EXHIBIT 10.11
GAS SALES AGREEMENT
(Irrigation)
between
K N MARKETING, L.P.
as "Seller"
and
ENERMART TRUST
as "Buyer"
Dated: March 1, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇
I N D E X
ARTICLE TITLE PAGE
I Definitions 1
II Quantity 2
III Delivery Points 3
IV Price and Taxes 3
V Term 4
VI Notices 4
VII Measuring Equipment and Testing 5
VIII Measurement Specifications 5
IX Quality 5
X Delivery Pressure 6
XI Billing, Payment and Audit 6
XII Notification of Curtailment 7
XIII Possession and Responsibility for Gas 7
XIV Title 8
XV Force Majeure 8
XVI Financial Responsibility 9
XVII Governmental Regulations 10
XVIII Entire Agreement 11
XIX Confidentiality 11
XX Successors and Assigns 12
XXI Maintenance of Facilities 12
XXII Indemnification 13
XXIII Third Party Transportation 13
XXIV Headings 13
XXV Waiver 13
XXVI Amendments 14
XXVII Remedies Upon Material Default 14
XXVIII Miscellaneous 15
Signatures 15
Exhibit "A" - Exemption Certificate A-1
GAS SALES AGREEMENT
(Irrigation)
THIS AGREEMENT, dated and effective this 1st day of March, 1996, (the
"Effective Date") by and between K N MARKETING, L.P., a Texas Limited
Partnership, hereinafter called "Seller", and ENERMART TRUST, a Pennsylvania
Business Trust, hereinafter called "Buyer";
W I T N E S S E T H
WHEREAS, Seller is the owner of a supply of firm natural gas from which
Seller will have available for sale certain volumes of natural gas; and
WHEREAS, Seller has made certain transportation arrangements with pipeline
companies which operate natural gas transmission systems ("Transporter(s)") ;
and
WHEREAS, Buyer desires to purchase volumes of firm natural gas to use as
fuel gas for its irrigation customers in accordance with the terms and
conditions of this Agreement; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1. "Buyer" means the Party who is purchasing and receiving gas
volumes under this Agreement.
Section 2. "Seller" means the Party who is selling gas volumes under this
Agreement.
Section 3. "Party" or "Parties" means Buyer and/or Seller hereunder,
acting by and through duly authorized representatives.
Section 4. "Day" means the period of twenty-four consecutive hours
commencing at 7:00 a.m. Central Time (CT) on one calendar day and ending at 7:00
a.m. CT on the following calendar day. The reference date for any day should be
the calendar date upon which such twenty-four (24) hour period began.
Section 5. "Month" means the period commencing at 7:00 a.m. CT on the
first day of a calendar month and ending at 7:00 a.m. CT on the first day of the
following calendar month.
Section 6. "Mcf" means the quantity of gas occupying a volume of one
thousand (1000) cubic feet at a temperature of sixty (60) degrees Fahrenheit and
an absolute pressure of fourteen and sixty-five hundredths pounds per square
inch (14.65 psia).
Section 7. "Btu" means the amount of heat required to raise the temperature
of one avoirdupois pound of pure water from fifty-eight and five tenths degrees
(58.5 degrees) Fahrenheit to fifty-nine and five tenths (59.5 degrees)
Fahrenheit at a constant pressure of fourteen and sixty-five hundredths (14.65)
pounds per square inch absolute ("psia").
Section 8. "MMBtu" means one million (1,000,000) Btu.
Section 9. "Operating Agreement" means the agreement between Energas
Company, and Westar Transmission Company dated December 1, 1996, covering
measurement equipment and testing, measurement specifications, pressures,
quality, maintenance of facilities, and other operational matters.
ARTICLE II
QUANTITY
Section 1.
A. During the period March 1, 1996 through December 31, 1998, Seller will
sell and deliver and Buyer will purchase and receive all of Buyer's requirements
from Seller hereunder to serve all of Buyer's irrigation fuel gas markets
existing as of December 31, 1995.
