UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-7910
TOSCO CORPORATION
(exact name of registration as specified in its charter)
NEVADA 95-1865716
(I.R.S. Employer
(State or other jurisdiction of Identification No.)
incorporation or organization)
72 Cummings Point Road, 06902
Stamford Connecticut (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code
(203) 977-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
Common Stock, $.175 par value New York Stock Exchange
Pacific Stock Exchange
$4.375 Series F Cumulative New York Stock Exchange
Convertible Preferred Stock,
$1.00 par value
9% Series A First Mortgage Bonds New York Stock Exchange
due March 15, 1997
9 5/8% Series B First Mortgage New York Stock Exchange
Bonds due March 15, 2002
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
The aggregate market value of the voting stock held by
non-affiliates of the registrant on February 28, 1994 based
on the closing price at which such stock was sold on the
New York Stock Exchange on such date was $1,080,780,919.
Registrant's Common Stock outstanding at February 28,
1994 was 32,262,117 shares.
Portions of registrant's definitive Proxy Statement relating
to its 1994 Annual Meeting of Shareholders are incorporated
by reference into Part III, as set forth herein.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The undersigned registrant hereby amends its Annual Report on
Form 10-K for the year ended December 31, 1993 (the "Form
10-K") by replacing the documents included as Exhibits 10(r) and
10(s) in the Form 10-K as filed with the Securities and
Exchange Commission on March 23, 1994 in their entirety
with the documents listed on the Exhibit Index to, and filed
with, this Amendment No. 1 to the Form 10-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned thereunto duly authorized.
TOSCO CORPORATION
Dated: August 29, 1994 By:/s/Jefferson F. Allen
Jefferson F. Allen
Executive Vice President
Chief Financial Officer
and Treasurer
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Exhibit Page
10(r) Crude Oil Supply Agreement dated 5
December 28, 1993 between BP Oil
Supply Company and Tosco
Corporation
10(s) Trademark License Agreement dated 10
December 28, 1993 between British
Petroleum Company p.l.c. and
Tosco Corporation
<PAGE>
EXHIBIT 10(R)
CRUDE OIL SALES CONTRACT
(CONFIDENTIAL)
BP Contract Number: 20870
This document is "Part 1" of a two-part Agreement (this
"Agreement"), effective as of December 15, 1993 and hereby
confirms the Agreement set forth in the Letter Agreement dated
September 2, 1993 between Tosco Corporation ("Buyer") and BP Oil
Supply Company ("BP"), BP Oil Supply Common Terms and Conditions
for the Sale and Exchange of Alaskan North Slope Crude Oil,
Effective November 1, 1991 are hereby incorporated by reference
as "Part 2" of this Agreement and shall prevail unless
superseded
by the terms contained in Part 1 hereof.
TERM: This Agreement shall be in effect for a term of five
years commencing on the closing date of the Agreement
for Purchase and Sale of Assets between BP Exploration
& Oil Inc. and Tosco Corporation dated November 9,
1993.
SELLER: BP Oil Supply Company (BP)
BUYER: Tosco Corporation (Buyer)
CRUDE TYPE: Alaskan North Slope Crude Oil (ANS)
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
QUANTITY: Up to[ ] barrels per month of ANS net of BS&W
subject to a maximum of [ ] barrels per calendar
year.
Buyer shall provide BP with its Purchase Volume +0/-
5MBD for the delivery month (M) no later than the last
business day of the second month (M-2) prior to the
delivery month. Buyer shall also at that time commit
to a range of Purchase Volume for the following two
months as follows: for the month after delivery month
(M+1) a volume +/-10 MBD and for the following month
(M+2) a volume +/-15 MBD. Buyer shall provide BP with
its final purchase volume by the 15th of the month (M-
1) prior to the delivery month (M). (For example, by
December 31, 1993 Purchase volume +0/-5 MBD for
February 1994, committed +/-10 MBD for March 1994,
committed +/-15 MBD for April 1994; by January 15,
1994, fixed volume for February 1994). This rolling
three month process is meant to ensure stable supply
operations between Buyer and BP.
DELIVERY: All ANS sold under this Agreement shall be delivered
in
vessels provided by BP to Buyer's Ferndale, Washington
dock only, except in the case of unanticipated
operational difficulty of either party, including, but
not limited to, maintenance of refinery process units
or tanks, and ship delays. BP shall to the extent
necessary to mitigate the unanticipated operational
difficulty use reasonable efforts to accommodate such
alternate delivery points as Tosco may request with an
appropriate differential (not to exceed actual cost
differences to BP). Title and risk of loss of ANS
shall pass from BP to Buyer as the ANS passes the
vessel's last permanent flange at the delivery port.
If Buyer's Ferndale facility is not covered by Marine
Preservation Association (MPA) membership and if in
the
future the MPA imposes fees on its members (BP being a
member) for deliveries to non-member facilities, Buyer
shall reimburse BP for one-half of such fees up to a
maximum reimbursement of five cents per barrel.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
PRICE: The monthly average spot market price of ANS for the
month prior to the intended delivery month. The final
volume fixed for any month will be sold at the price
applying to the intended delivery month regardless of
time of actual delivery. The spot market price for
any month is [
] .
If on the first or any subsequent anniversary of this
Agreement either party believes that the formula set
forth herein ceases on an ongoing basis to reflect the
midpoint of the spot market price, it may propose a
prospective revision to the formula to take effect six
months thereafter. Thereupon the parties will
negotiate in good faith to reach a revised formula
which accurately reflects such price. Until a revised
formula is agreed, the then effective formula shall
continue to be used.
If the parties cannot agree within 60 days either
party may demand binding arbitration according to procedures
to be agreed by the parties or, in the absence of such
agreement, before a mutually-agreed single arbitrator
who shall be a person familiar with the ANS market and
whose authority shall be limited to selecting among
the then current formula and any revised formulas proposed
by the parties. The arbitrator shall be charged with
selecting the formula which most closely approximates
the spot market price midpoint and shall detail the
reasons for his or her choice in a written opinion.
If in any given month either party believes the
formula price misrepresents the spot market price because of
inclusion in the indices, of non-representative
transactions involving either of the parties, the
parties shall adjust the formula to eliminate the
effect of any such non-representative transactions.
If the parties cannot agree on an adjustment then either
party may call for binding arbitration according to the
procedures described in the paragraph above.
