NATURAL GAS PURCHASE AGREEMENT
between
Energy Marketing Service, Inc.,
and
▇▇▇▇▇ Petroleum Corporation
23876-001 -iii
084-kls
▇▇▇▇▇▇▇▇▇▇a
DWA
EXHIBIT 10.1
Table of Contents
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Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1. Definitions; Exhibits . . . . . . . . . . . . . . . . . 1
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . 1
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Anniversary Date. . . . . . . . . . . . . . . . . . . . . . . 1
Btu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Commencement Date . . . . . . . . . . . . . . . . . . . . . . 1
Contract Price. . . . . . . . . . . . . . . . . . . . . . . . 1
Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Dekatherm (Dth) . . . . . . . . . . . . . . . . . . . . . . . 2
Delivery Points . . . . . . . . . . . . . . . . . . . . . . . 2
FERC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Initial Term. . . . . . . . . . . . . . . . . . . . . . . . . 2
Mcf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
MMBtu . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Month . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Renewal Term. . . . . . . . . . . . . . . . . . . . . . . . . 2
Subject ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 2
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Transporter . . . . . . . . . . . . . . . . . . . . . . . . . 2
Transporter's Requirements. . . . . . . . . . . . . . . . . . 3
Section 1.02. Exhibits. . . . . . . . . . . . . . . . . . . . . 3
A Term Sheet . . . . . . . . . . . . . . . . . . . . . . . . 3
B Notices to Seller . . . . . . . . . . . . . . . . . . . . . 3
Article 2. Term. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.01. Term. . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.02. Termination . . . . . . . . . . . . . . . . . . . 3
Article 3. Sale and Purchase of Gas. . . . . . . . . . . . . . . . 4
Section 3.01. Agreement To Sell and To Purchase . . . . . . . . 4
Section 3.02. Incorporation of Transporter's
Requirements. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.03. Quality . . . . . . . . . . . . . . . . . . . . . 4
Section 3.04. Measurement . . . . . . . . . . . . . . . . . . . 5
Article 4. Delivery; Title . . . . . . . . . . . . . . . . . . . . 5
Section 4.01. Pressure. . . . . . . . . . . . . . . . . . . . . 5
Section 4.02. Possession and Responsibility . . . . . . . . . . 5
Section 4.03. Warranty of Title . . . . . . . . . . . . . . . . 5
Article 5. Price; Payment. . . . . . . . . . . . . . . . . . . . . 6
Section 5.01. Price . . . . . . . . . . . . . . . . . . . . . . 6
Section 5.02. Royalty Payments; Taxes . . . . . . . . . . . . . 6
Section 5.03. Payment . . . . . . . . . . . . . . . . . . . . . 6
Section 5.04. Inspection of Records; Adjustment of
Errors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Article 6. Force Majeure . . . . . . . . . . . . . . . . . . . . . 8
Section 6.01. Definition of Force Majeure . . . . . . . . . . . 8
Section 6.02. Effect of Force Majeure . . . . . . . . . . . . . 8
Section 6.03. Obligation To Remedy. . . . . . . . . . . . . . . 8
Article 7. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 9
Section 7.01. Governmental Regulation . . . . . . . . . . . . . 9
Section 7.02. Confidentiality . . . . . . . . . . . . . . . . . 9
Section 7.03. Indemnification . . . . . . . . . . . . . . . . . 10
Section 7.04. Notices . . . . . . . . . . . . . . . . . . . . . 10
Section 7.05. Waiver of Breach. . . . . . . . . . . . . . . . . 11
Section 7.06. Time Is of the Essence. . . . . . . . . . . . . . 11
Section 7.07. Severability. . . . . . . . . . . . . . . . . . . 11
Section 7.08. Governing Law; Jurisdiction and Venue . . . . . . 11
Section 7.09. Entire Agreement. . . . . . . . . . . . . . . . . 11
Section 7.10. Amendments. . . . . . . . . . . . . . . . . . . . 12
Section 7.11. Binding Effect; Assignment. . . . . . . . . . . . 12
Section 7.12. Legal Benefits. . . . . . . . . . . . . . . . . . 12
Section 7.13. Captions. . . . . . . . . . . . . . . . . . . . . 12
Section 7.14. Counterparts. . . . . . . . . . . . . . . . . . . 12
NATURAL GAS PURCHASE AGREEMENT
This is a Natural Gas Purchase Agreement (the "Agreement"), made and
entered into this 14 day of December, 1994, by and between ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Corporation ("Seller"), and Energy Marketing Services, Inc., an Ohio
corporation ("Buyer").
