Vehicle Lease Service Agreement - Silsbee Trading and Transportation Corp. and South Hampton Refining Co.
VEHICLE LEASE SERVICE AGREEMENT
Silsbee Trading and Transportation Corp., a Texas Corporation, (hereinafter
"STTC", with an address at P. O. Box 695, Silsbee, Texas 77656, agrees to lease
to South Hampton Refining Co., a Texas Corporation, (hereinafter "SHRCO"), with
an address at P. O. Box 1636, Silsbee, Texas 77656, which agrees to lease from
STTC the Vehicles and equipment described in Schedule "A" attached hereto. The
term of the lease shall begin on October 1, 1989, and shall continue for a
period of five (5) years unless terminated early as provided in the lease.
Upon expiration or termination of the Vehicle lease, SHRCO shall return the
vehicles to STTC at its location at Highway 418 in Hardin County, Texas, in the
same condition and appearance as when received, ordinary wear and tear excepted.
Any holding over after the expiration of the Vehicle lease shall be on a
week-to-week basis and subject to all the terms of this Lease.
1. MAINTENANCE AND REPAIR. STTC agrees, at its own cost and expense,
to provide with respect to the Vehicles leased, at STTC facilities: (a) all
preventive maintenance, replacement parts, and repairs to keep the Vehicles in
good repair and operating condition; (b) oil and lubricants necessary for the
efficient operation of the Vehicles; (c) all necessary tires and tubes; (d) road
service due to mechanical and tire failures; (e) periodic exterior washing; (f)
initial painting and lettering of each Vehicle according to SHRCO specifications
at the time the Vehicle is placed into service, at a cost not exceeding the
per-vehicle allowance specified in Schedule "A". In the event any Vehicle shall
be disabled for any reason, SHRCO and/or its driver shall immediately notify
STTC. SHRCO agrees that it will not cause or permit any person other than STTC
or persons authorized by STTC to make any repairs or adjustments to a Vehicle,
and shall abide by its directions concerning emergency repairs. In the event a
Vehicle is disabled due to mechanical or tire failure, STTC shall, within a
reasonable period of time after receipt of notification, properly repair, or
cause the repair of, the Vehicle. STTC shall have no responsibility for any
repair or service to a Vehicle away from its facilities unless authorized by
STTC and documented by a properly receipted and itemized bill for such repairs
or services, listing the Vehicle number.
SHRCO will cause its drivers to report any trouble concerning the
Vehicle not later than the date of occurrence on forms provided by STTC and to
check oil and coolant levels in each Vehicle on a daily basis to prevent damage.
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VEHICLE LEASE SERVICE AGREEMENT PAGE 2
STTC will provide for inspections, preventive maintenance, and routine
repairs in such a manner and at such times as to minimize the disruption of the
normal use of the Vehicle. STTC will pick up the Vehicles at SHCRO's location on
Highway 418 in Hardin County, Texas, and return them to the same location after
repairs or maintenance is completed.
2. FUEL. STTC will provide all fuel required for the operation of the
Vehicles and will rebill the costs to SHRCO, prepare and file fuel tax returns,
provided SHRCO submits weekly to STTC all driver trip records, original fuel
receipts or invoices, and any other information necessary for the preparation of
such fuel tax returns. SHRCO shall reimburse STTC for any additional charges,
assessment, tax, penalty, or credit disallowed as a result of untimely or
improper submission of such information by SHRCO.
3. LICENSES, TAXES AND PERMITS. STTC shall, at its own expense,
register and title each Vehicle, and pay for any Vehicle inspection fees, in the
state of domicile of such Vehicle for the licensed weight. STTC shall also pay
the Federal Highway Use Tax and all personal property tax applicable to such
Vehicle in that domicile state. If permitted by law, STTC shall obtain, at
SHCRO's expense, other vehicle licenses, registrations, or pro-rate or state
reciprocity plates, as SHRCO may request. Any increase in these rates or fees or
change in the method of assessment over the allowance shown in Schedule "A" will
be paid for by SHRCO.
Other than as set forth above, SHRCO shall pay for all permits,
plates, special licenses, fees, or taxes (including any penalties or interest)
required by SHRCO's business or now or hereafter imposed upon the operation or
use of the Vehicles, or on this lease or on the charges accruing under this
lease, including, but not limited to, sales or use taxes, mileage or ton mileage
taxes, highway and bridge tolls, and any new and/or additional taxes and fees.
SHRCO shall also pay for all fuel taxes paid by STTC in excess of the fuel taxes
which would have been payable with respect to the fuel used by SHRCO had such
fuel been purchased in the state of consumption.
