AGREEMENT FOR SALE OF PRODUCTS
This Agreement ("Agreement") is made and entered into as of the 8th day of
SEPTEMBER, 1998 by and between XXXX REFINING COMPANY, L.P., a limited liability
company organized under the laws of Delaware and headquartered in Wichita,
Kansas ("Xxxx") and XXXXXXX OIL, INC., X.X. Xxx 0000, Xxxxx, XX 00000 ("Buyer").
Xxxx has developed and offers a long-term committed volume program for the sale
of fuels products. Buyer has met the qualifications for this program and desires
to purchase product from Xxxx pursuant to the terms and conditions of this
Agreement:
1. TERM
1.1 This Agreement shall have an initial term of five (5) years (the
"Initial Term"). The Initial term shall be from September 1, 1998
through August 31, 2003.
1.2 At the end of the Initial Term, this Agreement shall automatically
continue for consecutive one year periods unless terminated by
either party upon written notice thirty (30) days prior to the
expiration of the existing period.
2. PURCHASE AND SALE
2.1 During the Term of this Agreement, and any successive renewals,
Xxxx shall sell to Buyer, and Buyer shall purchase from Xxxx, the
following products (all together defined as "Products"):
UNBRANDED PRODUCTS
All Gasolines
All Distillates
Ethanol
BRANDED PRODUCTS
Arctic Premium Diesel
Performance Gold Diesel
Supreme Performance Diesel
3. QUALIFICATION/MINIMUM VOLUMES
3.1 The pricing and other terms of this Agreement are based on Buyer's
commitment to buy, and actually lifting, a minimum of 32,000,000
gallons of Product per year (the "Annual Minimum Volume") during
the Term of this Agreement. In addition, the pricing and other
terms of this Agreement are based on Buyer's commitment to lift a
minimum of 5.5% of the Annual Minimum Volume per month during each
year of
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the Term of this Agreement, i.e. 1,760,000 gallons of
Product per month (the "Monthly Minimum Volume"). The Annual
Minimum Volume and Monthly Minimum Volume wiI1 be determined by the
combined total of the respective Products purchased at all
locations listed above. Volumes will be measured on a gross gallon
basis.
3.2 "Year" or "Contract Year" as used in this Agreement, shall be
defined as follows: the first year shall be a calendar year
beginning on the first day of the Initial Term of this Agreement.
All subsequent "years" or "Contract Years" shall be calendar years
beginning on the respective anniversary date of the first day of
the Initial Term of this Agreement.
3.3 Buyer may, on a quarterly basis, request to increase the Annual
Minimum Volume. Any such request shall be subject to Xxxx'x
approval, and must be based on a demonstrated increase in Buyer's
volume needs. If Xxxx agrees to increase Buyer's Annual Minimum
Volume, Buyer shall receive an additional Asset Growth Enhancement
Allowance ("AGEA"), in accordance with Section 6, based on the
proportional increase in volume and reduced time to take delivery,
to be paid at the time Xxxx agrees to the volume increase. In
addition, if Xxxx agrees to increase Buyer's Annual Minimum Volume,
Buyer shall be obligated to lift a minimum of 5.5% of such
Increased Annual Minimum Volume per month during each year in which
Buyer commits to the Increased Annual Minimum Volume.
4. PRICE
4.2 The price payable by Buyer for Product purchased hereunder shall be
Xxxx Refining Company, L.P.'s daily rack posted price at the
terminal from which Product is taken by Buyer.
5. DELIVERIES
5.1 Buyer may take delivery of Products hereunder from the following
terminal locations, subject to product availability:
Fargo, ND - Xxxxxxxx Pipeline Co.
Grand Forks, ND - Xxxxxxxx Pipeline Co.
Alexandria, MN - Xxxxxxxx Pipeline Co.
5.2 Xxxx shall have no obligation to transfer Product from one terminal
to another. All freight and transportation costs shall be for
Buyer's account. Title and risk of loss for the Product shall
transfer to Buyer at the time of loading of Product into Buyer's
assigned transportation vehicle.
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6. ASSET GROWTH ENHANCEMENT ASSISTANCE (AGEA)
6.1 As partial consideration for Buyer's commitment to purchase the
Annual Minimum Volume and Monthly Minimum Volume for the Term of
this Agreement, Xxxx shall provide Buyer with a one-time, up front,
rebate to the Price for Product hereunder (the "AGEA") as set forth
in this Section 6.
