Document:

Exhibit
10.13

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is made
and entered into as of March 17, 2006 (the “Effective Date”) by and
between FAIRPOINT COMMUNICATIONS, INC.,
a Delaware corporation (together with its successors and assigns permitted
hereunder, the “Company”), and EUGENE B.
JOHNSON (the “Executive”).

RECITALS:

WHEREAS, the Executive is currently employed by the
Company as its Chief Executive Officer pursuant to an Employment Agreement
dated as of December 31, 2002, for a period ending December 31, 2006
(the “Existing Employment Agreement”).

WHEREAS, the Board of Directors of the Company (the “Board”)
has determined that it is in the best interests of the Company and its
subsidiaries and stockholders to enter into this Agreement for purposes of
extending the term of Executive’s employment for an additional two (2) years
and otherwise employing the Executive on the terms and conditions set forth
herein.

NOW, THEREFORE, in consideration of the respective
agreements and covenants set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

1.             Employment Period.
Subject to Section 3, the Company hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by the Company, as Chief
Executive Officer of the Company and/or as Chairman of the Board of Directors
of the Company, in accordance with the terms and provisions of this Agreement
for a period commencing on the date hereof and ending on December 31, 2008
(the “Employment Period”). In the event the Executive continues to perform
services after the Employment Period, and pending agreement for extension of
the Employment Agreement, such services shall constitute employment for an
unspecified term, terminable at will, with or without cause or reason, with or
without advance notice, and with or without pay in lieu of advance notice.

2.             Terms of Employment.

(a)           Position
and Duties.

(i)            During the term of the Executive’s
employment, the Executive shall serve as the Chief Executive Officer of the
Company and/or as Chairman of the Board of Directors of the Company and, in so
doing, shall perform normal duties and responsibilities associated with such
positions.

 

(ii)           During the term of the Executive’s
employment, and excluding any periods of vacation and other leave to which the
Executive is entitled, the Executive agrees to devote substantially all his
business time to the business and affairs of the Company and to use the
Executive’s best efforts to perform faithfully, effectively and efficiently his
duties and responsibilities.

(iii)          Notwithstanding Section 2(a)(ii) hereof,
during the term of the Executive’s employment it shall not be a violation of
this Agreement for the Executive to (1) serve on industry, trade, civic,
educational or charitable boards or committees, (2) deliver lectures or
fulfill speaking engagements, and/or (3) manage personal investments, so
long as such activities do not interfere with the performance of the Executive’s
duties and responsibilities as an employee of the Company.

(iv)          Executive agrees to observe and comply
with the Company’s rules and policies as adopted by the Company from time
to time.

(b)           Compensation.

(i)            Base Salary. During the term
of the Executive’s employment, the Executive shall receive an annual base
salary of $460,000 (the “Annual Base Salary”), which shall be paid in
accordance with the customary payroll practices of the Company.

(ii)           Bonus. Executive shall be
eligible for a bonus each year (up to 100% of Executive’s Annual Base Salary),
which bonus shall be paid if fully earned, all as provided in an objective
bonus arrangement set and documented by the Company’s Compensation Committee
and Executive each year.

(iii)          Incentive, Savings, Stock Option,
Restricted Stock and Retirement Plans. During the term of the Executive’s
employment, the Executive shall be entitled to participate in all incentive,
savings, stock option, restricted stock and retirement plans, practices,
policies and programs applicable generally to other senior executives of the
Company, as amended from time to time. Without limiting the foregoing,
Executive currently has 273,812 fully vested options under the Company’s 1998
Stock Incentive Plan (the “98 Plan”), 20,490 fully vested options under the
Company’s 2000 Employee Stock Option Plan (the “2000 Plan”) and 189,488 shares
of restricted stock, still subject to certain vesting requirements, under the
Company’s 2005 Stock Incentive Plan (the “2005 Plan”). Except as provided in Section 4
hereof, all such options and/or shares of restricted stock shall vest and/or
become exercisable pursuant to the terms and conditions of the particular plans
and agreements relating thereto.

(iv)          Supplemental Grant(s) of
Restricted Stock. As additional consideration for Executive entering into
this Agreement, the Company simultaneously herewith shall grant to the
Executive 50,000 shares of restricted stock (the “Restricted Stock”), such
grant to be effective for all purposes on the date Executive and the

 2
 

 

Company execute the
Restricted Stock Agreement to be entered into by and between the Company and
Executive (the “Restricted Stock Agreement”). The Restricted Stock will vest in
three equal annual installments and pay current dividends, all pursuant to the
Company’s 2005 Stock Incentive Plan and the Restricted Stock Agreement. So long
as Executive has not been terminated for Cause by the Company and/or has not
voluntarily resigned prior to the following grant dates, an additional grant of
50,000 shares of restricted stock shall be made by the Company on each of January 1,
2007 and January 1, 2008, in each case pursuant to the Company’s 2005
Stock Incentive Plan or a replacement plan approved by the Company’s shareholders
at the Company’s 2007 annual meeting and pursuant to a restricted stock
agreement substantially in the form of the Restricted Stock Agreement relating
to the Restricted Stock. Each such grant’s shares of restricted stock will vest
in three equal annual installments from the date of grant and pay current
dividends, also pursuant to the Company’s 2005 Stock Incentive Plan and the
applicable restricted stock agreement. Such grants shall be made by the Company
even if Executive’s employment has been terminated prior to the foregoing grant
dates without Cause.

(v)           Welfare Benefit Plans. During
the term of the Executive’s employment, the Executive and/or the Executive’s
spouse, as the case may be, shall be eligible for participation in and shall
receive all benefits under the welfare benefit plans, practices, policies and
programs provided by the Company, including medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs, as amended from time to time, to
the extent applicable generally to other employees of the Company.

(vi)          Perquisites. During the term of
the Executive’s employment, the Executive shall be entitled to receive, in
addition to the benefits described above, such perquisites and fringe benefits
appertaining to his position in accordance with any policies, practices and
procedures established by the Board, as amended from time to time.

(vii)         Expenses. During the term of the
Executive’s employment, the Executive shall be entitled to receive prompt
reimbursement for all reasonable employment expenses incurred by the Executive
in accordance with the Company’s policies, practices and procedures, as amended
from time to time.

3.             Termination of Employment.

(a)           Death or Disability. The
Executive’s employment shall terminate automatically upon the Executive’s death
during the Employment Period. If a Disability (as defined below) of the
Executive has occurred during the Employment Period, the Company may give to
the Executive written notice in accordance with Section 8(e) hereof
of its intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the
ninetieth (90th) day after receipt of such notice by the Executive (the “Disability
Effective Date”),

 3
 

 

if, within ninety (90)
days after such receipt, the Executive shall not have returned to perform, with
reasonable accommodation, the essential functions of his position. For purposes
of this Agreement, at any time the Company or any of its affiliates sponsors a
long-term disability plan for the Company’s employees, “Disability” shall mean
disability as defined in such long-term disability plan. The determination of
whether the Executive has a Disability shall be made by the person or persons
required to render disability determinations under the long-term disability
plan. At any time the Company does not sponsor a long-term disability plan for
its employees, “Disability” shall mean the Executive’s inability to perform,
with reasonable accommodation, the essential functions of his position
hereunder for a period of 180 days in any 360 consecutive day period due to
mental or physical incapacity, as determined by a physician selected by the Company
or its insurers.

(b)           Cause or Without Cause. The
Company may terminate the Executive’s employment during the Employment Period
for Cause or without Cause. For purposes of this Agreement, “Cause” shall mean (a) misappropriating
any funds or any material property of the Company, (b) obtaining or
attempting to obtain any material personal profit from any transaction in which
the Executive has an interest which is adverse to the interest of the Company
unless the Company shall first give its consent to such transaction, (c) (i) the
willful taking of actions which directly impair the Executive’s ability to
perform the duties required by the terms of his employment, or (ii) taking
any action detrimental to the Company’s goodwill or damaging to the Company’s
relationships with its customers, suppliers or employees; provided that such
neglect or refusal, action or breach shall have continued for a period of
twenty (20) days following written notice thereof, (d) being convicted of
or pleading nolo  contendere to any crime or offense constituting
a felony under applicable law or any crime or offense involving fraud or moral
turpitude, or (e) any material intentional failure to comply with
applicable laws or governmental regulations within the scope of employment as
defined by this Agreement. For purposes of this Agreement, “without Cause”
shall mean a termination by the Company of the Executive’s employment during
the Employment Period for any reason other than a termination based upon Cause,
death or Disability.

(c)           Notice of Termination. Any
termination by the Company for Cause or without Cause shall be communicated by
a Notice of Termination to the Executive given in accordance with Section 8(e).
For purposes of this Agreement, the term “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated, and
(iii) if the Date of Termination (as defined below) is other than the date
of receipt of such notice, specifies the termination date. The failure by the
Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Cause shall not waive any right of the
Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company’s rights hereunder.

 4
 

 

(d)           Date of Termination. The term “Date
of Termination” means (i) if the Executive’s employment is terminated by
the Company for Cause, the date of receipt of the Notice of Termination or any
later date specified therein pursuant to Section 3(c), as the case may be,
(ii) if the Executive’s employment is terminated by the Executive, thirty
(30) days from the date of receipt of the Notice of Termination, (iii) if
the Executive’s employment is terminated by the Company other than for Cause,
the date on which the Company notifies the Executive of such termination, and (iv) if
the Executive’s employment is terminated by reason of death or Disability, the
date of death of the Executive or the Disability, as the case may be.

4.             Obligations of the Company upon Termination.

(a)           If, during the Employment Period, the
Company shall terminate the Executive’s employment for Cause or the Executive
shall voluntarily resign, the Executive shall not be entitled to any future
benefits pursuant to this Agreement.