4. LEASE CHARGES. SHRCO agrees to pay STTC the charges provided for
under this lease within fifteen (15) days of STTC's rendering of an invoice,
without deduction or offset. STTC will invoice SHRCO on a semi-monthly basis,
including the billing of fixed charges in advance, and payment shall be made to
the location designated by STTC. Unless SHRCO shall protest the correctness of
any invoice within seven (7) days of its receipt, SHRCO agrees that such
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VEHICLE LEASE SERVICE AGREEMENT PAGE 3
invoice shall be presumed to be correct. SHRCO shall provide STTC with mileage
readings for each Vehicle within twenty-four (24) hours after the end of each
week or as otherwise agreed upon. Mileage shall be determined by means of a
standard mileage recording device attached to the Vehicle. In the event such
device fails to function or becomes detached, the mileage shall be determined on
the basis of the fuel consumed and the average daily mileage for the preceding
thirty (30) days or by another reasonable method. Should SHRCO fail to pay any
charges when due, SHRCO shall pay interest on such delinquent amounts at one and
one-half percent (1-1/2%) per month or the maximum permissible rate allowed in
the jurisdiction in which SHRCO's principal place of business is located,
whichever is lower, from the date on which payment was due until paid, together
with all expenses of collection and reasonable attorneys' fees. This interest
charge shall not be construed as an agreement to accept late payments.
5. VEHICLE USE AND DRIVERS. SHRCO shall use the Vehicle only in the
normal and ordinary course of its business and operations and in a careful,
non-abusive manner, and not beyond its capacity, and SHRCO shall not make any
alterations to the Vehicle without STTC's prior written consent.
Subject to the terms of this lease, from the time of delivery to SHRCO
of any Vehicle covered by this lease, SHRCO shall have exclusive possession,
control, supervision and use of the Vehicle until its return to STTC. SHRCO
agrees that all Vehicles shall be operated by safe, qualified, properly licensed
drivers, who shall conclusively be presumed to be SHRCO's agent, servant or
employee only, and subject to its exclusive direction and control. The Vehicles
shall not be operated: (a) by a driver in possession of or under the influence
of alcohol or any controlled drug, substance, or narcotic; (b) in a reckless or
abusive manner; (c) off an improved road; (d) on an underinflated tire; (e)
improperly loaded or loaded beyond maximum weight; or (f) in violation of any
applicable laws, ordinances, or rules; and SHRCO shall protect, defend,
indemnify and hold STTC harmless from and against all fines, claims,
forfeitures, judgements, seizures, confiscations or penalties arising out of any
such occurrence. SHRCO will be responsible for all expenses for removing or
towing any mired or snowbound Vehicle. SHRCO agrees not to use or cause any
Vehicle to be used for the transportation of hazardous materials as defined by
regulations promulgated by the United States Department of Transportation,
unless otherwise agreed to in writing by STTC, nor for any illegal purpose.
SHRCO will cause each Vehicle to be stored in a safe location.
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VEHICLE LEASE SERVICE AGREEMENT PAGE 4
Upon receipt of a written complaint from STTC specifying any reckless,
careless or abusive handling by any driver of the Vehicle(s), SHRCO shall
prohibit the driver so identified from operating the Vehicle(s). In the event
that SHRCO shall fail to do so or shall be prevented from so doing by any
agreement with anyone on the driver's behalf, SHRCO shall reimburse STTC in full
for any loss and expense incurred by STTC as a result of operation or use of the
Vehicle(s) by such driver; and SHRCO shall protect, defend, indemnify and hold
STTC and its partners harmless from and against any costs, expenses or damages
arising out of the operation of any Vehicle(s) by such driver, notwithstanding
that STTC may be designated in this lease as responsible for extending liability
coverage or assuming the risk of loss of, or damage to, the Vehicle. SHRCO
authorizes STTC to investigate the driving record of each driver and test such
driver with respect to his ability to operate the Vehicle to which he will be
assigned, without prejudice to any right or remedy of STTC under this lease. The
drivers shall be selected and employed by SHRCO. STTC will have no
responsibility for compensation, supervision or control of such drivers.
