Exhibit 10.1
MASTER GAS PURCHASE CONTRACT
ALAMCO, INC.
CONTRACT NO. 9131-C
THIS MASTER GAS PURCHASE CONTRACT ("Agreement") is made and entered
into as of the 4th day of April, 1996, by and between ALAMCO, INC., a Delaware
corporation, ("Seller") with its principal address at 200 West Main Street,
Clarksburg, WV 26301, and HOPE GAS, INC., a West Virginia corporation ("Buyer"),
whose address is P. O. Box 2868, Clarksburg, West Virginia 26302-2868.
WHEREAS, Seller and Buyer are parties to a letter Agreement dated
November 23, 1994; and,
WHEREAS, Seller and Buyer wish to replace said Letter Agreement with
the terms and conditions set forth herein; and,
NOW, THEREFORE, WITNESSETH, in consideration of the mutual covenants
and promises set forth below, and intending to be bound by them, Seller and
Buyer covenant and agree:
ARTICLE I
SALE & PURCHASE OBLIGATIONS
1.01 Seller shall produce and sell to Buyer at the Points of
Delivery listed in Article III herein, and Buyer shall take and pay for, volumes
of natural gas from the wells and MID numbers set forth in Appendix B
(attached), as amended from time to time. Notwithstanding the foregoing, Buyer
shall be under no obligation to purchase any of the production offered by Seller
in the event that Buyer has insufficient pipeline capacity or market demand to
facilitate the sale and/or use of Seller's natural gas. However, Buyer shall
use its best efforts to ensure sufficient pipeline capacity and market demand to
facilitate the sale and/or use of Seller's natural gas. Further, in the event
of a curtailment, Buyer shall not discriminate against the gas described in
Appendix B, and any suspensions of deliveries shall be on a nondiscriminatory
basis.
1.02 Additional wells. Wells accepted by Buyer, under the terms of
this Agreement, shall be added to Appendix B along with their corresponding MID
numbers.
ARTICLE II
TERM
2.01 This Agreement shall be in full force and effect from November
1, 1995, through October 31, 1999, and thereafter unless terminated by either
Buyer or Seller upon sixty (60) days' prior written notification.
ARTICLE III
DELIVERY POINTS
3.01 The Points of Delivery for natural gas purchased hereunder
shall be at existing or future interconnections between the facilities of Buyer
and Seller at those MID numbers listed on Appendix B (attached).
3.02 Termination for low volume. In the event that Seller cannot
deliver to Buyer an average of five thousand (5,000) cubic feet of natural gas
per day at a Point of Delivery, during the period November 1, through April 30,
then Buyer may, in its sole discretion, either terminate the contract as it
relates to such Point of Delivery by giving Seller notice in writing ten (10)
days prior to the effective date of termination or withhold from Seller's
proceeds, or invoice Seller, for any costs imposed upon Buyer by upstream
transporters as a result of Seller's inability to transport certain minimum
quantities.
ARTICLE IV
METER SITE AND FACILITIES
4.01 Buyer's Facilities; Meter Site. All gas sold by Seller to
Buyer shall be measured by a meter owned, installed, maintained, and read by
Buyer upon a site satisfactory to Buyer. Rights-of-way and the related surface
grants for such site shall be furnished by Seller to Buyer free of all costs and
from all claims. In the event Buyer is at any time required to pay for such
rights-of-way or such costs or claims, then the amounts paid therefor and other
expenses related thereto may be deducted from the payments to be made for gas
purchased from Seller and applied to the reimbursement of Buyer for such
payments. Seller warrants generally that title to the rights-of-way and the
related surface grants conveyed hereunder shall be free and clear of all liens,
encumbrances, and claims whatsoever and free of any claim, rightful or
otherwise, of any third person by way of infringement.
4.02 Meter maintenance fee. Seller agrees that should the amount
of gas passing through any meter installed, maintained, and operated hereunder
during any month, be less than a daily average of ten thousand (10,000) cubic
feet, it will pay to Buyer a mutually agreed upon reasonable fee for maintaining
and operating each such meter for each month. Buyer shall render a bill for
such meter operating charge or deduct the amount thereof from the monthly
settlements hereunder.
ARTICLE V
PRICE
5.01 Commodity Rate. The price (per MMBtu) of natural gas
purchased hereunder shall be ninety-eight percent (98%) of the price set forth
in Inside F.E.R.C.'s Gas Market Report "Prices of Spot Gas Delivered to
Pipelines". The specific posting to be used for the pricing of all production
under this Agreement shall be that set forth under the column labeled "Index"
and described as "CNG Transmission Corporation: Appalachia". In the event that
Inside F.E.R.C.'s Gas Market Report ceases to be published, then the parties
will immediately negotiate in good faith to agree upon a substitute publication
or posting.
