EXHIBIT 10.13
"Pages where confidential treatment has been requested are stamped
Confidential Treatment Requested. The redacted material has been separately
filed with the Commission; the appropriate section has
been marked at the appropriate place and in the margin with a star (*)."
FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
This FEEDSTOCK AND REFINERY PRODUCT MASTER SERVICES AGREEMENT (the "Agreement")
is made and entered into effective this 1st day of September, 1996, by and
between Chevron Products Company, a Division of Chevron U.S.A. Inc., a
Pennsylvania corporation (hereinafter referred to as "CPC") and Xxxxxx Petroleum
Company, Limited Partnership, a Delaware limited partnership (hereinafter
referred to as "WPC").
WHEREAS, Chevron U.S.A. Inc. ("CUSA") and NGC Corporation ("NGC") have entered
into certain agreements (the "Merger Agreements") pursuant to which CUSA would
contribute certain gas gathering, processing, and other midstream assets and
related liabilities of XXXX'x Xxxxxx Petroleum Company division ("Xxxxxx") and
natural gas business unit division to a corporation to be formed which NGC would
then be merged into (the "Merger");
WHEREAS, immediately subsequent to the Merger, the gas gathering, processing and
other midstream assets and related liabilities of Xxxxxx will be transferred to
WPC;
WHEREAS, Xxxxxx previously sold to CPC and CPC purchased from Xxxxxx all of
CPC's Feedstock needs and Xxxxxx previously purchased from CPC and CPC sold to
Xxxxxx all of the Refinery Products and certain Offspec Refinery Products
produced at CPC's Refineries (hereinafter defined) and both CPC and WPC desire
that such relationship continue;
WHEREAS, Xxxxxx previously provided certain services to CPC and CPC provided
certain services to Xxxxxx, in connection with (a) Xxxxxx'x sale to CPC of
Feedstock and (b) Xxxxxx'x purchase from CPC of Refinery Products and certain
Offspec Products produced at CPC's refineries (collectively, the "Refineries",
and each, a "Refinery");
WHEREAS, contemporaneously with the consummation of the Merger Agreements, CPC
and WPC have entered into certain Feedstock Sale and Refinery Product Purchase
Agreements with each of the Refineries (as such Agreements may be amended from
time to time, the "Feedstock Agreements"), pursuant to which WPC shall sell
Feedstock to CPC and WPC shall purchase Refinery Products and certain Offspec
Refinery Products produced by the Refineries;
WHEREAS, CPC desires WPC to perform certain services described on EXHIBITS X-0,
X-0, X-0 XXX X-0 attached hereto ("WPC Services"), and WPC desires CPC to
perform certain services
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described on EXHIBITS B-1, B-1A and B-2 attached hereto ("CPC Services"; WPC
Services and CPC Services being collectively referred to as "Services");
WHEREAS, CPC desires that WPC maintain the same level of service that was
previously provided to it by Xxxxxx and WPC desires to continue such level of
service; and
WHEREAS, WPC and CPC desire to perform such Services for each other in
accordance with and subject to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and for the mutual benefit of
the Parties, as well as for other good and valuable consideration, WPC and CPC
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 SPECIFIC DEFINITIONS. As used herein, the following terms shall have the
following meanings:
"AAR" means American Association of Railroads.
"Agreement" means this Agreement, including all Exhibits and the Schedule
attached hereto and all amendments hereof that may be made from time to time.
"Affiliate" means any Person that directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
Person specified. The term "control" (including the terms "controlled by" or
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership, by contract, or otherwise. Any Person shall
be deemed to be an Affiliate of any specified Person if such Person owns fifty
percent (50%) or more of the voting securities of the specified Person, if the
specified Person owns fifty percent (50%) or more of the voting securities of
such Person, or if fifty percent (50%) or more of the voting securities of the
specified Person and such Person are under common control.
"Bankruptcy Event" means the occurrence of one or more of the following events
with respect to a Party: (A) the entry of a decree or order for relief against a
Party by a court of competent jurisdiction in any involuntary case brought
against a Party under any bankruptcy, insolvency or other similar law
(collectively, "Debtor Relief Laws") generally affecting the rights of creditors
and relief of debtors now or hereafter in effect; (B) the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar agent under applicable Debtor Relief Laws for a Party or for any
substantial part of its assets or property; (C) the ordering of the winding up
or liquidation of a Party's affairs; (D) the filing of a petition in any such
involuntary bankruptcy case, which petition remains undismissed for a period of
180 Days or which is not dismissed or suspended pursuant to Section 305 of the
Federal Bankruptcy Code (or any
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corresponding provision of any future United States bankruptcy law); (E) the
commencement by a Party of a voluntary case under any applicable Debtor Relief
Law now or hereafter in effect; (F) the consent by a Party to the entry of an
order for relief in an involuntary case under any such law or to the appointment
of or the taking of possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar agent under any applicable Debtor
Relief Laws for a Party or for any substantial part of its assets or property;
or (G) the making by a Party of any general assignment for the benefit of its
creditors.
"Base Rate" means the lesser of (i) two percent (2%) above the per annum rate of
interest announced from time to time as the "prime rate" for commercial loans by
First National Bank of Chicago, as such "prime rate" may change from time to
time, or (ii) the maximum applicable non-usurious rate of interest.
"BLS" means CPC's Xxxx of Lading System, including all enhancements and
replacements thereof.
"Business Day" means a Day on which Federal Reserve member banks in New York
City are open for business.
"Butane Cars" means pressure rail cars assigned from time to time to CPC's
1052 (Butane) fleet.
"CLM" means Car Location Message.
"CPC Cars" means the LPG Cars and all other rail cars owned or Leased by CPC
from time to time.
"CPC Databases" means BLS, CPS, RAS and RMS, including all enhancements and
replacements of any of them.
"CPS" means Chevron Products Systems, including all enhancements and
replacements thereof.
"Day" or "Daily" means a twenty-four (24) hour period commencing at 12:01 a.m.
local time and extending until 12:01 a.m. local time on the following Day.
"Disposition" means the assignment, sale, transfer, or other disposition of a
Refinery to a Transferee.
"DOT" means the United States Department of Transportation and any successor
agency thereof.
"Effective Date" means September 1, 1996.
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"Emergency Use Rights" means CPC's rights, exercisable only in situations
reasonably believed by CPC to be emergencies (excluding planned Refinery
turnarounds), to temporarily use Propane Cars that are within the Refinery
premises in accordance with the terms of this Agreement.
"Feedstock" shall have the meaning given such term in the Feedstock Agreement
for the applicable Refinery.
"Feedstock Products" means Feedstock and Offspec Feedstock.
"FIS" means TP&S's Freight Information Services group.
"Force Majeure" shall have the meaning given such term in Section 10.2.
"GAAP" means generally accepted accounting principles, as in effect from time
to time.
"Gallon" means the unit volume used for the purpose of measurement of liquid.
One (1) U.S. liquid gallon contains two hundred thirty-one (231) cubic inches
when the liquid is at a temperature of sixty degrees Fahrenheit (600 degrees F)
and at the vapor pressure of the liquid being measured.
"Isobutane" shall have the meaning given such term in the Feedstock Agreement
for the applicable Refinery.
"Isomerization Agreement" means the Isomerization Agreement dated as of July 14,
1995 between Xxxxxx and Lone Star Gas Liquids Processing, Inc.
"Lease" means, with respect to a rail car (including, but not limited to, the
LPG Cars), a time charter arrangement between the owner of the rail car and the
Person entitled to use such rail car, a lease in which the owner of the rail car
retains legal and beneficial title to such rail car, or any other contractual
arrangement of similar effect.
"LPG Cars" means pressure rail cars assigned from time to time to CPC's 1030
(Propane) and 1052 (Butane) fleets, but does not include the twenty eight (28)
rail cars assigned to the Pascagoula Refinery and included in CPC'c 1026 fleet
as of the date hereof.
"Mixed Butanes" shall have the meaning given such term in the Feedstock
Agreement for the applicable Refinery.
"Month" or "Monthly" means a period commencing at 12:01 a.m. local time on the
first Day of a calendar month and extending until 12:01 a.m. local time on the
first Day of the next succeeding calendar month.
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"WPC Locations" means locations where WPC personnel have access, through
computer terminals or otherwise, to any of the CPC Databases.
"Offspec Feedstock" shall have the meaning given such term in the Feedstock
Agreement for the applicable Refinery.
"Offspec Refinery Products" and "Type A Offspec Refinery Products" shall have
the meanings given such terms in the Feedstock Agreement for the applicable
Refinery.
"Operating Committee" shall have the meaning given such term in Section 8.1.
"Party" means individually either CPC or WPC (including their respective
successors and permitted assigns); collectively, the "Parties."
"Person" means any individual, corporation, partnership, limited liability
company, association, joint venture, trust, or other organization of any nature
or kind.
"Products" means Feedstock, Offspec Feedstock, Refinery Products and Type A
Offspec Refinery Products.
"Propane Cars" means pressure rail cars assigned from time to time to CPC's 1030
(Propane) fleet.
"RAS" means CPC's Rail Car Accounting System, including all enhancements and
replacements thereof.
"Refinery" and "Refineries" shall have the meanings set forth in the recitals to
this Agreement and shall refer to the Refineries in the following locations: El
Paso, Texas; El Segundo, California; Hawaii; Pascagoula, Mississippi; Richmond,
California; and Salt Lake City, Utah.
"Refinery Products" shall have the meaning given such term in the Feedstock
Agreements for the applicable Refinery.
"RELAM" refers to a third Person, unaffiliated with either Party, that provides
mileage credit auditing services.
"RMS" means CPC's Rail Car Management System, including all enhancements and
replacements thereof.
"T&F Costs" means all Transportation Costs and all costs and expenses reasonably
incurred in connection with the receipt, fractionation and sale or resale of
Refinery Products received by WPC from CPC. It is understood and agreed that
any fractionation costs that are incurred at a facility owned and/or controlled
by WPC or any of its Affiliates shall not exceed the lesser of (i)
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"Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission."
the fair market value for such fractionation services or (ii) the fees charged
by WPC or its Affiliates to CUSA in connection with the fractionation of natural
gas liquids (other than Refinery Products) owned by CUSA and purchased by WPC.
"TP&S" shall have the meaning given such term in Section 8.1.
"Third Party LPG" means liquefied petroleum gas transported by WPC for its own
account or the account of its Affiliates or for third Persons not Affiliated
with CPC.
"Transferee" means a third Person who acquires a Refinery pursuant to a
Disposition, and who is not an Affiliate of either Party.
"Transportation Costs" means all costs and expenses reasonably incurred in
connection with the transportation of Feedstock(s) and/or Refinery Product(s)
hereunder, including, without limitation, rail car, barges and truck costs,
Feedstock and/or Refinery Product losses that occur during transportation for
reasons other than the negligence or willful misconduct of WPC and all costs and
expenses reasonably incurred in loading, unloading, transporting, terminaling,
storing (if required) and handling such Feedstock(s) and/or Refinery Products.
It is understood and agreed that Transportation Costs shall not include any
portion of WPC's general and administrative costs and expenses, but will include
amounts paid by WPC to CPC in connection with the Propane Cars owned or Leased
by CPC but operated by WPC in connection with the Services rendered by WPC to
CPC pursuant to this Agreement. With respect to barges and trucks owned by WPC
or its Affiliates, the applicable Transportation Costs shall not exceed the fair
market value of the use of such barges and trucks in transporting Feedstocks
and/or Refinery Products hereunder.
"UMLER" means the Uniform Machine Language Equipment Register, a database
provided by the AAR in connection with the monitoring of rail car mileage credit
rating records.
"Year" means a period of twelve (12) consecutive months commencing from the
Effective Date.
1.2 OTHER DEFINITIONS. Other terms may be defined elsewhere in the text of
this Agreement (including but not limited to the Exhibits hereto) and shall have
the meanings indicated throughout this Agreement.
ARTICLE 2
TERM
2.1 GENERALLY. Unless otherwise provided herein, this Agreement shall remain
* in full force and effect for a period of REDACTED Years from the Effective
Date hereof and shall continue from Year to Year thereafter unless terminated
* by either Party hereto at the end of such REDACTED Year period or any Yearly
anniversary thereafter by giving the other Party at least
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ninety (90) Days, but not more than one hundred and eighty (180) Days, advance
written notice of its intention to so terminate. Notwithstanding the
foregoing, it is understood and agreed that shorter terms may be applicable to
certain Services described in Exhibit A and Exhibit B (as such terms are
hereafter defined), as more particularly set forth in such Exhibits.
