EXHIBIT NO. 10.11
Fuel Oil Purchase and Sale Agreement
This Agreement is made as of October l, 1993 among Tosco
Corporation ("Tosco"), a Nevada corporation with its principal
place of business at 72 Cummings Point Road, Stamford,
Connecticut (the "Seller"); and, The United Illuminating Company
("UI"), a Connecticut corporation with its principal place of
business at 157 Church Street New Haven, Connecticut, and The
Connecticut Light & Power Company ("CL&P"), a Connecticut
corporation with its principal office at 107 Selden Street,
Berlin, Connecticut. UI and CL&P are hereinafter referred to
collectively as "Buyers", and separately as "Buyer".
WHEREAS, Buyers and Seller intend that this Agreement shall
apply to Seller's supply of No. 6 fuel oil to Buyers, and each
Buyer's separate purchase of No. 6 fuel oil from Seller, during
the Term hereof as hereinafter defined;
NOW THEREFORE, in consideration of the premises and other
valuable consideration, the receipt of which is hereby
acknowledged by the respective parties hereto, the Buyers and
Seller hereby agree as follows:
Article 1 - Term
The term of this Agreement shall be for two (2) years (the
"Term") commencing on October 1, 1993 and expiring on September
30, 1995 and shall automatically renew for one additional
twelve-month period from October 1, 1995 to September 30, 1996
unless any party gives each of the other parties notice of its
desire to terminate the Agreement on or before June 30, 1995
effective at the close of business on September 30, 1995. Each
twelve month period, commencing on October 1 and expiring on
September 30, shall be referred to as a "Contract Year". Each
successive three month period within a Contract Year shall be
referred to as a "Contract Quarter".
Article 2 - Purchase and Sale
a. Seller shall sell and agrees to deliver to Buyers, and each
Buyer agrees to purchase from Seller and pay for an amount of No.
6 fuel oil (the "Product"). This amount shall be 100% of each
Buyer's purchase requirements of No. 6 fuel oil during each
Contract Year, as limited by Article 2.b. However, each Buyer
reserves the right to make "Spot Purchases" of Product. Such
Spot Purchases shall not exceed xx% of Buyers aggregate purchase
requirements in any Contract Year. For purposes of this
Agreement, UI's annual purchase requirements are estimated to be
6,500,000 barrels of Product (1.0% Sulfur maximum by weight);
and, CL&P's annual purchase requirements are estimated to be
6,500,000 barrels of Product (4,000,000 barrels of 1.0% Sulfur
maximum by weight and 2,500,000 barrels of 0.5% Sulfur maximum by
weight). Buyers shall provide Seller with a report of purchase
requirements and Spot Purchases each Contract Quarter.
b. If during a Contract Year, Buyers aggregate purchases exceed
14,300,000 barrels, Seller shall be under no obligation to sell
such excess to any Buyer and any Buyer shall be under no
obligation to purchase such excess from Seller.
c. Seller agrees that the ordering notice required of Buyers
under Article 3.d(1) is for Seller's convenience and may, from
time to time, not allow Buyers the necessary coverage because
actual demand often differs from estimated demand. Each Buyer
reserves the right to revise the volumes scheduled under Article
3.d(1), and shall provide Seller the option to meet the revised
schedule. Seller shall respond to Buyer's request for a revised
schedule within 24 hours from receiving notice. If Seller
declines the option to supply Buyer's revised schedule, Buyer
remains obligated, at a minimum, to purchase Product from Seller
at the original schedule. However, if Buyer's revised schedule
was for an increase in volumes, Seller shall allow that Buyer to
procure such Product in the open market. Such purchases will not
be included in that Buyer's Spot Purchases.
d. Notwithstanding Article 2.c, in the event that a Buyer
requires an emergency supply of Product to meet unanticipated
fuel needs at its electric generating stations, Seller agrees
that it will supply such Product within four days of notice, on a
delivered or a FOB point of shipment basis (at Buyers option).
