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Exhibit 10.12
GAS PURCHASE AGREEMENT
THIS AGREEMENT, entered into this first day of November. 1997,
("Effective Date") by and between EVERFLOW EASTERN PARTNERS, L. P. ("Seller"),
and CNG ENERGY SERVICES CORPORATION, a Delaware corporation ("Buyer").
WHEREAS, Seller has available a supply of natural gas at certain points
of connection on the pipeline system identified in Exhibit A. which are for
sale; and
WHEREAS, Buyer is seeking to purchase gas supplies; and
WHEREAS, Seller and Buyer desire to enter into an agreement relating to
the sale and purchase of such available natural gas supplies from the xxxxx
listed on Exhibit `"A'", all as hereinafter set forth.
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, Seller and Buyer hereby mutually agree as follows:
ARTICLE I
Definitions
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1.1 The term "Agreement" shall mean this Gas Purchase Agreement and the
Confirmation(s) attached hereto as executed from time to time and made a part
hereof,
1.2 The term "Confirmation" shall mean the letter agreement, a form
copy of which is attached hereto as Exhibit "A", which may be executed by Buyer
and Seller from time to time and which shall bind Buyer and Seller to particular
transactions for the purchase and sale of the gas in accordance with the terms
thereof and this Agreement.
1.3 The term "Day" shall mean the twenty-four (24) hour period
commencing at eight o'clock (8:00) a.m. Eastern Time,
1.4 The term "Dth" shall mean the quantity of heat energy which is one
million British Thermal Units (MMBtu).
1.5 The term "Effective Period" shall mean the period of time (Days,
Months, or any portion thereof) specified on the then effective Confirmation,
1.6 The term "Gas" shall mean natural gas or any mixture of
hydrocarbons or of hydrocarbons and noncombustible gases, in a gaseous state.
1.7 The term "Mcf" shall mean one thousand (1,000) cubic feet of gas
measured at the temperature and pressure specified by the System identified on
Exhibit "A."
1.8 The term "Quantity" shall mean the amount of Gas that Seller
produces from those xxxxx listed on Exhibit "A" which Buyer agrees to purchase
and receive pursuant to the terms and conditions hereof at the Delivery Point(s)
as defined in Article IV herein.
1.9 The term "System" shall mean the pipeline system of an interstate
pipeline or local distribution company as identified on the applicable
Confirmation.
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ARTICLE II
Nature of Service
-----------------
2.1 Not Applicable.
ARTICLE III
Confirmation
------------
3.1 Buyer agrees to purchase the Quantity of Gas from Seller for the
Price at the Delivery Point(s) for the Effective Period. The Quantity, Price,
Delivery Point(s), Effective Period and other special provisions shall be
identified in the Confirmation.
3.2 Buyer and Seller agree that the specific terms associated with
Price, Quantity, Delivery Point(s), Effective Period and other special
provisions are subject to change from time to time upon mutual agreement of the
parties hereto by written execution of a "Confirmation" substantially in the
form of Exhibit "A".
ARTICLE IV
Delivery Point(s)
-----------------
4.1 The "Delivery Point(s)", as listed in an effective Confirmation,
are the points at which delivery of the Gas purchased herein are deemed to be
made at a point of the interconnection of Seller's gathering facilities with the
metering facilities of the System identified on Exhibit ""A." Seller shall
arrange and be responsible for the delivery of the Gas to the Delivery Point(s)
as specified on the then effective Confirmation. Buyer shall arrange and be
responsible for the transportation of the Gas after delivery is made at the
Delivery Point(s).
ARTICLE V
Price
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5.1 The price ("Price") paid by Buyer during each Effective Period, for
the Gas delivered by Seller to the Delivery Point(s), shall be as specified on
the then effective Confirmation(s). The price is inclusive of all production,
severance, excise, ad valorem, royalties or similar taxes levied on the
production or transportation of the Gas prior to or at its delivery to Buyer
hereunder.