5.02 Price Renegotiation. Not less than thirty (30) days prior to
October 31, 1998, the parties will have negotiated in good faith to agree on the
price to be paid for gas sold and purchased hereunder for the succeeding year,
or for such other period as may be agreed upon by the parties. If, after good
faith negotiations, Buyer and Seller fail to agree upon the price to be paid for
gas for the succeeding term, either party may terminate this Agreement upon
thirty (30) days written notice. Buyer and Seller expressly agree that the
price to be paid for natural gas purchased through October 31, 1998, is non-
negotiable and that fluctuations in the market will not serve as grounds for
renegotiation.
5.03 Change in Regulation Results in Material Adverse Effect. If
the Public Service Commission of West Virginia or any other successor
governmental agency, whether state or federal, takes any action or issues any
determination that directly or indirectly results in a material adverse change
to any provision of this Agreement, then Buyer may either: (a) continue to
fulfill its obligations under this Agreement as altered by the change in
regulation; or (b) seek to renegotiate the affected terms of this Agreement by
giving notice to Seller within thirty (30) days of the material adverse change.
If Buyer elects to renegotiate the terms of this Agreement, both Parties shall
be obligated to renegotiate in good faith.
ARTICLE VI
STATEMENTS AND PAYMENT
6.01 Statements. On or before the last day of each calendar month,
Buyer shall mail to Seller a statement showing the quantity of natural gas
delivered by Seller to Buyer during the billing period ending with the next
preceding calendar month, Buyer's check in payment for said natural gas, and the
meter charts, if requested. If the meter charts are mailed to Seller, they
shall be returned to Buyer within fifteen days.
6.02 Audits. Buyer shall have the right to audit Seller's
accounting records and other documents relating to volumes of gas delivered by
or on behalf of Seller for Buyer's account for any calendar year within the
forty-eight (48) month period following the end of such calendar year. Buyer
shall also have the right to audit Seller's records relative to Hope's Business
Ethics policy which has been made available to Seller. Seller shall have the
right to audit Buyer's accounting records and other documents relating to
volumes of gas delivered by or on behalf of Seller for Buyer's account for any
calendar year within the forty-eight (48) month period following the end of such
calendar year. This provision shall continue in full force and effect for a
period of forty-eight (48) months from the termination of this Agreement.
6.03 Withholding. If Seller fails to comply with any of the
covenants contained herein, Buyer may immediately withhold all payments due to
Seller under the terms of this Agreement until all necessary actions have been
taken by Seller and all adjustments have been made by Seller so that in Buyer's
opinion Seller is fully complying with all the covenants and terms of this
Agreement.
6.04 Error Correction. In the event an error is discovered in the
amount billed in any statement rendered to Seller, such error shall be adjusted
within thirty (30) days of the determination thereof; provided that claim
therefor shall have been made within sixty (60) days from the date of discovery
of such error, but in any event within forty-eight (48) months from the date
such statement is rendered.
ARTICLE VII
POSSESSION
7.01 Seller shall be deemed to be in possession and control of the
natural gas sold by it hereunder until it shall have been delivered to Buyer at
the Delivery Point(s), after which delivery, as between Buyer and Seller, Buyer
shall be deemed to be in control and possession thereof. Buyer shall have no
responsibility with respect to any natural gas sold to it hereunder until it is
delivered at the Delivery Point(s), and no responsibility therefor because of
anything which may be done or may occur with respect to said natural gas before
delivery to Buyer at the Delivery Point(s). Seller shall have no responsibility
unless the gas does not meet the gas quality provision set forth in Appendix A
because of anything which may be done or may occur with respect to said natural
gas after its delivery to Buyer at such point of delivery.
ARTICLE VIII
WARRANTY, INDEMNIFICATION, WITHHOLDING
8.01 Title and Indemnification. Seller warrants generally the
title to the natural gas sold and delivered hereunder to Buyer and that at the
time of delivery the natural gas is or will be free and clear of all liens,
encumbrances, and claims whatsoever and free of any claim, rightful or
otherwise, of any third person by way of infringement. Seller further warrants
that at the time of delivery Seller will have good right and title to sell the
natural gas to Buyer, and that Seller will indemnify Buyer and save it totally
harmless from all suits, claims, actions, debts, levies, damages, costs, losses,
and expenses of any nature arising from or out of adverse claims of any kind or
nature asserted by anyone whatsoever to said natural gas, including but not
limited to claims, suits, actions, and demands which may arise due to non-
payment of landowner royalties, overriding royalties, or rentals thereof or
therefrom.