B. Beginning January 1, 1999 and continuing through the remaining term of
this Agreement, Buyer shall have the option to either (i) purchase from Seller
all or any portion of Buyer's irrigation fuel gas requirements, or (ii)
transport any such portion of Buyer's irrigation fuel gas requirements not
purchased from Seller hereunder, under either one of those certain Gas Service
Agreements between EnerMart Trust and KN Westex Gas Services Company dated
January 1, 1996 or between EnerMart Trust and Westar Transmission Company dated
January 1, 1996.
Section 2. It is expressly understood and agreed that all gas sold to
Buyer is to be used by Buyer solely for Buyer's
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irrigation fuel gas markets, and any other use of the gas ("Other Use Gas") by
Buyer will constitute a material breach of this Agreement, in which case,
without limiting any other remedies available to Seller, Seller may immediately
cease delivering Other Use Gas to Buyer at the Delivery Point(s).
ARTICLE III
DELIVERY POINT(S)
Section 1. The delivery of gas hereunder shall be subject to the
Operating Agreement and shall be at the outlet flange of Transporter(s)
facilities at all points of interconnection between Transporter(s) facilities
and Buyer where Buyer receives irrigation fuel gas from Seller as of December
31, 1995, or subsequently at any other mutually agreeable point(s) to be agreed
to in writing by the Parties ("Delivery Point(s)").
ARTICLE IV
PRICE AND TAXES
Section 1. For the period beginning March 1, 1996 through February 28,
1997, the price of each Mcf of gas purchased and sold hereunder, delivered to
Buyer at the Delivery Point(s), shall be $2.117.
Section 2. At least ninety (90) days prior to each of the periods of (i)
March 1, 1997 through February 28, 1998, and (ii) March 1, 1998 through December
31, 1998, the Parties shall meet and negotiate in good faith to establish a
price on an MMBtu basis for gas purchased and sold hereunder, taking into
consideration the type and level of services provided by Seller and the
prevailing market conditions. Such mutually agreed to price shall be effective
on the applicable March 1.
Section 3. Beginning January 1, 1999, and for the remaining term of this
Agreement, the price payable by Buyer to Seller may be renegotiated for all or
any portion of Buyer's irrigation fuel gas requirements. Any portion of Buyer's
irrigation fuel gas requirements not purchased from Seller hereunder will be
transported under either one of those certain Gas Service Agreements between the
EnerMart Trust and KN Westex
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Gas Services Company dated January 1, 1996 or Westar Transmission Company.
Section 4. In addition to the price to be paid for gas delivered
hereunder, Buyer agrees to reimburse Seller for gross receipts taxes, sales
taxes, and other similar taxes, which are lawfully imposed on Seller because of
the sale or delivery of gas to Buyer hereunder or the gas itself. Statements
for such tax reimbursement shall be rendered and paid as provided in accordance
with the billing and payment provisions of this Agreement. All taxes levied on
such gas after delivery and lawfully imposed on Buyer shall be paid by Buyer.
If Buyer claims an exemption from state sales taxes or desires to pay any
applicable sales taxes directly to the taxing authority, Buyer will execute the
"Exemption Certificate" attached hereto as Exhibit "A" or such other evidence of
exemption as may be required by Seller. Applicable rulings or orders of
governmental representatives in charge of the administration of any law or
ordinance increasing, decreasing, or creating any tax shall be binding and
conclusive upon Buyer and Seller until such time as the invalidity thereof has
been finally established by the decision of a court of competent jurisdiction.
Buyer shall be entitled to reimbursement from Seller to the extent of any
payments made by it to Seller for taxes pursuant to this Article which may
subsequently be refunded to Seller by the taxing authority. Buyer shall not be
obligated to reimburse Seller for any ad valorem taxes on properties or for
taxes which are based upon or measured by the natural gasoline or other
liquefied hydrocarbon content extracted from the gas before delivery to Buyer.
