EXHIBIT 10.42
GAS PURCHASE CONTRACT
BETWEEN
PANDA-▇▇▇▇▇▇▇▇ CORPORATION
AND
NATURAL GAS CLEARINGHOUSE
APRIL 12, 1990
TABLE OF CONTENTS
PAGE NO.
ARTICLE I -DEFINITIONS 2
ARTICLE II -COMMITMENT, NOMINATIONS AND 7
PRODUCTION NOTICES
ARTICLE III -FACILITIES 9
ARTICLE IV -PRICE AND PAYMENT 9
ARTICLE V -WARRANTIES 14
ARTICLE VI -TAXES 15
ARTICLE VII -TERM OF CONTRACT 16
ARTICLE VIII -DELIVERY PRESSURE, QUALITY 18
METERING AND MEASUREMENT
ARTICLE IX -NOTICES 19
ARTICLE X -DEFAULT 21
ANTICLE XI -FORCE MAJEURE 22
ARTICLE XII -ARBITRATION 23
ARTICLE XIII -BUYERS CREDIT 25
ARTICLE XIV -INDEMNIFICATION 25
ARTICLE XV -REPRESENTATIONS & WARRANTIES 26
ARTICLE XIII -MISCELLANEOUS PROVISIONS 27
GAS PURCHASE CONTRACT
This GAS PURCHASE CONTRACT (the "Contract") is
made and entered into on this day of , 1990 by and
between PANDA-▇▇▇▇▇▇▇▇ CORPORATION, a Delaware
corporation, hereinafter referred to as "BUYER",and
NATURAL GAS CLEARINGHOUSE, a Colorado general
partnership, hereinafter referred to as "SELLER".
WITNESSETH
THAT WHEREAS, SELLER has supplies of
natural gas ("Gas") available for sale to BUYER
hereunder; and
WHEREAS, BUYER is engaged in the development
of a cogeneration power generating project in
Roanoke Rapids, North Carolina ("Facility")
which will require Gas to fuel its operation; and
WHEREAS, SELLER desires to deliver and sell to
BUYER and BUYER desires to receive and purchase
from SELLER the Gas which SELLER has available
under the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the
mutual covenants and agreements herein set
forth, the parties hereto have agreed and do
hereby contract as follows:
I.
DEFINITIONS
1.01 "Average Gas Index Price" shall mean
the average of the twelve (12) preceding months
Gas prices as quoted in the first Monthly
issue each Month of Inside FERC's Gas Market Report
in the table "Prices of Spot Gas Delivered to
Pipelines" in the row entitled Texas Gas
Transmission - Louisiana under the heading "Index
Price."
1.02 "British thermal unit" or "Btu" shall
mean the amount of heat required to raise the
temperature of one pound of pure water from
fifty-eight and five tenths (58.5) degrees
Fahrenheit to fifty-nine and five-tenths (59.5)
degrees Fahrenheit.
1.03 "Commencement Date" shall mean the
date on which the Facility becomes commercially
operational. BUYER shall notify SELLER of the
date that the Facility becomes commercially
operational promptly after such event occurs.
1.04 "Cubic Foot of Gas" shall mean the
volume of Gas which would occupy one cubic
foot of space when such Gas is at a
temperature of sixty (60) degrees Fahrenheit and a
pressure of 14.73 pounds per square inch absolute.
1.05 "Day" shall mean a period of twenty-four
(24) consecutive hours beginning and ending at eight
o'clock A.M. local time.
1.06 "Dekatherm" or "dt" shall be equivalent to
one MMBtu.
1.07 "Delivery Point" shall mean the point or
points set forth on Exhibit "A" attached hereto and
made a part hereof, as the same may be amended from
time to time hereunder.
1.08 "Facility" shall mean that certain
cogeneration electrical power generation project
under development by BUYER in Roanoke Rapids, North
Carolina.
1.09 "Financier" means (a) any individual or
entity lending money to BUYER for the construction
or term financing of the Facility, or the
establishment and/or maintenance of working capital
requirements, or the refinance or take-out of any
such loan; or, (b) any lessor under a single
investor or leveraged lease finance arrangement.