P&C: Buyer agrees that the terms of its purchase of ANS
hereunder is private and confidential and will not be
disclosed to any third party without Seller's consent
except as required by law or regulation.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
INCENTIVE ALLOWANCE: [
].
PAYMENT TERMS: Payments made by Buyer for ANS and by BP for
incentive allowance shall be made on or before the
fifth day after the date of delivery of ANS.
Associated payment details are subject to Article 8,
Section 8.2 contained in Part 2 of this Agreement.
SCHEDULING & NOMINATIONS: Buyer shall provide BP by the 15th of
the month (M-1) prior to the delivery month (M) its
nominated delivery windows for the month with
operational flexibility to request +/-5 MBD over/under
delivery from Purchase Volume. Upon mutual agreement,
Seller may have the operational flexibility to
over/under deliver Buyer's nominated volume by up to
15%. In the event by mutual agreement Seller should
under-deliver Buyer's nomination in any given month,
the under-delivered volume will be delivered in the
following month in addition to the following month's
nomination and that volume will be priced as if it had
been delivered during the prior month. To the extent
Seller over-delivers in any given month, the over-
delivered barrels shall be subtracted from the next
month's nomination and will be priced as if it had
been delivered in the following month. This operational
flexibility will not increase the total Purchase
Volume by Buyer in any given month. BP will deliver to Buyer
in parcel sizes between 200,000 and 600,000 barrels,
with typical deliveries of about 400,000 barrels.
Volumes committed for any given month shall be
delivered on a ratable basis in cargo quantities. If
the parties cannot agree, then BP shall deliver and
Tosco shall receive vessels during the arrival windows
on the following days of the month; from the 1st
through the 6th; from the 7th through the 14th; from
the 15th through the 21st; and from the 22nd through
the 28th.
ALLOCATION: Article 14 in Part 2 of this Agreement is amended by
adding a new sentence as follows:
"In the event BP puts an allocation program into
effect, it shall allocate quantities to Buyer on a
basis which is no less favorable than that applied to
BP's other customers located on the U.S. West Coast."
LAYTIME: Modify Article 6, Section 6.6, in Part 2 of this
Agreement by inserting the following in lieu of the
first sentence of the fifth paragraph: "36 running
hours shall be allowed as laytime for discharging a
full cargo (including crude oil washing and/or cargo
stripping, if performed) and a pro rata amount of
hours, plus six additional hours, shall be allowed for
discharging partial cargoes subject to a minimum of 12
hours. For example, if a partial cargo of 400 MB is
delivered on a 120 MDWT vessel with capacity of 800
MB, a partial cargo laytime of 36 x (400/800) = 18 plus 6,
equal to a total of 24 hours will be allowed."
QUANTITY AND
QUALITY DETERMINATION:
Article 4.2C in Part 2 of this Agreement is amended as
follows: Delete "as available on the vessel" in the
first sentence. Add in the second sentence, before
the word "inspectors", the word "independent".
FINANCIAL SECURITY: Tosco Corporation shall comply with the
payment terms as set forth in Section 8.2 of Part 2 of
this Agreement and will provide additional financial
security as set forth in Section 8.4 of Part 2 of this
Agreement only if there is a material adverse change
in the financial condition of Tosco relative to the date
of this Agreement.
NOTICES: All written notices shall be sent by U.S. mail, telex
or telefax to the addresses listed below. Except as
otherwise provided in this Agreement, the effective
date of a notice shall be the date of receipt by the
addressee. A party shall promptly notify the other
party of any address change.
BP Oil Supply Company TOSCO Corporation
200 Public Square 2300 Clayton Road
5th Floor Suite 1100
Cleveland, OH 44114 Concord, CA 94520-2100
Telex: 62917760 (preferred mode of
communication)
Telefax: (216) 586-5243
BP OIL SUPPLY COMPANY TOSCO CORPORATION
By:________________________ By:___________________
Title:_____________________ Title:________________
Date:______________________ Date:_________________
<PAGE>
EXHIBIT 10(s)
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT ("Agreement"). with
an effective date of December 28, 1993, is between The British
Petroleum Company p.l.c., an English Corporation, with an
address of Britannic House, 1 Finsbury Circus, London EC2M7BA,
England; BP Exploration & Oil Inc., an Ohio Corporation with
offices at 200 Public Square, Cleveland, Ohio 44114-2375
(collectively "BP") as licensor and Tosco Corporation, a Nevada
corporation with an address of 72 Cummings Point Road, Stamford,
Connecticut 06902 ("Tosco") as licensee;
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
WHEREAS, BP has for many years been a refiner and
marketer of motor fuel, motor oil and related petroleum products
to the public in the United States; and
WHEREAS, because of the quality of the motor fuel,
motor oil and related petroleum products produced and thereafter
sold by BP and the excellent service rendered at BP retail
gasoline service stations the public has come to associate a
very high degree of consistency and quality with the motor fuel,
motor oil and related goods and services of BP; and
WHEREAS, BP has made significant expenditures
advertising and promoting its motor fuel, motor oil and related
petroleum products and services using certain trademark, service
marks, trade dress, color schemes, designs and other verbal and
non-verbal symbols which have come to represent BP throughout
the United States; and
WHEREAS, BP Exploration & Oil Inc. and Tosco have
entered into an Agreement for the Purchase and Sale of assets
pursuant to which Tosco has purchased the Ferndale refinery,
several terminals and numerous retail gasoline stations in
Washington and Oregon from BP; and
WHEREAS, Tosco wishes to use trademark, service mark,
trade dress, color schemes, designs and other verbal and
non-verbal symbols owned by BP in conjunction with the sale of
motor fuel, motor oil and related services in Washington and
Oregon;
WHEREAS, BP is willing to license such use subject to
the terms and conditions set forth herein which are designed to
protect the valuable goodwill of BP's trademarks, service mark,
trade dress, color schemes, designs and the verbal and
non-verbal symbols associated with BP's image as a refiner and
marketer of motor fuel, motor oil and related petroleum products
and services;
NOW THEREFORE in consideration of the premises and the
agreements hereinafter set forth, the parties agree as follows:
Article 1
DEFINITIONS
The terms set forth below shall be defined as follows
when used in this Agreement:
1.1 Licensor - The British Petroleum Company p.l.c.
for the trademark and service mark BP and BP Exploration & Oil
Inc., a wholly-owned subsidiary of the British Petroleum Company
p.l.c. for the trade dress, color schemes and other verbal and
non-verbal symbols associated with the trademark and service
mark BP. BP Exploration & Oil Inc. shall be directly
responsible for enforcing the rights and fulfilling the
obligations set forth herein.
