PENN OCTANE CORPORATION/EXXON COMPANY, U.S.A.
SALE AGREEMENT
PENN NO. ___/EXXON NO. PEB221
This Agreement is entered into effective November 1, 1997, by and between
Exxon Company, U.S.A., a division of Exxon Corporation ("Exxon"), and Penn
Octane Corporation ("Penn").
Penn and Exxon agree to a product sale as outline below:
1. TERM OF AGREEMENT
This Agreement shall begin with the first shipment to Penn in November
1997 (about November 10, 1997) and shall continue through September 30, 1998.
2. PRODUCT VOLUMES/PRICES
Exxon agrees to deliver to Penn the approximate product volumes show on
Exhibit A during the term of this Agreement at the location and pricing basis
outlined in Exhibit A.
3. PRODUCT SPECIFICATIONS
Exxon shall deliver to Penn products that meets applicable federal, state
and local requirements, as shown on Exhibit B, which is made a part hereof.
4. GENERAL PROVISIONS
Exxon's General Provisions dated December 1996 and attached as Exhibit C
are incorporated herein by reference and made a part hereof.
5. EXPORTS/IMPORTS
This is a domestic transaction.
6. ACCOUNTING
Forward all shipping documents, statements, and invoices to:
EXXON COMPANY U.S.A.
P.O. Box 2180
Room 3614-G, E
Houston, Texas 77252
FAX NO. (713) 656-2052
7. INVOICE PAYMENT METHOD/TERMS
In accordance with Exhibit C, General Provisions, except that invoices
shall be issued weekly and shall be paid by wire transfer with payment due
twelve (12) working days from receipt of invoice and acceptable supporting
documentation. If the invoice and acceptable supporting documentation are
received at the billing address on or before 12:00 noon on a working day,
working day 1 begins on that day. If the invoice and acceptable supporting
documentation are received at the billing address after 10:00 noon (or on a
non-working day), working day 1 begins on the first working day following
receipt.
If the transaction if effected via book transfer, quantity to be exact
barrels. Payment due date shall be the effective book transfer date, provided
the invoice and book transfer confirmation have been received by 12:00 noon on
the day preceding the effective book transfer date; otherwise, the payment due
date shall be the next business day following receipt of invoices and book
transfer confirmation.
8. CREDIT PROVISIONS
Penn agrees to provide a letter of credit acceptable to Exxon. Credit
balances shall be monitored by Exxon, and amendments to the letter of credit
may be required when it appears that those balances may exceed current
security levels. Timely receipt by Exxon of acceptable security and
amendments is a condition precedent to Exxon's performance under this
Agreement. Any letter of credit provided to Exxon must be issued in a format,
for and amount, by a bank and for a time duration acceptable to Exxon.
9. EXHIBITS
The following Exhibits are attached and are a part of this Agreement.
All references herein to the Agreement shall include the applicable Exhibits.
Exhibit A - Product Volumes/Locations/Differentials
Exhibit B - Product Specifications
Exhibit C - General Provisions
EXXON COMPANY, U.S.A. PENN OCTANE CORPORATION
a division of Exxon Corporation
BY /s/ M.W. Schwehr BY /s/ Jerome B. Richter
------------------ -----------------
M.W. Schwehr TITLE: Chairman
Manager, Products and Gas Liquids --------
DATE November 12, 1997 DATE November 12, 1997
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Exhibit A
Product Volumes/Locations/Differentials
Penn No. _______/Exxon No. PEB221
Sale Agreement
EXXON DELIVERS
Quantity
Product Method Approximate Exxon Receives
Location Description of Delivery Measurement k Bbls/Daily Price
Katy Gas Plant Propane/Butane To Pipeline By meter ticket at origin 6,500 (1)
============== ============== =========== ========================= ============ ===============
<FN>
(1) Price - Mt. Belvieu OPIS NON TET price average for the first business day for interim pricing
less 1.5 cents per gallon for each product. Invoices will be issued weekly. At the end of the
month, pricing will be adjusted to the Mt. Belvieu OPIS NON TET day weighted average for the delivery
month for each product less 1.5 cents per gallon.
Exhibit B
Product Specification
Penn No. _____/Exxon No. PEB221
Product
-------
Propane Butane Mix = 90% Propane and 10% Butane
EXHIBIT C
EXXON COMPANY, U.S.A. (A DIVISION OF EXXON CORPORATION)
PETROLEUM PRODUCTS & NATURAL GAS LIQUIDS
December 1996
Index to General Provisions
Page Number
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1. Special Provisions Shall Govern 1
2. Deliveries 1
3. Volumes 1
4. Measurements 1
5. D___ Integrity 1
6. Inspection 2
7. Title 2
8. Importer/Exporter of Record 2
9. Drawback 2
10. Warranty 2
11. Additional Equipment 3
12. Safety Regulations 3
13. Safety and Health Information 3
14. Statements and Invoices (Exchanges) 3
Payment (Purchases and Sales) 3
15. Taxes 4
16. Financial Responsibility 4
17. Exchange Basis 4
Balances Products 5
Balances Natural Gas Liquids 5
Exchange Imbalances 5
18. Set-Off 5
19. Continuing Obligation 5
20. Applicable Laws 5
21. Compliance with Laws and Regulations 5
22. Product Compliance and Documentation 5
23. Indemnity 6
24. Claims 6
25. Waiver 6
26. Force Majeure and Contingencies 6
27. Business Practices 7
28. Conflict of Interest 7
29. Audit 7
30. Assignment 7
31. Odorization 7
32. Quality 8
33. Storage 8
34. Demurrage on Tank Cars 8