1.10 "Force Majeure" as employed herein and for
all purposes relating hereto shall mean any
situation or occurrence not reasonably within the
control of the party claiming suspension and which,
by the exercise of due diligence, such party is
unable to prevent or overcome, and shall include,
not by way of limitation, acts of God, strikes,
lockouts or other industrial disturbances, acts of
the public enemy, wars, blockades, insurrections,
riots, epidemics, landslides, lightning,
earthquakes, fires, hurricanes, crevasses,
floods, washouts, arrests and restraints of
governments and people, civil disturbances,
explosions, breakage or accident to machinery
including the Facility or lines of pipe, the
necessity for making repairs or alterations to
machinery including the Facility or lines of pipe,
freezing of pipe or ▇▇▇▇▇, inability of any party
hereto to obtain necessary materials, supplies or
permits due to existing or future rules,
regulations, orders, laws or proclamations of
governmental authorities (both Federal and
State), including both civil and military, and
any other causes whether of the kind herein
enumerated or otherwise, not within the control of
the party claiming suspension and which by the
exercise of due diligence such party is unable
to prevent or overcome. Inasmuch as the ability of
BUYER and SELLER to perform hereunder is dependent
upon the availability of gas transportation at
the Delivery Point, the failure, refusal or
inability of Transporter to receive and transport
Gas on BUYER's or SELLER's behalf at the Delivery
Point shall operate as an event of Force
Majeure hereunder. It is understood and agreed
that the settlement of strikes or lockouts
shall be entirely within the discretion of the
party having the difficulty, but shall not require
the settlement of strikes or lockouts by acceding
to the demands of the opposing party when such
course is inadvisable in the discretion of the
party having the difficulty.
1.11 "Gas" or "Natural Gas" shall mean gas in
its natural state as produced from an oil, gas or
gas condensate well as well as residue gas
resulting from gas processing, and which gas
complies with the quality specifications of the
interstate pipeline transporting such Gas on
behalf of BUYER (whether directly or
beneficially).
1.12 "Beating Value" shall mean the total
number of Dekatherms attributed to SELLER's Gas by
BUYER's Transporter for Gas received at the Delivery
Point each Month.
1.13 "Interest" shall mean the compensation for
the accrual of monetary obligations under this
Contract computed Monthly and prorated Daily, from
the time each such obligation becomes due and
payable, based on an annual interest rate equal to
the Prime Rate plus one (1) percent. For purposes
hereof, Prime Rate shall mean the rate of interest
from time to time publicly announced by The Chase
Manhattan Bank, N.A., at its principal office,
presently located at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its prime commercial
lending rate, determined as of the time such
obligation becomes due and payable, or the maximum
non-usurious rate of interest allowed by the laws of
the State in which title to the Gas passes from
SELLER to BUYER, whichever is less.
1.14 "Maximum Daily Quantity" shall mean 3,500 dt
per Day.
1.15 "Minimum Take" shall mean 90,000 dt per
Month.
1.16 "MMBtu" shall denote one million
(1,000,000) British thermal units.
1.17 "Month" shall mean the period beginning at
eight o'clock A.M. on the first Day of a calendar
month and ending at eight o'clock A.M. on the first
Day of the next succeeding calendar month.
1.18 "Receipt Point" shall mean the
point of interconnection between BUYER's pipeline
and the pipeline facilities of TRANSCO and
Columbia Gas Transmission Corporation near Pleasant
Hill, Northampton County, North Carolina, or such
other point as the parties may mutually agree upon.
1.19 "TRANSCO" shall mean Transcontinental Gas
Pipe Line Corporation.
1.20 "Transporter" shall mean the
interstate pipeline company, whether one or more,
receiving Gas tendered by SELLER for BUYER's
account at the Delivery Point for further delivery
at BUYER's direction.
1.21 "Year" shall mean a contract year
(rather than a calendar year unless the
context clearly contemplated a calendar year)
which shall mean a period of three hundred sixty-
five (365) consecutive Days, the first such
contract year beginning at eight o'clock A.M. on
October 1, 1990 hereunder; provided, however, that
any such year which contains a date of February 29
shall consist of three hundred sixty-six (366)
consecutive Days.
II.
COMMITMENT, NOMINATIONS AND
PRODUCTION NOTICES
2.01 Commitment. Subject to all the terms and
conditions of this Contract, SELLER agrees to
sell and deliver or cause to be delivered to
BUYER, at the Delivery Point such quantities of Gas
as BUYER may nominate from time to time each Month
up to the Maximum Daily Quantity.
