Base Contract for Sale and Purchase of Natural Gas
Exhibit
10.1
This
Base
Contract is entered into as of the following date: The parties to this Base
Contract are the following:
| ATMOS ENERGY MARKETING, LLC |
and
|
KENTUCKY USA ENERGY, INC. | |||||||
| 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000 Xxxxxxx, Xxxxx 00000-0000XX Xxx 0000, 00 Xxxxxxxxxxx, Xxxxxx, XX 00000 | |||||||||
| Duns Number: | 00-000-0000 | Duns Number: | |||||||
| Contract Number: | Contract Number: | ||||||||
| U.S. Federal Tax ID Number: | 00-0000000 | U.S. Federal Tax ID Number: | |||||||
| Notices: | |||||||||
| 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000 Same as above | |||||||||
| Attn: | Contract Administration | Attn: | Xxxxx Xxxxxxxx | ||||||
| Phone: | (000) 000-0000 |
Fax:
|
(000) 000-0000 | Phone: | 000-000-0000 |
Fax:
|
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| Confirmations: | |||||||||
| 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000 Same as above | |||||||||
| Attn: | Contract Administration | Attn: | |||||||
| Phone: | (000) 000-0000 |
Fax:
|
(000) 000-0000 | Phone: |
Fax:
|
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| Invoices and Payments: | |||||||||
| 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000 Same as above | |||||||||
| Attn: | Gas Accounting | Attn: | |||||||
| Phone: | (000) 000-0000 |
Fax:
|
(000) 000-0000 | Phone: |
Fax:
|
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| Wire Transfer or ACH Numbers (if applicable): | |||||||||
| BANK: | BANK: | ||||||||
| ABA: | ABA: | ||||||||
| ACCT: | ACCT: | ||||||||
| Other Details: | Other Details: | ||||||||
This
Base
Contract incorporates by reference for all purposes the General Terms and
Conditions for Sale and Purchase of Natural Gas published by the North American
Energy Standards Board. The parties hereby agree to the following provisions
offered in said General Terms and Conditions. In the event the parties fail
to
check a box, the specified default provision shall apply. Select
only one box from each section:
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Section
1.2
Transaction
Procedure
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■ Oral
(default)
མ Written
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Section
7.2
Payment
Date
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■ 25th Day
of Month following Month of delivery (default)
མ _____
Day of Month following Month of delivery
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Section
2.5
Confirm
Deadline
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■ 2
Business Days after receipt (default)
མ _____
Business Days after receipt
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Section
7.2
Method
of Payment
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■ Wire
transfer (default)
མ Automated
Clearinghouse Credit (ACH)
མ Check
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Section
2.6
Confirming
Party
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■ Seller
(default)
མ Buyer
མ
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Section
7.7
Netting
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■ Netting
applies (default)
མ Netting
does not apply
|
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Section
3.2
Performance
Obligation
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■ Cover
Standard (default)
མ Spot
Price Standard
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Section
10.3.1
Early
Termination Damages
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■ Early
Termination Damages Apply
(default)
མ Early
Termination Damages Do
Not Apply
|
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Note:
The following Spot Price Publication applies to both of the immediately
preceding.
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Section
10.3.2
Other
Agreement Setoffs
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■ Other
Agreement Setoffs Apply (default)
མ Other
Agreement Setoffs Do Not Apply
|
|
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Section
2.26
Spot
Price
Publication
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■ Gas
Daily Midpoint (default)
མ
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Section
14.5
Choice
Of Law
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Texas
|
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Section
6
Taxes
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■ Buyer
Pays At and After Delivery Point (default)
མ Seller
Pays Before and At Delivery Point
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Section
14.10
Confidentiality
|
■ Confidentiality
applies (default)
མ Confidentiality
does not apply
|
|
■
Special Provisions Number
of sheets attached: 3
མ
Addendum(s):___________________________________________________________________________________________
|
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IN
WITNESS WHEREOF, the parties hereto have executed this Base Contract in
duplicate.
|
ATMOS
ENERGY MARKETING, LLC
|
(Party
“A”)
|
(Party
“B”)
|
||||||
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Party
Name
|
Party
Name
|
|||||||
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By
|
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By
|
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|||||
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Name:
|
Name: | |||||||
| Title: | Title: | |||||||
Exhibit
10.1
General
Terms and Conditions
PURPOSE
AND PROCEDURES
These
General Terms and Conditions are intended to facilitate purchase and sale
transactions of Gas on a Firm or Interruptible basis. "Buyer" refers to the
party receiving Gas and "Seller" refers to the party delivering Gas.
The
entire agreement between the parties shall be the Contract as defined in Section
2.7.
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The
parties have selected either the “Oral Transaction Procedure” or the
“Written Transaction Procedure” as indicated on the Base
Contract.
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Oral
Transaction Procedure:
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The
parties will use the following Transaction Confirmation procedure.
Any Gas
purchase and sale transaction may be effectuated in an EDI transmission
or
telephone conversation with the offer and acceptance constituting
the
agreement of the parties. The parties shall be legally bound from
the time
they so agree to transaction terms and may each rely thereon. Any
such
transaction shall be considered a “writing” and to have been “signed”.
Notwithstanding the foregoing sentence, the parties agree that Confirming
Party shall, and the other party may, confirm a telephonic transaction
by
sending the other party a Transaction Confirmation by facsimile,
EDI or
mutually agreeable electronic means within three Business Days of
a
transaction covered by this Section 1.2 (Oral Transaction Procedure)
provided that the failure to send a Transaction Confirmation shall
not
invalidate the oral agreement of the parties. Confirming Party adopts
its
confirming letterhead, or the like, as its signature on any Transaction
Confirmation as the identification and authentication of Confirming
Party.
If
the Transaction Confirmation contains any provisions other than those
relating to the commercial terms of the transaction (i.e., price,
quantity, performance obligation, delivery point, period of delivery
and/or transportation conditions), which modify or supplement the
Base
Contract or General Terms and Conditions of this Contract (e.g.,
arbitration or additional representations and warranties), such provisions
shall not be deemed to be accepted pursuant to Section 1.3 but must
be
expressly agreed to by both parties; provided that the foregoing
shall not
invalidate any transaction agreed to by the parties.
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Written
Transaction Procedure:
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1.2. The
parties will use the following Transaction Confirmation procedure.
Should
the parties come to an agreement regarding a Gas purchase and sale
transaction for a particular Delivery Period, the Confirming Party
shall,
and the other party may, record that agreement on a Transaction
Confirmation and communicate such Transaction Confirmation by facsimile,
EDI or mutually agreeable electronic means, to the other party by
the
close of the Business Day following the date of agreement. The parties
acknowledge that their agreement will not be binding until the exchange
of
nonconflicting Transaction Confirmations or the passage of the Confirm
Deadline without objection from the receiving party, as provided
in
Section 1.3.
