TERM OF CONTRACT

THE ANTICIPATED EFFECTIVE DATE AND EXPIRATION DATE OF THE CONTRACT ARE
SHOWN ON THE FRONT OF THIS SOLICITATION. IF AWARD HAS NOT BEEN MADE BY
THE ANTICIPATED EFFECTIVE DATE, THEN THE CONTRACT SHALL BECOME
EFFECTIVE UPON THE DATE THE BID IS ACCEPTED AND CONTRACT AWARDED BY
THE STATE, AS INDICATED BY THE PURCHASING AGENT'S SIGNATURE ON THE
CONTRACT NOTICE OF AWARD (NOTE: THE CHANGE OF EFFECTIVE DATE MAY NOT
RESULT IN A CHANGE OF THE ANTICIPATED EXPIRATION DATE.)

RENEWAL OPTIONS: THIS CONTRACT MAY BE RENEWED UPON SATISFACTORY
COMPLETION OF THE INITIAL CONTRACT TERM. THE STATE RESERVES THE RIGHT
TO EXECUTE UP TO - 2 - OPTIONS TO RENEW THIS CONTRACT ANNUALLY UNDER
THE SAME TERMS AND CONDITIONS FOR A PERIOD NOT TO EXCEED 12 MONTHS
EACH BY THE STATE. IT IS MUTUALLY UNDERSTOOD AND AGREED THAT THE
STATE'S COMMITMENT IS LIMITED TO A BASE TERM CONTRACT, NOT TO EXCEED
TWELVE (12) MONTHS, WHICH IS SUBJECT TO RENEWAL ANNUALLY AT THE
STATE'S SOLE OPTION.

IT IS UNDERSTOOD AND AGREED THAT THE STATE RESERVES THE RIGHT TO
EXTEND THE TERM CONTRACT PERIOD RESULTING FROM THIS SOLICITATION AN
ADDITIONAL PERIOD OF TIME, NOT TO EXCEED 180 DAYS BEYOND THE NORMAL
EXPIRATION DATE OF SUCH CONTRACT, UPON MUTUAL WRITTEN AGREEMENT BY
BOTH PARTIES, UNDER THE SAME TERMS AND CONDITIONS. PROVIDED, HOWEVER,
IN NO EVENT SHALL THE MAXIMUM TERM OF A CONTRACT EXCEED A TOTAL OF
SIXTY (60) MONTHS.
DELIVERY TIME (DAYS)

ALL ITEMS MUST BE DELIVERED WITHIN APPROXIMATELY - 3 - DAYS AFTER
RECEIPT OF A PURCHASE ORDER.

MINIMUM ORDER (EXEMPTION)

INDIVIDUAL ORDERS FOR LESS THAN 500 GALLONS OF ANY TYPE OF FUEL
I.E. ULR, DIESEL #2 ARE EXEMPT FROM PURCHASE FROM THIS CONTRACT.
USER AGENCIES WILL PURCHASE BY APPLICABLE PURCHASING PROCEDURES.

FREIGHT F.O.B. STATE AND LOCAL GOVERNMENT AGENCIES

ALL QUOTATIONS SHALL BE F.O.B. DESTINATION. THE TERM F.O.B.
DESTINATION SHALL MEAN DELIVERED AND UNLOADED ONTO THE RECEIVING DOCK
OF ANY STATE AGENCY AND, WHEN APPLICABLE, ANY LOCAL GOVERNMENT AGENCY
OR AUTHORIZED CORPORATION WITHIN THE STATE OF TENNESSEE, WITH ALL
CHARGES FOR TRANSPORTATION AND UNLOADING PREPAID BY THE
VENDOR/CONTRACTOR.

FIXED BID PRICE FOR CONTRACT PERIOD (NO PRICE INCREASE ALLOWED)

BID PRICES MUST BE FIXED FOR THE TERM OF THE CONTRACT, EXCEPT THE
STATE SHALL BE ADVISED OF AND RECEIVE THE BENEFIT OF ANY PRICE
DECREASE IN EXCESS OF FIVE (5) PERCENT AUTOMATICALLY. THE
VENDOR/CONTRACTOR MUST PROVIDE WRITTEN PRICE REDUCTION INFORMATION
WITHIN TEN (10) DAYS OF ITS EFFECTIVE DATE.