2.02 Commitment. If this Contract is not
terminated in accordance with Article VII hereof,
then SELLER shall, on or before October 1, 1993
do either of the following at SELLER's option, and
subject to approval by Financier in its sole
discretion: (a) dedicate Gas reserves sufficient to
deliver the Maximum Daily Quantity of Gas to the
Delivery Point for the then remaining term of this
Contract; or, (b) provide financial information
to Financier on or before October 1, 1993 and
annually thereafter sufficient to assure
Financier of SELLER's continuing ability to
perform under this Contract. SELLER shall be
conclusively presumed to have met Financier's
financial condition tests provided herein from
time to time, if its net worth (calculated in
accordance with Generally Accepted Accounting
Principles) is at least equal to seventy (70%)
percent of its net worth at date of execution of
this Contract. If, during the continuance of this
Contract, SELLER's net worth is found to be less
than seventy (70%) percent of its value at date
of execution hereof, then Financier may notify
SELLER of such fact (but the failure to so notify
shall not waive Financier's rights with regard to
this Section 2.02) and said notice shall specify in
detail the basis for Financier's concerns about
SELLER's financial condition. SELLER shall have
ninety (90) Days in which to provide Financier with
assurances of its ability to perform under the
Contract satisfactory to Financier, or to
dedicate Gas reserves sufficient to deliver the
Maximum Daily Quantity of Gas to the Delivery
Point for the remaining term of the Contract.
2.03 Nomination. On or before ten (10) business
Days prior to the beginning of each Month, BUYER
shall notify SELLER of BUYER's anticipated Gas
requirements for such Month.
2.04 Production Notices. SELLER shall have
agents or employees available at all reasonable
times to receive from BUYER, BUYER's agents, or
Transporter dispatcher's advice and requests for
changes in the rates of delivery of Gas hereunder
as required from time to time so as to prevent
BUYER's becoming liable for any penalties to
Transporter. SELLER shall deliver Gas to BUYER at
the Delivery Point at consistent rates during each
Day and during each Month and in accordance with
BUYER's or Transporter's advices.
III.
FACILITIES
3.01 SELLER's Facilities. SELLER shall, if
necessary, and at its expense, provide the
metering and interconnection facilities
necessary to accomplish delivery of the Gas at the
Delivery Point, such that Gas will be capable of
flowing on the Commencement Date.
IV.
PRICE AND PAYMENT
4.01 Gas Price-for Year 1. Subject to the
remaining terms and conditions of this Contract,
the price payable for all Gas received at the
Delivery Point by BUYER commencing October 1, 1990,
up to and including the Maximum Daily Quantity,
shall be equal to $2.147 per dt.
4.02 Gas Price for Subsequent Years.
Beginning on October 1, 1991 and on October 1 of
each Year thereafter for the term hereof, the price
payable to SELLER for quantities of Gas effective
for the next ensuing Year shall be redetermined
and shall be equal to the Average Gas Index Price
per dekatherm for the prior Year plus twenty-four
and seven-tenths cents ($0.247).
4.03 Transportation Charges. SELLER shall,
upon BUYER's request or requests from time to
time, transport the Gas to the Receipt Point
utilizing the lowest priced transportation
available from various pipelines SELLER utilizes
to deliver the Gas to the said Receipt Point.
If BUYER requests deliveries to the Receipt Point,
then BUYER and SELLER shall enter into a
mutually acceptable agreement naming SELLER as
agent under BUYER's firm or interruptible
transportation agreements. SELLER shall invoice
BUYER for all transportation costs incurred by it
in transporting the Gas from the Delivery Point to
the Receipt Point at the same time as it invoices
BUYER for Gas purchases and BUYER shall pay
therefor at the same time that it pays for said
Gas purchases.
4.04 Nomination Penalty. Should BUYER, for
any reason other than Force Majeure or a plant
turnaround initiated by BUYER's host, The ▇▇▇▇
Company, fail to nominate and take during any Month
at least the Minimum Take, then BUYER shall pay
SELLER a penalty of $.40/dt for each dekatherm
less than the Minimum Take nominated and taken by
BUYER during such Month. This penalty shall not
apply until BUYER's firm transportation agreement
becomes effective and the transportation
services therein contracted are available.
4.05 Penalties for Over/Under Tender of
Gas. SELLER shall be responsible for any
scheduling, balancing or other penalties imposed by
Transporter which are caused by SELLER's delivery of
Gas to the Delivery Point during a given Month
outside of the limits established from time to
time by BUYER or Transporter. SELLER shall
reimburse BUYER for any penalty including
interest imposed upon BUYER by Transporter and
actually paid by BUYER.