6.2 Upon execution of this Agreement, Xxxx shall provide AGEA in an
amount equal to $0.0075 per gallon for the Annual Minimum Volume
commitment made by Buyer during the Initial Term of this Agreement.
This AGEA will be calculated as follows:
160,000,000 GALS. (MIN. VOLUME REQUIREMENT COMMITTED TO BY
X $0.0075 BUYER DURING THE INITIAL TERM)
------------
$1,200,000 (AGEA PAYMENT MADE BY XXXX TO BUYER UPON EXECUTION
OF THIS AGREEMENT)
6.3 In the event that Buyer lifts in excess of the Annual Minimum
Volume (or Increased Annual Minimum Volume, as the case may be)
during any year of the Term of this Agreement, Xxxx shall pay
additional AGEA in an amount equal to $0.0075 per gallon for
volumes in excess of the Annual Minimum Volume (or Increased Annual
Minimum Volume, as the case may be), up to 165% of the Annual
Minimum Volume (or Increased Annual Minimum volume, as the case may
be). Buyer shall invoice Xxxx for such payment subsequent to the
Contract Year at issue and Xxxx shall make payment within ten (10)
days of such invoice. An example follows:
IN ANY GIVEN YEAR, BUYER LIFTS 35,000,000 GALLONS OF PRODUCT, AN OVERAGE OF
3,000,000 GALLONS OF THE ANNUAL MINIMUM VOLUME. AT THE END OF THE YEAR IN WHICH
THIS OVERAGE OCCURS, XXXX WILL MAKE AN ADDITIONAL AGEA PAYMENT TO THE BUYER AS
FOLLOWS:
3,000,000 GALS. (OVERAGE)
X $0.0075
---------
$22,500 (ADDITIONAL AGEA PAYMENT DUE BUYER BY XXXX)
NO ADDITIONAL AGEA WILL BE PAID BY XXXX FOR VOLUMES LIFTED IN EXCESS OF 165% OF
THE ANNUAL MINIMUM VOLUME (OR INCREASED ANNUAL MINIMUM VOLUME, AS THE CASE MAY
BE) IN A CONTRACT YEAR.
6.4 In the event that Buyer lifts less than the Monthly Minimum Volume
(or Increased Monthly Minimum Volume, as the case may be) during
any month of the Term of this Agreement, Buyer shall refund AGEA to
Xxxx in the amount of $0.0110 per gallon for such shortage. Xxxx
shall invoice Buyer for such payment subsequent to the month at
issue and
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Buyer shall make payment within ten (10) days of such
invoice. An example follows:
IN ANY GIVEN MONTH, BUYER LIFTS 1,000,000 GALLONS OF PRODUCT, A SHORTFALL OF
760,000 GALLONS OF THE MINIMUM MONTHLY VOLUME. AT THE END OF THE MONTH IN WHICH
THIS SHORTFALL OCCURS, BUYER WILL MAKE PAYMENT TO XXXX AS FOLLOWS:
760,000 GALS (SHORTFALL)
X$0.0110
---------
$8,360 (PAYMENT DUE XXXX BY BUYER)
For any shortfall, Xxxx shall additionally be entitled to any and all remedies
it may have at law, in equity, or under this Agreement. Buyer shall be
responsible for all tax or reporting consequences of the AGEA.
6.5 The AGEA payment as stated in this Section 6 is made in reliance upon
the Buyer lifting at least the Minimum Annual Volume (or Increased
Minimum Annual Volume, as the case may be) and the Minimum Monthly
Volume (or Increased Minimum Monthly Volume, as the case may be)
stated herein for the entire Term of this Agreement. In the event of
early termination or default of this Agreement for whatever reason by
Buyer (including, but not limited to, those circumstances set forth in
Section 14 of this Agreement), Xxxx shall be entitled to a refund of
the unrecouped AGEA paid to Buyer, calculated as follows: [Total
Contract Volume - Volume Purchased as of Termination Date] X $.0110.