ARTICLE V
TERM
Section 1. This Agreement, regardless of when executed, is effective as
of the Effective Date, and shall continue thereafter, unless earlier terminated
pursuant to the provisions in other Sections of this Agreement, for a term
ending on December 31, 2001.
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ARTICLE VI
NOTICES
Section 1. Any notice or statement (other than notices to be given under
the Price and Taxes Article of this Agreement which shall be by certified mail,
return receipt requested) to be given hereunder, unless otherwise specified
herein, shall be in writing and shall be deemed delivered as of the postmarked
date when deposited in the United States mail, postage prepaid, and addressed to
the respective Party at the following addresses or at such other addresses as a
Party may designate to the other in writing:
SELLER:
Notices: K N Marketing, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Gas Sales & T&E
Administration
Wire Transfer: K N Marketing, L.P.
Norwest Banks Colorado, N.A.
Denver, Co
ABA# 102 000 076
A/C# ▇▇▇-▇▇▇▇-▇▇▇
BUYER:
Notices: ENERMART TRUST
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Intrastate Gas Supply
Statements: ENERMART TRUST
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Intrastate Gas Supply
ARTICLE VII
MEASURING EQUIPMENT AND TESTING
Section 1. Measuring equipment and testing shall be governed by the
Operating Agreement.
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ARTICLE VIII
MEASUREMENT SPECIFICATIONS
Section 1. Measurement specifications shall be governed by the Operating
Agreement.
ARTICLE IX
QUALITY
Section 1. Quality shall be governed by the Operating Agreement.
ARTICLE X
DELIVERY PRESSURE
Section 1. Delivery Pressure shall be governed by the Operating
Agreement.
ARTICLE XI
BILLING, PAYMENT AND AUDIT
Section 1. On or before the fifteenth (15th) day of each Month, Seller
shall render a statement to Buyer giving the total quantity of gas, expressed in
Mcf's or MMBtu's, as the case may be, delivered and sold hereunder during the
preceding Month and the monies due therefor. Such statements are to be rendered
in accordance with this Agreement, and shall include any amounts due for tax
reimbursement under the provisions of this Agreement. In the event the total
amount due Seller cannot be determined on or before the fifteenth (15th) day of
the Month, Seller shall nevertheless invoice Buyer for the amounts that are
known and/or are nominated by Buyer, and when the information is available
Seller shall invoice for actual amounts (or refund any payment as necessary) as
soon as practicable after such amount is determined.
Section 2. Ten (10) days after the statement is received by Buyer, Buyer
shall make payment to Seller by wire transfer per the instructions set forth in
the Article titled NOTICES. If Buyer disputes the amount of any statement for
any reason, Buyer shall notify Seller of such dispute and shall be obligated to
pay only the undisputed portion of such statement on the due date. Buyer shall
pay the disputed portion of the statement which is
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determined to be owing to Seller within fifteen (15) days after the date the
dispute is resolved, together with interest on such amount at the rate set forth
in Section 4. below, commencing on the original due date of the statement and
continuing until paid. If the statement shall have been paid in full and it
shall be determined that such disputed portion of the statement was paid in
error, Seller shall refund such amount to Buyer, together with interest at the
rate hereinafter set forth below over the period that Seller had possession of
the money, within fifteen (15) days after resolution of the dispute.
Section 3. All statements, bills, computations and payments shall be
subject to correction of any errors contained therein until two (2) years after
date of payment, and after such period any errors found will be deemed to be
waived by the affected Party.
Section 4. Any amounts due for gas delivered hereunder remaining unpaid
after the due date for such payment shall bear interest, at the lesser of the
highest lawful interest rate or the prime rate charged by Norwest Bank of Denver
plus two percent (2%), until paid.
Section 5. Each Party shall have access to and the right to audit during
regular business days and business hours, upon reasonable notice, all
measurement, billing, computation and payment records maintained by the other
Party which relate to the gas received under this Agreement. All records will
be maintained for two (2) years after payment has been made for the month to
which the records pertain.