2.2 TERMINATION. Notwithstanding Section 2.1 above, this Agreement may be
terminated as follows:
(a) By the non-defaulting Party, upon thirty (30) Days written notice to the
other Party, after it has been determined through the alternative dispute
resolution procedures of Article 11 that a Material Default has occurred in
the Performance of a Party's obligations hereunder (it being understood
that, for purposes of the foregoing, "Material Default" shall mean that the
arbitrators have determined that (i) in consequence of such Default, the
objectives of this Agreement (as expressed in the Master Alliance Agreement
of even date herewith by and among CUSA, CPC, WPC and others) are not being
met and (ii) the defaulting Party failed to take the steps necessary to
accomplish such objectives);
(b) By a Party, in the event the other Party is dissolved (unless the successor
to such dissolved Party or its assets is an Affiliate of CPC or WPC);
(c) By a Party, if a Bankruptcy Event occurs with respect to the other Party;
or
(d) By either Party, with respect to each Refinery, if either Party has
terminated the Feedstock Agreement applicable to such Refinery in
accordance with the terms and provisions thereof.
In the event the Refinery is sold to a third Person not affiliated with CPC, the
reference to the Master Alliance Agreement set forth in Section 2.2(a), above,
shall be inapplicable.
2.3 CLOSURE OF REFINERY. It is agreed and understood that CPC, in its sole
discretion, may permanently close any Refinery at any time during the term of
this Agreement. Upon such permanent closure, CPC and WPC shall be relieved of
any further obligations under this Agreement with regard to such Refinery, if
CPC has provided WPC with written notice of such closure at least one hundred
and eighty (180) Days prior to the date of such closure.
2.4 PARTIAL TERMINATION OF AGREEMENT. Except as otherwise provided in this
Agreement, this Agreement shall terminate as to any Refinery (a) that has
terminated its Feedstock Agreement with WPC in accordance with the terms and
provisions thereof or (b) that has been the subject of a Disposition. Except as
otherwise provided in this Agreement, the Parties' obligations hereunder shall
terminate as to the Refinery affected by such termination or Disposition subject
to the provisions of Sections 2.5, (i) in the case of termination of its
Feedstock Agreement with a Refinery, upon the effective date of such termination
and (ii) in the case of a Disposition, upon the consummation of such
Disposition.
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2.5 POST-TERMINATION ITEMS. Upon the termination of this Agreement, any monies
due and owing either Party shall be paid to the other Party pursuant to the
terms hereof and any refunds due either Party shall be made at the earliest
possible time, and, in any event, no later than sixty (60) Days after the
expiration or termination of this Agreement. All audit rights shall survive for
the period prescribed by Section 7.2(g).
2.6 REMEDIES CUMULATIVE. Termination of this Agreement hereunder shall be
cumulative of any other rights or remedies that the terminating Party may have
in connection with such termination (subject to any limitations set forth
herein), including, but not limited to, damages and injunctive relief.
ARTICLE 3
SERVICES
3.1 AGREEMENT TO PROVIDE SERVICES.
(a) WPC shall perform the WPC Services described on Exhibits A-1 through A-4
attached hereto (such Exhibits being collectively sometimes hereinafter
referred to as "Exhibit A"), and CPC shall perform the CPC Services
described on Exhibits B-1 and B-2 attached hereto (such Exhibits, together
with Exhibit B-1a, being collectively sometimes hereinafter referred to as
"Exhibit B"), all such Services to be provided subject to and in accordance
with the terms and provisions of this Agreement.
(b) To request Services not generally described in Exhibit A or Exhibit B, the
Party desiring such additional services ("Non-Exhibit Services") shall
complete a Request for Services (the "Request for Services" or "RFS"),
substantially in the form attached hereto as "Exhibit C," describing with
specificity the scope and type of Non-Exhibit Services to be performed, and
the fee to be paid for them. The RFS shall be binding when signed by both
Parties. If there is a conflict between the terms of this Agreement and
the terms of the RFS, the terms of the RFS shall control.
(c) In connection with the rendering of Services that relate to transportation
(including, without limitation, the transportation of Products), it is
understood and agreed that the Party providing such Services shall provide
rail car, motor vehicle or other transportation equipment that (i) complies
with the requirements of all applicable federal and state statutes, all
applicable local government ordinances and all applicable rules,
regulations orders and other mandatory directives of any applicable
federal, state or local tribunal or agency (including but not limited to
those of the U.S. Department of Transportation) and (ii) is safe, complete
and efficient for the performance of such Party's obligations under this
Agreement.
3.2 RELATIONSHIP BETWEEN THE PARTIES.
(a) The relationship between the Parties is purely contractual. Nothing set
forth herein shall constitute, or be construed as creating, an employment
relationship, a partnership, a
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joint venture, a relationship of lessor and lessee or xxxxxx and bailee, or
any other kind of relationship or association between the Parties. Except
as otherwise expressly provided herein, neither Party hereto has any
authority, expressed or implied, to bind or to incur liabilities on behalf
or in the name of, the other Party.
(b) All Services to be provided by either Party under this Agreement may be
furnished by any officer, employee or contractor of such Party. Each Party
shall devote such time in providing its respective Services hereunder as is
reasonably necessary to fully provide the same. Each Party shall use
qualified and properly trained personnel as are necessary to perform the
Services in accordance with the terms of this Agreement and in compliance
with applicable law.
(c) The Parties agree to cooperate with each other in effectuating the purposes
of this Agreement. Without limiting the generality of the foregoing, (i)
the Parties shall promptly notify each other of any matter, or the
occurrence of any event, which matter or event could reasonably be expected
to materially and adversely affect the Services provided hereunder and (ii)
the Party for whom Services are being provided shall give the Party
providing Services all information necessary for such Party to perform the
Services required of it under this Agreement.
3.3 LICENSE FOR WPC USE OF CPC SOFTWARE AND DATABASES.
The Parties acknowledge that performance of the WPC Services will require CPC to
give WPC limited access to, and a limited right to use, the CPC Databases so
that WPC can perform its obligations and exercise its rights under this
Agreement. Accordingly, CPC does hereby grant WPC a non-exclusive license for
such access and use in respect of the CPC Databases for the term of this
Agreement, subject in all respects to the terms of this Section 3.3 and the
other terms and conditions of this Agreement. The rights granted herein to WPC
pertaining to the CPC Databases are subject to the terms and provisions of
Exhibit D attached hereto and made a part hereof which sets forth the
conditions of WPC's access to and right to use the CPC Databases. Without
limiting or modifying the generality of the foregoing, WPC's access to the CPC
Databases shall also be limited in accordance with the "Other Provisions"
section of Exhibit B-1.
3.4 AUTHORIZATION OF WPC's USE AND OPERATION OF CPC RAIL CARS; GRANT OF
OPERATING RIGHTS. The Parties acknowledge that the performance of the WPC
Services will (i) require CPC to give WPC the rights to use, operate, schedule,
dispatch and generally control the LPG Cars in accordance with and subject to
the terms of this Agreement (such rights to be referred to as the "Operating
Rights"), (ii) require the Parties to designate, from time to time and for the
purposes hereinafter set forth, such LPG Cars as either Butane Cars or Propane
Cars, with such designations to vary from time to time according to the use of
such LPG Cars and (iii) require the Parties to allocate depreciation, operating
costs and other costs and expenses among the LPG Cars generally and between
Propane Cars and Butane Cars, depending on the relevant business circumstances.
Accordingly, in connection with the foregoing and related matters, the Parties
agree as follows:
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(a) CPC hereby assigns the Operating Rights to WPC, subject to (i) the terms
and conditions of all Leases applicable to the LPG Cars, (ii) minor
encumbrances that, individually and in the aggregate, do not and will not
materially affect WPC's use of the Operating Rights, (iii) CPC's right,
exercisable in its sole discretion, to use Butane Cars while situated on
Refinery premises at any time and (iv) the terms and conditions of this
Agreement, including, but not limited to, CPC's Emergency Use Rights (the
matters in clauses (i) , (ii), (iii) and (iv) being herein referred to as
the "Permitted Encumbrances");
(b) the Parties, in consultation with the Operating Committee, shall designate
the LPG Cars as either Butane Cars or Propane Cars, and shall allocate
depreciation, operating costs and other costs and expenses among the LPG
Cars generally and between Propane Cars and Butane Cars, in accordance with
and subject to the terms of Exhibit B-1 and Exhibit B-1a, respectively, to
which reference is made for all relevant purposes hereunder;
(c) the WPC Services to be provided in connection with this grant of the
Operating Rights, together with the fees to be paid for such WPC Services
and all other pertinent information with respect thereto, are set forth in
Exhibits A-1 through A-4, to which reference is made for all relevant
purposes hereunder;
(d) the CPC Services to be provided in connection with the LPG Cars, together
with the fees to be paid for such CPC Services and all other pertinent
information with respect thereto, are set forth in Exhibits B-1, B-1a and
B-2, to which reference is made for all relevant purposes hereunder;
(e) CPC may exercise its Emergency Use Rights at any time by giving WPC oral
notice regarding the existence of an emergency, and if the LPG Cars
situated on Refinery premises are insufficient to handle such emergency,
WPC shall assist CPC in securing additional LPG Cars. In the event CPC
exercises its Emergency Use Rights, (i) WPC's obligations under the
applicable Feedstock Agreements shall be suspended insofar as WPC's ability
to perform such obligations are materially and adversely affected by the
exercise of CPC's Emergency Use Rights and (ii) CPC shall reimburse WPC for
all reasonable costs, expenses and penalties incurred by WPC in connection
with, arising out of, or directly resulting from CPC's exercise of such
Emergency Use Rights;
(f) CPC represents, warrants and covenants as follows that:
(i) (A) with respect to LPG Cars that CPC Leases, CPC has or will have the right
to transfer the Operating Rights to WPC in accordance with the terms of this
Agreement, subject to any applicable third Person consents required under the
Leases; (B) with respect to LPG Cars that CPC owns, it will (1) maintain and
defend its right, title and interest in such LPG Cars, subject to the Permitted
Encumbrances, subject further to CPC's right to contest in good faith and by
appropriate means any claims by third Persons affecting CPC's right, title and
interest in such LPG Cars, and (2) not assign any interest in such LPG Cars
except as provided in Section 12.3,
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and (C) with respect to LPG Cars that CPC Leases, it will (1) timely pay all
amounts due from CPC under the Leases applicable to the LPG Cars and otherwise
comply with such Leases in all material respects, (2) maintain such Leases in
full force and effect, the foregoing being subject only to CPC's right to
contest in good faith and by appropriate means any disputes arising under such
Leases and (3) not assign any of its interest under the Leases except as
provided in Section 12.3; and
(ii) it will exercise every reasonable effort to ensure that each LPG Car
departing from any Refinery shall be properly coded to reflect whether such
departing LPG Car is a Propane Car or a Butane Car;
(iii) it will exercise every reasonable effort to ensure that each LPG Car
within the Refinery premises that is used by CPC for Refinery purposes shall be
properly coded as a Butane Car; and
(iv) EXCEPT AS EXPLICITLY SET FORTH IN THIS SECTION 3.4(F), THERE ARE NO OTHER
WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY,
CONFORMITY TO MODELS OR SAMPLES, OR AGAINST INFRINGEMENT OF ANY PATENT,
TRADEMARK, COPYRIGHT OR OTHERWISE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY
DISCLAIMED BY CPC AND EXCLUDED FROM THIS AGREEMENT.
(g) WPC represents, warrants and covenants as follows that:
(i) it has or, by the Effective Date, will have all material governmental
consents, licenses and approvals necessary to exercise the Operating Rights and
generally to perform Services using the LPG Cars in accordance with the
applicable terms and conditions of this Agreement;
(ii) it will (A) maintain its right, title and interest in the Operating Rights,
subject to the terms of this Agreement and subject further to WPC's right to
contest in good faith and by appropriate means any claims by third Persons
affecting WPC's right, title and interest in the Operating Rights, (B) COMPLY IN
ALL MATERIAL RESPECTS WITH THE APPLICABLE TERMS OF LEASES APPLICABLE TO THE LPG
CARS AND INDEMNIFY AND HOLD CPC HARMLESS FROM AND AGAINST ALL COSTS, LIABILITIES
AND EXPENSES ARISING OUT OF, OR IN ANY WAY ASSOCIATED WITH, WPC'S USE OF ANY LPG
CAR FOR PURPOSES OTHER THAN THOSE CONTEMPLATED BY THE APPLICABLE LEASE,
INCLUDING BUT NOT LIMITED TO CLEANING AND INSPECTION COSTS AND ADDITIONAL RENTAL
FEES FOR SUCH LPG CAR AND/OR FOR OTHER RAIL CARS OR OTHER EQUIPMENT REQUIRED TO
BE LEASED OR PURCHASED AS A RESULT OF SUCH USE BY WPC and (C) not assign any of
its interest in the Operating Rights except as provided in Section 12.3, or as
provided in any applicable Lease; and
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(iii) it will exercise every reasonable effort to ensure that each LPG Car
departing from a location other than a Refinery shall be properly coded to
reflect whether such departing LPG Car is a Propane Car or a Butane Car,
including, but not limited to, coding as a Propane Car each LPG Car moving Third
Party LPG on behalf of WPC to a location other than a Refinery, whether or not
Propane is being transported.