ARTICLE VI
Term
----
6.1 The Agreement shall become effective with the Production Period
listed on the Confirmation(s) and shall remain in full force and effect for one
year from the Production Period and thereafter until terminated by either party
upon thirty (30) days' written notice to the other party; however, in the event
either party terminates this Agreement during a Production Period of a
Confirmation, this Agreement shall survive until the expiration of such
Production Period and the satisfaction of all obligations thereunder.
ARTICLE VII
Billing and Payment
-------------------
7.1 Buyer shall pay Seller not later than twenty five (25) days after
receipt of the delivery statement provided by the System Identified on Exhibit
"A." In the event a dispute arIses as to the amount
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payable in any invoice rendered hereunder, Buyer shall nevertheless pay when due
the amount not in dispute under such invoice. Such payment shall not be deemed
to be a waiver of the right by Buyer to recoup any overpayment, nor shall
acceptance of any payment be deemed to be a waiver by Seller of any
underpayment.
7.2 In the event Buyer fails to forward the entire amount due, except
amounts disputed in good faith, to Seller when same is due, interest on the
unpaid portion shall accrue at a rate equal to one percent (1%) above the prime
rale charged by Chase Manhattan Bank, New York, from time to time, or the
maximum legal rate, whichever is the lesser, compounded daily from the date such
payment is due until the same is paid.
7.3 Each party hereto shall have the right at all reasonable times to
examine the books and records of the other party to the extent necessary to
verify the accuracy of any statement, charge, computation, invoice or demand
made under or pursuant to this Agreement. Any payment shall be final as to both
parties unless questioned within twelve (12) calendar months from the date of
such payment.
ARTICLE VIII
Measurement and Quality of Gas
------------------------------
8.1 Quantities of Gas delivered to the Delivery Point(s) hereunder
shall be measured according to the measurement provisions contained in the
tariff of the applicable System.
8.2 Seller shall deliver Gas which meets the applicable System's
required quality specifications.
ARTICLE IX
Title and Warranty of Title
---------------------------
9.1 Except as provided by Section 4.1. title to and risk of loss of all
Gas delivered hereunder shall pass and vest in Buyer at the Delivery Point(s).
9.2 Seller warrants the title to the Gas delivered hereunder, that it
has good and lawful authority to sell such Gas, and that such Gas is free from
all liens and adverse claims of any kind or character. Seller agrees to
indemnify and hold Buyer harmless from all claims, suits, actions, debts,
accounts, damages, costs, losses and expenses of every kind and character
arising out of any adverse claim to or against such title. In the event an
adverse claim is brought against Gas which is subject to this Agreement, Buyer
may suspend payment for such Gas pending resolution of that claim.
ARTICLE X
Force Majeure
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10.1 If, by reason of Force Majeure, either party is rendered unable,
wholly or in part, to carry out its obligations under this Agreement, such party
shall be excused from performance hereunder, except to the extent payment is due
for Gas delivered, during the continuance of any inability so caused. "Force
Majeure" shall mean acts of God, strikes, lockouts or industrial disturbances,
interruptions by government or court orders, present or future orders of any
regulatory body having jurisdiction, acts of the public enemy, wars, riots,
inability to secure materials or labor, inability to secure right-of-way,
epidemics, landslides, lightning, earthquakes, fires, storms, floods,
explosions, breakage or accident to machinery, pipelines, equipment, freezing of
xxxxx or pipelines or any other situation, occurrence or condition not
reasonably within the control of the party claiming suspension, including,
without limitation, interruption of firm transportation, gathering, treating,
compression or services required of third parties, In the event either party is
unable to perform its obligations hereunder due to Force Majeure as defined
herein. that party shall notify the other party as soon as practicable and shall
use due diligence to alleviate such condition(s).
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ARTICLE XI
Taxes
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11.1 Seller shall pay, or cause to be paid, all royalties, overriding
royalties and payments out of production and all taxes including, without
limitation, severance and production taxes, imposed on or with respect to the
gas prior to or at its delivery at the Delivery Point; provided, however, if
state law requires Buyer to remit such taxes to the collecting authority, Buyer
shall do so and deduct the taxes so paid from payments otherwise due hereunder.
