EXHIBIT 10.3
PURCHASE CONTRACT
BETWEEN
PENN OCTANE CORPORATION
"SELLER"
AND
RIO VISTA OPERATING PARTNERSHIP L.P.
"BUYER"
ARTICLE I. QUANTITY OF LPG...................................................... 4
ARTICLE II. TERM................................................................. 4
Section 2.1 Term............................................................ 4
Section 2.2 Termination..................................................... 4
ARTICLE III. PRICE................................................................ 5
ARTICLE IV. TAXES................................................................ 5
ARTICLE V. POINT OF DELIVERY, FACILITIES AND OWNERSHIP AND CONTROL OF LPG....... 5
Section 5.1 Point of Delivery; Facilities................................... 5
Section 5.2 Ownership and Control of LPG.................................... 5
ARTICLE VI. DELIVERY PRESSURE.................................................... 6
ARTICLE VII. NOTICES.............................................................. 6
Section 7.1 Notices......................................................... 6
Section 7.2 Change of Address............................................... 6
ARTICLE VIII. ASSIGNMENT........................................................... 6
ARTICLE IX. GENERAL TERMS AND CONDITIONS......................................... 7
EXHIBITS
Exhibit A - General Terms and Conditions
PURCHASE CONTRACT
THIS PURCHASE CONTRACT (this "Contract") is made and entered into
effective as of the 1st day of October, 2004, by and between PENN OCTANE
CORPORATION, a Delaware corporation (hereinafter called "Seller"), and RIO VISTA
OPERATING PARTNERSHIP L.P., a Delaware limited partnership (hereinafter called
"Buyer"):
W I T N E S S E T H:
WHEREAS, Seller desires to sell and deliver to Buyer and Buyer desires to
purchase and receive from Seller liquefied petroleum gas ("LPG"), in the
quantities and upon the terms and conditions hereinafter set forth;
WHEREAS, the Conflicts Committee of Rio Vista GP LLC has approved of the
terms and conditions of this Contract;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants and agreements contained herein, and the general terms and provisions
hereof, Buyer and Seller agree as follows:
ARTICLE I.
QUANTITY OF LPG
Seller agrees to sell and deliver to Buyer and Buyer agrees to purchase
and receive from Seller a monthly volume of LPG equal to the total amount of LPG
per month that Buyer sells or otherwise distributes using, in whole or in part,
any of the Contributed Assets to the extent Seller is able to supply quantities
of LPG sufficient for Buyer's needs. Notwithstanding anything herein to the
contrary, Buyer shall have no obligation to purchase LPG from Seller in the
event the distribution of such LPG by Buyer to its customers would not require
the use, in whole or in part, of any of the Contributed Assets. In addition, to
the extent Seller does not or cannot supply quantities of LPG sufficient for
Buyer's needs, Buyer may purchase LPG from other suppliers during the period
that Seller does not or cannot supply quantities of LPG sufficient for Buyer's
needs without any obligation to Seller hereunder.
ARTICLE II.
TERM
Section 2.1 Term. This Contract shall be effective as of the 1st day of
October, 2004, and, subject to the provisions of this Contract, shall continue
and remain in full force and effect for so long as the earlier to occur of (i)
Seller ceases to have the right to access the Seadrift Pipeline and (ii) Buyer
ceases to use, in whole or in part, any of the Contributed Assets for the sale
of LPG.
Section 2.2 Termination. In the event Buyer takes no LPG under this
Contract for thirty (30) consecutive Days for any reason whatsoever other than
force majeure, Seller shall have the right, at its option, exercisable at any
time within fifteen (15) Days following such thirty (30) consecutive Day period,
to terminate this Contract by delivering to Buyer written notice of termination.
In the event Seller so elects to terminate this Contract, such termination shall
be
effective as of 7:00 o'clock a.m. Central Time on the first Day of the Month
next following the date of delivery of such notice to Buyer, whereupon the
parties hereto shall be relieved of all liabilities and obligations hereunder
except for liabilities and obligations of the parties that shall have accrued as
of such date of termination. In the event Seller does not or cannot supply
quantities of LPG sufficient for Buyer's needs for thirty (30) consecutive Days
for any reason whatsoever other than force majeure, Buyer shall have the right,
at its option, exercisable at any time within fifteen (15) Days following such
thirty (30) consecutive Day period, to terminate this Contract by delivering to
Seller written notice of termination. In the event Buyer so elects to terminate
this Contract, such termination shall be effective as of 7:00 o'clock a.m.