(h) (i) This Section 3.4(h) establishes the term of the Operating Rights
granted by CPC to WPC hereunder and the respective rights and obligations of the
Parties regarding the LPG Cars upon the termination of such Operating Rights.
(ii) The Operating Rights with respect to all LPG Cars, other than the WPC LPG
Cars (hereinafter defined), shall terminate and revert to CPC at the end of the
Primary Term (hereinafter defined). Notwithstanding the foregoing, CPC shall
transfer the WPC LPG Cars to WPC in accordance with the terms and provisions of
this Section 3.4(h). "WPC LPG Cars" means a number of LPG Cars equal to the
number of LPG Cars, averaged over the twelve (12) Month period ending the Month
before the Month in which the Primary Term ends, engaged by WPC in carrying
Third Party LPG for itself or for WPC customers other than CPC (such activity
being hereinafter referred to as "WPC Third-Person Carriage") during such twelve
(12) Month period. "Primary Term" shall mean ten (10) Years from the Effective
Date, and any extensions mutually agreed to in writing by the Parties.
(iii) If WPC terminates this Agreement before the end of the Primary Term in
accordance with Section 2.2 because of CPC's Material Default, CPC's dissolution
(subject, however, to the provisions of Section 2.2(b)) or the occurrence of a
Bankruptcy Event with respect to CPC, then:
(1) WPC's Operating Rights shall terminate and revert to CPC as to a number of
Butane Cars equal to the average number of all Butane Cars in the LPG Car
fleet over the twelve (12) Month period ending the Month before the Month
in which WPC terminates this Agreement;
(2) WPC shall retain the exclusive Operating Rights to a number of Propane Cars
equal to the average number of all Propane Cars in the LPG Car fleet over
the twelve (12) Month period ending the Month before the Month in which WPC
terminates this Agreement, until the end of the Primary Term, and CPC shall
have no rights whatsoever to such Propane Cars until the end of the Primary
Term, including, but not limited to, any Emergency Use Rights, the right to
use such Propane Cars to carry Products to and from all Refineries subject
to this Agreement (such activity being hereinafter referred to as "Refinery
Service") or for any other purpose whatsoever; and
(3) at the end of the Primary Term, (a) at WPC's option, exercised in
accordance with Section 3.4(h)(vii)(7), CPC shall transfer to WPC a number
of LPG Cars equal to the number of LPG Cars, averaged over the twelve (12)
Month period ending the Month before the
12
Month in which the Primary Term expires, engaged in WPC Third-Person
Carriage during such twelve (12) Month period and (b) WPC's Operating
Rights in the remaining LPG Cars shall terminate and revert to CPC.
(iv) If CPC terminates this Agreement before the end of the Primary Term in
accordance with Section 2.2 because of WPC's Material Default, WPC's
dissolution (subject, however, to the provisions of Section 2.2(b)), or the
occurrence of a Bankruptcy Event with respect to WPC, then WPC's Operating
Rights shall terminate and revert to CPC as to all LPG Cars, including but
not limited to LPG Cars engaged in WPC Third-Person Carriage.
(v) If there is a partial termination of this Agreement pursuant to Section 2.4
before the end of the Primary Term, then:
(1) if such termination is due to termination of a Feedstock Agreement between
WPC and a Refinery based on CPC's Material Default thereunder, then, at the
time of such partial termination, (a) WPC's Operating Rights shall
terminate and revert to CPC as to a number of Butane Cars equal to the
number of Butane Cars, averaged over the twelve (12) Month period ending
the Month before the Month in which such partial termination occurred,
engaged in Refinery Service for such Refinery covered by such terminated
Feedstock Agreement during such twelve (12) Month period, and (b) WPC shall
retain the exclusive Operating Rights to a number of Propane Cars equal to
the number of Propane Cars, averaged over the twelve (12) Month period
ending the Month before the Month in which such partial termination
occurred, engaged in Refinery Service and WPC Third-Person Carriage during
such twelve (12) Month period, and CPC shall have no rights whatsoever to
such Propane Cars until the end of the Primary Term, including, but not
limited to, any Emergency Use Rights, the right to use such Propane Cars
for Refinery Service or for any other purpose whatsoever;
(2) except as otherwise provided in this Section 3.4(h)(v), if such termination
occurs in connection with the consummation of the Disposition of a Refinery
and the assignment by CPC to the Transferee of the Feedstock Agreement
associated with such Refinery, then WPC shall retain its Operating Rights
as to all LPG Cars until the end of the Primary Term (it being understood
that if such Feedstock Agreement is not assigned in connection with such
Disposition, then, at the time of such partial termination, WPC's Operating
Rights shall terminate and revert to CPC as to a number of LPG Cars equal
to the number of LPG Cars, averaged over the twelve (12) Month period
ending the Month before the Month in which such Disposition was
consummated, engaged in Refinery Service for such Refinery);
(3) if such termination is due to termination of a Feedstock Agreement between
WPC and a Refinery based on WPC's Material Default thereunder (including
but not limited to the occurrence of a Refinery Closure Event, as defined
in such Feedstock Agreement), then, at the time of such partial
termination, WPC's Operating Rights shall terminate and revert to CPC as to
a number of LPG Cars equal to the number of LPG Cars, averaged over the
twelve (12) Month period ending the Month before the Month in which such
partial termination occurred,
13
engaged in Refinery Service for such Refinery covered by such terminated
Feedstock Agreement during such twelve (12) Month period and WPC shall
retain its Operating Rights as to all other LPG Cars until the end of the
Primary Term; and
(4) at the end of the Primary Term, (a) at WPC's option, exercised in
accordance with Section 3.4(h)(vii)(7), CPC shall transfer the WPC LPG Cars
to WPC, and (b) WPC's Operating Rights in the remaining LPG Cars shall
terminate and revert to CPC.
(vi) If, in connection with the Disposition of a Refinery, the Feedstock
Agreement for such Refinery is assigned to the Transferee, CPC agrees that
it will use every reasonable effort to maintain during the Primary Term a
number of LPG Cars in the LPG Car fleet equal to the average number of LPG
Cars that were in the LPG Car fleet over the twelve (12) Month period
ending the Month before the Month the Disposition of such Refinery and the
assignment of the associated Feedstock Agreement were consummated.
(vii) It is understood and agreed that, with respect to all transfers of LPG
Cars and/or the termination of Operating Rights under this Section 3.4:
(1) all such transfers shall be consummated as soon as practicable, but in no
event later than sixty (60) Days after the end of the Primary Term;
(2) in cases where WPC's Operating Rights are being terminated, WPC shall
return the LPG Cars in WPC's possession that are affected by such
termination as soon as practicable, but in no event later than sixty (60)
Days after the termination of WPC's Operating Rights in such LPG Cars;
(3) LPG Cars transferred to WPC shall reflect, as nearly as practicable, (a)
the proportion of CPC-owned and CPC-Leased LPG Cars at the time of such
transfer and (b) the age distribution of all LPG Cars owned by CPC at the
time of the transfer;
(4) all transfers of LPG Cars to WPC shall be made without warranty other than
warranties of the type given by CPC in Section 3.4(f)(i), subject to the
disclaimers set forth in Section 3.4(f)(iv), and, with respect to the
Leased LPG Cars, subject to the Leases applicable to such LPG Cars;
(5) CPC shall have no obligation to provide Services to LPG Cars which have
been transferred to WPC in accordance with this Section 3.4(h) or as to
which WPC's Operating Rights have terminated;
(6) where CPC transfers LPG Cars owned by CPC to WPC, such transfers shall be
accompanied by payment to CPC, in immediately available funds, of an amount
necessary, after taking into account prior capital cost recovery payments
by WPC, to yield CPC a seven percent (7%) return on capital. An example of
the foregoing which embodies the intent of
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the Parties is attached hereto as Schedule 3.4(h). WPC shall pay such
amount simultaneously with the transfer of such LPG Cars; and
(7) in connection with the exercise of WPC's option to cause CPC to transfer to
WPC LPG Cars in accordance with Sections 3.4(h)(iii)(3) or 3.4(h)(v)(4),
WPC shall exercise such option in either event by providing CPC with
written notice to such effect, which notice shall be received by CPC not
less than 45 Days before the end of the Primary Term. The transfer of WPC
LPG Cars pursuant to the exercise of such option shall take place in
accordance with and subject to the terms and provisions of this Section
3.4(h)(vii). Time is of the essence in connection with the exercise of
WPC's option under this Section 3.4(h), and WPC shall be deemed to have
waived such option under this Section 3.4(h) if it does not timely deliver
written notice to CPC exercising such option in accordance with this
Section 3.4(h)(vii)(7). If WPC fails to exercise its option in accordance
with this Section 3.4(h)(vii)(7), WPC's Operating Rights in such LPG Cars
shall terminate and revert to CPC at the end of the Primary Term in
accordance with Section 3.4(h)(ii).
ARTICLE 4
STANDARD OF PERFORMANCE AND CARE
4.1 WPC Standard of Performance. WPC shall perform the WPC Services and shall
require all of its employees and any agents or subcontractors furnishing WPC
Services, to exercise reasonable care and diligence in providing WPC Services to
CPC.
4.2 CPC Standard of Performance. CPC shall perform the CPC Services and shall
require all of its employees and any agents or subcontractors furnishing CPC
Services to exercise reasonable care and diligence in providing CPC Services to
WPC.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of CPC. CPC hereby represents and warrants
to WPC that on and as of the date hereof:
(a) It has all requisite power and authority to carry on the business in which
it is engaged and to perform its respective obligations under this
Agreement;
(b) The execution and delivery of this Agreement have been duly authorized and
approved by all requisite corporate action;
(c) It has all requisite power and authority to enter into this Agreement and
perform its obligations hereunder;
15
(d) The execution and delivery of this Agreement does not, and consummation of
the transactions contemplated herein will not, violate any of the material
provisions of its organizational documents, any material agreement pursuant
to which CPC or its properties are bound or, to its knowledge, any material
laws applicable to CPC; and
(e) This Agreement is valid, binding, and enforceable against it in accordance
with its terms, subject to bankruptcy, moratorium, insolvency and other
laws generally affecting creditors' rights and general principles of equity
(whether applied in a proceeding in a court of law or equity).
5.2 REPRESENTATIONS AND WARRANTIES OF WPC. WPC hereby represents and warrants
to CPC that on and as of the date hereof:
(a) It has all requisite power and authority to carry on the business in which
it is engaged and to perform its respective obligations under this
Agreement;
(b) The execution and delivery of this Agreement have been duly authorized and
approved by all requisite partnership action;
(c) It has all requisite power and authority to enter into this Agreement and
perform its obligations hereunder;
(d) The execution and delivery of this Agreement does not, and consummation of
the transactions contemplated herein will not, violate any of the material
provisions of its organizational documents, any material agreement pursuant
to which WPC or its properties are bound or, to its knowledge, any material
laws applicable to WPC; and
(e) This Agreement is valid, binding, and enforceable against it in accordance
with its terms, subject to bankruptcy, moratorium, insolvency and other
laws generally affecting creditors' rights and general principles of equity
(whether applied in a proceeding in a court of law or equity).
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ARTICLE 6
INDEMNIFICATION
6.1 WPC'S INDEMNITY. WPC AGREES TO INDEMNIFY AND HOLD HARMLESS CPC, ITS
AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND
CONTRACTORS (COLLECTIVELY, THE "CPC INDEMNIFIED PERSONS"), FROM ALL ACTUAL
LOSSES, COSTS, EXPENSES, CLAIMS (INCLUDING, WITHOUT LIMITATION, PERSONAL INJURY
OR PROPERTY DAMAGE CLAIMS), DAMAGES AND CAUSES OF ACTION, INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES AND COSTS OF COURT (COLLECTIVELY, THE
"LOSSES") INCURRED BY THE CPC INDEMNIFIED PERSONS, OR ANY OF THEM, AND PAID TO
THIRD PERSONS RESULTING FROM THE NEGLIGENCE, DISHONESTY, WILLFUL MISCONDUCT OR
GROSS NEGLIGENCE OF WPC (INCLUDING, WITHOUT LIMITATION, ITS OFFICERS, EMPLOYEES,
AGENTS, CONTRACTORS AND AFFILIATES) OR WPC'S BREACH OF THIS AGREEMENT IN
CONNECTION WITH THE PERFORMANCE OF WPC'S OBLIGATIONS UNDER THIS AGREEMENT.