1.2 Licensee - Tosco Corporation.
1.3 Licensed Mark - the service mark and trademark
"BP".
1.4 Licensed Marketing Indicia - the trade dress,
color schemes, designs, and verbal and non-verbal symbols
associated with BP's retail image. Such symbols include, but
are not limited to, the proprietary typeface associated with
signage at BP service stations; canopy facia including both the
rounded "bullnose" sections and the flat sections contiguous to
the "bullnose" sections; the round monocolumns found on multiple
product dispensers; the round shrouds that surround the major
identification (MID) signs; the round corners on the ancillary
buildings and the colors green and yellow.
* Photographs of a service station displaying one
version of the Licensed Marketing Indicia accompany
this Agreement as Exhibit A.
1.5 Licensed Goods and Services - motor fuel and
motor oil produced in accordance with BP specifications; car
wash services; motor vehicle repair services; and retail
convenience store services.
1.6 Licensed Territory - the States of Oregon and
Washington, U.S.A.
1.7 Effective Date - December 15, 1993.
Article 2
LICENSE GRANT
2.1 Subject to the terms and conditions of this
Agreement, BP grants to Tosco the exclusive right to use the
Licensed Mark and the Licensed Marketing Indicia only in the
Licensed Territory and only in connection with the production,
advertising, promotion and sale of the Licensed Goods and
Services. As consideration for use of the Licensed Mark and the
Licensed Marketing Indicia Tosco shall pay BP a royalty fee
which shall be paid up for the first five (5) years after the
Effective Date of this Agreement. This royalty fee shall be
deemed a part of the purchase price paid to BP pursuant to the
Agreement for Purchase and Sale of Assets between BP and Tosco.
Thereafter, the license granted shall bear a royalty fee as
provided in Section 3.04 of this Agreement.
2.2 Tosco may grant sublicenses to third party
petroleum jobbers and dealers to use the Licensed Mark and the
Licensed Marketing Indicia in the Licensed Territory in
connection with the Licensed Goods and Services and may
authorize the jobbers to grant further rights to their reseller
customers for such use, so long as all such third parties first
agree in writing that their rights are subordinate to and
derived from this Agreement and that they shall be bound by the
terms of this Agreement related to use and display of the
Licensed Mark and Licensed Marketing Indicia and sale of the
Licensed Goods and Services.
2.3 Tosco shall not use the Licensed Mark or the
Licensed Marketing Indicia or any mark similar to the Licensed
Mark as part of its corporate name or its trade name or at or on
any manufacturing or terminal facility.
2.4 Until this Agreement is terminated BP shall not
use the Licensed Mark or the Licensed Marketing Indicia in the
Licensed Territory in connection with the Licensed Goods and
Services.
2.5 Nothing in this Agreement shall be deemed to
constitute an assignment by BP of the Licensed Mark or the
Licensed Marketing Indicia or any of its rights therein or to
give Tosco or any sublicensee of Tosco any right, title or
interest in and to the Licensed Mark or the Licensed Marketing
Indicia except as provided in this Agreement.
2.6 Tosco acknowledges that neither this Agreement
nor the relationship contemplated by this Agreement is a
"Franchise" or "Business Opportunity" within the meaning of:
(i) 16 Code of Federal Regulations 436;
(ii) Revised Code of Washington Title 19, Chapters
19.100, 19.110 and 19.120;
(iii) Oregon Revised Statutes Title 50, Sections
650.005 through 650.250;
(iv) 15 United States Code Chapter 55.
Tosco shall not, under sections 2.02 above, or otherwise, grant
any rights in the name of or on behalf of BP or otherwise
obligate BP or cause BP to be liable under the statutes set
forth herein or their amended, successor or replacement
statutes.
Article 3
TERM AND TERMINATION
3.1 This Agreement shall have a term of five (5)
years commencing with its Effective Date. It shall continue
thereafter unless it is terminated as provided for in this
Article or elsewhere in this Agreement.
On the fourth anniversary of the Effective Date of
this Agreement and thereafter either BP or Tosco may terminate
the license grant provision of this Agreement upon giving one
(1) year's prior notice in accordance with the notice provisions
of this Agreement.
3.2 In addition to the termination provisions set
forth elsewhere in this Agreement if, at any time, BP believes
that Tosco is in breach of any of its obligations under this
Agreement, it may send Tosco notice thereof. Tosco shall have
sixty (60) days from the date it receives such notice to cure
such breach. If such breach is not cured within such period of
time then BP may terminate the license grant provisions of this
Agreement upon giving one hundred and twenty (120) days prior
notice to Tosco.
3.3 At least forty-five (45) days prior to filing a
petition for any arrangement or reorganization under any
bankruptcy or insolvency law, Tosco shall inform BP of its
intention to file such a petition or of any other party's
intention to file such a petition. Failure to conform to this
notice requirement shall be an incurable prepetition breach of
this Agreement. BP may immediately terminate the license grant
provisions of this Agreement if Tosco or another party declares
its intention to file a petition for any arrangement or
reorganization of Tosco under any bankruptcy or insolvency law.
3.4 Provided that Tosco has fully performed all its
obligations under this Agreement, BP and Tosco shall, prior to
the third anniversary of this Agreement, enter into negotiations
to extend Tosco's use of the Licensed Mark and the Licensed
Marketing Indicia in the Licensed Territory. Any such extension
agreement shall include use of the Licensed Mark and the
Licensed Marketing Indicia on terms and conditions reflecting
fair market value as agreed to by BP and Tosco.
3.5 Upon the termination of the license grant
provisions of this Agreement Tosco shall cease to use in any
manner whatsoever the Licensed Mark and the Licensed Marketing
Indicia. In particular, Tosco shall stop using all signs,
advertising materials, forms and promotional materials that
display the Licensed Mark or the Licensed Marketing Indicia.
