TOSCO REFINING CO. (A DIV OF TOSCO CORP)
3003 N. CENTRAL AVE., STE. 1500
PHOENIX, AZ 85012
SEPTEMBER 29, 1997
HALLADOR PRODUCTION COMPANY
1660 LINCOLN ST.,
STE. 2700
DENVER, CO 80264 **REVISED 10/7/97--SECTION 19
TELEX/TWX:
FAX: 303-832-3013
ATTENTION: VICTOR STABIO
TELEX CONTRACT
RE: TOSCO CONTRACT # 009237
HALLADOR # PLEASE ADVISE
TOSCO REFINING CO. (A DIV OF TOSCO CORP) (TOSCO) HAS THE PLEASURE
TO CONFIRM THE FOLLOWING TRANSACTION AGREED TO BY VICTOR STABIO OF
HALLADOR PRODUCTION COMPANY (HALLADOR) AND JIM GRAVATT OF TOSCO ON
SEPTEMBER 23, 1997. THIS TELEX SETS FORTH AND CONFIRMS THE COMPLETE
AGREEMENT BETWEEN THE PARTIES AND SUPERSEDES, AND REPLACES ALL
OTHER AGREEMENTS, WRITTEN OR ORAL, REGARDING ITS SUBJECT MATTER.
ALL OTHER TERMS AND CONDITIONS ARE HEREBY OBJECTED TO AND SHALL NOT
BE BINDING UNLESS IN WRITING AND SIGNED BY BOTH PARTIES.
1. SELLER: HALLADOR PRODUCTION COMPANY
1660 LINCOLN ST., STE. 2700
DENVER, CO 80264
2. BUYER: TOSCO REFINING CO. (A DIV OF TOSCO CORP)
3003 N. CENTRAL AVE., STE. 1500
PHOENIX, AZ 85012
3. TERM: FROM NOVEMBER 1, 1997 TO OCTOBER 31, 1998, AND
CONTINUING YEARLY THEREAFTER UNTIL CANCELLED BY EITHER
PARTY PROVIDING 60 DAYS PRIOR WRITTEN NOTICE OF SUCH
CANCELLATION.
4. CRUDE TYPE: SOUTH CUYAMA.
5. QUANTITY: APPROXIMATELY 1,100 BARRELS PER DAY.
6. DELIVERY METHOD: PIPELINE
7. DELIVERY: BY IN-LINE TRANSFER FROM LACT UNIT INTO FOUR
CORNERS PIPELINE AT S. CUYAMA UNIT.
8. MEASUREMENT: PIPELINE METERS
9. TITLE & RISK: TITLE TO AND RISK OF LOSS OF THE CRUDE
PASSES FROM THE SELLER TO THE BUYER AS THE CRUDE IS LINE
TRANSFERRED AT SAID FACILITY.
TOSCO REFINING CO. (A DIV OF TOSCO CORP)
3003 N. CENTRAL AVE., STE. 1500
PHOENIX, AZ 85012
Contract 9237
PAGE 2
10. PRICE: THE AVERAGE OF CHEVRONIS, UNION 76'S, AND
TEXACO'S POSTED PRICES FOR BUENA VISTA HILLS CRUDE OIL
FOR GRAVITY DELIVERED IN THE MONTH OF DELIVERY, PLUS
$0.3100 PER BARREL. FOR PRICING PURPOSES, VOLUMES WILL
BE CONSIDERED TO BE DELIVERED ON AN EQUAL DAILY BASIS.
11. PAYMENT: PAYMENT SHALL BE MADE ON OR BEFORE THE 20TH
CALENDAR DAY OF THE MONTH FOLLOWING THE MONTH OF
DELIVERY BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE U.S.
DOLLARS, WITHOUT DEDUCTION, DISCOUNT OR OFFSET. IF
PAYMENT DATE FALLS ON A SATURDAY, PAYMENT IS DUE ON THE
PRECEDING BUSINESS DAY. IF PAYMENT DATE FALLS ON
SUNDAY, PAYMENT IS DUE ON THE FOLLOWING BUSINESS DAY.
IF PAYMENT DATE FALLS ON A HOLIDAY, PAYMENT SHALL
BE DUE ON THE PRECEDING BUSINESS DAY EXCEPT WHEN A
HOLIDAY FALLS ON A MONDAY, AND IN THAT INSTANCE, PAYMENT
SHALL BE DUE ON THE FOLLOWING BUSINESS DAY.