6.2 CPC'S INDEMNITY. CPC AGREES TO INDEMNIFY AND HOLD HARMLESS WPC, ITS
AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND
CONTRACTORS (COLLECTIVELY, THE "WPC INDEMNIFIED PERSONS"), FROM ALL ACTUAL
LOSSES, COSTS, EXPENSES, CLAIMS (INCLUDING, WITHOUT LIMITATION, PERSONAL INJURY
OR PROPERTY DAMAGE CLAIMS), DAMAGES AND CAUSES OF ACTION, INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES AND COSTS OF COURT (COLLECTIVELY, THE
"LOSSES") INCURRED BY THE WPC INDEMNIFIED PERSONS, OR ANY OF THEM, AND PAID TO
THIRD PERSONS RESULTING FROM THE NEGLIGENCE, DISHONESTY, WILLFUL MISCONDUCT OR
GROSS NEGLIGENCE OF CPC (INCLUDING, WITHOUT LIMITATION, ITS OFFICERS, EMPLOYEES,
AGENTS, CONTRACTORS AND AFFILIATES) OR CPC'S BREACH OF THIS AGREEMENT IN
CONNECTION WITH THE PERFORMANCE OF CPC'S OBLIGATIONS UNDER THIS AGREEMENT.
ARTICLE 7
FEES
7.1 COMPENSATION.
(a) WPC COMPENSATION. As compensation for the WPC Services under this
Agreement, CPC shall pay WPC the respective amounts set forth on Exhibits
A-1 through A-4, as applicable, unless a different amount has been agreed
upon in writing by WPC and CPC. Compensation for Non-Exhibit Services
performed by WPC shall be determined in accordance with the applicable RFS.
WPC's compensation shall be paid in accordance with the billing and payment
procedures set forth in Section 7.2.
(b) CPC COMPENSATION. As compensation for the CPC Services under this
Agreement, WPC shall pay CPC the respective amounts set forth on Exhibits
B-1, B-1a or B-2, as applicable, unless a different amount has been agreed
upon in writing by WPC and CPC. Compensation for Non-Exhibit services
performed by WPC shall be determined in accordance with the applicable RFS.
CPC's compensation shall be paid in accordance with the billing and payment
procedures set forth in Section 7.2.
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(c) PERIODIC FEE REDETERMINATION. Every Year after the Effective Date of this
Agreement, either Party shall have the option to open this Agreement solely
for the purpose of renegotiating the fees to be paid for Services rendered
hereunder. To exercise such option, a Party at least ninety (90) Days
before the expiration of such one (1) Year period must provide to the other
Party written notification (the "Renegotiation Notice") of its desire to
renegotiate fees for any or all Services rendered hereunder. In any such
renegotiations, the Parties shall continue to recognize that the fees to be
paid for Services rendered hereunder must reflect the fair market value of
comparable Services provided and received by third Persons who are not
Affiliates of either Party in the area(s) where such Services are being
provided. If, after negotiating in good faith for a period of ninety (90)
Days following the date of the Renegotiation Notice, the Parties are unable
to agree upon a mutually satisfactory fee for the Services in question, the
matter shall be submitted to the alternative dispute resolution procedures
as provided in Article 11 hereof. During the period while such
negotiations or dispute resolution procedures are ongoing until (i) a new
fee is agreed to or (ii) a new fee is established as provided herein, the
fee for the Services in question shall be determined in accordance with the
fee arrangement that was applicable immediately prior to the date of the
Renegotiation Notice. If a new fee is established under this Section
7.1(c), whether by renegotiation, arbitration, or otherwise, such new fee
shall be effective as of, and shall, if necessary, be made retroactive to
the first Day of the applicable one (1) Year period immediately following
the Renegotiation Notice, plus interest thereon at the Base Rate.
(d) HARDSHIP REDETERMINATION. In the event conditions change such that this
Agreement causes, or could reasonably be expected to cause, a material long
term economic or operational hardship to either Party, upon the written
request of either Party, CPC and WPC shall meet to renegotiate in good
faith such burdensome terms and provisions so as to make them fair and
equitable. Such renegotiations shall occur within thirty (30) Days of the
date of the non-requesting Party's receipt of such written request for such
renegotiations. If the Parties are unable to agree on new provisions to
replace such burdensome terms and provisions within ninety (90) Days of the
non-requesting Party's receipt of such written request, the matter shall be
submitted to the alternative dispute resolution procedures set forth in
Article 11 hereof. It is understood and agreed that the rights granted in
this Section 7.1(d) can only be used by a Party to commence good faith
renegotiations once during each Year during the term hereof. If new
provisions are agreed upon under this Section 7.1(d), whether by
renegotiation, arbitration, or otherwise, such new provisions shall be
effective as of, and shall, if necessary, be made retroactive to, the date
on which the notice commencing renegotiations under this Section 7.1(d) was
given, plus interest thereon at the Base Rate. The retroactivity
provisions of the preceding grammatical sentence shall apply only to
economic provisions, and, without limiting or modifying the foregoing, it
is understood and agreed that such retroactivity provisions shall not apply
to operational provisions.
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7.2 BILLING AND PAYMENT.
(a) After rendering Services hereunder, the Party rendering such Services shall
submit an invoice to the other Party by facsimile transmission describing
such Services with reasonable specificity, the amounts due in respect of
such Services and such other information and detail as may be mutually
agreeable to the Parties. By not later than ten (10) Days after the other
Party's receipt of such invoice, such other Party shall pay the Party
delivering the invoice all amounts due for Services rendered in immediately
available funds via wire transfer (or other mutually agreeable manner) into
an account designated by the invoicing Party. If the Day on which any
payment is due is not a Business Day, then the relevant payment shall be
due upon the immediately preceding Business Day, except if such payment due
date is a Sunday or Monday, then the relevant payment shall be due upon the
immediately succeeding Business Day.
(b) If CPC or WPC should fail to remit any amounts in full when due as required
hereunder, or if any adjustments are made under this Agreement, including,
without limitation, adjustments as the result of the conclusion of any
audits or as a result of the resolution of a billing dispute, interest on
the unpaid portion shall accrue from the date upon which such payment
should have been made hereunder until paid in full at the Base Rate. All
such accrued interest shall be added to the amount reflected as being owed
hereunder by either CPC or WPC, as the case may be, on the next invoice or
by separate invoice.
(c) If a good-faith dispute arises as to the amount payable in any statement,
the amount not in dispute shall be paid. If either Party elects to
withhold any payment otherwise due as a consequence of such good-faith
dispute, the withholding Party shall provide the other Party with written
notice of its reasons for withholding payment, and shall simultaneously
place the disputed amount into an escrow account at a mutually acceptable
commercial bank, pending resolution of the dispute. Any such dispute shall
be resolved in accordance with the alternative dispute resolution
procedures set forth in Article 11. The performance of both Parties under
this Agreement shall continue pending the outcome of such procedures. If
it is subsequently determined, whether by mutual agreement of the Parties
or otherwise, that the withholding Party is required to pay all or any
portion of the disputed amounts to the other Party, the withholding Party,
in addition to paying over such amounts, shall also pay interest accrued on
such amounts from the original due date until paid, at the Base Rate.
(d) No retroactive adjustments may be made for any overcharge or under-charge
after a period ending twenty-four (24) Months from the end of the Month in
which the invoice for the Services forming the basis of the overcharge or
undercharge was rendered or not rendered, as the case may be, unless a
claim for such adjustment shall have been presented prior to the end of
such period. Any payment with respect to a retroactive adjustment shall
include an amount equal to interest on all amounts past due, from the date
such amounts should have been paid until the date of their payment, at the
Base Rate, except in instances where neither Party knew or could have known
19
that the overcharge or undercharge occurred, in which case interest on such
amounts shall accrue at the Base Rate from the date of demand for payment
until such amounts are paid.
(e) Either Party, upon notice in writing to the other, shall have the right at
reasonable hours to audit the accounts and records relating to the
accounting or billing under the provisions of any article hereof; provided,
however, that the auditing Party must take written exception to and make
claim upon the other Party for all discrepancies disclosed by said audit
within twenty-four (24) Months of the rendition of any statement or invoice
forming the basis of such claim. Such audit shall be conducted by the
auditing Party's representative or auditor at the auditing Party's expense.
(f) All payments will be made without setoff or counterclaim; provided,
however, that upon a Party's (the defaulting Party) failure to make payment
of undisputed amounts on the due date, the other Party (the non-defaulting
Party) may, at its option and in its discretion, setoff against any amounts
owed to the defaulting Party any amounts owed by the defaulting Party under
this Agreement or otherwise. The obligations of the non-defaulting Party
and the defaulting Party under this Agreement in respect of such amounts
shall be deemed satisfied and discharged to the extent of any such setoff.
The non-defaulting Party will give the defaulting Party notice of any
setoff made under this Section 7.2(f) as soon as practicable after the
setoff is made provided that failure to give such notice shall not offset
the validity of the setoff.
(g) ALL DISPUTES ARISING UNDER THIS ARTICLE 7 THAT ARE NOT OTHERWISE RESOLVED
AS PROVIDED HEREIN SHALL BE SUBMITTED TO THE ALTERNATIVE DISPUTE RESOLUTION
PROCEDURES AS SET FORTH IN ARTICLE 11 HEREOF. TO THE EXTENT THAT ANY SUCH
UNRESOLVED DISPUTE HAS NOT BEEN SUBMITTED TO SUCH ALTERNATIVE DISPUTE
RESOLUTION PROCEDURES WITHIN TWENTY-FIVE (25) MONTHS AFTER THE EVENT
CAUSING THE DISPUTE IS DISCOVERED OR REASONABLY SHOULD HAVE BEEN
DISCOVERED, THE PARTY ASSERTING THE CLAIM IN DISPUTE SHALL BE DEEMED TO
HAVE WAIVED ANY SUCH CLAIM AND ALL RIGHTS HEREUNDER WITH RESPECT THERETO.
ARTICLE 8
OPERATING COMMITTEE
8.1 GENERALLY. For each of the Services rendered hereunder, CPC and WPC agree
to establish an Operating Committee ("Operating Committee") for each Refinery
receiving Services to perform the duties outlined below. The Operating
Committee shall be composed of members from both CPC and WPC, and, where
appropriate, shall include a representative of CPC's Transportation Planning and
Services ("TP&S") group. Duties of the Operating Committee will include, but
will not be limited to, the following:
20
(a) administering and coordinating the routine business of the Operating
Committee, which will include the planning, coordinating, and scheduling of
Services;
(b) determining and developing strategies with respect to Operating Committee
activities;
(c) developing, communicating, and monitoring mutually agreed to standards of
performance for Services;
(d) reviewing all significant equipment, design, process, and operating changes
affecting Services;
(e) conducting regularly scheduled planning, problem solving, and expense
review meetings pertaining to Services;
(f) participating in the alternative dispute resolution procedures as set forth
in Article 11 hereafter; and
(g) developing procedures for making the Parties' performance of Services more
efficient and cost-effective.
ARTICLE 9
CONFIDENTIALITY
9.1 Confidentiality. Each Party agrees that it will maintain this Agreement,
all terms and conditions of this Agreement and all other Confidential
Information (as hereinafter defined) in strictest confidence and that it will
not cause or permit disclosure of Confidential Information to any third Person
without the express written consent of the other Party hereto. Disclosures of
Confidential Information otherwise prohibited by this Article 9 may be made by
either Party: (i) to the extent necessary for such Party to enforce its rights
hereunder against the other Party; (ii) to the extent a Party is contractually
or legally bound to disclose information to a third Person (such as a
shareholder, a commercial lender or a Transferee or a prospective Transferee of
any Refinery); (iii) only to the extent to which a Party hereto is required to
disclose all or part of this Agreement by a statute or by the order of a court,
agency, or other governmental body exercising jurisdiction over the subject
matter hereof, by order, by regulations, or by other compulsory process
(including, but not limited to, deposition, subpoena, interrogatory, or request
for production of documents); (iv) to the extent required by the applicable
regulations of a securities or commodities exchange; or (v) to an Affiliate (but
only if such Affiliate agrees to be bound by the provisions of this Article 9).
"Confidential Information" shall mean any information proprietary to either
Party and maintained by it in confidence or as a trade secret, including,
without limitation, business plans and strategies, proprietary software,
financial statements, customer or client lists, personnel records, analysis of
general energy market conditions, sales, transportation and service contracts
and the commercial terms thereof, relationships with current and potential
business partners, suppliers, customers,
21
service providers and financial sources, data base contents (including but not
limited to the CPC Databases) and valuable information of a like nature relating
to the business of such Party. It is understood and agreed that Confidential
Information shall not include information of a Party that (w) becomes generally
available to the public at the time of disclosure to the other Party, or (x)
after the time of disclosure to the other Party, was generally made available to
the public without breach of this Agreement, or (y) the Person receiving the
information can show was rightfully in its possession at the time of disclosure
or (z) was rightfully acquired by the recipient from third Persons who did not
themselves obtain such information under a confidentiality or other similar
agreement with the Party whose information was disclosed.
9.2 NOTIFICATION OF DISCLOSURE. If either Party is or becomes aware of a fact,
obligation, or circumstance that has resulted or may result in a disclosure of
Confidential Information authorized by this Article 9, it shall so notify the
other Party promptly and shall provide documentation or an explanation of such
disclosure as soon as it is available. Each Party further agrees to cooperate
to the fullest extent in seeking confidential status to protect any Confidential
Information so disclosed.
