PART II
LNG Sale and Supply Agreement
Terms and Conditions
1. Applicability
This LNG Sale and Supply Agreement (as hereinafter
defined, “Agreement”) is entered into by and between
the parties set forth in Part I, Boxes 2 and 3 and, to the
extent stated herein, is subject to the terms and
conditions of any ocean carrier’s bill of Lading or sea
waybill (receipt) and applicable carrier’s tariff(s) as filed
with U.S. Federal Maritime Commission (“FMC”), the
Surface Transportation Board (“STB”) or any Terms of
Service of any upstream LNG Suppliers as may be filed
with the Federal Energy Regulatory Commission
(“FERC”) or State Public Utilities Commission or other
applicable regulatory body that governs the particular
portion of sale, transfer or transportation, including but
not limited to pipeline, ocean, terminal, truck or rail,
relating to any LNG sold, transported or stored in
accordance
this
Agreement.
The
covenants,
exceptions, limitation and liberties (including those
relating to pre-carriage, on-carriage and multimodal
through-carriage) set forth in this Agreement between
Buyer and Seller with respect to the LNG, any ocean or
motor carrier's bill of lading or applicable tariff(s) or
receipt(s) set forth in ANNEX “C” are incorporated
herein by this reference and, to the extent stated in this
Agreement, apply to transportation of any LNG
hereunder before or after title and risk of loss have
passed to Buyer as set forth in Part I, Box 6. Except as
expressly agreed in this Agreement, all compensation,
assessorial and other charges (including but not limited
to freight, demurrage and detention) set forth in
applicable ocean carrier’s tariff(s) shall be due and
payable by Buyer to Seller in accordance therewith.
The Buyer accepts the covenants, exceptions,
limitations and liberties of this Agreement on its own
behalf and on behalf of any Affiliates, the Consignee or
owner or beneficial owner of the LNG to which title and
risk of loss may pass set forth in Part I, Box 6 (but only
after such title and risk of loss have passed to the
aforementioned party), and Buyer warrants to Seller
that Buyer has the authority to bind the Consignee or
owner of the LNG to such extent.
2. Definitions
In this Agreement, save where the context otherwise
requires, words and expressions shall have the same
meanings hereby assigned to them as follows:
“Additional Quantity” shall have the meaning set forth
in Clause 4.2(a).
“Affiliate” means two or more entities, which are under
common ownership or control by reason of being
parent and subsidiary or entities associated with, under
common control with, or otherwise related to each
other through common stock ownership or common
directors or officers.
“Annual Contract Quantity” means the Daily Contract
Quantity set forth in Part I, Box 8 multiplied by 365
days per year.
“Annual Nominated Quantity” means the calendar year
sum of each month’s Monthly Nomination quantity.
“Applicable Law” means any and all applicable acts,
laws, statutes, ordinances, orders, rules, permits,
regulations, rulings, decrees, directives, judgments, or
policies (to the extent mandatory) or any similar form
of decision or determination having the effect of law
and/or official governmental actions, whether of a
federal, state, local, or tribal nature, promulgated by a
Governmental Authority having jurisdiction, including
but not limited to commercial trucking and licensing
requirements. Applicable Law includes Anti-Corruption
Laws (as defined below and applicable) and any safety
rules, protocols or requirements of Buyer or Seller or
their respective Representatives.
“Bankruptcy” means, with respect to a Person, (i) the
filing by such Person of a petition or the
commencement of, or the acquiescence in the
commencement of, a proceeding or cause of action
under any Bankruptcy, insolvency, or similar law
providing for the protection from its creditors, or a
Person having any such proceeding or cause of action
filed or commenced against it; (ii) the seeking by such
Person of the appointment of a trustee, receiver,
liquidator, custodian, or other similar official over it or
any substantial part of its property, or consenting to
any such relief or to the appointment of or taking
possession by any such official in an involuntary case
or other proceeding commenced against it; (iii) the
making of an assignment or any general arrangement
for the benefit of its creditors; (iv) such Person
admitting its inability to pay its debts as they fall due;
(v) such Person becoming bankrupt or insolvent
(however documented or evidenced); or (vi) such
Person making a general assignment for the benefit of
its creditors.
“Business Day” means any day (other than Saturdays,
Sundays and national holidays in the United States of
America) on which banks are normally open to conduct
business in the United States of America.
“Buyer” shall have the meaning set forth in Part I, Box
3.
“Buyer’s Destination” means the point or place set forth
in Part I, Box 7, which for the avoidance of doubt shall
be the final delivery location of Buyer’s LNG, carried in
Seller’s ISO Tank.
“Buyer’s Facility” means the factory, plant or facility for
which Buyer has entered into this Agreement to
purchase and supply LNG to operate all machinery and
equipment thereon, capable of being operated or
converted for operation by LNG.
“Commodity Charge Index” means Natural Gas and
Pipeline Index costs to Seller’s Liquefaction Facility.
“Consignee” means, after title and risk of loss have
transferred to Buyer at the Point of Delivery set forth in
Part I, Box 6, any Affiliate of Buyer or third party
receiver or handler of LNG (whether nominated by
either Seller or Buyer), that is deemed responsible for
LNG loaded in an ISO Tank at the port of destination or
Buyer’s Destination set forth in Part I, Box 7.
“Contract Price” shall have the meaning set forth in
Clause 5.1.
“Daily Contract Quantity” means the daily quantity set
forth in Box 8 of Part I (and more fully detailed in
ANNEX “B” REXOP). It is the amount of LNG as
measured in MMBtus that Buyer shall be responsible
paying Seller for on a monthly basis, regardless of
whether or not Buyer has nominated, taken, received
or accepted for delivery a greater or lesser amount of
LNG than Buyer’s Monthly Nomination in any month for
which such monthly LNG charge applies. Daily Contract
Quantity may also be referred to herein as “DCQ”.
“Defaulting Party” shall have the meaning set forth in
Clause 14.1.
“Deferred Delivery Cap” and “Deferred Delivery LNG”
shall have the meanings set forth for each in Clause
4.2(c).
“Early Termination Date” shall have the meaning set
forth in Clause 14.2.
“Event of Default” shall have the meaning set forth in
Clause 14.1.
“Force majeure” shall have the meaning set forth in
Clause 10.2.
“Freight Variables” means any and all ISO Tank and
LNG related transportation and/or loading charges on
a round-trip basis from Seller’s Liquefaction Facility to
Buyer’s Destination as may be more fully detailed in
ANNEX “C”.
“Gas” means any mixture of hydrocarbons and noncombustible gases in a gaseous state consisting
essentially of methane.
“Governmental Authority” means any federal, state,
local, or municipal governmental body; any
governmental, regulatory, or administrative agency,
commission, body, or other authority exercising or
entitled to exercise any administrative, executive,
judicial, legislative, policy, regulatory, or taxing
authority or power; or any court or governmental
tribunal.
“Initial Delivery Date” means the date on which Seller
shall commence selling LNG and delivering LNG carried
in Seller’s ISO Tanks and Buyer shall commence
purchasing LNG and receiving LNG carried in Seller’s
ISO Tanks in accordance with the covenants of this
Agreement.
“Interest Rate” means a rate equal to the lower of (i)
the then effective prime rate of interest published
under “Money Rates” by The Wall Street Journal, on
the first Monday of each quarter, plus two percent
(2%) per annum; or (ii) the maximum applicable lawful
Interest Rate.
Page 2 of 13
“ISO Tank” means a forty-foot Liquid Cryogenic UN T75
Portable, 40 Foot, ISO Container used for the delivery
of LNG pursuant to this Agreement.
“LNG” means Gas that has been converted to liquid
form for ease of storage or transport.
“LNG Storage” means the LNG Storage tank(s)
designated by Buyer to receive and store the LNG
provided to Buyer by Seller under this Agreement at
Buyer’s Destination.
“MMBtu” means one million British thermal units.