RECITALS:
---------
A. Seller is engaged in natural gas exploration and development and
has developed a supply of natural gas from the "Subject ▇▇▇▇▇" (as
hereinafter defined) that Seller wishes to sell.
B. The parties desire to enter into this Agreement for the sale and
purchase of the natural gas produced from the Subject ▇▇▇▇▇.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and
Buyer agree as follows:
ARTICLE 1. DEFINITIONS; EXHIBITS
SECTION 1.01. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
(a) "AGREEMENT" shall mean this Natural Gas Purchase Agreement, as
the same may from time to time be amended or supplemented.
(b) "ANNIVERSARY DATE" shall mean the date identified as the
Anniversary Date in EXHIBIT A.
(c) "BTU" shall mean one British Thermal Unit.
(d) "COMMENCEMENT DATE" shall mean the date identified as the
Commencement Date in EXHIBIT A.
(e) "CONTRACT PRICE" shall mean the price per Dekatherm or Mcf, as
the case may be, that Buyer shall pay Seller for each Dekatherm
or Mcf, as the case may be, delivered to Buyer pursuant to this
Agreement, as designated in EXHIBIT A.
(f) "DAY" shall mean a period of twenty-four (24) consecutive hours
commencing at 8:00 a.m., Eastern Time, on a
calendar day and ending at 8:00 a.m., Eastern Time on the
following calendar day.
(g) "DEKATHERM (DTH)" shall mean one (1) MMBtu.
(h) "DELIVERY POINTS" shall mean the various locations, as identified
from time to time in EXHIBIT A, at which Seller shall deliver Gas
into the mainline facilities of Transporter for redelivery to
Buyer's account.
(i) "FERC" shall mean the Federal Energy Regulatory Commission or any
successor agency.
(j) "GAS" shall mean natural gas as produced from gas ▇▇▇▇▇ and gas
produced in association with oil, excluding any products or
byproducts extracted from gas through processing operations.
(k) "INITIAL TERM" shall mean the period of time identified as the
Initial Term in EXHIBIT A.
(l) "MCF" shall mean one thousand (1,000) cubic feet measured at a
pressure of fourteen and seventy-three hundredths (14.73) pounds
per square inch and at a temperature of sixty degrees (60)
Fahrenheit.
(m) "MMBTU" shall mean one million (1,000,000) Btus.
(n) "MONTH" shall mean the period beginning at 8:00 a.m., Eastern
Time, on the first Day of a calendar month and ending at 8:00
a.m., Eastern Time, on the first Day of the next succeeding
calendar month.
(o) "RENEWAL TERM" shall have the meaning given to such term in
Section 2.01.
(p) "SUBJECT ▇▇▇▇▇" shall mean the ▇▇▇▇▇ identified as the Subject
▇▇▇▇▇ in EXHIBIT A.
(q) "TAXES" shall mean all ad valorem, property, occupation,
severance, production, gathering, pipeline, utility, gross
production, gross receipts, sales, use, consumption, excise, and
other taxes, governmental charges, licenses, permits, and
assessments, other than taxes based on excess profits, net
income, or net worth.
(r) "TRANSPORTER" shall mean any third-party transporter identified
as Transporter in EXHIBIT A, with which Buyer has entered, or
will enter, into agreements for the
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transportation and delivery of Seller's natural gas to the
facilities of Buyer's customers.
(s) "TRANSPORTER'S REQUIREMENTS" shall have the meaning given to such
term in Section 3.02.
