EXHIBIT 10.14
DEALER SALE CONTRACT Conoco Inc. CONOCO
Gas Products Division
Humber Building - 1021
P.O. Box 2197 LP-gas
Houston, TX 77252
(713) 293-3815
We hereby confirm SALE
to:
Empire Gas Corporation DATE: January 21, 1992
P.O. Box 303 CONOCO NO.: 30-9026859-0000-A01
Lebanon, MO 65536 SYSTEM CODE: 35
Attention: Earl Noe ACCOUNT CODE: 586
Per conversations between Earl Noe and our Lewis Bradshaw
PRODUCT: Propane (Stenched) meeting GPA specifications
PRICE: Conoco Established Price On Date Of Delivery
TERMS OF PAYMENT: 1% 10 Days/Net 11 Days From Date of Invoice
F.O.B. ORIGIN POINT DESTINATION
- --------------------------------------- --------------------------------------
Texas Eastern Pipeline - Coshocton, OH 30-9013694-0000 Various, Illinois
Texas Eastern Pipeline - Greensburg, PA 30-9026840-0000 Various, Indiana
Texas Eastern Pipeline - Todhunter, OH 30-9026859-0000 Various, Ohio
Texas Eastern Pipeline - Princeton, IN 30-9027260-0000 Various, Pennsylvania
FREIGHT: Origin Collect
METHOD OF TRANSPORTATION: Common Carrier and/or Customer Truck
TERM OF AGREEMENT: January 21, 1992 through June 30, 1993 and year to year
thereafter.
QUANTITY: Subject to the terms and conditions on the reverse hereof, seller
agrees to sell and deliver, and buyer agrees to purchase and receive the
following volumes of product: (000) Gallons
MIN MAX MIN MAX MIN MAX MIN MAX
---- ---- ---- ---- ---- ---- ---- ----
JAN 1016 1524 APR 248 372 JUL 112 168 OCT 856 1284
FEB 776 1164 MAY 192 288 AUG 240 360 NOV 832 1248
MAR 512 768 JUN 152 228 SEP 504 756 DEC 960 1440
---- ---- ---- ---- ---- ---- ---- ----
Q1 2304 3456 Q2 592 888 Q3 856 1284 Q4 2648 3972
Year Total 6400 9600
REMARKS: CONVERSION OPTION: Empire Gas reserves the right to convert up to 5
million gallons of the above stated volumes to "5 cents down - forward
contract volumes". No more than 25,000 barrels per day will be
converted without Conoco's prior approval. Upon an Empire conversion
request, Conoco will
(Continued on attached page)
Conoco Inc. invoices should be Customer invoices, contracts, and
mailed to the following address: correspondence to be mailed to:
Conoco Inc.
Empire Gas Corporation Gas Products Division
P.O. Box 303 Humber Building - 1021
Lebanon, MO 65536 P.O. Box 2197
Houston, TX 77252
("Buyer") ("Seller")
Subject to terms and conditions on reverse side
Accepted June 9, 1992 By /s/ Ben Boldt
----------------------------- ------------------------------------
Empire Gas Corporation Ben Boldt
- --------------------------------------
Manager - Marketing
By /s/ Earl Noe
------------------------------------
Please sign and return one copy and retain one copy for your files.
TERMS AND CONDITIONS DEALER SALE CONTRACT
1. SPECIFICATIONS. All Products delivered hereunder will conform to applicable
NGPA and individual pipeline specifications in effect at time of delivery
unless mutually agreed otherwise and specified elsewhere in this Agreement.
Seller guarantees specifications at delivery point.
2. MEASUREMENT. Quantities of Products delivered will be determined in tank
cars or trucks at delivery point by means of slip tube, rotary gauge, or
other mutually acceptable gauging method or device. Volumes of LP-gas
Products will be corrected for temperature to 80DEG.F using "Standard
Factors for Volume Correction and Specific Gravity Conversion of Liquified
Petroleum Gases and Volatile Gasolines," NGPA Publication No. 2142-57 or
latest revision thereof. Volumes of Natural Gasoline will be corrected for
temperatures to 60DEG.F, using ASTM-IP Petroleum Measurement Tables,
American Addition, ASTM designation D 1250, abridged Table No. 7. A barrel
will consist of 42 U.S. gallons, and a gallon will contain 231 cubic
inches.