An example follows:
ASSUME BUYER PURCHASED A TOTAL OF 96,000,000 GALLONS OF PRODUCT FROM XXXX
PRIOR TO EARLY TERMINATION/DEFAULT AT THE END OF THE THIRD YEAR OF THE INITIAL
TERM. THIS IS A 64,000,000 SHORTFALL OF THE TOTAL CONTRACT VOLUME OF 160,000,000
GALLONS WHICH SHOULD HAVE BEEN PURCHASED PURSUANT TO THIS AGREEMENT (ASSUMING NO
INCREASED ANNUAL VOLUME WAS AGREED TO BETWEEN THE PARTIES). IN ADDITION TO ANY
OTHER REMEDY AVAILABLE TO XXXX PURSUANT TO THIS AGREEMENT, AT LAW OR IN EQUITY,
XXXX WOULD BE ENTITLED TO REIMBURSEMENT OF THE AGEA PAID, CALCULATED AS FOLLOWS:
[160,000,000 - 96,000,0001] X $0.0110
[64,000,000] X $0.0110 = $704,000.00 PAYMENT DUE TO XXXX, UNAMORTIZED NO
PENALTIES OR INTEREST
Xxxx shall have a right to set off any such unpaid reimbursement against any
other debt or obligation owed by Xxxx to Buyer. This right of set off is in
addition to any other rights which Xxxx may have at law, equity, or under this
Agreement
6.6 In the event of early termination or default of this Agreement for
whatever reason by Xxxx (including, but not limited to, those
circumstances set forth in Section 14 of this Agreement), except for
termination arising out of Buyer's default which will be handled
consistent with Section 6.5,
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Xxxx shall be entitled to a refund of the unrecouped AGEA paid to
Buyer, calculated as follows: [Total Contract Volume - Volume
Purchased as of Termination Date] X $.0075. An example follows:
ASSUME BUYER PURCHASED A TOTAL OF 96,000,000 GALLONS OF PRODUCT FROM XXXX PRIOR
TO EARLY TERMINATIONLDEFAULT AT THE END OF THE THIRD YEAR OF THE INITIAL TERM.
THIS IS A 64,000,000 SHORTFALL OF THE TOTAL CONTRACT VOLUME OF 160,000,000
GALLONS WHICH SHOULD HAVE BEEN PURCHASED PURSUANT TO THIS AGREEMENT (ASSUMING NO
INCREASED ANNUAL VOLUME WAS AGREED TO BETWEEN THE PARTIES). IN ADDITION TO ANY
OTHER REMEDY AVAILABLE TO XXXX PURSUANT TO THIS AGREEMENT, AT LAW OR IN EQUITY,
XXXX WOULD BE ENTITLED TO REIMBURSEMENT OF THE AGEA PAID, CALCULATED AS FOLLOWS:
[160,000,000 - 96,000,000] X $.0075
[64,000,000] X $.0075 = $480,000.00 PAYMENT DUE TO XXXX, UNAMORTIZED, NO
PENALTIES OR INTEREST
Xxxx shall have a right to set off any such unpaid reimbursement against any
other debt or obligation owed by Xxxx to Buyer. This right of set off is in
addition to any other rights which Xxxx may have at law, equity, or under this
Agreement
7. SPECIAL REQUIREMENTS APPLICABLE TO BRANDED PRODUCTS
7.1 Buyer desires to purchase certain of Xxxx'x branded Products as
identified above. Xxxx has invested money, time and effort to
develop name recognition for its brands and has taken great care to
ensure that its branded products are associated with high quality,
high performance products. Xxxx desires to preserve and continue to
enhance the value of its brands and their continued association
with quality and performance. Xxxx is willing to sell Buyer the
Branded Products identified above only upon Buyer's compliance with
all of the terms of this Agreement and additional compliance with
the following terms and conditions:
(a) During the Term of the Agreement only, Buyer is permitted to
display Xxxx'x trademarks solely to designate the origin of the
Branded Products. Buyer will only display materials, signs, or
other decorative materials which have been pre-approved by Xxxx
in connection with Xxxx'x trade names or trademarks. Upon
termination, Buyer shall remove and cease displaying any such
Xxxx materials, signs, or other decorative materials;
(b) Buyer will not sell the petroleum products of others under any
trade name, trademark, brand name, label, insignia, symbol, or
imprint owned by, used by, or associated with Xxxx;
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(c) Buyer will only sell Branded Products which meet Xxxx'x
specifications, under the trade name or trademark associated
with those Products; Buyer will not sell any Product which does
not meet Xxxx'x specifications under any trade name or
trademark owned by, used by, or associated with Xxxx;
(d) Buyer will maintain the quality of all Xxxx Branded Products
purchased and resold by Buyer to others. These efforts include,
but not limited to, storing the Products in segregated storage,
ensuring the Products are not contaminated, and ensuring the
Products are not otherwise caused to fail to meet Xxxx'x
specifications. Buyer shall not mix, commingle or otherwise
change the composition of any Branded Products purchased from
Xxxx and resold by Buyer;
(e) Buyer shall promptly, courteously and appropriately respond to
any customer complaints raised in connection with Buyer's
resale of Xxxx'x Products (Branded or Unbranded), or use of