SECTION 1.02. EXHIBITS. The following Exhibits are attached to and
made a part of this Agreement:
EXHIBIT A TERM SHEET
EXHIBIT B NOTICES TO SELLER
EXHIBIT A may be amended from time to time by mutual agreement, evidenced
by both parties signing appropriate Exhibit addendums. These mutually
agreed upon changes shall be effective as of the date signed. All other
provisions, terms, and conditions in this Agreement shall continue to
remain in full force and effect.
ARTICLE 2. TERM
SECTION 2.01. TERM. This Agreement shall become effective on the date
of its execution by Buyer and Seller, and delivery of Gas shall begin on
the Commencement Date. Unless sooner terminated pursuant to the other
provisions of this Agreement, the Initial Term of this Agreement shall be
as set forth in EXHIBIT A; and such Initial Term shall automatically be
extended for successive additional terms of one (1) year each (a "RENEWAL
TERM") at a new Contract Price determined in accordance with Section
5.01(b).
SECTION 2.02. TERMINATION.
(a) Either party may terminate this Agreement, without cause,
effective as of the Anniversary Date immediately following the expiration
of the Initial Term or any subsequent Renewal Term, by written notice of
termination to the other party no less than sixty (60) Days prior to the
Anniversary Date upon which termination is to be effective.
(b) If any order, opinion, enactment, or regulation of the FERC, any
other governmental body (federal or state) having direct jurisdiction, or
any court proscribes or imposes terms, conditions, regulations, or other
restraints that directly affect the sale, release, purchase, or
transportation of Gas hereunder by or to the parties hereto as originally
contemplated on the date of execution of this Agreement, and, in the sole
judgment of either party, such action would render such party's continued
performance hereunder imprudent, utilizing sound business judgment, the
party so affected may terminate this Agreement upon thirty (30) Days
written notice to the other party.
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(c) No termination of this Agreement by reason of default or breach
of covenant by Seller or Buyer, or by virtue of the expiration of the term
hereof, or by virtue of the exercise of any right of termination contained
herein shall relieve Buyer of its obligation to make payments to Seller for
any amounts due Seller for Gas delivered prior to the time of such
termination or relieve Seller of any of its obligations provided for herein
to indemnify Buyer.
ARTICLE 3. SALE AND PURCHASE OF GAS
SECTION 3.01. AGREEMENT TO SELL AND TO PURCHASE. Subject to the
conditions hereinafter set forth, Seller hereby agrees to sell and to
deliver to Buyer, and Buyer agrees use its best efforts and all due
diligence to purchase and to take from Seller, at the Delivery Points, all
of the Gas that may be produced by or for Seller from the Subject ▇▇▇▇▇.
SECTION 3.02. INCORPORATION OF TRANSPORTER'S REQUIREMENTS.
Transporter's tariff and its rules, guidelines, and policies
("TRANSPORTER'S REQUIREMENTS"), as the same may be modified or amended from
time to time, shall define and set forth, among other things, the
nominating and operating procedures, units of measurement, measurement
specifications, quality, heating value, testing specifications, and
delivery terms and specifications of the Gas to be delivered to Buyer
pursuant hereto. Transporter's tariff, all such definitions,
specifications, procedures, and terms, and all other terms and provisions
of Transporter relating to the delivery of Gas, are hereby expressly
incorporated herein by reference and shall be applicable to and binding
upon Seller and all Gas sold by Seller to Buyer.
SECTION 3.03. QUALITY.
(a) All Gas delivered by Seller to Buyer's account shall be of
merchantable quality and shall meet or exceed the quality standards set
forth in Transporter's Requirements.
(b) Seller will indemnify, defend, and save Buyer harmless from any
and all suits, actions, debts, accounts, damages, costs, losses, and
expenses, including, but not limited to, attorneys' fees, arising from or
as a result of Seller's Gas failing to meet such quality specifications.
Buyer shall have the right to ▇▇▇▇ Seller for any such damages, costs,
losses, or expenses incurred by Buyer; and, should Seller fail to pay such
▇▇▇▇, Buyer may deduct the amount of such ▇▇▇▇ from payment otherwise due
Seller for Gas delivered hereunder.
