LIQUIFIED PETROLEUM GAS CONTRACT
THIS IS A CONTRACT effective June 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 June 1, 1996, and ending on May 31,
1997.
2. PRODUCTS-QUANTITIES-QUALITY.
2.1 Products-Quantities. Shell shall sell and
deliver to Buyer, and Buyer shall purchase and accept
from Shell, "Shell" Odorized 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):
June 250 September 275 December 275 March 250
July 250 October 275 January 275 April 250
August 275 November 275 February 275 May 250
provided that Buyer shall order and accept deliveries in
quantities and at intervals approximately equal during
each month.
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 of 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.
3. PRICES.
3.1 Definitions. The price for the Product during
July, August, September, April, May, June, F.O.B. Shell's
Wood River Manufacturing Complex, shall be determined by
adding the mean (sum of high/low OPIS prices divided by
two) spot prices of propane at Mapco 140 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 2.25 cents per
gallon differential added to produce the final selling
price. During October, November, December, January,
February, and March, the average price will have 3.25
cents per gallon differential added to produce the final
selling price. This calculation will be completed by
Shell on Thursday and Friday each week and 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.
3.2 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.
3.3 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. The Product shall be delivered to
Buyer at Shell's origin(s) (including pipeline terminals)
at Wood River. However, Shell shall have the right at
any time or times to change any place of delivery from
origin to Buyer's destination(s) 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.
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 Origin Deliveries. All deliveries of Products
at Shell's origin(s) shall be into delivery equipment
(including any pipeline) selected by Buyer and acceptable
to Shell. Shell shall not be obligated to deliver the
Product in bulk in any quantity less than the maximum
full load delivery permitted by applicable law for the
type of delivery equipment (including any pipeline)
utilized, or outside of the usual business hours of
Shell's plant. All delivery equipment and transportation
shall comply with applicable laws, regulations, and
tariffs.
4.4 Measurements. Quantities of Product delivered
shall be determined (a) if into or by transport truck, by
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 siding at Wood River by the
delivering railroad. With respect to any rail car 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,
its 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
designation(s). 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 OFFSHORE INC.
("Buyer") ("Shell")
By /s/ Kris Lindsey /s/ W. R. Davenport, Jr.
Kris Lindsey W. R. Davenport, Jr.
(Type or Print Name) (Type or Print Name)
Vice President Manager NGL Marketing & Supply
(Title of Officer or Agent) (Title of Officer or Agent)
Date: July 15 , 1996 Date: 8/20/ , 1996