9.3 DISCLOSURE TO COUNSEL. The Parties hereto acknowledge that independent
legal counsel, certified public accountants or other consultants or independent
contractors of a Party (collectively, "Outside Consultants") may, from time to
time, be provided with a copy of this Agreement if, in the judgment of the
disclosing Party, the information contained in this Agreement is necessary to
the performance of such Outside Consultants' duties. Accordingly, the Parties
agree that such disclosure does not require consent by the other Party, provided
that any such Outside Consultants agree to be bound by the provisions of this
Article 9.
9.4 RESPONSIBILITY FOR CONFIDENTIALITY. Each Party will be deemed solely
responsible and liable for the actions of its employees, Outside Consultants,
officers and agents for maintaining the confidentiality commitments of this
Article 9, but will be required in that regard only to exercise such care in
maintaining the confidentiality of the Confidential Information as such Party
normally exercises in preserving the confidentiality of its other commercially
sensitive information.
ARTICLE 10
FORCE MAJEURE
10.1 In the event either Party is rendered unable, wholly or in part, by Force
Majeure to carry out its obligations under this Agreement, it is agreed that
upon such Party's giving notice and reasonably full particulars of such Force
Majeure in writing to the other Party after the occurrence of the cause relied
on, then the obligations of the Party giving such notice, so far as and to the
extent that they are affected by such Force Majeure, shall be suspended during
the continuance of any inability so caused, but for no longer period, and such
cause shall so far as possible be remedied with all reasonable dispatch. This
Agreement shall not be terminated by reason of any such cause, but shall remain
in full force and effect, and this Agreement shall not be extended regardless of
such curtailment or cessation.
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10.2 The term "Force Majeure" as used herein shall mean acts of God, strikes,
lockouts, or other industrial disturbances, acts of the public enemy, wars,
blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes,
fires, tornadoes, hurricanes, or storms, tornado, hurricane, or storm warnings
which in any Parties' judgment require the precautionary shutdown of a Refinery
or any operating units thereof, or modes of transportation used by WPC to
perform its Services hereunder, floods, washouts, arrests or restraints of the
government, either federal or state, civil or military, civil disturbances,
explosions, sabotage, breakage or accident to equipment, machinery or lines of
pipe, freezing of machinery, equipment or lines of pipe, electric power
shortages, inability of any Party to obtain necessary permits and/or permissions
due to existing or future rules, orders, laws or governmental authorities (both
federal, state and local), shutdowns of a Refinery or any operating units
thereof or modes of transportation used by WPC to perform its Services hereunder
due to explosion or other extraordinary incident, or any other causes, whether
of the kind herein enumerated or otherwise, which were not reasonably
foreseeable on the Effective Date, and which are not within the control of the
Party claiming suspension and which such Party is unable to overcome by the
exercise of due diligence. It is understood and agreed that the settlement of
strikes or lockouts shall be entirely within the discretion of the Party having
the difficulty, and that the above requirement that any Force Majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of opposing parties when such
course is inadvisable in the discretion of the Party having difficulty. The
term "Force Majeure" shall also include any such event occurring with respect to
the facilities or services of either CPC's or WPC's third Party suppliers or
customers delivering or receiving any product, fuel, feedstock, or other
substance necessary to the performance of such Party's obligations, and shall
also include curtailment or interruption of deliveries or service by such third
Party suppliers or customers as a result of another event of Force Majeure.
ARTICLE 11
ALTERNATIVE DISPUTE RESOLUTION PROCEDURES
11.1 Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach or performance hereof, including, but not limited to,
any disputes concerning the interpretation of the terms and provisions hereof,
shall be resolved through the use of the following procedures:
(a) The Parties will initially attempt in good faith to resolve any disputes,
controversy or claim arising out of or relating to this Agreement.
(b) Should the Parties directly involved in any dispute, controversy or claim
be unable to resolve same within a reasonable period of time, such dispute,
controversy or claim shall be submitted to the Operating Committee with
such explanation or documentation as the Parties deem appropriate to aid
the Operating Committee in their consideration of the issues presented.
The date the matter is first submitted to the Operating Committee shall be
referred to as the "Submission Date." The Operating Committee
representatives shall attempt in good faith, through
23
the process of discussion and negotiation, to resolve any dispute,
controversy, or claim presented to it within forty-five (45) Days after the
Submission Date.
(c) If the Operating Committee representatives cannot so resolve any dispute,
controversy, or claim submitted to it within forty-five (45) Days after the
Submission Date, the Parties shall attempt in good faith to settle the
matter by submitting the dispute, controversy or claim to mediation within
sixty (60) Days after the submission date using any mediator upon which
they mutually agree. If the Parties are unable to mutually agree upon a
mediator within seventy-five (75) Days after the Submission Date, the case
shall be referred for mediation to the office of Judicial Arbitration and
Mediation Services, Inc. ("JAMS") in Houston, Texas. The cost of the
mediator will be split equally between the Parties unless they agree
otherwise in writing.
(d) If the matter has not been resolved pursuant to the aforesaid mediation
procedure within thirty (30) Days of the initiation of such procedure, or
if either Party will not participate in such mediation, either Party may
request that the matter be resolved through arbitration by submitting a
written notice (the "Arbitration Notice") to the other. Any arbitration
that is conducted hereunder shall be governed by the Federal Arbitration
Act, 9 U.S.C. (S) 1 et seq., and will not be governed by the arbitration
acts, statutes or rules of any other jurisdiction.
(e) The Arbitration Notice shall name the noticing Party's arbitrator and shall
contain a statement of the issue(s) presented for arbitration. Within
fifteen (15) Days of receipt of an Arbitration Notice, the other Party
shall name its arbitrator by written notice to the other and may designate
any additional issue(s) for arbitration. The two named arbitrators shall
select the third arbitrator within fifteen (15) Days after the date on
which the second arbitrator is named. Should the two arbitrators fail to
agree on the selection of the third arbitrator, either Party shall be
entitled to request the Senior Judge of the United States District Court
for the Southern District of Texas to select the third arbitrator. All
arbitrators shall be qualified by education or experience within the
liquefied petroleum gas, natural gas liquids, or petroleum refining
industry to decide the issues presented for arbitration. No arbitrator
shall be: a current or former director, officer or employee of either
Party, or its Affiliates; an attorney (or member of a law firm) who has
rendered legal services to either Party, or its Affiliates, within the
preceding three (3) Years; or an owner of any of the common stock of either
Party or its Affiliates.
(f) The three arbitrators shall commence the arbitration proceedings within
twenty-five (25) Days following the appointment of the third arbitrator.
The arbitration proceedings shall be held at a mutually acceptable site and
if the Parties are unable to agree on a site, the arbitrators shall select
the site. The arbitrators shall have the authority to establish rules and
procedures governing the arbitration proceedings. Each Party shall have
the opportunity to present its evidence at the hearing. The arbitrators
may call for the submission of pre-hearing statements of position and legal
authority, but no post-hearing briefs shall be submitted. The arbitration
panel shall not have the authority to award punitive, exemplary or
consequential damages. The arbitrators' decision must be rendered within
thirty (30) Days following the conclusion of the hearing or submission of
evidence, but no later than ninety (90) Days after the
24
appointment of the third arbitrator. With respect to disputes regarding the
value of transferred LPG Cars under Section 3.4(h)(vii) or fee
redeterminations under Article 7, each Party shall submit to the
arbitration panel a final offer of its proposed resolution of the dispute.
A majority of the arbitrators shall approve the final offer of one Party
without modification, and reject the offer of the other Party.
(g) The decision of the arbitrators or a majority of them, shall be in writing
and shall be final and binding upon the Parties as to the issue(s)
submitted. The cost of the hearing shall be shared equally by the Parties,
and each Party shall be responsible for its own expenses and those of its
counsel or other representatives. Each Party hereby irrevocably waives, to
the fullest extent permitted by law, any objection it may have to the
arbitrability of any such disputes, controversies or claims and further
agrees that a final determination in any such arbitration proceedings shall
be conclusive and binding upon each Party. Judgment on the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
The prevailing Party shall be entitled to recover reasonable attorneys'
fees and court costs in any court proceeding relating to the enforcement or
collection of any award or judgment rendered by the arbitration panel under
this Agreement.
(h) All deadlines specified herein may be extended by mutual written agreement
of the Parties. The procedures specified herein shall be the sole and
exclusive procedures for the resolution of disputes between the Parties
arising out of or relating to this Agreement; provided, however, that a
Party may seek a preliminary injunction or other preliminary judicial
relief if in its judgment such action is necessary to avoid irreparable
damage. Despite such action, the Parties will continue to participate in
good faith in the procedures specified herein. All applicable statutes of
limitation, including, without limitation, contractual limitation periods
provided for in this Agreement shall be tolled while the procedures
specified in this Section 11 are pending. The Parties will take all
actions, if any, necessary to effectuate the tolling of any applicable
statutes of limitation.
ARTICLE 12
MISCELLANEOUS
12.1 INTEGRATION, AMENDMENTS, AND WAIVER. This Agreement, including, without
limitation, all exhibits hereto, integrates the entire understanding between the
Parties with respect to the subject matter covered and supersedes all prior
understandings, drafts, discussions, or statements, whether oral or in writing,
expressed or implied, dealing with the same subject matter. This Agreement may
not be amended or modified in any manner except by a written document signed by
both Parties that expressly amends this Agreement. No waiver by CPC or WPC of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver unless expressly provided. No waiver
shall be effective unless made in writing and signed by the Party to be charged
with such waiver. Notwithstanding the foregoing, however, if there is a conflict
between this Agreement and a RFS, the RFS shall control.
25
12.2 INDEPENDENT RELATIONSHIP. Nothing contained in this Agreement shall be
construed to create an association, trust, partnership, or joint venture or
impose a trust or partnership duty, obligation, or liability on or with regard
to either Party.
12.3 BINDING NATURE; ASSIGNMENT AS SECURITY. Except as provided in this
Section 12.3, neither Party may assign all or any part of its rights or
obligations under this Agreement without the prior written consent of the other
Party, such consent to be granted at the sole discretion of the other Party,
except that (i) either Party may assign its rights hereunder to any Affiliate of
such Party without the approval of the other Party (but such assignment shall in
no way relieve or release the assigning Party from any obligations hereunder,
whether accrued or unaccrued, unless consented to in writing by the non-
assigning Party, such consent to be granted at the sole discretion of such
Party) and (ii) either Party may, for collateral purposes, mortgage, pledge,
encumber or grant a security interest in or a lien on its interest in this
Agreement and/or its rights hereunder to any commercial bank, trustee or other
Person acting on behalf of any such commercial bank, but only with the prior
consent of the other Party, such consent not to be unreasonably withheld. Any
transfer or assignment in violation of this Section 12.3 shall be void.
12.4 CHOICE OF LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES
ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED, AND
PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS THE SAME MAY BE
AMENDED FROM TIME TO TIME, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF
LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF TEXAS.
12.5 CONFLICTS OF INTEREST. No director, employee, or agent of either Party
shall give or receive any commission, fee, rebate, gift, or entertainment of
significant cost or value in connection with this Agreement.
12.6 REPORTS AND RECORD KEEPING. Each Party shall provide the other Party with
such reports as may be mutually agreeable to both Parties. Each Party shall
maintain such records and accounts as may be necessary to the performance of its
respective duties and obligations hereunder, in accordance with good business
practices.
12.7 REMEDIES.
(a) FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF
DAMAGES IS PROVIDED IN THIS AGREEMENT, SUCH EXPRESS REMEDY OR MEASURE OF
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND THE OBLIGOR'S
LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER
REMEDIES OR DAMAGES ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS
26
EXPRESSLY PROVIDED HEREIN, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO
DIRECT ACTUAL DAMAGES ONLY, EXCLUDING LOST PROFITS, AND SUCH DIRECT ACTUAL
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND ALL OTHER
REMEDIES OR DAMAGES ARE WAIVED. IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY UNDER ANY PROVISION OF THIS AGREEMENT (INCLUDING,
WITHOUT LIMITATION, ANY INDEMNITY PROVISION HEREOF) FOR CONSEQUENTIAL,
INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES IN TORT OR CONTRACT. EXCEPT AS
EXPRESSLY PROVIDED HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
UNDER ANY PROVISION OF THIS AGREEMENT FOR INCIDENTAL DAMAGES. TO THE
EXTENT ANY PAYMENT REQUIRED TO BE MADE PURSUANT TO ANY PROVISION OF THIS
AGREEMENT IS AGREED BY THE PARTIES TO CONSTITUTE LIQUIDATED DAMAGES, THE
PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO
DETERMINE, AND THAT SUCH PAYMENT CONSTITUTES A REASONABLE APPROXIMATION OF
THE AMOUNT OF SUCH DAMAGES.
(b) Except as otherwise provided herein, each Party reserves to itself all
rights, setoffs, counterclaims, and other remedies and/or defenses which
such Party is or may be entitled to arising from or out of this Agreement
or as otherwise provided by law.