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SECTION 3.04. MEASUREMENT.
(a) For the purpose of this Agreement all Gas shall be measured in
accordance with Transporter's Requirements at the time of delivery by
Seller to Transporter for transportation to Buyer.
(b) All Gas delivered hereunder shall be measured at the measuring
station(s) on Transporter's system at the Delivery Points. Pursuant to any
rights Buyer may have under any agreements with Transporter, Buyer shall,
at Seller's request, ask for measurement verification in the event of any
dispute regarding measurement; and Seller shall reimburse Buyer for costs
associated with same, or Buyer may offset these costs against proceeds due
Seller.
ARTICLE 4. DELIVERY; TITLE
SECTION 4.01. PRESSURE. Seller shall deliver the Gas at the Delivery
Points at a pressure sufficient to allow the Gas to enter Transporter's
facilities at such Delivery Points.
SECTION 4.02. POSSESSION AND RESPONSIBILITY. Title to all Gas
delivered hereunder shall pass from Seller at the Delivery Points. As
between Buyer and Seller, Seller shall be deemed to be in control and
possession of the Gas hereunder until it shall have been delivered to Buyer
at the Delivery Points, after which Buyer shall be deemed to be in control
and possession of the Gas. Buyer shall have no responsibility with respect
to any Gas hereunder at any time because of anything that may be done,
happen, or arise with respect to said Gas before the Gas reaches the
Delivery Points. In like manner, Seller shall have no responsibility with
respect to any Gas hereunder at any time because of anything that may be
done, happen, or arise with respect to said Gas after it is delivered to
Buyer at the Delivery Points, except as provided for in Section 4.03. Each
party agrees to indemnify and hold the other harmless against any and all
claims for loss, damages, or injury caused or occurring during any period
in which it is deemed to be in possession and control of the Gas. It is the
understanding and intent of the parties hereto that Seller will assume the
full cost and expense, as well as full and complete liability and
responsibility, for collecting and transporting the Gas to the Delivery
Points.
SECTION 4.03. WARRANTY OF TITLE. Seller warrants that it will, at the
time of delivery to Buyer at the Delivery Points, have good title to, or
due authorization to sell on behalf of others, all Gas to be delivered
hereunder and the right to sell said Gas, free and clear of all liens,
encumbrances, and adverse claims whatsoever that would interfere with
Buyer's use of same. Seller
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will indemnify, defend, and save Buyer harmless from all suits, actions,
debts, accounts, damages, costs, losses, and expenses (including attorneys'
fees) arising from or out of adverse claims by any and all persons to Gas
delivered hereunder or to royalties or to any charges against said Gas. If
any adverse claims concerning title to the Gas delivered hereunder are
asserted against Buyer, Buyer shall have the right to withhold payment for
said Gas in accordance with instructions from a judicial court until the
dispute has been resolved or until Seller has furnished bond (in an amount
and with sureties satisfactory to Buyer) conditioned for the protection of
Buyer with respect to any such claim.
ARTICLE 5. PRICE; PAYMENT
SECTION 5.01. PRICE.
(a) The Contract Price per Dekatherm or Mcf, as the case may be, for
Gas delivered at the Delivery Points will be as set forth in EXHIBIT A.
Except as otherwise expressly set forth in this Agreement, such Contract
Price shall be deemed to include all allowances and adjustments, including,
but not limited to, gas heating value, Taxes, and gathering,
transportation, and compression expenses prior to the Delivery Points.
(b) The Contract Price set forth in EXHIBIT A shall remain in effect
for a period of one (1) year. No less than seventy (70) Days prior to the
expiration of the Initial Term or any subsequent Renewal Term, Buyer shall
give Seller written notice setting forth Buyer's new Contract Price
("BUYER'S NOTICE"), to be effective as of the next succeeding Anniversary
Date, for the next succeeding Renewal Term.