Central Time on the first Day of the Month next following the date of delivery
of such notice to Seller, whereupon the parties hereto shall be relieved of all
liabilities and obligations hereunder except for liabilities and obligations of
the parties that shall have accrued as of such date of termination.
ARTICLE III.
PRICE
Subject to the provisions of this Contract, the amount payable by Buyer to
Seller for each Gallon of LPG purchased hereunder each Month shall equal the
Purchase Price.
ARTICLE IV.
TAXES
Seller shall pay or cause to be paid all taxes and assessments imposed on
Seller with respect to the LPG delivered hereunder prior to its delivery to
Buyer, and Buyer shall pay or cause to be paid all taxes and assessments imposed
upon Buyer with respect to LPG delivered hereunder after its receipt by Buyer.
Neither party shall be responsible or liable for any taxes or other statutory
charges levied or assessed against any of the facilities of the other party used
for the purpose of carrying out the provisions of this Contract.
ARTICLE V.
POINT OF DELIVERY, FACILITIES AND OWNERSHIP AND CONTROL OF LPG
Section 5.1 Point of Delivery; Facilities. Seller shall deliver the LPG to
Buyer hereunder at the point at which the LPG exits the Seadrift Pipeline and is
delivered into Buyer's facilities at its Brownsville, Texas terminal or any
other point which employs the use of the Contributed Assets. Buyer shall be
responsible for arranging for Buyer or its designee, to receive delivery of LPG
sold hereunder to Buyer at the Delivery Point into Buyer's or its designee's
gathering system.
Section 5.2 Ownership and Control of LPG. Title to the LPG sold and
delivered hereunder shall pass to Buyer at the Delivery Point. As between the
parties hereto, Seller shall be in control and possession of the LPG and
responsible for any damage or injury caused thereby until same shall have been
delivered to Buyer, after which delivery Buyer shall be deemed to be in
exclusive control and possession thereof and responsible for any injury or
damage caused thereby.
ARTICLE VI.
DELIVERY PRESSURE
The LPG delivered or caused to be delivered hereunder by Seller to Buyer
or its designee(s) at the Delivery Point shall be delivered at a pressure
sufficient to enter the facilities at such point of Buyer or its designee(s).
ARTICLE VII.
NOTICES
Section 7.1 Notices. Every notice, consent, approval, communication,
request or reply which is required or which may be given by either party to the
other under the terms of this Contract must be in writing, and may be effected
by actual delivery to the party to be notified, by depositing such notice in the
United States mail, postage prepaid, registered or certified mail, and addressed
to the party to be notified with return receipt requested, or by facsimile
transmission. Every notice deposited in the United States mail as hereinabove
authorized shall, in the absence of a strike, lock-out, boycott or other labor
dispute affecting the delivery of United States mail, be effective three (3)
days following the date on which it is so deposited. Notice given by facsimile
transmission shall be effective on completion and confirmation of the facsimile
transmission. Notice given in any other manner shall be effective only if and
when received by the party to be notified. For purposes of notice, the addresses
of the parties, until changed as hereinafter provided, shall be as follows:
Seller: Penn Octane Corporation
00-000 Xxxxxxx Xxxx, Xxxxxxxx X
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President
Facsimile: (000) 000-0000
Buyer: Rio Vista Operating Partnership L.P.
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: General Partner
Facsimile: (713) _____________
Section 7.2 Change of Address. Each of the parties shall have the right,
from time to time, to change its address, and each shall have the right to
specify as its address any other address within the United States of America by
delivering to the other party not less than ten (10) days' prior notice in
writing of such new address.
ARTICLE VIII.
ASSIGNMENT
All the terms, conditions and provisions of this Contract shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, no assignment of this Contract by
either party shall be effective or binding until a copy of such assignment has
been furnished to the other party.
ARTICLE IX.
GENERAL TERMS AND CONDITIONS.
Annexed hereto as a part hereof are General Terms and Conditions of this
Contract which General Terms and Conditions constitute a part of this Contract
and the terms and provisions hereof to the same extent as if written in full in
the body hereof.
(Signatures on following page)
IN WITNESS WHEREOF, the parties hereto have executed this Contract in
multiple counterparts, each of which shall be deemed an original but all of
which constitute one and the same instrument as of the date first above
mentioned.