(b)           Upon the earliest of (A) expiration
of the Employment Period, or (B) termination of the Executive’s employment
as Chief Executive Officer and as Chairman of the Board of Directors without
Cause, the Executive shall be entitled to receive from the Company the
following, effective as of the date of occurrence of such event (the “Termination
Event”), subject to the following being suspended for a breach of the Executive’s
covenant not to compete set forth in Section 6 hereof:

(i)            Continued medical coverage for
Executive and Executive’s spouse, at Executive’s election, for the life of each
under the Company’s then existing health insurance plan upon continued timely
payment by Executive or Executive’s spouse of the then applicable employee and
spouse premium. This coverage shall continue to be available to Executive’s
spouse upon the death of Executive. Following the time each of which Executive
or Executive’s spouse is eligible for Medicare, ongoing retiree health coverage
shall be calculated on the assumption that each of Executive or Executive’s spouse
had enrolled in all available parts of Medicare.

(ii)           As provided in the Existing
Employment Agreement, extension of the Executive’s right to exercise all of his
vested options under the 2000 Plan until the earlier of (a) March 12,
2012, or (b) the Sale of the Company (as defined in the 98 Plan).

(iii)          Continued vesting of all restricted
stock granted as of the Termination Event under the Company’s 2005 Stock
Incentive Plan or a replacement plan as provided in the restricted stock
agreement applicable to each grant of such restricted stock.

(c)           Upon the expiration of the Employment
Period at December 31, 2008, unless extended by the mutual agreement of
the Company and Executive commencing on the day following the six month
anniversary of the Termination Event,

 5
 

 

Executive shall receive his Base Salary in accordance
with customary payroll practices of the Company for one year thereafter,
subject to such payment being suspended for a breach of the Executive’s
covenant not to compete set forth in Section 6 hereof.

(d)           In the event that the Executive’s
employment as Chief Executive Officer of the Company and as Chairman of the
Board of Directors of the Company is terminated without Cause at any time
during the Employment Period, the Executive shall be entitled to receive,
commencing on the day following the six month anniversary of such Termination
Event and in accordance with the customary payroll practices of the Company,
payment of Executive’s Base Salary as of the Termination Event for a period of
time equal to the remainder of the Employment Period as of the Termination
Event plus one year as provided in Section 4(c) hereof, subject to
such payment being suspended for a breach of the Executive’s covenant not to
compete set forth in Section 6 hereof.

5.             Protection
of Confidential Information. Executive acknowledges that
by reason of his position with the Company, he has had and will continue to
have complete access to and knowledge of the Company’s Confidential Information.
The Company’s “Confidential Information”, as used in this Agreement, means any
form of data or information in the possession or control of the Company which
relates to its business affairs, including but not limited to trade secrets,
proprietary information or other information not in the public domain. Confidential
Information includes but is not limited to product or service concepts and
designs, marketing insights, technology related to the Company’s business,
business methods and strategies, all financial information and plans of the
Company, acquisition targets and potential targets, strategic business plans,
pricing terms and methods, growth, expansion or acquisition plans, financing or
venture capital sources and plans, and all similar information that the Company
holds in confidence or that competitors of the Company would be desirous of
obtaining. Executive agrees to use the Confidential Information only for the
purpose of or in connection with the business of the Company, and to keep the
Company’s Confidential Information in strictest confidence and secrecy and not
to use or disclose Confidential Information to any person or entity except for
purposes of conducting the business of the Company, both during the term of
Executive’s employment with the Company (both during the Employment Period and
any continuation period thereafter) and thereafter for a period of five (5) years.
Executive will return all Confidential Information to the Company immediately
upon termination of his employment with the Company.

6.             Non-Competition.

(a)           Non-Competition Agreement. Executive
agrees that, without the prior written consent of the Company’s Board of
Directors, during the term of his employment with the Company, including any
continued employment after the Employment Period, and for a period of three (3) years
thereafter, he will not “Compete” with the Company in the “Prohibited
Territory.”

 6
 

 

(b)           Definition of “Compete”. For
purposes of this Section 6, the term “Compete” means to be employed or
engaged in any capacity, whether as an employee, as a consultant, or by
self-employment, individually or on behalf of others, or to have any ownership
interest in, any business or entity engaged in business in the “Communications
Industry”; provided, however, that the purchase and ownership of capital stock
of less than two percent (2%) in a publicly traded entity within the
Communications Industry shall not constitute competing. As used herein, the
term “Communications Industry” shall have its broadest definition, as generally
understood by the investing public, and includes, but is not necessarily
limited to the ownership, acquisition or operation of, investment in, or the
provision of services or technology related to Rural Local Exchange Carriers
(RLECs), Incumbent Local Exchange Carriers (ILECs), Competitive Local Exchange
Carriers (CLECs), Internet Service Providers (ISPs), cable television services,
retail or wholesale distribution of long distance services, Internet portal
services, web casting and web hosting, dedicated service lines (DSL),
broadband, voice or video conferencing, voice mail services, voice, data or
video transmissions, cellular or wireless telephone, data, paging or Internet
access services, prepaid calling cards and other prepaid communication
services, electronic mail services, directory and operator assistance services,
facsimile and data services, and other similar and related services and
products.

(c)           Definition of “Prohibited
Territory”. For purposes of this Section 6, the term “Prohibited
Territory” shall mean and include each of the following defined areas: (i) the
United States, and (ii) any State within the United States where the
Company is engaged in business in the Communications Industry. For purposes of
this Section 6, a person or entity is considered to be Competing in the
Prohibited Territory if it is engaged in offering or providing products or
services related to the Communications Industry within the Prohibited
Territory, regardless of the geographic location of the Competing individual or
entity.

(d)           Acknowledgments by Executive. Executive
acknowledges that the terms of this Section 6, including the definitions
of “Compete”, “Communications Industry” and “Prohibited Territory”, and the
three (3) year post employment term are reasonable, and are no broader
than necessary to protect the Company’s legitimate business interests. Executive
specifically acknowledges and agrees that (i) he has received adequate and
valuable consideration for entering into this noncompetition agreement, (ii) the
Company is currently engaged in business in the Communications Industry, and is
either actively engaged in each aspect thereof set out in the definition set
forth in Section 6(b) above, or it reasonably anticipates that it
will be engaged in each such aspect or activity competitive with it, during the
Employment Period, and that part of Executive’s responsibilities as Chief
Executive Officer of the Company and as Chairman of the Board of Directors of
the Company are and will continue to be to explore and expand the Company into
each aspect of the Communications Industry where it can profitably do so, (iii) the
nature of the Communications Industry is such that the range of business and
competition is not necessarily contained within easily definable

 7
 

 

geographic territories, and that in many respects,
otherwise unrelated aspects of the Communications Industry are competitive with
each other (for example, cable television providers, telephone companies and
ISPs all compete with each other to provide Internet access and services to
consumers and businesses), (iv) the business of investing in and operating
RLECs, ILECs, CLECs and/or ISPs is highly competitive, and (v) by reason
of his responsibilities as Chief Executive Officer of the Company and/or as
Chairman of the Board of Directors of the Company, he will be intimately
familiar with and engaged in developing the Company’s business, financial and
growth plans and other Confidential Information, and that if he engages in any
of the activity prohibited by this Section 6, it is inevitable that he
would use or disclose Confidential Information of the Company.

(e)           Governing Law; Enforcement;
Survival. Notwithstanding the provisions of Section 8(c), the
provisions of Section 5 and the provisions of this Section 6 shall be
construed and enforced in accordance with the laws of the State of North
Carolina, without regard to principles of conflict of laws. Executive agrees
that the Company would suffer irreparable harm in the event of any violation of
Sections 5 or 6 hereof, and the Company is therefore entitled to injunctive
relief to enforce the provisions thereof. The provisions of Sections 5 and 6
shall survive the termination of this Agreement in accordance with their terms,
and shall inure to the benefit of the Company and its affiliates, and each of
their successors and assigns.

(f)            Severability. In the event
that any provision contained herein is held to be invalid, prohibited or
unenforceable because of the scope, duration or area of applicability, such
provision shall be ineffective only to the extent of such invalidity,
prohibition or unenforceability. Executive and the Company agree that it is
each of their intent and desire that the provisions of Section 6 be
enforced to the absolute greatest extent permissible by law, and they each
therefore agree and request that, to the extent a court determines these
provisions or any part thereof are unenforceable to any extent, such court may
and should limit the enforcement to discrete geographic territories set forth
in Section 6(c), or to specific states in which the Company is doing
business, or to specific aspects of the Communications Industry, as listed in Section 6,
as the court deems necessary to the enforceability of the letter and intent of
this Agreement.

7.             Severability.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provision shall be fully
severable, this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. This Section 7
is intentionally in addition to but not in replacement of Section 6(f) above.

 8
 

 

8.             Miscellaneous.

(a)           Counterparts. This Agreement
may be executed in several counterparts each of which is an original. This
Agreement and any counterpart so executed shall be deemed to be one and the
same instrument. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

(b)           Contents of Agreement;
Parties-In-Interest. This Agreement sets forth the entire understanding of
the parties regarding the subject matter hereof. Any previous agreements or
understandings between the parties regarding the subject matter hereof are
merged into and superseded by this Agreement. All representations, warranties,
covenants, terms, conditions and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
legal representatives, successors and permitted assigns of the Company and the
Executive. Neither this Agreement nor any rights, interests or obligations
hereunder may be assigned by any party without the prior written consent of the
other party hereto.

(c)           NEW YORK LAW TO GOVERN. EXCEPT AS PROVIDED IN SECTION 6(e),
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.

(d)           Section Headings. The
section headings herein have been inserted for convenience of reference only
and shall in no way modify or restrict any of the terms or provisions hereof.

(e)           Notices. All notices,
requests, demands and other communications which are required or permitted
hereunder shall be sufficient if given in writing and delivered personally or
by registered or certified mail, postage prepaid, or by facsimile transmission
(with a copy simultaneously sent by registered or certified mail, postage
prepaid), as follows (or to such other address as shall be set forth in a
notice given in the same manner):

If to the Company, to:

FairPoint
Communications, Inc.