4.06 Payment for Gas. On or before the tenth
(lOth) Day of the Month following the Month in
which the Gas was received, SELLER shall furnish
a statement to BUYER showing the number of
dekatherms that Transporter received from SELLER at
the Delivery Point for such Month accompanied by
SELLER's invoice for all sums due SELLER from
BUYER therefor. BUYER shall wire transfer
payment for such Gas according to SELLER's
instructions, within ten (10) Days after receipt
of SELLER's statement and invoice or the twentieth
(20th) Day of the Month in which the said
statement and invoice were received, whichever is
later, except that BUYER may withhold payment for
any Gas subject to a bona fide dispute, or if
BUYER has been put on notice that title to Gas
delivered or the right to receive payment therefor
is subject to a third party claim. BUYER agrees
to pay SELLER any undisputed amounts each Month as
required in this Article IV. Should BUYER fail to
pay the full amount due SELLER when the same is due
as herein provided, Interest on the unpaid balance
shall accrue from the date such payment or payments
was/were due until the same is/are paid. If such
failure to pay continues for thirty (30) Days beyond
the due date, then, subject to notification of
BUYER's Financiers (as hereinafter required),
SELLER may suspend deliveries of Gas hereunder,
but the exercise of such right shall be in
addition to any and all other remedies available to
SELLER.
4.07 Refunds for Overpayment. In the event
that it is determined by any regulatory or
legislative body having jurisdiction over the
pricing or sale of Gas that BUYER has paid SELLER
a price in excess of the maximum lawful price to
which SELLER is entitled, then SELLER shall,
within fifteen (15) Days after receipt of BUYER's
invoice for the amount of such overpayment, remit
its check to BUYER in full refund for such
overpayment together with applicable penalties, if
any.
4.08 Price Reopener and Minimum Take
Revision. Either party hereto may, at least ninety
(90) Days but not more than one hundred twenty
(120) Days before each anniversary commencing
October 1, 1993, give notice to the other party
that it wishes to change the method or formula by
which the price of Gas is determined. The
parties shall thereafter promptly meet and shall
negotiate in good faith to agree on a modified
price determination method or formula. In addition,
BUYER may, at least ninety (90) Days but not more
than one hundred twenty (120) Days before each
anniversary commencing October 1, 1993, give
notice to SELLER that it wishes to revise the
amount of gas which constitutes Minimum Take due
to a change in BUYER's steam host's requirements.
If the parties are unable to reach an agreement by
thirty (30) Days before the commencement of the
next anniversary, then either party may refer
the disputed matter to arbitration pursuant to
Article XII hereof. The arbitrator's decision shall
be effective from the date either party invoked
arbitration. In the event that the index used to
compute the Average Gas Index Price is
discontinued or if at any time it becomes
substantially unresponsive to the actual price of
Gas available for purchase and use by the
Facility, then the parties shall mutually agree
upon a substitute index; provided that, if such an
agreement is not reached within thirty (30) Days
after commencement of negotiation to select a new
index, then the matter shall be submitted to
arbitration as provided in Article XII hereof. The
parties shall continue to perform under the
Contract during the period prior to the
arbitrator's decision under the pricing and
other conditions including the definition of
Minimum Take in effect immediately prior to
either party's invocation of arbitration. Within
thirty (30) Days following the decision of the
arbitration board, BUYER and SELLER shall adjust
their accounts by making payments one to the other
as may be required to give effect to the decision of
the arbitration board.
V.
WARRANTIES
5.01 Warranty of Title. Title to and
responsibility for all Gas contracted hereunder
shall pass at the Delivery Point unless BUYER
requests delivery of the Gas at the Receipt Point,
in which case title to and responsibility for
the Gas shall pass at the Receipt Point. SELLER
represents and warrants that the Gas subject hereto
is not now dedicated or committed to any purchase
other than SELLER herein, except that prior to
the commencement of deliveries, SELLER shall have
the right to sell its Gas in such manner as it
deems advisable. SELLER represents and warrants
that is has the authority to contract for and
bind all interest in the Gas subject hereto.
SELLER warrants that it has good and merchantable
and unencumbered title to all of the Gas
delivered hereunder. SELLER agrees to indemnify
BUYER and save BUYER harmless from all suits,
actions, debts, accounts, damages, costs, losses
and expenses, including attorney fees, arising
from or out of adverse claims of any and all
persons to said Gas.