ARTICLE XII
Miscellaneous
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12.1 NOTICE. Any notice, request, or statement ("Notice") provided in
this Agreement between Buyer and Seller shall be in writing. Such Notice may be
transmitted via ordinary mail or facsimile.
Any such Notice shall be considered as duly delivered as of the earlier
of the receipt date indicated on the facsimile or the postmark date when mailed
by ordinary mail to the other party at the following address:
(a) Notice to
Seller: EVERFLOW EASTERN PARTNERS, L. P.
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxx 00000
Attn: Xx. Xxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) Notice
to Buyer: CNG ENERGY SERVICES CORPORATION
c/o East Ohio Gas
0000 Xxxx Xxxxx Xxxxxx, Xxxx 000
Xxxxxxxxx, XX 00000
Attn: Contract Administrator
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12.2 ENTIRE AGREEMENT AND AMENDMENTS. This written Agreement, including
the then effective Confirmation(s), contains the entire Agreement between the
parties and there are no other understandings or representations between the
parties hereto. This Agreement may not be amended except by an instrument in
writing.
12.3 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the substantive laws of the state of Ohio without regard to the
choice of law rules thereof.
12.4 SEVERABILITY. If any provision of this Agreement shall be held
invalid, illegal, or unenforceable to any extent and for any reason by a court
of competent jurisdiction, the remainder of this Agreement shall not be affected
thereby and shall be enforceable to the full extent permitted by law.
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12.5 WAIVER. The failure of either party at any time to exercise any
right or to require performance by the other party of any provision herein shall
in no way affect Ihe right of such party thereafter to enforce the same, nor
shall the waiver by either party hereto of any breach of any provision herein by
the other party be a waiver of any other breach of such provision, or as a
waiver of the provision itself.
12.6 HEADINGS. The title headings are for identification and reference
only and shall not be used in interpreting any part of this Agreement.
12.7 JOINT EFFORTS. This Agreement shall be considered for all purposes
as prepared through the joint efforts of the parties, and shall not be construed
against one party or the other as a result of the preparation, submittal or
other event of negotiation drafting or execution thereof.
12.8 ASSIGNMENT. This Agreement shall inure to and be binding upon the
successors and assigns of the parties hereto; provided, that neither party shall
assign this Agreement and the rights hereunder without first having obtained the
written approval of the other party which approval shall not be unreasonably
withheld.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
effective as of the day and year first above written.
CNG ENERGY SERVICES CORPORATION
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxx
Dir., Appalachian & Canadian Business Development
EVERFLOW EASTERN PARTNERS, L. P.
By: Everflow Management Corp., Managing G.P.
-------------------------------------------------
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxx, President
This is the signature page to the Gas Purchase Agreement dated as of the first
day of November, 1997 between CNG ENERGY SERVICES CORPORATION and EVERFLOW
EASTERN PARTNERS, L.P..
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Exhibit A
CONFIRMATION
For the
Gas Purchase Agreement
Dated November 1,1997
Between
CNG ENERGY SERVICES CORPORATION ("BUYER")
and
EVERFLOW EASTERN PARTNERS, L. P. ("SELLER")
Contract Number: 11467
Effective Period: November, 1997 Production Period
Term: One Year
Buyer: CNG Energy Services Corporation
c/o East Ohio Gas
0000 Xxxx Xxxxx Xxxxxx, Xxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Seller: EVERFLOW EASTERN PARTNERS, L. P.
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxx 00000
Attn: Xx. Xxx Xxxxxx
Quantity: Up to 2,000 Mcf/day (Estimated)
Price: $2.93
Delivery Point: E258 K719, K739, K778, K801, K817, K846, K927, K983,
K993, K995, E388
SPECIAL PROVISIONS: None
SELLER: BUYER:
EVERFLOW EASTERN PARTNERS, L.P. CNG ENERGY SERVICES CORPORATION
By: Everflow Management Corp.,
Managing G.P.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------ ----------------------------------
Xxxxxx X. Xxxxxx
President Dir., Appalachian & Canadian Bus. Dev.