8.02 Withholding. In the event of any adverse claim to or against
the proceeds payable under this Agreement is made by any person, Buyer may
withhold payment due Seller under this Agreement or any other contract between
Buyer and Seller or may refuse to accept delivery of such natural gas until the
dispute is settled by contract between Seller and such adverse claimant or by
the final decree of a court of competent jurisdiction. If litigation results
from any such adverse claim, Buyer may pay any money withheld by it hereunder
into court without further liability therefor, or may interplead all claimants,
including Seller. Seller will reimburse Buyer for all costs incurred, including
reasonable attorney's fees, as a result of litigation.
8.03 Payment Correction. In the event Buyer mistakenly overpays or
underpays Seller for natural gas sold and purchased hereunder, which over- or
under-payment is the result of a mistake of fact or law, miscalculation,
coercion, duress, fraud, governmental or regulatory constraint, ignorance or
want of knowledge, then Seller or Buyer, as the case may be, will promptly upon
demand by the other party make appropriate refund or adjustment in such over- or
under-payments, without liability for payment of interest by either party;
provided, however, that the obligation of either party to make restitution
hereunder shall be limited to mistaken payments made within the period
commencing four (4) years prior to the date on which demand for refund or
adjustment shall be made. In the event of Seller's refusal or inability to
refund undisputed over-payments, Buyer may withhold payment for the natural gas
sold and purchased under this agreement between Seller and Buyer in an amount
equivalent to the over-payment, without liability for payment of interest on the
amounts so withheld. Nothing in this Agreement shall be construed as a waiver
or relinquishment by Seller or Buyer of either of its rights to recover such
over-payments.
8.04 Royalties. In no event will Buyer be obligated to make
royalty, overriding royalty, or working interest payments to any party or
payments to any supplier of Seller for natural gas purchased hereunder.
ARTICLE IX
COMMUNICATIONS
9.01 Unless otherwise instructed in writing, all communications
shall be sent to the parties at the following addresses:
Seller: Alamco, Inc.
200 West Main Street
P. O. Box 1740
Clarksburg, WV 26301
Attn: Bridget D. Furbee
Buyer: Hope Gas, Inc.
P. O. Box 2868
Clarksburg, WV 26302-2868
Attn: Manager, Gas Supply
ARTICLE X
GENERAL PROVISIONS
10.01 Labor. Seller covenants and agrees to comply with all the
requirements of the Fair Labor Standards Act of 1938 and the Civil Rights Act of
1964, as amended, with respect to all natural gas produced or sold and delivered
under the terms of this Agreement to the extent that said Acts as now or
hereafter amended are applicable to Seller and Seller's employees.
10.02 Force Majeure. Neither party to this Agreement shall be liable for
any damage or loss that may be due to force majeure as defined herein. In the
event either party is rendered unable, wholly or in part, by force majeure to
carry out its obligations under this Agreement, other than to demand payment of
amounts due hereunder, then the obligations of such party, so far as they are
affected by such force majeure, shall be suspended during the continuance of any
inability so caused. However, the party claiming the existence of force majeure
shall use all reasonable efforts to remedy any situation which may interfere
with the performance of its obligations hereunder. The term "force majeure" as
used herein, and as applied to either party hereto, shall mean acts of law, acts
of God, strikes, lockouts or other labor disturbances, acts of the public enemy,
war, blockades, insurrections, riots, epidemics, fires, floods, washouts,
arrests and restraints of rules and people, civil disturbances, explosions or
any other cause, whether of the kind herein enumerated or otherwise, not
reasonably within the control of the party claiming suspension. It is
understood that settlement of strikes, lockouts, or labor disturbances shall be
entirely within the discretion of the party having the difficulty and that the
above requirement that any force majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes, lockouts, or labor
disturbances by acceding to the demands of the opposing party when such course
is inadvisable in the discretion or judgment of the party having the difficulty.
Among other things, the term "Force Majeure" shall not include: (a) any
cause resulting from a Party's negligence or willful misconduct; (b) the
freezing of any wells or pipelines; and (c) lack of funds by either party.