ARTICLE XII
NOTIFICATION OF CURTAILMENT
Section 1. Seller and Buyer agree to provide each other with as early a
notice as is reasonably practical of any curtailment or cessation of deliveries
or receipts due to Force Majeure or pursuant to this Article.
Section 2. Gas delivered under this Agreement shall be subject to
curtailment when necessary to protect public health
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and safety. Such curtailment shall be performed by Seller and/or Transporter(s)
in accordance with Seller's and/or Transporter(s)' applicable procedures from
time to time in effect and/or on file with the appropriate regulatory agency,
and shall not be the basis for any claim for damages sustained by any Party.
Section 3. In the event a curtailment of deliveries shall become
necessary or advisable, Seller shall notify, or cause Transporter(s) to notify,
Buyer as soon as possible before actual curtailment, if possible, by telephone,
or other means, of the nature, extent and probable duration of such curtailment.
Buyer shall resume the taking of gas within a reasonable length of time
following notification that gas is again available.
ARTICLE XIII
POSSESSION AND RESPONSIBILITY FOR GAS
Section 1. As between the Parties hereto, Seller shall be in exclusive
control and possession of the gas delivered hereunder and responsible for any
damage or injuries caused thereby until the same shall have been delivered to
Buyer at the Delivery Point(s) (except to the extent such damages or injuries
shall have been caused by the act or omission of Buyer), after which Buyer shall
be deemed to be in exclusive control and possession thereof and responsible for
any such damages or injuries (except to the extent such damages or injuries
shall have been caused by the act or omission of Seller). Each of the Parties
hereto agree to indemnify, defend and hold the other Party harmless from and
against any and all claims, liabilities, damages, losses, costs, and expenses
(including attorneys' fees) incurred by the indemnified Party arising from or
relating to any damages, losses, or injuries for which the indemnifying Party is
responsible pursuant to the foregoing sentence.
ARTICLE XIV
TITLE
Section 1. Seller hereby warrants that (i) it has good title to all gas
delivered to Buyer hereunder, (ii) it has the right to sell such gas, and (iii)
all such gas is free from any
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and all liens, encumbrances, and adverse claims. Seller agrees to hold Buyer
harmless from and against any adverse claims asserted with respect to any gas
delivered hereunder.
Section 2. Title to the gas shall pass from Seller to Buyer, upon the
delivery thereof, at the Delivery Point(s).
ARTICLE XV
FORCE MAJEURE
Section 1. In the event that either Seller or Buyer is rendered unable,
wholly or in part, by reason of an event of force majeure, to perform its
obligations under this Agreement, other than to make payment due hereunder, and
such Party has given notice and full particulars of such force majeure in
writing to the other Party as soon as possible after the occurrence of the cause
relied on, then the obligation of the Parties, insofar as they are affected by
such force majeure, shall be suspended during the continuance of such inability,
but for no longer period, and such cause shall, insofar as possible, be remedied
with all reasonable dispatch. The term "force majeure" as employed herein and
for all purposes relating hereto shall mean acts of God, strikes, lockouts or
other industrial disturbances, acts of the public enemy, wars, blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires,
storms, hurricane warnings, crevasses, floods, washouts, arrests and restraints
of governments and people, civil disturbances, explosions, breakages or accident
to machinery or lines of pipe, the necessity for making repairs or alterations
to machinery or lines of pipe, freezing of ▇▇▇▇▇ or lines of pipe, partial or
entire failure of ▇▇▇▇▇, inability of any Party hereto to obtain necessary
materials, supplies (excluding inability due to the cost of gas or the cost of
transportation of gas), 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, any failure due to force majeure by
any transporter(s) to deliver Seller's gas to Buyer's facilities or thereafter
to transport gas for Buyer, partial or entire failure of Seller's
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source of supply, 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; such
term shall likewise include (a) the inability of such Party to acquire, or the
delays on the part of such Party in acquiring, at reasonable cost and after the
exercise of due diligence, any necessary servitudes, right-of-way grants,
permits or licenses, and (b) the inability of each Party to acquire, or the
delays on the part of such Party in acquiring at reasonable cost and after the
exercise of due diligence, any necessary materials and supplies, permits and
permissions. It is understood and agreed that the settlement of strikes,
lockouts or other industrial disturbances shall be entirely within the
discretion of the Party or a transporter having the difficulty and that the
above requirement that any force majeure shall be remedied by the exercise of
due diligence 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.