Xxxx'x trade name and trademarks, and shall promptly notify
Xxxx of any such complaints;
(f) Xxxx reserves the right to change, alter, amend or eliminate
any of the trade names, trademarks or brands of its Branded
Products, or any of the descriptive material associated with
such trade names, trademarks or brands. Xxxx reserves the right
to change, alter, modify, or eliminate any of the Branded
Products, or any of the specifications, or product qualities
associated with such Branded Products;
(g) Buyer understands and acknowledges that certain of the Branded
Products are seasonal in nature, and only manufactured and
offered for sale by Xxxx during certain times of the year as
determined by Xxxx;
(h) In the event Xxxx discontinues the manufacture of any Branded
Product (other than for temporary inactivity as described in
subpart (g) above), Xxxx shall notify Buyer of the
discontinuance of such Branded Product, and this Agreement
shall terminate as to such Branded Product on the effective
date of the notice;
(i) Buyer shall not reverse engineer, or otherwise attempt to
recreate, duplicate or discover the specifications,
formulations, techniques, blends, components or ingredients of
Xxxx'x Branded Products, except only for the purpose of
verifying that the Product meets the specification represented
by Xxxx. Buyer shall not disclose to any third person or use
any of the information it may discover, learn or obtain
regarding the composition of Xxxx'x Branded Products, and shall
maintain any such information in confidence at all times.
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8. TERMINATION
8.1 The price, terms and volumes offered by Xxxx and committed to by
Buyer hereunder are based on Buyer's commitment to honor the terms
of this Agreement for the full Initial Term. Accordingly, Buyer may
terminate this Agreement only after expiration of the Initial Term,
and then only upon thirty (30) days prior notice given before the
expiration of the Initial Term or any subsequent extensions.
8.2 Xxxx may terminate this Agreement: (i) after expiration of the
Initial Term, upon thirty (30) days prior notice given before the
expiration of the Initial Term or any subsequent extensions; (ii)
at anytime due to Buyer's uncured failure to purchase the Annual
Minimum Volume or Monthly Minimum Volume or for any other breach of
this Agreement by Buyer, in which event Xxxx may also assert any
other remedies it may have against Buyer including but not limited
to the remedies stated in this Agreement; and (iii) at anytime due
to a material change in circumstances (whether foreseeable or
unforeseeable) which makes this Agreement impossible or impractical
for Xxxx to continue to perform. By way of illustration only, and
without limitation of the preceding clause in any way, examples of
such change in circumstances include, but are not limited to, a
shutdown or breakdown of Xxxx'x refinery or other assets necessary
to enable Xxxx to supply product; a sale (voluntary or involuntary)
of Xxxx'x refinery or other material assets; a material change in
ownership of Xxxx; governmental regulations; a material reduction
of supply or withdrawal from the market by Xxxx; or any similar
change in circumstances. In no event shall Xxxx be obligated to
procure product from any other person or entity for delivery to
Buyer.
9. PAYMENT
9.1 Buyer shall pay Xxxx for Product net 10 days on an electronic fund
transfer basis. Buyer shall pay Xxxx'x invoice within 10 days of
the date on the Xxxx of Lading.
10. LIMITED WARRANTIES/REMEDIES
10.1 Xxxx warrants only that Xxxx has good and marketable title to the
Products sold to Buyer and that the Products shall conform, at the
time of loading, to the typical specifications for such Products.
ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY AND/OR OF FITNESS FOR PURPOSE ARE
EXCLUDED.
10.2 Xxxx'x liability, and Buyer's sole and exclusive remedy, for any
cause of action arising out of or related to the sale of Product
under this
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Agreement is expressly limited at Xxxx'x option to (a)
replacement of a nonconforming product FOB point of delivery; or
(b) payment not to exceed the purchase price for the shipment which
is the subject of the claim or cause of action. WITHOUT LIMITATION
ON THE FOREGOING, XXXX SHALL NOT BE OBLIGATED FOR LOST PROFITS,
ECONOMIC LOSS, OR ANY OTHER SPECIAL, CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHETHER ARISING UNDER WARRANTY, FAILURE OF ESSENTIAL
PURPOSE, AGREEMENT, GUARANTEE, TORT (INCLUDING BUT NOT LIMITED TO
NEGLIGENCE), STRICT LIABILITY, VIOLATION OF LAW, OR OTHERWISE.
