Exhibit 10.7
TREASURY SERVICES AGREEMENT
This Treasury Services Agreement (the "Agreement") is made as of this 8th
day of February 2002, by and among SUNOCO, INC., a Pennsylvania corporation
("Sunoco"), SUNOCO LOGISTICS PARTNERS L.P., a Delaware limited partnership (the
"Master Partnership"), and SUNOCO LOGISTICS PARTNERS OPERATIONS L.P., a Delaware
limited partnership (the "Operating Partnership") (each of the Master
Partnership and the Operating Partnership being a "Partnership" and,
collectively, the "Partnerships").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Sunoco, through one or more of its subsidiaries, owns the
general partner of each Partnership, holds a majority percentage of each
Partnership's limited partner interests, and controls each Partnership
through such ownership; and
WHEREAS, the Partnerships each desire to engage Sunoco to perform
certain financial, administrative, and management services, and Sunoco is
willing to perform such services for each Partnership, in accordance with
the terms and conditions in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and upon the terms and conditions hereinafter set forth, the
parties hereby, intending to be legally bound, agree as follows:
ARTICLE I
Services
1.1. Specified Services. Sunoco will perform for each Partnership, the
treasury services described in Schedule 1.1 attached hereto and incorporated
herein by reference, with such deletions, additions or modifications as the
parties may from time to time agree upon (the "Treasury Services"). Sunoco makes
no representations or warranties of any kind, express or implied, with respect
to the Treasury Services to be provided hereunder, except that the Treasury
Services shall be provided in a reasonably timely manner by personnel that
Sunoco deems to be competent and qualified to perform such services.
1.2. Additional Services. Subject to Subsection 2.1(b) hereof, Sunoco also
may perform such related additional services as either Partnership may request
from time to time, as more particularly described in Schedule 1.2 attached
hereto and incorporated herein by reference, with such deletions, additions or
modifications as the parties may from time to time agree upon (the "Additional
Services").
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ARTICLE II
Charges and Payment
2.1 Fees and Charges.
(a) Each Partnership promptly shall:
(i) reimburse Sunoco for all reasonable out-of-pocket expenses (other
than those associated with Sunoco's normal overhead), which are incurred by
Sunoco in connection with the performance of the Treasury Services and the
Additional Services, if any, for such Partnership (reimbursable expenses
being deemed to include, without limitation, the cost of meals, lodging,
travel, entertainment, equipment purchases, external consultants, long
distance telephone calls, duplicating costs, and charges of suppliers of
special products and services); and
(ii) pay to Sunoco an amount equal to any and all sales, use or other
taxes (excluding income taxes) applicable to the Treasury Services or
Additional Services, if any, performed for such Partnership hereunder.
(b) For any Additional Services performed hereunder, each Partnership shall
pay to Sunoco such fee or fees as from time to time may be agreed upon between
such Partnership and Sunoco. Sunoco shall not be required to perform any
particular Additional Services unless the fee payable for such services shall
have been agreed upon in writing, in advance, by the applicable Partnership and
Sunoco.
(c) Sunoco shall invoice each Partnership for all fees, expenses, and taxes
which become payable by such Partnership pursuant to this Section 2.1. Payment
of the amount reflected on each such invoice shall be paid by the applicable
Partnership to Sunoco, without any discount, within fifteen (15) days after such
Partnership's receipt of the invoice.
ARTICLE III
Miscellaneous
3.1 Term, Renewal, and Termination. The term of this Agreement shall
commence as of the date hereof and shall continue until the close of business on
December 31, 2004, unless renewed or sooner terminated pursuant to this Section
3.1. The original term of this Agreement automatically shall be renewed for
successive terms of one (1) full calendar year each unless written notice of
election not to renew is given by either party to the other at least thirty (30)
days prior to the expiration of the original or then current term hereof. The
obligations of any party under this Agreement may be terminated by such party
upon thirty (30) days written notice to the other party. Such termination shall
not relieve a terminating party of its obligations up to and including the date
of termination.
3.2 Ownership and Inspection. As between each Partnership and Sunoco, all
the applicable Partnership's funds, or portfolio securities, and all books and
records of account, checkbooks, bank and brokerage statements, accounting,
financial and other records, financial statements, reports, and other documents
maintained, received, or prepared for such Partnership pursuant to this
Agreement at all times shall constitute the sole and exclusive property of that
Partnership and shall not be subject to any lien, encumbrance, or security
interest of Sunoco. While in the possession or custody, or under the control, of
Sunoco, all of the foregoing at all times shall be available to such
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Partnership, and its officers, attorneys, accountants, and other
representatives, for inspection, copying, or other purposes and, if so requested
by such Partnership, promptly shall be delivered to the Partnership, temporarily
or permanently.
3.3 No Consequential Damages. In no event shall a party hereto be liable to
any other party hereto for any consequential damages arising from, in connection
with, or relating to, any matter provided for in this Agreement.