“Monthly Contract Quantity” means the DCQ set forth
in Part I, Box 8 multiplied by the number of days in the
month for which such nomination applies Monthly
Contract Quantity may also be referred to herein as
“MCQ”.
“Monthly Nomination” shall have the meaning set forth
in Clause 4.
“Non-Defaulting Party” shall have the meaning set forth
in Clause 14.1.
“Person” means any natural Person, corporation,
general partnership, limited partnership, Limited
Liability Company, firm, association, Governmental
Authority, or any other entity whether acting in an
individual, fiduciary, or other capacity.
“Point of Delivery” means the location set forth in Part
I, Box 6, at which location title and risk of loss of any
LNG carried in Seller’s ISO Tank passes to Buyer in
accordance with Clause 6.1. If Part I, Box 6 is left
blank, delivery shall be deemed Ex Works (“EXW”) at
Seller’s Liquefaction Facility.
“Price Elements” means the charges that shall be
invoiced by Seller to Buyer set forth in Part I, Box 4.
“Quality Specifications” shall have the meaning set
forth in Clause 9.1.
“Representatives” means, with respect to a party, such
party’s Affiliates and such parties and its Affiliates’
respective directors, officers, employees, agents and
any other Persons or entities (excluding the other party
or its Affiliates) who contribute to the performance of
such party’s obligations under this Agreement. For
purposes of this Agreement, Seller’s Representatives
shall include any and all Subcontractors and such
Subcontractors’ directors, officers, employees and
agents.
“REXOP Charge” means the pipeline demand charge,
liquefaction demand charge and liquefaction energy,
liquefaction storage, liquefaction operations, Buyer
specific ISO Tank fleet costs, Seller’s Operations Cost
as may be more specifically set forth in ANNEX “B”.
“Seller” shall have the meaning set forth in Part I, Box
2.
“Seller’s Liquefaction Facility” means any LNG facilities
located in the United States from which Seller may
source LNG for supply to Buyer at Buyer’s Destination
in accordance with this Agreement.
“Subcontractor” means any Person that has been
retained to perform all or a portion of Seller’s
obligations hereunder.
“Taxes” means all applicable import duties, federal,
state, and local ad valorem, property, occupation,
severance, first use, conservation, Btu or energy, gross
receipts, privilege, sales, use, consumption, excise and
other Taxes, governmental charges, duties, tariffs,
levies, licenses, fees, permits, and assessments, other
than Taxes based on a party’s income or net worth.
“Term” means the period that this Agreement is
effective, which shall be from the Effective Date set
forth in Part I, Box 1, subsection (ii) to the Expiration
Date set forth in subsection 1(iii), and any written
extensions thereto, unless terminated sooner in
accordance with Clause 14.
3. Essential Terms
3.1 Sale and Supply - From the Effective Date set
forth in Part I, Box 1(ii) to the Expiration Date in Box
1(iii) and commencing on the Initial Delivery Date,
Seller shall sell, deliver, or cause to be delivered to
Buyer at least the Daily Contract Quantity of LNG
committed by Buyer in Part I, Box 8 at the Point of
Delivery set forth in Part I, Box 6, and Buyer shall
purchase LNG at the Point of Delivery and receive and
accept delivery of such LNG, carried in Seller’s ISO
Tanks, at Buyer’s Destination set forth in Part I, Box 7,
pursuant to the terms and conditions set forth in this
Agreement.
3.2 Full Requirements – Seller shall supply, and
Buyer shall take and purchase pursuant to this
Agreement one hundred per cent (100%) of the fuel
necessary to operate Buyer’s Facility in machinery,
vehicles and/or equipment that can use or are capable
of using LNG as its or their primary source of fuel.
Buyer shall not use any fuel other than LNG supplied
by Seller to operate Buyer’s Facility, except during
instances of Seller Force majeure or a delivery default
by Seller.
Due to uncertainties, interruptions or
disruption of service in Seller’s LNG term supply
situation, Seller may not have sufficient supplies of LNG
covered by this Agreement to meet full
requirements.
In the case of partial or total
interruption of supply, Seller may allocate deliveries on
any basis which in Seller’s sole and absolute discretion
is fair and reasonable, allowing for such priorities as
Seller deems appropriate. Buyer shall be entitled to
procure additional supply per the provisions in section
4.2.
3.3 Alternative Damages Clause - ABSENT FORCE
MAJEURE AND ANY FAULT DIRECTLY CAUSED BY
BUYER, IN THE EVENT THAT LNG WILL BE DEPLETED
FROM BUYER’S STORAGE ON ACCOUNT OF SELLER’S
GROSS NEGLIGENCE OR WILFUL MISCONDUCT, AND
BUYER SHALL IMMEDIATELY NOTIFY SELLER.
THEREAFTER, BUYER MAY PURCHASE ALTERNATIVE
FUEL FROM ANOTHER SUPPLIER TO COVER BUYER’S
NEEDS (BASED ON BUYER’S HISTORICAL USE DATA
AT BUYER’S RELEVANT FACILITY) UNTIL SUCH TIME
AS SELLER DELIVERS LNG TO SUCH FACILITY’S
STORAGE (OR FORCE MAJEURE OR BUYER’S FAULT
INTERVENES).
SELLER SHALL CREDIT THE
DIFFERENCE
OF
THE
ACTUAL
VERIFIABLE
ALTERNATIVE FUEL COST LESS THE THEN CURRENT
LNG (PER GALLON) COST. IN NO EVENT SHALL THE
VOLUME OF ALTERNATIVE FUEL CREDITED TO BUYER
UNDER THIS ALTERNATIVE DAMAGES, OR “COVER”
PROVISION, EXCEED THE MAXIMUM AMOUNT OF LNG
STORAGE (EXPRESSED IN MMBtus) ON SELLER’S
FACILITY DURING THE DEFAULT PERIOD.
3.4 LNG Not For Resale or Reshipment - LNG
delivered by Seller to Buyer pursuant to this Agreement
shall be solely for Buyer’s use at Buyer’s Facility. Buyer
shall not resell or otherwise transfer LNG delivered by
Seller to any other Person, and Buyer shall not use LNG
delivered by Buyer at any location other than at Buyer’s
Facility. Buyer shall not ship LNG delivered by Buyer
out the country or U.S. territory of destination.
4. Monthly Nomination
4.1 Nomination Buyer shall provide Seller with
written notice no later than 5:00 p.m. Eastern Standard
Time on or before the fifteenth (15th) day of each
month of Buyer’s LNG requirements for the following
month in MMBtu (“Monthly Nomination”), subject to
Seller’s availability. The “Monthly Nomination” quantity
available for nomination shall be the Daily Contract
Quantity times the number of days in the month for
which such nomination applies. In the event Buyer
nominates less than the maximum monthly quantity,
Buyer may request additional quantities of LNG up to
the Monthly Nomination quantity available for
nomination after the deadline for providing the Monthly
Nomination, and Seller shall use reasonable efforts to
supply such LNG. Seller shall have no liability to Buyer
for failure to deliver any quantity of LNG that is either
(i) more than the Monthly Nomination in the month for
which such LNG was nominated or (ii) Additional
Quantities. The Buyer is responsible for any additional
charges, fees, or penalties that may be applicable.
4.2(a) Additional Quantity - “Additional Quantity”
shall mean any LNG amounts requested by Buyer
above the DCQ. Based upon Buyer’s monthly
fluctuation in volume, Seller, will provide the ability to
nominate different monthly amounts based upon
Buyer’s Annual Contract Quantity. Each month, Buyer
may nominate an amount up to 15% above that
month’s average (1.15 multiplied by the DCQ multiplied
by the number of days in the month). This 15%
additional shall allow Buyer to access additional supply
of LNG that Buyer may need in peak months. For LNG
Page 3 of 13
amounts nominated above the additional 15%, price
shall be based upon Buyer’s supplier’s ability and
confirmation of price. Buyer shall pay Commodity and
Freight Variable charges monthly based upon the actual
LNG nominated (taken and/or deferred) as set forth in
the ANNEX “A” and “C” of this Agreement. Buyer shall
pay REXOP Charges monthly based upon the DCQ
times the number of days in the month (independent
of actual LNG taken in such month) as set forth in this
Agreement. Notwithstanding the foregoing, to ensure
the cumulative amount of LNG nominated tracks with
Buyer’s Annual Contract Quantity commitment, every
six (6) months an audit of actual LNG nominated under
the Annual Contract Quantity commitment shall be
performed and any discrepancies shall be resolved in
accordance with the terms and conditions of this
Agreement.