"SELLER"
PENN OCTANE CORPORATION
By: /s/ XXXXXX X. XXXXXXX
---------------------------------------
Xxxxxx X. Xxxxxxx, Chief Executive
Officer
"BUYER"
RIO VISTA OPERATING PARTNERSHIP L.P.
By: RIO VISTA OPERATING GP LLC,
Its General Partner
By: /s/ XXXXXXX XXXXX, JR.
------------------------------
Xxxxxxx Xxxxx, Jr.,
President
EXHIBIT A
GENERAL TERMS AND CONDITIONS
ARTICLE I.
DEFINITIONS
1.1 For the purpose of this Contract, the following terms shall have the
meanings ascribed thereto unless their use in context is specifically to the
contrary:
(a) Day - That period of time consisting of twenty-four (24) consecutive
hours beginning at 7:00 a.m. Central Time.
(b) COGS - is the average cost to Seller per Gallon of LPG on a monthly
basis of all LPG supplies obtained by Seller, including the base cost per Gallon
of LPG, costs to mix the product, premiums/discounts paid to suppliers for LPGs,
mercaptain, testing and inspection costs.
(c) Contributed Assets - shall have the meaning set forth in that
certain Contribution, Conveyance and Assumption Agreement dated September 16,
2004 between Seller and Buyer.
(d) ECCPL - the twelve inch pipeline to which the Seller has access and
which connects ExxonMobil Corporation's Xxxxx valve station in Nueces County,
Texas to the inlet of the King Ranch Gas Plant.
(e) Gallon - 231 cubic inches or 0.133681 cubic feet of liquid at sixty
(60) degrees Fahrenheit and at the equilibrium vapor pressure of the liquid.
(f) Margin Allocation Amount - is the product of (i) the quotient of (a)
the difference of Revenues minus COGS divided by (b) the Total LPG Gallons,
multiplied by (ii) the quotient of (c) Penn Costs divided by (d) Total Costs.
(g) Month - A chart accounting month commencing at 7:00 a.m. on the
first day of the chart accounting month and ending at 7:00 a.m. on the first day
of the following chart accounting month.
(h) OPIS - the Oil Price Information Service.
(i) Penn Costs - All costs of Seller on a per Gallon of LPG basis
associated with the ownership or lease and operation of assets related to
bringing LPG from suppliers to the Delivery Point. These costs principally
relate to all variable charges for use of the ECCPL (including minimum thruput
charges), the Seadrift Pipeline (including minimum fixed rental charges),
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minimum Markham storage reservation fees, utilities, trucking costs, insurance
costs and depreciation. Penn Costs shall also include all indirect selling,
general and administrative costs (excluding amounts paid by Buyer). In
determining Penn Costs, only cost items paid in cash or to be paid in cash plus
depreciation and amortization excluding interest and income taxes, gains/losses
on disposal of assets shall be included.
(j) Point of Delivery and Delivery Point - the point of delivery as
described in Section 5.1 of the Contract.
(k) Purchase Price - is the sum of the Margin Allocation Amount and the
Product Price Allocation.
(l) Product Price Allocation - the average monthly per Gallon price of
LPG in accordance with Buyer specifications (generally 90% propane and 10%
butane) based on the price quoted for the month average of Mont Belvieu non-tet
propane per OPIS and the month average price for Mont Belvieu non-tet normal
butane per OPIS.
(m) Revenues - Total proceeds per Gallon of LPG to Buyer from the sale
of LPG supplied by Seller.
(n) Rio Vista Costs - All costs to Buyer on a per Gallon of LPG basis
associated with ownership or lease and operation of assets employed by Buyer to
bring LPG supplied by Seller from the Delivery Point to Buyer's customers. These
costs principally relate to the costs of operating the Brownsville terminal
facility, the US-Mexico pipelines and the Matamoros terminal facility and any
other asset brought on-line in the future which is put into operation for the
purpose of enhancing or providing sales of LPG to customers from LPG supplies
provided by Seller. Rio Vista Costs include payroll costs, rent, insurance,
utilities, repairs and maintenance and depreciation. Rio Vista Costs shall also
include all indirect selling, general and administrative costs (including costs
allocated from Seller, including costs incurred as a result of the creation of
Rio Vista Energy Partners L.P. as a publicly traded limited partnership). In
determining Rio Vista Costs, only costs items paid in cash or to be paid in cash
plus depreciation and amortization excluding interest and income taxes,
gains/losses on disposal of assets shall be included.