521 East Morehead Street, Suite 250

Charlotte, North Carolina 28202

Facsimile: (704) 344-1594

Attn: Shirley J. Linn, Esq.

 9
 

 

If to the Executive, to:

Eugene B. Johnson

920 Berkeley Avenue

Charlotte, North Carolina 28203

(f)            Modification and Waiver. Any
of the terms or conditions of this Agreement may be waived in writing at any
time by the party which is entitled to the benefits thereof, and this Agreement
may be modified or amended at any time by the Company and the Executive. No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof nor shall such waiver constitute a continuing
waiver.

(g)           Third Party Beneficiaries. Except
as otherwise expressly set forth herein, no individual or entity shall be a
third-party beneficiary of the representations, warranties, covenants and
agreements made by any party hereto.

(h)           Termination of Prior Arrangements.
The parties hereto acknowledge and agree that this Agreement supersedes and
terminates all existing employment and severance agreements or arrangements
between the Company and/or any of its affiliates and the Executive, including
but not limited to Executive’s employment agreement with the Company dated as
of December 31, 2002.

(i)            Executive’s Legal Fees. The
reasonable costs and expenses for legal services incurred by Executive in the
negotiation and execution of this Agreement shall be paid by the Company.

(j)            Section 409A. If any
amounts payable under this Agreement may result in the application of Section 409A
of the Internal Revenue Code, the Company shall modify the timing of payments
hereunder, if and to the extent necessary in order to comply with the
provisions of such section.

 10
 

 

IN WITNESS WHEREOF,
the parties hereto have executed or have caused this Agreement to be duly
executed as of the date first above written.

	
  

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Eugene B.
  Johnson

  
	
   

  	
  Eugene B.
  Johnson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FAIRPOINT
  COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John P.
  Crowley

  
	
   

  	
  Name:

  	
  John P. Crowley

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  

 

 11Exhibit 10.3

 

TERMINALING SERVICES
AGREEMENT

 

 

This Terminaling Services Agreement (“Agreement”)
is made by and between TransMontaigne
Partners L.P. on behalf of itself and its Affiliates (“Owner”), and Marathon Petroleum Company LLC (“Customer”), sometimes referred to individually as “Party” and collectively as “Parties”, effective as of February 20, 2006
(“Effective Date”).  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 (a) directly or
indirectly controls such Party; (b) is directly or indirectly controlled by
such Party; or (c) 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 /units or voting power or control in
fact of the entity or Person or otherwise.

 

“Applicable Law” means, with respect to any Governmental
Authority, (a) any law, statute, regulation, code, ordinance, license,
decision, order, writ, injunction, decision, directive, judgment, policy,
decree and any judicial or administrative interpretations thereof, (b) any
agreement, concession or arrangement with any other Governmental Authority and
(c) 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.

 

                “Contract Year” means a period of twelve
(12) consecutive Months, except for the first “Contract Year” which means the period of time commencing with
the Effective Date of this Agreement and ending on April 30, 2007.

 

                “Force Majeure” means:

 

(a) strikes, lockouts or
other industrial disputes or disturbances;

 

 (b) acts of the public enemy or of
belligerents, hostilities or other disorders, wars (declared or undeclared),
blockades, thefts, insurrections, riots, civil disturbances or sabotage;

 

 (c) acts of nature, landslides, severe
weather, 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;

 

 (d) arrests and restraints of or other
interference or restrictions imposed by a Governmental Authority (whether legal
or de facto or purporting to act under some constitution, decree, law or
otherwise), necessity for compliance with any court order, or any law, statute,
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

 

(e) 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 in this definition 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.

 

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.

 

                “Good Industry Practice” means the exercise
of that degree of skill, care, diligence, prudence and foresight that would
reasonably and ordinarily be expected from a skilled and experienced product
terminal operator engaged in the same or similar type of undertaking under the
same or similar circumstances.

 

 “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 for them.

 

 “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 with respect to the applicable Month(s).

 

“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.

 

                “Month” means a calendar month, except for
time period commencing with the Effective Date of this Agreement and ending on
February 28, 2006, which will also mean a “Month.”

 

                “Product” means asphalt.

 

                “Product Loss” means any loss or downgrade
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 Good Industry Practice in the handling, testing
or storage of Product, or in the performance of the services provided hereunder
and shall not include loss of or damage to Product that is:

 

(a) associated with Product
flushing to eliminate residual particles or other contaminants from pipelines,
Tanks, valves or pumps according to Good Industry Practice;

 

(b) associated with
circumstances involving Force Majeure;

 

(c) caused by the act or
omission of Customer;

 

2

 

(d) associated with the
blending of Product or regrades of Product resulting from commingling of
Product in pipelines according to Good Industry Practice; or

 

(e) due to normal Product
evaporation, shrinkage, line loss, clingage, or tolerance of Product
measurement inaccuracies (in compliance with Applicable Law, or, in the absence
of either, Good Industry Practice).

 

                “Tank” has the meaning described in Attachment
“A-1”.

 

                “Term” has the meaning indicated in Attachment
“A”.

 

                “Terminal” or “Terminals” has the meaning
described in Attachment “A” and references to it will be deemed to
include the Terminal manager or his/her representative.

 

                “Third Party” means any entity other than
Owner, Customer, or their respective Affiliates.

 

                “Third Party Claim” has the meaning
assigned to such term in Section 18.3.

 

                “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 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 accordance with Good Industry Practice and in compliance with Applicable
Law.  Subject to the provisions of
Attachment “A”, all Tanks will be heated, insulated, and thereby suitable for
Product storage, with the exception of Tank No. 8 at Jacksonville.  Owner will review and estimate the cost to
heat and insulate Tank No. 8.  When
estimates are complete, Owner, at its option, will either begin work to make
the tank available for service as soon as practical or notify Customer that
Tank No. 8 will not be made available for service.  Until such time that Tank No. 8 is placed
into service, it shall be deemed Out of Service for purposes of Monthly Service
Charge calculation.

 

                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, as applicable.  These
documents will be transmitted to Customer at the address indicated in Attachment
“A,” or such other address as may be mutually agreed upon by Customer and
Owner at the time the request is made. 
Daily inventories by Terminal, Tank and Product shall be electronically
transmitted to Customer within four (4) business hours of each Business Day.
Customer sales information shall be transmitted at least twice daily via
electronic interface with Customer’s accounting system.  Customer’s copy of applicable Bills of Lading
shall be sent to the address in Attachment “A” at the close of each
Business Day.  Owner shall be responsible
for all hardware, software and supplies necessary to print Bills of Lading
locally and transmit information to Customer.

 

                2.3           Within three(3) Business 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
reflecting beginning inventory balances, the volume of Customer’s Product
received into the Terminal, throughput from the Terminal and ending inventory
balances during the preceding Month, together with an invoice for amounts due
for services provided during the preceding Month, as applicable, 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 2.3, the Monthly statements provided
under this Section 2.3 will prevail as to the volume of Product received and
delivered by Owner, unless disputed by Customer.

 

3

 

                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 written 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.

 

                2.5           During the Term of this Agreement, Owner will not, and
will not allow any of its Affiliates or any Third Party, to store, throughput,
or sell, construct or cause to be constructed any tanks, at the Terminals
specifically for the storage of Product without the prior written consent of
Customer.  Customer shall be the
exclusive seller of Product at the Terminals.

 

 

SECTION 3.         FEES,
CHARGES AND TAXES.

 

                3.1           Customer will pay Owner, for services
provided under this Agreement, the charges and fees indicated in Attachment “A”.

 

                3.2           All fees and charges reflected in
Owner’s invoices are due and payable within fifteen (15) Business Days of the
date of Owner’s invoice.  Payment must be
made by electronic wire transfer of same day available U.S. 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 plus 3% from the date that
payment is due until paid in full. 
Likewise previously paid or disputed amounts in favor of the Customer
will accrue interest at the Interest Rate plus 3% from the date that payment
was made until credit is issued to Customer’s Account.  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 property at the Terminal.  Customer will indemnify and reimburse Owner
for any costs or expense incurred by Owner in association with the foregoing
taxes, expenses, fees or costs.  Owner
will be responsible for and pay all other applicable taxes levied upon Owner,
including any increases in taxes levied on Owner’s Terminal (including real or
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           Customer
agrees not to challenge, protest or file a complaint, or cause, encourage or
recommend to any Affiliate or any other person that it challenge, protest or
file a complaint with respect to any rates, tariffs, rules, regulations in
effect during the term of this Agreement, if applicable, as the same may be
amended from time to time provided that such tariffs, regulatory filings or
rates do not conflict with the terms of this Agreement.

 

 

SECTION 4.         OPERATIONS, RECEIPTS AND DELIVERIES.

 

                4.1           Customer’s
Product will be delivered to the Terminal free of any charge to Owner.  Receipts and deliveries of Product will be
handled within the operating hours of the Terminal as set forth on Attachment
“A”.  Owner may make temporary
changes in operating hours or temporarily close the Terminal because of an
extraordinary event or maintenance, without Customer’s approval.  Owner will notify Customer of such temporary
changes or closure in advance, or as soon after implementation as is
practicable.  Owner will notify Customer
of any planned maintenance at least seven (7) days prior to altering business
hours or restricting deliveries or sales. 
Vessels, railroad tank cars, and tank trucks will be loaded and unloaded
on first come, first serve basis and Owner will not be responsible for the
payment of any demurrage or costs incurred by Customer or its transportation
carrier for delays in receipt or throughput of the Product or other costs or
fees in connection with receipt or throughput of the Product that are not the
fault of the Owner.  Owner shall be
responsible for demurrage costs incurred and paid by Customer or its
transportation carrier for delays in receipt or throughput of the Product, or
other costs or fees incurred and paid by Customer in connection with receipt or
throughput of the Product if the Owner is responsible for the delay or cost as
a result of mechanical 

 

4

 

malfunction, lack of
manpower, Product spill or release, or other cause determined to be within the
reasonable control of the Owner.