Tosco shall further cause any third parties who are using the
Licensed Mark and the Licensed Marketing Indicia under Tosco's
sublicense to cease all such use. Within 60 days of the
termination or expiration of the license grant provisions of
this Agreement, Tosco shall provide a written report to BP
setting forth each location where it had authorized any use of
the Licensed Mark and the Licensed Marketing Indicia and the
date that all such use ceased.
3.6 Within sixty (60) days of the termination of the
license grant provisions of this Agreement Tosco shall, at its
expense, deliver to one (1) of two (2) designated storage sites
all signs, station design elements or other materials in the
Licensed Territory bearing the Licensed Mark or constituting the
Licensed Marketing Indicia. One (1) designated storage site
shall be located within the city limits of Seattle, Washington;
the other designated storage site shall be located within the
city limits of Portland, Oregon. The material delivered shall
be in as good condition as when installed by Tosco or received
by Tosco from BP normal wear and tear excepted.
Thereafter BP shall have sixty (60) days to remove all
such signs, station design elements or other materials bearing
the Licensed Mark or constituting the Licensed Marketing Indicia
from each of the designated sites. If BP fails to remove all
such materials within the sixty (60) day period, then BP shall
pay reasonable storage fees until such time as all such
materials are removed.
As an alternative or a supplement to the above
procedure BP may instruct Tosco to destroy certain signs,
station design elements or other materials bearing the Licensed
Mark or constituting the Licensed Marketing Indicia. Tosco
shall bear all costs associated with any such destruction of
materials so long as such costs are lower than the cost of
transportation and storing materials that would otherwise be
destroyed.
Unless the provisions of Section 4.4 are applicable,
Tosco shall also take all necessary steps to alter the existing
color scheme of each motor fuel service station in the Licensed
Territory such that the service station and related equipment,
including vehicles, do not suggest to the public in any way the
retail image of BP. Such necessary steps shall include, but are
not limited to, repainting to a color other than green the
following: canopies, MID signs, pump dispenser panels, pump
island spreaders and the background color for the permanent
signage, at each motor fuel gasoline service station in the
Licensed Territory.
3.7 As soon as practicable but in any event within
one (1) year after the expiration or termination of the license
grant provision of this Agreement, Tosco shall delete from any
telephone directory entry or yellow pages any display or listing
of the Licensed Mark or the Licensed Marketing Indicia. Tosco
shall also direct its sublicensees to remove any such telephone
directory or yellow pages listing that displays the Licensed
Mark or the Licensed Marketing Indicia.
Article 4
OWNERSHIP OF THE MARK AND MARKETING INDICIA
4.1 Tosco acknowledges BP's exclusive right, title
and interest in and to the Licensed Mark, the Licensed Marketing
Indicia and the goodwill associated therewith. Tosco shall not
represent in any manner that it has ownership in the Licensed
Mark or the Licensed Marketing Indicia. Tosco acknowledges
that, other than as expressly provided herein, its use thereof
shall not create any right, title or interest in Tosco but that
all such use by Tosco shall inure to the benefit of BP.
4.2 Tosco shall not do or permit to be done any act
that might jeopardize or invalidate the Licensed Mark and the
Licensed Marketing Indicia or the goodwill or title of BP in and
to the Licensed Mark and the Licensed Marketing Indicia. Tosco
shall not dispute, contest, jeopardize or impair directly or
indirectly the validity of BP's ownership of the Licensed Mark
or the Licensed Marketing Indicia.
4.3 During this Agreement and after the license grant
provisions of this Agreement have been terminated Tosco shall
not adopt any name or symbol that incorporates the color green
or is otherwise similar to the Licensed Mark in the Licensed
Territory. After the license grant provisions of this Agreement
have been terminated, Tosco shall not use the color green on
canopies, MID signs, pump dispenser panels, pump island
spreaders or as the background color for permanent signage, at
any gasoline service station in the Licensed Territory.
4.4 Notwithstanding the provisions of Section 4.3
Tosco may, after the license grant provisions of this Agreement
have been terminated, use the color green if Tosco must do so as
part of a rebranding program whereby Tosco assumes the brand and
marketing indicia of an established national marketer of
gasoline that has already been using the color green to identify
its brand or marketing indicia. Nothing in this section shall
be construed to limit BP's ability to enforce BP's rights in the
Licensed Mark or the Licensed Marketing Indicia against any such
established national marketer or its licensee. Nothing in this
section shall be construed as granting Tosco the right to use
the color green inside the Licensed Territory in any manner as
part of a brand or marketing indicia that Tosco develops or that
is developed under Tosco's influence or direction.
4.5 BP acknowledges that after the Effective Date of
this Agreement the MID signs that BP owns shall become the
property of Tosco. So long as Tosco complies with the terms and
conditions of this Agreement Tosco may erect any further such
MID signs in the Licensed Territory as Tosco wishes. If this
Agreement is terminated, Tosco shall take all necessary actions
to ensure that all MID signs in the Licensed Territory bearing
the Licensed Mark or containing elements of the Licensed
Marketing Indicia are altered so that they do not convey to the
consuming public the retail image of BP. Such actions shall
include, but are not limited to, removing the round pole shrouds
and removing all green and yellow BP signage, message and price
panels from each such sign.
Article 5
DISPLAY OF THE LICENSED MARK AND THE LICENSED MARKETING
INDICIA
5.1 Tosco shall only use the Licensed Mark and the
Licensed Marketing Indicia in connection with the Licensed Goods
and Services and only in the Licensed Territory. Tosco shall
display the proper form of trademark and service mark notice
associated with the Licensed Mark in accordance with
instructions received from BP.
5.2 BP shall provide Tosco with relevant portions of
its Visual Standards Manuals as updated from time to time that
relate to the use and display of the Licensed Mark and the
Licensed Marketing Indicia. Tosco shall strictly comply with
the standards set forth in the Visual Standards Manuals. BP
shall notify Tosco in writing if the standards embodied in the
Visual Standards Manuals are changed. Tosco shall acknowledge
any such changes in writing and shall, at its own expense,
incorporate such changes at a rate and in a manner inside the
Licensed Territory similar to the rate such changes are being
made by BP outside the Licensed Territory.
5.3 To assist Tosco and any third parties authorized
by Tosco to comply with this Agreement in their use of the
Licensed Mark and the Licensed Marketing Indicia, BP shall
designate a representative to advise on proper techniques for
displaying the Licensed Mark and the Licensed Marketing Indicia.