The amount of such Product supplied to Buyers shall not exceed
100,000 barrels during each Contract Quarter. The price of such
additional supply shall be determined as described in Article 4
herein, plus other such documented costs incurred by Seller to
respond to Buyers emergency demand.
e. While the parties intend that the principal purpose of this
agreement is to supply Buyers needs for fuel for their electric
generating stations, Buyers and Seller recognize that there may
be occasions when Buyers will sell fuel hereunder. Buyers and
Seller agree that such sales by Buyers will not exceed x% of
aggregate purchases from Seller. Buyers shall provide Seller
with a report each Contract Quarter.
Article 3 - Quality and Quantity
a. Product Grades
--------------
Grade 0.5/10 - 0.5% Sulfur maximum by weight, 10.0 minimum
API Gravity.
Grade 1.0/10 - 1.0% Sulfur maximum by weight, 10.0 minimum
API Gravity.
Grade 1.0/8 - 1.0% Sulfur maximum by weight, 8.0 minimum API
Gravity.
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b. Quality Specifications
----------------------
Product delivered by Seller to Buyers hereunder shall be
commercially acceptable, not contain any hazardous materials, and
comply with the following quality specifications (subject to the
Product availability provision of Article 3.f):
Specification Table:
ASTM/IP Specification Requirement
------- ------------- -----------
D-287 API Gravity ("API") 8.0 minimum, or
10.0 minimum
D-4294 Sulfur 0.5% maximum by weight, or
1.0% maximum by weight
D-445(1) Viscosity SSF at
122 Degrees F. 15 minimum - 300 maximum
D-482 Ash - 8.0 API Grade 0.15% maximum
Ash - 10.0 API Grades 0.10% maximum
D-97 Pour point - Degrees F. 15 maximum
D-93 Flash point - Degrees F. 150 minimum
D-95 Water by Distillation 0.5 maximum
D-473 Sediment by Extraction 0.25 maximum
D-1548 Vanadium 200 ppm maximum
IP-377 Aluminum - 8.0 API Grade 175 ppm maximum
Aluminum - 10.0 API Grades 175 ppm maximum per shipment
125 ppm maximum per calendar
month
IP-377 Silicon - 8.0 API Grade 175 ppm maximum
Silicon - 10.0 API Grades 175 ppm maximum per shipment
125 ppm maximum per calendar
month
Oil loading or discharge temperature shall be the greater of
110 Degrees Fahrenheit or 30 Degrees Fahrenheit above Pour
Point. Minimum discharge temperature into UI's Bridgeport
Harbor Terminal shall be 70 Degrees Fahrenheit.
<FN>
Note 1: ASTM D-2161 shall be used to convert kinematic
viscosity test results (ASTM D-445) to Saybolt Furol
Viscosity.
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c. In-Tank Specifications & Barge Blending
---------------------------------------
Seller will provide a Buyer, upon Buyer's request, any and
all available specifications of in-tank Product quality at the
loadport, and/or on-board Product quality as the case may be for
delivered transactions. In the event Seller anticipates loading
from multiple (two or more) shore tanks, the official Product
quality analysis shall be determined by a barge composite
performed by a mutually agreed upon independent inspector.
d. Deliveries & Delivery Locations
-------------------------------
(1) Delivery Notice
---------------
No later than the first business day of the month preceding
the delivery month, each Buyer shall notify Seller of: (1 ) a
firm volume of purchases, by specific Product grade, for the
following month; (2) for each separate loading, a three day
loading range and volume per load; and, (3) estimated total
purchase volume, by specific Product grade, for the following two
months. Within three business days of such notice, Seller shall
advise each Buyer of points of loading for such volumes. In the
event Seller cannot accommodate a Buyer's request, it should so
state its documentable operational reason for such and the
parties will endeavor to provide a mutually acceptable
alternative. It is the intent of this provision that Seller
shall exercise best efforts to accommodate a Buyer's proposed
schedule because sufficient notice is being given.
(2) Terminals
---------
Except as otherwise provided herein, Product shall be sold
on a FOB point of shipment basis at either one of the following
four terminals: IMTT Terminal, Bayonne, New Jersey ("IMTT");
Bayway Refinery, Bayway, New Jersey ("Bayway"); Tosco's Riverhead
Terminal, Riverhead, Long Island ("Riverhead"); or Seller's
facility, leased from UI, at Bridgeport, Connecticut
("Bridgeport"). Terminal choice is the Seller's option.