SECTION 5.02. ROYALTY PAYMENTS; TAXES. Seller shall pay or cause to
be paid any royalty payments and all Taxes due or levied on the Gas
delivered hereunder prior to its delivery to Buyer at the Delivery Points
and shall indemnify Buyer and hold Buyer harmless from any liability or
obligation for the payment of same. It is contemplated that the Contract
Price will reimburse Seller for any such Taxes as may be levied, and Seller
may not charge Buyer additional amounts for any such taxes, new Taxes, or
any increase in Tax amounts.
SECTION 5.03. PAYMENT.
(a) The volumes of Gas delivered pursuant to this Agreement shall be
determined by the measurement procedures of Buyer's agreements with its
third party purchasers. Buyer shall render to Seller, on a Monthly basis,
an estimated volume statement. The
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methodology used to determine THE ESTIMATED VOLUME WILL BE 80 PERCENT TIMES
(X) THE PREVIOUS MONTH ACTUAL VOLUME AS SHOWN ON THE TRANSPORTER'S
PRODUCTION STATEMENTS. Buyer shall remit to Seller the amounts due for the
volumes of Gas delivered pursuant to this Agreement on the 25th day of the
month. Correction of the volume estimated and paid for will be adjusted for
the actual volume upon receipt of the Transporter's Production statement.
A copy will be provided by Buyer to Seller with the adjusted for actual
volume payment on the 25th day of the month.
(b)Although the terms of this Agreement extend to and are binding on
all parties to it, and on their respective heirs, successors, personal
representatives, and assigns, Buyer will in no event issue, or be required
to issue, more than one (1) Monthly check in payment of the emoluments
hereunder. If, at any time, more than one (1) person or entity becomes
entitled to payment hereunder for the emoluments hereunder, Buyer may
withhold such payment, without interest, unless and until Buyer is
furnished by Seller with the necessary documentation (properly executed and
acknowledged by all parties) designating an agent to receive payments
hereunder, to allocate, to prorate, and to distribute such payments among
the various parties Seller, and to do and to receive all things provided
for concerning Seller in this Agreement. Buyer may act, and shall be fully
protected in acting, in reliance upon any and all acts and things done or
performed by such agent on behalf of the parties Seller, as fully and
effectively as though each Seller had done, performed, made, or executed
the same. Such agent shall indemnify Buyer and hold Buyer harmless from any
liability or obligation and/or any claim of any party (including royalty
owners, whom agent shall have the obligation to pay or to cause to be paid)
with respect to any payments made by Buyer to such agent hereunder.
SECTION 5.04. INSPECTION OF RECORDS; ADJUSTMENT OF ERRORS. Each party
shall have the right at all reasonable times during business hours and upon
reasonable notice to examine the books, billing statements, records,
charts, meters, measuring equipment, and other pertinent matter or data of
the other party to the extent necessary to verify the accuracy of any
statement, charge, computation, or demand made under or pursuant to any of
the provisions of this Agreement. If any such examination shall reveal, or
if either party shall otherwise discover, any error or inaccuracy in its
own or the other party's statements, payments, calculations, or
determinations, then, within thirty (30) Days after the final determination
thereof, Seller shall refund the amount of any overpayment or Buyer shall
pay the amount of any underpayment; PROVIDED, HOWEVER, that no adjustment
of any statement, billing, or payment shall be made after the lapse of
twenty-four (24) Months from the date of such statement, billing, or
payment.