6. PHYSICAL DAMAGE TO VEHICLES. SHRCO assumes the risk of loss of, or
damage to, the Vehicle(s) covered by this lease from any and every cause
whatsoever, including, but not limited to, casualty, collision, upset, fire,
theft, malicious mischief, vandalism, graffiti, glass breakage, and mysterious
disappearance, except as otherwise provided in this lease. SHRCO shall, at its
sole cost, procure and maintain an automobile collision and comprehensive
insurance policy protecting STTC against any and all loss or damage to the
Vehicles covered by this lease, in form and amount satisfactory to STTC, which
policy shall provide that losses, if any, shall be payable to STTC and/or its
assignee. SHRCO shall deliver to STTC all policies of insurance, or evidence
satisfactory to STTC of such coverage, prior to delivery to SHRCO of any Vehicle
covered by this lease. Each insurer shall agree, by endorsement upon the policy
issued by it, or by an independent document provided to STTC, that it shall give
STTC thirty (30) days' prior written notice of the effective date of any
alteration or cancellation of such policy, and that such notice shall be sent by
registered or certified mail postage prepaid, return receipt requested, to STTC,
P. O. Box 695, Silsbee, Texas 77656.
7. LIABILITY COVERAGE. SHRCO shall, at its sole cost, provide
liability coverage for SHRCO and STTC and their respective agents, servants and
employees, in accordance with the standard provisions of a basic automobile
liability insurance policy as required in the jurisdiction in which the Vehicle
is operated, against liability for bodily injury, including death, and property
damage arising out of
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VEHICLE LEASE SERVICE AGREEMENT PAGE 5
the ownership, maintenance, use and operation of the Vehicle(s) with limits of
at least a combined single limit of $5,000,000 per occurrence (except that STTC
shall not be liable for damage to property left, stored, loaded, or transported
in, upon, or by the Vehicle). Such coverage shall be primary and not excess or
contributory and shall be in conformity with the basic requirements of any
applicable No-Fault or uninsured motorist laws, but does not include "Uninsured
Motorist" or supplementary "No-Fault", or optional coverage. Such coverage, if
the obligation of SHRCO, shall be in a form acceptable to STTC and SHRCO shall
deliver all policies of insurance, or evidence satisfactory to STTC of such
coverage, prior to delivery to SHRCO of any Vehicle covered by this lease. Each
insurer shall agree, by endorsement upon the policy issued by it, or by an
independent document provided to STTC, that it shall give STTC thirty (30) days'
prior written notice of the effective date of any alteration or cancellation of
such policy and that such notice shall be sent in the manner contemplated by
Article 6.
SHRCO shall notify STTC as well as SHRCO's insurance company, of any
loss of, or damage to, or accident involving any Vehicle, immediately by
telephone, and in writing as soon as practicable thereafter, and to cooperate
fully in the investigation, prosecution and/or defense of any claim or suit and
to do nothing to impair or invalidate any applicable liability, physical damage
or cargo coverage.
SHRCO shall provide in each vehicle proof of financial responsibility.
8 . INDEMNIFICATION. SHRCO shall protect, defend, indemnify and hold
harmless STTC and its partners and its agents, servants and employees from any
and all claims, suits, costs, damages, expenses and liabilities arising from:
(a) SHRCO's failure to comply with its obligations to governmental bodies having
jurisdiction over SHRCO and the Vehicles or its failure to comply with the terms
of this lease, or the use, selection, possession, maintenance, and/or operation
of the Vehicle; (b) any liability imposed upon or assumed by SHRCO under any
Workers' Compensation Act, plan or contract and any and all injuries (including
death) or property damage sustained by SHRCO or any driver, agent, servant or
employee of SHRCO; or (c) SHRCO's failure to properly operate or maintain a
trailer or other equipment not leased by STTC under this lease, or properly
connect any trailer or other equipment. Where the Vehicle is operated with a
trailer or other equipment not leased by STTC under this lease, then SHRCO
warrants that such trailer or other equipment shall be in good operating
condition compatible in all respects with the Vehicle with which it is to be
used and in compliance with all laws and regulations covering the trailer or
other equipment.
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VEHICLE LEASE SERVICE AGREEMENT PAGE 6
9. ACCEPTANCE OF VEHICLES. If subsequent to the date of preparation of
the Schedule "A", any law, rule, or regulation shall require the installation of
any additional equipment or accessories, including, but not limited to,
anti-pollution and/or safety devices, or in the event that any modification of
the Vehicle shall be required by virtue of such law, rule or regulation, STTC
and SHRCO agree to cooperate in arranging for the installation of such equipment
or the performance of such modifications and SHRCO agrees to promptly pay the
full cost thereof, including any additional maintenance expenses upon receipt of
an invoice for same.
10. FORCE MAJEURE. STTC shall incur no liability to SHRCO for failure
to perform any obligation under this lease caused or contributed to by events
beyond STTC's reasonable control, such as, but not limited to, war, fire,
governmental regulations, labor disputes, manufacturer, supplier or
transportation shortages or delays, or fuel allocation programs.