PURCHASE ORDER RELEASE (SWC)

ORDERS FOR SERVICES OR SUPPLIES THAT ARE INCLUDED ON STATEWIDE
CONTRACTS SHALL BE PREPARED BY AGENCIES ON DEPARTMENTAL PURCHASE
ORDERS AND FORWARDED DIRECTLY TO THE VENDOR/CONTRACTOR. THESE PURCHASE
ORDERS, WHEN RECEIVED BY THE VENDOR/CONTRACTOR, SERVE AS AUTHORIZATION
FOR SHIPMENT. ITEMS FROM DIFFERENT CONTRACTS MAY BE COMBINED ON A
SINGLE PURCHASE ORDER TO THE SAME VENDOR/CONTRACTOR TO MEET MINIMUM
ORDER REQUIREMENTS. LOCAL GOVERNMENT AGENCIES OR AUTHORIZED
CORPORATIONS, WHERE APPLICABLE, WILL ISSUE THEIR PURCHASE ORDER
RELEASES DIRECTLY TO THE VENDOR/CONTRACTOR(S).

BILLING INSTRUCTIONS
THE CONTRACTOR SHALL INVOICE THE STATE ONLY AFTER COMPLETION OF THE
WORK DESCRIBED IN THE PURCHASE ORDER/CONTRACT, AND AS REQUIRED BELOW
PRIOR TO ANY PAYMENT.

THE CONTRACTOR SHALL SUBMIT AN INVOICE, WITH ALL NECESSARY SUPPORTING
DOCUMENTATION, TO: STATE AGENCY BILLING ADDRESS

SUCH INVOICE SHALL CLEARLY AND ACCURATELY DETAIL THE FOLLOWING
REQUIRED INFORMATION.

INVOICE/REFERENCE NUMBER; (ASSIGNED BY THE CONTRACTOR)
INVOICE DATE;
CONTRACT AND/OR PURCHASE ORDER NUMBER; (ASSIGNED BY THE STATE)
ACCOUNT NAME; PROCURING STATE AGENCY AND DIVISION NAME
ACCOUNT/CUSTOMER NUMBER; (UNIQUELY ASSIGNED BY THE CONTRACTOR TO
THE ABOVE-REFERENCED ACCOUNT NAME;
CONTRACTOR NAME;
CONTRACTOR FEDERAL EMPLOYER IDENTIFICATION NUMBER OR SOCIAL
SECURITY NUMBER; (AS REFERENCED IN CONTRACT)
CONTRACTOR CONTACT (NAME, PHONE, AND/OR FAX FOR THE INDIVIDUAL TO
CONTACT WITH BILLING QUESTIONS);
CONTRACTOR REMITTANCE ADDRESS;
DESCRIPTION OF DELIVERED ITEM OR SERVICE; AND
TOTAL AMOUNT DUE FOR DELIVERED ITEM OR SERVICE.

THE CONTRACTOR UNDERSTANDS AND AGREES THAT THE INVOICE SHALL;

INCLUDE ONLY CHARGES FOR SERVICE DESCRIBED IN CONTRACT OR PURCHASE
ORDER AND IN ACCORDANCE WITH PAYMENT TERMS AND CONDITIONS SET FORTH
IN CONTRACT OR PURCHASE ORDER;

NOT INCLUDE ANY FUTURE WORK BUT WILL ONLY BE SUBMITTED FOR
COMPLETED SERVICE; AND

NOT INCLUDE SALES TAX OR SHIPPING CHARGES (UNLESS OTHERWISE
STIPULATED IN THE CONTRACT OR PURCHASE ORDER).

THE CONTRACTOR AGREES THAT TIMEFRAME FOR PAYMENT (AND ANY DISCOUNTS)
BEGINS WHEN THE STATE IS IN RECEIPT OF A CORRECT INVOICE MEETING THE
MINIMUM REQUIREMENTS ABOVE.