12.8 NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole benefit of
the Parties and their respective successors and permitted assigns, and shall not
inure to the benefit of any other Person whomsoever, it being the intention of
the Parties that no Person shall be deemed a third Party beneficiary of this
Agreement.
12.9 NOTICES. Any notice or other communication provided for in this Agreement
or any notice which either Party may desire to give to the other shall be in
writing and shall be deemed to have been properly given if and when sent by
facsimile transmission, delivered by hand, or if sent by mail, upon deposit in
the United States mail, either U.S. Express Mail, registered mail, or certified
mail, with all postage fully prepaid, or if sent by courier, by delivery to a
bonded courier with charges paid in accordance with the customary arrangements
established by such courier, in each case addressed to the Parties at the
following addresses:
If to CPC: Chevron Products Company
To the Refinery Manager for each Refinery receiving the Services
at issue and in need of notice herein, at the addresses set
forth in the applicable Feedstock Agreements.
In addition, for matters involving LPG Car Services:
Chevron Products Company
Manager, Rail Transportation Services
000 Xxxxxx Xxxx
27
Section 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: 510/000-0000
Facsimile: 510/977-7066
In all situations, with a copy to:
Vice President and General Counsel
Chevron Products Company
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to WPC: Xxxxxx Petroleum Company, Limited Partnership
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Vice President and General Manager - NGL Marketing
Telephone: 713/000-0000
Facsimile: 713/507-6834
with a copy to:
Vice President and General Counsel
Xxxxxx Petroleum Company, Limited Partnership
00000 Xxxxxxxxx Xxxxxxx - Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: 713/000-0000
Facsimile: 713/507-6834
or at such other address as either Party shall designate by written notice to
the other. A notice sent by facsimile shall be deemed to have been received by
the close of the Business Day following the Day on which it was transmitted and
confirmed by transmission report or such earlier time as confirmed orally or in
writing by the receiving Party. Notice by U.S. Mail, whether by U.S. Express
Mail, registered mail, or certified mail, or by overnight courier shall be
deemed to have been received by the close of the second Business Day after the
Day upon which it was sent, or such earlier time as is confirmed orally or in
writing by the receiving Party. Any Party may change its address or facsimile
number by giving notice of such change in accordance with the terms of this
Section 12.9.
12.10 Government Regulation. This Agreement and the operations hereunder shall
be subject to the valid and applicable federal and state laws and the valid and
applicable orders, laws, local ordinances, rules, and regulations of any local,
state or federal authority having jurisdiction, but nothing contained herein
shall be construed as a waiver of any right to question or contest any
28
such order, laws, local ordinances, rules, or regulations in any forum having
jurisdiction in the premises.
12.11 Safe Practices. Both Parties acknowledge that they are familiar with,
and shall take all steps necessary to inform, warn and familiarize their
respective employees, agents, customers and contractors who may be affected by
the provision or receipt of Services of all hazard and proper safety procedures
pertaining thereto.
12.12 Construction of Agreement. IN CONSTRUING THIS AGREEMENT, THE FOLLOWING
PRINCIPLES SHALL BE FOLLOWED:
(a) no consideration shall be given to the fact or presumption that one Party
had a greater or lesser hand in drafting this Agreement;
(b) examples shall not be construed to limit, expressly or by implication, the
matter they illustrate;
(c) the word "includes" and its syntactical variants mean "includes, but is not
limited to" and corresponding syntactical variant expressions; and
(d) the plural shall be deemed to include the singular and vice versa, as
applicable; and
(e) captions used in this Agreement are for the Parties' convenience only, and
shall not be used in its construction or interpretation.
12.13 Severability. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable under the present or future laws effective during the
term of this Agreement, (i) such provision will be fully severable, (ii) this
Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement, and (iii)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid, or unenforceable provision or
by its severance from this Agreement. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there will be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and may be legal, valid and
enforceable. If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, the foregoing event shall not affect the
validity or enforceability in that jurisdiction of any other provision of this
Agreement nor the validity or enforceability in other jurisdictions of that or
any other provision of this Agreement.
12.14 Further Assurances. Each Party shall take such acts and execute and
deliver such documents in form and substance reasonably satisfactory to each of
them, in order to effectuate the
29
purposes of this Agreement. This Section 12.14 neither limits nor modifies the
rights and obligations of the Parties to cooperate in accordance with the terms
of Section 3.2(c).
12.15 WAIVER OF CONSUMER RIGHTS. EACH PARTY EXECUTING THIS AGREEMENT AS A
BUYER OR SELLER HEREBY WAIVES ITS RESPECTIVE RIGHTS UNDER THE DECEPTIVE TRADE
PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., TEXAS BUSINESS &
COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, EACH PARTY EXECUTING THIS
AGREEMENT VOLUNTARILY CONSENTS TO THIS WAIVER. IN ADDITION, EACH PARTY
EXECUTING THIS AGREEMENT HEREBY REPRESENTS AND WARRANTS THAT (I) SUCH PARTY'S
LEGAL COUNSEL WAS NOT DIRECTLY OR INDIRECTLY IDENTIFIED, SUGGESTED, OR SELECTED
BY THE OTHER PARTY EXECUTING THIS AGREEMENT OR BY AN AGENT OF SUCH OTHER PARTY
SELLER, AND (II) NEITHER PARTY EXECUTING THIS AGREEMENT IS IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION.
12.16 Insurance. Each Party agrees to carry insurance of the types and in the
amounts mutually agreed to by the Parties. Either Party may elect to self-
insure for all or any portion of such coverages without the consent of the other
Party.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the Day and
Year first above written.
CHEVRON PRODUCTS COMPANY XXXXXX PETROLEUM COMPANY,
a Division of Chevron U.S.A. Inc. LIMITED PARTNERSHIP
By: XXXXXX PETROLEUM G.P., INC.
By: __________________________ By: ____________________________
Name: ________________________ Name: __________________________
Title: _______________________ Title: _________________________
30
EXHIBITS AND SCHEDULES
Exhibit A-1 WPC Transportation Services
Exhibit A-2 WPC Feedstock Products Storage Services
Exhibit A-3 WPC Isomerization Services
Exhibit A-4 WPC Feedstock Products Transfer Services
Exhibit B-1 CPC Rail Transportation Services
Exhibit B-1a Fee for CPC Rail Services
Exhibit B-2 CPC Freight Audit and Payment Services
Exhibit C Request for Services
Exhibit D WPC Acknowledgment of Security Procedures and Conditions
Schedule 3.4(h) Illustration of LPG Car Payment Under Section 3.4(h)(vii)(6)
31
EXHIBIT A-1
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
WPC TRANSPORTATION SERVICES
SCOPE OF SERVICES: WPC shall perform all Services reasonably requested in
connection with the transportation of Products. In general, WPC will be
required under Exhibits A-1 through A-4 to:
1. Determine the availability of modes of transportation for such Products;
2. Secure the availability of trucks, barges, pipelines or other modes of
transportation (excluding rail cars);
3. Dispatch, on a Daily basis, the foregoing modes of transportation for such
Products;
4. Trace and track LPG Cars, trucks, barges or other modes of transporting
Products; and
5. Negotiate commercially reasonable freight rates for LPG Cars, trucks, barges
and other modes of transporting Products.
In addition, WPC shall perform the Services more particularly described in Parts
I, II and III of this Exhibit.
Part I -- LPG Car Operation Services
------------------------------------
1. Through the use of the RMS, track the actual movements of all LPG Cars.
2. Generate and review reports from the RMS to monitor all rail activities,
including providing reports to shipping locations and receiving locations.
3. In consultation with CPC, schedule LPG Cars to be in place to meet
Refinery needs.
4. Plan and coordinate LPG Car fleet sizing requirements.
5. Resolve scheduling and dispatching problems of LPG Cars in transit.
32
6. Coordinate the scheduling of LPG Cars into maintenance shops for required
inspections.
7. Work with Refineries, Refinery customers and TP&S maintenance specialists on
handling LPG Cars that need maintenance in addition to required inspections.
8. Maintain rail tariff, rate files and associated data bases and provide
reports on rail tariffs and rates to such CPC personnel as are necessary to
perform the Services as set forth in Exhibits B-1, B-1a and B-2.
9. Attend DOT and AAR hazardous material seminars and training sessions.
10. Review all DOT/AAR publications for changes in regulations that would
affect the shipping of LPG Cars or any other regulation that might affect the
LPG Cars.
11. Assist in training CPC personnel in preparing and shipping LPG Cars in
accordance with all applicable DOT and AAR regulations.
12. Work with all government and industry groups on issues regarding
odorization of Propane in LPG Cars.
13. Assist in developing and communicating quality standards for all Products
that are shipped by CPC.
14. Maintain an Emergency Response Procedure in accordance with applicable
law.
15. Enter orders into CPS for Products shipped from each Refinery.
Part II -- Commercial Truck Operation Services
----------------------------------------------
1. Review third Person carrier insurance coverage for compliance with CPC and
DOT policies.
2. Review third Person carrier Motor Carrier Safety rating for compliance with
CPC and DOT policies.
3. Have third Person carrier complete Motor Carrier Safety Survey.
33
4. Have third Person carrier complete Chemical Manufacturers Association
Highway Carrier Assessment Protocol.
5. Work with all government and industry groups on issues regarding odorization
of Propane in trucks.
6. Provide freight rate or other pertinent information to FIS.
7. Assist in resolving freight xxxx problems.
8. Conduct on-site safety audits of third Person carriers.
9. Perform DOT/SFH reviews on all common carrier trucks used by CPC.
10. Enter orders into CPS for truck shipments of Products shipped from the
Refineries.
Part III -- Barge Operation Services
------------------------------------
1. Monitor all regulatory developments applicable to barges and the movement of
Products on barges, including issues regarding the odorization of Propane.
2. Perform compliance reviews for all marine terminals and transport operations
pertinent to the transportation of Products.
3. Develop emergency response and spill plans for facilities to comply with
applicable federal, state and local requirements.
4. Maintain training programs that comply with federal HAZMAT regulations.
FEES: The consideration for WPC providing the transportation Services set forth
in Exhibit A-1 in connection with the transportation of Feedstocks and Refinery
Products as provided in the Feedstock Agreements is included in the pricing
provisions of each Feedstock Agreement. In addition, the fees for
transportation Services set forth herein are included in the fees set forth in
Exhibits X-0, X-0 and A-4.
34
"Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission."
EXHIBIT A-2
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
WPC FEEDSTOCK PRODUCTS STORAGE SERVICES
SCOPE OF SERVICES: WPC will perform all Services reasonably requested in
connection with the storage of Feedstock Products, including but not limited to:
1. Negotiating, in consultation with CPC, commercially reasonable leases or
other contractual arrangements for the storage of Feedstock Products;
2. Consulting with the Refineries in connection with the management of
Feedstock Products inventories including accounting for volumes of Feedstock
Products moved into and out of storage facilities; and
3. Any other Services mutually agreed to in writing by the Parties.
* REDACTED
35
"Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission."
EXHIBIT A-3
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
WPC ISOMERIZATION SERVICES
SCOPE OF ISOMERIZATION SERVICES: WPC will perform all Services reasonably
requested in connection with the isomerization and general processing of Mixed
Butanes into Isobutane, including but not limited to:
1. Negotiating, in consultation with CPC, (i) commercially reasonably
relationships with third Persons providing services (including, without
limitation, storage services) with respect to isomerization and general
processing of Mixed Butanes into Isobutane and (ii) planning and accounting for
Daily movements of Mixed Butanes and Isobutane into and out of the Refineries
and relevant isomerization facilities (such Refineries and facilities being
collectively called the "Locations") according to their Daily Mixed Butanes and
Isobutane requirements;
2. Arranging for storage of Mixed Butanes and Isobutane at the Locations; and
3. Any other Services mutually agreed to in writing by the Parties.
* REDACTED
36
"Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission."