 

                4.2           Customer must arrange for and pay all Third Party costs
related to the receipt or delivery of Customer’s Product to and from the
Terminal. Owner is responsible only to receive or throughput, as the case may
be, the Product at its Terminal.  Owner
shall also provide personnel required to load trucks at the Port Everglades
Terminals at rates specified in Attachment “A”, Section 5.K., except on
designated holidays as described in Attachment “A”.  On those designated holidays, vessels will be
handled at the rates described in Attachment “A”.  Unless otherwise provided to Owner in
writing, Customer must provide notice reasonably acceptable to Owner (in accordance
with Section 13) containing all necessary shipping instructions, including
without limitation, the identity and quantity of the Product and the tentative
arrival date(s) (the “Arrival Notice”). 
If this Agreement involves marine receipts or throughput of Product, Owner
will advise Customer concerning the Vessel that may be berthed, including its
maximum size, draw, draft and length, the docks and associated positions to be
used for each Product movement, as well as the minimum and maximum pumping rates
or pressure, as applicable, or both. 
Owner and/or the applicable port authority may change Vessel limitation,
dock designation, and pumping rates and pressure criteria from time to time
upon prior reasonable notice to Customer. 
If Owner determines that a Vessel, truck or railroad car is unsuitable
for shipment of Products, as Owner deems appropriate, Owner may refuse to load
or unload such equipment and will advise the carrier and Customer of the
situation immediately, and request further instructions from the Customer.  It is the responsibility of Customer to
notify the appropriate Governmental Authorities regarding Vessel arrivals.

 

                4.3           If Customer requires any change in the shipping
instructions, including, without limitation, the identity and timing of the
Product, Customer must provide notice of any change in the Arrival Notice (in
accordance with Section 13) to the Owner and the Terminal before the arrival of
the Product at the Terminal.  Upon
receipt of Customer’s shipping instructions, Owner will immediately advise
Customer of the Terminal’s availability. 
If the Terminal will not be available to receive or deliver Customer’s
Product on the communicated arrival date, Owner will advise as to the earliest
time when Customer’s Product may be received or delivered at the Terminal.  Customer will ensure that confirmation of the
arrival date(s) and time of the Product will be communicated to Owner and the
Terminal by Customer’s carrier periodically, at intervals of at least 48, 24
and 12 hours in advance of the anticipated date and time of arrival of the
Product.  If Customer fails to provide
Owner and the Terminal the notice containing shipping instructions in the form
and manner required by this Section 4.3, Owner will not be obligated to receive
or deliver Customer’s Product.  Owner
will not be responsible for any Product Loss directly attributable to Owner’s
receipt or delivery of Product based upon erroneous shipping instructions, the
notice of which is timely received by Owner in accordance with this Section
4.3.

 

                4.4           If any of Customer’s Vessels (a) fails to vacate a dock
upon completion of loading or discharge, (b) fails to discharge or load a barge
within twenty-four (24) hours or within thirty-six (36) hours for an ocean
going barge or vessel, or (c) fails to vacate in order to conduct repairs,
then, after having been notified by Owner to vacate, Customer shall be
responsible for the cost applicable to the berths together with any costs
incurred by any Vessel which would otherwise be occupying such dock but for the
failure of Customer’s Vessel to vacate, save and except any such costs arising
due to delay caused by Owner.

 

                4.5           Subject to Product Loss, Owner will deliver to Customer,
or to such Third Parties as Customer may direct, the Product held by Owner at
the Terminal for the account of Customer. 
Customer is responsible for providing to Owner documentation required to
authorize deliveries for or on its behalf from the Terminal and only to
properly qualified individuals who have complied with the terms of Section 11.

 

                4.6           Customer
may use the Tanks only for storage of Customer’s Product and may use the Tanks
for storage of other products only with the prior written consent of
Owner.  If a special method of storing or
handling Product is required, then Customer must notify Owner in sufficient
time to enable Owner to consider whether it will accept the proposed changes in
the Product stored or the method of storing or handling the Product and to take
the necessary preparatory measures if it agrees with such changes.  Failing such notice, Owner will not be liable
for losses or damage incurred during the storage and handling of the Products,
nor will Owner be obligated to provide such special storage and handling
service.  It is understood that the cost
of any additional or special equipment required by Customer or of alterations
made necessary by the nature of Customer’s Product, will be for the account of
Customer and Customer will be responsible for the expense of any necessary
cleaning of the storage and handling equipment, including, without 

 

5

 

limitation, Tanks,
pipelines, pumps, hoses, meters, and loading arms, unless otherwise explicitly
stated in this Agreement.  All fixtures,
equipment and appurtenances attached to the Tanks, pipelines and other
facilities of the Terminal by either Party are and will remain the property of
Owner.  No such items may be installed by
Customer without the prior written consent of Owner.

 

                4.7           (a) 
Upon execution of this Agreement, Customer agrees to purchase from Owner
any existing, on specification Product inventory
at the Port Manatee and Jacksonville Terminals at a price of $150/ton up to a
maximum of $1,500,000.  On May 1, 2006,
Customer agrees to purchase from Owner any existing tank inventory at the Cape
Canaveral and Port Everglades Terminals at a price of $130/ton up to a maximum
$1,300,000.  In the case of Port
Everglades and Cape Canaveral, if the Product is off specification, Customer
and Owner will negotiate a different price in good faith.

 

(b)  Within ten (10) Business Days following
termination or cancellation of this Agreement (subject to any lien that Owner
may have on the Product), Customer will remove and properly dispose of all
Product, including Product tank bottoms and line fill, residue, scale, and any
other accumulation from the Tank and pipelines and clean both Tank interior and
pipelines then in use for Customer’s Product to a condition suitable for the
storage of No. 6 Oil.  Customer shall reimburse
Owner for all costs and expenses reasonably incurred by Owner in taking such
action, plus a 15% handling fee, as well as the cost of storage and handling of
the Product removed, if any, at a rate of $0.03 per Barrel per day in addition
to any other fees due hereunder, which fees and Business rates will continue to
be charged if Customer shall not have removed Customer’s Product from the Tanks
within ten (10) Business Days from the date of cancellation or termination of
this Agreement.

 

(c)  Subject to the provision of Section 4.7(b)
above, upon termination or cancellation of this Agreement, Owner shall have the
option of purchasing any of Customer’s Product remaining at the Port Manatee
Terminal or the Jacksonville Terminal for $165/ton and the Cape Canaveral
Terminal or the Port Everglades Terminal at a price of $135/ton.   If Owner elects to purchase remaining
Product at any Terminal, Section 4.7(b) will not apply.

 

                4.8           If
any Governmental Authority requires installation of any improvement, alteration
or addition to any Tank or other equipment at the Terminal for purposes of
compliance with Applicable Law that would require Owner to make substantial and
unanticipated capital expenditures, other than continued maintenance and
capital expenditures not affected by such requirement, Owner will notify
Customer of (a) the cost of making any such improvement, alteration or
addition, after Owner’s efforts to mitigate such costs, (b) when such
improvement, alteration or addition must be completed, and (c) Customer’s share
of such costs.  Owner will not be
required to make any improvements, alterations or additions to the Terminal in
such circumstance unless Customer either agrees to pay its share of such costs
in the manner provided below or agrees in good faith with Owner for a ratable
surcharge to serve as a monthly fee increase.

 

                                If Customer elects, after negotiation
with Owner in good faith, not to share in such costs and Owner chooses not to
pay for such improvement, alteration or addition in lieu thereof, and if Owner
does not direct the affected Product to mutually acceptable terminal assets
owned by Owner or its Affiliates, either Party may terminate or release the
affected facilities or Tanks from this Agreement, with an equivalent reduction
of the fees herein, by giving the other Party notice of its intention no later
than thirty (30) calendar days after Owner’s receipt of notice of Customer’s
election not to share in such costs.

 

                                If Customer elects to pay its share
of such costs, Owner shall likewise pay its share of such costs and proceed
with the installation of the required improvement, alteration or addition.  Customer may elect to either pay its
proportionate share of such costs in one lump sum or pay its proportionate
share of the costs on a prorated Monthly basis over the remaining Term of this
Agreement.  In addition to installation
costs, these costs will include engineering and interest expense at a rate of
3% over the Interest Rate on the date of completion of such installation and
subsequent reasonable expenses, if any, of operating or maintaining such
installation.

 

                                This Section 4.8 shall not apply to
establish compliance with any Applicable Law at the time this Agreement is
executed, e.g., Maritime Transportation Security Act.

 

4.9           Customer will be
responsible for providing all Tank bottoms and line fill.

 

6

 

SECTION 5.         PRODUCT QUALITY STANDARDS AND
REQUIREMENTS.

 

                5.1           Customer
warrants to Owner that Product tendered by or for the account of Customer for
receipt by the Terminal will conform to the specifications for such Product set
forth in Attachment “B”, attached to this Agreement and included in it
for all purposes by this reference, and will comply with Good Industry Practice
and all Applicable Law.  If tendered
Product does not comply with the specifications set forth in Attachment “B”,
Customer will be responsible for blending Product to meet specifications and
Applicable Law.  Owner will not be
obligated to receive Product into the Terminal that is contaminated or that
otherwise fails to meet those specifications which, as a result, places Owner
and/or its employees at undue risk. 
Customer will have the right to notify Owner of Product that does not
meet the specifications set forth in Attachment “B” and Owner will consider
receiving such product for the purposes of blending in order to meet the
specifications.  Owner’s agreement to
such a request shall not be unreasonably withheld.  Any blending activity, and associated costs,
will be subject to the terms and conditions outlined in this Agreement.  Owner may rely upon the specifications and
representations of Customer set forth in the Arrival Notice as to Product
quality and shall verify quality prior to release for sale according to Section
5.4.  Should Owner remove or dispose of
any water or other material in or associated with the Product at any time,
Customer shall pay or reimburse all costs and expense associated with such
removal or disposal unless water or other material was introduced by Owner or
via a mechanical or structural flaw in Owner’s assets.