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11. ALLOCATION RIGHTS
11.1 In periods of shortage of Product for whatever cause(s) or
reason(s), Xxxx shall be entitled to allocate available supply
among itself, its affiliated, subsidiary and parent companies, and
any customers, Buyer included, in a fair and reasonable manner.
12. GROUNDS FOR DISQUALIFICATION
12.1 Xxxx may take such action as it deems appropriate, including
immediate termination of this Agreement, at any time for cause,
including, but not limited to: (i) any claim to a discount to which
Buyer is not entitled; (ii) any failure by Buyer to keep
confidential all terms of this Agreement, or the fact that it has
entered into this Agreement with Xxxx; or (iii) any failure by
Buyer to comply with the terms or intentions of this Agreement, and
a failure to cure within a reasonable time thereafter, not to
exceed thirty (30) days.
13. SECURITY INTEREST
13.1 Buyer grants Xxxx a security interest in all Products purchased,
and the proceeds from the sale by Buyer of such Products, to secure
any outstanding indebtedness to Xxxx. Buyer shall execute any
documentation which Xxxx may require to perfect its security
interest.
13.2 Buyer will comply with Xxxx'x credit terms, and if Buyer exceeds
the allocated credit line while attempting to fulfill this
Agreement, at Xxxx'x request Buyer will provide any or all, but not
exclusively, the following: wire transfer, letter of credit, and
prepayments. Each party shall have the right to offset any
payments, obligations or debts due to the other party under this
Agreement or any other agreement between the parties.
14. EXCUSED PERFORMANCE
14.1 Except for the payment of money owed, neither Xxxx nor Buyer shall
be liable to the other for any delay or failure of performance
which is caused, in whole or predominately by, only the following:
act of God, fire, explosion, earthquake, storm, flood, serious and
adverse weather conditions, war, riot, insurrection, or any similar
unpredictable adverse event or condition which is reasonably beyond
the control of the party whose performance is delayed or prevented
thereby, provided that such party gives the other party prompt
notice, confirmed in writing, of the existence of any such force
majeure event, and similar notice of the cessation of such force
majeure event.
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15. NOTICE
15.1 All notices pursuant to this Agreement shall be delivered to the
following persons on behalf of each party, unless either party
notifies the other of a new recipient for notice purposes.
Xxxx: Xxxx Refining Co. L.P. Buyer: Xxxxxxx Oil
X.X. Xxx 00000 X.X. Xxx 0000
Xx. Xxxx, XX 00000-0000 Xxxxx, XX 00000
Attention: Xxxx Xxxxx Attention: Xxxxxx Xxxxxxx
--------------
16. MISCELLANEOUS PROVISIONS
16.1 ASSIGNMENT. This Agreement shall not be assigned or transferred by
Buyer without the written consent of Xxxx, such consent not to be
unreasonably withheld. This Agreement shall be binding upon the
parties hereto, and their respective heirs, administrators,
executors, and assigns.
16.2 AMENDMENTS AND WAIVER. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by either party
therefrom, shall be effective unless the same is in writing and
signed by Xxxx and Buyer, and such waiver or consent shall be
effective only in the specific instance and for the specified
purpose for which given.
16.3 ENFORCEABILITY. Each party hereby waives, with full knowledge and
understanding of the consequences of such waiver, any claim, cause
of action or right which it might otherwise be entitled to assert
against the other party regarding the validity or enforceability of
the Agreement under any applicable laws or regulations.
16.4 CONSTRUCTION. This Agreement has been negotiated and prepared at
the joint request, direction and construction of the parties, at
arms length, with the advice and participation of counsel for each
party, and will be interpreted in accordance with its terms without
favor to any party.
16.5 SEVERABILITY. If any provision or any portion of any provision of
this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, is held invalid or
unenforceable, the remaining portion of such provision and the
remaining provisions shall remain in full force and effect.
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16.6 GOVERNING LAW. This Agreement shall be deemed in all respects to
have been created and entered into under the laws of the State of
Kansas.
16.7 ENTIRE AGREEMENT. This Agreement and Xxxx Refining Company, L.P.'s
Standard Product Sales Terms and Conditions dated May 1998
constitute the entire agreement between the parties. All prior
agreements with respect to the subject matter of this Agreement are
hereby superseded and replaced. Where the Standard Product Sales
Terms and Conditions are inconsistent with the specific provisions
of this Agreement, this Agreement shall control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by an authorized representative as of the date above stated.