ARTICLE XVI
FINANCIAL RESPONSIBILITY
Section 1. If, during the term of this Agreement, Seller, in good faith,
determines that the financial responsibility of Buyer has become impaired or
unsatisfactory, advance cash payment or other satisfactory security will be
given by Buyer upon demand by Seller, and delivery of gas may be withheld until
such payment or assurance is received. If such payment or assurance is not
received within fifteen (15) days of demand, Seller may terminate this Agreement
at any time effective upon the dispatch of written notice. Additionally, if
there are instituted by or against either Party hereunder; proceedings in
bankruptcy or under any insolvency law, the other Party may terminate this
Agreement at any time.
Section 2. If, during the term of this Agreement, Buyer, in good faith,
determines that the financial responsibility of
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Seller has become impaired or unsatisfactory, a corporate warranty or other
satisfactory security will be given by Seller upon demand by Buyer. If such
assurance is not received within fifteen (15) days of demand, Buyer may
terminate this Agreement at any time effective upon the dispatch of written
notice.
ARTICLE XVII
GOVERNMENTAL REGULATIONS
Section 1. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, EXCEPT ANY RULE OR
PRINCIPLE OF THE LAWS OF THE STATE OF TEXAS WHICH WOULD REFER THE CONSTRUCTION
OF THIS AGREEMENT TO THE LAWS OF ANOTHER STATE. This Agreement shall be subject
to all valid laws, regulations or orders of duly constituted governmental
authorities having jurisdiction which are applicable to the subject matter
hereof and effective from time to time. Seller and Buyer agree to obtain, if
possible, whatever authority is necessary, if any, to effectuate the purchase,
sale or transportation of gas hereunder in the event this Agreement and the
purchase, sale or transportation of gas hereunder for any reason become subject
to the jurisdiction of any governmental authority, which at the present time
does not have such jurisdiction.
Section 2. Notwithstanding any other provision of this Agreement, if at
any time during the term of this Agreement, any federal or state law or any
rule, order, opinion, enactment or regulation of any governmental authority or
of any court, prevents Buyer from including in its cost of service for
ratemaking purposes to its customers the full amount of any cost incurred under
this Agreement which Buyer has agreed to pay Seller hereunder, Buyer shall
immediately notify Seller in writing of the price that it is allowed to include
in its cost of service for ratemaking purposes for gas purchased under this
Agreement. Upon receiving such notification, Seller, at its sole discretion,
may choose to either amend the Agreement so that the Buyer can include in its
cost of service for ratemaking purposes the full price for gas sold under the
Agreement or terminate the
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Agreement. Seller shall notify Buyer of its choice in writing within twenty-four
(24) hours of receiving Buyer's notice.
Section 3. Notwithstanding any other provision of this Agreement, if at
any time during the term of this Agreement, any federal or state law or any
rule, order, opinion, enactment or regulation of any governmental authority or
of any court, prevents Seller from recovering from Buyer the full price for gas,
which Buyer has agreed to pay Seller hereunder, inclusive of any charges
assessed as a result of Buyer's failure to take gas, as set forth herein, then
Seller shall be excused from delivering gas, effective prospectively from the
date that Buyer receives written notice from Seller of the pertinent rule,
order, opinion, enactment or regulation. Each time that Seller invokes this
right to be excused from taking or delivering gas pursuant to this paragraph,
the Parties may renegotiate an acceptable price, or, at any time during
renegotiation or in lieu of renegotiation, terminate this Agreement immediately.