PAYMENT

IT SHALL BE THE RESPONSIBILITY OF THE "BILL TO" AGENCY TO MAKE
PAYMENT. ANY QUESTIONS CONCERNING PAYMENT SHOULD BE ADDRESSED TO THE
"BILL TO" AGENCY LISTED IN THE TOP, RIGHT SIDE OF THE PURCHASE ORDER,
NOT THE PURCHASING DIVISION.

CANCELLATION

TERMINATION FOR CONVENIENCE: THE STATE MAY TERMINATE THIS CONTRACT
WITHOUT CAUSE. SAID TERMINATION SHALL NOT BE DEEMED A BREACH OF
CONTRACT BY THE STATE. THE STATE SHALL GIVE THE VENDOR/CONTRACTOR AT
LEAST NINETY (90) DAYS WRITTEN NOTICE BEFORE THE EFFECTIVE CANCELATION
DATE.
THE VENDOR/CONTRACTOR SHALL BE ENTITLED TO RECEIVE COMPENSATION FOR
GOODS SHIPPED OR SERVICES SATISFACTORILY COMPLETED AS OF THE
CANCELATION DATE, BUT IN NO EVENT SHALL THE STATE BE LIABLE TO THE
VENDOR/CONTRACTOR FOR COMPENSATION FOR ANY GOODS OR SERVICES WHICH
HAVE NOT BEEN RENDERED.
UPON SUCH TERMINATION, THE VENDOR/CONTRACTOR SHALL HAVE NO RIGHT TO
ANY ACTUAL GENERAL, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR ANY OTHER
CLAIMS WHATSOEVER OF ANY DESCRIPTION OR AMOUNT.

TERMINATION FOR CAUSE: IF THE VENDOR/CONTRACTOR FAILS TO FULFILL ITS
OBLIGATIONS UNDER THIS CONTRACT IN A TIMELY OR PROPER MANNER, OR IF
THE VENDOR/CONTRACTOR VIOLATES ANY TERMS OF THIS CONTRACT, THE STATE
SHALL HAVE THE RIGHT TO IMMEDIATELY TERMINATE THE CONTRACT UPON
WRITTEN NOTICE OF INTENT TO CANCEL. THE STATE SHALL HAVE THE RIGHT TO
WITHHOLD PAYMENT IN EXCESS OF FAIR COMPENSATION FOR COMPLETED
SERVICES. NOTWITHSTANDING THE ABOVE, THE CONTRACTOR SHALL NOT BE
RELIEVED OF LIABILITY TO THE STATE FOR DAMAGES SUSTAINED BY VIRTUE OF
ANY BREACH OF THIS CONTRACT BY THE CONTRACTOR.

AT THE END OF ANY FISCAL YEAR ANY CONTRACT MAY BE CANCELED BY THE
STATE WITHOUT NOTICE, IN THE EVENT THAT FUNDS TO SUPPORT THE CONTRACT
BECOME UNAVAILABLE.

THE VENDOR/CONTRACTOR WILL BE REQUIRED TO HONOR ALL PURCHASE ORDERS
THAT WERE PREPARED AND DATED PRIOR TO THE DATE OF THE TERMINATION, IF
RECEIVED BY THE VENDOR/CONTRACTOR WITHIN A PERIOD OF THIRTY (30) DAYS
FOLLOWING THE DATE OF TERMINATION.

A. PRODUCT SPECIFICATIONS: GASOLINE AND DIESEL

1. GASOLINE:
GASOLINE SUPPLIED UNDER THIS CONTRACT SHALL MEET OR EXCEED
REQUIREMENTS FOR VOLATILITY CLASS B, C AND D OF THE AMERICAN SOCIETY
FOR TESTING AND MATERIALS STANDARDS (ASTM) SPECIFICATION D-439-77 AND
ENVIRONMENTAL PROTECTION AGENCY STANDARDS. THE ANTIKNOCK INDEX
(RON + MON/2) SHALL BE NO LESS THAN THE VALUES SPECIFIED BELOW:

UNLEADED REGULAR GASOLINE - MINIMUM 87 OCTANE

UNLEADED PREMIUM GASOLINE - MINIMUM 91 OCTANE

NOTE: A SUFFICIENT AMOUNT OF DETERGENT SHALL BE ADDED TO "KEEP
CLEAN" MULTI-PORT FUEL INJECTED ENGINES.