XXXXXXX OIL, INC. XXXX REFINING COMPANY, L.P.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxx
----------------------------- --------------------------------
Title: CEO Title: Regional Marketing Mgr
----------------------------- --------------------------------
Date: 9/8/98 Date: 9/10/98
----------------------------- --------------------------------
Xxxx Ragasz
--------------------------------
Vice President Northern Region
Marketing
9/11/98
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XXXX REFINING COMPANY, L.P.
STANDARD PRODUCT SALES TERMS AND CONDITIONS
1. TITLE: On sales FOB Xxxx'x location, title and risk of loss shall pass
to Buyer as product passes through the flange connection between the delivery
line and Buyer's receiving line. On sales FOB Buyer's location, title and risk
of loss shall pass to Buyer as product leaves delivery vessel.
2. TAXES: Buyer shall pay, or reimburse Xxxx for all taxes, duties and
other governmental charges of whatever kind (except for income taxes) imposed on
any transaction of product sold hereunder. Without limitation on the foregoing,
Buyer shall bear the effect of all Federal Goods and Services Tax on or with
respect to this Agreement or the transactions or products hereunder.
3. MARINE: (a) Notices - Notice of estimated time of arrival (ETA) and name
of vessel or barge tow shall be given to receiving or loading party a reasonable
time before arrival at port. Any change in ETA shall be reported promptly. If a
berth is not available for the latest ETA, a berth will be scheduled for the
next earliest time a berth is open on the dock's schedule. Upon arrival in port,
notice of readiness to load or discharge shall be given, with allowed free time
being three hours for barge tows and six hours for vessels. Laytime shall
commence at the earlier of becoming all fast at berth or expiration of the
respective three or six hour period.
(b) Berth - Barge tow or vessel shall not exceed the maximum draft or
length allowed by dock operator. Receiving or loading party shall provide a
berth that tow or vessel may safely proceed to, lie at always afloat, and safely
depart from. Receiving or loading shall be done within the time, or at the rate,
agreed to by the parties. Seller shall pay wharfage fee, if any. Buyer shall pay
all fees or charges assessed against a vessel or barge.
(c) Demurrage - Seller is liable for demurrage caused by Seller's sole
fault. Buyer shall be liable for all other demurrage.
4. QUANTITY: All quantities shall be measured according to then prevailing
practices and methods generally used by Seller at its locations. Each party may
have its representative observe all measurements, sample taking and testing.
5. SCHEDULING: (a) Cooperation - To the extent flexibility is allowed by
this Agreement for time or size of deliveries, the parties shall cooperate to
the extent reasonable to coordinate period(s) and time(s) for deliveries
hereunder; and Buyer shall give reasonable prior notice as to quantities and
scheduling desired.
(b) Lots - Seller may deliver in lots. Failure of Seller to deliver shall
not relieve Buyer from accepting and paying for conforming lots tendered.
6. CREDIT: Seller's duty to perform, and Buyer's right to purchase,
hereunder are at all times subject to approval, and continuing approval, of
Buyer's credit by Seller. No assurance or guarantee is made of, or of
continuation of, any particular credit; and Seller without limitation reserves
the right to sell on pre-paid, COD, standby letter of credit, or other secured
or collaterally assured basis acceptable to Seller. Unless credit is approved
and arranged by Buyer with Seller payment shall be due in full in cash prior to
loading of product. Without limitation on Seller's rights and remedies on credit
issues or any other cause(s), if Buyer fails to pay any amount promptly when due
hereunder or if Seller needs assurance, or further assurance, of Buyer's credit
worthiness, Seller may cancel this Agreement, demand different payment terms,
suspend or recall deliveries or shipments, impose different credit terms, or
impose different requirements for collateral assurance of payment. ANY SUCH
DEMAND MAY BE MADE ORALLY AT SELLER'S ELECTION. Seller is hereby given an
express right to set-off against any amount whatsoever owing or becoming due to
Buyer, any amount owing by or becoming due from Seller or any company that is
directly or indirectly subsidiary to, parent of, or affiliated with Seller.
7. WARRANTIES AND LIMITATIONS: Seller warrants only that--(a) content of
product conforms at the time of loading to Seller's then current, standard
specifcation therefor; and (b) Seller has good title to the product at the time
of loading hereunder.
