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HomeMy WebLinkAboutPR 18998: NON-EXCLUSIVE PRODUCT SALES AGREEMENT WITH TOTAL PETROCHEMICALS & REFINING USA, INC. P. R. No. 18998 05/12/14 gt RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A NON-EXCLUSIVE PRODUCT SALES AGREEMENT WITH TOTAL PETROCHEMICALS & REFINING USA, INC. TO PROVIDE CERTAIN QUANTITIES OF ON- ROAD DIESEL AT TOTAL' S PORT ARTHUR, TEXAS REFINERY IN THE CASE OF AN EMERGENCY OR A DISASTER WITH A TERM OF THE AGREEMENT FROM JUNE 25, 2015 TO JUNE 25, 2017 WHEREAS, per Resolution No. 13-266, the City Council had entered into an Emergency Agreement with Total Petrochemicals & Refining USA, Inc . , with said Agreement expiring on June 25, 2015; and WHEREAS, the City of Port Arthur desires to enter into a non- exclusive Emergency Contract with Total Petrochemicals & Refining USA, Inc . , as to provide certain quantities of on-road diesel at TOTAL' s Port Arthur, Texas refinery, in the case of an emergency or a disaster, with the term of the Agreement from June 25, 2015 to June 25, 2017 , as delineated in Exhibit "A" . NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct . Section 2 . That the City Manager is herein authorized to enter into a non-exclusive Emergency Contract with Total Petrochemicals & Refining USA, Inc . , as to provide certain quantities of on-road diesel at Total' s Port Arthur, Texas s.pr18998 refinery, in the case of an emergency or a disaster, with the term of the Agreement from June 25, 2015 to June 25, 2017, as delineated in Exhibit "A" . Section 3 . That a copy of the caption of this Resolution be spread upon the Minutes of the City Council . READ, ADOPTED AND APPROVED on this day of May, A.D. , 2015, at a Meeting of the City Council of the City of Port Arthur, by the following vote : AYES : Mayor: Councilmembers : NOES : Deloris "Bobbie" Prince, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED AS TO FORM: alecia R. T ze ', City Attorney APPROVED FOR ADMINISTRATION: Brian McDougal, City Manager s.pr18998 EXHIBIT "A" s.pr18998 PRODUCT SALES AGREEMENT This Product Sales Agreement by and between Total Petrochemicals & Refining USA, Inc., a Delaware corporation, located at 1201 Louisiana Street, Suite 1800, Houston, Texas 77002 ("Seller") and the City of Port Arthur, Texas ("Buyer") is entered into and effective June 25, 2015 (the "Agreement"). WITNESSETH WHEREAS, Seller and Buyer are desirous of entering into an agreement whereby after a disaster (as defined below) Buyer would have the right to purchase from Seller's Port Arthur refinery certain quantities of ultra low sulfur diesel; NOW THEREFORE, in consideration of the foregoing premise and the mutual terms and conditions hereinafter set forth, the Parties agree as follows: ARTICLE 1—DEFINITIONS AND RULES OF CONSTRUCTION 1.01 Seller and Buyer may also be referred to herein individually as a "Party" and collectively as "Parties." 1.02 The word "includes" and its derivatives means "includes, but not limited to" and corresponding derivative expressions. 1.03 The singular shall include the plural and the plural shall include the singular and any gender shall include all other genders, all as the meaning and context of this Agreement shall require. Each defined term herein shall be equally applicable both to the singular and the plural forms of the terms so defined. 1.04 In connection with any action or event which by the terms hereof requires consent of an Party hereto, such consent shall not be unreasonably withheld, conditioned or delayed. 1.05 The term "Person" herein may refer to an individual, corporation, limited liability company, partnership, joint venture association, joint stock company, trust, trustee, unincorporated organization, Governmental Authority or any other form of entity, as appropriate. References herein to a "Person" are also to its permitted successors and assigns. 1.06 The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 1.07 Unless the context requires otherwise,: (i) references to "Article" and "Section," "Subsection" or "Clause" refer to an article, section, subsection or clause of this Agreement, (ii) references to "Appendix," Exhibit" or "Schedule" refer to an appendix, exhibit or schedule to this Agreement, each of which is made a part hereof for all purposes, (iii) the words "hereof," "hereunder," "herein," "hereby" or words of similar import shall refer to this Agreement as a whole and not to a particular article, section, subsection, clause or other subdivision hereof; and (iv)the term "cost" includes expense, and the terms "expense" includes cost. Page I 1 Product Sales Agreement—City of Port Arthur 2015 1.08 "Disaster" means a sudden, calamitous event bringing great damage, loss or destruction as (i) might be officially be declared by the Mayor of the City of Port Arthur, Texas and agreed to have occurred by Seller, or (ii) as might be officially declared for Port Arthur or Jefferson County, Texas by the Governor of Texas or the President of the United States. 1.09 "Specific Terms" means Articles I thought VIII of this Agreement. 1.10 "ULSD" means ultra low sulfur diesel. 