BP shall make such a representative available to consult with
Tosco for the duration of this Agreement.
5.4 BP shall provide Tosco with the names of
authorized vendors for the sale or repair of the Licensed
Marketing Indicia. Tosco may select other vendors provided that
such vendors' construction or repairs conform to BP's
specifications and standards of display.
5.5 BP shall, upon reasonable advance notice, have
the right to inspect any motor fuel service station in the
Licensed Territory displaying the Licensed Mark and the Licensed
Marketing Indicia to ensure that appropriate visual standards
are being met. Tosco's agreements with its sublicensees shall
provide that BP shall have such inspection right with respect to
the sublicensees' stations.
5.6 If BP determines that its standards for the
visual display of the Licensed Mark and the Licensed Marketing
Indicia at an individual location are not being met, BP shall so
advise Tosco. Tosco or any third party sublicensed by Tosco to
use the Licensed Mark and the Licensed Marketing Indicia shall
promptly take the necessary corrective actions to conform to the
visual standards set forth by BP. If Tosco does not correct the
defect in visual standards within 5 days or such longer time as
may be reasonable in the circumstances, the continuance of the
defect shall constitute an "occurrence". BP shall notify Tosco
of each such occurrence.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
If during the term of this Agreement Tosco or any
third party authorized by Tosco to use the Licensed Mark or the
Licensed Marketing Indicia is responsible for [ ] occurrences
at a particular location BP may terminate the license grant
provisions of this Agreement for that location upon giving one
hundred and twenty (120) days prior notice to Tosco. If during
the term of this Agreement a total of [ ] locations
accumulate [ ] occurrences referred to herein then BP may
terminate the license grant provisions of this Agreement upon
giving one hundred and twenty (120) days prior notice to Tosco.
Article 6
QUALITY OF GOODS ASSOCIATED WITH THE LICENSED MARK AND THE
LICENSED MARKETING INDICIA
6.1 All motor fuel or motor oil sold by Tosco or its
sublicensees in the Licensed Territory under the Licensed Mark
shall conform to BP's specifications for such products. To that
end Tosco shall only use the Licensed Mark and the Licensed
Marketing Indicia in connection with motor fuel or motor oil
that meets or exceed the formulation specifications set forth in
Exhibit B to this Agreement. BP may by written notice change
its formulation specifications or its proprietary gasoline
additives from time to time. Tosco shall acknowledge in writing
its receipt of any such changes and immediately thereafter
incorporate them in the products it produces for sale under the
Licensed Mark and the Licensed Marketing Indicia in the Licensed
Territory. BP shall not impose unreasonable product
formulations on Tosco. In this context reasonableness shall be
defined as follows: a) the minimum product specifications as
defined by the Olympic Pipeline and the Santa Fe Pipeline
Partnership or b) product specifications for products then being
sold by two major brand competitors or three competitors in the
Licensed Territory. Other than this reasonableness definition,
BP shall not impose on Tosco higher specifications than those
used by BP outside the Licensed Territory.
6.2 Tosco acknowledges that the information contained
in the product formulation specifications is a confidential
trade secret of BP. Tosco shall exercise at least the same
degree of diligence to protect BP's product formulation
specifications as Tosco takes for its own most confidential
proprietary information. Such necessary steps shall include,
but are not limited to, restricting the access of employees or
other parties to BP's formulation specifications and having
employees and others who must have access to BP's formulation
specifications sign confidentiality agreements. If Tosco fails
to comply with its secrecy obligations under this Agreement BP
may immediately terminate the license grant provisions of this
Agreement. The confidentiality provisions of this Agreement
shall survive its termination or expiration for a period of ten
(10) years.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
6.3 To ensure that BP's established standards of
gasoline quality are maintained throughout the duration of this
Agreement, Tosco shall utilize BP's proprietary additives in all
motor fuel sold in the Licensed Territory under the Licensed
Mark and the Licensed Marketing Indicia. Such additives are a
necessary component of the formulation specifications set forth
in Exhibit B. [
].
6.4 To further ensure that BP's established standards
of motor fuel quality are maintained throughout the duration of
this Agreement Tosco shall, at its expense, hire an independent
laboratory to demonstrate that the motor fuels sold under the
Licensed Mark and the Licensed Marketing Indicia meet or exceed
the product formulation specifications set forth in Exhibit B.
The testing required shall be done at least as often as BP
conducts such similar testing. Such testing shall conform to
the procedures set forth in Exhibit C and shall also include the
following: random sampling each year of at least ten retail
gasoline stations in both the greater Seattle and Portland
markets, with at least five such stations sampled each six month
period; sampling of the refinery and terminals every month.
Tosco shall instruct the independent laboratory to send BP a
copy of the results at the time such test results are provided
to Tosco.
The testing required in this Section shall be in
addition to any testing required by local, state or federal laws
or regulations such as regulations directed to oxygenated
gasoline, low RVP gasoline, low sulfur diesel fuel or
reformulated gasoline.
6.5 If the independent laboratory determines that the
motor fuel produced by Tosco has failed to meet the formulation
specifications set forth by BP, Tosco shall immediately explain
to BP's designated representative the cause for such failure.
If Tosco's motor fuel has failed to meet the
specifications because of willful misconduct BP may immediately
terminate the license grant provisions of this Agreement. If
Tosco's motor fuel has failed to meet BP's specifications
because of inadvertence Tosco shall seek a waiver from BP. If
BP determines that a waiver from its product formulation
specifications will not result in a materially defective
gasoline BP may grant the waiver without further penalty to
Tosco.
If BP determines that a waiver is not possible then BP
and Tosco shall consult to determine how best to dispose of the
defective motor fuel or what corrective actions are necessary by
Tosco to eliminate or minimize the possibility that such motor
fuel could be purchased by consumers.