Section 4. In addition, if any federal or state law, rule, order,
opinion, enactment or regulation of any governmental authority or of any court,
prevents either Party from receiving the full benefits as bargained for under
this Agreement and in any way prevents either Party from exercising its right to
terminate or cease deliveries under this Agreement, this Agreement shall be
deemed to have terminated one (1) day prior to the attempted implementation of
such governmental action unless the Party whose benefit is diminished agrees to
waive this clause in writing in which case the Agreement shall be deemed to be
reinstated.
ARTICLE XVIII
ENTIRE AGREEMENT
Section 1. This Agreement contains the entire agreement of the Parties
with respect to the matters covered. No other agreement, statement or promise
not contained herein shall be binding or valid.
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ARTICLE XIX
CONFIDENTIALITY
Section 1. The terms of this Agreement, including but not limited to the
price paid for gas, the identified transporting pipelines and cost of
transportation, the quantities of gas purchased and sold and all other material
terms shall be kept confidential by the Parties, except to the extent that any
information must be disclosed to a third Party as required by federal, state or
local law, regulation or governmental process, or for the purpose of
effectuating transportation of the gas hereunder or for obtaining regulatory
orders pertaining to the delivery or utilization of gas sold hereunder or for
regulatory filings or reports, or except to the extent that any information is
in the public domain, or which, through no breach by either Party of its
obligations herein, ceases to be confidential.
ARTICLE XX
SUCCESSORS AND ASSIGNS
Section 1. This Agreement may not be assigned by either Party without the
consent of the other Party, which consent shall not be unreasonably withheld,
unless assigned to an affiliate or subsidiary of a Party. Such assignment shall
not relieve the assigning Party of any of its obligations under this Agreement.
Section 2. Either Party may assign its rights, title, and interest in,
to, and under this Agreement to a trustee or trustees, individual or corporate,
as security for bonds or other obligations or securities, without such trustee
or trustees assuming or becoming in any respect obligated to perform the
obligations of the assignor under this Agreement, and, if any such trustee be a
corporation, without its being required to qualify to do business in any state
in which any performance of this Agreement may occur. However, such assignment
for security purposes shall not relieve the assigning Party of any of its
obligations under this Agreement.
Section 3. This Agreement shall be binding upon and shall inure to the
benefit of and be enforceable by the Parties hereto and their respective
successors and assigns, and is intended solely for the benefit of Seller and
Buyer and their respective
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successors and assigns, and not for the benefit of any other person or entity
not a Party hereto.
ARTICLE XXI
MAINTENANCE OF FACILITIES
Section 1. Maintenance of facilities shall be governed by the Operating
Agreement.
ARTICLE XXII
INDEMNIFICATION
Section 1. Buyer and Seller shall each indemnify, defend, and save
harmless the other including their employees and agents from and against any and
all loss, damage, injury, liability, and claims for injury to or death of
persons (including any employee of Buyer or Seller), or for loss or damage to
property (including the property of Buyer or Seller), to the extent that such
losses, damages, injuries or claims result from the negligence of the
indemnifying Party in its performance of its obligations arising pursuant to
this Agreement (including the installation, maintenance, and operation of
property, equipment, and facilities) or any other operations under this
Agreement.
ARTICLE XXIII
THIRD-PARTY TRANSPORTATION
Section 1. Buyer and Seller acknowledge that Seller will be obtaining
transportation from third Parties in order to have the gas covered hereby
delivered to the Delivery Point(s). In the event such transportation is
interrupted or terminated by an event of force majeure as defined in Article XV,
Seller shall be fully excused for its failure to deliver gas hereunder.
ARTICLE XXIV
HEADINGS
Section 1. The descriptive headings of the provisions of this Agreement
are formulated and used for convenience only and shall not be deemed to affect
the meaning or construction of any such provisions.
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ARTICLE XXV
WAIVER
Section 1. No waiver by either Party of any one or more defaults by the
other in the performance of the provisions of this Agreement shall operate or be
construed as a waiver of any other default or defaults, whether of a like or a
different character.
