Fuel Purchase Agreement (Page 3 of 24) in pdf

FLORIDA POWER & LIGHT COMPANY

FUEL OIL PURCHASE CONTRACT

GENERAL TERMS AND CONDITIONS

The quality measurement procedures to be followed by the Parties for determining the quality of the delivered Product are

summarized in Section 4.2 for Vessel deliveries and Section 4.3 for Tank Truck and Oil Pipeline deliveries.

Quality Measurement Procedures for Vessel Deliveries of Product

4.2

Loading Facility Sampling and Analysis

4.2.1

SELLER shall require the Loading Inspector to: (i) obtain a volumetrically weighted composite sample of Product in all Vessel

tank compartments, upon completion of loading the Vessel at the Loading Facility, in accordance with prevailing industry

standards; (ii) promptly perform an analysis of such samples to determine the quality characteristics of the Product to be

delivered to BUYER; and, (iii) prepare a written report of the results. SELLER shall promptly provide BUYER with a copy of the

Loading Inspector’s quality analysis report but in no event later than twenty-four (24) hours prior to the Vessel's arrival at the

designated Delivery Point.

The Vessel will not be allowed to discharge Product at the Delivery Point until such quality

characteristics have been communicated to and approved by BUYER.

Delivery Point Sampling

4.2.2

For each cargo and separate grade of Product delivered at the Delivery Point(s), BUYER shall require the Delivery Inspector to

obtain samples of Product for quality analysis purposes, in accordance with prevailing industry standards.

SELLER or

SELLER’s representative may be present for and witness the sampling.

Quality Analysis of Delivered Product

4.2.3

FPL will analyze the sample of the Product delivered using the test methods identified in APPENDIX C (NO. 2 FUEL OIL

QUALITY SPECIFICATIONS), or APPENDIX D (NO. 6 FUEL OIL QUALITY SPECIFICATIONS). The SELLER will be notified

of any test results, which indicate the Product does not comply with these Quality Specifications. Unless otherwise mutually

agreed, FPL will request the Delivery Inspector run the appropriate test(s) for only the nonconforming characteristic(s) using the

sealed sample corresponding to the delivery in question as collected and retained by the Delivery Inspector. The results of the

tests conducted by the Delivery Inspector as determined using the appropriate test methods identified in either APPENDIX C or

APPENDIX D shall be final and binding on both Parties, except in the case of fraud or manifest error. Disposition of the

nonconforming cargo will be determined as specified in Section 4.4 (Nonconforming Product).

Quality Measurement Procedures for Tank Truck or Oil Pipeline Deliveries of Product

4.3

SELLER shall require the Loading Inspector to determine and report Product quality based on sampling of the supplying tanks at the

Loading Facility, in accordance with ASTM procedures, prevailing industry standards, and any applicable Laws and Regulations.

Nonconforming Product

4.4

BUYER may, at its sole discretion and by giving SELLER written Notice thereof, refuse to accept any Product which is not in

conformance with the Quality Specifications, including the presence of extraneous materials, whether the nonconformance is found

(i) during or after loading by SELLER at the Loading Facility, or (ii) prior to commencement of, during, or after completion of

discharge by SELLER at the Delivery Point. BUYER shall incur no cost, penalty, or Liability as a result of such refusal to accept the

nonconforming Product.

BUYER Accepts Product

4.4.1

In the event that the Product is determined not to meet BUYER’s Quality Specifications and is therefore not acceptable, BUYER

may, at its sole discretion, agree to accept the delivery of such nonconforming Product subject to: (i) previously agreed upon

Quality Adjustments, if any, specified in the notes OF APPENDIX C (NO. 2 FUEL OIL QUALITY SPECIFICATIONS) or

APPENDIX D (NO. 6 FUEL OIL QUALITY SPECIFICATIONS), as appropriate, or

(ii) a negotiated acceptable Quality

Adjustment which reduction shall be negotiated in good faith by the Parties and documented via email or fax communications

exchanged by the Parties. Such Quality Adjustments shall be included as separate line items on invoices pursuant to Section

7.5 (Quality and Quantity Adjustments).

BUYER Refuses Product

4.4.2

In the event a cargo of Product is determined not to meet BUYER’s Quality Specifications and BUYER refuses to accept the

Product after delivery; unless the Parties agree otherwise, SELLER shall remove and properly dispose of the nonconforming

Product from BUYER’s facilities at the Delivery Point, at SELLER’s sole expense, within seven (7) calendar days from the date

on which SELLER receives or is deemed to have received BUYER’s written Notice of refusal to accept the Product. In the event

SELLER does not remove the Product from BUYER’s facilities within the required seven (7) calendar day period, BUYER may

have the Product removed, stored, or otherwise disposed of at SELLER's expense.

Title to and risk of loss for the

nonconforming Product shall pass from BUYER to SELLER at the end of seven (7) calendar days from the date on which

BUYER's written Notice is received by SELLER, or when the Product is removed by SELLER, whichever is earlier. SELLER

agrees to indemnify and hold BUYER harmless from and against any Liabilities that arise with respect to the Product during the

period between SELLER’s receipt of written Notice of BUYER’s refusal to accept the non-conforming Product and return of title

to SELLER.

Modifications to Quality Specifications

4.5

BUYER may from time to time amend its Quality Specifications to meet changes in BUYER’s operational requirements or industry

standards or procedures. Absent Laws and Regulations to the contrary, BUYER’s amendment of Quality Specifications shall be

effective no earlier than thirty (30) calendar days from the date of notice to SELLER of such change(s). If, however, due to changes

or additions to Laws and Regulations, BUYER's Quality Specifications must be altered or BUYER’s use of Product as fuel for its

electric generating facilities is restricted or prohibited, BUYER shall have the right to terminate this Contract or to reduce the quantity

of Product delivered under this Contract to a lesser amount, upon Notice to SELLER. In the event BUYER amends the Quality

Specifications in accordance with this paragraph which must be implemented during a Transaction Period in which the SELLER is

obligated to sell and deliver Product to BUYER, and the SELLER can reasonably demonstrate an increase in cost to meet such

amended Quality Specifications, then the Parties shall negotiate an adjustment to the Transaction Price to cover the SELLER’s

additional cost to meet the amended Quality Specifications.

FPL FOG GTC R20100101.doc

Fuel Purchase Agreement Page 3

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