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If
a
sending party's Transaction Confirmation is materially different from the
receiving party's understanding of the agreement referred to in Section 1.2,
such receiving party shall notify the sending party via facsimile, EDI or
mutually agreeable electronic means by the Confirm Deadline, unless such
receiving party has previously sent a Transaction Confirmation to the sending
party. The failure of the receiving party to so notify the sending party in
writing by the Confirm Deadline constitutes the receiving party's agreement
to
the terms of the transaction described in the sending party's Transaction
Confirmation. If there are any material differences between timely sent
Transaction Confirmations governing the same transaction, then neither
Transaction Confirmation shall be binding until or unless such differences
are
resolved including the use of any evidence that clearly resolves the differences
in the Transaction Confirmations. In the event of a conflict among the terms
of
(i) a binding Transaction Confirmation pursuant to Section 1.2, (ii) the
oral agreement of the parties which may be evidenced by a recorded conversation,
where the parties have selected the Oral Transaction Procedure of the Base
Contract, (iii) the Base Contract, and (iv) these General Terms and
Conditions, the terms of the documents shall govern in the priority listed
in
this sentence.
The
parties agree that each party may electronically record all telephone
conversations with respect to this Contract between their respective employees,
without any special or further notice to the other party. Each party shall
obtain any necessary consent of its agents and employees to such recording.
Where
the
parties have selected the Oral Transaction Procedure in Section 1.2 of the
Base
Contract,
the
parties agree not to contest the validity or enforceability of telephonic
recordings entered into in accordance with the requirements of this Base
Contract. However, nothing herein shall be construed as a waiver of any
objection to the admissibility of such evidence.
DEFINITIONS
The
terms
set forth below shall have the meaning ascribed to them below. Other terms
are
also defined elsewhere in the Contract and shall have the meanings ascribed
to
them herein.
“Alternative
Damages” shall mean such damages, expressed in dollars or dollars per MMBtu, as
the parties shall agree upon in the Transaction Confirmation, in the event
either Seller or Buyer fails to perform a Firm obligation to deliver Gas in
the
case of Seller or to receive Gas in the case of Buyer.
"Base
Contract" shall mean a contract executed by the parties that incorporates these
General Terms and Conditions by reference; that specifies the agreed selections
of provisions contained herein; and that sets forth other information required
herein and any Special Provisions and addendum(s) as identified on page
one.
"British
thermal unit" or "Btu" shall mean the International BTU, which is also called
the Btu (IT).
"Business
Day" shall mean any day except Saturday, Sunday or Federal Reserve Bank
holidays.
Exhibit
10.1
"Confirm
Deadline" shall mean 5:00 p.m. in the receiving party's time zone on the second
Business Day following the Day a Transaction Confirmation is received or, if
applicable, on the Business Day agreed to by the parties in the Base Contract;
provided, if the Transaction Confirmation is time stamped after 5:00 p.m. in
the
receiving party's time zone, it shall be deemed received at the opening of
the
next Business Day.
"Confirming
Party" shall mean the party designated in the Base Contract to prepare and
forward Transaction Confirmations to the other party.
"Contract"
shall mean the legally-binding relationship established by (i) the Base
Contract, (ii) any and all binding Transaction Confirmations and (iii) where
the
parties have selected the Oral Transaction Procedure in Section 1.2 of the
Base
Contract, any and all transactions that the parties have entered into through
an
EDI transmission or by telephone, but that have not been confirmed in a binding
Transaction Confirmation.
"Contract
Price" shall mean the amount expressed in U.S. Dollars per MMBtu to be paid
by
Buyer to Seller for the purchase of Gas as agreed to by the parties in a
transaction.
"Contract
Quantity" shall mean the quantity of Gas to be delivered and taken as agreed
to
by the parties in a transaction.
"Cover
Standard", as referred to in Section 3.2, shall mean that if there is an
unexcused failure to take or deliver any quantity of Gas pursuant to this
Contract, then the performing party shall use commercially reasonable efforts
to
(i) if Buyer is the performing party, obtain Gas, (or an alternate fuel if
elected by Buyer and replacement Gas is not available), or (ii) if Seller is
the
performing party, sell Gas, in either case, at a price reasonable for the
delivery or production area, as applicable, consistent with: the amount of
notice provided by the nonperforming party; the immediacy of the Buyer's Gas
consumption needs or Seller's Gas sales requirements, as applicable; the
quantities involved; and the anticipated length of failure by the nonperforming
party.
"Credit
Support Obligation(s)” shall mean any obligation(s) to provide or establish
credit support for, or on behalf of, a party to this Contract such as an
irrevocable standby letter of credit, a margin agreement, a prepayment, a
security interest in an asset, a performance bond, guaranty, or other good
and
sufficient security of a continuing nature.
"Day"
shall mean a period of 24 consecutive hours, coextensive with a "day" as defined
by the Receiving Transporter in a particular transaction.
"Delivery
Period" shall be the period during which deliveries are to be made as agreed
to
by the parties in a transaction.
"Delivery
Point(s)" shall mean such point(s) as are agreed to by the parties in a
transaction.
"EDI"
shall mean an electronic data interchange pursuant to an agreement entered
into
by the parties, specifically relating to the communication of Transaction
Confirmations under this Contract.
"EFP"
shall mean the purchase, sale or exchange of natural Gas as the "physical"
side
of an exchange for physical transaction involving gas futures contracts. EFP
shall incorporate the meaning and remedies of "Firm", provided that a party’s
excuse for nonperformance of its obligations to deliver or receive Gas will
be
governed by the rules of the relevant futures exchange regulated under the
Commodity Exchange Act.
"Firm"
shall mean that either party may interrupt its performance without liability
only to the extent that such performance is prevented for reasons of Force
Majeure; provided, however, that during Force Majeure interruptions, the party
invoking Force Majeure may be responsible for any Imbalance Charges as set
forth
in Section 4.3 related to its interruption after the nomination is made to
the
Transporter and until the change in deliveries and/or receipts is confirmed
by
the Transporter.
"Gas"
shall mean any mixture of hydrocarbons and noncombustible gases in a gaseous
state consisting primarily of methane.
"Imbalance
Charges" shall mean any fees, penalties, costs or charges (in cash or in kind)
assessed by a Transporter for failure to satisfy the Transporter's balance
and/or nomination requirements.
"Interruptible"
shall mean that either party may interrupt its performance at any time for
any
reason, whether or not caused by an event of Force Majeure, with no liability,
except such interrupting party may be responsible for any Imbalance Charges
as
set forth in Section 4.3 related to its interruption after the nomination is
made to the Transporter and until the change in deliveries and/or receipts
is
confirmed by Transporter.
"MMBtu"
shall mean one million British thermal units, which is equivalent to one
dekatherm.
"Month"
shall mean the period beginning on the first Day of the calendar month and
ending immediately prior to the commencement of the first Day of the next
calendar month.
"Payment
Date" shall mean a date, as indicated on the Base Contract, on or before which
payment is due Seller for Gas received by Buyer in the previous
Month.
