Exhibit 10.3
TERMINALING AND TRANSPORTATION
SERVICES AGREEMENT
This Terminaling and Transportation
Services Agreement (“Agreement”) entered into this 27
th day of May, 2005 (“Effective Date”) is
made by and between TransMontaigne Partners L.P. on behalf
of itself and its Affiliates (“Owner”), and
TransMontaigne Product Services Inc. and Coastal Fuels
Marketing, Inc., (“Customer”), sometimes
referred to individually as “Party” and collectively as
“Parties”. In consideration of the mutual
promises contained in this Agreement, the Parties agree to the
following terms and conditions.
Section 1.
Definitions.
In this Agreement, unless the
context requires otherwise, the terms defined in the preamble have
the meanings indicated and the following terms will have the
meanings indicated below:
“Affiliate” means, in relation to a Party, any Person that
(i) directly or indirectly controls such Party; (ii) is
directly or indirectly controlled by such Party; or (iii) is
directly or indirectly controlled by a Person that directly or
indirectly controls such Party. For this purpose,
“control” of any entity or Person means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of any Person, whether
through the ownership of a majority of issued shares or voting
power or control in fact of the entity or Person or
otherwise.
“Applicable
Law” means, with
respect to any Governmental Authority, (i) any law, statute,
regulation, code, ordinance, license, decision, order, writ,
injunction, decision, directive, judgment, policy, decree and any
judicial or administrative interpretations thereof, (ii) any
agreement, concession or arrangement with any other Governmental
Authority and (iii) any license, permit or compliance
requirement, in each case applicable to either Party and as amended
or modified from time to time.
“Arrival
Notice” has the
meaning assigned to such term in Section 4.2
.
“Barrel”
means 42 U.S. Gallons.
“Business
Day” means each
calendar day, excluding Saturdays, Sundays, or other holidays
observed by Owner.
“Commencement
Date” means
May 27, 2005 the date of the closing of Owner’s initial
public offering of common units.
“Contract
Quarter” means a
three month period that commences January 1, April 1,
July 1, or October 1, and ends March 31,
June 30, September 30, or December 31
respectively.
“Contract
Year” means a
period of 365 consecutive days commencing on January 1, 2006
and each successive period of 365 consecutive days during the Term
of this Agreement with the exception of any Contract Year in which
February has 29 days when the period will be 366 days, except
the initial Contract Year which shall begin on the Commencement
Date, and end December 31, 2005.
“FERC”
means the United States Federal
Energy Regulatory Commission.
“Force
Majeure” means
(i) strikes, lockouts or other industrial disputes or
disturbances, (ii) acts of the public enemy or of
belligerents, hostilities or other disorders, wars (declared or
undeclared), blockades, thefts, insurrections, riots, civil
disturbances or sabotage, (iii) acts of nature, landslides,
severe lightning, earthquakes, fires, tornadoes, hurricanes,
storms, and warnings for any of the foregoing which may necessitate
the precautionary shut-down of pipelines, docks, loading and
unloading facilities or the Terminal or other related facilities,
floods, washouts, freezing of machinery, equipment, or lines of
pipe, inclement weather that necessitates extraordinary measures
and expense to construct facilities or maintain operations, tidal
waves, perils of the sea and other adverse weather conditions or
unusual or abnormal conditions of the sea or other water,
(iv) arrests and restraints of or other interference or
restrictions imposed by governments (either federal, state, civil
or military and whether legal or de facto or purporting to act
under some constitutions, decree, law or otherwise), necessity for
compliance with any court order, or any law, statue, ordinance,
regulation, or order promulgated by a Governmental Authority having
or asserting jurisdiction, embargoes or export or import
restrictions, expropriation, requisition, confiscation or
nationalization, or, (v) epidemics or quarantine, explosions,
breakage or accidents to equipment, machinery, plants, facilities
or lines of pipe, electric power shortages, breakdown or
injury of vessels or any other causes, whether of the kind
enumerated above or otherwise, which were not reasonably
foreseeable, and which are not within the control of the Party
claiming suspension and which by the exercise of due diligence such
Party is unable to prevent or
overcome, and which continue for a
period of thirty (30) consecutive days. Such term will
likewise include, in those instances where either Party is required
to obtain servitudes, rights-of-way, grants, permits, or licenses
to enable such Party to fulfill its obligations under this
Agreement, the inability of such Party to acquire, or delays on the
part of such Party in acquiring, at reasonable cost and after the
exercise of reasonable diligence, such servitudes, rights-of-way
grants, permits or licenses, and in those instances where either
Party is required to furnish materials and supplies for the purpose
of constructing or maintaining facilities to enable such Party to
fulfill its obligations under this Agreement, the inability of such
Party to acquire, or delays on the part of such Party in acquiring,
at reasonable cost and after the exercise of reasonable diligence,
such materials and supplies.