5.02 Warranty of Delivery. If SELLER fails to
deliver any volumes of Gas nominated by BUYER up
to the Maximum Daily Quantity, SELLER will pay
damages equal to the difference between BUYER's
reasonably incurred cost for alternate fuel at the
Facility and the applicable price under this
Contract including the transportation charges that
would have been applicable had SELLER delivered the
nominated volumes of Gas and including for BUYER's
firm transportation demand charges, if any. The
cost of such alternate fuel, if gas, will be the
actual price paid by BUYER and, if No. 2 fuel oil,
will be the current market value of No. 2 fuel
oil delivered to the Facility. SELLER shall pay
BUYER's damages under this Section 5.02 within
fifteen (15) Days after receipt of BUYER's invoice
accompanied by a statement setting forth the
particulars on which the computation of damages
was based. BUYER shall exercise its best efforts to
obtain the lowest cost alternative supplies of
fuel under the circumstances and consistent with
reliable supplies available at the time of
SELLER's nonperformance. In no event shall
SELLER be liable for any consequential damage
suffered by BUYER.
VI.
TAXES
6.01 Taxes. All taxes, severance taxes, fees
and assessments imposed with respect to Gas or
the facilities through which it is handled at or
prior to delivery to BUYER at the Delivery Point
shall be borne by SELLER, and all other taxes, fees
and assessments imposed with respect to such Gas or
the facilities through which it is handled after
delivery to BUYER at the Delivery Point shall be
borne by BUYER. BUYER shall be responsible for
any sales, use, gross receipts, franchise or
other such tax imposed by the state, city, or county
in which the Gas is ultimately consumed and if any
such taxes are imposed on SELLER, BUYER agrees to
reimburse SELLER therefor promptly after receipt of
SELLER's invoice and supporting documentation
therefor.
VII.
TERM OF CONTRACT
7.01 Term. Subject to the other terms and
conditions hereof, this Contract shall be effective
as of the date first above written and shall
continue in full force and effect through November
30, 2005, and thereafter from Month to Month until
terminated by either Party upon not less than
thirty (30) Days' prior written notice to the other
party.
7.02 BUYER's Early Termination Privilege.
BUYER may wish to purchase Gas reserves and, if it
does so, then BUYER shall have the right at any
time, prior to October 1, 1992, to terminate this
Contract by tendering written notice to SELLER not
less than one hundred and twenty (120) Days prior to
the effective date of such termination. If BUYER
exercises such privilege, then this Contract shall
be ended and the rights and duties of the parties
hereto, excepting any claims arising prior to the
effective date of the early termination, shall cease
to exist.
7.03 Termination For Condition Subsequent.
BUYER shall have the right to terminate this
Agreement upon thirty (30) Days notice in the
event that BUYER's Power Sales Agreement with
Virginia Electric And Power Company is terminated
due to reasons such as, but not limited to: (i)
failure to cure a material event of default
within a reasonable time after notice; (ii)
failure to provide and maintain the performance
and security deposit; (iii) failure to indemnify
and hold Virginia Power harmless from any liability
due to the acts of Operator (BUYER herein); (iv)
attempts by Operator to tamper with the
Interconnection Facilities; (v) reduction in energy
sales in order to sell power to any other
entity; (vi) failure to comply with
representations and warranties or insurance
provisions; or (vii) appointment of a liquidator
or trustee of Operator or adjudication by a court
of competent jurisdiction that Operator is
insolvent or bankrupt. Further, BUYER shall have
the right to terminate this Agreement in the
event that BUYER's Cogeneration Energy Supply
Agreement with The ▇▇▇▇ Company ("▇▇▇▇") is
terminated for reasons such as, but not limited
to: (i) SUPPLIER's (BUYER herein) failure to supply
steam and chilled water in conformance with the
terms of the Contract; or (ii) appointment of a
liquidator or trustee of SUPPLIER or adjudication
by a court of competent jurisdiction that SUPPLIER
is insolvent or bankrupt.
VIII .
DELIVERY PRESSURE, QUALITY, METERING
AND MEASUREMENT
8.01 Delivery Pressure. The Gas shall be
delivered by SELLER at the Delivery Point at
pressures sufficient to enable Transporter to
receive the Gas at flow rates consistent with
SELLER's Gas quantity obligations hereunder.
SELLER shall not be obligated to install
compression to effect deliveries hereunder.
8.02 Quality. All Gas delivered to the
Delivery Point shall be of standard pipeline
quality, including heating value and pressure
suitable for acceptance by BUYER and Transporter.
SELLER shall be responsible for such
suitability as to any Gas received at the
Delivery Points.
8.03 Metering and Measurement. The Gas
received at the Delivery Point will be metered
and measured by Transporter. The volume and
heating value of the Gas delivered hereunder shall
be determined by Transporter in accordance with
its established practices and procedures and all
payments hereunder shall be based thereon.
8.04 Corrections. BUYER will invoice or
credit SELLER with SELLER's proportionate part of
any corrected volumes for which BUYER is notified by
BUYER's Transporter promptly upon receipt of such
notification. Any payments not questioned within
two (2) Years shall be considered conclusively
correct as rendered.