12. CREDIT: OPEN LINE OF CREDIT
13. TAXES: BUYER SHALL REIMBURSE SELLER FOR ALL TAXES
IMPOSED BY FEDERAL, STATE OR LOCAL GOVERNMENTS WITH
RESPECT TO PRODUCT DELIVERED UNDER THIS AGREEMENT. IF
BUYER IS ENTITLED TO PURCHASE PRODUCT FREE OF ANY TAX
(STATE OR FEDERAL), BUYER SHALL FURNISH TO SELLER THE
PROPER EXEMPTION CERTIFICATE.
14. ASSIGNMENT: NEITHER PARTY SHALL ASSIGN THIS AGREEMENT
WITHOUT THE WRITTEN APPROVAL OF THE OTHER PARTY.
15. GOVERNING LAW: THIS AGREEMENT SHALL BE GOVERNED,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICT OF
LAW RULES AND EACH PARTY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF THE COURTS IN CALIFORNIA. RESOLUTION OF
DISPUTES BY ARBITRATION IS SPECIFICALLY EXCLUDED FROM
THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR CONSEQUENTIAL DAMAGES OR SPECIFIC
PERFORMANCE.
16. FORCE MAJEURE: IF EITHER PARTY IS RENDERED UNABLE BY
FORCE MAJEURE TO PERFORM OR COMPLY FULLY OR IN PART WITH
ANY OBLIGATION OR CONDITION OF THIS CONTRACT, THE
AFFECTED PARTY SHALL GIVE WRITTEN NOTICE TO THE OTHER
PARTY OF SUCH FORCE MAJEURE WITHIN FORTY-EIGHT (48)
HOURS AFTER RECEIVING NOTICE OF THE OCCURRENCE OF FORCE
MAJEURE RELIED UPON AND SUCH AFFECTED PARTY SHALL BE
RELIEVED OF LIABILITY AND SHALL SUFFER NO PREJUDICE FOR
FAILURE TO PERFORM SAME DURING SUCH PERIOD. IN THE
EVENT THAT THE SAID PERIOD OF SUSPENSION SHALL CONTINUE
IN EXCESS OF THIRTY (30) CALENDER DAYS, THIS CONTRACT
MAY BE CANCELLED AT THE OPTION OF EITHER PARTY, WITHOUT
LIABILITY OF EITHER PARTY.
TOSCO REFINING CO. (A DIV OF TOSCO CORP)
3003 N. CENTRAL AVE., STE. 1500
PHOENIX, AZ 85012
Contract 9237
PAGE 3
AS USED HEREIN, THE TERM "FORCE MAJEURE" SHALL INCLUDE,
BY WAY OF EXAMPLE AND NOT IN LIMITATION, FIRE; ACTS OF
GOD; NAVIGATIONAL ACCIDENTS; VESSEL DAMAGE OR LOSS;
ACCIDENTS AT OR CLOSING OF NAVIGATIONAL OR TRANSPORATION
MECHANISM; STRIKES, GRIEVANCES OR ACTIONS BY OR AMONG
WORKERS, LOCK-OUTS, OR LABOR DISTURBANCES; EXPLOSIONS OR
ACCIDENTS TO WELLS, PIPELINES, STORAGE DEPOTS, REFINERY
FACILITIES, MACHINERY, AND OTHER FACILITIES; ACTIONS OF
ANY GOVERNMENT, OR BY PERSONS PURPORTING TO REPRESENT A
GOVERNMENT; OR OTHER CAUSES NOT REASONABLY WITHIN
CONTROL OF THE RESPECTIVE PARTIES.
17. FINANCIAL RESPONSIBILITY: IN THE EVENT THAT EITHER PARTY
(THE --NON-PERFORMING PARTY-') FAILS TO MAKE TIMELY
PAYMENT OF ANY SUMS DUE HEREUNDER OR DEFAULTS IN THE
PERFORMANCE OF ANY OBLIGATION TO THE OTHER PARTY (THE
"PERFORMING PARTY") UNDER THIS AGREEMENT, OR OTHERWISE
GIVES THE PERFORMING PARTY REASONABLE GROUNDS TO DOUBT
ITS CONTINUING FINANCIAL RESPONSIBILITY, THE
NON-PERFORMING PARTY SHALL PROVIDE SUCH ADDITIONAL
SECURITY FOR OR ASSURANCES OF THE PERFORMANCE OF ITS
OBLIGATIONS AS MAY BE DEMANDED BY THE PERFORMING PARTY.