Provided that Buyers have nominated a minimum volume of xxxxxxx
barrels per Contract Quarter, then beginning with the first full
Contract Quarter after the completion of the installation of
sparging equipment in tank C or D of UI's Bridgeport terminal
leased to Seller, if the volume of Product delivered to Buyers
from Bridgeport does not reach a minimum volume of xxxxxxx
barrels per Contract Quarter, Buyers, at their option, may
request an increase in the Spot Purchase option and/or a decrease
in the prices for Product under this agreement and, if such
negotiation does not successfully conclude in an increase in the
Spot Purchase option and/or a decrease in the prices for Product
that is acceptable to Buyers, Buyers may elect to terminate this
agreement ninety days after written notification to Seller of
Buyers election to terminate.
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(3) Buyers may load in varying lot sizes and Seller shall
not require Buyers to shift berths, or load at multiple locations
unless Seller agrees to fully compensate the affected Buyer for
its increased freight and inspection charges to accommodate such
a request.
(4) Subject to specific agreement between a Buyer and
Seller, delivery may occur via tank transfer at Bridgeport at the
FOB Bridgeport price.
e. Quantity and Quality Determination
----------------------------------
(1) The quantity and quality of a specific loading or
delivery shall be determined by a mutually agreed to,
independently licensed and certified Petroleum inspector (the
"Inspector"). FOB point of shipment loadings shall be determined
at the loadport. Delivered barges shall be determined at the
discharge port. The costs of the independent inspection and any
laboratory fees shall be shared by Buyers and Seller.
The determination of compliance of each loading or delivery
shall be made after taking a representative composite sample of
the applicable shore tank(s) and loading line(s); or, if
delivered via barge or tank transfer, by a representative
composite sample of the barge and/or transfer tank(s) and loading
lines (if applicable). The Inspector shall be required by the
parties to deliver a certificate setting forth the quality
analysis and quantity of the Product for each shipment of
Product. Buyers and Seller reserve the right to request
supplemental tests from the Inspector at the expense of the party
making such request. If such supplemental tests indicate that
the results fail to meet any of the quality characteristics
specified in Article 3.b, then the provisions of Article 3.e(2)
apply.
The quantity of the Product delivered for FOB point of
shipment loadings shall be ascertained at the loadport by
measurement of a static shore tank(s) from which delivery is made
immediately before and after delivery. For delivered barges,
quantity shall be ascertained at the discharge port by
measurement of Buyer's shore tanks immediately before and after
delivery. In the event the Inspector suspects the shore tank
quantity is in error he/she will notify the Buyer and Seller that
an alternative method based on barge quantity (after adjustment
for bottoms and the barge's vessel experience factor ("VEF"))
will be used. All quantities shall be adjusted to 60 Degrees
Fahrenheit in accordance with Table 6B of ASTM D-1250 Petroleum
Measurement Tables.
(2) If the Inspector certifies that the results fail to
meet any of the quality characteristics specified in Article 3.b,
the Buyer will use its reasonable efforts to accept the shipment
if its receipt is legal under Federal and Connecticut Laws or
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regulations, and its use of such Product will not damage that
Buyer's facilities, equipment or operations. Seller shall
provide a discount to the price for Buyer's role in accepting
such nonconforming fuel oil. The amount of such discount shall
be negotiated by the Buyer and Seller.
If, in the reasonable judgement of the Buyer, after good
faith consultation with the Seller, the non-conforming fuel oil
cannot be corrected in a timely manner or the discount proposed
by Buyer is not agreed to by Seller, Seller at its sole cost and
risk shall promptly remove the non-conforming fuel oil from that
Buyer's barge and/or tank(s) and reimburse that Buyer for its
reasonably incurred costs for the delivery of the nonconforming
fuel oil to that Buyer's facilities or, if in progress, back to
Seller's loading facility.
(3) Buyers and Seller shall have the right to have a
representative present to observe the loading, unloading, and
inspection.