IX
NOTICES
9.01 Notices. Until BUYER is otherwise
notified in writing by SELLER, notices to SELLER
shall be addressed to SELLER at the address set
forth below or at such other address as may
hereafter be named:
Natural Gas Clearinghouse
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Until SELLER is otherwise notified in writing
by BUYER, notices to BUYER shall be addressed to
BUYER at the address set forth below or at such
other address as may hereafter be named:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice
President Panda Energy
Corporation ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
9.02 Style of Notice. All notices are
required to be given in writing and shall be
deemed received when actually received by the
party being notified. All notices to commence,
suspend deliveries or terminate this Contract,
declare events of Force Majeure, redetermine the
price mechanism, or terminate any portion of this
Contract shall be given by telegram or telecopier
transmittal provided that such notice is
confirmed the same Day by certified mail,
postage prepaid to the last known mailing address of
the party being notified.
9.03 Notices to Financier. BUYER shall
provide SELLER in writing with the name and address
of each Financier on a current basis. For so long
as BUYER shall have outstanding and unpaid
any financing liabilities, SELLER agrees to
promptly furnish to all Financiers, then known to
SELLER, a copy of any notice of default, breach,
failure to pay ▇▇▇▇▇▇▇▇, or notice of suspension
of deliveries or termination given to BUYER.
Notwithstanding anything to the contrary herein,
SELLER shall neither suspend its performance under
nor terminate this Contract prior to the expiration
of sixty (60) Days written notice to Financier of
SELLER's intent to suspend or terminate this
Contract, as the case may be and accompanied by, the
reasons therefor. SELLER shall not suspend
performance or terminate this Agreement if, after
said notice thereof and prior to any effective
date of suspension or termination, as the case
may be, Financier or BUYER has either: (a) caused
the condition precipitating the notice of
suspension or termination to be cured; or (b)
Financier has assumed all obligations of BUYER under
this Contract.
9.04 Change General Partner. SELLER shall
make a reasonable effort to notify BUYER in
writing of a change in the number and/or identity
of its general partners during the continuance of
this Agreement. BUYER shall have the right in its
sole discretion, for six (6) Months following
receipt of such notice, to terminate this
Agreement upon thirty (30) Days written notice to
SELLER.
X
DEFAULT
10.01 Default. If any party hereto shall fail
to perform any of the material covenants or
obligations imposed upon it under and by virtue
of this Contract, then unless such failure to
perform is due to an event of Force Majeure as
provided in Article XI below, the non-defaulting
party may at its option, and in addition to any
other remedies available to such party, elect to
terminate this Contract by giving written notice to
the party in default stating specifically the
cause or causes sufficiently material for
terminating this Contract and declaring it to be
the intention of the party giving the notice to
terminate same; whereupon the party in default
shall have sixty (60) Days after receipt of the
aforesaid notice in which to remedy or remove the
cause or causes stated in the notice for
terminating this Contract, and if within said period
of sixty (60) Days the party in default does so
remedy or remove said cause or causes and fully
indemnify the party not in default for any and
all consequences of such breach, then such notice
shall be withdrawn and this Contract shall continue
in full force and effect. In case the party in
default does not so remedy or remove the cause or
causes and indemnify the party giving the notice in
any and all consequences of such breach, within
said period of sixty (60) Days, then at the
option of the non-defaulting party, this Contract
shall become null and void from and after the
expiration of said period.
10.02 Waiver of Default. No waiver by either
party of one or more defaults by any other party
in the performance of any of the provisions of
this Contract shall operate or be construed as a
waiver of any other or further default of defaults,
whether of a like or of a different character.
XI.
FORCE MAJEURE
11.01 Force Maieure. In the event of
either party hereto being rendered unable, wholly
or in part, by Force Majeure to carry out its
obligations hereunder, it is agreed that on such
party's giving notice and full particulars of such
Force Majeure in writing or by telegraph to the
other party as soon as practicable after the
occurrence of the cause relied on, then the
obligations of the party giving such notice, so
far as they are affected by such Force Majeure,
shall be suspended during the continuance of any
inability so caused but for no longer period, and
such cause shall as far as possible be remedied
with all reasonable dispatch. The occurrence of a
cause of Force Majeure shall not excuse the
payment of money due and owing as of the date of
the event of Force Majoure.