"Receiving
Transporter" shall mean the Transporter receiving Gas at a Delivery Point,
or
absent such receiving Transporter, the Transporter delivering Gas at a Delivery
Point.
"Scheduled
Gas" shall mean the quantity of Gas confirmed by Transporter(s) for movement,
transportation or management.
"Spot
Price " as referred to in Section 3.2 shall mean the price listed in the
publication indicated on the Base Contract, under the listing applicable to
the
geographic location closest in proximity to the Delivery Point(s) for the
relevant Day; provided, if there is no single price published for such location
for such Day, but there is published a range of prices, then the Spot Price
shall be the average of such high and low prices. If no price or range of prices
is published for such Day, then the Spot Price shall be the average of the
following: (i) the price (determined as stated above) for the first Day for
which a price or range of prices is published that next precedes the relevant
Day; and (ii) the price (determined as stated above) for the first Day for
which a price or range of prices is published that next follows the relevant
Day.
Exhibit
10.1
"Transaction
Confirmation" shall mean a document, similar to the form of Exhibit A, setting
forth the terms of a transaction formed pursuant to Section 1 for a particular
Delivery Period.
“Termination
Option” shall mean the option of either party to terminate a transaction in the
event that the other party fails to perform a Firm obligation to deliver Gas
in
the case of Seller or to receive Gas in the case of Buyer for a designated
number of days during a period as specified on the applicable Transaction
Confirmation.
"Transporter(s)"
shall
mean all Gas gathering or pipeline companies, or local distribution companies,
acting in the capacity of a transporter, transporting Gas for Seller or Buyer
upstream or downstream, respectively, of the Delivery Point pursuant to a
particular transaction.
PERFORMANCE
OBLIGATION
Seller
agrees to sell and deliver, and Buyer agrees to receive and purchase, the
Contract Quantity for a particular transaction in accordance with the terms
of
the Contract. Sales and purchases will be on a Firm or Interruptible basis,
as
agreed
to
by the parties in a transaction.
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The
parties have selected either the “Cover Standard” or the “Spot Price
Standard” as indicated on the Base Contract.
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Cover
Standard:
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The
sole and exclusive remedy of the parties in the event of a breach
of a
Firm obligation to deliver or receive Gas shall be recovery of the
following: (i) in the event of a breach by Seller on any Day(s),
payment
by Seller to Buyer in an amount equal to the positive difference,
if any,
between the purchase price paid by Buyer utilizing the Cover Standard
and
the Contract Price, adjusted for commercially reasonable differences
in
transportation costs to or from the Delivery Point(s), multiplied
by the
difference between the Contract Quantity and the quantity actually
delivered by Seller for such Day(s); or (ii) in the event of a breach
by
Buyer on any Day(s), payment by Buyer to Seller in the amount equal
to the
positive difference, if any, between the Contract Price and the price
received by Seller utilizing the Cover Standard for the resale of
such
Gas, adjusted for commercially reasonable differences in transportation
costs to or from the Delivery Point(s), multiplied by the difference
between the Contract Quantity and the quantity actually taken by
Buyer for
such Day(s); or (iii) in the event that Buyer has used commercially
reasonable efforts to replace the Gas or Seller has used commercially
reasonable efforts to sell the Gas to a third party, and no such
replacement or sale is available, then the sole and exclusive remedy
of
the performing party shall be any unfavorable difference between
the
Contract Price and the Spot Price, adjusted for such transportation
to the
applicable Delivery Point, multiplied by the difference between the
Contract Quantity and the quantity actually delivered by Seller and
received by Buyer for such Day(s).
Imbalance Charges shall not be recovered under this Section 3.2,
but
Seller and/or Buyer shall be responsible for Imbalance Charges, if
any, as
provided in Section 4.3.
The amount of such unfavorable difference shall be payable five Business
Days after presentation of the performing party’s invoice, which shall set
forth the basis upon which such amount was calculated.
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Spot
Price Standard:
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3.2. The
sole and exclusive remedy of the parties in the event of a breach
of a
Firm obligation to deliver or receive Gas shall be recovery of the
following: (i) in the event of a breach by Seller on any Day(s),
payment
by Seller to Buyer in an amount equal to the difference between the
Contract Quantity and the actual quantity delivered by Seller and
received
by Buyer for such Day(s), multiplied by the positive difference,
if any,
obtained by subtracting the Contract Price from the Spot Price; or
(ii) in
the event of a breach by Buyer on any Day(s), payment by Buyer to
Seller
in an amount equal to the difference between the Contract Quantity
and the
actual quantity delivered by Seller and received by Buyer for such
Day(s),
multiplied by the positive difference, if any, obtained by subtracting
the
applicable Spot Price from the Contract Price. Imbalance Charges
shall not
be recovered under this Section 3.2, but Seller and/or Buyer shall
be
responsible for Imbalance Charges, if any, as provided in Section
4.3. The
amount of such unfavorable difference shall be payable five Business
Days
after presentation of the performing party’s invoice, which shall set
forth the basis upon which such amount was
calculated.
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Notwithstanding
Section 3.2, the parties may agree to Alternative Damages in a Transaction
Confirmation executed in writing by both parties.
In
addition to Sections 3.2 and 3.3, the parties may provide for a Termination
Option in a Transaction Confirmation executed in writing by both parties. The
Transaction Confirmation containing the Termination Option will designate the
length of nonperformance triggering the Termination Option and the procedures
for exercise thereof, how damages for nonperformance will be compensated, and
how liquidation costs will be calculated.
TRANSPORTATION,
NOMINATIONS, AND IMBALANCES
Seller
shall have the sole responsibility for transporting the Gas to the Delivery
Point(s). Buyer shall have the sole responsibility for transporting the Gas
from
the Delivery Point(s).
The
parties shall coordinate their nomination activities, giving sufficient time
to
meet the deadlines of the affected Transporter(s). Each party shall give the
other party timely prior Notice, sufficient to meet the requirements of all
Transporter(s) involved in the transaction, of the quantities of Gas to be
delivered and purchased each Day. Should either party become aware that actual
deliveries at the Delivery Point(s) are greater or lesser than the Scheduled
Gas, such party shall promptly notify the other party.
The
parties shall use commercially reasonable efforts to avoid imposition of any
Imbalance Charges. If Buyer or Seller receives an invoice from a Transporter
that includes Imbalance Charges, the parties shall determine the validity as
well as the cause of such Imbalance Charges. If
the
Imbalance Charges were incurred as a result of Buyer’s receipt of quantities of
Gas greater than or less than the Scheduled Gas, then Buyer shall pay for such
Imbalance Charges or reimburse Seller for such Imbalance Charges paid by Seller.
If the Imbalance Charges were incurred as a result of Seller’s delivery of
quantities of Gas greater than or less than the Scheduled Gas, then Seller
shall
pay for such Imbalance Charges or reimburse Buyer for such Imbalance Charges
paid by Buyer.