(4) Buyers and Seller shall allow the Inspector reasonable
facility (but not equipment) necessary for sampling, taking
measurements, and temperatures before, during, and after pumping
Product.
f. Product Availability
--------------------
Seller and Buyers acknowledge Seller's primary source of
Grade 1.0/8 fuel oil is low API blend stocks from the Bayway
Refining Company of Tosco Corporation ("Tosco's Bayway
Refinery"), while Grades 1.0/10 and 0.5/10 are readily available
from other sources. Providing Tosco's Bayway Refinery is
operating at a capacity of at least xx% during the delivery
month, Buyers may elect to purchase, and Seller must deliver at
Buyer's option at least xx% of Buyers aggregate 1.0% Sulfur
maximum by weight purchase requirements as Grade 1.0/8. The
minimum volume of Grade 1.0/8 to be delivered, if Buyer so elects
to receive Grade 1.0/8, is xxxxxxx barrels.
In the event Tosco's Bayway Refinery is operating at a
capacity of at least xx% during the delivery month and cannot
make Grade 1.0/8 Product available to Buyers, Seller will supply
Grade 1.0/10, as a replacement, and such Grade 1.0/10 will be
deemed as Grade 1.0/8 for the pricing and Btu per gallon
guarantees contained herein.
In the event Tosco's Bayway Refinery operates at a capacity
lower than xx% during the delivery month, and Seller has no other
source of lower API gravity blend stocks, Seller shall notify
each Buyer forthwith. Any Buyer may then elect either to; (1)
purchase such quantities from other sources, which shall be
included in calculating Buyers xx% minimum purchase requirement
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obligation, or, (2) purchase Grade 1.0/10 from Seller under the
pricing and Btu/gallon guarantee for Grade 1.0/10.
In the event Seller has not declared a Force Majeure
condition, and will not supply a Buyer's requirement(s) of Grade
1.0/10 (including the amount of Grade 1.0/10 that replaces
unavailable Grade 1.0/8) or Grade 0.5/10, and such Buyer must
purchase Product from other sources, such purchases shall be
included when determining a Buyer's xx% minimum purchase
requirement obligation to Seller, and Seller will reimburse Buyer
within ten days of notice thereto for any increased costs of
those purchases versus the pricing herein contained.
g. BTU Guarantee & Credit Adjustment
---------------------------------
The weighted average of the Btu content of fuel delivered
hereunder during each Contract Year shall meet the Btu Guarantee
below.
Fuel Specification BTU Guarantee
------------------ -------------
Grade 0.5/10 151,500 Btu/gallon
Grade 1.0/10 152,625 Btu/gallon
Grade 1.0/8 154,000 Btu/gallon
In the event that the weighted average of the BTU content
for a given fuel specification, for each Buyer, is not met during
an applicable Contract Year, the affected Buyer shall be entitled
to a credit determined in accordance with the following:
If the actual weighted average Btu/gallon content for the
most recent Contract Year (including any overages from the
preceding Contract Year) when divided by the guarantees listed in
3.g, is less than 1.0, the difference from 1.0 will be multiplied
times the weighted average purchase price of the specific fuel
type for the same Contract Year. This result will then be
multiplied by the purchase volume of such specific fuel type for
such period to determine the total credit due the affected
Buyer(s). Any and all credits due Buyer(s) will be issued within
thirty days after the end of the Contract Year.
Article 4 - Pricing
a. Purchase Price
--------------
Product prices, in dollars per barrel and rounded to three
decimal places, shall be determined as follows. The xxxxxxxxxx
xxxxxxxx shall mean the xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx posted effective
price for New York Harbor for the applicable Sulfur percent by
weight (typically reported at 5:00 p.m. EST/EDT). xxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. The loading
date referred to above is the calendar date of the commencement
of loading. Refer to Exhibit 1 for examples of xxxxxxxxxxxxxxx
effective prices used in the xxxxxxxxxxxxxxxxxx pricing formula.
(1) For Grade 0.5/10; the xxxxxxxxxxxxxxxxx of xxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx prices, will
determine the Product price. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx to determine the final
Product price.
(2) For Grade 1.0/10; the Three Day Average of the spot
cargo low 1.0% Sulfur posted effective price will be determine
the final Product price.