3.4 Severability. If any provision of this Agreement is prohibited by or
held to be invalid under applicable law, such provision will be ineffective to
the extent of such prohibition or invalidity, without invalidating the remaining
provisions of this Agreement. If necessary to effect the intent of the parties
hereto, the parties shall negotiate in good faith to amend this Agreement to
replace the unenforceable language with enforceable language that as closely as
possible reflects such intent.
3.5 Notices. All notices, consents, request, demands and other
communications hereunder shall be in writing and shall be deemed given and
effective five (5) business days after being mailed first class, certified or
registered mail, postage prepaid, return receipt requested, addressed as set
forth below, or two (2) business days after being sent by overnight courier,
telex or telecopy (by a machine that indicates the telex or telecopy number of
the machine to which such communication is sent and the receipt by such machine
of such communication) or by personal delivery to the address set forth below:
If to Sunoco:
SUNOCO, INC.
0000 Xxxxxx Xxxxxx -00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxxx
Treasurer
000-000-0000 FAX
000-000-0000 Confirm
If to the Master Partnership:
SUNOCO LOGISTICS PARTNERS L.P.
0000 Xxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
President and Chief Executive Officer
Sunoco Partners LLC
000-000-0000 FAX
000-000-0000 Confirm
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If to the Operating Partnership:
SUNOCO LOGISTICS PARTNERS L.P.
0000 Xxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
President and Chief Executive Officer
Sunoco Partners LLC
000-000-0000 FAX
000-000-0000 Confirm
or, in each case, at such other address or telecopy number or to such other
Person as may be specified in writing by a party to whom notices are to be sent.
3.6 No Agency. In connection with the parties' performance of services
hereunder, the relationship of the parties shall be solely that of independent
contractors. No party is the agent of the other. This Agreement does not create,
and shall not be construed as creating, a partnership or joint venture between
the parties hereto. Nothing in this Agreement shall authorize or be construed as
authorizing Sunoco to enter into contracts or agreements on behalf of any
Partnership or to incur any obligations or create any liabilities which are
binding on any Partnership; provided, however, that Sunoco shall act as an agent
for each Partnership when performing such Additional Services as to which Sunoco
may be authorized in writing by such Partnership to act as agent for the
Partnership.
3.7 Modification or Waiver. This Agreement may be modified at any time, but
only by written instrument executed by the parties hereto and expressly stating
it is an amendment to this Agreement. Any of the terms, covenants and conditions
of this Agreement may be waived at any time by the party entitled to the benefit
of such term, covenant or condition; provided, however, that such waiver must be
in writing and executed by the party against whom such waiver is asserted. No
course of dealing will be deemed effective to modify, amend or discharge any
part of this Agreement.
3.8 Force Majeure. If either party to this Agreement is rendered unable by
force majeure to carry out its obligations under this Agreement, other than each
Partnership's obligation to make payments to Sunoco provided for herein, that
party shall give the other party prompt written notice of the force majeure with
reasonably full particulars concerning it. Thereupon, the obligations of the
party giving the notice, so far as they are affected by the force majeure, shall
be suspended during, but no longer than the continuance of, the force majeure.
The affected party shall use all reasonable diligence to remove or remedy the
force majeure situation as quickly as practicable. The requirement that any
force majeure situation be removed or remedied with all reasonable diligence
shall not require the settlement of strikes, lockouts or other labor difficulty
by the party involved, contrary to its wishes. Rather, all such difficulties may
be handled entirely within the discretion of the party concerned. The term
"force majeure" means any one or more of:
(a) an act of God;
(b) a strike, lockout, labor difficulty or other industrial disturbance;
(c) an act of a public enemy, war, blockade, insurrection or public riot;
(d) lightning, fire, storm, flood or explosion;
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(e) governmental action,delay, restraint or inaction;
(f) judicial order or injunction;
(g) material shortage or unavailability of equipment; or
(h) any other cause or event, whether of the kind specifically enumerated
above or otherwise, which is not reasonably within the control of the
party claiming suspension.
3.9 Headings, Etc. The division of this Agreement into Articles and
Sections and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms
"this Agreement", "hereof", "hereunder" and similar expressions refer to this
Treasury Services Agreement and not to any particular Section or other portion
hereof and include any agreement supplemental hereto. Unless something in the
subject matter or context is inconsistent therewith, references herein to
Articles and Sections are to Articles and Sections of this Agreement.
3.10 Number and Gender. Words importing the singular number shall include
the plural and vice versa, words importing the masculine gender shall include
the feminine and neuter genders and vice versa, and words importing persons
shall include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations and vice versa.
3.11 Third Party Rights. This Agreement shall not provide any third parties
with any remedy, claim, liability, reimbursement, cause of action or other right
in excess of those existing without reference to this Agreement.