3. DELIVERIES. Seller's tank cars must be unloaded and returned to railroad
within the 48-hour period beginning at 7 a.m. on the day following notice
of arrival at destination. Demurrage charges at destination will be borne
by Buyer. Seller's tank cars and transport trucks will not be diverted
except with written consent from Seller. If delivery is made by Seller, in
Seller-owned equipment, there will be added to the invoice a separate
freight charge equal to the lowest published applicable transportation
charge, as determined by Seller, from Supplier's terminal to Buyer's
destination(s).
4. TITLE. Seller represents that it has title to the Products delivered and
has the right to deliver same. Title to Products delivered will pass to
Buyer upon completion of loading the same into tank trucks and/or tank cars
furnished by Buyer, upon delivery of Products in a tank car to carrier,
upon delivery thereof in a tank truck or tank car furnished by Seller
alongside Buyer's storage facilities at destination, or as stipulated on
the face hereof, as the case may be. Thereafter, Buyer will bear all risk
of and be solely liable for any loss or damage caused by or attributable to
said Products, or to their transportation, care, handling, resale, or use.
Title to Products delivered via pipeline will pass to Buyer at the FOB
point.
5. TAXES. In addition to the delivered price, Buyer will pay all applicable
federal, state, and local sales or other excise taxes required to be paid
or collected by Seller by reason of the manufacture, sale, or delivery of
Products. Buyer agrees to furnish Seller with satisfactory tax exemption
certificate where exemption from applicable taxes is claimed.
6. PAYMENT REQUIREMENTS. Payment for all Product delivered under this
Agreement will be paid to Seller at the place of payment designated on the
invoice. Invoices not paid pursuant to the "Terms of Payment section on the
face of this Agreement will be considered delinquent. Seller may charge
interest at the lesser of the maximum legal interest or 18 percent per
annum on all unpaid amounts on any delinquent accounts. Cash discounts, if
any, will not apply to freight charges prepaid by Seller.
7. CREDIT. If Buyer's credit becomes impaired or unsatisfactory to Seller or
if Buyer fails to make any payment due to Seller or if Buyer defaults in
performance of any of Buyer's obligations hereunder, Seller may, at its
discretion and without prejudice to its other legal remedies, suspend
deliveries to Buyer, or cancel this Agreement or ship hereunder only on a
COD or other basis satisfactory to Seller. In event of suspension of
deliveries, Seller reserves the right to adjust scheduled volumes.
8. MALODORANT. Unless otherwise expressly directed in writing or on the face
hereof, LPG Products delivered will contain malodorant at the rate of 1 1/2
pounds of ethyl mercaptan, or its equivalent, per 10,000 gallons; the kind
and quantity of malodorant added will be indicated on the bill of lading or
the invoice relating to each delivery.
9. CLAIMS. Seller will have no liability to Buyer for any defect in quality or
shortage in quantity of Products sold and delivered hereunder, unless Buyer
gives Seller notice of Buyer's claim by telegraph and Seller is given an
opportunity to inspect the Products in question prior to unloading or, in
case of any latent defect in quality, Buyer gives Seller notice thereof
within 48 hours after Buyer's discovery of such defect. Seller will have no
liability for any defect in any Product which has been commingled in any
way with a similar Product obtained elsewhere or with a different Product,
regardless of where obtained. Every notice of claim will set forth fully
the facts upon which the claim is based. It is agreed that any claim of any
kind by Buyer based upon or arising out of this Agreement or otherwise will
be barred unless asserted by Buyer by the commencement of an action within
12 months after the delivery of the Product or other event, action, or
inaction to which such claim relates, provided, however, Seller will not be
liable for prospective profits or special, indirect, or consequential
damages. This provision will survive any termination of this Agreement,
however arising.