2. DIESEL FUEL NO. 2-D (LOW SULPHUR)

DIESEL FUEL NO. 2-D SUPPLIED UNDER THIS CONTRACT SHALL MEET
THE REQUIREMENTS OF THE AMERICAN SOCIETY FOR TESTING AND MATERIALS
STANDARDS (ASTM) D-975-78 AND D-913-79, AND ENVIRONMENTAL PROTECTION
AGENCY STANDARDS.

3. TESTS:
DISTILLATION - METHOD D-86, DISTILLATION OF PETROLEUM PRODUCTS.

VAPOR LIQUID RATIO - METHOD D-2533, FOR VAPOR LIQUID RATIO OF GASOLINE

VAPOR PRESSURE - METHOD D-323, TEST FOR VAPOR PRESSURE OF
PETROLEUM PRODUCTS (REID METHOD), OR METHOD D-2551, TEST FOR
VAPOR PRESSURE OF PETROLEUM PRODUCTS (MICROMETHOD)

RESEARCH METHOD OCTANE NUMBER - METHOD D-2699, TEST FOR KNOCK
CHARACTERISTICS OF MOTOR FUELS BY RESEARCH METHOD, OR METHOD D-2885,
RESEARCH AND MOTOR METHOD OCTANE RATINGS USING ON-LINE ANALYZERS

MOTOR METHOD OCTANE NUMBER - METHOD D-2700, TEST FOR KNOCK
CHARACTERISTICS OF MOTOR AND AVIATION TYPE FUELS BY THE MOTOR
METHODS OR METHOD D-2885, RESEARCH AND MOTOR METHOD OCTANE
RATINGS USING ON-LINE ANALYZERS.

CORROSION - METHOD D-130, TEST FOR DETECTION OF COPPER CORROSION
FROM PETROLEUM PRODUCTS BY THE COPPER STRIP TARNISH TEST 3-H AT
122 DEGREES F (50 DEGREE C).

EXISTENT GUM - METHOD D-381, TEST FOR EXISTENT GUM IN FUELS BY
JET EVAPORATION.

SULFER - METHOD D-1266, TEST FOR SULFER IN PETROLEUM PRODUCTS
(LAMP METHOD) OR METHOD D-2622, TEST FOR SULFER IN PETROLEUM
PRODUCTS (X-RAY SPECTROGRAPHIC METHOD).

LEAD - METHOD D-2547, TEST FOR LEAD IN GASOLINE, VOLUMETRIC CHROMATE
METHOD OR METHOD D-2599, TEST FOR LEAD IN GASOLINE BY X-RAY SPECTRO -
METRY. FOR LEAD LEVELS BELOW 0.1 G/GAL. (0.03 G/LITRE) USE METHOD
D-3116, TEST FOR TRACE AMOUNTS OF LEAD ON GASOLINE.

OXIDATION STABILITY - METHOD D-525, TEST FOR OXIDATION STABILITY
OF GASOLINE INDUCTION PERIOD METHOD.

B. BIDDING CONDITIONS AND INSTRUCTIONS

1. SPECIAL DELIVERY/HANDLING
IT SHALL BE THE RESPONSIBILITY OF THE BIDDER TO FOLLOW-UP WITH THE
ORDERING AGENCY PURSUANT TO "SPECIAL DELIVERY HANDLING". AN EXAMPLE
OF SPECIAL DELIVERY/HANDLING WOULD BE THE PUMPING OF FUEL IN LIEU OF
GRAVITY UNLOADING. NOTE IN SPECIFICATIONS SECTION 3 C, SOME ABOVE
GROUND TANKS ARE IDENTIFIED.
ANY SPECIAL DELIVERY/HANDLING CHARGES THAT MAY BE INCURRED BY THE
BIDDER ARE TO BE INCORPORATED IN THE BIDDERS "MARK-UP" COST. THE
STATE DOES NOT PROVIDE FOR SEPARATE OR ADDITIONAL BILLING.