(3) For Grade 1.0/8; the Three Day Average of the spot
cargo low 1.0% Sulfur posted effective price will be determine
the Product price. A discount of $0.175 per barrel will be
subtracted from the Three Day Average to determine the final
Product price.
b. Subject to mutual agreement, each Buyer may request Seller
to deliver the Product to its generating stations, providing that
Buyer and Seller agree on a transportation price. Any and all
delivered oil (except for revised schedules under Article 2.c and
emergency supply under Article 2.d herein) shall be requested by
a Buyer at the time the initial volumes are pledged.
c. In the event that Buyer's barges are not presented to Seller
for loading within the agreed three-day window, Seller shall be
entitled to the higher of; the price determined pursuant to
Article 4 herein as if the Barge had commenced loading on the
last day of the three-day window, or, the price determined
pursuant to Article 4 herein on the basis of the day of the
actual commencement of loading.
d. In the event that Seller fails to load a barge nominated by
a Buyer or a Buyer's agent, and providing such Buyer's nomination
is within the agreed three-day window and notice of the
nomination is given two days in advance, Buyer shall be entitled
to be charged by Seller the lower of; the price as determined
pursuant to Article 4 herein as if the barge commenced loading on
the day it was nominated for, or, the price determined pursuant
to Article 4 herein on the day of actual commencement of loading.
For delivered barges, delivered by Seller prior to the three
day range, pricing will be determined under Article 4 herein as
the lower of; the first day of the three day range, or, the day
of commencement of discharge.
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For delivered barges, delivered by Seller after the three
day range, pricing will be determined under Article 4 herein as
the lower of; the last day of the three day range, or, the day of
commencement of discharge.
e. If xxxxxxxxxxxxxxxxxxxxxxxx, then the Buyers and Seller
agree to substitute the comparable effective price xxxxxxxxxxxx
xxxxx during the duration of the non-publication by xxxxxxxx.
f. In the event of a holiday or other calendar day for which
neither xxxxxxxxxxxxxxxxx are published, the prices are to be
selected in accordance with the schedule provide in Exhibit 1,
attached hereto. If xxxxxx does not report a price on any day
used to determine a xxxxxxxxxxxxxxxxxx and xxxxx does report a
price xxxxxxxxxxxxxxxxxxxxxx, the parties agree to substitute the
comparable effective price in xxxxxxxxxxxxxxx for those day(s).
g. Seller shall furnish and each Buyer shall complete and
provide Seller with export certificates or other legally
acceptable evidence that will exempt any sale hereunder from New
York or New Jersey gross receipts taxes payable by Seller, or the
prices hereunder shall be adjusted to account for such tax
liability. Seller shall be responsible for administering all
applicable federal, state taxes and the Connecticut Gross
Receipts Tax (on FOB Connecticut loadings, deliveries or
transfers) which shall be paid to Seller, if applicable, by a
Buyer via a separate line item invoice charge. Regarding FOB New
York or New Jersey loadings, Buyers or their agents, will
administer the Connecticut Gross Receipts Tax. The parties agree
that the pricing described in Article 4 herein include the
following taxes and fees currently in effect for domestic
Product; Import Duty, Superfund Tax, Customs Users Fee, Harbor
Maintenance Tax, Federal Oil Spill Tax, New York and New Jersey
Spill Tax, and OPA 1990 Pollution Spill Coverage of Seller or
Seller's Terminal(s).
Article 5 - Demurrage & Dead Freight
a. Seller shall pay Buyer (within fifteen calendar days of
receipt of documentation from Buyer or Buyer's agent) for
applicable demurrage on all FOB point of shipment loadings,
except those from the Bridgeport Terminal. Demurrage shall be
for tug and barge at Riverhead, and for barge only at IMTT and
Bayonne. Laytime will commence from Notice Of Readiness (NOR)
given by Buyer or Buyer's agent, and end xx hours after,
providing such barge arrives at its scheduled time (or
re-scheduled time as the case may be) as agreed between Seller
and Buyer or Buyer's agent. If barge arrives outside of its
scheduled, or rescheduled, time or if such time(s) are in
dispute, Laytime shall commence when barge is all fast in berth.
b. Buyer shall pay Seller (within xxxxxxx calendar days of
receipt of documentation from Seller) for applicable demurrage on
all delivered loadings.