 

                5.2           The
quality of Product tendered into the Terminal for Customer’s account must be
verified either by Customer’s laboratory analysis, or by an Independent
Inspector’s analysis indicating that the Product so tendered meets Owner’s
minimum Product specifications set forth in Section 5.1 above.  Such analysis may be conducted on a periodic
basis in accordance with a Quality Control Plan implemented by Customer, which
program shall be subject to the approval of Owner, which approval shall not be
unreasonably withheld.  Owner, at its
expense, shall take samples from each Tank at least every thirty (30) days and,
at Customer’s cost, ship to Catlettsburg Asphalt Certification Lab at 11631 US
Route 23 Catlettsburg, KY 41129 unless otherwise notified by Customer.  Except as identified otherwise, all costs
associated with such compliance program shall be borne by Customer.  Upon reasonable notice to Customer, Owner, at
its expense, may sample any Product tendered to Owner for Customer’s account
for the purpose of confirming the accuracy of the analysis.

 

                5.3           At
least twenty-four (24) hours prior to the time of each receipt from Customer, a
certificate setting forth the quality, grade and other specifications of the
Product must be delivered to Owner.  Each
Party may at all reasonable times make appropriate tests to determine whether
Product stored or delivered meets those specifications.  Owner will be liable to Customer and any of
Customer’s purchasers for damages incurred by reason of contamination of
Product, while in Owner’s custody, that fails to meet Customer’s
specifications, but only to the extent such contamination involves a Product
Loss

 

                5.4           Quality
Control Plan and Testing

 

                                (a) 
Customer shall develop and provide a Terminal specific Quality Control
Plan, subject to approval of Owner, which approval shall not be reasonably
withheld.  A sample Quality Control Plan
is provided as Attachment “D”. 
Customer shall finalize a Quality Control Plan at each Terminal upon
execution of this Agreement.

 

(b)  As outlined in the Quality Control Plan and
mentioned here for reference, Customer requires QC testing for Viscosity of
Asphalts by Vacuum Capillary @ 140F, AASHTO T-202 or ASTM D 2171.  Customer shall provide initial equipment and
viscosity test training to Owner at each of its Terminals.  Owner shall provide ongoing training of its
operating staff and will operate equipment to run all viscosity tests on site.
Customer will be responsible for expenses related to the calibration,
maintenance and replacement of the testing equipment unless such calibration,
maintenance or repair is the result of mishandling or negligence of the Owner.
Owner will be responsible for conducting, at its expense, normally occurring
semi-annual maintenance and calibration.

 

7

 

(c)  Viscosity testing shall be conducted on each
Tank following receipt of Product or Tank transfer.  In addition, static Tanks available for shipment
will be tested weekly for viscosity.  If
the Product is off specification through no fault of Owner, Customer shall bear
the cost to bring Product to specification.

 

(d)           Viscosity test results shall be
compiled when completed and made available to Customer in accordance with the
Quality Control Plan or when requested.

 

 

SECTION 6.         TITLE AND CUSTODY OF PRODUCT.

 

                6.1           Title to Customer’s Product will
remain with Customer at all times subject to any lien in favor of Owner created
pursuant to the terms of this Agreement or under Applicable Law.  Owner will assume custody of the Product at
the time such Product passes the last permanent discharge flange connection of
the delivering Vessel, truck, or railroad tank car of Customer’s transportation
carrier. If Products are delivered to Customer, custody shall pass to Customer
at the point where Products pass the first permanent flange connection of the
receiving Vessel, truck or railroad tank car.

 

 

SECTION 7.         LIMITATION OF LIABILITY AND DAMAGES.

 

                7.1           Upon
throughput of Customer’s Product, as provided above, Owner shall have no
further responsibility for any loss, damage or injury to persons or property
(including the Products) arising out of possession or use of the Product,
except to the extent that such loss, damage or injury involves a Product Loss
or loss or damage to other property or injury to persons is caused by Owner’s
sole negligence.

 

                7.2           The maximum liability of Owner for Product Loss will not
exceed, and is strictly limited to, the market value of the Product at the time
of the Product Loss or immediately prior to its contamination, plus the costs
and expenses actually, reasonably and necessarily incurred by Customer or
Customer’s immediate purchaser in damage to equipment, cleaning and repairing
trucks, and facilities into which such Product was delivered at the Terminal,
plus any fines and penalties actually levied against and paid by Customer or
Customer’s immediate purchaser by reason of such fault on Owner’s part.  Owner may, in lieu of payment for any Product
Loss, replace such Product with Product of like grade and quality.

 

                7.3           EXCEPT FOR THE PARTIES’ INDEMNIFICATION OBLIGATIONS WITH
RESPECT TO CLAIMS OF THIRD PARTIES, THE PARTIES’ LIABILITY FOR DAMAGES
HEREUNDER IS LIMITED TO DIRECT, ACTUAL DAMAGES ONLY AND NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR SPECIFIC PERFORMANCE, LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES, OR SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
EXEMPLARY OR INDIRECT DAMAGES, IN TORT, CONTRACT OR OTHERWISE, OF ANY KIND,
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE PERFORMANCE, THE SUSPENSION OF
PERFORMANCE, THE FAILURE TO PERFORM, OR THE TERMINATION OF THIS AGREEMENT.  EACH PARTY ACKNOWLEDGES ITS DUTY TO MITIGATE
DAMAGES HEREUNDER.

 

 

SECTION 8.         PRODUCT MEASUREMENT.

 

8.1           Quantities of Product received into and delivered from the
Terminal shall be determined as follows:

 

 (a) for deliveries and receipts by Vessel,
volumes shall be measured by the following methods in order of priority: (i)
proven API-approved meters, (ii) static terminal tank gauges or scales, as
applicable.

 

(b) for deliveries and
receipts by truck, volumes shall be measured by the following methods in order
of priority: (i) static calibrated scales, (ii) proven API-approved meters, or
(iii) static terminal tank gauges, as applicable.

 

8

 

At no time shall Owner gauge, measure,
witness, or confirm any measurements on a Vessel.  If tankage has movements in or out (active
Tanks) during the measurement process, they shall be manually gauged and
metered, if applicable and as necessary, and corrected in the reasonable
judgment of Owner to reflect actual quantities received into and delivered from
such active Tanks.  Absent fraud or
manifest error, the quantities of Products in storage at any time will be
determined from Terminal inventory records of receipts and throughput.  Unless indicated otherwise, quantity
determinations will be based on a Barrel of Product and shall be determined in
accordance with the latest established API/ASTM standards for the method of
delivery.  All volumes shall be
temperature corrected to 60°F in accordance with the latest supplement or
amendment to ASTM-IP petroleum measurement tables (ASTM designated D#1250.
table 6(b)).  Gauging of Product receipt,
throughput and storage will be taken jointly by representatives of the Parties;
provided, however, that if Customer does not have representatives present for
gauging, Owner’s gauging will be conclusive, absent fraud or manifest error.  Customer may use an Independent Inspector at
its own expense.

 

                8.2           Terminal meters and scales will be calibrated
periodically, at least to the frequency defined by the State of Florida, and
upon each completion of repair or replacement of a meter, at the meter or scale
owner’s expense.  Such calibration shall
be in accordance with the latest applicable API/ASTM standards.  If a meter or scale is determined by either
Party to be defective or inoperative, such Party shall immediately notify the
other Party, and it will be the responsibility of the Owner to promptly make
repairs or replacements.  Product
received or delivered through a facility having an inoperative or defective
meter or scale will be measured based upon before and after static Tank gauges
and any active Tanks measured in accordance with Section 8.1.  In such event, the Parties shall appoint a
mutually acceptable Independent Inspector to gauge the applicable Tanks and the
findings of the Independent Inspector shall be final and binding on the
Parties, except for fraud or manifest error. 
The Parties shall share equally the cost of the Independent Inspector
under this Section 8.2.

 

 

SECTION 9.         PRODUCT LOSS/GAIN.

 

                9.1           Except as provided otherwise in
Section 4.3 and Section 6, and during such time as Owner has custody of the
Product, Owner will indemnify Customer against and is responsible for any
Product Loss that occurs while the Product remains in storage based on
measurements of each Product grade.  In
the case of Product that has been delivered to or for the account of Customer,
Owner will be responsible for any Product Loss occurring while the Product was
in storage, provided Customer gives Owner notice of the claim within thirty
(30) calendar days after such Product left the Terminal.  In the event of the foregoing Product Loss,
the total Barrels of Product Loss will be determined and will either be
replaced by Owner or Owner will reimburse Customer the cost of such Product in
accordance with Section 7.

 

                9.2           Each Month, Owner will balance the
Terminal in accordance with Section 8 to determine the net gain or loss of each
Product, excluding any Product Loss in the calculation.  Owner shall be responsible for any volume
losses of Product due to the sole negligence of Owner, its employees, agents,
contractors or subcontractors.  Any
losses other than those caused by the sole negligence of Owner or by a Force
Majeure event shall be for the account of Customer.  Any Product gains over the same period shall
be for the account of Customer.

 

 

SECTION 10.       FORCE MAJEURE.

 

10.1         If either Party is unable to perform or
is delayed in performing, wholly or in part, its obligations under this
Agreement, other than the obligation to pay funds when due, as a result of an
event of Force Majeure, that Party may seek to be excused from such performance
by giving the other Party prompt written notice of the event of Force Majeure
with reasonably full particulars and timing of such Force Majeure event.  The obligations of the Party giving notice,
so far as they are affected by the event of Force Majeure, will be suspended
during, but not longer than, the continuance of the event of Force
Majeure.  The affected Party must act
with commercially reasonable diligence to resume performance and notify the
other Party that the event of Force Majeure no longer affects its ability to
perform under the Agreement.  If Owner is
excused from providing service pursuant to this Agreement due to an event of
Force Majeure, the fees hereunder not already due and payable will be excused
or proportionately reduced, as appropriate, for so long as the Owner’s
performance is excused due to the event of Force Majeure.