6.6 Tosco and its sublicensees shall also comply with
local, state or federal laws and regulations applicable to motor
fuel quality. If Tosco or its sublicensees fails to comply with
local, state or federal laws and regulations applicable to motor
fuel quality Tosco shall advise BP on the reason for any such
failure. BP and Tosco shall consult to determine what
corrective actions are necessary by Tosco to eliminate or
minimize the effect of such non-compliance and what measures
Tosco can take to avoid any future non-compliance. If the
failure is due to willful misconduct of Tosco BP may immediately
terminate the license grant provisions of this Agreement for a
particular site or sites depending on the scope of the willful
failure. ln the event of willful misconduct by a sublicensee, BP
may require Tosco to immediately terminate the sublicensee or a
particular site or sites of the sublicensee depending on the
scope of the willful failure.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
If the failure to meet such standards is due to
inadvertence then Tosco shall take the necessary corrective
actions required by local, state or federal laws or regulations.
If Tosco or its sublicensees fails to meet applicable local,
state or federal regulations on motor fuel quality on [ ]
BP may terminate the license grant provisions of this Agreement
upon giving Tosco one hundred and twenty (120) days prior
notice.
For purposes of this Section 6.6, a failure to comply
because of events flowing from a common source shall constitute
a single event. (For example, if a batch of off-grade motor
fuel is distributed to several stations and used to fuel a
number of vehicles, it will count as one incident of non-
compliance.) If Tosco terminates a non complying
jobber-supplied site or sites, non-compliance attributable to
such sites shall be deleted from the non-compliance count. If
new fuel regulations are imposed that result in a significant
increase in citations to all gasoline marketers in the Licensed
Territory BP and Tosco shall consult to determine whether such
violations by Tosco constitute non-compliance of this Agreement
that should subject Tosco to possible termination of the license
grant provisions of this Agreement.
Article 7
QUALITY OF SERVICE ASSOCIATED
WITH THE LICENSED MARK AND THE LICENSED MARKETING INDICIA
7.1 Tosco shall operate its business in the Licensed
Territory in accordance with the standards and requirements
necessary to maintain the quality level of service now
associated by consumers with the Licensed Mark and the Licensed
Marketing Indicia in the Licensed Territory as defined by
section 7.2-7.5 of this Agreement.
7.2 To ensure that the existing standards of service
and responsiveness in the Licensed Territory are maintained,
Tosco shall develop customer responsiveness programs that meet
the following criteria: (1) customer inquiries or complaints
shall be addressed within a maximum of fourteen (14) days of
receipt by Tosco or its sublicensees; (2) Tosco shall institute
a Tosco Shopper Program (TSP) similar to BP's "Mystery Shopper
Program." Tosco shall design its TSP in such a manner that its
results measure the same criteria as and can be meaningfully
compared with the results generated by BP's Mystery Shopper
Program. To achieve such meaningful comparisons Tosco shall
sample its customers and its sublicensees' customers at the same
intervals as such customers are sampled under BP's Mystery
Shopper Program. Tosco shall provide BP copies of the results
of all TSP surveys.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
7.3 The baselines for the TSP for the first year of
this Agreement (1994) shall be as follows:
Self-Service Mini-Service Station
Housekeeping
Average [ ]
Consistency [ ]
Each subsequent year beginning in 1995 the baselines
for Tosco's TSP Program shall be either the baselines from the
prior year or from any earlier year whichever represents the
higher baselines for compliance by Tosco.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
If the results of the TSPs in any three month period
are lower than the applicable baselines, Tosco shall take the
necessary steps to ensure that the resulting customer
satisfaction levels are restored within two (2) testing periods.
If, [ ] any one of the elements of Tosco's TSP
Program still does not meet the applicable baselines then BP may
terminate the license grant provisions of this Agreement.
7.4 So that the existing standards of service and
responsiveness are not diminished any service station in the
Licensed Territory bearing the Licensed Mark and the Licensed
Marketing Indicia shall honor BP's and other credit cards in
accordance with the terms of BP's credit card program so long as
BP sponsors such a program. Tosco and its sublicensees shall
also stock sufficient quantities of BP branded motor oil to meet
customer demand in the Licensed Territory.
7.5 Tosco shall ensure that all service stations not
branded BP on the Effective Date of this Agreement that it later
authorizes to use the Licensed Mark and the Licensed Marketing
Indicia shall comply with the retail marketing matrix attached
to this Agreement as Exhibit D; further, Tosco shall ensure that
all such service stations sell at least twenty-five thousand
(25,000) gallons of motor fuel per month; have a paved driveway,
a canopy for the gasoline pumps and Electronic Point of Sale
(EPOS) equipment for processing credit card sales.
7.6 To further ensure that the goodwill associated
with the Licensed Mark and the Licensed Marketing Indicia is
preserved in the Licensed Territory and to preserve the image
and value of the BP brand, Tosco shall either participate in, or
adopt, at its expense, motor fuel and product guarantee programs
comparable to those adopted by BP from time to time outside the
Licensed Territory in connection with the Licensed Goods and
Services.
Article 8
ADVERTISING
8.1 Tosco shall submit to BP for prior approval
samples of any proposed advertising materials, signage, graphic
designs, product brochures, technical data sheets or premium
items bearing the Licensed Mark or the Licensed Marketing
Indicia planned for public viewing or listening and materials
not bearing the Licensed Mark used to promote products and
services at motor fuel service stations within the Licensed
Territory. BP shall notify Tosco in writing if it objects to
any such materials and, unless the objections are resolved,
Tosco shall not use or display such materials. BP shall not
unreasonably withhold its approval or unreasonably object to any
such materials submitted by Tosco for prior approval. If BP
does not notify Tosco of its objection or disapproval within
fifteen (15) days after receipt by BP of any such submission of
advertising materials, signage, graphic designs, product
brochures, technical data sheets or premium items, such approval
shall be deemed to have been given by BP.
BP shall notify Tosco in writing if it objects to any
such materials and, unless the objections are resolved, Tosco
shall not use or display such materials. BP shall not
unreasonably raise such objections.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
8.2 To help ensure that the goodwill associated with
the Licensed Mark and Licensed Marketing Indicia is preserved in
the Licensed Territory Tosco shall commit funds to advertise the
goods and services associated with the Licensed Mark and the
Licensed Marketing Indicia. Tosco shall spend a minimum of
[ ] during each [ ] consecutive year period that this
Agreement is in force for advertising that promotes the BP brand
in association with the Licensed Goods and Services. Of this
total Tosco shall spend at least [ ] per year for the
duration of this Agreement for advertising on television, on
radio, in magazines, in newspapers and on billboards.
