer or Agent) SUPPLY
(Title of Officer or Agent)
Date: December 17, 1996 Date: 3/21, 1997
EXHIBIT A
2.1 Products-Quantities. Shell shall sell and deliver to
Buyer, and Buyer shall purchase and accept from Shell, "Shell"
Propane HD-5 ("Product") in such quantities as Buyer shall order
from time to time, but during any calendar month, not less than
90% nor more (except at Shell's option) than all of the quantity
specified for such month in the following schedule (in thousands
of gallons):
July 546 October 1,105 January 1,210 April 615
August 695 November 1,060 February 1,290 May 590
September 875 December 1,340 March 1,300 June 520
provided that Buyer shall order and accept deliveries in
quantities and at intervals approximately equal during each
month.
3. PRICES.
3.1 Definitions. The price for the Product, F.O.B. various
Florida destinations shall be determined by adding the mean (sum
of high/low OPIS prices divided by two) spot prices of propane at
Mont Belvieu (TET) as published by Oil Pricing Information
Service (OPIS/Petroscan) for the following weekly OPIS report
days: Thursday, Friday, Monday, Tuesday, and Wednesday and
dividing the sum by five (5). This average price will have 12.25
cents per gallon differential added for freight loading, margin
and car costs for the months of April September and 12.75 cpg for
the months of October - March. This calculation will be
completed by Shell on Thursday and Friday each week and is
effective for all product purchased beginning on the following
Monday through Sunday. In the event OPIS fails to publish a
price for any of these days, the day or days will be excluded
from the calculation.
4.1 Places. The Product shall be delivered to Buyer at
various Florida rail sidings. However, Shell shall have the
right at any time or times to change any place of delivery from
origin to Buyer's destinations) or from Buyer's destination to
origin, and to change any origin either to another one specified
in this article 4.1 or to a new one designated by Shell, by
giving Buyer at least 15 days' prior notice or such shorter
notice as may be reasonable in emergency situations. Such notice
shall specify the new place of delivery, the effective date of
the change, and, for Buyer's information, Shell's then-current
price for the Product, F.O.B. that place. If Shell exercises
this right, Buyer may, within 15 days after Shell's notice,
terminate this Contract as to the Product and place of delivery
by giving Shell at least five days' notice.
/s/ Kris Lindsey /s/ W.R. Davenport, Jr.
EMPIRE GAS ("Buyer") SHELL OFFSHORE INC.
EXHIBIT B
2.1 Products-Quantities. Shell shall sell and deliver to
Buyer, and Buyer shall purchase and accept from Shell, "Shell"
Propane HD-5 ('Product') in such quantities as Buyer shall order
from time to time, but, during any calendar month, not less than
90% nor more (except at Shell's option) than all of the quantity
specified for such month in the following schedule (in thousands
of gallons):
July 210 October 210 January 210 April 210
August 210 November 210 February 210 May 210
September 210 December 210 March 210 June 210
provided that Buyer shall order and accept deliveries in
quantities and at intervals approximately equal during each
month.
3. PRICES.
3.1 Definitions. The price for the product FOB Mt.
Belvieu shall be the mean (sum of the high plus the low divided
by two) spot price of propane at Texas Eastern Pipeline Terminal
(TET) Mt. Belvieu as reported by Oil Pricing Information Service
(OPIS/Petroscan) for all reporting days of the month plus the
following respective monthly differentials: April - September
1.74; October and March 2.24; November - February 2.49. Should
Shell be unable to deliver any portion of the above portions at
Grangeville, then that portion of the undeliverable volume will
be made available at Hattiesburg in-line at an additional charge
of .88 cents per gallon.
4. DELIVERIES.
4.1 Places. The Product shall be delivered to Buyer at
Shell's origin at the Grangeville Dixie Pipeline Injection Point.
However, Shell shall have the right at any time or times to
change any place of delivery from origin to Buyer's destinations)
or from Buyer's destination to origin, and to change any origin
either to another one specified in this article 4.1 or to a new
one designated by Shell, by giving Buyer at least 15 days' prior
notice or such shorter notice as may be reasonable in emergency
situations. Such notice shall specify the new place of delivery,
the effective date of the change, and, for Buyer's information,
Shell's then-current price for the Product, F.O.B. that place.
If Shell exercises this right, Buyer may, within 15 days after
Shell's notice, terminate this Contract as to the Product and
place of delivery by giving Shell at least five days' notice.
/s/ Kris Lindsey /s/ W.R. Davenport, Jr.
EMPIRE GAS ("Buyer") SHELL OFFSHORE INC.