(b)
REXOP Demand Fees (ANNEX “B”) Notwithstanding the additional flexibility provided to
Buyer in subsection 4.2(a) herein REXOP shall be paid
monthly based upon DCQ x # days in the month (e.g.
414 X 31 days for December x REXOP Fee – ANNEX B).
In the event that Buyer has, at the end of any Calendar
year, paid REXOP Charges on more LNG than Buyer has
taken in that year, any demand fee overage or credit
shall not carry over into the next Calendar year of the
Agreement.
(c) Deferred Delivery - Buyer may choose to
defer delivery for a total quantity of LNG (“Deferred
Delivery LNG”) that shall in aggregate at any one time
not exceed the product of 8 multiplied by the DCQ (the
“Deferred Delivery Cap”) at no additional cost subject
to the following:
(i) Buyer may exercise its option to defer the
delivery of LNG by nominating up to the MCQ of
Deferred Delivery LNG. Buyer must nominate
volumes of Deferred Delivery LNG by the deadline
for Monthly Nominations. Buyer may also submit a
nomination for Deferred Delivery LNG during the
month of delivery, and Seller shall confirm this
nomination if capacity is available at the time of the
request.
(ii) Once a nomination for Deferred Delivery LNG
volumes is confirmed by Seller, the confirmed
Deferred Delivery LNG volumes shall be firm.
(iii) Deferred Delivery LNG volumes that have
been confirmed by Seller may either be scheduled
for truck loading at any time during the Term, on a
firm basis.
(iv) The Deferred Delivery Commodity Charges will
be calculated as described in the Commodity
Charges, ANNEX “A”, attached hereto and
incorporated herein by this reference, as if the LNG
was delivered at the Point of Delivery as set forth
in Part I, Box 6 and will be invoiced along with the
LNG delivered to Buyer during that month.
If Buyer has not reduced its balance of
Deferred Deliver LNG volumes to zero at the end of
the Term, or any written extensions thereto, Seller
(v)
may retain any remaining balance and shall pay
Buyer an amount equal to 80% of the Commodity
Charges applicable to such quantities (determined
on a first-in, first-out basis).
For the avoidance of doubt, all LNG shall be considered
sold in the month that it is produced and loaded into
the ISO Tanks or deferred into storage and shall be
invoiced by Seller to Buyer in that month.
(d)
Freight Variable Charges (ANNEX
“C”) - For the avoidance of doubt, the parties
acknowledge and agree that the transportation fee
component of the Freight Variable Index shall be paid
upon shipment of LNG and subject to change on each
anniversary date of this Agreement.
(e) Additional Quantities above 15% of
Monthly Contract Amount - Seller shall have no
obligation to deliver quantities of LNG in any month in
excess of 15% of the MCQ, although it will use its
reasonable efforts to deliver any such Additional
Quantities as may be requested by Buyer hereunder. If
the parties reach such an agreement, Seller will
confirm, sell and deliver and Buyer shall be required to
purchase and receive, the agreed upon amount of LNG.
Seller’s confirmation shall indicate the Additional
Quantity LNG to be delivered at the Point of Delivery.
Seller will invoice Additional Quantity of LNG to Buyer
in addition to Buyer's Monthly Nomination (or Deferred
Delivery LNG), as the case may be.
4.3 Startup Costs - Seller and Buyer will work
together to determine the timing for the startup of
supply to Buyer’s storage flange. Due to timing of
logistics, certain services may be required in the month
previous to the Initial Delivery Date to ensure delivery
on the Initial Delivery Date. The mutual determination
and agreement of this timing may require Seller to
procure LNG and related services that occur before the
Initial Delivery Date, the costs of which services Seller
shall provide to Buyer in a reasonable time in advance
of the Initial Delivery Date.
Buyer will confirm
agreement to any reasonable startup costs prior to the
Initial Delivery Date and Seller will invoice such startup
costs as mutually agreed with the Buyer for the month
the services were provided.
5. Price, Invoice, Credit, Payment and Disputes
5.1(a) Price Elements – Seller shall charge, and
Buyer shall pay for all LNG, ISO Tank transportation
and/or storage and related services with respect to the
sale and supply of LNG carried in Seller’s ISO Tanks to
Buyer’s Destination under this Agreement at the rates
set forth in Part I, Box 4, as more fully detailed in
ANNEX’s “A”, “B” and “C”, to wit: a Commodity Charge
Index, a Seller’s “REXOP” Charge and Freight Variables,
Page 4 of 13
all of which together shall constitute the Contract Price.
Buyer agrees to pay Seller the Contract Price of LNG as
specified in this Agreement, without deduction, setoffs
or counterclaims of any kind. Any claims of Buyer
against Seller with respect to any LNG shall be
considered separately from payment of the Contract
Price. In the event payment is not made on the Due
Date (as further defined in Clause 5.5 below), time
being of the essence in this regard, Buyer shall pay
Seller daily interest on the late payment at the Interest
Rate. For the avoidance of doubt, Buyer shall pay all
Taxes and inspection fees associated with the LNG that
is purchased by Buyer and Buyer shall reimburse Seller
upon receipt of invoice for any such Taxes paid by
Seller in respect of LNG sold or supplied by it. Buyer is
responsible for any additional costs incurred due to
Buyer’s Facility or interchange with Buyer’s
transportation or discharge equipment being deemed
unsafe for delivery of LNG by Seller.
(b) Bulk Delivery Option – In the event Seller
commences a bulk delivery method to the State or
Territory in which Buyer’s Facility is located, Seller
agrees to in good faith to adjust any or all Contract
Price Elements to ensure that Buyer receives the
benefit of any such change in the delivery method
commensurate with any efficiencies and cost savings
derived by Seller, if any, with respect to such a change
in service.
5.2 Financial Instruments – Any financial
instruments (hedging, collar, etc.) Buyer may choose
to implement are outside of the scope of this
Agreement and shall no way bear on Seller’s
responsibilities, risk or obligations under this
Agreement.
5.3 Liquidated Damages – If Buyer fails to nominate
or take the Minimum MCQ set forth in Part I, Box 8
(unless otherwise agreed, expressed as a monthly
volume number in MMBtus), Buyer shall be liable to
Seller for liquidated damages in the amount set forth in
ANNEX “A”. Liquidated Damages shall be calculated by
multiplying the difference between the volume sold and
quantity agreed as set forth in Part I, Box 8 times the
charge set forth in ANNEX “B”. This amount shall be in
lieu of actual damages, if any, which would be difficult,
if not impossible, to ascertain to a reasonable certainty.
ANY FAILURE BY BUYER TO TAKE FULL DELIVERY OF
THE PRODUCT QUANTITY NOMINATED BY BUYER AND
SPECIFIED ON ANY INVOICE SHALL RESULT IN AN
ADDITIONAL CHARGE OF 50% OF THE APPLICABLE
MMBtu UNIT PRICE FOR MMBtus NOT DELIVERED
LESS APPLICABLE TAXES WHICH IS LIQUIDATED
DAMAGES REPRESENTING A PRE-ESTIMATE OF COSTS
SELLER WILL INCUR TO DEAL WITH LNG THAT WAS
NOMINATED, PRODUCED, AND SHIPPED BUT
ULTIMATELY NOT RECEIVED/ACCEPTED BY BUYER.