“Gallon”
means a U.S. gallon of 231 cubic
inches corrected to 60 degrees Fahrenheit.
“Governmental
Authority” means
any foreign or U.S. federal, state, regional, local or municipal
governmental body, agency, instrumentality, board, bureau,
commission, department, authority or entity established or
controlled by a government or subdivision thereof, including any
legislative, administrative or judicial body, or any person
purporting to act therefor.
“Indemnified
Party” has the
meaning assigned to such term in Section 18.1
.
“Indemnifying
Party” has the
meaning assigned to such term in Section 18.1
.
“Independent
Inspector” means a
licensed Person who performs sampling, quality analysis and
quantity determination of the Products received or
delivered.
“Interest
Rate” means the
one-month LIBOR rate.
“Liabilities”
means any losses, charges, damages,
deficiencies, assessments, interests, penalties, costs and expenses
of any kind related to or that arise out of this Agreement
(including reasonable attorneys’ fees, other fees, court
costs and other disbursements), including any Liabilities that
directly or indirectly arise out of or are related to any claim,
proceeding, judgment, settlement or judicial or administrative
order made or commenced by any third party or Governmental
Authority related to or that arise out of this
Agreement.
“Minimum Revenue
Commitment” has the
meaning set out in Section 3.4 .
“Month”
means a calendar month.
“Product”
has the meaning described in
Attachments “A” and “B”
.
“Product
Loss” means any
loss of Product occurring as a result of any contamination,
adulteration, mislabeling, misidentification or other loss of or
damage to Product caused by the failure of the Owner to use
reasonable industry procedures in the handling, testing or storage
of Product. Product Loss is not the result of loss of or
damage to Product (i) associated with Product flushing to
eliminate residual particles or other contaminants from pipelines,
Tanks, valves or pumps, (ii) associated with circumstances
involving Force Majeure, (iii) caused by the act or omission
of Customer, (iv) due to normal Product evaporation,
shrinkage, line loss, clingage, or tolerance of Product measurement
inaccuracies in compliance with federal or state law, or, in the
absence of either, industry standards, and shall only be considered
if in excess of 0.10% of Product receipts which 0.10% of Product
receipts is referred to as “Product Loss Tolerance”,
calculated on a terminal by terminal basis, or (v) regrades of
Product resulting from commingling of Product in
pipelines.
“Tank”
has the meaning described in
Attachment “A” .
“Term”
has the meaning indicated in
Attachment “A” .
“Terminal”
has the meaning of an applicable
Terminal or Terminals described in Attachment
“A” .
“Third
Party” means any
entity other than Owner, Customer or their Affiliates.
“Third Party
Claim” has the
meaning assigned to such term in Section 18.3
.
“Throughput” shall be all Product delivered from a Terminal
or Terminals.
2
“Vessel”
means an ocean-going tanker, barge
or inland barge.
Section 2.
Service, Statements, Invoices,
Documents and Records.
2.1
Owner will provide services related
to the receipt, storage, throughput, heating, additive and other
injection, blending and delivery of Customer’s Product to and
from Customer or on behalf of Customer into and out of the Tanks at
the Terminal and transportation of Customer’s Product, and
provide the facilities reasonably necessary to perform such
services and provide such additional services as may be provided
under this Agreement and its attachments, for the fees, rates and
charges contained in this Agreement. Those services will be
performed in a manner consistent with Owner’s current
practices at the Terminal and in compliance with Applicable
Law.