QUALITY
AND MEASUREMENT
All
Gas
delivered by Seller shall meet the pressure, quality and heat content
requirements of the Receiving Transporter. The unit of quantity measurement
for
purposes of this Contract shall be one MMBtu dry. Measurement of Gas quantities
hereunder shall be in accordance with the established procedures of the
Receiving Transporter.
Exhibit
10.1
TAXES
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The
parties have selected either “Buyer Pays At and After Delivery Point” or
“Seller Pays Before and At Delivery Point” as indicated on the Base
Contract.
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Buyer
Pays At and After Delivery Point:
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Seller
shall pay or cause to be paid all taxes, fees, levies, penalties,
licenses
or charges imposed by any government authority (“Taxes”) on or with
respect to the Gas prior to the Delivery Point(s). Buyer shall pay
or
cause to be paid all Taxes on or with respect to the Gas at the Delivery
Point(s) and all Taxes after the Delivery Point(s). If a party is
required
to remit or pay Taxes that are the other party’s responsibility hereunder,
the party responsible for such Taxes shall promptly reimburse the
other
party for such Taxes. Any party entitled to an exemption from any
such
Taxes or charges shall furnish the other party any necessary documentation
thereof.
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Seller
Pays Before and At Delivery Point:
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Seller
shall pay or cause to be paid all taxes, fees, levies, penalties,
licenses
or charges imposed by any government authority (“Taxes”) on or with
respect to the Gas prior to the Delivery Point(s) and all Taxes at
the
Delivery Point(s). Buyer shall pay or cause to be paid all Taxes
on or
with respect to the Gas after the Delivery Point(s). If a party is
required to remit or pay Taxes that are the other party’s responsibility
hereunder, the party responsible for such Taxes shall promptly reimburse
the other party for such Taxes. Any party entitled to an exemption
from
any such Taxes or charges shall furnish the other party any necessary
documentation thereof.
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BILLING,
PAYMENT, AND AUDIT
Seller
shall invoice Buyer for Gas delivered and received in the preceding Month and
for any other applicable charges, providing supporting documentation acceptable
in industry practice to support the amount charged. If the actual quantity
delivered is not known by the billing date, billing will be prepared based
on
the quantity of Scheduled Gas. The invoiced quantity will then be adjusted
to
the actual quantity on the following Month's billing or as soon thereafter
as
actual delivery information is available.
Buyer
shall remit the amount due under Section 7.1 in the manner specified in the
Base
Contract, in immediately available funds, on or before the later of the Payment
Date or 10 Days after receipt of the invoice by Buyer; provided that if the
Payment Date is not a Business Day, payment is due on the next Business Day
following that date. In
the
event any payments are due Buyer hereunder, payment to Buyer shall be made
in
accordance with this Section 7.2.
In
the
event payments become due pursuant to Sections 3.2 or 3.3, the performing party
may submit an invoice to the nonperforming party for an accelerated payment
setting forth the basis upon which the invoiced amount was calculated. Payment
from the nonperforming party will be due five Business Days after receipt of
invoice.
If
the
invoiced party, in good faith, disputes the amount of any such invoice or any
part thereof, such invoiced party will pay such amount as it concedes to be
correct; provided, however, if the invoiced party disputes the amount due,
it
must provide supporting documentation acceptable in industry practice to support
the amount paid or disputed. In the event the parties are unable to resolve
such
dispute, either party may pursue any remedy available at law or in equity to
enforce its rights pursuant to this Section.
If
the
invoiced party fails to remit the full amount payable when due, interest on
the
unpaid portion shall accrue from the date due until the date of payment at
a
rate equal to the lower of (i) the then-effective prime rate of interest
published under "Money Rates" by The Wall Street Journal, plus two percent
per
annum; or (ii) the maximum applicable lawful interest rate.
A
party
shall have the right, at its own expense, upon reasonable Notice and at
reasonable times, to examine and audit and to obtain copies of the relevant
portion of the books, records, and telephone recordings of the other party
only
to the extent reasonably necessary to verify the accuracy of any statement,
charge, payment, or computation made under the Contract. This right to examine,
audit, and to obtain copies shall not be available with respect to proprietary
information not directly relevant to transactions under this Contract. All
invoices and xxxxxxxx shall be conclusively presumed final and accurate and
all
associated claims for under- or overpayments shall be deemed waived unless
such
invoices or xxxxxxxx are objected to in writing, with adequate explanation
and/or documentation, within two years after the Month of Gas delivery. All
retroactive adjustments under Section 7 shall be paid in full by the party
owing
payment within 30 Days of Notice and substantiation of such
inaccuracy.
Unless
the parties have elected on the Base Contract not to make this Section 7.7
applicable to this Contract, the
parties shall net all undisputed amounts due and owing, and/or past due, arising
under the Contract such that the party owing the greater amount shall make
a
single payment of the net amount to the other party in accordance with Section
7; provided that no payment required to be made pursuant to the terms of any
Credit Support Obligation or pursuant to Section 7.3 shall be subject to netting
under this Section. If the parties have executed a separate netting agreement,
the terms and conditions therein shall prevail to the extent inconsistent
herewith.
TITLE,
WARRANTY, AND INDEMNITY
Unless
otherwise
specifically agreed, title to the Gas shall pass from Seller to Buyer at the
Delivery Point(s). Seller shall have responsibility for and assume any liability
with respect to the Gas prior to its delivery to Buyer at the specified Delivery
Point(s). Buyer shall have responsibility for and any liability with respect
to
said Gas after its delivery to Buyer at the Delivery Point(s).
Seller
warrants that it will have the right to convey and will transfer good and
merchantable title to all Gas sold hereunder and delivered by it to Buyer,
free
and clear of all liens, encumbrances, and claims.
EXCEPT
AS PROVIDED IN THIS SECTION 8.2 AND IN SECTION 14.8, ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS
FOR
ANY PARTICULAR PURPOSE, ARE DISCLAIMED.
Exhibit
10.1
Seller
agrees to indemnify Buyer and save it harmless from all losses, liabilities
or
claims including reasonable attorneys' fees and costs of court ("Claims"),
from
any and all persons, arising from or out of claims of title, personal injury
or
property damage from said Gas or other charges thereon which attach before
title
passes to Buyer. Buyer agrees
to
indemnify Seller and save it harmless from all Claims, from any and all persons,
arising from or out of claims regarding payment, personal injury or property
damage from said Gas or other charges thereon which attach after title passes
to
Buyer.
Notwithstanding
the other provisions of this Section 8, as between Seller and Buyer, Seller
will
be liable for all Claims to the extent that such arise from the failure of
Gas
delivered by Seller to meet the quality requirements of Section 5.
NOTICES
All
Transaction
Confirmations, invoices, payments and other communications made pursuant to
the
Base Contract ("Notices") shall be made to the addresses specified in writing
by
the respective parties from time to time.
All
Notices required hereunder may be sent by facsimile or mutually acceptable
electronic means, a nationally recognized overnight courier service, first
class
mail or hand delivered.
Notice
shall be given when received on a Business Day by the addressee. In the absence
of proof of the actual receipt date, the following presumptions will apply.