IN THE EVENT BUYER CANCELS A NOMINATION IN ITS
Page 5 of 13
ENTIRETY FOR LNG NOMINATED, AND SELLER HAS
ALREADY SHIPPED PRODUCT FOR DELIVERY TO
BUYER, BUYER AGREES TO PAY A CANCELLATION FEE
IN THE AMOUNT OF THE MMBtu PRICE SPECIFIED ON
THE FACE OF THE INVOICE, LESS APPLICABLE TAXES,
FOR ALL SUCH LNG CANCELED, SUBJECT TO Seller’s
MITIGATION, IN WHICH CASE BUYER SHALL PAY, AS
LIQUIDATED DAMAGES, THE DIFFERENCE BETWEEN
THE INVOICE PRICE AND THE PRICE AT WHICH
SELLER IS ABLE TO RESELL THE LNG.
5.4 Invoice - Seller shall invoice Buyer on or before
the tenth (10th) day of the Calendar month covering all
deliveries of LNG made in the prior month, and all other
amounts owed to Seller by Buyer under this Agreement
for the prior month.
5.5 Credit - Credit is subject to credit approval by
Seller in accordance with the Credit Application and
Agreement of Seller’s parent company, Crowley
Maritime Corporation, the terms and conditions of
which are incorporated herein by this reference. Seller
may from time to time review Buyer’s credit and
payment terms. Within three Business Days of the
execution of this Agreement, Buyer shall provide to
Seller credit support, if any, as set forth in Part I, Box
11.
5.6 Payment - Buyer shall remit all payments to Seller
via Automated Clearing House (ACH) or by wire
transfer (in lieu of check) in immediately available
funds on the later of the seventh (7th) Business Day
after receipt by Buyer of Seller’s Invoice in accordance
with Clause 5.4 above, provided that if such day is not
a Business Day, then payment shall be made on the
first (1st) Business Day thereafter (the “Due Date”).
Provided, however, that in no event shall payment be
made after the Due Date later than at least one (1) day
prior the next vessel’s arrival at the port of discharge
named on the face of the bill of lading or sea waybill
after such due date with respect to supply and delivery
of any of the following months’ Monthly Nomination.
Payments shall be made to Seller as follows:
Bank Name: Citibank, NA
Bank Address: 111 Wall Street, New York, NY
10043
Account Name: Crowley Maritime Corporation /
Carib Energy (USA) LLC
ABA Number: 021000089
Account Number: 39003321
Amounts due Seller shall be paid in US currency without
discount or set-off of any kind; sums due which have
not been paid shall accrue interest at the Interest Rate
until paid in full.
5.7 Good Faith Disputes - Should an invoice be
disputed by Buyer in good faith, except in the case of
manifest error, Buyer shall nevertheless pay when due
the amount of such invoice not in dispute under such
invoice, and shall, within ten (10) days receipt of the
invoice disputed by Buyer, provide written notice to
Seller indicating the disputed amount, the reason for
such dispute and supporting documentation. Such
payment shall not be deemed to be a waiver of the
right by Buyer to recover from Seller any overpayment,
nor shall acceptance of any payment by Seller be
deemed to be a waiver by Seller of any underpayment.
Failure to pay all amounts not paid on the applicable
payment due date shall accrue interest at the Interest
Rate from the due date until the day payment is
received by Seller.
for an industrial account in the country or U.S. territory
of Buyer’s Destination. Upon notice from Buyer, Seller
shall exercise reasonable efforts to remove any spent
ISO Tanks from Buyer’s Destination or Buyer’s Facility
within three (3) Business Days of Buyer’s notice. Buyer
shall ensure when Seller retrieves any spent ISO Tanks
that such ISO Tank is, in accordance with Applicable
Law: (i) empty such that it does not constitute
hazardous cargo, (ii) fully operational, and (iii) in the
same physical condition as when interchanged Buyer
shall be liable to Seller for any damage to an ISO Tank
of Seller that occurs while such ISO Tank is in Buyer’s
care, custody or control and for all damages, claims, or
actions, including damage to property or injury to or
death of Persons, arising from any breach of this
provision attributable to Buyer.
6. Sale, Title and Risk of Loss
6.1 Sale - Seller shall deliver or cause to be delivered
LNG to Buyer at the location set forth in Part I, Box 6.
LNG shall be considered “sold” to Buyer for purposes of
this Agreement when LNG passes the flange of Seller’s
Liquefaction Facility into Seller’s ISO Tank, unless
specified otherwise in Part I, Box 6.
6.2 Title and Risk of Loss - Title to and risk of loss
for LNG passes from Seller to Buyer at the time and
place of sale and delivery at the Point of Delivery. For
the avoidance of doubt, unless otherwise agreed in Part
I, Box 6 or set forth in Terms Covering Additional or
Special Services as may be set forth in Part I, Box 13,
the parties understand and agree that the Point of
Delivery of LNG is a separate and distinct transaction
from, and, for the purposes of sale and risk of physical
loss or damage of any LNG sold or carried in Seller’s
ISO Tanks under this Agreement, shall be in no way
confused with the delivery of LNG carried in Seller’s ISO
Tank to Buyer’s Destination.
7. Supply,
Interchange,
Delivery,
and
Transportation
7.1 Supply – Unless otherwise agreed between the
parties either: (i) in Terms Covering Additional or
Special Services as may be set forth in Part I, Box 12;
or (ii) as specified in Part I, Box 6, LNG shall be
considered “supplied” or “delivered” to Buyer, its
Affiliate or Consignee for purposes of this Agreement
when Seller’s ISO Tank in which such LNG is being
transported is interchanged at Buyer’s Destination,
which may or may not be Buyer’s Facility.
7.2 Interchange - In the event Buyer, its Affiliate or
Consignee re-gasifies directly from Seller’s ISO Tank,
Buyer shall provide storage at Buyer’s Destination or
Buyer’s Facility sufficient to safely store up to the
number of ISO Tanks set forth in Part I, Box 9 (ISO
Tank Storage Quantity), whether full or spent. In such
case, Buyer represents and warrants that such space
will meet or exceed the NFPA59A guidelines for storage
of LNG as well as applicable local regulations per site
7.3 Delivery – Seller shall have the right to refuse to
make any delivery to Buyer’s facility or interchange with
Buyer’s transportation or discharge equipment if Seller
deems Buyer’s Facility, delivery site, discharge
equipment or transportation service provider is unsafe
for delivery of LNG.
7.4 Transportation – Seller shall have the right, for
any reason, to change any transportation service
providers, including but not limited to ocean or motor
carriers, that Seller has contracted with to provide
Buyer LNG delivery services during the Term and, in
relation to which carriers, the parties have agreed as
set forth in ANNEX “C” to form the basis of the Freight
Variables; provided, further, that any decrease in
Freight Variables during the Term as a result of using
any such substitute carrier shall inure to the benefit of
Seller. In the event that during the Term, any carrier
in relation to which the parties have agreed as set forth
in ANNEX “C” to form the basis of the Freight Variables
cannot or will not, for any reason, continue to provide
transportation services to Seller, Seller shall have the
right, and use its reasonable efforts to arrange for a
substitute transportation service provider on
comparable terms and pass on any additional costs
therefore to Buyer in an amended ANNEX “C”, which
shall apply in such event; provided, however, that
Seller shall use reasonable efforts to ensure that any
such substitute carrier does not materially increase the
Freight Variables set forth in ANNEX “C”.
7.5 LNG Supply Source - Seller shall have the right,
for any reason, to change LNG supply source(s) during
the Term of this Agreement so long as the new or
alternative source does not materially increase the
Contract Price. The Seller shall notify the Buyer of any
such change and provide an updated ANNEX “A”, “B”
and “C” to reflect updated rates.
8. Terms Covering Additional or Special Services
Page 6 of 13
In addition to providing sale and supply of LNG via
ocean transportation and motor carrier services in the
U.S. non-contiguous domestic trades or to other U.S.