11. VEHICLE TITLE. Title to the Vehicles and all equipment delivered
to SHRCO under this lease shall remain in STTC or its designee. SHRCO shall, at
all times, at its sole cost, keep the Vehicles and related equipment free and
clear from all liens, encumbrances, levies, attachments or other judicial
process from every cause whatsoever, (other than a claimant through an act of
STTC), and shall give STTC immediate written notice thereof and shall indemnify
and hold STTC harmless from any loss or damage, including attorneys' fees,
caused thereby.
12. DEFAULT BY SHRCO AND REMEDIES. In the event SHRCO shall fail or
refuse to pay any charges under this lease when due, or perform or observe any
other term of this lease for five (5) days after written notice is sent to SHRCO
by STTC, or if SHRCO or any guarantor of SHRCO'S obligations shall become
insolvent or make a bulk transfer of its assets or make an assignment for the
benefit of creditors, or if SHRCO or any guarantor of SHRCO's obligations shall
file or suffer the filing against it of a petition under the Bankruptcy Act or
under any other insolvency law or law providing for the relief of debtors, or if
any representation or warranty made by SHRCO herein or any document furnished by
SHRCO or a guarantor of SHRCO's obligations shall prove to be incorrect in any
material respect, STTC shall be entitled to pursue the remedies specified in the
following paragraph.
Upon the happening of one of the preceding Events of Default, STTC
may, with or without terminating this lease, with or without demand or notice to
SHRCO, and with or without any court order or process of law, take immediate
possession of, and remove, any and all
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VEHICLE LEASE SERVICE AGREEMENT PAGE 7
Vehicles covered by this lease wherever located, and/or retain and refuse to
deliver, and/or re-deliver to SHRCO, the Vehicle(s), without STTC being liable
to SHRCO for damages caused by such taking of possession.
In addition, STTC may proceed by appropriate court action to enforce
the terms of this lease or to recover damages for the breach of any of its
terms.
In the event STTC takes possession of or retains any Vehicle and there
shall, at the time of taking or retention, be in, upon or attached to the
Vehicle any property or things of a value belonging to SHRCO or in SHRCO's
custody or control, STTC is authorized to take possession of such items and
either hold the items for SHRCO or place them in public storage for SHRCO, at
SHRCO's sole cost and risk of loss or damage.
13. ADJUSTED COST. The parties hereto recognize that the lease rates
provided for in this lease are based upon STTC's current costs and that such
costs may fluctuate. Accordingly, STTC and SHRCO agree that for each rise or
fall of one percent (1%) in the Consumer Price Index for All Urban Consumers for
the United States, published by the United States Department of Labor, Bureau of
Labor Statistics, or any successor index designated by STTC, above or below the
Consumer Price Index figure applicable for each leased Vehicle as shown on
Schedule "A", the fixed lease charges and the basic mileage charges (excluding
fuel) shall be adjusted upward or downward.
All increases under this Article shall be cumulative and shall be
calculated only on the charges initially shown on the Vehicle's Schedule "A".
Upon adjustment, the fixed lease charge shall be rounded off to the nearest
whole cent.
14. NON-LIABILITY FOR CONTENTS. STTC shall not be liable for loss of,
or damage to, any cargo or other property left, stored, loaded or transported
in, upon, or by any vehicle furnished to SHRCO pursuant to this lease at any
time or place, and SHRCO agrees to protect, indemnify, defend and hold STTC and
its partners harmless from and against any claims for such loss or damage.
15. ASSIGNMENT AND SUBLETTING. Without prior written consent of STTC,
which consent will not be unreasonably withheld, SHRCO shall not voluntarily or
involuntarily assign or pledge this lease or the Vehicles, or sublet, rent or
license the use of the Vehicles, or cause or permit the Vehicles to be used by
anyone other than SHRCO or its agents, servants or employees.
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VEHICLE LEASE SERVICE AGREEMENT PAGE 8
This lease and any Vehicles, rent or other sums due or to become due
hereunder may be assigned or otherwise transferred, either in whole or in part,
by STTC, without affecting any obligations of SHRCO and, in such event, the
right of SHRCO shall be subject to any lien, security interest or assignment
given by STTC in connection with the ownership of the Vehicle(s), and the
transferee or assignee shall have all of the rights, powers, privileges and
remedies of STTC.
16. DISCLAIMER. STTC MAKES NO WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, AS TO THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY
VEHICLE COVERED BY THIS LEASE. STTC SHALL NOT BE LIABLE FOR LOSS OF SHRCO'S
PROFITS OR BUSINESS, LOSS OR DAMAGE TO CARGO, DRIVER'S TIME, OR ANY INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES.