---------------------------- -------------------------------------
Title Title
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Exhibit A
CONFIRMATION
For the
Gas Purchase Agreement
Dated November 1,1997
Between
CNG ENERGY SERVICES CORPORATION ("BUYER")
and
EVERFLOW EASTERN PARTNERS, L. P. ("SELLER'")
CONTRACT NUMBER: 11467
EFFECTIVE PERIOD: November. 1997 Production Period
TERM: One Year
BUYER: CNG Energy Services Corporation
c/o East Ohio Gas
0000 Xxxx Xxxxx Xxxxxx, Xxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
SELLER: EVERFLOW EASTERN PARTNERS, L. P.
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxx 00000
Attn: Xx. Xxx Xxxxxx
Quantity: Up to 1,200 Mcf/day (Estimated)
Price: NYMEX + $.52
Delivery Point: E250, E253, E288, K633, K674, K788, K810, K811, K821,
K867, K893, K898, K922, E295, New Xxxxx*
Special Provisions: None
*New Xxxxx: Trumbull Properties #1D, Trumbull Co., Xxxxxx Twp.,
Permit #3637 AME Church #1, Mahoning Co., C/Youngstown,
Permit #2684
SELLER: BUYER:
EVERFLOW EASTERN PARTNERS, L.P. CNG ENERGY SERVICES CORPORATION
By: Everflow Management Corp.,
Managing G.P.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------ ----------------------------------
Xxxxxx X. Xxxxxx
President Dir., Appalachian & Canadian Bus. Dev.
---------------------------- -------------------------------------
Title Title
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EXHIBIT A
CONFIRMATION LETTER
For the
Gas Purchase Agreement
Dated November 1, 1997
Between
CNG RETAIL SERVICES CORPORATION ("BUYER")
and
EVERFLOW EASTERN PARTNERS, L.P. ("SELLER")
CONTRACT NUMBER: 11467-A
EFFECTIVE PERIOD: November 1998 Production Period
TERM: One Year
BUYER: CNG Retail Services Corporation
c/o CNG Field Services Company
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
SELLER: Everflow Eastern Partners, L.P.
000 Xxxx Xxxx Xxxxxx
P.O. Box 629
Canfield, 01-1 44406
Attn: Xxx Xxxxxx
QUANTITY: Up to 1,400 Mcf/day (Estimated)
PRICE: $ 2.82/MCF
Delivery Points: BOG Meters: E515, E486, E484, E250, E253 ,E295, E288,
K633, K674, K788, K821, K811, K810,K898,K893,K867,K922
SPECIAL PROVISIONS: Less Applicable Deductions: if any
SELLER: BUYER:
EVERFLOW EASTERN PARTNERS, L.P. CNG RETAIL SERVICES CORPORATION
By: Everflow Management Corp.,
MGP
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxx
------------------------ ----------------------------------
Xxxxxx X. Xxxxxx
Title: President Title: Agent
---------------------- -------------------------------
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EXHIBIT A
CONFIRMATION LETTER
For the
Gas Purchase Agreement
Dated November 1, 1997
Between
CNG RETAIL SERVICES CORPORATION ("BUYER")
and
EVERFLOW EASTERN PARTNERS, L.P. ("SELLER")
CONTRACT NUMBER: 11467
EFFECTIVE PERIOD: November 1998 Production Period
TERM: One Year
BUYER: CNG Retail Services Corporation
c/o CNG Field Services Company
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
SELLER: Everflow Eastern Partners, L.P.
000 Xxxx Xxxx Xxxxxx
P.O. Box 629
Canfield, 01-1 44406
Attn: Xxx Xxxxxx
QUANTITY: Up to 1,300 Mcf/day (Estimated)
PRICE: $ 2.82/MCF
DELIVERY POINTS: EOG Meters: E258,E388,K719,K739,K778,K817,K80l,K846,
K927,K983,K995,K993.
SPECIAL PROVISIONS: Less Applicable Deductions: if any
SELLER: BUYER:
EVERFLOW EASTERN PARTNERS, L.P. CNG RETAIL SERVICES CORPORATION
By: Everflow Management Corp.,
MGP
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxx
------------------------ ----------------------------------
Xxxxxx X. Xxxxxx
Title: President Title: Agent
---------------------- ------------------------------------
