EXHIBIT 10.7
THROUGHPUT AGREEMENT
THIS THROUGHPUT AGREEMENT (the "Agreement") is made and entered into as
of the of _______, 2002 (the "Effective Date"), by and between ▇▇▇▇▇▇ GAS SALES,
INC. (the "Owner"), and ▇▇▇▇▇▇ MIDSTREAM PARTNERS L.P. (the "Customer").
WITNESSETH:
WHEREAS, the Owner owns a liquefied petroleum gas ("LPG") truck loading
and unloading and pipeline distribution terminal facility located at Mont
Belvieu, Texas (the "Terminal Facility"); and
WHEREAS, the Customer is in the LPG products ("Products") distribution
business; and
WHEREAS, it is the desire of the Owner and the Customer that the
Customer be provided with sole access to and use of the Terminal Facility, all
on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Owner and the Customer agree that the Owner shall provide
the Customer with sole access to and use of the Terminal Facility, on the terms
and conditions hereinafter provided:
1. TERM OF AGREEMENT. The term of this Agreement shall begin on the Effective
Date and shall end on the third anniversary of the Effective Date. Thereafter,
the term shall automatically renew from year to year, unless either party gives
written notice at least thirty (30) days prior to the expiration of the
applicable term.
2. OWNER'S DUTIES. In consideration of the compensation provided in Section 3
hereof, the Owner shall provide Customer with sole access to and use of the
Terminal Facility.
3. OWNER'S COMPENSATION.
(a) For the sole access to and use of the Terminal Facility, the Owner
shall receive total compensation of $400,000 per year ("Annual
Compensation") subject to adjustment as set forth in subsection (b)
below. The Customer shall remit payment for 1/12 of the Annual
Compensation each month payable on the last day of the month.
(b) The Annual Compensation shall remain as stated in subsection (a)
until the first anniversary of the Effective Date. Thereafter, the
Annual Compensation shall be adjusted annually (both upward and
downward as hereinafter provided)
by a factor equal to the increase or decrease, as the case may be, in
the Consumer Price Index. The adjustment shall be calculated annually
in [o] of each year, commencing in _________ 2003. The adjustment shall
be calculated as follows: the Annual Fee in effect shall be multiplied
by a factor equal to the amount of the increase or decrease, as the
case may be, in the Consumer Price Index for the immediately preceding
month of [o], over the Consumer Price Index for ________ of the
preceding year. For purposes hereof, the term "Consumer Price Index"
shall mean the "Consumer Price Index for Urban Wage Earners and
Clerical Workers (1967=100)" specified for "All Items. United States"
compiled by the Bureau of Labor Statistics of the United States
Department of Labor (the "Index"). In event the Index shall be
converted to a different standard reference base or otherwise revised,
the determination of the percentage change shall be made with the use
of such conversion factor, formula or table for converting the Index as
may be published by the Bureau of Labor Statistics or, if said Bureau
shall not publish the same, then as shall be reasonably determined by
the parties.
4. TITLE TO PRODUCT. Title to all of the Product received, stored and handled at
the Terminal Facility shall remain at all times in the name of the Customer. The
Customer agrees not to deliver for storage at the Terminal Facility any Product
which may not be lawfully stored on the premises of the Terminal Facility or any
Product injurious to the premises or facilities, or which would render the
facilities unfit, after cleaning, for the proper storage of similar products, or
Products.
5. ASSIGNMENT. Neither party shall assign this Agreement without the express
written consent of the other party.
6. FACILITY, TANK AND EQUIPMENT CONDITION. The Owner shall, at its sole cost and
expense, provide and maintain all handling and storage equipment and facilities
necessary to the performance of its services hereunder in compliance with
prevailing industry standards and all applicable Laws (as such term is defined
in Section 7 below) as they may exist from time to time.
7. CUSTOMERS COMPLIANCE WITH LAWS. In the conduct of its business on the
premises of the Terminal Facility, the Customer shall comply in all material
respects with all federal, state and local laws, ordinances, decrees, orders,
regulations, permits or other requirements having the force of law (the "Laws").
8. ENTIRE AGREEMENT AND AMENDMENT. This Agreement shall constitute the entire
agreement concerning the subject hereof between the parties superseding all
previous agreements, negotiations and representations made prior or
contemporaneous to the date hereof. This Agreement shall be modified or amended
only by written agreement executed by both parties hereto.
9. CONTROLLING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
EXECUTED as of the date first set forth above.
▇▇▇▇▇▇ GAS SALES, INC.
NAME:
-----------------------
TITLE:
-----------------------
▇▇▇▇▇▇ MIDSTREAM PARTNERS L.P.
BY: ▇▇▇▇▇▇ MIDSTREAM GP LLC
ITS: GENERAL PARTNER
NAME:
-----------------------
TITLE:
-----------------------