ALL OTHER WARRANTIES OF SELLER, EXPRESSED OR IMPLIED, AND ALL
REPRESENTATIONS, GUARANTEES, INSTRUCTIONS, PROMISES, DESCRIPTIONS AND SAMPLES
FROM SELLER OF, OR PERTAINING TO, PRODUCT QUALITY, COMPOSITION, CHARACTERISTICS,
ENVIRONMENTAL OR HUMAN SAFETY OR HAZARD OR HEALTH AFFECTS, PERFORMANCE, OR LIKE
MATTERS ARE EXCLUDED. WITHOUT LIMITATION ON THE FOREGOING SENTENCE, ALL IMPLIED
WARRANTIES OF FITNESS FOR PURPOSE AND OF MERCHANTABILITY AND ALL WARRANTIES OF
SELLER OF FREEDOM FROM PATENT INFRINGEMENT ARE EXCLUDED.
8. ACCEPTANCE: All quantities of product shall, unless otherwise agreed, be
determined in accordance with the following and adjusted to a standard
temperature of sixty (60) degrees Fahrenheit in compliance with applicable
A.S.T.M. methods. Quantities delivered to vessels shall be determined by shore
tank measurements at the point of delivery or receipt or, if unavailable, by
vessel loaded or discharge figures as adjusted by the appropriate vessel
experience factor as determined by an independent petroleum inspector.
Quantities delivered into or by pipelines shall be determined by meter. The term
"barrel" as used herein shall mean forty two (42) U.S. gallons. The term
"gallon" as used herein shall mean a U.S. gallon of two hundred thirty one (231)
cubic inches. All quality determinations shall be made by an independent
inspector to be employed at the equally shared expense of the parties.
Acceptance shall be deemed to have irrevocably occurred when the governing
sample of the product for purpose of quality determination has been found by the
independent inspector to conform to the specification required hereby.
9. EXCUSED PERFORMANCE: (a) Beyond Reasonable Control - The parties shall
be excused from their respective performances hereunder if performance has been
prohibited or delayed by any foreseeable or unforeseeable cause(s) beyond the
reasonable control of the party claiming excuse. Such shall include without
limitation any failure of mechanical or chemical function or equipment
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normally used by Seller for manufacturing, handling or delivering of
product covered hereby, acts of God, fire, explosion, strike, serious and
adverse weather conditions, civil or public disturbance, riots, inability
to obtain necessary authorizations, failure of supply or ability to produce
supply, governmental regulations or requirements. Promptly after a party
determines to claim excuse of performance, the party shall notify the other
of the circumstances and consequences claimed and shall use reasonable
means to remove the cause(s) in question. But in no event shall either party
be obligated to settle any demands of, or disputes with, laborers; nor
shall either party be excused from paying monies due or complying with
credit terms of Seller. Quantities affected by such cause(s) shall be
dropped from this Agreement, but this Agreement shall otherwise continue in
force and effect. In periods of shortage of product due to such cause(s),
Seller shall be entitled to allocate available supply among itself and its
affiliated, subsidiary and parent companies and customers, Buyer included.
(b) Impracticability - Seller shall have the right to cancel this Agreement
without liability to Seller if for any reason Seller shuts down the unit(s) in,
or the plant at, which the product is made or if a change in circumstances
(whether foreseeable or unforeseeable) causes Seller to incur a loss on a full
cost basls at any time on the sale of product hereunder.
(c) Alternate Supply - Under no circumstances shall Seller be obligated to
obtain product for delivery hereunder from any person or entity that is not an
affiliate, subsidiary or parent company of Seller.
10. LIMITED REMEDIES: Seller's liability, and Buyer's exclusive remedy, for
any cause of action (whether in contract, warranty, guarantee, failure of
essential purpose, tort [including but not limited to negligence], violation of
law, strict liability, or otherwise) arising out of or related to this Agreement
is expressly limited at Seller's option to - (a) replacement of a nonconforming
product FOB Seller's point of delivery; or (b) payment not to exceed the
purchase price for the shipment which is the subject of the claim or cause of
action.
WITHOUT LIMITATION ON THE FOREGOING, SELLER SHALL NOT BE OBLIGATED FOR LOST
PROFITS, ECONOMIC LOSS, OR ANY OTHER SPECIAL, CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHETHER ARISING UNDER WARRANTY, FAILURE OF ESSENTIAL PURPOSE, AGREEMENT,
GUARANTEE, TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE), STRICT LIABILITY,
VIOLATION OF LAW, OR OTHERWISE.
Solely as a means of early identification of any possible problems or
disputes and not by way of limitation of Seller's rights hereunder nor in
mitigation of acceptance hereunder, on each shipment Buyer shall sample and test
such prior to use or resale or other transfer thereof by Buyer in order to
independently determine conformity at as early a time as possible; and if Buyer
determines or suspects nonconformity, Buyer shall not use or resell or
otherwise transfer the same unless Seller gives Buyer written notice to proceed
with use or resale. Seller shall be reasonably prompt in giving any instruction
to Buyer concerning such.