(o) Seadrift Pipeline - an approximately 132 mile pipeline which is
leased by Seller from the Seadrift Corporation and connects ExxonMobil
Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La
Xxxxxx Gas Plant in Xxx Xxxxx County, Texas to Buyer's Brownsville, Texas
terminal facility.
(p) Total Costs - The sum of the Penn Costs and the Rio Vista Costs
calculated on a monthly basis.
(q) Total LPG Gallons - is the total number of Gallons of LPG sold by
Buyer from supplies of LPG provided by Seller in any one month calculation
period.
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ARTICLE II.
QUALITY
Seller agrees that the LPG delivered hereunder shall be of merchantable
quality meeting the pressure and quality specifications of customers of Buyer.
Buyer shall not be obligated to purchase any LPG which fails to meet the
foregoing contract quality specifications. If LPG does not meet such
specifications and Buyer desires not to purchase LPG, Seller will be given a 15
day written notice of such intent. Except as hereinafter expressly provided,
Buyer shall be obligated to purchase all LPG tendered by Seller hereunder,
whether or not such LPG meets the quality specifications of any particular third
party purchaser or transporter, so long as such LPG meets the foregoing contract
quality specifications. Notwithstanding the foregoing, in the event (a) LPG
delivered by Seller to Buyer hereunder is unmarketable and, such LPG, when
blended together with LPG from any other sources available to Buyer that exceeds
the quality of Seller's LPG, for purposes of improving the overall quality of
Seller's LPG, is still unmarketable, and (b) Buyer reasonably demonstrates to
Seller's satisfaction that Buyer has made reasonable efforts to market the LPG
but has been unable to market the LPG due specifically to the quality of
Seller's LPG, then Buyer shall be relieved from its obligation to purchase and
take the portion of Seller's LPG which is unmarketable but only for the period
of time such LPG remains unmarketable. In the event that such LPG remains
unmarketable for a period of ninety (90) days, Seller's obligation to sell and
deliver to Buyer and Buyer's obligation to purchase and receive hereunder the
portion of Seller's LPG that is unmarketable shall cease and Seller shall be
entitled to dispose of such LPG to any third party or parties free and clear of
any claim by Buyer hereunder.
ARTICLE III.
MEASUREMENT
3.1 The unit of volume for purposes of measurement of LPG delivered
hereunder shall be one (1) Gallon. All fundamental constants, observations,
records and procedures involved in the determining and/or verifying of the
quality and other characteristics of LPG delivered hereunder shall, unless
otherwise specified herein, be in accordance with the standards and methods
prescribed in Gas Measurement Committee Report No. 3, dated April, 1955, of the
American Gas Association as now and from time to time amended.
3.2 The temperature of the LPG flowing through the meter or meters shall
be assumed to be sixty (60) degrees Fahrenheit, but may be determined by
continuous use of a recording thermometer installed by Seller (if deemed
necessary by Buyer and at Buyer's expense) so that it will properly record the
temperature of the LPG flowing through the meter or meters. The arithmetical
average of the temperatures recorded while LPG is passing through the meter or
meters in each chart period shall be used in computing measurements for that
chart period.
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3.3 The specific gravity of the LPG flowing through the meter or meters
shall be assumed to be .600; however, at Buyer's option and expense, the
specific gravity may be determined by use of a sampling device, connected so as
to collect a representative sample of the LPG delivered hereunder. The specific
gravity of the LPG sample will be determined by calculation from a fractional
analysis obtained with a chromatograph. The specific gravity will be calculated
from the fractional analysis using data in the most up-to-date table, "Physical
Constants of Paraffin Hydrocarbons," published by the Natural LPG Processors
Association. The specific gravity so determined will be used in calculating LPG
deliveries for the Month during which the sample is collected.
3.4 The reading, calibrating and adjustment of such equipment and
instruments on which quantities of LPG delivered hereunder are determined and
the changing of charts shall be done by employees, agents or representatives of
Buyerr. Upon request of Seller, Buyer shall submit to Seller records and charts
from such equipment, subject to return by Seller within twenty (20) days after
receipt thereof. The charts and records shall be kept on file for a period of
three (3) years for the mutual use of the parties hereto.