EXHIBIT A-4
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
WPC FEEDSTOCK PRODUCTS TRANSFER SERVICES
SCOPE OF SERVICES: WPC will perform all Services reasonably requested in order
to effectuate the transfer of Feedstock Products between the Refineries,
including but not limited to:
1. Scheduling movement of Feedstock Products between Refineries;
2. Determining the availability of LPG Cars for the transportation of such
Feedstock Products ;
3. Securing the availability of trucks, barges, pipelines and other related
equipment for such transportation;
4. Daily dispatching of LPG Cars and other means of transporting Feedstock
Products;
5. Negotiating commercially reasonable freight rates for LPG Cars and other
means of transporting Feedstock Products; and
6. Any other Services mutually agreed to in writing by the Parties.
* REDACTED
37
EXHIBIT B-1
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
CPC RAIL TRANSPORTATION SERVICES
SCOPE OF SERVICES: CPC will perform the following Services in connection with
WPC's rail transportation of Products and Third-Party LPG:
1. Providing WPC with access to CPC's car tracking data systems currently used
(or planned) at mutually agreeable Refinery locations and WPC locations, subject
to the limitations set forth below in this Exhibit B-1 and any and all
limitations in the applicable Database Agreements;
2. Managing and operating RMS, BLS and RAS components of the CPC Databases;
3. Managing accounting for the LPG Cars;
4. Using commercially reasonable efforts to: (i) provide rail car capacity as
requested by WPC for transportation Services; (ii) administer Leases; (iii)
negotiate (in consultation with WPC) new Lease(s) or the purchase of LPG Cars,
subject to the provisions of Exhibit B-1a; and (iv) process Lease rental
payments;
5. Providing the following maintenance services for LPG Cars:
(a) oversee shop work to ensure the use of appropriate repair
practices and procedures;
(b) coordinate LPG Car maintenance schedules with WPC;
(c) develop planned maintenance activity schedules for LPG Cars in
consultation with WPC;
(d) contract with maintenance shops and others for required LPG Car
maintenance work;
(e) review LPG Car maintenance invoices for appropriateness and
process them for payment; and
38
(f) manage the response to government-mandated rail car maintenance
programs for all LPG Cars, including coordinating and reporting
routine DOT compliance maintenance and testing activities (such
as, for example, safety valve and tank testing);
6. Providing a reasonable number of WPC personnel or contractors with training
on applicable CPC Databases (to the extent permitted under license agreements
applicable to such Databases) to permit such WPC personnel or contractors to
perform car tracking and scheduling functions;
7. Supervising and monitoring the following accounting functions with respect
to the LPG Cars:
(a) processing and payment of pertinent LPG Car-related invoices;
(b) processing of certain LPG Car-related receivables, including but
not limited to LPG Car mileage credits;
(c) providing to CPC and WPC pertinent tax reporting information, as
needed;
(d) processing LPG Car mileage equalization invoices;
(e) distributing and allocating costs among LPG Cars in accordance
with Exhibit B-1a; and
(f) summary reporting to WPC of pertinent accounting information
relating to the LPG Cars;
8. Updating UMLER, including the review of car mileage credit rating records to
ensure proper payment of credits due and making routine contacts with AAR
personnel regarding the foregoing and related matters;
9. Monitoring and participating in DOT and AAR related legislative and other
public affairs activities to gauge impact on CPC and WPC operations hereunder;
10. Procuring CLM services and car mileage credit auditing services on
commercially reasonable terms;
11. Overseeing activities intended to enhance and update the CPC Databases;
and
12. Any other Services mutually agreed to in writing by the Parties.
39
OTHER PROVISIONS: It is understood and agreed that (a) WPC's access to the
Databases shall not include tracking systems for CPC Cars
other than the LPG Cars, and (b) CPC shall have no
obligation under any circumstances to add WPC-owned or WPC-
Leased rail cars to the CPC Databases, or to provide any
Services with respect to such rail cars. CPC may take all
steps reasonably necessary, consistent with the foregoing,
to ensure the integrity of the CPC Databases (including but
not limited to its car tracking data systems) for all CPC
Cars. Any incremental costs or expenses that are approved
by WPC in writing prior to incurring same and attributable
to providing WPC with access to CPC's car tracking data
systems or other CPC Databases (including but not limited to
amounts reasonably incurred in amending applicable license
agreements and increased fees and cost reimbursements
payable under such agreements) shall be borne solely by WPC.
FEES: Calculated in accordance with the procedures set forth in Exhibit B-1a.
NOTICES: Notices to CPC in respect of CPC Services hereunder shall be given in
accordance with and subject to Section 12.9 of the Agreement to:
Chevron Products Company
Transportation Planning and Services Group
000 Xxxxxx Xxxx
Section 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Manager, Rail Transportation Services
Telephone: 510/000-0000
Facsimile: 510/977-7066
With a copy to:
Vice President and General Counsel
Chevron Products Company
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: 415/000-0000
Facsimile: 415/894-5489
40
EXHIBIT B-1A
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
FEE FOR CPC RAIL SERVICES
-------------------------
LEASE COSTS
-----------
LPG Car Lease costs (including, but not limited to, rentals and tax and other
cost reimbursements to the owner of an LPG Car) are payable Monthly in advance.
These costs are paid by CPC on receipt of invoice, according to Lease terms.
Detailed cost information on these Lease payments is retained in RAS on an LPG
Car-by-LPG Car basis. Costs are assigned to and payable by WPC in the following
Month for Propane Cars. Determination of Propane Car Lease costs allocable to
WPC shall be made in accordance with Note 1 below.
MAINTENANCE/REPAIR COSTS
------------------------
LPG Car maintenance expense is payable to contract shops and railroads depending
on actual work performed. These costs are paid by CPC on receipt of invoice,
according to contract terms. Maintenance cost information is retained in RAS on
an LPG Car-by-LPG Car basis. Costs will be charged to WPC for Propane Cars on a
Monthly basis. (*See Note 1 below.)
MATERIAL SUPPLY COSTS
---------------------
Material purchase costs which are not a part of normally scheduled maintenance
activities (such as, for example, special purchases or purchases in advance) are
accrued in this category. Invoices for material supply are paid by CPC
according to invoice terms. Material supply cost information is retained in RAS
on an LPG Car-by-LPG Car basis or fleet user code basis when appropriate. Costs
in this category will be allocated to WPC if special material purchases are
requested by WPC, or if Propane Cars have required special material purchases.
(*See Note 1 below.)
INFORMATION SERVICES COSTS
--------------------------
Fees paid to contractors who supply CLM and car mileage data are retained in RAS
on a distributed basis. The costs are divided equally among all CPC Cars. A
pro rata portion of these costs will be charged to WPC based on the ratio of
Propane Cars to all CPC Cars. (*See Note 1 below.)
MILEAGE EQUALIZATION COSTS
--------------------------
Mileage equalization charges are received from the AAR for all rail cars owned
by CPC and from each lessor for all rail cars Leased by CPC. These costs are
divided among all CPC Cars based on their calculated share of excess empty trip
miles (defined as all empty miles in excess of 106% of loaded miles). This
calculation is done each calendar year by TP&S for all CPC Cars using actual
route mileage and shipment information in the CPC Databases. Invoices for
mileage equalization are usually received in the third or fourth quarter for the
preceding calendar year and are processed
41
on receipt. Mileage equalization charges for WPC's account will be based on
WPC's actual Propane Car shipment activity and its calculated share of excess
empty miles.
INSPECTION FEES
---------------
Contract fees paid for mileage credit auditing services (provided by RELAM) are
paid by CPC and captured in RAS on a distributed basis as Inspection Fees. The
costs are divided among all CPC Cars according to the number of CPC Cars
assigned to each fleet with an equal share charged per CPC Car. A pro rata
portion of these costs will be allocated to WPC for Propane Cars. (*See Note 1
below.)
PROPERTY TAX COSTS
------------------
Rail car property taxes applicable to the LPG Cars shall be paid each calendar
year by the CUSA tax group. These tax payments are accrued monthly by the tax
group and are charged to TP&S through the CPC Databases. The accruals are
captured on a pro rata basis in RAS based on an approximation of the current
value. During the first quarter of each calendar year, detailed state-by-state
mileage reports are issued by TP&S. These reports are used by the CUSA tax
department to determine actual tax liabilities and payments to the various
government entities. The actual payments are then used to adjust the current
calendar year accruals for estimated tax payments. A pro rata portion of these
costs will be allocated to WPC for Propane Cars. (*See Note 1 below.)
DEPRECIATION EXPENSES
---------------------
Depreciation expenses for LPG Cars owned by CPC are charged to TP&S and are
captured on an LPG Car-by-LPG Car basis. These LPG Car-specific costs will be
allocated to WPC for Propane Cars. Depreciation costs are calculated on CPC's
standard calculation for assets of this class. (*See Note 2 below).
GENERAL & ADMINISTRATIVE EXPENSES
---------------------------------
General and administrative expenses ("G&A") include (but are not limited to)
labor and burden, office expense, travel, miscellaneous expense, and computer
systems charges for LPG Car administration. G&A is divided equally among all
CPC Cars. As of March 1, 1996, there were approximately 2000 CPC Cars. A
portion of G&A is charged Monthly to WPC based on the number of CPC Cars that
are Propane Cars. (*See Note 1 and Note 3 below.) G&A statements are generated
and billed internally by CPC, and will be allocated to WPC on an equivalent
basis to other internal customers served by TP&S.
MILEAGE CREDITS
---------------
Mileage credits (also referred to as "car hire credits") received are captured
in RAS on a CPC Car-by-CPC Car basis. (*See Note 1 below.) These credits shall
be rebated to WPC for CPC Cars that are Propane Cars. Due to delays in
processing mileage data by the AAR, mileage credits are paid three (3) Months in
arrears. RELAM is currently used for auditing mileage credit payments to ensure
that credits are received when due. RELAM's fee is based on a percentage of
actual
42
underpayments recovered. No reverse audit is presently performed - i.e., if
mileage credits are overpaid, there is no mechanism for detecting the
overpayment. If CPC is billed for overpayment of mileage credits, WPC will be
responsible for rebating the full amount of the overpayment attributable to
Propane Cars after receipt, in accordance with the billing procedures set forth
in Article 7 of the Agreement. (*See Note 1 below.)
*NOTES
------
1. (a) Allocation of costs among LPG Cars shall be made according to the
allocation of LPG Cars between Butane Cars and Propane Cars, as such cars
are assigned in the CPC Databases pursuant to WPC or Refinery coding, as
applicable, according to the actual assignment of LPG cars on the last Day
of the applicable Month unless specifically noted otherwise. It is
understood and agreed that all costs allocable to LPG Cars engaged in WPC
Third-Person Carriage shall be borne solely by WPC. The Parties
acknowledge that CPC is currently in the process of updating and enhancing
the CPC Databases, and as soon as reasonably possible CPC and WPC agree (i)
to establish, by not later than the Effective Date, a method reasonably
satisfactory to the Parties to ensure that costs allocable to WPC Third-
Person Carriage are not borne by CPC (such method being called the "Cost
Allocation Method"), and (ii) to establish a method reasonably satisfactory
to the Parties to allocate costs among LPG Cars on the basis of such Cars'
actual usage for Butane Car purposes, Propane Car purposes or WPC Third-
Person Carriage, as applicable (such method of cost allocation to be
referred to as the "Usage Method"), and shall exercise commercially
reasonable efforts to agree upon a method for measuring and providing each
Party with accurate information regarding the actual usage of each LPG Car.
Without limiting the generality of any other provision of this Agreement
(including, but not limited to, Sections 3.2 and 12.14), the Parties agree
to take such acts (including, but not limited to, providing all reasonably
necessary personnel and funds) and to execute and deliver such documents
(including but not limited to any amendments to this Agreement) reasonably
necessary to evidence and confirm the adoption of a Cost Allocation Method
and a Usage Method that is commercially reasonable and otherwise mutually
satisfactory to the Parties.
(b) The applicable calendar month shall correspond to the Month in which
pertinent invoices or receivables are processed. With respect to such a
Month, the RAS close normally occurs on the 18th Business Day of the next
Month; items after such Day shall be processed in the following Month.
2. Depreciation for CPC-owned LPG Cars is billed at the established rate
according to GAAP. A substantial number of LPG Cars will be retired at the
mandatory 40 year age within the next six calendar years. Replacement of
these LPG Cars will be made in consultation with WPC; however, CPC reserves
the right to determine whether CPC should make this replacement through
capital investment. Other options would include Leasing replacement LPG
Cars from third Persons. In the event CPC elects (after consultation with
WPC) to
43
"Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission."
purchase replacement LPG Cars, the expenses charged to WPC will include a
reasonable capital cost recovery factor for each such LPG Car. Failure of
the Parties to agree upon a capital cost recovery factor for any such LPG
Car within 30 Days after CPC begins negotiations with WPC regarding such
factor shall be submitted to the alternative dispute resolution procedures
in Article 11. For purposes of determining whether a capital cost recovery
factor is "reasonable" for purposes of the foregoing, the Parties agree
that such factors shall not exceed the cost payable for a long term lease
of a comparable LPG Car.
3. * G&A allocation to Propane Cars will be the lesser of (a) REDACTED per LPG
* Car per Year (billed at REDACTED per LPG Car per Month) or (b) actual
G&A, as determined under this Exhibit B-1a. Beginning on the last to
occur of (x) January 1, 1997, or (y) the Month following the Month in
which the updated and enhanced CPC Databases, modified in accordance with
Note 1 above, have begun commercial operation, and for the remaining term
of this Agreement, G&A allocation to Propane Cars shall be determined in
accordance with "General and Administrative Expenses" above.