 

9

 

10.2         The requirement that any event of Force Majeure be remedied
with all reasonable dispatch shall not require the settlement of strikes,
lockouts, or other labor difficulty by the Party claiming excuse due to an
event of Force Majeure contrary to its wishes.

 

                10.3         If either Party is rendered unable to perform by reason of
an event of Force Majeure for a period in excess of one hundred eighty (180)
consecutive calendar days, then the other Party may terminate this Agreement
upon written notice to the Party claiming excuse due to the event of Force
Majeure.

 

 

SECTION 11.       INSPECTION OF AND ACCESS TO TERMINAL.

 

11.1         Customer may, during Owner’s normal business hours and after
reasonable written notice to Owner and the Terminal, so as not to disrupt the
Terminal’s or Owner’s operations;

 

 (a) make periodic operational inspections of
the Terminal;

 

(b) conduct audits of any
pertinent books and records, including those related to receipts, throughput
and inventories of Products; and

 

(c) conduct physical
verifications of the amount of Products stored in the Terminal.

 

                                Customer’s right and that of its
authorized representatives to enter the Terminal will be exercised by Customer
in a way that will not interfere with or diminish Owner’s control over or its
operation of the Terminal and will be subject to reasonable rules and regulations
promulgated by Owner.  Customer
acknowledges that under this Agreement none of Customer’s vehicles or vehicles
acting on behalf of Customer will be granted access to the Terminal until the
owner of such vehicles and its employees or agents have been properly qualified
and such owner has executed the then-current Owner’s “Terminal
Access Agreement” substantially
in the form of Attachment “C”. 
Customer acknowledges its awareness of the terms of the Terminal Access
Agreement.  If there is any conflict between
the terms of this Agreement and those contained in the Terminal Access
Agreement, the terms and provisions of this Agreement shall take
precedence.  Owner will be responsible
for tracking execution of and compliance with all Terminal Access Agreements
and any associated insurance requirements, but will not be responsible if
Customer or its agents are non-compliant and such non-compliant activity is
beyond the reasonable control of Owner.

 

11.2         As soon as possible after the Effective Date of this Agreement,
Customer shall notify Owner of those Third Parties to whom Owner may deliver
Products from the Terminal.  Customer
must furnish forty-eight (48) hours notice of any additions or deletions to its
list of approved Third Parties.

 

11.3         Customer acknowledges that any grant by Owner of the right
of access to the Terminal to Customer or any Customer Third Party under this
Agreement or under any document related to this Agreement is a grant of a
license only and shall convey no interest in or to the Terminal or any part of
it to Customer or any Customer Third Party, and may be withdrawn by Owner at
its discretion at any time.

 

  Owner agrees to operate the Terminal in
compliance with Applicable Law and Good Industry Practices.  Customer shall have the right to conduct
periodic inspections and surveys of the Terminals, but Owner shall have no
obligation to comply with any findings or recommendations that exceed those
practices or specifications required by Applicable Law and Good Industry
Practice.

 

 

SECTION 12.       ASSIGNMENT.

 

This Agreement shall be
binding upon and shall inure to the benefit of the successors and assigns of
the  Parties.  Customer and Owner covenant that they will
not by operation of law or otherwise assign, sublet, hypothecate, pledge,
encumber or mortgage this Agreement, or any part of or right or obligation
under it, or permit the Tanks to be used by others without the prior written
consent of the other Party.  For purposes
of this Section, “assign” will be considered to include any change in the
majority ownership or control of Customer or Owner.  Any attempt by Customer 

 

10

 

or Owner to assign, sublet, hypothecate,
encumber or mortgage this Agreement will be null and void.  The consent by Owner or Customer to any
assignment, subletting, hypothecation, pledge, encumbrance, mortgage or use of
this Agreement or the Tanks by others will not constitute a waiver of the other
Party’s right to withhold its consent to any other or further assignment, subletting,
hypothecation, pledge, encumbrance, mortgage or use of the Agreement or Tanks
by others.  The absolute and
unconditional prohibitions contained in this Section 12 and the Parties’
agreement to them are material inducements to the Parties to enter into this
Agreement and any breach of them will constitute a material default under this
Agreement permitting the Parties to exercise all remedies provided in this
Agreement or by Applicable Law.

 

 

SECTION 13.       NOTICE.

 

Except as provided below, any notice required
under this Agreement must be in writing and will be deemed received when
actually received and delivered by (a) United States mail, certified or
registered, return receipt requested, (b) confirmed overnight courier service,
(c) confirmed facsimile transmission, or (d) electronic mail properly addressed
or transmitted to the address of the Party indicated in Attachment “A”
or to such other address, physical or electronic, or facsimile number as one
Party shall provide to the other Party in accordance with this provision.  Notifications and confirmation of delivery,
receipt or shipping instructions as outlined in Section 4 may also be made via
telephone, if such telephone notification is confirmed by one or more of the
methods described above within two hours.

 

 

SECTION 14.       COMPLIANCE WITH LAW AND SAFETY.

 

                14.1.        Customer warrants that the Products tendered by it have been
produced, transported, and handled, and Owner warrants that the services
provided by it under this Agreement are in full compliance with all Applicable
Laws.  Each Party also warrants that it
may lawfully receive and handle such Products, and it will furnish to the other
Party any evidence required to provide compliance with Applicable Laws and to
file with applicable Governmental Authorities reports evidencing such
compliance.

 

                14.2.        Customer certifies, on behalf of itself, its employees,
agents and contractors, that all tank cars, vehicles and Vessels, used in
connection with this Agreement will comply with all Applicable Laws and that
they will comply with Owner’s safety and security rules that have been provided
to Customer prior to the execution of this Agreement and which are subject to
reasonable change by Owner.  Customer
will furnish Owner with information (including Material Safety Data Sheets)
concerning the safety and health aspects of Products stored or throughput under
this Agreement.  Owner will communicate
such information to all persons who may be exposed to or may handle such Products,
including without limitation, Owner’s employees, agents and contractors.

 

                14.3         Owner acknowledges that it has an acceptable Policy and
Procedure program for the handling and storage of hydrogen sulfide (H2S),
which includes the use of personal monitoring devices, and further acknowledges
that hazardous concentrations of hydrogen sulfide (H2S) can be
generated and accumulate in the vapor space of barges, storage tanks, transport
trucks, tank cars or other enclosed spaces where Product is stored or
transported under certain conditions. 
Owner agrees that it shall provide adequate warnings and safe handling
information about H2S to its employees, agents, contractors and
invitees, and shall require them to further communicate the warnings and
information to all persons that they reasonably foresee may be exposed to or
handle any cargoes that may contain H2S.  The warnings and information shall include a
communication that lethal levels of H2S may be present, a statement
of adequate precautions, and the information contained in the Material Safety
Data Sheets.  Owner further agrees that
it is responsible for determining, implementing, and ensuring compliance with
work procedures to provide adequate precautions against H2S exposure
by its employees, agents, contractors and invitees.

 

                14.4         Owner certifies, on behalf of itself, its employees, agents
and contractors, that all Tanks and associated piping used in connection with
this Agreement will comply with all Applicable Laws, including without
limitation, 40 CFR 112, Spill Prevention Control and Countermeasure (SPCC).

 

11

 

SECTION 15.       DEFAULT, WAIVER AND REMEDIES

 

15.1         The occurrence of any of the following
events shall constitute an “Event of Default” hereunder:

 

(a)                                  failure of either Party to pay any
interest or fees when due under this Agreement, in each case whether at stated
maturity, by acceleration, or otherwise;

 

(b)                                 either Party fails to perform any
obligation to the other Party or breaches any covenant made to the Party under
this Agreement, which, if capable of being cured, is not cured to the
satisfaction of the other Party (in its sole discretion) within ten (10)
Business Days from the date that such Party receives notice that corrective
action is needed;

 

(c)                                  either Party becomes insolvent or
bankrupt, or bankruptcy, receivership, or similar proceedings are initiated by
or against either Party;

 

(d)                                 any material covenant, agreement or
obligation of any Party contained in or evidenced by this Agreement shall cease
to be enforceable in accordance with its terms;

 

(e)                                  either Party to this Agreement shall
repudiate, deny or disaffirm its obligations under this Agreement;

 

(f)                                    this Agreement is cancelled, terminated,
revoked or rescinded without the express prior consent of the other Party, or
any Proceeding shall have been commenced by any person (other than either
Party) seeking to cancel, revoke, rescind or disaffirm the obligations of any
Party to this Agreement (unless such Party is contesting the Proceeding in good
faith and such Proceeding is withdrawn or dismissed with prejudice within
ninety (90) calendar days), except as otherwise described in this Agreement;

 

(g)                                 any Governmental Authority shall issue a
judgment, order, decree or ruling to the effect that any of the obligations of
any Party to this Agreement is illegal, invalid or unenforceable;  or

 

(h)                                 any claim or lien (other than a claim
pursuant to Section 18 or any statutory liens for taxes not yet due) is
asserted or placed on any portion of Customer’s Product while stored at the Terminal.

 

15.2         The waiver by the
non-defaulting Party of any right under this Agreement will not operate to
waive any other such right nor operate as waiver of that right at any future
date upon another default by either Party under this Agreement and a single or
partial exercise of any right, power or privilege will not be presumed to
preclude any subsequent or further exercise of that right, power, or privilege
or the exercise of any other right, power, or privilege.  Nothing in this Section 15.2 is intended in
any way to limit or prejudice any other rights or remedies the non-defaulting
Party may have under this Agreement, under Applicable Law or in equity.  The remedies provided in this Agreement are
not exclusive and, except as otherwise expressly limited by this Agreement, are
in addition to all other remedies of the non-defaulting Party at law or in
equity.  Acceptance by Owner of any
payment from Customer for any charge or service after termination of this Agreement
shall not be deemed a renewal of this Agreement under any circumstances.  Notwithstanding any provision in this
Agreement to the contrary, if Customer is not then in default, Customer shall
be entitled to remove its Product from the Terminal at any time if Owner is in
default under this Agreement.