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ARTICLE 6. FORCE MAJEURE
SECTION 6.01. DEFINITION OF FORCE MAJEURE. The term "FORCE MAJEURE,"
as used in this Agreement, shall mean acts of God; fires, storms, floods,
washouts, landslides, lightning, earthquakes, epidemics, and casualties;
acts of law, acts of federal, state, or local governments and/or their duly
constituted agencies, and the orders of any court or governmental authority
that render performance of obligations under this Agreement impossible;
acts of the public enemy, sabotage, wars, blockades, insurrections, civil
disturbances, rebellion, riots, vandalism, interruption of civil or public
service, arrests, and restraints; strikes, lockouts, and other industrial
disturbances; the inability to acquire, or delays in acquiring, at
reasonable cost and after the exercise of reasonable diligence, materials,
supplies, contractors, labor, transportation, and such servitudes, rights
of way, permits, licenses, approvals, and authorizations by regulatory
bodies as may be necessary in order that obligations assumed hereunder may
be lawfully performed in the manner herein contemplated; explosions, well
blowouts, craterings, the freezing of ▇▇▇▇▇ or lines of pipe, hydrate
obstructions of lines of pipe, breakage of or accident to machinery,
equipment, or lines of pipe, and the making of repairs, alterations, or
tests on machinery, equipment, or lines of pipe; any interruption of
delivery by a transporter of Gas for Seller or Buyer, the failure of any
pipeline to accept all or any portion of the Gas for delivery, and any act
or omission on the part of any purchaser of Gas from Buyer by reason of
FORCE MAJEURE affecting such purchaser; and any other causes, whether of
the kind herein enumerated or otherwise, that are not reasonably within the
control of the party claiming suspension and that, by the exercise of due
diligence, such party is unable to prevent or to overcome.
SECTION 6.02. EFFECT OF FORCE MAJEURE. If either party is rendered
unable, wholly or in part, by FORCE MAJEURE to perform or to comply with
any obligation or condition of this Agreement, all obligations of both
parties shall be suspended during the continuance of the inability so
caused, and the parties shall be relieved of liability and shall suffer no
prejudice for failure to perform the same during such period; PROVIDED,
HOWEVER, that Buyer's obligation to make payments for Gas accepted shall
not be suspended, and FURTHER PROVIDED that the dedication of Seller's
leaseholds and/or ▇▇▇▇▇ shall not be waived or suspended.
SECTION 6.03. OBLIGATION TO REMEDY. Each party agrees to exercise all
reasonable efforts to remedy any situation that might interfere with the
performance of its obligations hereunder; PROVIDED, HOWEVER, that the
settlement of strikes, lockouts, or other industrial disturbances shall be
entirely within the discretion of the party having the difficulty and that
the term
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"all reasonable efforts" shall not require the settlement of strikes,
lockouts, or other industrial disturbances by acceding to the demands of an
opposing party when such course of action is inadvisable in the discretion
or judgement of the party having the difficulty. Whenever possible, advance
notice of a FORCE MAJEURE occurrence shall be given to the other party, and
in all cases notice and reasonably full particulars of the occurrence shall
be provided to the other party as soon as reasonably possible after the
occurrence of the cause relied on. As soon as possible after the FORCE
MAJEURE event shall have been remedied, the party claiming suspension shall
likewise give notice to the effect that the same has been remedied and that
such party has resumed, or is then in a position to resume, the performance
of its obligations.
ARTICLE 7. MISCELLANEOUS
SECTION 7.01. GOVERNMENTAL REGULATION. This Agreement is subject to
all applicable federal, state, and local laws and ordinances, and to the
orders, rules, and regulations of any federal, state, or local regulatory
or administrative body or authority having jurisdiction in the premises.
Neither party shall be held in default for failure to perform hereunder if
such failure is due to compliance with such laws, ordinances, orders,
rules, or regulations. Should either Buyer or Seller, by law or regulation,
be ordered or required to do any act inconsistent with the provisions of
this Agreement, this Agreement shall be deemed modified to conform with
such law or regulation. Nothing in this Agreement shall prevent either
party from contesting the validity of any such law, order, rule, or
regulation, nor shall anything in this Agreement be construed to require
either party to waive its right to assert the lack of jurisdiction of such
regulatory body, governmental entity, or agency over this Agreement or any
party hereto; but Buyer and Seller agree that neither of them will
initiate, advocate, or voluntarily support any action before any regulatory
agency or authority that would or might alter or adversely affect the terms
hereof.