3.5 At least once each year Buyer, or its affiliates, shall test and
calibrate the meter and instruments or cause the same to be tested and
calibrated consistent with prior practices. Buyer shall give Seller notice of
the time of all tests sufficiently in advance of holding same so that Seller may
conveniently have Seller's representative present; however, if Seller's
representative is not present, Buyer or a third party acting for Buyer may
proceed with the test.
3.6 If the metering equipment in the aggregate is found to be inaccurate
by two percent (2%) or more, registrations thereof and any payments based upon
such registrations shall be corrected at the rate of such inaccuracy for any
period which is definitely known or agreed upon, then for a period extending
back one-half (1/2) of the time elapsed since the last test not exceeding,
however, fifteen (15) days. Following any test, any metering equipment found to
be inaccurate to any degree shall be adjusted immediately to record accurately.
3.7 If for any reason any meter, scale or other system of measurement is
out of service or out of repair so that the quantity of LPG received and/or sold
by Buyercannot be ascertained or computed from the reading thereof, the quantity
of LPG so received and/or sold during the period the system of measurement is
out of repair shall be estimated and agreed upon by the parties hereto upon the
basis of the best available data, using the first of the following methods which
is feasible:
(a) by using the registration of any check measuring equipment of
Buyer if installed and accurately registering;
(b) by correcting the error if the percentage or amount of error
is ascertainable by calibration, test or mathematical calculation;
(c) by estimating the quantity of purchases during preceding
periods under similar conditions when the meter was registering accurately.
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3.8 For the purpose of measurement and meter calibration, the
atmospheric pressure shall be assumed to be constant at fourteen and
seven-tenths (14.7) psia.
3.9 The measurement hereunder shall be corrected for deviation from
Xxxxx'x law at the pressure and temperature under which LPG is delivered
hereunder.
3.10 It is agreed that the value of the EXPANSION FACTOR, XXXXXXXX NUMBER
FACTOR, SUPERCOMPRESSABILITY FACTOR and MANOMETER FACTOR (where Mercury type
orifice meters are used) shall be actual values.
ARTICLE IV.
BILLING AND PAYMENT
Buyer shall render to Seller on or before the tenth day of each month a
statement of the quantity of LPG (in terms of Gallons) purchased by Buyer from
Seller during the preceding Month or for which payment is due, and the amount
payable. Buyer shall make payment to Seller for LPG received and/or sold during
the preceding Month upon Seller's receipt of the proceeds from the sales of such
LPG. Such payments shall be made by wire transfer of immediately available funds
to the bank account of Seller specified by Seller to Buyer from time to time
pursuant to Article VII of the Contract. Accounting shall be by Buyer, and
xxxxxxxx for payment shall be accompanied by a statement showing such
calculations and adjustments, if any, as were used to arrive at the amount set
out.
ARTICLE V.
WARRANTY OF TITLE
Seller warrants title to all LPG delivered hereunder by Seller, that
Seller has the right to sell the same and that such LPG is free from liens
(other than liens in favor of RZB Finance LLC) and adverse claims of every kind.
Seller will pay all royalties, taxes and other sums due on production of the LPG
delivered hereunder. Seller further warrants that the LPG delivered hereunder is
free and clear of any prior contract or dedication to any third party that
limits or restricts the right of Seller to sell LPG to Buyer hereunder, or that
gives such third party a claim to either the proceeds paid or a claim that a
like quantity of LPG be tendered to such third party at a later date. Seller
will indemnify and save Buyer harmless against all loss, damage and expense of
every character on account of adverse claims to the LPG delivered by Seller or
of royalties, taxes, payments or other charges thereon applicable before or upon
delivery to Buyer. If Seller's title is questioned or involved in any legal
action, Buyer may withhold payment of sums due hereunder up to the amount of the
claim until title is freed from such question or such action is finally
determined, or until Seller furnishes either bond with surety or an escrow
arrangement satisfactory to Buyer and conditioned to save Buyer harmless.
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ARTICLE VI.
REGULATORY BODIES
This Contract shall be subject to all valid and applicable laws, rules and
regulations of any duly constituted governmental body having jurisdiction
herein. Buyer does not require any governmental authority or approval to enter
into this Contract or to accept the delivery of LPG from Seller hereunder. If at
any time there is a new law, rule or regulation, or changed interpretation of
any existing law, rule or regulation that requires Buyer to obtain any
governmental approval or authorization, Buyer will notify Seller of the
requirement and will furnish Seller with any application filed, the evidence to
support the application and of the order or authorization entered.