Notices sent by facsimile shall be deemed to have been received upon the sending
party's receipt of its facsimile machine's confirmation of successful
transmission. If the day on which such facsimile is received is not a Business
Day or is after five p.m. on a Business Day, then such facsimile shall be deemed
to have been received on the next following Business Day. Notice by overnight
mail or courier shall be deemed to have been received on the next Business
Day
after it was sent or such earlier time as is confirmed by the receiving party.
Notice via first class mail shall be considered delivered five Business Days
after
mailing.
FINANCIAL
RESPONSIBILITY
If
either
party (“X”) has reasonable
grounds for insecurity regarding the performance of any obligation under this
Contract (whether or not then due) by the other party (“Y”) (including, without
limitation, the occurrence of a material change in the creditworthiness of
Y), X
may demand Adequate Assurance of Performance. “Adequate Assurance of
Performance” shall mean sufficient security in the form, amount and for the term
reasonably acceptable to X, including, but not limited to, a standby irrevocable
letter of credit, a prepayment, a security interest in an asset or a performance
bond or guaranty (including the issuer of any such security).
In
the
event (each an "Event of Default") either party (the "Defaulting Party") or
its
guarantor shall: (i)
make an
assignment or any general arrangement for the benefit of creditors;
(ii)
file a
petition or otherwise commence, authorize, or acquiesce in the commencement
of a
proceeding or case under any bankruptcy or similar law for the protection of
creditors or have such petition filed or proceeding commenced against it;
(iii)
otherwise become bankrupt or insolvent (however evidenced); (iv)
be
unable to pay its debts as they fall due; (v)
have a
receiver, provisional liquidator, conservator, custodian, trustee or other
similar official appointed with respect to it or substantially all of its
assets; (vi)
fail to
perform any obligation to the other party with respect to any Credit Support
Obligations relating to the Contract; (vii)
fail to
give Adequate Assurance of Performance under Section 10.1 within 48 hours but
at
least one Business Day of a written request by the other party; or (viii)
not
have paid any amount due the other party hereunder on or before the second
Business Day following written Notice
that
such
payment is due; then the other party (the "Non-Defaulting Party") shall have
the
right, at its sole election, to immediately withhold and/or suspend deliveries
or payments upon Notice and/or to terminate and liquidate the transactions
under
the Contract, in the manner provided in Section 10.3, in addition to any and
all
other remedies available hereunder.
If
an
Event of Default has occurred and is continuing, the Non-Defaulting Party shall
have the right, by Notice
to
the
Defaulting Party, to designate a Day, no earlier than the Day such Notice
is
given
and no later than 20 Days after such Notice is given, as an early termination
date (the “Early Termination Date”) for the liquidation and termination pursuant
to Section 10.3.1 of all transactions under the Contract, each a “Terminated
Transaction”. On the Early Termination Date, all transactions will terminate,
other than those transactions, if any, that may not be liquidated and terminated
under applicable law or that are, in the reasonable opinion of the
Non-Defaulting Party, commercially impracticable to liquidate and terminate
(“Excluded Transactions”), which Excluded Transactions must be liquidated and
terminated as soon thereafter as is reasonably practicable, and upon termination
shall be a Terminated Transaction and be valued consistent with Section 10.3.1
below.
With
respect to each Excluded Transaction, its actual termination date shall be
the
Early Termination Date for purposes of Section 10.3.1.
Exhibit
10.1
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The
parties have selected either “Early Termination Damages Apply” or “Early
Termination Damages Do Not Apply” as indicated on the Base
Contract.
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Early
Termination Damages Apply:
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As
of the Early Termination Date, the Non-Defaulting Party shall determine,
in good faith and in a commercially reasonable manner, (i) the amount
owed
(whether or not then due) by each party with respect to all Gas delivered
and received between the parties under Terminated Transactions and
Excluded Transactions on and before the Early Termination Date and
all
other applicable charges relating to such deliveries and receipts
(including without limitation any amounts owed under Section 3.2),
for
which payment has not yet been made by the party that owes such payment
under this Contract and (ii) the Market Value, as defined below,
of each
Terminated Transaction. The Non-Defaulting Party shall (x) liquidate
and
accelerate each Terminated Transaction at its Market Value, so that
each
amount equal to the difference between such Market Value and the
Contract
Value, as defined below, of such Terminated Transaction(s) shall
be due to
the Buyer under the Terminated Transaction(s) if such Market Value
exceeds
the Contract Value and to the Seller if the opposite is the case;
and (y)
where appropriate, discount each amount then due under clause (x)
above to
present value in a commercially reasonable manner as of the Early
Termination Date (to take account of the period between the date
of
liquidation and the date on which such amount would have otherwise
been
due pursuant to the relevant Terminated Transactions).
For
purposes of this Section 10.3.1, “Contract Value” means the amount of Gas
remaining to be delivered or purchased under a transaction multiplied
by
the Contract Price, and “Market Value” means the amount of Gas remaining
to be delivered or purchased under a transaction multiplied by the
market
price for a similar transaction at the Delivery Point determined
by the
Non-Defaulting Party in a commercially reasonable manner. To ascertain
the
Market Value, the Non-Defaulting Party may consider, among other
valuations, any or all of the settlement prices of NYMEX Gas futures
contracts, quotations from leading dealers in energy swap contracts
or
physical gas trading markets, similar sales or purchases and any
other
bona fide third-party offers, all adjusted for the length of the
term and
differences in transportation costs. A party shall not be required
to
enter into a replacement transaction(s) in order to determine the
Market
Value. Any extension(s) of the term of a transaction to which parties
are
not bound as of the Early Termination Date (including but not limited
to
“evergreen provisions”) shall not be considered in determining Contract
Values and Market Values. For the avoidance of doubt, any option
pursuant
to which one party has the right to extend the term of a transaction
shall
be considered in determining Contract Values and Market Values. The
rate
of interest used in calculating net present value shall be determined
by
the Non-Defaulting Party in a commercially reasonable
manner.
|
|
Early
Termination Damages Do Not Apply:
|
|
10.3.1. As
of the Early Termination Date, the Non-Defaulting Party shall determine,
in good faith and in a commercially reasonable manner, the amount
owed
(whether or not then due) by each party with respect to all Gas delivered
and received between the parties under Terminated Transactions and
Excluded Transactions on and before the Early Termination Date and
all
other applicable charges relating to such deliveries and receipts
(including without limitation any amounts owed under Section 3.2),
for
which payment has not yet been made by the party that owes such payment
under this Contract.