Territories, Seller may provide additional and/or other
related logistics services as may be agreed in Part I,
Box 12. The terms of any such additional or special
services shall be incorporated herein by such reference
to the extent not inconsistent with this Agreement and,
in the event of a conflict of conditions between this
Agreement and all documents incorporated by
reference, the Terms of this Agreement and its Annex’s
shall control to the extent of such conflict but no
further.
9. Quality and Measurement
9.1 Specifications - All LNG delivered by Seller at the
Point of Delivery shall meet the quality requirements
set forth in Seller’s Liquefaction Facility’s product
specifications (collectively the “Quality Specifications”),
included hereunder as ANNEX “E” and incorporated
herein by this reference. Buyer has reviewed and
agreed to these minimum quality requirements. The
quality of LNG shall be consistent with the foregoing
standards and be the usual production quality being
sold by Seller, or Seller’s supplier, at the time and place
of delivery to Seller in the continental United States.
9.2 Odorization - Buyer’s re-gasification skid must
include an Odorization system and meet all other
certifications and specifications to meet or exceed all
applicable technical requirements for LNG use. Seller
shall have no liability with respect to odorizing the LNG
sold and delivered to Buyer pursuant to this
Agreement.
9.3 Delivered Quantity and Proof - The total
MMBtus of LNG delivered by Seller to Buyer in any ISO
Tank shall be the quantity calculated by weight as
delivered by Seller’s Liquefaction Facility into such ISO
Tank pursuant to Seller’ contract with Seller’s
Liquefaction Facility. Upon request, Seller shall provide
Buyer copies of Seller’s Liquefaction Facility’s ISO Tank
load receipts evidencing the quantity of LNG delivered.
Any claims for shortage in quantity of LNG must be
made by written notice to Seller within thirty (30) days
after supply and delivery; otherwise any such claim
shall be deemed to have been waived.
10. Force majeure
10.1 Force majeure, Generally - No failure or
omission by either party hereto in the performance of
any obligation under this Agreement (except failure or
delay of either party to pay any amount as and when
due hereunder) shall be considered a breach of
contract, nor create any liability for damages, if and to
the extent such failure or omission shall arise from any
event beyond the control of such party (collectively,
“Force majeure”).
Page 7 of 13
10.2 Events of Force majeure - Force majeure
means any cause, whether of the kind enumerated
hereinafter or otherwise, not reasonably within the
control of a party and which by the exercise of due
diligence the party is unable to prevent or overcome,
including but not limited to: (a) physical events such
as acts of God, epidemics, landslides, lightning,
earthquakes, fires, floods, washouts, explosions,
freezing of or damage to receipt or delivery facilities,
breakage, or accident or necessity of repairs to
machinery, equipment, or lines of pipe; (b) weatherrelated events affecting the relevant
geographic
region, such as low temperatures which cause freezing
or failure of lines of pipe or storms or storm warnings,
such as tropical storms or hurricanes, which result in
evacuation of facilities; (c) marine disaster or perils of
the sea, including but not limited to fire or other
causality; (d) acts of others such as strikes, lockouts or
other
industrial
disturbances,
arrests,
civil
disturbances, riots, terrorist attacks, sabotage,
blockades, insurrections, or wars (declared or
undeclared); (e) inability to obtain government
approvals or governmental actions such as those
necessary for compliance with Applicable Law; (f)
inability to obtain or unavoidable delay in obtaining
material or equipment; and (g) interruption and/or
curtailment of LNG deliveries by Seller’s LNG Supplier
for reasons that constitute Force majeure under the
Terms of Seller’s LNG Supply Agreement with any such
LNG Supplier.
10.3 Limitations - Neither party shall be entitled to
the benefit of the provisions of this Clause 10 under
either or both of the following circumstances: (i) to the
extent the failure to perform was caused by the sole or
contributory negligence of the party claiming excuse;
or (ii) to the extent the failure to perform was caused
by the party claiming excuse having failed to remedy
the condition and to resume the performance of such
covenants or obligations with reasonable commercial
dispatch.
10.3 Notice of Force majeure - Telephonic or
electronic notice of a party’s claim of excused
performance due to Force majeure shall be given to the
other party as soon as reasonably and practicably
possible after the occurrence of the event of Force
majeure with reasonably full specificity as to the event
of Force majeure, and such non-written notice shall be
followed up with written notice as soon as reasonably
possible thereafter. Upon providing the required
notices of Force majeure to the other party, the
affected party will be relieved of its obligation, from the
onset of the event of Force majeure, to deliver or
receive LNG, as applicable, to the extent of and for the
duration of the event of Force majeure, and neither
party shall be deemed to have failed in such obligations
to the other during such occurrence or event. Each
party agrees to act with due diligence to remedy and
avoid the adverse impacts of such event; provided that
the resolution of strikes, lockouts, or other labor
disputes shall be within the sole discretion of the party
experiencing such event, and provided that nothing
herein shall require any party to take any actions that
are not commercially reasonable.
10.4 Non-waiver - Without restricting the generality
of this Clause 10, if an event of Force majeure occurs,
the affected party may, in its sole discretion and
without notice to the other party, determine not to
make a claim of Force majeure and to waive its rights
thereunder as they would apply to such event. Such
determination or waiver shall not preclude the affected
party from claiming Force majeure in respect of any
subsequent event, including any event that is
substantially similar to the event in respect of which
such determination or waiver is made.
11. Liabilities
11.1 Indemnities - As between them, Seller and
Buyer each agree that the party with title to the LNG at
the time of an act or accident that causes injury to
Person(s) or property (including to third Persons) shall
assume full responsibility and liability for those injuries.
The party with title to the LNG at the time of the act or
accident shall indemnify, defend, and hold harmless,
the other party and its officers, directors, employees,
agents, shareholders, and partners from all liability
(including strict liability) and expense (including,
without limitation, reasonable attorneys’ and expert
fees) on account of any and all damages, claims, or
actions, including damage to property or injury to or
death of Persons, arising from any act or accident
occurring while title to the LNG is vested in the
indemnifying party, except to the extent any such
damages, claims, or actions are caused by the gross
negligence or willful misconduct of any indemnified
party.
11.2 Pollution Prevention and Responsibility –
(a) Response, Mitigation, Cleanup - In the
event of a spill, release or discharge of LNG or other
contaminating product occurs during delivery or
interchange at the Point of Delivery and causes or
threatens to cause pollution damage (“Spill”), Buyer
shall promptly take whatever measures are necessary
to prevent or mitigate such damage. Seller may, but is
not obligated to, undertake any measures that are, in
its sole discretion, reasonably necessary to prevent or
mitigate the pollution damage. Any and all costs or
expenses incurred as a result of any measures so taken
shall be at Buyer’s expense.
(b) Responsibility - Buyer shall be responsible to
indemnify, defend and hold harmless Seller from any
and all claims, costs, expenses, clean-up costs, fines,
losses, penalties, damages or other liability incurred by
Page 8 of 13
Seller as a result of the Spill. This duty to indemnify,
defend, and hold harmless shall be owed to Seller
without regard to the negligence or fault of Seller,
except to the extent the negligence or other fault of
Seller is a proximate cause of the Spill, in which case
Seller shall be responsible only for reasonable costs and
expenses attributable to that portion of the Spill.
11.3 Limitation - THE PARTIES CONFIRM THAT THE
EXPRESS REMEDIES AND MEASURES OF DAMAGES
PROVIDED IN THIS AGREEMENT OR ANY
TRANSACTION DOCUMENTATION SATISFY THE
ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY
PROVISION FOR WHICH AN EXPRESS REMEDY OR
MEASURE OF DAMAGES IS PROVIDED IN THIS
AGREEMENT, SUCH EXPRESS REMEDY OR MEASURE
OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE
REMEDY, THE LIABLE PARTY’S LIABILITY SHALL BE
LIMITED AS SET FORTH IN SUCH PROVISION AND ALL
OTHER REMEDIES OR DAMAGES AT LAW OR IN
EQUITY ARE HEREBY WAIVED, UNLESS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY
HEREIN PROVIDED, THE LIABLE PARTY’S LIABILITY
SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES
ONLY. SUCH DIRECT ACTUAL DAMAGES SHALL BE
THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER
REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
WAIVED UNLESS EXPRESSLY PROVIDED IN THIS
AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL,
PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES,
INCLUDING BUT NOT LIMITED TO LOST PROFITS OR
OTHER BUSINESS INTERRUPTION DAMAGES, BY
STATUTE, IN TORT, OR CONTRACT UNDER ANY
INDEMNITY PROVISION OR OTHERWISE AND EVEN IF
THE POSSIBILITY OF SUCH DAMAGES IS OR WAS
FORESEEABLE.
