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Terms & Conditions for the Sale of Fixed Forward Price Marine Fuel

Marine Fuels Fixed Forward Price Agreement

1. Time Periods

The time periods (the “Contractual Periods”) for which Buyers has committed to purchase marine fuels from Seller and for Seller to sell marine fuels to Buyer at a fixed price are as set forth in Annex 1.

2. Sale and Purchase

2.1 The Seller shall sell and the Buyer shall purchase and take delivery of the quantity of marine fuels (the “Contract Quantity”) at the locations and during the Contractual Periods set forth set forth in Annex 1 in accordance with the terms and conditions of this Agreement.

2.2 Seller’s General Terms and Conditions for Sale of Marine Fuel in their latest version (“Seller’s T&C”) are applicable to the marine fuels sold by Seller to Buyer under this Agreement, including but not limited to the provisions regarding nomination, delivery, quality and claims processing; however, Section 5 and other provisions of the Seller’s T&C which directly conflict with this Agreement shall not be applicable to this Agreement. Seller’s T&C are available at www.chemoil.com and Buyer hereby acknowledges having accepted these terms.

3. Price

Buyer shall pay the fixed prices set forth in Annex A (“Contract Fixed Price”) for the marine fuel sold under this Agreement for the relevant location, grade and Time Period.

4. Payment

Payment for the marine fuels sold to the Buyer shall be made by the Buyer by the due date stated in the invoice or as otherwise set forth in the Seller’s T&C. Any delay in payment shall entitle the Seller to receive from the Buyer an interest rate of 1.5% per month as per the Seller’s T&C.

5. Multiple Location Options

In the event that multiple location options or grades of marine fuels are covered by this Agreement, each location and each product grade shall be separately listed in Annex A and a different Contract Price may apply to each port and product grade.

6. Conversion of Agreement

To the extent that either party wishes to amend this Agreement in any way, the written and signed mutual consent of the Seller and the Buyer shall be required, including but not limited to the following modifications:

• i)Termination of the contract by mutual consent;
• ii)Conversion of all or any part of the Contract Quantity to a floating price formula;
• iii)Conversion of all or any part of the commitments under this Agreement to another risk management instrument offered by Seller; or
• iv)Conversion of the Contract Quantity from one location to another location.

Any and all terminations and conversions shall incur fees as negotiated between the Seller and Buyer prior to the time of conversion.

7.Under-Lifting, Extension and Over-lifting

7.1 Under Lifting. In the event the Buyer has purchased from Seller less than the required Contract Quantity at the end of a relevant Contractual Period (the “Underlifted Quantity”), the Buyer shall pay to Seller the following liquidated damages for the Underlifted Quantity:

Buyer shall make the foregoing payment within 5 days of the date of the invoice issued by Seller which contains a calculation of the foregoing liquidated damages.

In addition to the foregoing, Seller shall be entitled to declare Buyer in breach of the Agreement and declare an early termination of the Agreement due to such breach, and in such event, Seller shall also be entitled to collect the damages listed below in Section 8 for any Contract Periods not covered by the foregoing damages calculation.

 

Extension to Perform with Seller’s Consent. Notwithstanding the foregoing Section 7.1, in the event that Buyer requests that the Underlifted Quantity in any particular Contract Period be delayed to the next time period or any later period and if Seller agrees to do so in writing, Buyer shall pay Seller the following sums in consideration for Seller’s agreement to delay lifting:

7.3 Over Lifting. In the event the Buyer nominates more than the Contract Quantity within the relevant Contract Period, the Seller shall have the option to supply the additional volume at the fixed prices set forth in Annex A. However, in the event the Seller does not elect to supply the additional volume at the fixed prices set forth in Annex A, then the Seller may quote an alternative spot price to the Buyer and Buyer shall then promptly confirm in writing its acceptance or declination of Seller’s spot price for the additional volume.

8. Breach of Agreement and Early Termination

In the event that the Buyer breaches its obligations under this Agreement and such breach is not waived by the Seller in a signed writing and instead Seller chooses to terminate the Agreement, Buyer shall pay Seller the following liquidated damages for the Contract Quantity which has not already been purchased by Buyer and therefore remains to be purchased under the Agreement (the “Remaining Contract Quantity”):

Buyer shall make the foregoing payment within 5 days of the date of the invoice issued by Seller which contains a calculation of the foregoing liquidated damages.