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c. In the event that, due to the fault of the Seller or its
designated terminal controlling such loading, xx% of the
nominated net barrel volume is not loaded onto Buyers' barge,
Seller shall also be liable for applicable dead-freight (payable
within xxxxxxx calendar days of receipt of documentation from
Buyer or Buyer's agent).
Article 6 - Title
Title to, responsibility for, and risk of loss of the
Product, including but not limited to responsibility for any
Product spills, shall, for FOB point of shipment loadings, pass
from Seller to the respective Buyer when and as the Product
passes that Buyer's outboard flange which is connected to
Seller's outboard fixed flange. For delivered shipments, title
to, responsibility for, and risk of loss of the Product,
including but not limited to responsibility for any Product
spills, shall pass at the first connecting flange connection of
Seller's outboard flange and the respective Buyer's outboard
fixed flange. Responsibility for leakage at the flange
connections mentioned above shall be with the Party making up the
flange.
Article 7 - Payment
Each Buyer shall pay the Seller an amount due calculated by
multiplying the Purchase Price determined in accordance with
Article 4 herein (including any quality credits due the
respective Buyer and/or any transportation costs for delivered
Product) and the Inspector's certified quantity in accordance
with 3.e(1) herein, by telegraphic transfer to a U.S. account
designated by Seller in writing in immediately available U.S.
funds on or before the xxxxx calendar day after delivery of an
invoice to the applicable Buyer.
No Buyer shall act as surety or guarantor for the other
Buyer. Each Buyer is solely responsible for payment of its
obligation to Seller.
Article 8 - Oil Spills & Pollution
Buyers and Seller shall comply with the requirements of the
Oil Pollution Act of 1990 ("OPA-90") for all vessels and/or
facilities, as defined in OPA-90, which pertain to this
Agreement. In the event that Product is spilled, Buyers and
Seller will implement their OPA-90 spill response plan in
accordance with applicable guidelines.
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Article 9 - Force Majeure
"Force Majeure" as used herein shall mean a cause beyond the
control of, and without the fault or negligence of Buyers or
Seller, as the case may be, which wholly or partially prevents
either party from carrying out its obligations under this
Agreement. Examples of "Force Majeure", include but are not
limited to, wars, hostilities, public enemy's actions, sabotage,
blockade, revolution, insurrections, riots, commotions, acts of
God, fire, frost, earthquake, storm, lightening, tidal waves,
tsunamis, perils of the sea, navigational accidents, vessel
damage, accidents, closing of ports, docks, dams, channels,
riverbeds or other marine or navigational aids, epidemics and
quarantines, strikes or agreements among workers, lockouts or
other labor disturbances, explosions or accidents, expropriation,
requisition, confiscation, nationalization, embargo, export or
import restrictions, rationing, declaration of Force Majeure by
or other failure of Seller's suppliers, severe shortage or
unavailability of crude oil or Product of the type to be
delivered hereunder from Seller's existing source of supply, acts
of civil or military governments including such acts as would
prevent storage, blending and burning of Product at Buyers
facilities and any other event of a similar nature or effect.
Economic reasons, such as the price of Product, are not
considered to be valid Force Majeure claims.
A party suffering from a condition of Force Majeure shall
give prompt notice thereof, including the nature of the event,
its anticipated length, the actions taken to relieve the event
and another such other information as is reasonably requested by
the other party. Such notice shall be supplemented from time to
time upon request of the other party.
If because of Force Majeure either Buyers or Seller are
unable to carry out their obligations under this Agreement, the
obligations and liabilities of the party giving such notice and
the corresponding obligations of the other party arising or
occurring after such notice shall be suspended to the extent made
necessary by and during the continuance of such Force Majeure;
provided, however, that the disabling effects of such Force
Majeure shall be eliminated as soon as and to the extent possible
or reasonable, and further provided, however, no party shall be
required to accede to the demands of the labor unions, suppliers
or other third parties that such party, in its discretion, deems
unacceptable.
