October 19, 1999
Xxxxxxx County Gas Utility District
Attn: Mr. Xxxxx Xxxxx, General Manager
000 Xxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Re: AMENDMENT to Agreement dated September 26, 1996, as amended.
Dear Xx. Xxxxx:
This letter sets forth amendment to, and an agreement concerning, the
captioned agreement between Tengasco, Inc. as Seller, and Natural Gas Utility
District of Xxxxxxx County, TN, as Buyer.
Section 3.0 is amended by rewriting 3.1 and 3.2, and adding 3.3 and 3.4. Section
3.0 of the captioned agreement is hereby amended to read as follows:
3.0 Quantity
3.1 Daily Quantity - On each day during the term of this agreement,
Buyer shall have the right to purchase and receive Seller's available
production up to a total quantity of 4,000 MCF/D. Seller shall be obligated
to sell and deliver to Buyer from its production xxxxx in Xxxxxxx County
Tennessee, its available production up to a total quantity of 4,000 MCF/D.
During each month of the term of this agreement, Buyer shall have the
obligation to purchase on a best efforts basis from Seller an average
minimum daily volume of 500 MCF/D when all quality standards set forth in
Section 10.0 are met by Seller. In the event Seller can not meet the quality
standards as set out aforesaid as to the minimum of 500 MCF Daily, then
Buyer will use its best efforts to purchase such lesser amounts as do meet
said quality standards on a daily basis.
3.2 Buyer shall have first option to purchase Seller's production in
excess of 4,000 MCF/D up to a volume of 7,000 MCF/D. In the event Buyer
chooses not to purchase a quantity over 4,000 MCF/D and up to a volume of
7,000 MCF/D, or does not purchase its total quantity of 4,000 MCF/D, Buyer
agrees to receive such excess quantity and transport such gas across its
distribution system to the extent possible with existing facilities on
behalf of Seller or third party purchaser to mutually agreeable points of
delivery and at an initial transportation rate of $0.20 per MMBTU. In no
event shall gas be sold by Seller or transported and delivered by Buyer or
Seller to any customer or potential customer of Buyer within Buyer's service
area without the written consent of Buyer. Seller shall be responsible for
all facilities including compression, if necessary, to deliver gas into the
ETNG pipelines or other third party facilities. In no event shall Buyer be
required to install additional facilities for transporting gas for Seller.
3.3 Buyer shall notify Seller by telephone, facsimile, or in writing on
or before the 25th day of each month, or the next business day following the
25th day of the month if that day is a Saturday, Sunday, or state or federal
holiday of its best estimate of the quantity of gas Buyer will purchase
under 3.1 and 3.2 above for each weekday and each Saturday and Sunday of the
next succeeding calendar month. ("Buyer's Monthly Notification Buyer will
exercise its best efforts to purchase from Seller the quantities estimated
in the Buyer's Monthly Notification.
3.4 "Best Efforts" referred to in Paragraphs 3.1 and 3.3 aforesaid shall
be further defined, as agreed by the parties, to mean the following:
FORCE MAJEURE: The "best efforts" of buyer are interpreted to mean that
buyer would purchase the quantities of gas set out in the aforesaid
paragraph except for those circumstances which are unforeseen or not within
the reasonable control of buyer including, but not totally limited to, line
breaks or other system emergencies, large industrial user problems, large
load swings, contaminants in gas stream, odorizer failure, station regulator
failure, high or low pipeline pressures, unsafe operating conditions or
maintenance of station or station problems, as well as strikes, riots, war,
fire, acts of God or any other matter not within its reasonable control. At
such time as any force majeure problem should cease or terminate, buyer's
obligation to so purchase shall immediately resume. Xxxxx agrees to make
reasonable, diligent efforts to correct such problems if and when same
occur.
Section 10.1 of the agreement is amended in part as follows, with all provisions
of Section 10 other than 10.1 remaining in full force and effect:
10.1 Have a total heating value of not less than one thousand (1,000)
Btu's per cubic foot, nor more than twelve hundred (1,200) Btu's per cubic
foot.
All other terms and provisions of the agreement, as they may have been
amended in writing from time to time, shall remain in full force and effect.
If you are in agreement with the foregoing amendments, please sign in
the space provided below and return by facsimile.
On receipt of your signed copy and our execution of same, I will return
an executed copy for your files and I shall instruct counsel of record to
immediately dismiss the litigation pending as Tengasco, Inc. v. The Natural Gas
Utility District of Xxxxxxx County, Tennessee, No. 143562-2 in the Chancery
Court for Xxxx County, Tennessee.
Very truly yours,
/s/ M.E. Xxxxxxx
M.E. Xxxxxxx
Chief Executive Officer
AGREED AND SO AMENDED EFFECTIVE October 19, 1999.
SELLER:
Tengasco, Inc.
BY: /s/ M.E. Xxxxxxx
----------------------------
M.E. Xxxxxxx
Chief Executive Officer
BUYER:
Natural Gas Utility District of Xxxxxxx County, TN
BY: /s/ Xxxxx X. Xxxxx
----------------------------
Xxxxx X. Xxxxx
General Manager
