EXHIBIT 10(n)
BASE CONTRACT FOR SHORT-TERM
SALE AND PURCHASE OF NATURAL GAS
This Base Contract is entered into as of the following date: January 1,
2002. The parties to this Base Contract are the following:
M&B Gas Services, Inc. and Delta Natural Gas Company, Inc.
X.X. Xxx 000 0000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000 Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx Attn: Xxxxx X. Xxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Federal Tax ID Number: 00-0000000 Federal Tax ID Number: 00-0000000
Duns # Duns # 00-77-9408
Invoices and Payments: Delta Natural Gas Company, Inc.
M&B Gas Services, Inc. Attn: Xxxxx X. Xxxxxx
Attn: Gas Accounting 0000 Xxxxxxxxx, Xxxx
P.O. Box 377 Winchester, Kentucky 40391
Xxxxxxxxxxx, Xxxx 00000 Phone: (000) 000-0000
Phone: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
Wire Transfer Payments:
Summit Bank Hackensack ABA #000000000
Credit To: Clearfield Energy, Inc.
A/C #496-08311
This Base Contract incorporates by references for all purposes the General
Terms and Conditions for Short-Term Sale and Purchase of Natural Gas
published by the Gas Industry Standards Board. The parties hereby agree to
the following provisions offered in said General Terms and Conditions
(SELECT ONLY ONE FROM EACH BOX, BUT SEE "NOTE" RELATING TO SECTION 2.24.):
SECTION 1.2 X Oral SECTION 6. X Buyer Pays At and After Delivery Point
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Transaction Procedure Written Taxes Seller Pays Before and At Delivery Point
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SECTION 2.4 X 2 Business Days after receipt SECTION 7.2 25th date of Month following Month of
--- ---
Confirm Deadline (default) Payment Date Month of delivery
Business Days after receipt
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SECTION 2.5 X Seller SECTION 7.2 X Wire Transfer (WT)
--- ---
Confirming Party Buyer Method of Payment Automated Clearinghouse (ACH)
--- ---
Check
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SECTION 3.2 X Cover Standard
--- ---
Performance Obl. Spot Price Standard SECTION 13.5
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CHOICE OF LAW: Ohio
NOTE: THE FOLLOWING SPOT PRICE PUBLICATION APPLIES TO
BOTH OF THE IMMEDIATELY PRECEDING STANDARDS AND
MUST BE FILLED IN AFTER A STANDARD IS SELECTED.
SECTION 2.24
Spot Price Publication: Gas Daily SPECIAL PROVISIONS:
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IN WITNESS WHEREOF, the parties hereto have executed this Base Contract in
duplicate.
M&B Gas Services, Inc. Delta Natural Gas Company, Inc.
By:/s/ XXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXXXX
------------------- ----------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: President Title: Manager - Gas Supply
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. This Contract is intended for interruptible
transactions or Firm transactions of one month or less and may not be
suitable for Firm transactions of longer than one month. Further, GISB does
not mandate the use of this Contract by any part. GISB DISCLAIMS AND
EXCLUDES AND ANY USER OF THIS CONTRACT ACKNOWLEDGES AND AGREES TO GISB'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 GISB KNOWS, HAS REASON TO KNOW, HAS BEEN
ADVIED, 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 GISB BE LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF THIS CONTRACT.
GENERAL TERMS AND CONDITIONS
BASE CONTRACT FOR SHORT-TERM
SALE AND PURCHASE OF NATURAL GAS
SECTION 1. PURPOSE AND PROCEDURES
1.1 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 PARTIES HAVE SELECTED EITHER THE "ORAL" VERSION OR THE "WRITTEN" VERSION
OF TRANSACTION PROCEDURES AS INDICATED ON THE BASE CONTRACT.
ORAL TRANSACTION PROCEDURE:
1.2 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 and
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. Confirming Party
adopts its confirming letterhead, or the like, as its signature on any
Transaction Confirmation as the identification and authentication of
Confirming Party.
WRITTEN TRANSACTION PROCEDURE:
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 non-conflicting
Transaction Confirmation or the passage of the Confirm Deadline without
objection from the receiving party, as provided in Section 1.3.
1.3 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 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 second 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. The entire agreement between the parties
shall be those provisions contained in both the Base Contract and any
effective Transaction Confirmation. In the event of a conflict among the
terms of (i) a Transaction Confirmation, (ii) the Base Contract, and (iii)
these General Terms and Conditions, the terms of the documents shall govern
in the priority listed in this sentence.
SECTION 2. DEFINITIONS
2.1 "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.
2.2 "British thermal unit" or "Btu" shall have the meaning ascribed to it by
the Receiving Transporter.
2.3 "Business Day" shall mean any day except Saturday, Sunday or Federal
Reserve Bank holidays.
2.4 "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.