2.2
As requested by Customer, Owner will
transmit to Customer a statement of receipts, deliveries and ending
inventory, copies of individual Tank gauging documents, pipeline
meter tickets, tank truck loading rack bills of lading, scale
tickets, and railroad tank car gauging documents, if any are
applicable. These documents will be transmitted to Customer
at the number or other address indicated in Attachment
“A” .
2.3
Within 15 days following the end of
each Month during the Term of this Agreement, Owner will submit to
Customer, at the address indicated in Attachment
“A,” statements recording the volume of
Customer’s Product received into and delivered from the
Terminal during the preceding Month, together with an invoice for
amounts due for services provided during the preceding Month, as
applicable and all as set forth on Attachment
“A” . In case of any conflict between the
documents provided to Customer under Section 2.2 and
the Monthly statements provided under this Section, the Monthly
statements provided under this Section will prevail as to the
volume of Product received and delivered by Owner, unless disputed
by Customer.
2.4
Each Party will maintain a true and
correct set of records pertaining to its performance of this
Agreement and will retain copies of all such records for a period
of not less than two (2) years following termination or
cancellation of this Agreement. Upon reasonable prior notice,
a Party or its authorized representative may at its sole cost,
during the Term of this Agreement and for the aforesaid two
(2) year period, inspect such records of the other Party
during normal business hours at the other Party’s place of
business.
Section 3.
Fees, Charges and
Taxes.
3.1
Customer will pay Owner for services
provided under this Agreement as indicated in Attachment
“A” .
3.2
All fees and charges reflected in
Owner’s invoices are due and payable within 15 Business Days
of the receipt of Owner’s invoice. Payment must be made
by electronic wire transfer of same day available Federal funds to
Owner’s account and bank, both as indicated on Owner’s
invoice. Invoices may be sent by electronic mail and
telephone facsimile. If Customer disputes any portion of an
invoice, Customer must pay the undisputed portion of the
invoice. Overdue amounts or disputed amounts that are
resolved in favor of the Owner will accrue interest at the Interest
Rate from the date that payment is due until paid in full.
The defaulting Party will pay all of the other Party’s costs
(including reasonable attorney’s fees and court costs) of
collecting past due payments and late payment charges, whether or
not suit is brought.
3.3
Customer will pay any and all taxes,
fees or other charges and assessments, (including any charge or
payment in lieu thereof), including inventory, sales taxes on
Terminal services and Product ownership taxes, if any, on
Customer’s Product and Customer’s property at the
Terminal. Owner shall be responsible for and pay all other
applicable taxes levied upon Owner, including any increases in
taxes levied on Owner’s Terminal (including real property,
personal property of Owner or both) as a result of Customer’s
activities at the Terminal that Owner may be required to pay or
collect under Applicable Law.
3.4
Subject to the terms herein, Owner
will transport and throughput an amount of Customer’s Product
in the aggregate that will produce revenue to the Owner in an
amount at least equal to $5.0 million per Contract Quarter (the
“Minimum Revenue Commitment ”). Any
deficiency between the actual charges for services herein and the
Minimum Revenue Commitment for a Contract Quarter shall be invoiced
and paid in accordance with this Section. Any such deficiency
payment shall be credited against any payments owed by Customer in
any of the next succeeding four (4) Calendar Quarters in
excess of the respective Minimum Revenue Commitment for such
Calendar Quarter. Should the initial
3
Calendar Quarter under this
Agreement be less than a full calendar three month period, the
Minimum Revenue Commitment for that Calendar Quarter shall be
proportionately reduced to reflect the actual time
period.
If Customer is unable for a period
of time to transport or throughput the volumes of Product required
to meet the Minimum Revenue Commitment as a result of Owner’s
operational difficulties, prorationing or difficulties with
pipeline connections, then upon written notice by Customer to
Owner, the Minimum Revenue Commitment will be reduced
proportionately for such period of time of the operational
difficulties, prorationing or difficulties with pipeline
connections.
3.5
Customer agrees not to challenge,
protest or file a complaint, or cause, encourage or rec