1.11 "USGC" means the United States Gulf Coast. ARTICLE II— PURCHASE AND SALE 2.01 In the event of a Disaster, then during the term of such Disaster, Buyer shall have the right to purchase and receive from Seller's Port Arthur, Texas refinery only, monthly quantities of ULSD as set forth below. Such sale is subject to the following conditions: (i) that such ULSD can be produced by the Port Arthur, Texas refinery at the quality minimums required for legal sale of the products, (ii) that the ULSD can be loaded into tank trucks at the Port Arthur refinery, and (iii) that the ULSD shall be sold from Seller's Port Arthur refinery, Texas only and Seller shall not be required to acquire ULSD from third parties in order to fulfill the requirements of this Agreement. 2.02 Subject to the conditions in Section 2.01 above, Seller shall sell to Buyer and Buyer shall purchase and receive a volume of ULSD in the quantities per month set forth in (a) or (b) below, whichever quantity is less, during the term of the Disaster: (a) 5,000 barrels per month of ULSD; or (b) one quarter (1/4th) of the ULSD, which is not otherwise committed or needed in connection with Seller's business or operations at the Port Arthur, Texas refinery or elsewhere (as may be determined by Seller at its discretion). 2.03 The ULSD shall be delivered into tank trucks provided by Buyer and approved by Seller at the Port Arthur refinery site. The tank trucks shall be equipped with Seller approved custody transfer metering devices which shall measure the amount of purchased ULSD. 2.04 Seller shall invoice Buyer after each loading of ULSD. All invoices shall be hand delivered to Buyer or transmitted via facsimile to the following address: The City of Port Arthur, Texas Attn.: City Manager 444 4th Street Port Arthur, Texas 77641 Telephone 409-983-8101 Fax: 409-983-6743 Page 12 Product Sales Agreement—City of Port Arthur 2015 2.05 All correspondence concerning scheduling shall be addressed as follows: The City of Port Arthur, Texas Attn.: City Manager 444 4th Street Port Arthur, Texas 77641 Telephone: 409-983-8101 Fax: 409-983-6743 Total Petrochemicals & Refining USA, Inc. Attn.: Jeff Paules 1201 Louisiana Street Suite 1800 Houston, Texas 77002 Telephone: 713-483-5662 Fax: 713-483-5700 ARTICLE III — PRICES 3.01 All sales shall be priced as if all sales are delivered FOB Seller's Port Arthur, Texas refinery. 3.02 The price paid by Buyer for the ULSD delivered hereunder shall be the monthly average for the month of delivery of all posting days during such month as specified in Platt's Oilgram Mean Price Report for USGC pipeline for ULSD. ARTICLE IV—TERM The term of this Agreement shall be from the effective date stated in the preamble through June 25, 2017. ARTICLE V—SPECIFICATIONS 5.01 The ULSD delivered under this Agreement shall meet the following quality criteria: Colonial Pipeline specifications for ULSD 69 or 61 grade (12ppm sulfur). 5.02 Seller warrants that the ULSD delivered hereunder shall (a) conform to the specifications set forth in 5.01 above, (b) Seller has good and defensible title, free and clear of liens, security interests and encumbrances at the time of delivery or transfer of title, and (c) Seller has full right and authority to transfer such title and effect delivery of such products to Buyer. EXCEPT AS STATED IN THE FOREGOING, SELLER MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR USE OR OTHERWISE, WHETHER THE PRODUCT DELIVERED IS USED SINGULARLY OR IN COMBINATION WITH OTHER SUBSTANCES OR IN A PROCESS. Page I3 Product Sales Agreement—City of Port Arthur 2015 ARTICLE VI— PAYMENT TERMS 6.01 All payments by Buyer to Seller for the ULDS purchased under this Agreement shall be made by wire transfer of immediately available funds within thirty (30) days of the date of each invoice. Payments due on a Saturday or weekday holiday other than a Monday, shall be made on the preceding business day. Payments due on a Sunday or a Monday holiday shall be made on the succeeding business day. Any amount not paid when due shall bear interest from the due date (inclusive) until the date full payment is received by Seller (exclusive) at a rate equal to the lesser of two percent (2%) above the prime rate in effect at the opening of business on the due date at major lending institutions as quoted in the "Money Rates" section of the Wall Street Journal, and the maximum rate of interest permitted under applicable law. Buyer shall pay all of Seller's costs (including attorneys' fees and court costs) of collecting past due payments. 6.02 Wire payments made to Seller shall be sent to: JP Morgan Chase Bank ABA No. 021000021 Account No. 747497113 Swift Code CHASUS33 ARTICLE VII—TERMINATION 7.01 This Agreement may be terminated by: (a) Mutual consent of the Parties; (b) Buyer, if a material default shall be made by Seller in the observance or in the due and timely performance by Seller of any of the covenants of Seller contained herein, and such default shall continue un-remedied for a period of two business days after Seller's receipt of written notice of default; or © Seller, if a material default is made by Buyer, in the observance or in the due and timely performance of Buyer or any of the covenants of Buyer contained herein, and such default shall continue un-remedied for a period of two business days after Buyer's receipt of written notice of default. 