SECTION 7.02. CONFIDENTIALITY. Buyer and Seller mutually agree that
they shall maintain this Agreement and its terms and conditions in strict
confidence and that they will not, without the prior written consent of the
other (which consent shall not be unreasonably withheld), cause or permit
disclosure of the contents hereof to any third party. The foregoing
notwithstanding, either party may make such disclosure without the prior
written consent of the other, if such disclosure is required by valid law,
regulation, or legal order; PROVIDED, HOWEVER, that the party required to
make such disclosure shall (a) provide the other party with prompt notice
of such requirement to enable that party to seek an
9
appropriate protective order and (b) take all reasonable steps to protect
the confidentiality of this Agreement.
SECTION 7.03. INDEMNIFICATION. Seller shall save harmless and
indemnify Buyer from any and all loss, injury, death, or damage (regardless
of whether such loss, injury, death, or damage occurs to an employee or
employees or property of Buyer or to any one or more of the persons or
employees or property of any other related or unrelated individual or
entity), or claim of loss, injury, death, or damage, together with all
costs, including attorneys' fees, incident to any such claim, caused or
occasioned by the negligence or willful misconduct of Seller or its
employees, agents, subcontractors, suppliers, or affiliates. Seller shall
also save harmless and indemnify Buyer from any loss, injury, or death to
Seller's own employees or the employees of its agents, subcontractors,
suppliers, or affiliates, wherever occurring.
SECTION 7.04. NOTICES.
(a) Except as otherwise provided herein, any notice, request, demand,
statement, or ▇▇▇▇ provided for in this Agreement, or any notice that
either party may desire to give to the other, shall be in writing and shall
be deemed to have been duly given as follows:
(1) upon receipt, when delivered personally to a party at its address
as hereinafter set forth;
(2) one business Day after being delivered to a reputable overnight
courier service, prepaid, marked for next Day delivery to a party
at its address as hereinafter set forth; or
(3) upon receipt, via telefacsimile and confirmed receipt by
telephone; or
(4) on the third business Day after being mailed by United States
mail first class, registered or certified, return receipt
requested, postage prepaid, addressed to a party at its address
as hereinafter set forth.
(b) All notices, requests, demands, statements, or bills to be given
to Buyer pursuant to this Agreement shall be sent to Buyer at the following
address:
Energy Marketing Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
10
(c) All notices, requests, demands, statements, or bills to be given
to Seller pursuant to this Agreement shall be sent to Seller at the address
set forth in EXHIBIT B.
(d) Either party may at any time change its address for such notices,
requests, demands, statements, or bills by giving the other party written
notice thereof in accordance Section 7.04(a).
SECTION 7.05. WAIVER OF BREACH. No waiver by either party will be
effective unless it is in writing and then only to the extent specifically
stated. No failure on the part of either party to exercise, and no delay in
exercising, any right, power, or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power,
or remedy by any party preclude any other or further exercise thereof or
the exercise of any other right, power, or remedy. Failure of either party
to demand strict performance of the provisions of this Agreement by the
other party, or any forbearance by either party in exercising any right or
remedy hereunder or otherwise afforded by law, shall not constitute a
waiver by such party of any provision of this Agreement. Any condition,
term, or covenant in this Agreement that is not complied with will be
considered a breach.
SECTION 7.06. TIME IS OF THE ESSENCE. Time is of the essence in the
compliance with the terms and conditions of this Agreement.
SECTION 7.07. SEVERABILITY. Whenever possible each provision of this
Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but, if any provision of this Agreement shall
be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
SECTION 7.08. GOVERNING LAW; JURISDICTION AND VENUE. This Agreement
shall be deemed to be made under and shall be governed by the laws of the
State of Ohio in all respects, including matters of construction, validity,
and performance, notwithstanding the place where this Agreement may be
executed or performed by either party hereto. The parties agree that
jurisdiction and venue shall be proper only in the Franklin County, Ohio,
Court of Common Pleas, and the United States District Court for the
Southern District of Ohio.
SECTION 7.09. ENTIRE AGREEMENT. This Agreement (including the
Exhibits hereto, which are by this reference incorporated herein and made
a part hereof) sets forth all understandings between the parties respecting
the subject matter of this transaction, and all prior agreements,
understandings, and representations, whether oral or written, representing
this subject
11
matter are merged into and superseded by this written Agreement No course
of prior dealings between the parties and no usage trade shall be relevant
or admissible to supplement, to explain, to vary any of the terms of this
Agreement.