THIS SUB-CLAUSE 11.3 SHALL
SURVIVE THE EXPIRATION OF THE AGREEMENT OR
THE LIQUIDATION AND TERMINATION OF ALL
TERMINATED TRANSACTIONS. IT IS THE INTENT OF
THE PARTIES THAT THE LIMITATIONS HEREIN
IMPOSED ON REMEDIES AND THE MEASURE OF
DAMAGES BE WITHOUT REGARD TO THE CAUSE OR
CAUSES RELATED THERETO, INCLUDING THE
NEGLIGENCE OF ANY PARTY, WHETHER SUCH
NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR
ACTIVE OR PASSIVE UNLESS OTHERWISE PROVIDED
IN THIS AGREEMENT. TO THE EXTENT ANY DAMAGES
REQUIRED TO BE PAID HEREUNDER ARE
CONSIDERED TO BE LIQUIDATED DAMAGES, THE
PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE
DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS
INCONVENIENT AND THE DAMAGES CALCULATED
HEREUNDER
CONSTITUTE
A
REASONABLE
APPROXIMATION OF THE HARM OR LOSS.
12. Insurance
UNLESS OTHERWISE AGREED IN PART I, BOX
11, NO MARINE ALL-RISK CARGO, LIABILITY OR
POLUTION INSURANCE HAS BEEN PURCHASED
BY SELLER FOR THE BENEFIT OF BUYER. Buyer
may instruct Seller to purchase cargo marine insurance
on an All-Risk basis for the benefit of Buyer by inserting
“Yes” in Part I, Box 11. If applicable, such insurance
includes limitations, terms and conditions that may limit
or preclude recovery in various cases.
Seller and Buyer agree, and are required
hereunder, to maintain the minimum insurance
requirements and related conditions described
in ANNEX “D”, of this Agreement.
13. Warranty
13.1 Seller - Seller represents and warrants that: (i)
it has good and merchantable title to all LNG sold and
delivered by it to Buyer hereunder at the Point of
Delivery, free and clear of all Taxes, liens, claims,
security interests, encumbrances, and other defects of
title; (ii) it has the right to sell such LNG; (iii) such LNG
meets the Quality Specifications; (iv) it is duly licensed,
trained and proficient, in accordance with Applicable
Law, relating to the purchase, storage, transportation,
sale and supply of LNG. EACH PARTY EXPRESSLY
DISCLAIMS
AND
NEGATES
ANY
OTHER
REPRESENTATION OR WARRANTY, WRITTEN OR
ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY REPRESENTATION OR WARRANTY
WITH RESPECT TO CONFORMITY TO MODELS OR
SAMPLES, INFRINGEMENT, MERCHANTABILITY, OR
FITNESS FOR ANY PARTICULAR PURPOSE.
13.2 Buyer - Buyer represents and warrants that it is
familiar with LNG and the characteristics thereof and
assumes all risks whatsoever after Seller’s delivery at
the Point of Delivery resulting from Buyer’s (or its
customers, Representatives or Subcontractors)
handling, storage, sales, transportation, use, misuse or
disposal of the LNG, whether used singly or in
combination with other substances or in any process,
and Buyer shall indemnify, defend and hold harmless
Seller from and against any and all liability whatsoever
occurring or arising therefrom. This Clause 13 shall
survive expiration or termination of this Agreement.
14. Termination
14.1 Events of Default - An “Event of Default” means
any of the following events with respect to a party
(such party being the “Defaulting Party” and the other
party being the “Non-Defaulting Party”): (i) the failure
to make, when due, any payment required under this
Agreement, which failure is not remedied within ten
(10) Business Days after written notice of such failure
is given to such party; (ii) the failure to perform or
Page 9 of 13
breaching any other material obligation, covenant,
representation, or warranty under this Agreement
(except to the extent such failure constitutes a separate
Event of Default, and except for such party’s
obligations to deliver or receive LNG, the exclusive
remedy for which is provided for in Clause 5.3) if such
failure is not remedied within twenty (20) Business
Days after receipt of written notice or is otherwise
being diligently addressed by the party at fault; (iii)
consolidating or amalgamating with, or merging with or
into, or transferring all or substantially all of its assets
to, another Person and, at the time of such
consolidation, amalgamation, merger, or transfer, the
resulting, surviving, or transferee Person fails to
assume all the obligations of such party under this
Agreement to which it or its predecessor was a party
by operation of Applicable Law or pursuant to an
agreement reasonably satisfactory to the other party,
or fails to be as creditworthy as such party as measured
immediately preceding the time of such consolidation
or amalgamation or merger; (iv) Bankruptcy; (v)
having a credit support provider subject to Bankruptcy;
or (vi) the failure by the Defaulting Party to comply with
the credit support requirements of this Agreement.
Notwithstanding anything to the contrary herein, Seller
shall have the sole option of Early Termination in the
event any Government, State or Local authority,
through enactment of new, or enforcement of existing
Applicable Laws that effectively halts the sale and or
distribution of LNG for any reason.
14.2 Default Remedies - If an Event of Default
occurs, the Non-Defaulting Party may, in its sole
discretion, do any or all of the following: (i) suspend
performance of its obligations under this Agreement
until such Event of Default is cured to its satisfaction by
the Defaulting Party; (ii) establish a date (which date
shall be no earlier than the date that such Notice is
given to the Defaulting Party) (“Early Termination
Date”) on which this Agreement will terminate if the
Defaulting Party has not by such date cured or
remedied the Event of Default, or is otherwise diligently
addressing the Event of Default to the satisfaction of
the Non-Defaulting Party; (iii) withhold any payments
due in respect of this Agreement; and/or (iv) exercise
such other remedies as may be provided for in this
Agreement.
14.3 Early Termination - As of the Early Termination
Date, the Non-Defaulting Party shall determine, in good
faith and in a commercially reasonable manner, (i) the
amount owed (whether or not then due) by each party
with respect to all LNG delivered and received between
the Parties under this Agreement on and before the
Early Termination Date, and all other applicable
charges relating to such deliveries and receipts, for
which payment has not yet been made by the party
that owes such payment under this Agreement; and (ii)
any and all other amounts owed (whether or not then
due) by each party under this Agreement (including but
not limited to Buyer’s obligation to pay Seller the
REXOP Charge and the fixed equipment cost element
of the Freight Variable if Buyer is the Defaulting Party,
as calculated for each month remaining in the Term as
liquidated damages, not as a penalty and any other
amounts owed to Seller.
15. Dispute Resolution
Any claim, counterclaim, demand, cause of action,
dispute, or any other controversy arising out of or
relating in any way to this Agreement or to the subject
matter of this Agreement (each a "Dispute") shall be
resolved by binding arbitration. A Dispute must be
resolved through arbitration regardless of whether the
Dispute involves claims that the Agreement is nonarbitrable, unlawful, unenforceable, void, or voidable or
involves claims under statutory, civil or common law.