Any deficiencies in the sale of Product hereunder caused by
Force Majeure shall not be made up except by mutual consent nor
shall the term of this Agreement be extended by Force Majeure.
Buyers shall have the option to purchase Product in the open
market in an amount equal to that which the Seller failed to
supply for reasons of Force Majeure provided such open market
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purchases are made only during the period of such Force Majeure
or to remedy the effects of Force Majeure.
In the event of restricted supply conditions of Product
resulting from Force Majeure affecting Seller, Seller agrees not
to enter new contracts for the supply of Product to electric
generating utilities which it is not then supplying or to make
spot sales of Product to such electric generating utilities
unless it will also be able to supply Buyers contract
requirements hereunder. The provision shall not prevent Seller
from renewing or extending any existing such contract between
Seller and any other electric generating utility at existing
quantity levels.
Article 10 - Notices
Any notice, demand or other communication required to be
sent hereunder shall not be effective unless in writing and hand
delivered, faxed, telexed or mailed certified mail/return receipt
requested, postage pre-paid, to the address, telex or fax number
noted below:
If to Seller, to: Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Attn: Wilkes McClave, III
Telephone: (203) 977-1005
Fax (203) 964-3187
and,
Bayway Refining Company
1400 Park Avenue
Linden, New Jersey 07036
Attn: Andrew J. Kelleher
Telephone: (908) 523-5145
Fax (908) 523-5045
If to Buyers, to: The United Illuminating Company
P.O. Box 1564
157 Church Street
New Haven, Connecticut 06506-0901
Attn: Robert W. Lancio
Telephone: (203) 499-2719
Fax (203) 499-3617
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and,
Northeast Utilities Service Company
agent for The Connecticut Light & Power
Company
P.O. Box 270
Hartford, Connecticut 06141
Attn: Mark K. Coulson
Telephone: (203) 665-2503
Fax (203) 665-2383
Notices sent by certified mail shall be deemed to have been
given at the earlier of seven (7) days after the mailing thereof
or date of receipt noted on the return receipt. All other
notices shall be deemed to have been given on the date of receipt
thereof at the designated address, telex or fax number. Any
party may change its address by giving notice of such change in
the manner provided above.
Article 11 - Miscellaneous
a. Assignment
----------
This Agreement shall not be assigned or transferred by
either party hereto without the written consent of the other
parties, which shall not be unreasonably withheld, except that,
1. Seller may assign or transfer to an affiliate (as that term is
defined in the Internal Revenue Code of 1954, as amended and
specifically includes any wholly-owned subsidiaries of TOSCO
Corporation) or to a successor or transferee of all of its
assets, providing such assignee is of equal stature as Seller,
without release of liability hereunder of the party making the
assignment, and 2. Buyers may assign this Agreement to a banking
institution, insurance company or other institutional lender
("Institution") which shall have agreed to maintain Buyers
Product reserves and to supply Product from such reserves to
Buyers. Any such assignment shall contain a provision entitling
Buyers to a reassignment to it of this Contract at any time; and
Buyers covenants and agrees to exercise said right if any of the
Product sold is proposed to be resold by the "Institution" to any
entity other than Buyers. Such assignment shall not relieve the
assignor of its obligations hereunder. Any assignment in
violation hereof shall be void.
b. Separation
----------
In the event Buyers decide that separate agreements with
Seller are desired, Buyers will propose draft language to Seller
for such a separation and Seller will be obligated to meet its
same obligations herein when aggregating the separate Agreements
with the Buyers.