10.03 Tax. In the event any tax is now or hereafter imposed on the
production, severance, delivery to the point of sale, or sale of natural gas, or
upon the business of producing, severing, selling or delivering natural gas to
the point of sale, or if such tax is imposed in any other manner so as to
constitute directly a charge upon the gas delivered to Buyer hereunder, then the
amount of such tax shall be borne by Seller so far as it affects or relates to
or is apportionable to the gas delivered to Buyer hereunder. In the event Buyer
is required to pay such tax, the amount thereof may be deducted from the
payments accruing to Seller under this Agreement.
10.04 Persons Bound. All of the terms, covenants, conditions, and
obligations of this Agreement shall extend to and be binding upon the parties
hereto and their heirs, successors, and assigns. Any sale or assignment by
Seller of its interest in the natural gas delivered hereunder or its interest in
this Agreement or its interest in any property, real or personal, required for
or dedicated to the performance of this Agreement, shall be made expressly
subject to the rights of Buyer hereunder and with provision that the assignee or
purchaser shall assume and covenant to perform all of the Seller's obligations
hereunder. Seller will give notice in writing to Buyer of any sale or
assignment or other disposition of its interest hereunder and will furnish to
Buyer copies of any relevant documents evidencing transfer or assignment of
Seller's interest. Until notice and relevant documents have been given and
furnished to Buyer, Buyer may withhold all payments that may become due
hereunder, without interest.
10.05 Terms and Governing Law. The terms and provisions of this
Agreement are subject to the limitations of orders of courts and the orders,
rules and regulations of all regulatory bodies having jurisdiction. This
Agreement shall be interpreted in accordance with the laws of the State of West
Virginia.
10.06 Captions. The captions of the articles of this Agreement are
inserted for the purpose of convenient reference and are not intended to be a
part of this Agreement nor considered in any interpretation of the same.
10.07 Severability. If any part, term, or provision of this Agreement is
held by any court to be illegal or in conflict with any law of the State of West
Virginia, the validity of the remaining portions or provisions shall not be
affected, and the rights and obligations of the parties shall be construed and
in force as if the Agreement did not contain the particular part, term, or
provision held to be invalid.
10.08 Entire Agreement. This Agreement constitutes the entire agreement
between Seller and Buyer with respect to the subject matter hereof and
supersedes all prior offers, negotiations, and other written or oral agreements,
including the Letter Agreement. This Agreement may only be amended or modified
by written instrument signed by duly authorized representatives of Seller and of
Buyer.
IN WITNESS WHEREOF, Seller and Buyer have duly executed this Agreement as
of the day and year first above written.
ALAMCO, INC.
By /s/ John L. Schwager
Its President & CEO
HOPE GAS, INC.
By /s/ Marc A. Halbritter
Its Secretary
APPENDIX B
GPC #9131
WELL NAME & NO. API NO. MID NO.
L. Giles - 1925 47-061-1174 1091201
Boy Scout - 1926 47-061-1179 1091201
C. Hoke - 1965 47-061-1114 1091201
Paulak - 1969 47-061-1118 1091201
L. Giles - 1970 47-061-1127 1091201
Laurita - 1973 47-061-1122 1091201
Laurita - 1974 47-061-1123 1091201
J. Johnson - 1993 47-061-1132 1091201
Johnson - 2046 47-061-1217 1091201
Ludwig - 2053 47-061-1218 1091201
Forlini -1958 47-061-1113 1093101
Forlini - 1967 47-061-1117 1093101
Martin - 1968 47-061-1177 1093101
Brown - 2032 47-061-1178 1093101
McBee - 2033 47-061-1173 1093101
R. Williams - 2039 47-061-1180 1093101
Herron - 2040 47-061-1182 1093101
Teets - 2042 47-061-1192 1093101
Holt - 2049 47-061-1217 1093101
Britton - 2045 47-061-1193 1097301
Rumble - 2050 47-061-1214 1099401
Bolyard - 2051 47-077-0288 1098901
Frey - 2052 47-077-0289 1098901
White - 1930 47-061-1210 1033001
White - 1935 47-061-1233 1033001
Helms - 2058 47-077-0294 1032501
ACCEPTED AND AGREED TO THIS 9TH DAY
OF APRIL, 1996.
ALAMCO, INC. HOPE GAS, INC.
BY: /s/ JOHN L. SCHWAGER BY: /s/ NANCY M. AUCREMANNE
TYPED NAME: JOHN L. SCHWAGER TITLE: TYPED NAME: NANCY M. AUCREMANNE
TITLE: PRESIDENT & CEO TITLE: MANAGER, GAS SUPPLY