11. INDEMNITY: Buyer shall indemnify and defend and hold harmless Seller as
to any breach of this Agreement by Buyer and from any liability and/or remedy,
of whatever nature or kind, to which Seller might become subject directly or
indirectly resulting from Buyers negligence or willful misconduct. Buyer agrees
without limitation to promptly and properly provide to its employees, customers
and community representatives, as appropriate, any information provided by
Seller relating to human health or human or environmental safety on the product
sold hereunder.
12. LAW AND JURISDICTION: This Agreement shall be governed by the laws of
the State of Kansas, excluding rules of conflict of law, and by applicable
United States federal law and by INCOTERMS.
13. COMPLIANCE WITH LAW: Vessels shall fully comply (or hold necessary
waivers if not in compliance) with all applicable U.S. Coast Guard regulations
in effect as of the date vessel berths. Vessels shall comply with all local,
state and federal environmental laws and regulations while berthed at the
terminal, including the U.S. Federal Water Pollution Control Act, as amended,
and shall have secured and carry aboard the vessel a current U.S. Coast Guard
Certificate of Financial Responsibility (Water Pollution) (The "Certificate").
Terminal shall not be liable for demurrage or other expenses during any time
lost as a result of failure to obtain or maintain the Certificate. If any vessel
fails to comply with such laws and regulations, the vessel may be required to
leave the terminal. Any vessel delay time caused by the vessel's failure to meet
such laws and regulations shall not count as used laytime.
14. OIL POLLUTION AVOIDANCE: In the event of an escape or discharge of oily
water, oil ballast, or oil in any form occurring at the Terminal (regardless of
cause), Seller shall immediately notify Buyer and shall cooperate with Buyer in
jointly effecting a cleanup, or other resolution to the spill and necessary
notifications. Buyer agrees to keep Seller advised of the nature and extent of
the measures to be undertaken by it. Any of the aforementioned measures
undertaken shall be at the expense of the party causing the discharge. The above
shall not be considered to be inderogation of any other such right as Buyer or
Seller may have or acquire by law or international convention.
15. WAIVERS: Waivers by Seller or Buyer of a breach by the other party of
any provision of this Agreement shall not be deemed a waiver of future
compliance therewith. No delay or failure on Seller's or Buyer's part to enforce
any right or claim which it may have hereunder shall constitute a waiver on
Seller's or Buyer's part of such right or claim.
16. EXPORT/IMPORT: Buyer shall be the exporter and importer of record with
respect hereto and shall have the duty and risk of determining and complying
with all export and import laws.
17. ASSIGNMENT: Buyer shall not assign this Agreement or any part hereof
except upon, and according to, such prior, written consent as Seller may choose
to give in its sole discretion.
18. MISCELLANEOUS: These sale terms constitute the entire agreement and
contract of the parties and shall control over any other terms except that, to
the limited extent that any separate writing of the parties - (i) relates
expressly and directly hereto; (ii) is mutually executed by respective officers
of Seller and Buyer; and (iii) is intended by the parties to replace or
supersede, rather than to supplement, a
ii
specific portion of these sales terms, then such specific replacing or
superseding term shall control over the term hereof in question but not
otherwise.
THESE STANDARD TERMS AND CONDITIONS OF SALE ARE DEEMED AN OFFER FOR SALE BY
SELLER. IF BUYER DOES NOT ACCEPT THIS OFFER BY EXECUTION HEREON OR OTHERWISE IN
WRITING WITHOUT ALTERATION HEREOF OR ADDITION HERETO, BUYER SHALL BE DEEMED TO
HAVE ACCEPTED THIS OFFER BY PURCHASING, OR TAKING DELIVERY OF, PRODUCT FROM
SELLER. ANY ACCEPTANCE IS EXPRESSLY LIMITED TO THESE TERMS AND CONDITIONS EXCEPT
SUCH AS MEETS THE REQUIREMENTS OF THE FIRST PARAGRAPH OF THIS SECTION 19.
Without limitation on Seller's rights, no term in Buyer's purchase order or any
other document, correspondence or communication from Buyer which conflicts with
the terms of this Agreement is, or shall be, accepted by Seller except in a
separate writing executed by an officer of Seller. Headings are provided for
convenience, and are not part of the Agreement of the parties. Seller's rights
and remedies hereunder are in addition to, and not in lieu of. Seller's other
rights and remedies.
(P980523/ KRCLPTRMS.DOC) May, 1998
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