The validity, construction and interpretation of this
Agreement to arbitrate, and all other procedural
aspects of the arbitration conducted pursuant hereto
shall be decided by the arbitral tribunal. The arbitration
shall be conducted under the arbitration rules (the
“Rules”) of the American Arbitration Association (the
“AAA”) and administered by the AAA. The arbitration
shall be conducted by three neutral arbitrators. The
claimant shall appoint an arbitrator with its demand for
arbitration, and the respondent shall appoint an
arbitrator with its answering statement. The two partyappointed arbitrators shall appoint a third arbitrator to
chair the arbitration. If the party-appointed arbitrators
are unable to agree upon a third arbitrator within 15
days of the appointment of the second arbitrator, or if
a party does not appoint an arbitrator, then the
remaining arbitrator(s) shall be appointed in
accordance with the Rules. The arbitration shall be
held in New York, New York and conducted in the
English language. The arbitral tribunal shall not be
empowered to decide any dispute ex aequo et bono or
amiable compositeur. The award shall be final and
binding and may be enforced by any court of
competent jurisdiction. The parties agree that service
of process may be accomplished in any enforcement
action by using the notice provisions of Clause 16 or
any other means authorized by law. The parties agree
that the award may be enforced in any jurisdiction
where the party against whom the award is sought to
be enforced has assets that may be available to satisfy
the award, and they waive any objections they may
have to personal jurisdiction, venue or inconvenient
forum for any action brought in those jurisdictions. The
arbitral tribunal is authorized to award the costs of the
arbitration, including reasonable costs and attorneys’
fees, to the prevailing party. The award shall include
pre-judgment interest at the Interest Rate, and interest
shall accrue until the date the award is paid in full. If
a court enters judgment on an award, thereafter
interest shall accrue at the higher of the Interest Rate
or the statutory rate applicable to judgments entered
by such court. Any arbitral award issued pursuant
hereto may be enforced pursuant to the United Nations
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of June 10, 1958 or, if that
Convention is not applicable, then pursuant to the
Inter-American
Convention
on
International
Commercial Arbitration.
16. Notice
Any notice, request, or correspondence shall be
delivered personally, by first class U.S. mail or postage
prepaid or facsimile to the address and/or facsimile
number set forth in Part I of this Agreement until
changed by written notice given in accordance with this
Clause 16. Such notice shall be deemed received when
sent by courier, facsimile, or deposited in the U.S. Post
Office. In the absence of proof of the actual receipt
date, notices sent by facsimile shall be deemed to have
been received upon the receipt of the sending party’s
facsimile machine’s confirmation of successful
transmission. If the day on which such facsimile is
received is not a Business Day or is after 5:00 p.m.
Eastern Prevailing Time on a Business Day, then such
facsimile shall be deemed to have been received on the
next following Business Day. Notice by overnight
courier or personal delivery shall be deemed to have
been received on the next Business Day after it was
sent or such earlier time as is confirmed by the
receiving party. Notice via first class mail shall be
considered delivered five (5) Business Days after
mailing. Such notice and payments required to be
made by either party hereunder shall be sent to the
individuals and locations of the parties for service of
such communication shall be as stated in Part I, Boxes
2 and 3 respectively.
17. Confidentiality
This Agreement and the Terms set forth herein
(including any financial information exchanged
pursuant to this Agreement) are confidential and the
parties agree not to disclose such Terms other than as
otherwise set forth herein and as required by Applicable
Law, any exchange, including any securities exchange;
provided that each party may disclose the terms hereof
to each of their respective Affiliates’ directors, officers,
employees, agents, and other advisors that have a
bona fide business need to know such information and
that have agreed to use this information only for the
purposes intended herein and to keep such information
confidential. Notwithstanding the foregoing, each
party may disclose the existence of this Agreement to
any lender or potential lenders that have agreed to use
Page 10 of 13
this information only for the purposes of evaluating
such loans and to keep such information confidential,
except (i) to the extent necessary for the authorization
or enforcement of this Agreement; (ii) to the extent
necessary to implement this Agreement; or (iii) to the
extent such information is delivered to such third party
for the sole purpose of calculating a published index or
resolving a dispute. Each party shall notify the other
party of any proceeding of which it is aware which may
result in disclosure of the terms of this Agreement
(other than as permitted hereunder) and use
reasonable efforts to prevent or limit the disclosure.
Subject to this Clause 17, the parties shall be entitled
to all remedies available at law or in equity to enforce
or seek relief in connection with this confidentiality
obligation.
18. General Provisions
18.1 Headings - Captions used in this Agreement are
for convenience of reference only and shall have no
legal effect or meaning in the construction or
enforcement of this Agreement.
18.2 Drafting - Whenever used in this Agreement, the
singular shall include the plural and the plural shall
include the singular, and the neutral gender shall
include the male and female as well as a trust, firm,
company, or corporation, all as the context and
meaning may require.
18.3 Severability - The rights and obligations of the
parties hereunder are subject to all Applicable Law,
present and future. In the event that any of the
provisions of this Agreement are held to be
unenforceable or invalid by a court of competent
jurisdiction the parties shall, to the extent permitted by
Applicable Law, negotiate in good faith an equitable
adjustment to the provisions of this Agreement with a
view toward effecting to the extent possible the original
purpose of this Agreement, and the validity and
enforceability of the remaining provisions, or portions
or applications thereof, shall not be affected thereby.
18.4 Third Party Beneficiaries - This Agreement
shall extend to and be binding upon the successors,
heirs, assigns, personal Representatives, and
Representatives in Bankruptcy of the parties hereto.
Neither Seller nor Buyer may assign this Agreement in
whole or in part and/or may cause any or all of their
obligations hereunder to be performed by others,
without the prior written consent of the other party.
Except as specifically provided for elsewhere in this
Agreement, this Agreement shall not be construed to
confer any benefit on any third party not a party to it
nor shall the Agreement provide any rights to such third
party to enforce its provisions. Buyer shall keep Seller
informed regarding any incident of which Buyer
becomes aware, which gives or may give rise to claims
or disputes involving third parties.
Page 11 of 13
18.5 Waiver - No benefit or right accruing to either
party under this Agreement shall be waived unless the
waiver is reduced to writing and signed by both Seller
and Buyer. A waiver by a party of any one (1) or more
defaults hereunder shall not operate as a waiver of any
future default, whether of a like or a different
character.
18.6 Warranty of Authority - Seller and Buyer each
warrant and represent that the Person whose signature
appears in Part I of this Agreement is its representative
and is duly authorized to execute this Agreement as a
binding commitment of such party.
18.7 Integration - This Agreement and all documents
attached hereto or available on-line and incorporated
by reference herein represent the final and complete
agreement of the parties for the sale and supply of LNG
and this Agreement replaces or supersedes all prior
written or oral agreements between the parties with
respect to the sale of LNG or any of the services
provided or arranged for by Seller herein. Any written
confirmation of an order or nomination, or of any oral
understanding upon which the sales confirmation is
based, containing proposals or terms additional to or
different from those set forth herein are not binding on
Seller unless Seller expressly agrees to any such
proposal or term in writing. Buyer’s performance of
any of its obligations hereunder shall constitute
acceptance by Buyer of a sale or delivery s confirmation
and all of its terms and conditions. Each party has
relied solely on its own judgment and on the advice of
its counsel in the negotiation and execution of this
Agreement; neither party has relied on any
representation not expressly included within the four
corners of this Agreement.
18.8 Counterparts - This Agreement may be
executed in multiple counterparts, each of which shall
constitute an original of this Agreement, but all of
which together shall constitute but one and the same
instrument.
18.9 Survival - Clauses 11, 13, 17, and 18.9 shall
survive termination or expiration of this Agreement, in
addition to any provisions which by their nature should,
or by their express terms do, survive or extend beyond
termination or expiration of this Agreement.
18.10 Rights and Remedies - Except where this
Agreement expressly provides to the contrary, the
rights and remedies contained in this Agreement are
cumulative and not exclusive of any rights and
remedies provided by Law.
18.11 Governing Law – This Agreement shall be
interpreted and enforced in accordance with the law of
the State of New York without giving effect to any
conflict of law provision that would result in the
application of another state or territory’s law.