XII
ARBITRATION
12.01 Arbitration. Any dispute arising between
SELLER and BUYER under this Contract relative to
Section 4.08 shall be determined by a board of
three (3) arbitrators to be selected for each such
dispute so arising as follows: Either SELLER or
BUYER may, at the time such board of arbitration
is desired by such party, notify the other party of
the name of an arbitrator. Such other party shall,
within ten (10) days thereafter, select an
arbitrator and notify the party desiring
arbitration of the name of such arbitrator. If such
other party shall fail to name a second
arbitrator within ten (10) days, the party who
first served the notice may, on reasonable notice
to the other party, apply to the person who is
then Chief Federal Judge of the Federal Judicial
District in which the Delivery Point is located
for the appointment of such second arbitrator for
and on behalf of the other party, and in such case
the arbitrator appointed by the Judge shall act as
if named by the other party. The two (2) arbitrators
chosen as above provided shall, within (10) days
after the appointment of the second arbitrator,
choose the third arbitrator. In the event of their
failure to do so within said (10) days, either of
the parties hereby may in like manner, on reasonable
notice to the other party, apply to such Chief
Federal Judge for the appointment of a third
arbitrator and in such case the arbitrator appointed
by the Chief Federal Judge shall act as the third
arbitrator. The arbitrators selected to act
hereunder shall be qualified by education,
experience, and training to pass upon the particular
question in dispute. The board so constituted shall
fix a reasonable time place for the hearing, at
which time each of the parties hereto may submit
such evidence as it may see fit. Such board shall
have jurisdiction solely to determine the issue in
controversy. The action of a majority of the members
of such board shall govern and their decisions in
writing shall be final and binding on the parties
hereto. Each party shall pay the expense of the
arbitrator selected by or for it and all other costs
of the arbitration shall be equally divided between
the parties hereto. The arbitration shall be
conducted under the Commercial Arbitration Rules of
the American Arbitration Association and the
arbitration hearing shall be conducted in Dallas,
Texas. The arbitrators shall, in their deliberations
as regards pricing, employ the following criteria:
(a) the location of the gas; (b) the term for which
the price is to apply; (c) the quantity of reserves
attributable thereto; (d) the average daily takes
of gas, (c) the quality of the gas; (f) the terms
and conditions of delivery; (g) BUYER's
alternative fuel costs and fuel sources; and
(h) applicable transmission and distribution rates
to deliver the gas to BUYER's Facility.
XIII.
BUYER'S CREDIT
13.01 Credit Arrangements. SELLER shall have
the right to request that BUYER make credit
arrangements reasonably satisfactory to SELLER at
any time during the term of this Agreement in
order to secure SELLER for payment of Gas
delivered hereunder for up to three (3) Months'
value of Gas, based on the Minimum Take and the
price in effect for the then current Year.
SELLER shall have the right to suspend
deliveries hereunder until such time as BUYER
provides said security should BUYER fail to make
the said credit arrangements prior to the later
of: (a) the expiration of thirty (30) Days from
BUYER's receipt of SELLER's request for said
security; or, (b) October 1, 1990.
ARTICLE XIV.
INDEMNIFICATION
14.01 Indemnification. Each party
("Indemnitor") shall indemnify, defend and hold
harmless the other party ("Indemnitee"), and their
officers, directors, employees, heirs, successors
and administrators from and against any and all
claims, demands, suits, actions, liabilities,
losses, damages, judgments, and/or legal or
other expenses (collectively "Claims") which may
arise from or in connection with the
performance or non-performance of their
obligations hereunder. If a claim is asserted
or action brought against Indemnitee as to
which it believes it is entitled to
indemnification under this Article, Indemnitee
shall promptly notify Indemnitor in writing of
such claim or action. Prompt notice as
contemplated in the preceding sentence shall mean
such notice as would be required to enable
Indemnitor to assert and prosecute appropriate
defenses relative co such claim or such action in a
timely fashion. If Indemnitee fails to give
Indemnitor prompt notice of any claim or action
as provided in this Section, Indemnitor shall
have no obligation to indemnify pursuant to this
Article. Upon receipt of such notice request for
indemnification, Indemnitor shall promptly make a
determination of whether it is required to
indemnify and shall promptly notify Indemnitee in
writing of that determination.
ARTICLE XV.