7.02 In the event of a termination of this Agreement, the respective liabilities of the Parties shall be as follows: (a) In the event of a termination of this Agreement pursuant to Section 7.01(a) hereof, neither Party shall have any further obligation or liability under this Agreement except for obligations previously accrued that survive termination of this Agreement. Page 14 Product Sales Agreement—City of Port Arthur 2015 (b) In the event of a termination of this Agreement pursuant to Section 7.01(b) hereof, Buyer may, in addition to any other remedy at law or in equity, bring suit for damages against Seller. © In the event of a termination of this Agreement pursuant to Section 7.01© hereof, Seller may, in addition to any other remedy at law or in equity, bring suit for damages against Buyer. ARTICLE VIII— MISCELLANEOUS 8.01 General Terms and Conditions. TOTAL's General Terms and conditions for Purchase and Sale of Petroleum Products (Revised 7/2006) attached hereto as Exhibit "A" and incorporated herein by reference are made a part of this Agreement. In the event of a conflict between these Specific Terms and the General Terms and Conditions, these Specific Terms shall control. 8.02 Notices. Any and all notices herein prescribed shall be transmitted via hand delivery, overnight courier, facsimile or certified letter, return receipt requested, to the following respective addresses: Total Petrochemicals & Refining USA, Inc. Attn. : Jeff Paules 1201 Louisiana Street Suite 1800 Houston, Texas 77002 Telephone: 713-483-5662 Fax: 713-483-5700 The City of Port Arthur, Texas Attn.: City Manager 444 4th Street Port Arthur, Texas 77641 Telephone: 409-983-8101 Fax: 409-983-6743 8.03 Survival. All provisions regarding payment for product, payment terms, warranties, disclaimers of warranty, governing law, limitation of liability, rights of offset, payment of taxes, audit rights, and the time in which to make claims shall survive termination of this Agreement. 8.04. Waiver. Waiver by either party of any breach, or failure to enforce any of the terms and conditions of the Agreement at any time, will not in any way affect, limit, or waive the right of that party thereafter to enforce the Agreement and compel strict compliance with every term and condition thereof. Page 15 Product Sales Agreement—City of Port Arthur 2015 8.05 Entirety/Requirement of a Writing. This Agreement constitutes the full understanding of the parties, and a complete and an exclusive statement of the terms of their agreement for the sale and purchase of ULSD. All representations, offers, allowances and undertakings of the parties made prior to the effective date hereof, whether oral or in writing, are merged herein. No conditions, understandings, or agreements purporting to modify, amend or vary the terms of this Agreement will be binding unless hereafter made in writing and signed by an authorized representative of each party. No requirement stated herein that an item be in writing may be waived except by means of a written instrument issued by the party making the waiver. The acknowledgment or acceptance by a party of the purchase orders, shipping instructions, broker's correspondence or sales acknowledgment forms containing terms or conditions at variance with or in addition to those set forth herein will not in any event be deemed to amend, modify or vary the terms of this Agreement. All exhibits are hereby incorporated into this Agreement by reference. 8.06 Disputes. In the event of a dispute between the parties in connection with this Agreement, or relating to any maritime incident or issue connected with this Agreement, the prevailing party in the resolution of any such dispute, whether by litigation or otherwise, shall be entitled to full recovery of all attorney's fees (including a reasonable hourly fee for in-house legal counsel), costs and expenses incurred in connection therewith, including court costs, from the non-prevailing party. BOTH PARTIES HEREBY AGREE TO SUBMIT TO THE JURISDICTION AND VENUE OF THE COURTS LOCATED IN HARRIS COUNTY, TEXAS. THE PARTIES WAIVE ANY DEFENSE BASED UPON LACK OF JURISDICTION OR FORUM NON CONVENIENS. 8.07 Invalidity. If any part of this Agreement is declared invalid for any reason, this ruling shall not affect the validity of the rest of the Agreement or any other part thereof. 8.08 Cumulative Remedies. All rights and remedies of both parties hereunder are cumulative, and the election of one remedy shall not exclude another. 8.09 Applicable Laws. To the extent applicable, the parties shall comply with all laws, ordinances, rules, codes, regulations and lawful orders of any federal, state or local governmental authority applicable to performance of this Agreement. 8.10 Joint Preparation. This Agreement has been jointly prepared by both parties to this Agreement and there shall be no presumptions regarding such preparation which will be used against either party in connection with any subsequent judicial construction of this Agreement. 8.011 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the Parties have duly executed this Agreement on this day of , 2015. Pagel 6 Product Sales Agreement—City of Port Arthur 2015 Total Petrochemicals& Refining USA, Inc. By: Name: Title: The City of Port Arthur,Texas By: Name: Title: Page 17 Product Sales Agreement—City of Port Arthur 2015