10. PURCHASE REQUIREMENT. If maximum, minimum volumes are specified on the face
of this Agreement, then Buyer will use its best effort to purchase and
accept delivery of the scheduled volumes indicated on the face of the
Agreement each month as scheduled. Buyer will not exceed the specified
maximum volumes during any month without prior consent of Seller. Buyer may
order and take delivery of volumes less than the scheduled minimum volumes
during any month, provided, however, that Buyer must purchase and accept
delivery of the minimum cumulative volumes for each calendar quarter.
Should Buyer fail to purchase and accept delivery of the minimum cumulative
volumes for any calendar quarter, Seller may at its option cancel this
Agreement, except as provided for in paragraph 13.
11. TRADEMARK AND TRADE NAME. If Conoco is the Seller hereunder, Conoco hereby
grants Buyer, during the term of this Agreement, the right and license to
use and display, in a manner specified by Conoco, and at Buyer's expense,
Conoco's trademarks, trade name, advertising, and other indicia of Conoco
in the advertisement, sale, or distribution of the Product, provided,
however, that the right and license hereby granted will terminate when this
Agreement ceases to be in force and effect or may be cancelled at any time
upon 30 days' prior written notice from Conoco to Buyer. Upon the effective
date of such notice or upon the termination of such right and license,
Buyer will forthwith remove such trademark, trade name, advertising, and
the indicia from Buyer's Delivery Points, other places of business, and
equipment. At no time will Buyer apply Conoco's trademark, trade name,
advertising, or other indicia to any Product other than Products sold and
purchased under this Agreement.
12. SET-OFF. In the event Buyer fails to make timely payment of any monies due
and owing to Seller, Seller may offset any deliveries or payments due under
this or any other agreement between the parties.
13. FORCE MAJEURE. Neither party will be liable to the other for any delay or
failure in performance under this Agreement other than the obligation to
make payments in the event and to the extent that such delay or failure in
performance is caused or prevent by any cause reasonably beyond its
control, including, but not limited to, acts of God, perils of navigation,
public enemies, war, riots, insurrection, acts or orders of governmental
authorities, fire, flood, explosion, accident, strike, or other difference
with workmen, embargo, inability to obtain fuel, power, labor,
transportation facilities, or raw materials upon which their performance of
this Agreement is dependent, accident, breakage of machinery or apparatus,
or national defense requirements, provided; however, that performance will
be resumed with a reasonable time after such cause has been removed and
provided, further, that neither party will be required to settle any labor
dispute against its will. Any deliveries suspended as a result of this
paragraph 13 will be cancelled without prejudice or penalty, but this
Agreement will otherwise remain unaffected. If, because of any of the
foregoing circumstances, Seller is unable to supply its requirements for
and its contractual obligations for one or more of the Products, then
Seller will allocate the available supply of such Product among its
contract customers and itself on an equitable pro rata basis. In the event
Seller, during a period of allocation pursuant to the provisions of this
paragraph 13, delivers to Buyer a quantity of product less than the minimum
quantity Buyer is required to purchase during such period as provided on
the face of this Agreement, then neither Seller nor Buyer will have any
obligation to sell or purchase the difference between the amount so
delivered and such minimum quantity during such period.
14. MISCELLANEOUS. (a) Except as provided for in paragraph 13, should either
party fail to comply with any of the terms and conditions of this
Agreement, the other party, by notice in writing, may request the
noncomplying party to correct such noncompliance within 10 days from the
date of such notice. If such noncompliance is not corrected before the
expiration of said 10-day period, the other party, at its option, may
terminate this Agreement forthwith, but failure of either party to notify
the other party of such noncompliance will not be regarded, in the event of
any future similar noncompliance, as a waiver of the right to terminate
this Agreement in accordance with the foregoing provision.
(b) This Agreement sets forth the entire agreement between parties
respecting the sale and purchase of the Products, but neither it nor any
amendment will be binding upon either party until it is executed by both
parties.
(c) This Agreement will inure to the benefit of and be binding upon the
parties, their heirs, personal representatives, successors, and assigns,
but no assignment of all or any portion of this Agreement by Buyer will be
valid without the written consent of Seller.