 

15.3         Subject to Section 15.4 below, upon the
occurrence and during the continuance of an Event of Default, and at any time
thereafter, the non-defaulting Party may, by delivery of written notice to the
defaulting Party, take any or all of the following actions, without prejudice
to the rights of the non-defaulting Party to enforce its claims against the
defaulting Party:

 

                (a)           withhold or suspend its performance under this Agreement
without prior notice;

 

                (b)           immediately terminate this Agreement; and

 

12

 

                                                (c)           enforce any and all rights and interests created
and existing under this Agreement or arising under Applicable Law, including,
without limitation, all rights and remedies existing under any security
documents and all rights of setoff.  The
enumeration of the foregoing rights is not intended to be exhaustive and the
exercise of any right shall not preclude the exercise of any other rights, all
of which shall be cumulative.

 

15.4         If Customer should fail to pay such
sums owned by it to Owner, Owner shall provide Customer with notice of default
as provided in this Agreement and an opportunity to cure such default within a
period of fifteen (15) calendar days.  If
Customer has not cured such default within such fifteen (15) day cure period,
Owner may proceed in accordance with Applicable Law to recover its contractual
and statutory obligations of Customer under this Agreement, including, without
limitation, all costs, reasonable attorney’s fees, and expenses incurred by
Owner in the recovery of sums owed to Owner by Customer hereunder.

 

15.5         If any insolvency, bankruptcy,
receivership, or similar proceedings are initiated by or against Customer, on
the day immediately before such event, any fees for services rendered or to be
rendered under this Agreement and any fees required to be paid for the
remaining Term of this Agreement, will become immediately due and payable and
this Agreement will terminate, without prejudice to any other rights or remedies
it may have under this Agreement or Applicable Law.

 

15.6         In the event litigation if initiated by
either Party related to any breach hereunder, the prevailing Party, after entry
of a final, non-appealable order, shall be entitled to receive as part of such
judgment reimbursement of all reasonable attorney’s fees and costs incurred by
such Party in connection with the prosecution of such action.

 

                15.7         Notwithstanding anything hereinabove to the contrary, the
sale or transfer by Owner of all or part of its Terminals and related assets to
an Affiliate, whether by sale or by operation of law, shall not constitute an
Event of Default.  Likewise, the sale or
transfer by Owner of all or part of the Terminals and related assets, to a
non-Affiliate shall not constitute an Event of Default unless:

 

 (a)                             such sale or transfer would have a
material adverse effect on the economics of the transactions contemplated under
this Agreement; or

 

(b)                               such sale or transfer is made to a Third
Party that Customer reasonably deems to be unacceptable based upon a review of
such Third Party’s creditworthiness, financial capabilities, and ability to
operate the Terminals.

 

15.8         Upon termination of
this Agreement, Customer shall dispose of any of its remaining Product stored
at a Terminal that is subject to this Agreement.

 

 

SECTION 16.       INSURANCE.

 

16.1         Insurance Required for Both Parties.  Throughout the Term, each Party and its
agents shall, at such Party’s sole expense, carry and maintain in full force
and effect insurance coverages, with insurance companies rated not less than
A-, IX by A.M. Best or otherwise reasonably satisfactory to the other Party, or
may meet the requirements of this Section 16.1 by being self-insured to the
satisfaction of the other Party, provided that the financial ability to
self-insure meets or exceeds the limits of coverage specified in Sections 16.1,
16.2 and, if applicable, Section 16.3, of the following types and amounts:

 

                (a)           Workers Compensation coverage in compliance with the
Applicable Law of the states having jurisdiction over each
employee and employer’s liability coverage, and coverage under the Federal
Longshoremen and Harbor Workers’ Act, the Jones Act, and the Federal Death on
the High Seas Act for all marine and vessel matters, in a minimum amount of one
million dollars ($1,000,000) per accident, one million dollars ($1,000,000)
disease per employee and one million dollars ($1,000,000) disease policy limit
and including general maritime remedies of seamen including transportation,
wages, maintenance and cure whether the action is in rem or in
personam;

 

13

 

                (b)           Automobile
liability coverage in a minimum amount of one million dollars ($1,000,000); and

 

                (c)           Comprehensive or commercial general liability coverage and
umbrella excess liability coverage, which includes bodily injury, broad form property damage and contractual
liability coverages in a minimum amount of two million dollars ($2,000,000).

 

                16.2         Insurance
Required by Owner.  In addition to the
insurance required pursuant to Section 16.1, Owner shall provide comprehensive
or commercial general liability coverage and umbrella excess liability
coverage, which includes Product Loss for Product in Owner’s care, custody and
control, and “sudden and accidental pollution” liability coverages (excluding
events that result in acidic deposition) in a minimum amount of ten million
dollars ($10,000,000).

 

16.3         Other Insurance. 
To the extent Customer utilizes its own or contracted Vessels to deliver
or receive Product, Customer shall maintain or cause to be maintained at its
expense or at vessel owners’ expense the following insurance on the
Vessels:  Hull and Machinery insurance,
to the market value of the Vessels, and P&I insurance (including pollution
liability but not tower’s liability covering cargo) including full mutual entry
in an international or American Group P&I Club with IGA pooling, or
alternatively, maritime liability coverage evidenced on the SP-23 form or its
equivalent, including collision liability, tower’s liability except cargo, and
liability for seepage, pollution, containment and cleanup, with extensions for
marine contractual liability with a minimum liability limit of one hundred
million dollars ($100,000,000). 
Pollution liability coverage should cover, if outside of a P&I Club
entry, bodily injury, property damage, including cleanup costs and defense
costs resulting from sudden and gradual pollution conditions of contaminates or
pollutants into or upon the land, atmosphere, or any water course or body of
water.  WQIS should be utilized as
necessary to comply with U.S. regulations, with limits of at least ten million
dollars ($10,000,000).

 

16.4         Additional
Insurance Requirements.

 

                Customer is
self-insured in amounts which are in excess of the amounts required
herein.  Owner will accept Customer’s
self-insurance based upon discussion and review of Customer’s financial ability
to meet or exceed the limit requirements specified in Sections 16.1, 16.2 and,
if applicable Section 16.3.

 

                                (a)           Each Party shall cause its insurance
carriers to furnish to the other Party insurance certificates or, in the case
of Customer, an
officer’s certificate, in a form reasonably satisfactory to the other Party,
evidencing the existence of the coverages required pursuant to Sections 16.1,
16.2, and, if applicable, Section 16.3. 
Such certificates shall specify that no insurance shall be canceled or
materially changed during the Term unless prior written notice is given at
least thirty (30) calendar days’ prior to cancellation or prior to a material
change becoming effective.  Renewal
certificates shall be provided within thirty (30) calendar days of expiration
of the policy under which coverage is maintained.

 

                                (b)           The mere purchase and existence of
insurance coverage, self-insurance or otherwise, shall not reduce or release
either Party from any Liabilities incurred or assumed under this Agreement.

 

                                (c)           In the event of a Product Loss for
which Owner must indemnify Customer under this Agreement, Owner’s insurance
shall be the primary and exclusive coverage for such loss, notwithstanding the
existence of other valid and collectible insurance.

 

16.5         Notwithstanding anything to the contrary contained in this
Agreement, Customer may self-insure to
satisfy the minimum amounts outlined above.  Upon request by Owner,
Customer shall provide Owner with a letter confirming Customer’s self insured
status.

 

14

 

SECTION 17.       SECURITY AND CREDIT.

 

                17.1         If Customer should fail to pay such
sums owed by it to Owner, Owner shall provide Customer with notice of default
as provided in this Agreement and an opportunity to cure such default within a
period of thirty (30) calendar days.  If
Customer has not cured such default within such thirty (30) day cure period,
Owner may proceed in accordance with Applicable Law to recover its damages,
including, without limitation, all costs, reasonable attorney fees, and
expenses incurred by Owner in the recovery of money owed to Owner by Customer.

 

                17.2         If at any time Owner believes in good faith that the
financial responsibility of the Customer has been impaired or is
unsatisfactory, advance cash payment or other security, including letters of
credit, will be given by Customer upon demand to cover the value of all
anticipated throughput and other fees, as well as the value of Products
delivered for the account of Customer in the event that Customer has a negative
inventory of its own Products.  If the
current value of the Products in Owner’s custody is at any time less than the
value of the security provided by Customer, Owner may refuse to deliver to
Customer any additional Products until such time as Customer provides
additional security.

 

                17.3         If any insolvency, bankruptcy, receivership, or similar
proceedings are initiated by or against Customer, on the day immediately before
such event, any fees for services rendered or to be rendered under this
Agreement and any fees required to be paid for the remaining Term of this
Agreement, will become immediately due and payable and this Agreement will
terminate, without prejudice to any other rights or remedies it may have under
this Agreement or the law.

 

 

SECTION 18.       INDEMNITY.

 

                18.1         Indemnity.

 

                                (a)           Owner shall indemnify and hold
Customer, its Affiliates, and their employees, directors, officers,
representatives, agents and contractors harmless from and against any and all
Liabilities arising from Owner’s (i) performance of the services provided under
this Agreement, (ii) breach of this Agreement, (iii) negligence or willful
misconduct of it, its Affiliates and their employees, directors, officers,
representatives, agents or contractors, (iv) failure to comply with Applicable
Law with respect to the sale, transportation, storage, handling or disposal of
the Product, (v) representations, covenants or warranties made under this
Agreement which prove to be materially incorrect or misleading when made,
unless and to such extent that such Liability results from Customer’s
negligence or willful misconduct, or is covered by the following indemnity.

