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EXHIBIT 10(c)
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GAS PURCHASE AGREEMENT DATED MARCH 31, 1999
BETWEEN NORTHEAST OHIO GAS MARKETING, INC., AND ATLAS
ENERGY
GROUP, INC., ATLAS RESOURCES, INC., AND RESOURCE ENERGY, INC.
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GAS PURCHASE AGREEMENT
This Agreement made and entered into as of this 31st day of
March,
1999, by and between Northeast Ohio Gas
Marketing, Inc., an Ohio corporation
("Buyer") of P. O. Box 430, Lancaster, Ohio
43130-0430 and Atlas Energy Group,
Inc., an Ohio corporation, Atlas Resources,
Inc., a Pennsylvania corporation and
Resource Energy, Inc., a Delaware
corporation (collectively "Seller" of 311
Rouser Road, P.O. Box 611, Coraopolis,
Pennsylvania 15108.
RECITALS
WHEREAS, Buyer utilizes volumes of natural gas, hereinafter
referred to
as "gas", for its customers situated in
Ohio and Pennsylvania; and
WHEREAS, Seller is in the business of developing and producing a
supply
of gas from gas and/or on wells situated in
Ohio and Pennsylvania; and
WHEREAS, Seller is the owner of such gas or is the authorized agent
for
the owner or owners of such gas and
therefore has the authority to contract for
the sale of such gas; and
WHEREAS, Seller desires to sell and to agree to sell for itself
and
those owners for which it is the authorized
agent, all of the gas produced from
the wells, and Buyer desires to purchase
such gas; and
WHEREAS, as of the date hereof, FirstEnergy Trading and Power
Marketing, Inc., an affiliate of Buyer, and
AIC, Inc., an affiliate of Seller,
are entering into an agreement (the "Stock
Purchase Agreement') relating to the
purchase of all of the common stock of
Atlas Gas Marketing, Inc.
NOW, THEREFORE, in consideration of the mutual covenants
contained
herein and other good and valuable
consideration, the receipt and sufficiency of
which are hereby expressly acknowledged,
the parties do hereby agree as follows:
1. AGREEMENT: Subject to the terms of this Agreement, Seller
does
hereby agree to sell to Buyer on a firm
basis and Buyer does hereby agree to
purchase on a firm basis, during the
continuing term of this Agreement, those
quantities of natural gas described in.
this Agreement.
2. TERM OF AGREEMENT: The term of this Agreement shall be effective
for
a primary term of ten (10) years commencing
March 31, 1999 and terminating March
31, 2009. This Agreement shall
automatically renew for successive annual terms
unless either party, within one hundred
twenty (120) days prior to the end of
the primary term or any successive annual
term, notifies the other party, in
writing, of its intent to terminate this
Agreement at the end of such term. The
primary term and successive annual terms
shall be considered the "term" of this
Agreement. The price for gas for the first
one (1) or two (2) years of the term
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of this Agreement shall be set forth on
Schedule I attached hereto. The price
for gas for subsequent annual periods shall
be agreed to between Buyer and
Seller by November 30th of each subsequent
year for the next succeeding annual
period, which period shall commence on
April 1st.
Should the Buyer and Seller be unable to reach agreement as to
the
purchase price at any Point of Delivery,
after the initial one or two year term,
as applicable, or for any subsequent annual
period, the Seller may solicit
offers to purchase such gas from other
third parties. In the event Seller should
receive a bona fide offer to purchase all
of Seller's gas, which is subject to
this Agreement, at a specific Point of
Delivery, it shall give notice (the
"Notice") of the Point of Delivery, the
name of prospective purchaser, the term
of the proposed agreement and the purchase
price to Buyer. If Buyer refuses to
match such offer within five (5) business
days of receipt of the Notice from
Seller, then Seller shall be free to sell
such gas to a party other than Buyer
on the terms set forth in the Notice.
Buyer's future rights to purchase such gas
shall be restored at the completion of the
term set forth in the Notice, subject
to the provisions of this Paragraph.
3. DELIVERY POINT AND TRANSPORTATION: Subject to further provisions
of
this Agreement, and during the term hereof,
any gas purchased hereunder shall be
sold and delivered by Seller to Buyer at
the interstate pipeline or local
distribution company facilities of
Tennessee Gas Pipeline Company, East Ohio Gas
Company, National Fuel Gas Distribution,
National Fuel Gas Supply, Peoples
Natural Gas Company and Columbia Gas
Transmission Corp., hereinafter be referred
to as the "Points of Delivery". Additional
Points of Delivery may be added by
mutual agreement of Buyer and Seller. Title
to the gas delivered hereunder shall
vest to Buyer upon delivery by Seller to
the Points of Delivery. Seller shall be
responsible and pay for all gas
transportation costs and retainage imposed by
upstream pipelines to the Points of
Delivery. As between the parties hereto,
Seller shall be responsible for any damage
or injury caused by the gas until the
same shall have been delivered to the
Points of Delivery after which delivery
Buyer shall be in exclusive control and
possession thereof and responsible for
any damage or injury caused thereby.
4. QUANTITY: Seller shall exclusively make available to Buyer and
Buyer
agrees to purchase from Seller, during the
term of this Agreement a quantity
equal to 100% of the current and future
production into the Points of Delivery.
Except as otherwise provided in this
Section, Seller shall deliver all gas it
develops and produces into the Points of
Delivery. Unless agreed to by Buyer
Seller shall not sell any gas to any other
party. It is currently estimated that
Atlas Energy Group, Inc. and Atlas
Resources, Inc. will collectively deliver
approximately 27,000 Mcf per day and
Resource Energy. Inc. will deliver
approximately 7,000 Mcf per day at the
Points of Delivery. Buyer and Seller
agree to mutually cooperate and regularly
meet to establish production schedules
of gas into the Points of Delivery.