2.5 "Confirming Party" shall mean the party designated in the Base Contract
to prepare and forward Transaction Confirmations to the other party.
2.6 "Contract" shall mean the legally-binding relationship established by
(i) the Base Contract and (i) the provisions contained in any effective
Transaction Confirmation.
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2.7 "Contract Price" shall mean the amount expressed in U.S. Dollars per
MMBtu, as evidenced by the Contract Price on the Transaction Confirmation.
2.8 "Contract Quantity" shall mean the quantity of Gas to be delivered and
taken as set forth in the Transaction Confirmation.
2.9 "Cover Standard", if applicable, shall mean that if there is an
unexcused failure to take over or deliver any quantity of Gas pursuant to
this Contract, then the non-defaulting party shall use commercially
reasonable efforts to obtain Gas or alternate fuels, or sell Gas, at a price
reasonable for the delivery or production area, as applicable, consistent
with: the amount of notice provided by the defaulting 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 defaulting party.
2.10. "Day" shall mean a period of 24 consecutive hours, coextensive with a
"day" as defined by the Receiving Transporter in a particular transaction.
2.11 "Delivery Period" shall be the period during which deliveries are to be
made as set forth in the Transaction Confirmation.
2.12 "Delivery Point(s)" shall mean such point(s) as are mutually agreed
upon between Seller and Buyer as set forth in the Transaction Confirmation.
2.13 "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.
2.14 "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."
2.15 "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.
2.16 "Gas" shall mean any mixture of hydrocarbons and non-combustible gases
in a gaseous state consisting primarily of methane.
2.17 "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.
2.18 "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.
2.19 "MMBtu" shall mean one million British thermal units which is
equivalent to one dekatherm.
2.20 "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.
2.21 "Payment Date" shall mean a date, selected by the parties in the Base
Contract, on or before which payment is due Seller for Gas received by Buyer
in the previous Month.
2.22 "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.
2.23 "Scheduled Gas" shall mean the quantity of Gas confirmed by
Transporter(s) for movement, transportation or management.
2.24 "Spot Price" as referred in Section 3.2 shall mean the price listed in
the publication specified by the parties in 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.
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2.25 "Transaction Confirmation" shall mean the document, substantially in
the form of Exhibit A, setting forth the terms of a purchase and sale
transaction formed pursuant to Section 1. for a particular Delivery Period.
2.26 "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 Confirmation.
SECTION 3. PERFORMANCE OBLIGATION
3.1 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 specified in the Transaction Confirmation.
THE PARTIES HAVE SELECTED THE "COVER STANDARD" VERSION OR THE "SPOT PRICE
STANDARD" VERSION AS INDICATED ON THE BASE CONTRACT.
COVER STANDARD:
3.2 In addition to any liability for Imbalance Charges, which shall not be
recovered twice by the following remedy, the exclusive and sole remedy of
the parties in the event of a breach of a Firm obligation 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
for replacement Gas or alternative fuels 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 exclusive and sole remedy of
the non-breaching 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).
SPOT PRICE STANDARD:
3.2 In addition to any liability for Imbalance Charges, which shall not be
recovered twice by the following remedy, the exclusive and sole remedy of
the parties in the event of a breach of a Firm obligation 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; (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.
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, IN NO EVENT WILL
EITHER PARTY BE LIABLE UNDER THIS CONTRACT, WHETHER IN CONTRACT, IN TORT
(INCLUDING NEGLIGENCE AND STRICT LIABLITY), OR OTHERWISE, FOR INCIDENTAL,
CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES.
SECTION 4. TRANSPORTATION, NOMINATIONS AND IMBALANCES
4.1 Seller shall have the sole responsibility for transporting the Gas to
the Delivery Point(s) and for delivering such Gas at a pressure sufficient
to effect such delivery but not to exceed the maximum operating pressure of
the Receiving Transporter. Buyer shall have the sole responsibility for
transporting the Gas from the Delivery Point(s).
4.2 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.
4.3 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 actions or
inactions (which shall include, but shall not be limited to, Buyer's failure
to accept quantities of Gas equal to the Scheduled Gas), then Buyer shall
pay for such Imbalance Charges, or reimburse Seller for such Imbalance
Charges paid by Seller to the Transporter. If the Imbalance Charges were
incurred as a result of Seller's actions or inactions (which shall include,
but shall not be limited to, Seller's failure to deliver quantities of Gas
equal to the Scheduled
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Gas), then Seller shall pay for such Imbalance Charges, or reimburse Buyer
for such Imbalance Charges paid by Buyer to the Transporter.
SECTION 5. QUALITY AND MEASUREMENT
All Gas delivered by Seller shall meet the 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.
SECTION 6. TAXES
The parties have selected either the "Buyer Pays At and After Delivery
Point" version or the "Seller Pays Before and At Delivery Point" version as
indicated on the Base Contract.