(d) This Agreement is subject to and may be overridden by all applicable
federal, state, and local laws, rules, regulations, and orders. Invoices
must bear a certification that these Products were produced and handled in
compliance with applicable requirements of the Fair Labor Standards Act, as
amended, and the regulations and orders of the U.S. Labor Department issued
pursuant thereto.
(e) Unless otherwise provided for herein, all notices will be in writing
and considered given when deposited in the United States mail, postage
prepaid, addressed to the appropriate party at the address shown above.
(f) Seller will indemnify, defend, and hold Buyer harmless from the acts or
omissions of Seller, and Buyer will indemnify, defend, and hold Seller
harmless from the acts or omissions of Buyer.
15. AUDIT. No commissions or fees will be paid nor any payments or rebates be
made to any employee or officer of Conoco, nor will anyone favor any
employee or officer of Conoco with gifts or entertainment of significant
cost or value, or enter into any business arrangements with any employees
or officers of Conoco other than as representatives of Conoco.
The parties hereto will maintain a true and correct set of records
pertaining to this Agreement and all transactions related thereto and will
retain such records for a period of 2 years after termination of this
Agreement. Prior to the expiration of such 2-year period, either party will
have access to all of such records and information, including all books,
papers, documents, agreements, and any other information that may have any
bearing on or pertain to this Agreement or any business conducted between
the parties, and either party will have the right to audit all such records
and information at reasonable times and places during normal working hours.
The parties hereto will also have the right to obtain statements from any
personnel of the other party in order to conduct or complete such audit.
The other party will cooperate fully in any such audit. All audits will be
conducted in accordance with generally accepted auditing standards.
16. WARNING. The Material Safety Data Sheets and labels for Products delivered
hereunder contain formation regarding health risks and recommendations for
the safe use and handling of such Products. Buyer acknowledges and
represents that it has read and understands the Material Safety Data
Sheets, the labels, or warnings regarding such Products. Buyer will
exercise the degree of care necessary to protect all persons and property
from all hazards disclosed in such Material Safety Data Sheets, labels, or
warnings. Buyers obligations in this regard will include but not be limited
to (1) warning the employees of Buyer and its affiliates who may become
exposed to such Products or their hazards; (2) taking measures to assure
that such employees have appropriate safety equipment which is adequately
maintained and properly used and that all precautions contained in Material
Safety Data Sheets, labels, and other warnings are followed; and (3)
warning third parties, including but not limited to Buyer's customers, who
may use or be exposed to such Products of their hazards, and requiring that
the precautions contained in such Material Safety Data Sheets, labels, and
other warnings are followed. If Buyer does not so protect all persons and
property from all hazards disclosed in such Material Safety Data Sheets,
labels, or warnings, Buyer will indemnify and hold Seller harmless from any
claims, causes of action, liabilities, losses, or expenses on account of
injury or death of persons and/or damage to property arising directly or
indirectly out of Buyer's failure to fulfill its obligations under this
paragraph 16.
CONTRACT ATTACHMENT 30-9026859-0000-A01 Page 2
January 21, 1992
offer a quote based on current market conditions and the following
formulae:
Conversion Dates Mt. Belvieu Current spot plus
Princeton's Winter T&T plus 1.85
CPG plus
January 21 - April 30, 1992 1.25 CPG
May 1 - July 31, 1992 1.00 CPG
August 1 - October 31, 1992 0.75 CPG
Additionally, deliveries to Todhunter, Coshocton and Greensburg will also
be billed the incremental winter tariff for delivery beyond Princeton.
Empire reserves the right to determine which terminals the converted
volumes will be pulled.
No vintaging of conversion volumes will occur. Instead, a new weighted
average conversion price will be calculated as additional volumes are
converted.
The down payment of 5.00 CPG will be due within ten days from date of
invoice. The balance will be invoiced in accordance with the above
schedule as the product is delivered to Empire, but in no event later than
March 31, 1993. Balances will be due net, upon receipt of invoice.
This section shall be updated in 1993, prior to converting volumes for the
1993/1994 heating season.