Seller shall nominate, by the 25th calendar day of the preceding
month,
the daily volumes to be delivered during
the following month to the Points of
Delivery. Seller's daily deliveries shall
be no greater than one hundred and ten
percent (110%) or no less than ninety
percent (90%) of Seller's daily nominated
volume as long as Seller's deliveries at
each Point of Delivery are at least 500
Mcf per day, with the exception of the
Wheatland Dehydration Meter, for which
the minimum volume is 300 Mcf per day. If
Seller's daily volume delivery is less
than ninety percent (90%) of Seller's daily
nominated volume, then Seller's
shall pay Buyer one hundred and two percent
(102%) of the Buyer's replacement
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cost, less the price set forth on Schedule
I, for the volume of gas which is the
difference between Seller's daily volume
delivery and ninety percent (90%) of
Seller's daily nominated volume. If
Seller's daily volume delivery is more than
one hundred and ten percent (110%) of
Seller's daily nominated volume, then,
regardless of other pricing provisions
contained in this Agreement, Buyer shall
pay Seller ninety eight percent (98%) of
the daily market price of each Point of
Delivery, as set forth on Schedule I, for
the volume of gas which is the
difference between Seller's daily volume
delivery and one hundred and ten
percent (110%) of Seller's daily nominated
volume.
Notwithstanding the first paragraph of this Section 4, it is
understood
and agreed to by the parties that Seller
shall continue to supply gas to its
three (3) direct delivery customers,
Wheatland Tube Company, CSC Industries and
Warren Consolidated for the life of those
agreements, including any extensions
or renewals. Buyer and Seller agree that
Buyer will provide all billing services
for the above three (3) customers. Buyer
agrees that it will not utilize
Seller's local production, or any other
source of supply, as source of sales to
the above three (3) customers of Seller to
the extent Buyer's offer would
supplant or in any manner displace the
existing amount of Seller's direct
delivery agreements throughout the term of
Seller's agreements with the above
three (3) customers, including any
extensions or renewals. Seller currently
delivers 2,600 Mcf per day to the Wheatland
Tube Company, 3,400 Mcf per day to
CSC Industries and 325 Mcf per day to
Warren Consolidated. Seller agrees that
Buyer may sell any amount, in excess of
Seller's current volumes (so long as
Seller continues to have a contact with the
above three (3) customers) to such
customers. Buyer shall not be restricted in
selling to any of the above three
(3) customers if Seller no longer has a
contract with such customer.
Seller's commitment to deliver all of the gas it produces to Buyer
is
subject to the right of investors,
including limited partnerships where Seller
is acting as the General Partner, in wells
operated by Seller, to take their gas
in kind. In the event a party wishes to
take its gas in kind, Seller shall
promptly notify Buyer. Seller further
agrees to indemnify Buyer for full losses
attributable to gas which has been taken in
kind by investors in wells operated
by Seller, to the extent Buyer has incurred
a loss on such gas because of a
prior commitment by Buyer.
5. PURCHASE PRICE: The price to be paid by Buyer to Seller for
gas
delivered to Buyer at the Point(s) of
Delivery shall be as set forth on Schedule
I attached hereto.
6. BILLING AND PAYMENT: Invoices shall be rendered to Buyer by the
14th
calendar day of the month for gas delivered
the preceding monthly period and
payment shall be made monthly to Seller not
later than the 28th calendar day of
the month. Payment shall be made at the
following address, or other address that
may be designated by Seller from time to
time: 311 Rouser Road, P.O. Box 611,
Coraopolis, Pennsylvania 15108. Invoices
shall be delivered to Buyer at: P.O.
Box 430, Lancaster, Ohio 43130-0430. The
quantities invoiced by Seller will be
based on the quantities delivered by Seller
at the Point(s) of Delivery. In the
event the actual quantity delivered to the
Point(s) of Delivery is unavailable,
the estimated volumes of gas tendered for
delivery by Seller to the Point(s) of
Delivery shall be invoiced to Buyer. Any
appropriate adjustment shall be made in
the following billing period. Payment not
received by the twenty-eighth (28th)
calendar day of the month shall bear
interest at PNC Bank, NA's then current
prime lending rate minus two percent
(2%).
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7. QUALITY AND MEASUREMENT: Seller warrants that gas delivered
under
this Agreement shall meet the quality and
measurement standards established by
interstate pipeline and/or local
distribution companies receiving gas from
Seller for Buyer's account at the Point(s)
of Delivery.
8. WARRANTY OF TITLE AND TAXES. Seller warrants title to all
gas
delivered by it and warrants that such gas
is free from all liens and adverse
claims. Seller shall indemnify and save
Buyer harmless against all suits, debts,
damages, costs and expenses arising from
adverse claims to the gas delivered by
it or taxes, payments or other charges
thereon applicable before such gas is
delivered to the Point(s) of Delivery. All
present and future production,
severance, gross proceeds or assessments of
a similar nature imposed or levied
by any state or other governmental agency
or duly constituted authority upon the
gas sold and delivered hereunder and the
components thereof and the royalty,
overriding royalty, production payment and
other lease burden owners, as the
case may be, shall be borne and paid by
Seller. In the event Buyer is required
to pay any of such taxes and assessments,
Buyer may deduct same from the
payments to be made by it hereunder and may
make a reasonable charge for such
service. Buyer shall be res