9. Credit and Margin

9.1 Credit. In the event that Buyer does not meet Seller’s credit terms or fails to post adequate security through a letter of credit or other method acceptable to Buyer (“Security”) after the execution of the Agreement, Buyer shall pay to the Seller the following liquidated damages:

Buyer shall make the foregoing payment within 5 days of the date of the invoice issued by Seller which contains a calculation of the foregoing liquidated damages.

9.2 Margin Payments. In the event that the current market spot bunker prices as determined by Platts Mid Bunkerwire posted market price per metric ton for product closest in grade to product listed in Annex A are lower than the Fixed Prices listed in Annex A and the Seller deems that the Security posted in Section 9.1 inadequate to cover the potential exposure, the Seller shall be entitled to receive margin payments from the Buyer on the Remaining Contract Quantity. Margin payments will be calculated on or about the second business day of each calendar week (the “Calculation Day”) as follows:

(The Contract Fixed Price less the Platts Mid Bunkerwire posted market price per metric ton for the appropriate location and for the product closest in grade to product listed in Annex A for the business day preceding the Calculation Day) x (the Remaining Contract Quantity).In the event that the Buyer does not fund the margin payment through an L/C, cash or other collateral acceptable to Seller within 3 business days after Seller’s request for margin, Buyer shall be deemed to have breached this Agreement and Seller shall be entitled to terminate this Agreement and recover the liquidated damages set forth above in Section 8.

10. Miscellaneous

10.1 Waiver. The waiver by either party of a breach or default in any of the provisions of this Agreement by the other party shall not be construed as a waiver of any other breach of the same or other provisions. Furthermore, any delay or omission on the part of either party to exercise or avail itself of any right, power or privilege that it has or may have hereunder shall not operate as a waiver of any breach or default by the other party.

10.2 Integration. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, agreements and representations between the parties, whether written or oral, relating to the same subject matter. This Agreement may be amended or modified only by an instrument in writing duly executed by the authorized officers of the parties.

10.3 Assignment. Buyer may not transfer, assign or delegate any of its rights or obligations, in whole or in part, under this Agreement without the express written consent of Seller and any purported violation hereof shall be voidable by the Seller. This Agreement and each and every covenant, term and condition herein are binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

10.4 Severability. If any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby and the invalid, illegal or unenforceable provision shall be modified to the minimum extent necessary to make such provision valid, legal or enforceable, in keeping with the spirit and intent behind such provision.

10.5 Controlling Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding its conflict-of-laws principles.

10.6 Mandatory Arbitration. If any controversy, claim or dispute between the parties arises under this Agreement (“Dispute”), such Dispute shall be submitted for arbitration in accordance with the provisions contained herein and in accordance with the Comprehensive Arbitration Rules of JAMS in effect at the time of the arbitration or the Streamlined Arbitration Rules, to the extent the parties mutually agree to use them (such applicable rules, “Rules”); provided, however, that in the event of any conflict between the procedures herein and the Rules the procedures herein shall control. Any Party desiring arbitration shall serve on the other Party and the regional case management center of the JAMS administering cases for such location in accordance with the aforesaid Rules, its notice of intent to arbitrate (“Arbitration Notice”). The Arbitration Notice shall be made within a reasonable time after the Dispute has arisen, and in no event shall it be made after the date when institution of legal or equitable proceedings based on such Dispute would be barred by the applicable statute of limitations. All arbitration proceedings shall take place at San Francisco, California and be conducted in the English language and shall be conducted before a panel of three arbitrators unless the parties agree upon a single arbitrator. If no single arbitrator is agreed upon within 10 days following the filing of the Arbitration Notice, each party shall designate one arbitrator, and those two arbitrators shall select a mutually acceptable third arbitrator within 20 days following the filing of the Arbitration Notice. If either party fails to appoint an arbitrator, or the two appointed arbitrators cannot agree on the third arbitrator, within the applicable time period, then the arbitrators not yet appointed shall be selected in accordance with the Rules. The arbitrator(s) shall determine all questions of fact and law relating to any Dispute hereunder, including whether or not any Dispute is subject to the arbitration provisions contained herein. The award of the arbitrator(s) shall be binding and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. In any arbitration or litigation to enforce the provisions of this Agreement, the prevailing party in such action shall be entitled to the recovery of its reasonable legal fees and expenses (including reasonable attorneys’ fees and legal costs), fees of the arbitrators, costs and expenses such as expert witness fees.

10.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any counterpart.

For Terms & Conditions for the Sale of Fixed Forward Price Marine Fuel, please click here.