REPRESENTATIONS AND WARRANTIES
15.01 SELLER's Representations and
Warranties. SELLER represents and warrants the
following to BUYER: That is a general partnership
duly organized and existing under the laws of
the State of Colorado possessing the power to do
business in North Carolina as well as each state
in which it will purchase Gas for delivery hereunder;
that it is solvent and has not sought protection
from its creditors in Bankruptcy; that each of the
general partners is solvent and has not sought
protection from its creditors in Bankruptcy; that
it has the power to enter into this Agreement; that
all actions required to enter and to perform this
Agreement have been taken or will be taken when
required; that the parties executing this Agreement
on behalf of SELLER are duly authorized and empowered
to bind SELLER under the terms of this Agreement;
and that there are no impediments of any sort to
SELLER's entering into this Agreement.
15.02 BUYER's Representations and
Warranties. BUYER represents and warrants the
following to SELLER: That is a duly incorporated and
validly existing Delaware corporation qualified to
do business in the State of North Carolina;
that it is solvent and has not sought protection
from its creditors in Bankruptcy; that is has the
power to enter into this Agreement; that all
corporate action required to enter and to perform
this Agreement have been taken or will be taken
when required; that the parties executing this
Agreement on behalf of SELLER are duly
authorized and empowered to bind SELLER under the
terms of this Agreement; and that there are no
impediments of any sort to SELLER's entering into
this Agreement.
16.01 Assignment. This Contract shall be
binding upon and inure to the benefit of the
heirs, legal representatives, successors and
assigns of the respective parties hereto. SELLER
covenants and agrees that in the event it assigns
any interest in this Contract, then the party
receiving such interest shall expressly assume the
obligations of the party from whom the
interest was acquired hereunder. No assignment
or sale of any interest by SELLER shall be
effective for any purpose until BUYER has
approved such substitute SELLER, but approval
thereof shall not operate as a novation of this
Contract. No assignment or sale of interest shall
relieve the assigning party of its continuing
obligations hereunder, without the prior approval
of the other party hereto which will not be
unreasonably withheld.
16.02 Severability. Any part of this
Contract which is found to be in violation of any
valid rule, regulations or law promulgated by a
properly authorized state or federal agency,
Congress, or State legislature shall be stricken
from this Contract and the remainder of the
Contract shall be construed without such part,
provided that the surviving provisions achieve the
purposes and intents of the parties.
16.03 Entire Contract. ThiS Contract
constitutes the entire agreement between the
parties and supersedes all previous contracts,
agreements and understandings both written and oral.
This Contract may not be amended except in writing
and executed by both parties hereto.
16.04 Multiple Originals. This Contract
may be executed in multiple originals, each of
which, when taken together, shall be construed as
a single complete Contract.
16.05 Memorandum of Contract. Upon request
of BUYER, SELLER will execute a Memorandum of
Contract which BUYER may record in the counties
or parishes in which SELLER,s production is located.
16.06 Applicable Law. This Agreement shall
be governed by and construed in accordance with
the laws of the State of Texas, excluding any
conflicts of laws principles that might require the
application of the laws of another jurisdiction,
(except to the extent otherwise required by
Federal laws).
16.07 Assignment for Security Purposes.
BUYER may assign, pledge and hypothecate this
Contract as additional security for certain loans
made or to be made to BUYER by Financier relative to
the development of the Facility, and SELLER hereby
grants its consent and agreement to such action,
provider that BUYER shall first obtain SELLER's
written consent, which shall not be unreasonably
withheld. In the event that Financier forecloses on
its secured interest, SELLER agrees that, absent a
material breach of any of the other terms
hereof, this Contract shall remain in force and
effect, and SELLER shall accept Financier's or
Financier's assignees substitute performance
hereunder for all purposes.
16.08 Joint Preparation. In interpreting
this Contract, it is acknowledged by BUYER and
SELLER that it was prepared jointly by the parties
and not by either party to the exclusion of the
other party and that in preparing this Contract;
each Party had access to advice of its own counsel.
16.09 No Partnership. It is not the purpose
of the parties hereto to create a partnership,
joint venture or association, or the
relationship of agency or employer-employee and
neither this Contract nor any of the other
dealings hereunder shall be construed or
considered as creating such relationship.
16.10 Further Assurances. The
parties hereto recognize that execution of
additional amendments, clarifications,
documentation, assignments, mortgages, pledges and
other evidences of security herein may be required
from time to time by Financier. BUYER and SELLER
agree to promptly execute each such instrument
requested by Financier from time to time and at
all times during the continuance of this Contract.
IN WITNESS HEREOF, this instrument is
executed in duplicate originals as of the date
first hereinabove written.
BUYER:
PANDA-▇▇▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Attest
▇▇▇▇ ▇▇▇▇▇▇▇
SELLER:
NATURAL GAS CLEARINGHOUSE
By:
Its: Senior Vice President
Attest
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