BUYER PAYS AT AND AFTER DELIVERY POINT:
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.
SELLER PAYS BEFORE AND AT DELIVERY POINT:
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 which 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.
SECTION 7. BILLING, PAYMENT AND AUDIT
7.1 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.
7.2 Buyer shall remit the amount due 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. If Buyer fails to remit the full amount
payable by it when due, interest on the unpaid portion shall accrue 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 from the date due until the date of payment; or (ii) the maximum
applicable lawful interest rate. If Buyer, in good faith, disputes the
amount of any such statement or any part thereof, Buyer will pay to Seller
such amount as it concedes to be correct; provided, however, if Buyer
disputes the amount due, Buyer must provide supporting documentation
acceptable in industry practice to support the amount paid or disputed.
7.3 In the event any payments are due Buyer hereunder, payment to Buyer
shall be made in accordance with Section 7.2. above.
7.4 A party shall have the right, at its own expense, upon reasonable notice
and at reasonable times, to examine the books and records 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
examination right 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
unless 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.
SECTION 8. TITLE, WARRANTY AND INDEMNITY
8.1 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
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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).
8.2 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.
8.3 Seller agrees to indemnify Buyer and save it harmless from all losses,
liabilities or claims including 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.
8.4 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.
SECTION 9. NOTICES
9.1 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.
9.2 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.
9.3 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 two Business Days after mailing.
SECTION 10. FINANCIAL RESPONSIBILITY
10.1 When reasonable grounds for insecurity of payment or title to the Gas
arise, either party may demand adequate assurance of performance. Adequate
assurance shall mean sufficient security in the form and for the term
reasonably specified by the party demanding assurance, including, but not
limited to, a standby irrevocable letter of credit, a prepayment, a security
interest in an asset acceptable to the demanding party or a performance bond
or guarantee by a creditworthy entity. In the event either party shall
(i) make an assignment or any general arrangement for the benefit of creditors;
(ii) default in the payment obligation to the other party; (iii) file a
petition or otherwise commence, authorize, or acquiesce in the commencement
of a proceeding or cause under any bankruptcy or similar law for the
protection of creditors or have such petition filed or proceeding commenced
against it; (iv) otherwise become bankrupt or insolvent (however evidenced);
or (v) be unable to pay its debts as they fall due; then the other party
shall have the right to either withhold and/or suspend deliveries or
payment, or terminate the Contract without prior notice, in addition to any
and all other remedies available hereunder. Seller may immediately suspend
deliveries to Buyer hereunder in the event Buyer has not paid any amount due
Seller hereunder on or before the second day following the date such payment
is due.
10.2 Each party reserves to itself all rights, set-offs, counterclaims, and
other defenses which it is or may be entitled to arising from the Contract.
SECTION 11. FORCE MAJEURE
11.1 Except with regard to a party's obligation to make payment due under
Section 7. 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.
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
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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 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, or regulation 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.
11.3 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. The party claiming Force Majeure shall
not be excused from its responsibility for Imbalance Charges.
11.4 Notwithstanding anything to the contrary herein, the parties agree that
the settlement of strikes, lockouts or other industrial disturbances shall
be entirely within the sole discretion of the party experiencing such
disturbance.
11.5 The party whose performance is prevented by Force Majeure must provide
notice to the other party. Initial notice may be given orally; however,
written notification with reasonably full particulars of the event or
occurrence is required as soon as reasonably possible. Upon providing
written notification of Force Majeure to the other party, the affected party
will be relieved of its obligation 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.
SECTION 12. TERM
This Contract may be terminated on 30 days' written notice, but shall remain
in effect until the expiration of the latest Delivery Period of any
Transaction Confirmation(s). The rights of either party pursuant to Section
7.4., 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 Confirmation.
XXXXXX 00. MISCELLANEOUS
13.1 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, which consent will not be unreasonably
withheld or delayed; provided, either party may transfer its interest to any
parent or affiliate by assignment, merger or otherwise without the prior
approval of the other party. Upon any transfer and assumption, the
transferor shall not be relieved of or discharged from any obligations
hereunder.
13.2 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.
13.3 No waiver of any breach of this Contract shall be held to be a waiver
of any other or subsequent breach.
13.4 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 Confirmation(s). This Contract may be amended only by
a writing executed by both parties.
13.5 The interpretation and performance of this Contract shall be governed
by the laws of the state specified by the parties in the Base Contract,
excluding, however, any conflict of laws rule which would apply the law of
another jurisdiction.
13.6 This Contract and all provisions herein will be subject to all
applicable and valid statutes, rules, orders and regulations of any Federal,
State or local governmental authority having jurisdiction over the parties,
their facilities, or Gas supply, this Contract or Transaction Confirmation
or any provisions thereof.
13.7 There is no third party beneficiary to this Contract.
13.8 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.
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