17. MISCELLANEOUS. This lease and the schedules and/or riders attached
hereto shall constitute the entire agreement between the parties and to be
binding on STTC must be signed by an officer of STTC. This document shall
constitute an agreement of lease and nothing shall be construed as giving to
SHRCO any right, title or interest in any of the Vehicles or related equipment,
except as lessee only. Upon execution of this lease by STTC and SHRCO, the lease
shall be binding on the respective parties and their legal representative,
successors and assigns. Its terms shall not be amended or altered by failure of
either party to insist on performance, or failure to exercise any right or
privilege, or in any manner unless such amendment or alteration is in writing
and signed on behalf of the parties hereto. This lease shall supersede any and
all proposals or agreement, written or verbal, between the parties, relating to
the subject matter of this lease and may not be modified, terminated or
discharged, except in writing and signed by the party against whom the
enforcement of the discharge, modification or termination is sought. Any notice
given under this lease shall be in writing and sent by registered or certified
mail to STTC or to SHRCO, as the case may be, to the addresses set forth in this
lease, or to such other addresses as are designated in writing by either party.
This lease is to be interpreted, construed and enforced in accordance with the
laws of the State of Texas. In the event any of the terms and provisions of this
lease are in violation of or prohibited by any law, statute, regulation or
ordinance of the United States and/or state or city where the lease is
applicable, such terms and provisions shall be deemed amended to conform to such
law, statute, regulation or ordinance without invalidating any of the other
terms and provisions of this lease.
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VEHICLE LEASE SERVICE AGREEMENT PAGE 9
IN WITNESS WHEREOF, the parties shall cause this lease to be executed
by their authorized representative this 28th day of September, 1989.
SILSBEE TRADING & TRANSPORTATION SOUTH HAMPTON REFINING CO.
CORPORATION
By /s/ [ILLEGIBLE] By /s/ [ILLEGIBLE]
------------------------------ -------------------------------
Its Vice President Its President
----------------------------- ------------------------------
WITNESSED OR ATTESTED BY: WITNESSED OR ATTESTED BY:
/s/ SANDRA J. BARNES /s/ EVELYN SIMS
-------------------------------- ---------------------------------
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VEHICLE AND EQUIPMENT LEASE
SCHEDULE "A"
6 Trucks; 3 W/Sleepers, 3 WO/Sleepers @ $ 2,200 $ 13,200
I.D.# Description VIN
----- ----------- ---
104 `78 Mack Truck R686ST 20724
105 `78 Mack Truck R686ST 20725
106 `80 Mack Truck R686ST 34834
107 `80 Mack Truck R686ST 34835
108 `81 Mack Truck 1M2N178Y6BA073629
109 `89 Mack Truck 1M2N188Y9KW028029
4 #306 Trailers @ $ 885 $ 3,540
A2 `73 Trailmaster Trailer 73018
A3 `74 Trailmaster Trailer 74067
A4 `77 Trailmaster Trailer 77030
A5 `77 Trailmaster Trailer 77182
4 #307 Trailers @ $ 885 $ 3,540
AP22 `70 Gorbett Trailer 70089F
AP25 `73 Trailmaster Trailer 73014
AP26 `73 Trailmaster Trailer 73015
AP27 `73 Trailmaster Trailer 73028
3 LPG Trailers @ $ 1,200 $ 3,600
SP182 `72 Dalworth Trailer TP51480
SP183 `86 Enderby Anderson 1DZTA442XGG451111
SP184 `69 Lubbock LPG Trailer 57124
Tanks # 62 and # 63 2,500 Barrels Each (Cone Roof) $ 600
Tank 47 1,000 Barrels (Pressure) $ 160
Tank B-1 25,000 Gallons (Pressure) $ 85
2 Mole Sieve Vessels $ 300
------
Per Month $ 25,000
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Other services to be provided and covered by the Lease payments
include:
(1) Equipment will be picked up and returned to SHRCO yard on Highway
418. Maintenance will be scheduled around operating requirements
where possible.
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VEHICLE AND EQUIPMENT LEASE PAGE 2
SCHEDULE "A"
(2) Painting and lettering allowance of $3300.00 annually in total is included
in the above figures. Any excess will be charged SHRCO.
(3) License and Taxes allowance of:
(a) $2005.00 each annually for tractors
(b) $420.00 each annually for 307 trailers
(c) $600.00 each annually for LPG trailers
License and Taxes allowance is included in the above charges. Amounts
in excess shall be charged SHRCO.
(4) None of the above vehicles are subject to any other lease, memo, or
agreement which has been filed with the Department of Public Safety.
(5) The above vehicles are for the transportation of petroleum products.