ARTICLE XXVI
AMENDMENTS
Section 1. The terms and conditions of this Agreement may not be amended
except by the written agreement of the Parties.
ARTICLE XXVII
REMEDIES UPON MATERIAL DEFAULT
Section 1. If either Party hereto shall fail to perform any material
covenant or obligation imposed upon under this Agreement, then in such event the
non-defaulting Party may, at its option, terminate this Agreement upon acting in
accordance with the procedures hereafter set forth in this Section. The non-
defaulting Party shall cause a written notice to be served on the defaulting
Party, which notice shall state specifically the cause of terminating this
Agreement and shall declare it to be the intention of the non-defaulting Party
to terminate this Agreement if the default is not cured. The defaulting Party
shall have ten (10) days after receipt of the aforesaid notice in which to
remedy or remove the cause or causes stated in the termination notice, and, if
within such ten-day period, the defaulting Party does so remedy or remove said
cause or causes and fully indemnifies the non-defaulting Party for any and all
consequences of such breach, then such termination notice shall be withdrawn and
this Agreement shall continue in full force and effect. In the event that the
defaulting Party fails to remedy or remove the cause or causes or to indemnify
the non-defaulting Party for any and all consequences of such breach within such
ten-day period, this Agreement shall be terminated and of no
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further force or effect from and after the expiration of such ten-day period.
Section 2. Any termination of this Agreement pursuant to the provisions
of this Article shall be (i) without prejudice to the rights of Seller to
collect any amounts then due Seller for gas delivered prior to the time of
termination, (ii) without prejudice to the rights of Buyer to receive any gas
for which it has paid but not received prior to the time of termination, and
(iii) without waiver of any other remedy to which the non-defaulting Party may
be entitled.
ARTICLE XXVIII
MISCELLANEOUS
Section 1. This Agreement shall be deemed drafted and prepared equally
and jointly regardless of which Party prepared or submitted the Agreement to the
other.
Section 2. Buyer and Seller hereby cancel, supersede, and replace any and
all previous agreements which include, cover, or pertain in any manner to the
delivery of gas to Buyer at the Delivery Points.
Section 3. Except for the Parties hereto and their successors and
assigns, no person, including without limitation any owner of a royalty or
overriding royalty interest, shall have any rights as a third Party beneficiary
or otherwise under this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed.
"BUYER"
ENERMART TRUST
By:
---------------------------
Signature
Name:
---------------------------
Type / Print
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Title:
---------------------------
"SELLER"
K N MARKETING, L.P.
By its Managing General Partner,
American Pipeline Company
By:
---------------------------
Signature
Name:
---------------------------
Type / Print
Title:
---------------------------
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EXHIBIT "A" to Gas Sales Agreement
dated March 1, 1996 between K N Marketing, L.P. ("Seller")
and EnerMart Trust ("Buyer")
EXEMPTION CERTIFICATE
For Natural Gas Delivered By
K N Marketing, L.P. ("Seller")
To EnerMart Trust ("Buyer")
Buyer's Direct Payment Permit Number:
-----------------------------------------
Buyer's Address: ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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The undersigned hereby claims an exemption from payment of taxes under Tax Code,
Vernon Texas Code Annotated, Chapter 151, for the purchase and delivery of
natural gas from Seller.
The reason that Buyer is claiming this exemption is:
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Buyer will be liable for payment of the Limited Sales and Use Tax if Buyer uses
the natural gas in some manner other than the reason listed above, and shall pay
the tax based on the price paid for the natural gas.
This exemption is claimed for, and this exemption certificate shall apply to,
all gas delivered to Buyer by Seller on and after the date hereof, and shall be
effective until revoked by written notice to Seller by Buyer. If this exemption
is disallowed for any reason by the State for any part or all of the gas
delivered, Buyer will accrue and pay direct to the State any tax and penalty
due.
Executed this the day of , 19 .
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By:
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Signature
Name:
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Type /Print
Title:
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A-1