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c. Waiver
------
No waiver by either party of any breach of any of the
covenants or conditions herein contained to be performed by the
other party shall be construed as a waiver of any succeeding
breach of the same or any covenant or condition.d
d. Governing Law
-------------
This Agreement shall be governed by the laws of the State of
Connecticut applicable to agreements made and to be performed in
the State of Connecticut.
e. Binding Effect
--------------
This Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective permitted
successors and assigns.
f. Severability
------------
If any article, phrase, provision or portion of this
Agreement shall, for any reason, be held or adjudged to be
invalid or illegal or unenforceable by any court of competent
jurisdiction, such article, phrase, provision or portion so
adjudged shall be deemed separate distinct and independent and
the remainder of this Agreement shall be and remain in full force
and effect and shall not be invalidated or rendered illegal or
unenforceable or otherwise affected by such adjudication.
g. Counterparts
------------
With the written consent of all parties, this Agreement may
be executed in several counterparts, each of which shall be an
original and all of which shall constitute one and the same
instrument.
h. Confidentiality
---------------
Seller and Buyers agree that each of them will and will
cause their officers, agents and employees to maintain the
confidentiality of and not to disclose to third parties, the
terms and conditions of this agreement (including but not limited
to prices paid and purchase volumes estimated and ordered) unless
disclosure is required by court order. This provision does not
apply to the specifications listed in Article 3.b.
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i. Security
--------
Each Buyer reserves the right at any time during the Term of
this Agreement to require Seller to purchase a performance bond,
or similar security instrument, under Buyer's name which such
Buyer can and will draw down in the event of a material default
of this Agreement by Seller. The value of such performance bond,
or similar security instrument, shall in no event exceed
$4,000,000. Such Buyer will reimburse Seller for the costs of
such security instrument providing such is within acceptable
industry quotations for such instruments.
j. Entire Agreement
----------------
This Agreement constitutes the entire agreement between the
parties hereto relating to the subject matter hereof and shall
completely and fully supersede all other prior understandings or
agreements, both written and oral, between the parties. This
Agreement may be amended, changed, modified or altered only by a
written instrument executed by both parties.
IN WITNESS WHEREOF, the parties hereto have made and executed
this Agreement, signed by their duly authorized officers or
individuals, as of the day and the year first above written.
THE UNITED ILLUMINATING COMPANY, Buyer
By /s/ David W. Hoskinson
----------------------
Title Senior Vice President, Generation-
---------------------------------
Engineering and Operations
--------------------------
Witness: /s/ R.W. Lancio
---------------
NORTHEAST UTILITIES SERVICE COMPANY,
as agent for The Connecticut Light and Power
Company, Buyer
By /s/ Keith R. Marvin
-------------------
Title Vice President, Purchasing and General
--------------------------------------
Services
--------
Witness: /s/ Mary Ann Beatty
-------------------
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TOSCO CORPORATION, Seller
By /s/ Tom O'Malley
----------------
Title President and Chief Executive Officer
-------------------------------------
Witness: /s/ D.F. Lucey
--------------
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EXHIBIT 1
Three Day Average Purchase Price Examples
xxxxxxxxxxxxxxxxxxxxxxxx Product Pricing based on
Loading Date (calendar days) xxxxxxxxxxxxxxxxxxxxxx
Prices Effective for:
Non-Holiday Calendar Day Loadings:
Monday xxxxxxxxxxx xxxxxxxxxxx
Tuesday xxxxxxxxxxx xxxxxxxxxxx
Wednesday xxxxxxxxxxx xxxxxxxxxxx
Thursday xxxxxxxxxxx xxxxxxxxxxx
Friday xxxxxxxxxxx xxxxxxxxxxx
Saturday xxxxxxxxxxx xxxxxxxxxxx
Sunday xxxxxxxxxxx xxxxxxxxxxx
Holiday Calendar Day Loadings:
Monday-Holiday xxxxxxxxxxx xxxxxxxxxxx
Tuesday-Holiday xxxxxxxxxxx xxxxxxxxxxx
Wednesday-Holiday xxxxxxxxxxx xxxxxxxxxxx
Thursday-Holiday xxxxxxxxxxx xxxxxxxxxxx
Friday-Holiday xxxxxxxxxxx xxxxxxxxxxx
Calendar Day Loading prior to a Holiday:
Thursday before a
Friday Holiday xxxxxxxxxxx xxxxxxxxxxx
Sunday before a
Monday Holiday xxxxxxxxxxx xxxxxxxxxxx
Calendar Day Loading after a Holiday:
Tuesday after a
Monday Holiday xxxxxxxxxxx xxxxxxxxxxx
Saturday after a
Friday Holiday xxxxxxxxxxx xxxxxxxxxxx
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