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|
The
parties have selected either “Other Agreement Setoffs Apply” or “Other
Agreement Setoffs Do Not Apply” as indicated on the Base
Contract.
|
|
Other
Agreement Setoffs Apply:
|
|
The
Non-Defaulting Party shall net or aggregate, as appropriate, any
and all
amounts owing between the parties under Section 10.3.1, so that all
such
amounts are netted or aggregated to a single liquidated amount payable
by
one party to the other (the “Net Settlement Amount”). At its sole option
and without prior Notice to the Defaulting Party, the Non-Defaulting
Party
may setoff (i) any Net Settlement Amount owed to the Non-Defaulting
Party
against any margin or other collateral held by it in connection with
any
Credit Support Obligation relating to the Contract; or (ii) any Net
Settlement Amount payable to the Defaulting Party against any amount(s)
payable by the Defaulting Party to the Non-Defaulting Party under
any
other agreement or arrangement between the parties.
|
|
Other
Agreement Setoffs Do Not Apply:
|
|
10.3.2. The
Non-Defaulting Party shall net or aggregate, as appropriate, any
and all
amounts owing between the parties under Section 10.3.1, so that all
such
amounts are netted or aggregated to a single liquidated amount payable
by
one party to the other (the “Net Settlement Amount”). At its sole option
and without prior Notice to the Defaulting Party, the Non-Defaulting
Party
may setoff any Net Settlement Amount owed to the Non-Defaulting Party
against any margin or other collateral held by it in connection with
any
Credit Support Obligation relating to the
Contract.
|
If
any
obligation that is to be included in any netting, aggregation or setoff pursuant
to Section 10.3.2 is unascertained, the Non-Defaulting Party may in good faith
estimate that obligation and net, aggregate or setoff, as applicable, in respect
of the estimate, subject to the Non-Defaulting Party accounting to the
Defaulting Party when the obligation is ascertained. Any amount not then due
which is included in any netting, aggregation or setoff pursuant to Section
10.3.2 shall be discounted to net present value in a commercially reasonable
manner determined by the Non-Defaulting Party.
As
soon
as practicable after a liquidation, Notice shall be given by the Non-Defaulting
Party to the Defaulting Party of the Net Settlement Amount, and whether the
Net
Settlement Amount is due to or due from the Non-Defaulting Party. The Notice
shall include a written statement explaining in reasonable detail the
calculation of such amount, provided that failure to give such Notice shall
not
affect the validity or enforceability of the liquidation or give rise to any
claim by the Defaulting Party against the Non-Defaulting Party. The Net
Settlement Amount shall be paid by the close of business on the second Business
Day following such Notice, which date shall not be earlier than the Early
Termination Date. Interest
on any unpaid portion of the Net Settlement Amount shall accrue from the date
due until the date of payment at a rate equal to the lower of (i) the
then-effective prime rate of interest published under "Money Rates" by The
Wall
Street Journal, plus two percent per annum; or (ii) the maximum applicable
lawful interest rate.
Exhibit
10.1
The
parties agree that the transactions hereunder constitute a "forward contract"
within the meaning of the United States Bankruptcy Code and that Buyer and
Seller are each "forward contract merchants" within the meaning of the United
States Bankruptcy Code.
The
Non-Defaulting Party's remedies under this Section 10 are the sole and exclusive
remedies of the Non-Defaulting Party with respect to the occurrence of any
Early
Termination Date. Each party reserves to itself all other rights, setoffs,
counterclaims and other defenses that it is or may be entitled to arising from
the Contract.
With
respect to this Section 10, if the parties have executed a separate netting
agreement with close-out netting provisions, the terms and conditions therein
shall prevail to the extent inconsistent herewith.
FORCE
MAJEURE
Except
with regard to a party's obligation to make payment(s) due under Section 7,
Section 10.4, and Imbalance Charges under Section 4, neither party shall be
liable to the other for failure to perform a Firm obligation, to the extent
such
failure was caused by Force Majeure. The term "Force Majeure" as employed herein
means any cause not reasonably within the control of the party claiming
suspension, as further defined in Section 11.2.
Force
Majeure
shall include, but not be limited to, the following: (i) physical events
such as acts of God, landslides, lightning, earthquakes, fires, storms or storm
warnings, such as hurricanes, which result in evacuation of the affected area,
floods, washouts, explosions, breakage or accident or necessity of repairs
to
machinery or equipment or lines of pipe; (ii) weather related events
affecting an entire geographic region, such as low temperatures which cause
freezing or failure of xxxxx or lines of pipe; (iii) interruption and/or
curtailment of Firm transportation and/or storage by Transporters;
(iv) acts of others such as strikes, lockouts or other industrial
disturbances, riots, sabotage, insurrections or wars; and (v) governmental
actions such as necessity for compliance with any court order, law, statute,
ordinance, regulation, or policy having the effect of law promulgated by a
governmental authority having jurisdiction. Seller and Buyer shall make
reasonable efforts to avoid the adverse impacts of a Force Majeure and to
resolve the event or occurrence once it has occurred in order to resume
performance.
Neither
party shall be entitled to the benefit of the provisions of Force Majeure to
the
extent performance is affected by any or all of the following circumstances:
(i) the curtailment of interruptible or secondary Firm transportation
unless primary, in-path, Firm transportation is also curtailed; (ii) the party
claiming excuse failed to remedy the condition and to resume the performance
of
such covenants or obligations with reasonable dispatch; or (iii) economic
hardship,
to
include, without limitation, Seller’s ability to sell Gas at a higher or more
advantageous price than the Contract Price, Buyer’s ability to purchase Gas at a
lower or more advantageous price than the Contract Price, or a regulatory agency
disallowing, in whole or in part, the pass through of costs resulting from
this
Agreement; (iv) the loss of Buyer’s market(s) or Buyer’s inability to use or
resell Gas purchased hereunder, except, in either case, as provided in Section
11.2; or (v) the loss or failure of Seller’s gas supply or depletion of
reserves, except, in either case, as provided in Section 11.2.
The
party claiming Force Majeure shall not be excused from its responsibility for
Imbalance Charges.
Notwithstanding
anything to the contrary herein, the parties agree that the settlement of
strikes, lockouts or other industrial disturbances shall be within the sole
discretion of the party experiencing such disturbance.
The
party
whose performance is prevented by Force Majeure must provide Notice to the
other
party. Initial Notice may be given
orally;
however, written Notice with reasonably full particulars of the event or
occurrence is required as soon as reasonably possible. Upon providing written
Notice of Force Majeure to the other party, the affected party will be relieved
of its obligation, from the onset of the Force Majeure event, to make or accept
delivery of Gas, as applicable, to the extent and for the duration of Force
Majeure, and neither party shall be deemed to have failed in such obligations
to
the other during such occurrence or event.
Notwithstanding
Sections 11.2 and 11.3, the parties may agree to alternative Force Majeure
provisions in a Transaction Confirmation executed in writing by both
parties.
TERM
This
Contract may be terminated on 30 Day’s written Notice, but shall remain in
effect until the expiration of the latest Delivery Period of any transaction(s).
The rights of either party pursuant to Section 7.6 and Section 10, the
obligations to make payment hereunder, and the obligation of either party to
indemnify the other, pursuant hereto shall survive the termination of the Base
Contract or any transaction.
LIMITATIONS
FOR
BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS
PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY. A PARTY’S LIABILITY HEREUNDER SHALL BE LIMITED AS SET FORTH IN
SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR
IN A
TRANSACTION, A PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY.
SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL
OTHER
REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN
PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION
DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR
OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED
ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES
RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE
BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES
REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT
THE
DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN
ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE
A REASONABLE APPROXIMATION OF THE HARM OR LOSS.
Exhibit
10.1
MISCELLANEOUS
This
Contract shall be binding upon and inure to the benefit of the successors,
assigns, personal representatives, and heirs of the respective parties hereto,
and the covenants, conditions, rights and obligations of this Contract shall
run
for the full term of this Contract. No assignment of this Contract, in whole
or
in part, will be made without the prior written consent of the non-assigning
party (and shall not relieve the assigning party from liability hereunder),
which consent will not be unreasonably withheld or delayed; provided, either
party may (i) transfer, sell, pledge, encumber, or assign this Contract or
the
accounts, revenues, or proceeds hereof in connection with any financing or
other
financial arrangements, or (ii) transfer its interest to any parent or affiliate
by assignment, merger or otherwise without the prior approval of the other
party. Upon any such assignment, transfer and assumption, the transferor shall
remain principally liable for and shall not be relieved of or discharged from
any obligations hereunder.
If
any
provision in this Contract is determined to be invalid, void or unenforceable
by
any court having jurisdiction, such determination shall not invalidate, void,
or
make unenforceable any other provision, agreement or covenant of this
Contract.
No
waiver
of any breach of this Contract shall be held to be a waiver of any other or
subsequent breach.
This
Contract sets forth all understandings between the parties respecting each
transaction subject hereto, and any prior contracts, understandings and
representations, whether oral or written, relating to such transactions are
merged into and superseded by this Contract and any effective transaction(s).
This Contract may be amended only by a writing executed by both
parties.
The
interpretation and performance of this Contract shall be governed by the laws
of
the jurisdiction as indicated on the Base Contract, excluding, however, any
conflict of laws rule which would apply the law of another
jurisdiction.
This
Contract and all provisions herein will be subject to all applicable and valid
statutes, rules, orders and regulations of any governmental authority having
jurisdiction over the parties, their facilities, or Gas supply, this Contract
or
transaction or any provisions thereof.
There
is
no third party beneficiary to this Contract.
Each
party to this Contract represents and warrants that it has full and complete
authority to enter into and perform this Contract. Each person who executes
this
Contract on behalf of either party represents and warrants that it has full
and
complete authority to do so and that such party will be bound
thereby.
The
headings and subheadings contained in this Contract are used solely for
convenience and do not constitute a part of this Contract between the parties
and shall not be used to construe or interpret the provisions of this
Contract.
Unless
the parties have elected on the Base Contract not to make this Section 14.10
applicable to this Contract, neither party shall disclose directly or indirectly
without the prior written consent of the other party the terms of any
transaction to a third party (other than the employees, lenders, royalty owners,
counsel, accountants and other agents of the party, or prospective purchasers
of
all or substantially all of a party’s assets or of any rights under this
Contract, provided such persons shall have agreed to keep such terms
confidential) except (i) in order to comply with any applicable law, order,
regulation, or exchange rule, (ii) to the extent necessary for the enforcement
of this Contract , (iii) to the extent necessary to implement any transaction,
or (iv) to the extent such information is delivered to such third party for
the
sole purpose of calculating a published index. Each party shall notify the
other
party of any proceeding of which it is aware which may result in disclosure
of
the terms of any transaction (other than as permitted hereunder) and use
reasonable efforts to prevent or limit the disclosure. The existence of this
Contract is not subject to this confidentiality obligation. Subject to Section
13, the parties shall be entitled to all remedies available at law or in equity
to enforce, or seek relief in connection with this confidentiality
obligation.
The
terms of any transaction hereunder shall be kept confidential by the parties
hereto for one year from the expiration of the transaction.
In
the
event that disclosure is required by a governmental body or applicable law,
the
party subject to such requirement may disclose the material terms of this
Contract to the extent so required, but shall promptly notify the other party,
prior to disclosure, and shall cooperate (consistent with the disclosing party’s
legal obligations) with the other party’s efforts to obtain protective orders or
similar restraints with respect to such disclosure at the expense of the other
party.
14.11 The
parties may agree to dispute resolution procedures in Special Provisions
attached to the Base Contract or in a Transaction Confirmation executed in
writing by both parties.
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DISCLAIMER: The
purposes of this Contract are to facilitate trade, avoid misunderstandings
and make more definite the terms of contracts of purchase and sale
of
natural gas. Further, NAESB does not mandate the use of this Contract
by
any party. NAESB
DISCLAIMS AND EXCLUDES, AND ANY USER OF THIS CONTRACT ACKNOWLEDGES
AND
AGREES TO NAESB'S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS
OR
REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT
TO THIS
CONTRACT OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES
OR
CONDITIONS OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS
OR
SUITABILITY FOR ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB KNOWS,
HAS
REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF
ANY
SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM
OR
USAGE IN THE TRADE, OR BY COURSE OF DEALING. EACH USER OF THIS CONTRACT
ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR
ANY
DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES
ARISING OUT OF ANY USE OF THIS
CONTRACT.
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Exhibit
10.1
TRANSACTION
CONFIRMATION
FOR
IMMEDIATE DELIVERY
SAMPLE
DOCUMENT
|
Letterhead/Logo
|
Date:
____________________, _____ Transaction
Confirmation
#: ______________
|
|||
|
This
Transaction Confirmation is subject to the Base Contract between
Seller
and Buyer dated ______________________. The terms of this
Transaction Confirmation are binding unless disputed in writing within
2
Business Days of receipt unless otherwise specified in the Base
Contract.
|
||||
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SELLER:
_______________________________________________
_______________________________________________
_______________________________________________
Attn:
___________________________________________
Phone:
_________________________________________
Fax:
___________________________________________
Base
Contract No. ________________________________
Transporter:
_____________________________________
Transporter
Contract Number: _______________________
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BUYER:
_______________________________________________
_______________________________________________
_______________________________________________
Attn:
___________________________________________
Phone:
_________________________________________
Fax:
___________________________________________
Base
Contract No. ________________________________
Transporter:
_____________________________________
Transporter
Contract Number: _______________________
|
|||
|
Contract
Price: $_____/MMBtu
or
______________________________________________________________________
|
||||
|
Delivery
Period: Begin: ,
End:: ,
|
||||
|
Performance
Obligation and Contract Quantity:
(Select One)
Firm
(Fixed
Quantity):
Firm
(Variable
Quantity):
Interruptible:
______MMBtus/day
______MMBtus/day
Minimum
Up
to
MMBtus/day
མ
EFP
______MMBtus/day
Maximum
subject
to Section 4.2. at election of
མ Buyer or ྑ Seller
|
||||
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Delivery
Point(s):
________________________
(If
a pooling point is used, list a specific geographic and pipeline
location):
|
||||
|
Special
Conditions:
SAMPLE
DOCUMENT
|
||||
|
Seller: SAMPLE
DOCUMENT
By:
Title:
Date:
|
Buyer: SAMPLE
DOCUMENT
By:
Title:
Date:
|
|||
Exhibit
10.1
SPECIAL
PROVISIONS TO THE NAESB BASE CONTRACT
FOR
SALE
AND PURCHASE OF NATURAL GAS
DATED
SEPTEMBER 1, 2008
BETWEEN
ATMOS
ENERGY MARKETING, LLC
AND
KENTUCKY
USA ENERGY CORP.