SECTION 7.10. AMENDMENTS. No modification or amendment of this
Agreement shall be binding on either party unless in writing and signed by
both parties. EXHIBIT A may be modified in accordance with Section 1.02.
SECTION 7.11. BINDING EFFECT; ASSIGNMENT. This Agreement, and the
terms, covenants, and conditions hereof, shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors, and assigns; PROVIDED, HOWEVER, that neither
party may assign this Agreement, in whole or in part, without the prior
written consent of the other, which consent shall not unreasonably be
withheld. No such consent shall be required, however, in those cases in
which a party wishes to pledge or to mortgage its interests or rights
hereunder as security for its indebtedness, or to dispose of its interests
by merger, reorganization, consolidation, or sale of all or substantially
all of its assets to a subsidiary or parent company, or to a subsidiary of
a parent company, or to any company in which any one party owns a majority
of the stock.
SECTION 7.12. LEGAL BENEFITS. It is understood and agreed that Seller
is not a party to or a third-party beneficiary of Buyer's agreements with
its ultimate purchasers. Since Buyer has many suppliers of Gas to its
ultimate purchasers, it would be impossible to determine the extent of the
contribution by any one seller toward Buyer's agreements with its ultimate
purchasers. Therefore, in the event of a dispute between Buyer and any
ultimate purchaser, Seller may look only to Buyer for payment for Gas sold
to Buyer and is not entitled to any damages, if any, that Buyer may recover
from any ultimate purchasers.
SECTION 7.13. CAPTIONS. The captions or headings at the beginning of
each article and section of this Agreement are merely guides or labels for
the convenience of the parties to assist in identifying those articles and
sections, are not intended to be a part of the context of this Agreement,
and shall not be deemed to modify, to explain, to enlarge, or to restrict
any of the provisions hereof.
SECTION 7.14. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
12
IN WITNESS WHEREOF, the parties have executed this Natural Gas
Purchase Agreement effective as of the date first set forth above.
WITNESSES: BUYER:
ENERGY MARKETING SERVICES, INC.
▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- ----------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇ Chief Executive Officer
-------------------------- ----------------------------
SELLER:
▇▇▇▇▇ PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- ----------------------------
its President
-------------------------- ----------------------------
13
EXHIBIT A
TERM SHEET
----------
ANNIVERSARY DATE: February 1
COMMENCEMENT DATE: February 1, 1995
INITIAL TERM: a period of one (1) year commencing on the
Commencement Date and ending on January 31,
1996
SUBJECT ▇▇▇▇▇: See EXHIBIT A-1
CONTRACT PRICE: Buyer shall pay Seller a monthly price based
on 100% the index price reported for spot
market gas supplies for the delivery month,
per dekatherm, less the applicable Columbia
Gas Transmission gathering charge in effect
for the period February 1, 1995 through
January 31, 1996. The index to be utilized
will be the INSIDE F.E.R.C.'S GAS MARKET
REPORT publication. The monthly price will
be comprised of the first of the delivery
month posted index price for Appalachia
(West Virginia, Ohio, Kentucky) supplies.
TRANSPORTER: Columbia Gas Transmission Corporation
DELIVERY POINTS: Columbia Gas Transmission Mainline
This Exhibit is attached to and a part of that certain Natural Gas
Purchase Agreement, dated as of 12/14, 1994, between Energy Marketing
Services, Inc., and ▇▇▇▇▇ Petroleum Corporation (the "AGREEMENT"). This
Exhibit is effective as of Feb. 1,1995. Except as herein modified, all
specifications, terms, and conditions concurrently applicable to the
Agreement shall remain in full force and effect.
BUYER: SELLER:
ENERGY MARKETING SERVICES, INC. ▇▇▇▇▇ PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- ----------------------------
Chief Executive Officer President
Date: 12/14/94 Date: 12/13/94