3.12 Subsidiaries. The parties hereto acknowledge that they may conduct
their business operations through subsidiaries and agree that they will cause
their respective direct and indirect subsidiaries to abide by the terms of this
Agreement as if they were parties hereto to the extent necessary to carry out
the purposes of this Agreement. Further, each party shall be entitled to cause
its obligations hereunder to be satisfied, and to cause its benefits hereunder
to be received, by its subsidiaries.
3.13 Cooperation. Each party shall from time to time, and at all times, do
such further acts and execute and deliver all such further deeds and documents
as shall be reasonably requested by the other party in order to fully perform
and carry out the terms of this Agreement.
3.14 Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws (without regard to the principles of conflict
of law) of the Commonwealth of Pennsylvania.
3.15 Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective permitted successors and
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assigns, but neither this Agreement nor any of the rights, interest or
obligations hereunder may be assigned by the Partnership without the prior
written consent of Sunoco.
3.16 Essence of Time. Time is of the essence of this Agreement.
3.17 Counterparts. This Agreement may be executed in several counterparts,
no one of which needs to be executed by both of the parties. Each counterpart,
including a facsimile transmission of this Agreement, shall be deemed to be an
original and shall have the same force and effect as an original. All
counterparts together shall constitute but one and the same instrument.
3.18 Entire Agreement. This Agreement embodies the entire agreement and
understanding and supersedes all prior agreements, understandings, undertakings,
declarations, commitments and representations, verbal or oral, of the parties
with respect to the specific matters contemplated hereby.
[COUNTERPART SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on their behalf on the date first above written.
SUNOCO, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------
Title: Senior Vice President & CFO
----------------------------
SUNOCO LOGISTICS PARTNERS L.P.
By its General Partner:
SUNOCO PARTNERS LLC
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNOCO LOGISTICS PARTNERS OPERATIONS L.P.
By its General Partner:
SUNOCO LOGISTICS PARTNERS GP LLC
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
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Schedule 1.1
to
Treasury Services Agreement
TREASURY SERVICES
-----------------
(a) Use of Sunoco's centralized consolidated cash management and financial
systems for accounts payable, accounts receivable and payroll processing,
tax filing and payment, and pension and benefit plan monitoring and
administration. Each Partnership will participate in Sunoco's centralized
cash management program, whereby all of such Partnership's cash receipts
and cash disbursements will be processed (together with those of Sunoco and
its other subsidiaries) through Sunoco's cash accounts with a corresponding
credit or charge to an inter-company account. Interest will be applied
daily to the net inter-company balance.
Each Partnership's net receivable balances will earn interest at a
rate equal to the average rate paid to such Partnership for its money
market funds invested. If the Partnership does not have funds invested in
money market accounts, the rate will be the average rate paid by the
Nations Cash Reserves Money Market Fund (or any successor entity thereto)
for the same period.
Each Partnership's net payable balances will pay interest at a rate
equal to the interest rate for Eurodollar loans, as provided in that
certain $150,000,000 Revolving Credit Facility for Sunoco Logistics
Operations L.P., with Bank of America as Administrative Agent (the "Senior
Credit Facility"), or applicable replacement facility, as the same may be
amended from time to time.
Each Partnership will settle any outstanding inter-company balance on
a periodic basis, but not less frequently than at the end of each month.
Funds from any net receivable balance from Sunoco may be applied by such
Partnership to repay any amount then outstanding under the Senior Credit
Facility, or (if no such amounts are outstanding) may be transferred by the
Partnership to a third-party money market account. A net payable balance to
Sunoco may be repaid by such Partnership with funds drawn from the Senior
Credit Facility or with such Partnership's surplus funds, including funds
in any money market account for such Partnership.
(b) Short-term funds management, investment and borrowing by Sunoco on behalf
of the Partnership. Sunoco, on behalf of each Partnership, will make
short-term investments of surplus funds in one or more third party money
market accounts. Any short-term borrowings will be executed from the Senior
Credit Facility on behalf of the applicable Partnership.
(c) Administration and servicing by Sunoco of Partnership debt obligations. On
behalf of each Partnership, Sunoco will administer the compliance
certificates for the Senior Credit Facility and for the Partnership's
long-term debt issuances, according to applicable covenant requirements.
(d) Participate with the Partnership in arranging financial transactions, and
interface with external credit rating agencies.
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(e) Advice from Sunoco on corporate finance and cash management issues. As
requested by each Partnership, Sunoco may provide advice, from time to
time, on the following matters:
. Banking arrangements (compensation, operating lines of credit, letters
of credit, etc.), existing public and private debt, and the structure
and arrangement of new debt and equity financing as required.
. Credit risk analysis and management, including counter-party credit
risk management
. Pension and benefit plan monitoring and administration
. Interest rate hedging
. Project financing
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Schedule 1.2
to
Treasury Services Agreement
ADDITIONAL SERVICES
-------------------
None.
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