ARTICLE VII.
FORCE MAJEURE
In the event either party hereto is rendered unable, wholly or in part, by
force majeure, to carry out its obligations under this Contract, other than to
make payments due hereunder, then on such party's giving notice and reasonable
full particulars of such force majeure in writing or by telecopy to the other
party as soon as possible after the occurrence of the cause relied upon, the
obligations of the party giving notice, so far as they are affected by such
force majeure, shall be suspended during, but only during, the continuance of
any inability so caused. The term "force majeure," as used herein, shall mean
acts of God, strikes, lockouts, acts of the public enemy, wars, blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, hurricanes
or the threat thereof, fires, storms, floods, washouts, arrest and restraints of
rulers of people, civil disturbances, the freezing of xxxxx or lines of pipe,
requisitions, directives, diversions, embargoes, priorities, expropriations of
government or governmental authorities, legal or de facto, whether purporting to
act under some constitution, decree, law or otherwise, failure of pipelines,
facilities or lines of pipe provided such failure of pipelines, facilities or
lines of pipe is not reasonably within the control of the party claiming
suspension, the partial or entire failure of LPG xxxxx, and the inability to
acquire, or the delays in acquiring at reasonable cost and after the exercise of
reasonable diligence, such servitudes, right of way grants, permits, licenses,
approvals and authorizations by regulatory bodies, and/or such supplies and
materials (or permission from regulatory bodies to use supplies and materials on
hand), as may be necessary in order that obligations assumed hereunder may be
lawfully performed in the manner herein contemplated. Upon the occurrence of an
event constituting force majeure, the same shall, so far as possible, be
remedied with all reasonable dispatch. The settlement of strikes or other labor
difficulties shall be entirely within the discretion of the party having the
difficulty, and the above requirement that any force majeure shall be remedied
with all reasonable dispatch shall not require the settlement of strikes or
other labor difficulties by acceding to the demands of any opposing party
therein when such course is inadvisable in the discretion of the party having
the difficulty.
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ARTICLE VIII.
INDEMNITY
Buyer shall indemnify, defend and hold Seller harmless from and against
all loss, cost and expense, including court costs and attorney's fees, for any
claims, suits, judgments, demands, actions or liability growing out of the
operations conducted hereunder by Buyer or arising while the LPG is in Buyer's
exclusive control and possession. Likewise, Seller shall indemnify, defend and
hold Buyer harmless from and against any loss, cost and expense, including court
costs and attorney's fees, for any claims, suits, judgments, demands, actions or
liability growing out of Seller's operations of its xxxxx, leases, equipment,
pipelines and other facilities and appurtenances thereto or arising while the
LPG is in Seller's exclusive control and possession.
ARTICLE IX.
MISCELLANEOUS
9.1 Entirety - This Contract contains the entire agreement between the
parties and there are no oral promises, agreements or warranties affecting it.
9.2 Titles - The numbering and titling of particular provisions of this
Contract are for the purpose of facilitating administration and shall not be
construed as having any substantive effect on the terms of this Contract.
9.3 Waiver - Waiver of any breach or failure to enforce any of the terms
and conditions of this Contract at any time shall not in any way affect, limit
or waive either party's right thereafter to enforce and compel compliance with
every term and condition hereof.
9.4 Time of Essence - Time is of the essence in this Contract in all
respects.
9.5 Preparer - This Contract was prepared jointly by the parties hereto
and not by either party to the exclusion of the other.
9.6 Severability - In the event that any clause or provision in this
Contract shall, for any reason, be deemed illegal, invalid or unenforceable, the
remaining provisions and clauses shall not be affected, impaired or invalidated
and shall remain in full force and effect. In lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Contract a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
9.7 Governing Law - As to all matters of construction and
interpretation, this Contract shall be interpreted, construed and governed by
the laws of the State of Texas, excluding conflicts of law principles that might
require the application of the laws of another jurisdiction.
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9.8 Damages - Neither party shall be liable to the other for any
indirect, incidental, consequential or punitive damages which may occur, in
whole or in part, as a result of a party's performance or non-performance of any
of the terms and conditions of this Contract.
End of General Terms and Conditions
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