IF SUCH SECURITY FOR OR ASSURANCES OF CONTINUED
PERFORMANCE IS NOT PROVIDED - WITHIN 48 HOURS OF THE
DEMAND THEREFOR, THE PERFORMING PARTY MAY SUSPEND ITS
OWN PERFORMANCE UNDER THIS CONTRACT UNTIL SUCH
SECURITY OR ASSURANCE IS PROVIDED, OR MAY IMMEDIATELY
TERMINATE THIS AGREEMENT WITHOUT FURTHER ADDITIONAL
NOTICE. IF EITHER PARTY MAKES A GENERAL ASSIGNMENT FOR
THE BENEFIT OF CREDITORS, OR FILES A PETITION OR
COMMENCES A CASE UNDER ANY BANKRUPTCY, REORGANIZATION,
OR SIMILAR LAW FOR THE PROTECTION OF CREDITORS,
OR HAS ANY SUCH PETITION FILED OR CASE COMMENCED AGAINST
IT, THEN THE OTHER PARTY MAY IMMEDIATELY TERMINATE THIS
AGREEMENT UPON WRITTEN NOTICE. EXERCISE BY EITHER PARTY
OF ANY RIGHTS UNDER THIS PROVISION SHALL BE WITHOUT
PREJUDICE TO ANY CLAIMS FOR DAMAGES OR ANY OTHER RIGHT
UNDER THIS AGREEMENT OR APPLICABLE LAW.
18. LIABILITY: NEITHER PARTY SHALL BE LIABLE FOR SPECIAL OR
CONSEQUENTIAL DAMAGES OR FOR SPECIFIC PERFORMANCE AND
THE LIABILITY OF EITHER PARTY WITH RESPECT TO THIS
AGREEMENT OR ANY ACT IN CONNECTION HEREWITH WHETHER IN
CONTRACT, TORT, OR OTHERWISE SHALL NOT EXCEED THE PRICE
OF THE PRODUCT SOLD HEREUNDER OR THE PRICE OF THAT
PORTION OF SUCH PRODUCT ON WHICH LIABILITY IS ASSERTED.
19. INDEMNITY: SELLER AGREES TO INDEMNIFY AND HOLD BUYER
HARMLESS FROM LIABILITY FOR ANY AND ALL LOSSES, DEMANDS
OR CLAIMS ARISING FROM INJURIES OR DAMAGES WHICH OCCUR
BEFORE TITLE IS TRANSFERRED TO BUYER AND IN CONNECTION
WITH THE TRANSPORTATION, USE OR HANDLING OF ANY PRODUCT
COVERED BY THIS AGREEMENT, WHETHER DELIVERIES ARE MADE
TO BUYER, ITS ASSIGNS OR NOMINEES.
TOSCO REFINING CO. (A DIV OF TOSCO CORP)
3003 N. CENTRAL AVE., STE. 1500
PHOENIX, AZ 85012
Contract 9237
PAGE 4
BUYER AGREES TO INDEMNIFY AND HOLD SELLER HARMLESS
FROM LIABILITY FOR ANY AND ALL LOSSES, DEMANDS OR
CLAIMS ARISING FROM INJURIES OR DAMAGES WHICH OCCUR
AFTER TITLE IS TRANSFERRED TO BUYER.
20. GOVERNMENT REGULATIONS: EACH PARTY SHALL, IN THE
PERFORMANCE OF THIS AGREEMENT, COMPLY WITH ALL
APPLICABLE GOVERNMENT LAWS AND REGULATIONS.
FURTHER, SELLER CERTIFIES THAT THE PRODUCT HAS BEEN
PRODUCED, PROCESSED AND TRANSPORTED IN COMPLIANCE
WITH ALL APPLICABLE LAWS AND REGULATIONS.
21. OTHER: ANY SITUATION NOT SPECIFICALLY ADDRESSED BY
ANY OF THE ABOVE TERMS SHALL BE GOVERNED BY STANDARD
INDUSTRY PRACTICE IN EFFECT AT THE DELIVERY
LOCATION.
22. CONTACTS:
COMMERCIAL: JIM GRAVATT (805) 393-8930
OPERATIONAL: ANDY HAUSIG (602) 200-4193
ACCOUNTING: CRUDE OIL ACCOUNTANT
FINANCIAL: GEORGE PADILLA (602) 200-4181
CONTRACT ADMIN: MIMI BARTON (602) 200-4131
INVOICING: CRUDE OIL ACCOUNTANT (602) 200-4110
PEASE INDICTE YOUR ACCEPTANCE AND AGREEMENT BY SIGNING IN THE SPACE BELOW
AND RETURNING ONE EXECUTED COPY TO THE ABOVE ADDRESS FOR OUR RECORDS.
TOSCO HALLADOR
/S/JOHN B. EIDMAN /S/RODERICK SMITH
- ------------------ ------------------
BY: JOHN B. EIDMAN BY: RODERICK SMITH
MGR., CRUDE SUPPLY & TRADING TITLE: VICE PRESIDENT