Article 9
INFRINGEMENT
9.1 Tosco shall immediately notify BP in writing of
any apparent infringement of, or challenge to, Tosco's use of
the Licensed Mark or the Licensed Marketing Indicia, or of any
claim by any person of any rights in a service mark, trademark
or overall image similar to the Licensed Mark or the Licensed
Marketing Indicia. Tosco shall not directly or indirectly
communicate with any person other than BP or BP's legal counsel
in connection with any such alleged infringement, challenge or
claim.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
9.2 BP shall have sole discretion to take the actions
it deems appropriate and the exclusive right to control any
litigation, U.S. Patent and Trademark Office proceeding or other
administrative proceeding arising from Tosco's use of the
Licensed Mark or the Licensed Marketing Indicia. Tosco shall
execute any and all documents and do all such acts and things
necessary in the opinion of BP to protect and maintain the
interest of BP in any such proceeding. If BP, in its sole
discretion, decides not to take further action in any
litigation, U.S. Patent and Trademark Office proceeding or other
administrative proceeding arising from Tosco's use of the
Licensed Mark or the Licensed Marketing Indicia, Tosco may take
such further action [ ] BP shall not unreasonably
withhold such approval. Tosco shall bear all the costs
associated with any such further action.
9.3 Except as set forth above in Section 9.2, BP
shall reimburse Tosco for all reasonable expenses incurred in
connection with any litigation, U.S. Patent and Trademark Office
proceeding or other administrative proceeding arising from
Tosco's use of the Licensed Mark or the Licensed Marketing
Indicia unless such litigation, U.S. Patent and Trademark Office
proceeding or other administrative proceeding arises from a
dispute between BP and Tosco.
9.4 BP represents and Tosco acknowledges that BP is
granting Tosco rights only to the extent, that BP has such
rights. If the Licensed Mark or the Licensed Marketing Indicia
are found to be invalid, defective or otherwise not the property
of BP, Tosco shall have no claim in law or equity seeking
compensation or redress for any such invalidity or defect, and
hereby expressly waves the right to pursue any such action or
proceeding.
The use of brackets "[ ]" indicates where information has
been omitted pursuant to a request for confidentiality filed with
the Securities and Exchange Commission on March 28, 1994. This
information has been filed separately with the Securities and
Exchange Commission.
Article 10
ASSIGNMENT/TRANSFER
10.1 This Agreement is personal to Tosco. Tosco
shall not attempt to assign or transfer this Agreement or any of
its rights or obligations hereunder except to one of its
affiliated companies. If Tosco does assign this Agreement to
one of its affiliated companies Tosco shall still assume primary
responsibility for its obligations under this Agreement. An
acquisition of more than [ ] of the stock of Tosco by a
third party shall be considered a transfer of this Agreement.
BP may then terminate the license grant provisions of this
Agreement upon giving Tosco one hundred and twenty (120) days
prior notice.
BP may terminate the license grant provisions of this
Agreement if Tosco sells or otherwise disposes of all or
substantially all of the retail properties in the Licensed
Territory that Tosco has purchased from BP; provided however,
that the sale or transfer of properties for financing purposes
under which Tosco retains control of the properties shall not
constitute grounds for termination. Termination under this
Section shall be effective if BP gives Tosco one hundred and
twenty (120) days prior notice.
Article 11
INDEMNIFICATION AND INSURANCE
11.1 Except to the extent directly caused by a defect
in the product specifications contained in Exhibit B, BP assumes
no liability to Tosco or to third parties with respect to goods
sold or services rendered under the Licensed Mark or the
Licensed Marketing Indicia by Tosco or by third parties
sublicensed by Tosco.
11.2 Tosco shall indemnify and hold harmless BP, its
officers, directors, subsidiaries and affiliates against any and
all claims, liabilities, damages, costs and expenses including
attorneys' fees incurred by BP arising out of or attributable in
any way to use by Tosco or third parties sublicensed by Tosco of
the Licensed Mark or the Licensed Marketing Indicia or the
breach by Tosco of any provision of this Agreement. Tosco shall
have no obligation to indemnify and hold harmless BP, its
officers, its directors, subsidiaries and affiliates if the
Licensed Mark or the Licensed Marketing Indicia are found to be
invalid, or otherwise not the property of BP.
11.3 Tosco shall purchase and maintain in full force
and effect during the term of this Agreement comprehensive
general or commercial general liability insurance covering
personal injury and property damage claims arising out of
Tosco's operations, which shall include contractual liability,
products liability and completed operations coverage. The
insurance shall be in an amount of at least ten million
($10,000,000) dollars combined single limit per occurrence. The
policy or policies of insurance shall be endorsed to name BP as
an additional insured with respect to any liability BP may incur
as a result of Tosco's or its sublicensees' use of the Licensed
Mark or the Licensed Marketing Indicia and to provide that such
coverage shall be primary to any other liability insurance
obtained and carried by BP.
11.4 At the Effective Date of this Agreement Tosco
shall furnish BP certificates issued by Tosco's insurer
indicating that all required insurance is in full force and
effect. Such certificates shall also include an undertaking by
the insurer to give BP written notice 10 days prior to
cancellation of or a material change in the coverage.
11.5 Tosco's failure or neglect to provide or keep in
force any or all of the insurance required under this Agreement
shall be considered a material breach of this Agreement that
shall give BP good cause for immediate termination.
Article 12
COMPLIANCE WITH LAWS AND REGULATIONS
12.1 Tosco shall acquaint itself and strictly comply
with all local, state and federal laws, ordinances and
regulations relating to the production, sale, handling and
distribution of motor fuel and other products including those
relating to environmental protection and compliance, and health,
safety and sanitation. Any motor fuel or other products
produced or sold in the Licensed Territory and services rendered
in the Licensed Territory by Tosco under the Licensed Mark and
the Licensed Marketing Indicia shall be in accordance with all
applicable local, state, and national laws and regulations.
Article 13
NOTICES
13.1 Any notice required or permitted to be given
under this Agreement shall be in writing and shall be given by
first class mail postage prepaid, by mail courier or by
facsimile transmission with a confirmation copy by first class
mail postage pre-paid. Any such notice shall be addressed as
follows:
(a) In the case of BP:
BP Exploration & Oil Inc.
200 Public Square, 39-5300-B
Cleveland, Ohio 44114-2375
Attn: Corporate Secretary
with a copy to:
The British Petroleum Company p.l.c.