If
the
terms of these Special Provisions and the other terms of the Base Contract
conflict, the terms of these Special Provisions shall govern. Any definitions
used in the Base Contract, unless otherwise defined in these Special Provisions,
shall have the same meaning in these Special Provisions.
Any
reference to a Section in these Special Provisions refers to the same Section
of
the General Terms and Conditions to the Base Contract.
Section
1. Purposes and Procedures
Section
1.2 shall be amended by adding the following sentence after the last sentence
of
the
Section:
“Notwithstanding
the provisions of this Section 1.2, the parties agree that for transactions
having a Delivery Period for less than one (1) Month’s duration, the Confirming
Party shall not be obligated to issue a Transaction Confirmation.”
Section
2. Definitions
Section
2.11 is amended by deleting the section in its entirety and replacing it with
the following:
2.11 “Credit
Support Obligation(s)” shall mean any obligation(s) to provide or establish
credit support for, or on behalf of, a party to this Contract such as
accelerated payment, a prepayment, an irrevocable standby letter of credit,
a
margin agreement, guaranty, deposit or other mutually acceptable form of
security, consideration or adequate assurance of performance.”
Section
2.28 is amended by deleting the section in its entirety and replacing it with
the following:
2.28 “Termination
Option” shall mean the option of either party to terminate a transaction in the
event that the other party fails to perform a Firm obligation to deliver Gas
in
the case of Seller or to receive and make full and timely payment for Gas in
the
case of Buyer for a designated number of days during a period as specified
on
the applicable Transaction Confirmation.”
Section
8. Title, Warranty and Indemnity
Section
8.3 is hereby amended by adding the following sentence to the end of this
paragraph:
“Neither
party shall be obligated to indemnify, defend, or hold the other party harmless
to the extent any liability, suit, action, damage, loss or expense arises out
of
or in connection with any intentional act, negligent act or failure to act
on
the part of the other party, its officers, agents, or employees.”
Section
10. Financial Responsibility
Section
10.1 is hereby amended by deleting everything after “may
demand”
on
line
3
and
replacing with:
“one
or
more Credit Support Obligations to provide adequate assurance of Y’s
performance.”
Exhibit
10.1
The
clause identified as (iv) in Section 10.2, shall be deleted and replaced by
the
following:
“(iv)
be
unable to pay its debts as they fall due at any time or become insolvent or
experience an adverse change in financial condition prior to the closing of
a
case arising under Title 11 of the United States Code;”
The
clause identified as (vii) in Section 10.2, shall be deleted and replaced by
the
following:
“(viix)
fail to
provide
the additional Credit Support Obligation required
under
Section 10.1 within at least two Business Days of a written request by the
other
party; or”
Section
10.5 is amended by deleting the section in its entirety and replacing it with
the following:
"Bankruptcy
Matters.
| (a) |
Each
party acknowledges and agrees that (i) the
Contract and all
transaction(s),
both together and separately,
constitute "forward contracts" within the meaning of Title 11 of
the
United States Code (the "Bankruptcy Code"); (ii) each Party
is
a “forward contract merchant” within the meaning of the Bankruptcy Code
with respect to the
Contract and any
transactions
thereunder;
(iii) all payments made or to be made by one party to the other
party,
and/or credits, offsets, liquidation of collateral, drawdowns, or
any
other similar settlement of the transactions and Credit Support
Obligations
pursuant to this Contract,
of whatever nature or character, physical or financial,
constitute "settlement payments" within the meaning of the Bankruptcy
Code; (iv) all transfers,
directly or indirectly,
by
one party to the other party arising
under
or
related to Section 10.1 of
this Contract constitute "margin payments" within the meaning of
the
Bankruptcy Code; and (v) each party’s rights under Sections 10.2, 10.3 and
10.4 of this Contract constitutes a “contractual right to
liquidate,
accelerate, offset and/or terminate”
the transactions within the meaning of the Bankruptcy
Code.
|
| (b) |
Each
party acknowledges and agrees that, for purposes of this Contract,
the
other party is not a "utility" as such term is used in Section 366
of the
Bankruptcy Code.
|
| (c) |
Each
party acknowledges and agrees that upon an Event of Default, the
Non-Defaulting Party may terminate the Contract and transactions,
and all
obligations, including Credit Support Obligations, arising under
or
related to the Contract and transactions, of whatever nature or character,
financial, physical or otherwise, may be liquidated, accelerated
and
settled at the option of the Non-Defaulting Party pursuant to the
terms of
this Contract and applicable state law and, if a case is initiated
under
the Bankruptcy Code, such termination shall occur pursuant to the
provisions in the Bankruptcy Code applicable to “forward contracts”. In
that regard, unless the parties have entered into a separate master
netting agreement covering all transactions, this Contract shall
constitute a “master netting agreement” under the applicable provisions of
the Bankruptcy Code, including, without limitation, Section 561
thereof.”
|
Exhibit
10.1
Section
11. Force Majeure
The
following shall be added to Xxxxxxx 00, Xxxxx Xxxxxxx, as Section
11.7
| 11.7 |
In
the event that the party whose performance is prevented by Force
Majeure
is unable to make or accept delivery of Gas, as applicable, pursuant
to
the Contract, or pursuant to a modified delivery schedule acceptable
to
the non-affected party, then such non-affected party shall also
be
relieved of its obligation, from the onset of the Force Majeure
event, to
make or accept delivery of Gas, as
applicable.
|
Section
14. Miscellaneous
Section
14.4 is amended by deleting the section in its entirety and replacing it with
the following:
“The
parties agree that this Contract shall supersede and replace all prior
agreements between the parties hereto with respect to the purchase and sale
of
natural gas and that all transactions under any such prior agreements are,
effective as of the date of this Contract, now governed solely by the terms
of
this Contract and shall be transactions hereunder and a part of the single
integrated agreement between the parties. This Contract may be amended only
by a
writing executed by both parties.”
The
following shall be added to Section 14, Miscellaneous, as Paragraph
14.12
| 14.12 |
The
parties do hereby represent and warrant that the General Terms and
Conditions of the Base Contract have not been modified, altered,
or
amended in any respect except for these Special Provisions which
are
attached to and made a part of the Base
Contract.
|
|
Atmos
Energy Marketing, LLC
|
Kentucky
USA Energy Corp.
|
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By:
|
By:
|
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|
Name:
|
Name:
|
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|
Title:
|
Title:
|
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Date:
|
Date:
|
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