 

(b)           Customer shall indemnify and hold Owner, its Affiliates,
and their employees, directors, officers, representatives, agents and
contractors harmless from and against any and all Liabilities arising from
Customer’s (i) breach of this Agreement, (ii) negligence or willful misconduct
of it, its Affiliates and their employees, directors, officers,
representatives, agents or contractors, (iii) failure to comply with Applicable
Law with respect to the sale, transportation, storage, handling or disposal of
the Product, (iv) representations, covenants or warranties made under this
Agreement which prove to be materially incorrect or misleading when made,
unless and to such extent that such Liability results from Owner’s negligence
or willful misconduct, or is covered by the preceding indemnity.

 

(c)           If any Product spills, leaks or is discharged, or other
environmentally polluting discharge related to the performance of this
Agreement occurs (an “Incident”), Owner shall have sole responsibility for
responding thereto and shall promptly undertake and complete such containment
and clean-up operations, as deemed appropriate by Owner and as required
by Applicable Law.  Indemnity with
respect to such Incidents shall be provided in accordance with subsections (a)
and (b) above.

 

                18.2         No Third Party Rights.  The Parties’ obligations to defend, indemnify
and hold each other harmless under the terms of this Agreement shall not vest
any rights in any Third Party, whether a Governmental Authority or private
entity, nor shall they be considered an admission of liability or
responsibility for any purposes other than those enumerated in this
Agreement.  The terms of this Agreement
are enforceable only by the Parties, and no limited partner 

 

15

 

of Owner shall have a separate right to
enforce any provision of this Agreement, or to compel any Party to comply with
the terms of this Agreement.

 

                18.3         Notice.  The indemnified Party shall notify the
indemnifying Party as soon as practicable after receiving notice of any claim
or proceeding brought against it that might give rise to an indemnity claim
under this Agreement (a “Third Party Claim”) and shall furnish to the
indemnifying Party the complete details within its knowledge.  Any delay or failure by the indemnified Party
to give notice to the indemnifying Party shall not relieve the indemnifying
Party of its obligations except to the extent, if any, that the indemnifying
Party shall have been materially prejudiced by reason of such delay or failure.

 

                18.4         Claims.  The indemnifying Party shall have the right
to assume the defense, at its own expense and by its own counsel, of any Third
Party Claim; provided, however, that such counsel is reasonably acceptable to
the indemnified Party.  Notwithstanding
the indemnifying Party’s appointment of counsel to represent the indemnified
Party, the indemnified Party shall have the right to employ separate counsel
reasonably acceptable to the indemnifying Party, and the indemnifying Party
shall bear the reasonable fees, costs and expenses of such separate counsel if
in the indemnified Party’s reasonable judgment (a) the use of counsel chosen by
the indemnifying Party to represent the indemnified Party would present such
counsel with a conflict of interest or (b) the indemnifying Party shall not
have employed counsel to represent the indemnified Party within a reasonable
time after notice of the institution of such Third Party Claim.

 

                If requested by
the indemnifying Party, the indemnified Party agrees to reasonably cooperate
with the indemnifying Party and its counsel in contesting any claim or
proceeding that the indemnifying Party defends, including, if appropriate,
making any counterclaim or cross-complaint. 
All reasonably incurred costs and expenses incurred in connection with
the indemnified Party’s cooperation shall be borne by the indemnifying
Party.  

 

                18.5         Settlement.  No Third Party Claim may be settled or
compromised by the indemnified Party without the consent of the indemnifying
Party or by the indemnifying Party without the consent of the indemnified
Party.

 

 

SECTION 19.       CONSTRUCTION
OF AGREEMENT.

 

19.1         Headings.  The headings of the sections and subsections
of this Agreement are for convenience only and shall not be used in the
interpretation of this Agreement.

19.2         Amendment or Waiver.  This Agreement may not be amended, modified
or waived except by written instrument executed by officers or duly authorized
representatives of the respective Parties, and required (if applicable)
approval by the Conflicts Committee of Owner.

19.3         Severability.  Any provision of this Agreement that is
prohibited or not enforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective only to the extent of the prohibition or lack of
enforceability without invalidating the remaining provisions of this Agreement,
or affect the validity or enforceability of those provisions in another
jurisdiction or the validity or enforceability of this Agreement as a whole.

 

                19.4
        Entire Agreement and Conflict
with Attachments.  This Agreement
(including the Attachments) contains the entire and exclusive agreement between
the Parties with respect to the subject matter hereof, and there are no other
promises, representations, or warranties affecting it.  The terms of this Agreement may not be
contradicted, explained or supplanted by any usage of trade, course of dealing
or course of performance and any other representation, promise, statement or
warranty made by either Party or their agents that differs in any way from the
terms contained herein will be given no force or effect.  Subject to Section 11.1, in the case of any
conflict between the body of this Agreement and any of its Attachments, those
contained in the Attachments will govern. 
Notwithstanding anything in this Agreement or the Attachments to the
contrary, nothing contained in the Attachments will diminish or otherwise
affect either Party’s indemnification obligations contained in this Agreement.

 

16

 

SECTION 20.       LAW.

 

                This Agreement
will be construed and governed by the laws of the State of Florida except the
choice of law rules of that State that may require the application of the laws
of another jurisdiction.

 

 

SECTION 21.       DISPUTE
RESOLUTION

 

                21.1         Covered Disputes. 
Any dispute, controversy or claim (whether sounding in contract, tort or
otherwise) arising out of or relating to this Agreement, including without
limitation the meaning of its provisions, or the proper performance of any of
its terms by either Party, its breach, termination or invalidity (“Dispute”) will be resolved in accordance
with the procedures specified in this Section 21, which will be the sole and
exclusive procedure for the resolution of any such Dispute, except that a
Party, without prejudice to the following procedures, may file a complaint to
seek preliminary injunctive or other provisional judicial relief, if in its
sole judgment, such action is necessary to avoid irreparable damage or to
preserve the status quo.  Despite that
action the parties will continue, subject to Section 21.5, to participate in
good faith in the procedures specified in this Section 21.

                21.2         Initiation of Procedures.  Either Party wishing to initiate the dispute
resolution procedures set forth in this Section 21 with respect to a Dispute
not resolved in the ordinary course of business must give written notice of the
Dispute to the other Party (“Dispute Notice”).  The Dispute Notice will include (i) a
statement of that Party’s position and a summary of arguments supporting that
position, and (ii) the name and title of the executive or non-lawyer
representative who will represent that Party, and of any other person who will
accompany the executive or representative, in the negotiations under Section
21.3 hereof.

                21.3         Negotiation Between
Executives/Representatives.  If one
Party has given a Dispute Notice under the preceding subsection, the parties
will attempt in good faith to resolve the Dispute within forty-five (45)
calendar days of the notice by negotiation between executives and appointed
representatives who have authority to settle the Dispute.  Within fifteen (15) calendar days after
delivery of the Dispute Notice, the receiving Party will submit to the other
Party a written response.  The response
will include (i) a statement of that Party’s position and a summary of
arguments supporting that position, and (ii) the name and title of the
executive or appointed representative who will represent that Party and of any
other person who will accompany the executive or appointed representative.  Within forty-five (45) calendar days after
delivery of the Dispute Notice, the executives or appointed representatives of
both parties will meet at a mutually acceptable time and place, and thereafter,
as often as they reasonably deem necessary, to attempt to resolve the Dispute.

 

                21.4         Arbitration.  If the Dispute has not been resolved under
the preceding Sections 21.2 and 21.3 within ninety (90) calendar days of the
Dispute Notice, and only in such event, either Party may initiate the
arbitration procedure of this subsection by giving written notice to the other
Party (“Arbitration Notice”).  The Dispute will be finally resolved by
binding arbitration in accordance with the then current Arbitration Rules of
the American Arbitration Association (“AAA”).  If the amount in controversy is less than
$500,000, there will be a single arbitrator, chosen by mutual agreement of both
parties.  If the parties cannot select an
arbitrator within thirty (30) calendar days of the Arbitration Notice, the AAA
will select the arbitrator.  If the
amount in controversy is $500,000 or more, there will be three arbitrators by
the AAA. The arbitration will be governed by the United States Arbitration Act,
9 U.S.C. Sec. 1-16, as amended (the “Act”),
and to the extent not inconsistent with the Act, the Colorado statutes
applicable to commercial arbitration. 
Judgment upon the award rendered by the arbitrator(s) may be entered by
any court of any state having jurisdiction. 
The statute of limitations of the State of Colorado for the commencement
of a lawsuit will apply to the commencement of an arbitration under this
Agreement, except that no defenses will be available based upon the passage of
time during any negotiation called for by this Section 21.  Each Party will assume its own costs of legal
representation and expert witnesses and the parties will share equally the
other costs of the arbitration.  The
arbitrator will award pre-judgment interest in accordance with the law of
Colorado; however, the arbitrator may not award punitive damages.  The arbitration will take place in a location
mutually agreeable to the Parties.

 

17

 

 

                Either Party may apply to the
arbitrators seeking injunctive relief until the arbitration award is rendered
or the controversy is otherwise resolved. 
Either Party also may, without waiving any remedy under this Agreement,
seek from any court having jurisdiction any interim or provisional relief that
is necessary to protect the rights or property of that Party, pending the
establishment of the arbitral tribunal (or pending the arbitral tribunal’s
determination of the merits of the controversy). This Agreement has been
executed by the authorized representatives of each Party as indicated below
effective as of the Effective Date.

 

 

	
  TRANSMONTAIGNE PARTNERS
  L.P.

  	
   

  	
  MARATHON PETROLEUM COMPANY
  LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  TransMontaigne GP L.L.C.

  	
   

  	
   

  	
   

  
	
   

  	
  Its General Partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ William S. Dickey

  	
   

  	
  By:

  	
  /s/ Mary Ellen Peters

  
	
  Name:

  	
  William S. Dickey

  	
   

  	
  Name:

  	
  Mary Ellen Peters

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  Senior Vice President,
  Marketing

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]