Britannic House
1 Finsbury Circus
London EC2M7BA, England
Attn: Group Legal: Trade Marks
(b) In the case of Tosco:
Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Attn: Vice President & General Counsel
13.2 Tosco shall accept any notice directed to
sublicensees, jobbers or branded dealers under this Agreement.
Article 14
GENERAL PROVISIONS
14.1 This Agreement shall be governed by the
substantive and procedural laws of the State of New York without
regard to rules on choice of law. BP and Tosco hereby submit to
the jurisdiction and venue of all courts located within the
State of New York, County of New York to hear disputes arising
under this Agreement.
14.2 Nothing in this Agreement is intended to
constitute or shall be construed so as to constitute BP and
Tosco as partners or joint venturers; or the employees, agents
or representatives of BP as employees, agents or representatives
of Tosco; or the employees, agents or representatives of Tosco
as the employees, agents or representatives of BP.
14.3 Each section, part, term or provision of this
Agreement shall be considered severable. If, for any reason, a
section is determined to be invalid or unenforceable, that
section shall be deemed not part of this Agreement and it shall
not impair the operation or effect of the remaining terms or
provisions of this Agreement.
14.4 The failure of BP or Tosco to require
performance of any provision in this Agreement shall not be
deemed a waiver. Any such failure shall not deprive BP or Tosco
of their right to require such performance in a particular
instance or at any other time. Any waiver of this Agreement
must be in writing signed by the waiving party.
14.5 This Agreement embodies the complete
understanding of the parties with respect to its subject matter.
It supersedes any prior understanding between the parties,
whether written or oral, with respect to its subject matter and
may not be modified or amended except in a written document
signed by a duly authorized representative of BP and Tosco.
14.6 The section or paragraph headings contained in
this Agreement are for convenient reference only, and shall not
in any way affect the meaning or interpretation of this
Agreement. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original,
but all of which shall constitute but one.
IN WITNESS WHEREOF, the parties have caused this
Trademark License Agreement to be duly executed by their
authorized officers or representatives as of the day and year
first written above.
THE BRITISH PETROLEUM COMPANY p.l.c. BP EXPLORATION & OIL INC.
By:________________________________ By:______________________
Title: Attorney-in-Fact Title: Vice President
Date: Date:
TOSCO CORPORATION
By:_______________________________________
Title: Vice President and General Counsel
Date:
<PAGE>
EXHIBIT A
Exhibit A is comprised of two photographs depicting Licensed
Marketing Indicia and is more fully described in Section 10.4 of
this agreement.
<PAGE>
EXHIBIT B
[ ]
The three pages which constitute Exhibit B to the Trademark
License Agreement have been omitted pursuant to a request for
confidentiality filed with the Securities and Exchange Commission
on March 28, 1994. This information has been filed with the
Securities and Exchange Commission.
<PAGE>
EXHIBIT C
FIELD QUALITY AUDIT PROGRAM
Field Quality Audit Program
The attached filed quality audit program is the minimum required
by BP Oil. This program does not take the place of a quality
oversight program as required by various state and federal
regulations.
Frequency of Fuel Audits
Service Stations: Random sampling and testing of gasoline at a
minimum of 10 service stations in both the greater Seattle and
Portland markets with at least 5 stations sampled each 6 month
period.
Terminals and Refinery: Testing all gasoline and diesel fuels
monthly.
Testing To Be Conducted On Fuel Samples
Gasoline from Service Stations and Terminals
Test ASTM Designation (if applicable)
RON D-2699
Mon D-2700
(R+M)/2
V/L D-2533
RVP D-5191
Distillation D-86
Pb Atomic Absorption
Alcohol, MTBE, Benzene Gas Chromatography
FIA D-1319
Low-Sulfur Diesel from Terminals (monthly)
Test ASTM
Cetane Index D-976
Sulfur D-2622
Flash Point D-93
Distillation D-86
Gravity, API D-287
Pour Point D-97 (October through February)
Cloud Point D-2500 (October through February)
Diesel from Terminals (quarterly)
(January, April, July, October)
Test ASTM Designation
Cetane D-4737
Flash Point D-93
Distillation D-86
Gravity, API D-287
Pour Point 1 D-97
Cloud Point 1 D-2500
Sulfur D-2622
1 Determine only in January and October
Gasoline from Refinery
Test ASTM
Ron D-2699
MON D-2700
(R+M)/2 (Calculated)
RVP D-5191
Diesel from Refinery
Test ASTM
Distillation D-86
Gravity, API D-287
Cetane Index D-976
Sulfur D-2622
<PAGE>
Reporting
In addition to TOSCO's requirements, a copy of the written test
reports will be provided to the designated BP representative as
follows:
Random/Semiannual Gasoline Service Station Survey
The results of these samples will be reported to BP in no more
than 30 days after sampling. Upon receipt at the laboratory, the
samples will be refrigerated to retain representative volatility
characteristics.
Monthly Gasoline Terminal Survey
Results on the terminal gasoline samples will be reported no
later than the end of the month in which the samples were taken.
Refinery Gasoline Survey
Results on the refinery gasoline samples will be reported no
later than three weeks after samples were taken.
Diesel Survey (all)
Test results will be reported during the month in which the
samples were taken.
Quality Assurance
The audit testing laboratory must agree to maintain active
membership in the national motor fuels exchange groups. A copy
of the monthly exchange report with the test lab data identified
will be forwarded to the BP Representative.
<PAGE>
EXHIBIT D
<TABLE>
<CAPTION>
MINIMUM RETAIL FACILITY BRANDING AND
IMAGE LEVEL STANDARDS FOR STATIONS
ACCORDING TO
CITY POPULATION, LOCATION AND MONTHLY VOLUME
<S> <C> <C> <C> <C>
Freeway City Population City Population City Population
up to 7,000 7,000-15,000 15,000 and up
Level I N/A 50,000 gals and 50,000 gals and N/A
less less
Level II 75,000 gals and 50,000 gals- 50,000 gals- 100,000 gals and
less 125,000 gals 100,000 gals less
Level III 75,000-125,000 More than 100,000 gals- 100,000 gals-
gals 125,000 gals 150,000 gals 150,000 gals
Level IV More than Optional More than More than
125,000 gals 150,000 gals 150,000 gals
</TABLE>