44
EXHIBIT B-2
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
CPC FREIGHT AUDIT AND PAYMENT SERVICES
SCOPE OF SERVICES: CPC will perform the following Services for WPC related to
the processing, pre-audit and payment of WPC's commercial rail, truck and air
freight invoices, including the following:
1. Data management of WPC's billing and audit information, including:
(a) capture invoice data electronically or manually, as appropriate;
(b) controlling and improving WPC carrier billing practices;
(c) maintaining and monitoring minimum billing requirements;
(d) developing Electronic Data Interface ("EDI")/Electronic Funds
Transfer ("EFT") partnerships with carriers;
(e) maintaining contract and tariff rates charged by WPC's carriers
for purposes of pre-auditing and validation that carrier invoiced
charges are correct;
(f) providing WPC with electronic B/L interfaces that are necessary
if WPC desires to use EDI;
(g) providing WPC with data repositories and archives; and
(h) maintaining control table and all other data in system-useable
form relating to WPC's arrangements with its carriers.
2. Financial controls over WPC's carrier expenses, including:
(a) automated ledger coding;
(b) validating invoices for duplicates, terms, rates and extensions;
(c) resolving billing disputes with carriers; and
45
"Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission."
(d) performing accounts payable interfacing needed to distribute
freight expense to WPC's cost centers.
3. Providing WPC with general information Services related to carrier billing
and audits, including:
(a) making CPC's client/server and database related to WPC's
commercial freight activity and expense accessible to WPC for
purposes of both routine and customized reporting;
(b) providing a reasonable number of WPC employees or contractors
with training in use of CPC's carrier audit and billing
information management system; and
(c) managing a systems environment that makes detailed commercial
freight expense information available to WPC.
4. WPC shall comply with all applicable reasonable funding requirements
established by CPC.
* REDACTED
TERM: Month-to-Month, terminable by either Party's giving not less than 60
Days' written notice to the other Party.
OTHER PROVISIONS: WPC shall provide CPC with copies of all contracts with
carriers.
NOTICES: Notices to CPC in respect of CPC Services hereunder shall be given in
accordance with and subject to Section 12.9 of the Agreement to:
Chevron Products Company
Supervisor, Freight Information Services
P. O. Xxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: 510/000-0000
Facsimile: 510/680-3212
46
With a copy to:
Vice President and General Counsel
Chevron Products Company
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: 415/000-0000
Facsimile: 415/894-5489
47
EXHIBIT C
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
FORM OF WORK ORDER
REQUEST FOR SERVICES
--------------------
This REQUEST FOR SERVICES (the "RFS") dated ____________, 1996, is made and
entered into by and between Chevron Products Company, a division of CUSA U.S.A.
Inc., a Pennsylvania corporation (hereinafter referred to as "CPC") and Xxxxxx
Petroleum Company, Limited Partnership, a Delaware limited partnership
(hereinafter referred to as "WPC"). This RFS has been executed and delivered in
connection with that certain Feedstock and Refinery Product Master Services
Agreement dated effective as of September 1, 1996 between CPC and WPC (the
"MSA"). Capitalized terms not defined in this RFS have the meanings given them
in the MSA.
For the mutual covenants and obligations set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, WPC and CPC agree as follows:
1. Services. The [WPC/CPC] Non-Exhibit Services to be rendered pursuant to
this RFS are described in Annex 1, which is attached hereto and incorporated
herein for all purposes.
2. Place of Performance: The [WPC/CPC] Non-Exhibit Services shall be performed
or delivered at the following location(s): _____________________________.
3. Date of Commencement and Completion of the Services. The [WPC/CPC] Non-
Exhibit Services shall begin on ____________________, proceeding diligently,
until all Services have been completed, which date of completion shall be no
later than ________________________.
4. Price or Rate. The price or rate for Non-Exhibit Services performed or
delivered under this RFS (unless otherwise indicated, inclusive of any and all
labor costs and any and all third-Party costs, fees, prices, rates and rentals
of any kind) are described in Annex 1, which is attached hereto and incorporated
herein for all purposes. The Party providing the Services acknowledges and
agrees that if the prices or rates quoted are on a lump sum basis, such Party
shall not be entitled to the entire lump sum amount unless and until all of the
Services have been completed.
48
5. Relationship of RFS to MSA. Except as specifically amended by this RFS, (i)
the terms and provisions of the MSA shall govern the rights and obligations of
the Parties hereto and (ii) the provisions of the MSA, including, without
limitation, the insurance and indemnity obligations of the Parties set forth
therein, are incorporated herein for all purposes. Notwithstanding the
foregoing, if a term or provision of the MSA conflicts with a term or provision
of this RFS, this RFS shall control.
WITNESS THE EXECUTION HEREOF as of the date first hereinabove referenced.
CHEVRON PRODUCTS COMPANY
a Division of Chevron U.S.A. Inc.
By: __________________________
Name: ________________________
Title: _______________________
XXXXXX PETROLEUM COMPANY,
LIMITED PARTNERSHIP
By: XXXXXX PETROLEUM G.P., INC.
By: __________________________
Name: ________________________
Title: _______________________
49
EXHIBIT D
TO FEEDSTOCK AND REFINERY PRODUCT
MASTER SERVICES AGREEMENT
XXXXXX PETROLEUM COMPANY ACKNOWLEDGMENT OF
CHEVRON PRODUCTS COMPANY COMPUTING SECURITY
PROCEDURES AND CONDITIONS
As a user who will be granted, or have, limited access to certain Chevron
Products Company Databases ("CPC Databases") Xxxxxx Petroleum Company, Limited
Partnership ("WPC"), a Delaware limited partnership, with an office address at
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, hereby acknowledges
that and agrees to the conditions set forth herein regarding its access to and
right to use the CPC Databases.
1. For the purpose of this Acknowledgment, the term "Network" shall mean
facilities and services for the transmission of data and information. The term
"System" shall mean a collection of electro-mechanical devices that work
together to store, retrieve and manipulate data and information under control of
a sequence of instruction steps known as a program which includes computers
described as host, control, mini computers, distributed computer environments,
personal computers and workstations.
2. General. WPC will be given certain Userid(s) (the "Userid") and will
thereby be granted access to certain CPC Databases, namely the Xxxx of Lading
System (BLS), Chevron Products Systems (CPS), Rail Car Accounting System (RAS)
and Rail Car Management System (RMS) for the uses and purposes as set forth in
(i) the Feedstock and Refinery Product Master Services Agreement (the "Master
Services Agreement"), (ii) the Feedstock Sale and Refinery Product Purchase
Agreements and (iii) the Refinery Product Purchase Agreement of even date
herewith between CPC and WPC (the Contracts.). Accordingly, WPC:
(a) will not use or access the CPC Databases for its own use or for any use
other than the uses and purposes as set forth in the Contracts;
(b) understands that the Userids are granted to it for its exclusive use in
connection with the uses and purposes as set forth in the Contracts, is not
to be shared with, or used by, any other user, and may be revoked by CPC
upon termination of the Contracts or for a material violation of the
provisions of this Acknowledgment;
50
(c) will adhere to applicable CPC regulations and procedures governing
computing security as provided herein;
(d) acknowledges that the access authority granted to WPC herein does not in
and of itself constitute System access authority and WPC will not access
data on Systems in the Network, other than those for which it has
specifically been granted access without the express written authorization
of CPC;
(e) shall not gain, or attempt to gain, access to any third-party Systems from
the CPC Databases, unless authorized by CPC;
(f) shall not gain, or attempt to gain, access to any of the CPC Databases from
any third-party Systems, unless authorized by CPC;
(g) shall treat any passwords to the CPC Databases as confidential
information;
(h) will not attempt unauthorized access to the CPC Databases or knowingly
install a virus on a CPC Database or Network;
(i) will maintain its PC workstation devices which allow access to CPC
Databases in locked areas; and
(j) acknowledges that if CPC elects to permanently cease using any of the CPC
Databases, upon ninety (90) days advance written notice to WPC, CPC shall
have the right to cease providing such CPC Database service to WPC upon the
later to occur of (i) cessation of such ninety (90) day period or (ii) the
date CPC permanently ceases to use such CPC Database. In such event, CPC
and WPC will consult with each other to explore other commercially
reasonable alternatives that may be available to provide the same or
similar Database services.
3. CPS
(a) WPC's access to CPS will be restricted to specific CPS functions and
information previously used by Xxxxxx Petroleum Company immediately prior
to the date hereof and which are necessary to the performance of the
Contracts.
(b) To the extent it becomes necessary for CPC to modify CPS to restrict WPC's
access to information and functions as set forth in the preceding
subparagraph, WPC and CPC shall mutually agree upon whether such costs
should be incurred and any such costs shall be shared equally by WPC and
CPC.
51
(c) The parties hereto acknowledge that Xxxxxx Petroleum Company has never been
charged for its use of CPS and, in the future, will not be charged for same
as long as the type and amount of WPC's use of such database system is
consistent with the previous practices of Xxxxxx Petroleum Company. In the
event the type and amount of WPC's use of CPS exceeds the previous
activities of Xxxxxx Petroleum Company, the Operating Committee will
determine the fair and reasonable rates that WPC should pay for such excess
use.
(d) WPC will not require CPC to provide advance notification of any changes to
CPS unless such changes will materially affect WPC's access to CPS and/or
the functions and information to which WPC needs to carry on its business.
(e) WPC and CPC acknowledge that any changes to CPS specific to WPC's needs
will be mutually agreed to by the parties.
(f) To the extent WPC requires CPS training, such training will be conducted on
CPC's premises and will be for WPC's account.
4. WPC will adhere to CPC's password guidelines for Systems to which it is
issued Userids, a copy of which is attached hereto as Attachment 1.
5. WPC Employees.
(a) WPC will notify CPC of its employees who will be direct users of the CPC
Databases (including specific names, locations and telephone numbers) prior
to any such employee being granted access to any CPC Database;
(b) WPC will cause all of its employees who will be direct users of the CPC
Databases to read this Acknowledgment and otherwise be familiar with the
terms and conditions set forth herein prior to being granted access to any
CPC Database;
(c) WPC will notify CPC of any changes in users within ten (10) working days
of the changes.
6. Confidentiality of CPC Information. Any information or data relating to the
CPC Databases to which WPC may have access is confidential and proprietary to
CPC, and will be subject to the confidentiality provisions of the Contracts.
7. Confidentiality of WPC Information. Any information or data inputted into
the CPC Databases by WPC is confidential and proprietary to WPC, and will be
subject to the confidentiality provisions of the Contracts.
52
8. Software. In connection with the uses and purposes as set forth in the
Contracts, WPC may need to use and have access to: (a) third-party software
licensed to CPC; and (b) if applicable, CPC proprietary software which CPC will
make available to WPC in connection therewith (hereinafter referred to
collectively as the "Software").
WPC will:
(a) use the software only for the purposes set forth herein and/or in
connection with the Contracts;
(b) not copy the Software, except for authorized back-ups;
(c) treat the Software as confidential information subject to the same
obligations as those set forth in the Contracts; and
(d) upon termination of the Contracts , return the Software to CPC, if
applicable.
9. Intellectual Property Laws and Contract Restrictions. WPC will comply with
all contractual restrictions disclosed to it by CPC as well as all copyright and
other intellectual property laws applicable to its access to the CPC Databases.
10. Consequences of Misuse or Misappropriation of CPC Confidential Information.
WPC recognizes that any misuse or misappropriation of the CPC Databases and/or
confidential information and/or data obtained therefrom could result in
termination of access to the CPC Databases.
11. Banner. WPC will adhere to all online banners utilized in connection with
the CPC Databases.
12. Monitoring. Persons using the CPC Databases may have their use monitored
and recorded. All persons, by using these Databases, expressly consent to such
monitoring and recording.
13. This Acknowledgment is subject in all respects to the Master Services
Agreement of even date herewith between CPC and WPC. Any conflicts between this
Acknowledgment and the Master Services Agreement shall be resolved in accordance
with the terms and provisions of the Master Services Agreement.
53
ANNEX 1 TO REQUEST FOR SERVICES
54
"Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission."
SCHEDULE 3.4 (H)
* REDACTED
55
The following agreements, in accordance with Instruction 2 of Item 601, are
substantially identical in all material respects to the agreement filed as
Exhibit 10.13 to the Registration Statement:
1. Feedstock Sale and Refinery Product Purchase Agreement dated as of
September 1, 1996, among Chevron Products Company and Xxxxxx Petroleum
Company Limited Partnership (El Segundo).
2. Feedstock Sale and Refinery Product Purchase Agreement dated as of
September 1, 1996, among Chevron Products Company and Xxxxxx Petroleum
Company Limited Partnership (Pascagoula).
3. Feedstock Sale and Refinery Product Purchase Agreement dated as of
September 1, 1996, among Chevron Products Company and Xxxxxx Petroleum
Company Limited Partnership (Richmond).
4. Feedstock Sale and Refinery Product Purchase Agreement dated as of
September 1, 1996, among Chevron Products Company and Xxxxxx Petroleum
Company Limited Partnership (Salt Lake City).
The following is a list of material details in which such agreements differ from
Exhibit 10.54:
1. The pricing terms for each of the agreements differs slightly depending on
the product sold.
2. The location of the pipe line facilities through which the product is
transported is different for each agreement.
3. The location of the plant covered by each agreement is different.