18.12 No Exclusivity - Nothing contained herein shall
(i) obligate Buyer or any Buyer Affiliate to any exclusive
relationship with Seller; or (ii) restrict or preclude Buyer
or any Buyer Affiliate from contracting with any
competitor of Seller.
18.13 Publicity - Except for the purposes of
performance hereunder, without Buyer’s prior written
consent, which may be withheld at Buyer’s sole
discretion, Seller and its Representatives shall not use
(including without limitation use in any publicity,
advertising, media release, public announcement or
other public disclosure) (i) any name, acronym, symbol
or other designation by which Buyer or its Affiliates or
any of their respective human therapeutics, products or
other materials is known or (ii) the names of any agent
or employee of Buyer or its Affiliates (each a
“Prohibited Use”). Seller shall immediately notify Buyer
in each event of a Prohibited Use and, at Seller’s sole
cost and expense, without limiting Buyer’s rights and
remedies hereunder, Seller shall, and shall cause its
Representatives, to immediately cease and desist each
such Prohibited Use and take such other actions as
requested by Buyer.
18.14 Foreign Corrupt Practices Act of 1977 (15
U.S.C. S. 78dd-1 et seq.) and Anti-Corruption.
Seller represents, warrants and covenants, as of the
Effective Date to and through the Expiration Date or
termination of this Agreement (the Term), as
applicable: (1) that Seller, and, to the best of its
knowledge, Seller’s Representatives, owners, or other
third parties acting for or on Seller’s behalf (collectively,
“Extended Representatives”), shall not, directly or
indirectly, offer, pay, promise to pay, or authorize such
offer, promise or payment, of anything of value, to any
individual or entity for the purposes of obtaining or
retaining business or any improper advantage in
connection with this Agreement, or that would
otherwise violate any Applicable Laws, rules and
regulations concerning or relating to public or
commercial bribery or corruption (“Anti-Corruption
Laws”) and (2) that Seller’s books, accounts, records
and invoices related to this Agreement or related to any
work conducted for or on behalf of Buyer or its Affiliates
are and will be complete and accurate. Without limiting
other rights or remedies, and anything in this
Agreement to the contrary notwithstanding, Buyer has
the right to terminate this Agreement without penalty
and without invoking the liquidated damages provision
hereof (a) if Seller or Extended Representatives fails to
comply with the Anti-Corruption Laws or with this
provision or (b) if Buyer has a good faith belief that
Seller or Extended Representatives has violated,
intends to violate, or has caused a violation of the AntiCorruption Laws. If Buyer requires that Seller complete
a compliance certification, without limiting other rights
or remedies, Buyer may also terminate this Agreement,
if Seller: (1) fails to complete a compliance certification;
(2) fails to complete it truthfully and accurately; or (3)
fails to comply with the terms of that certification.
18.15 U.S. Economic Sanctions. Neither Seller nor
its Representatives are: (a) listed on the Office of
Foreign
Assets
Control’s
(“OFAC”)
“Specially
Designated National and Blocked Person List” (“SDN
List”) or otherwise subject to any sanction administered
by OFAC (“U.S. Economic Sanctions”) or (b) owned,
controlled by or acting on behalf of, directly or
indirectly, any Person, entity, or government listed on
the SDN List or otherwise subject to any U.S. Economic
Sanction. Seller and its Representatives have not and
will not engage directly or indirectly in any transaction
on behalf of Buyer or its Affiliates that could potentially
violate applicable U.S. Economic Sanctions
19. Conditions Precedent
19.1 Sellers Conditions Precedent - The
obligations of Seller under this Agreement are subject
to the fulfillment and satisfaction of each of the
following conditions precedent on or prior to
corresponding date set forth below (or in Part I of this
Agreement), any one or more which may be waived in
writing, in whole or in part, by Seller in its sole
discretion.
(a) An LNG Transaction Confirmation for the supply of
LNG to Buyer is signed and executed with the LNG
supplier as per this Agreement.
(b) Sellers ISO Tanks have been ordered, built and
supplied to Seller on behalf of requirements in this
contract.
(c) LNG supply for the Term of this Agreement is
available at time of this Agreement being signed,
executed and effective.
(d) Supply and Transportation permits issued to Seller,
or its logistics Subcontractor, by the appropriate
Puerto Rico authority (i.e. Public Service
Commission of Puerto Rico, Puerto Rico
Department of Transportation and Public Works
(DTOP), etc.) for the sale and/or distribution of
LNG in the Commonwealth of Puerto Rico.
(e) Approval of this Agreement by Seller’s ultimate
parent’s Board of Directors.
20. Performance and Responsibilities
20.1 Seller’s Performance and Responsibilities In addition to its other obligations set forth in this
Agreement, Seller shall be responsible for the
following:
(a) To Notify Buyer at the earliest practical time of any
of the following: Operational issues resulting from
requests for delivery of LNG to the Commonwealth
of Puerto Rico; notices relating to an emergency
affecting the services provided hereunder; Notices
it receives of upstream Force majeure and/or
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transportation interruption issues resulting in
interruption or delay of service.
(b) Seller shall, at its cost, offer reasonable training
programs to educate Buyer's personnel as to the
applicable regulatory procedures for the safe and
efficient use, including, without limitation,
procedures relating to safe ISO Tank operations,
maintenance, troubleshooting and appropriate
emergency procedures.
20.2 Buyer’s Performance and Responsibilities
In addition to its other obligations set forth in this
Agreement, Buyer shall be responsible for the
following:
(a) Notify Seller at the earliest practical time of any of
the following: notices relating to an emergency
affecting the services provided hereunder; and
notices of any events resulting in the interruption
or delay of LNG receipts at Buyer’s Facility.
(b) Complete all relevant civil, mechanical and/or
permitting installations at Buyer’s Facility, all of
which must be finished before the commencement
of delivery of LNG to Buyer’s Facility. All power and
air requirements for the operation of the Buyer’s
LNG Storage infrastructure will be at Buyer’s
expense.
(c) Buyer acknowledges, pursuant to this Agreement,
that it has full knowledge of the hazards associated
with the storage, distribution and use of LNG and
Buyer hereby assumes all responsibility of
complying with Applicable Law and for warning its
personnel
and
any
Representatives,
Subcontractors’ or other third parties of such
hazards with respect to all operations within
Buyer’s Facility.
(d) Cooperate with Seller in resolving any imbalances
on interrupted delivery to Buyer’s Facility to bring
end of year balance to the Annual Nominated
Quantity in accordance with the Terms of this
Agreement.
(e) Buyer shall ensure that Buyer’s Facility, premises
and the real property in the vicinity of any LNG regasification are in a clean, safe, and commercially
reasonable condition suitable for LNG Storage,
discharge, and use, including ingress to, and
egress from, such area – all in accordance with
Applicable Law.
21. Incentives and Carbon Credits Seller shall
retain the rights to:
(a) Any federal or state tax credits associated with the
collection, production, transfer or sale of LNG;
(b) Any emission reduction credits required or available
with respect to the sale or use of LNG fuel; and
(c) Any credits or payments associated with the
reduction in or avoidance of Greenhouse Gas
emissions with respect to the sale or use of the LNG
Page 13 of 13
fuel, including emission reduction credits, lowcarbon fuel standard credits, verified emission
reductions, voluntary emission reductions, offsets,
allowances, voluntary carbon units, avoided
compliance
costs,
emission
rights
and
authorizations
and
CO2
reduction
and
sequestration. For purposes hereof “Greenhouse
Gas” means carbon dioxide (CO2), methane (CH4),
nitrous
oxide
(N2O),
hydroflourocarbons,
perflourocarbons, sulpher hexafluoride, or any
other substance or combination of substances that
may become regulated or designated as
Greenhouse Gases under any federal, state or local
law or regulation, or any emission reduction
registry, trading system, or reporting or reduction
program for Greenhouse Gas emission reductions
that is established, certified, maintained or
recognized by any international, governmental
(including U.N., federal, state or local agencies) or
non-governmental agency from time to time.