2. DELIVERY TICKETS
FOR PURPOSES OF VERIFICATION BY THE REQUESTING AGENCY AND AT NO
ADDITIONAL COST TO THE STATE, ALL DELIVERY VEHICLES ARE TO BE EQUIPPED
WITH A METERED PUMP OR SHALL HAVE PROPERLY CALIBRATED COMPARTMENTS
WITH THE CAPACITY CLEARLY MARKED ON EACH COMPARTMENT. IF A METERED
PUMP IS PROVIDED, A METERED DELIVERY TICKET SHALL ACCOMPANY DELIVERY.
IF NOT, DEPENDING ON QUANITY ORDERED, THE CALIBRATED COMPARTMENT SHALL
BE FILLED TO THE SECURED MARKERS IN EACH COMPARTMENT FOR VERIFICATION
BY THE AGENCY OF ACTUAL GALLONS RECEIVED,DELIVERIES TO BE NET GALLONS

3. COMBINED DELIVERIES
SHOULD DELIVERY OF OTHER FUELS BE MADE IN A SINGLE TRIP USING A
MULTI COMPARTMENT VEHICLE AND TOTAL COMBINED VOLUME IS 7000 GALLONS
OR ABOVE, THE STATE SHALL BE BILLED AT THE 7000 GALLON MARK-UP COST
FOR EACH PRODUCT.

4. INVOICE PRICING FOR FUEL
THE STATE IS TO BE BILLED FOR GALLONS DELIVERED AT "RACK PRICE", PLUS
MARK-UP OR MINUS DISCOUNT, FOR THE "RACK LOCATION" NOTED ON YOUR BID.
INVOICES ARE TO REFLECT "RACK PRICE" FOR DAY FUEL WAS DELIVERED.
PRICES FOR FUEL FOR THE (4) TENN LOCATIONS: KNOXVILLE, CHATTANOOGA,
NASHVILLE, MEMPHIS), ARE UPDATED WEEKDAYS BY 1:00PM CST AND SHALL BE
EFFECTIVE UNTIL 12:59 PM CST FOLLOWING DAY.

STATE OF TENN "RACK PRICING" IS AVAILABLE THROUGH THE STATE OF TENN.
PURCHASING DIVISION BY CALLING 615-741-4300

5. TAXES
FEDERAL EXCISE TAX CLAIMS WILL BE FILED AND PAID BY STATE AGENCIES
TO IRS FOR THE CURRENT CENTS/GALLON FEDERAL EXCISE TAX ON GASOLINE
PRODUCTS UNLESS NOTIFIED BY THE VENDOR OF EXEMPTION BY THE SUPPLIER.

THE STATE IS EXEMPT FROM STATE AND LOCAL SALES AND USE TAXES. THE
STATE IS EXEMPT FROM PAYMENT OF BOTH GASOLINE AND PRIVILEGE AND
SPECIAL TAX ON PETROLEUM PRODUCTS WHEN THE FOLLOWING CONDITIONS EXIST.

A. SHIPPED IN LOTS OF AT LEAST 500 GALLONS

B. STORED BY THE GOVERNMENTAL UNIT IN A STORAGE FACILITY EITHER OWNED
OR LEASED BY A GOVERNMENTAL UNIT.

C. USED EXCLUSIVELY FOR GOVT. PURPOSES IN EQUIPMENT EITHER OWNED OR
LEASED BY A GOVT. UNIT AND OPERATED BY GOVT. EMPLOYEES.

ALL APPLICABLE TAXES AND FEES SHALL BE SHOWN AS SEPARATE LINE ITEMS
ON THE VENDORS INVOICE TO THE AGENCY AND SHALL NOT BE INCLUDED IN
THE COST OF THE FUEL OR IN THE VENDORS MARK-UP.

"SAMPLE INVOICE"

PRODUCT GALLONS STATE COST/GAL. AMOUNT DUE
(RACK +/- MARK-UP)
DIESEL #2 2000 $ .7850 $ 1,373.75
UNLEADED REGULAR 5000 $ .8760 $ 4,380.00
FEDERAL EXCISE TAX 5000 $ .1840 $ 920.00
TOTAL DUE $ 6,673.75