THIS AGREEMENT
made and entered in this 1 st day of July, 2008 (“Commencement
Date”), by and between JOHN D. OIL & GAS MARKETING
CO., LLC, with its offices located at 3511 Lost Nation Road,
Willoughby, Ohio 44094, an Ohio Corporation (hereinafter referred
to as “Seller”), and NORTHEAST OHIO NATURAL GAS
CORP. (hereinafter referred to as “NEO”), ORWELL
NATURAL GAS COMPANY (hereinafter referred to as
“ONG”), and BRAINARD GAS CORP. (hereinafter
referred to as “BGC”), with all of their offices
located at 8500 Station Street, Suite 100, Mentor, OH 44060
(hereinafter NEO, ONG and BGC shall be collectively referred to as
“Buyer”).
WHEREAS, Buyer
desires to acquire supplies of natural gas (“gas”) and
to obtain delivery of such gas to it’s facilities through
various pipelines owned or leased by others; and
WHEREAS, Seller
is in the business of acquiring natural gas supplies for resale;
and
NOW, THEREFORE,
in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the parties hereby agree as
follows:
AGREEMENT Subject to the terms of this Agreement, Seller
does hereby agree to sell to Buyer on a best effort basis and Buyer
does hereby agree to purchase, during the term of this Agreement,
those quantities of natural gas as described in the
Agreement.
TERM OF
AGREEMENT The term of
this Agreement shall be effective from the Commencement Date and
shall continue in full force and effect until September 31,
2023 (“Term”).
QUANTITY Buyer agrees to purchase all of its gas
requirements from Seller at the location(s) described in the
Agreement. Buyer herein affirms that it will purchase volumes from
no other supplier unless Seller cannot supply the amounts of gas
requested by Buyer. In that event, Buyer, on a temporary basis, may
secure the volume of gas that Seller cannot provide from whatever
source Buyer chooses.
NOMINATIONS Buyer shall advise Seller in writing, such
notice to be received no later than fifteen (15) days prior to
the first day of each month during the term of this Agreement, of
Buyer’s anticipated consumption of natural gas which buyer
wishes to purchase from Seller (“Nominated Volume”)
hereunder for the following month.
REIMBURSEMENT To the extent Buyer’s monthly consumption
result in the imposition of a penalty or balancing charge by any
interstate and/or intrastate pipeline utilized to transport gas
which is the subject of this Agreement, Buyer shall be responsible
for and reimburse Seller for such penalty or balancing charge which
is the result of Buyer’s monthly nomination or
consumption.
DELIVERY
POINT AND TRANSPORTATION Any gas purchased hereunder shall be sold by
Seller or Seller’s agent to Buyer and delivered to the
pipelines designated by Buyer to transport gas to Buyer’s
pipelines located in Northeastern Ohio (“Delivery
Point”). Title to the gas delivered hereunder shall vest in
Buyer upon delivery to the Delivery Point. Buyer shall arrange and
pay for all gas transportation costs and retainage imposed by
pipelines downstream of the Delivery Point. At and beyond the
Delivery Point, Buyer or Buyer’s representative shall be in
exclusive control and possession and be responsible for any loss of
gas, damage, or injury caused thereby.
PURCHASE
PRICE The price to be
paid by NEO to Seller is set forth in Exhibit “A”; the
price to be paid by ONG to Seller is set forth in Exhibit
“B”; and the price to be paid by BNG to Seller is seth
forth in Exhibit “C”. The Delivered Price (as defined
in Exhibits “A”, “B”, and “C”)
may be modified from time to time subject to the mutual agreement
of both Buyer and Seller to reflect the then current market
conditions. If the parties cannot agree upon any such modification,
the price in effect at that time shall then remain in effect,
subject to any future price adjustment as set forth in the
following sentence. On the 5 th anniversary and 10 th anniversary of the Commencement Date of this
Agreement (the “Bid Dates”), Buyer shall have the right
to seek bona fide third party bids from other gas marketers. Within
thirty (30) days of the applicable Bid Date, Buyer shall
provide Seller with a copy of any such third party bid that Buyer
is willing to accept. Seller shall then have fifteen (15) days
from the date of its receipt of any such third party bid in which
to: (i) agree to match the third party bid; or (ii) elect
not to match the third party bid. If Seller agrees to match the
third party bid, the Delivered Price shall be amended to reflect
the Delivered Price proposed under the third party bid that Seller
agreed to match and Buyer shall be required to reject said thirty
party bid. If Seller elects not to match said third party bid,
Seller shall deliver written notice to the Buyer of its rejection
and the Delivered Price shall continue to be the Delivered Price
that was then in effect prior to the date of Buyer’s receipt
of the third party bids and Buyer shall remain obligated to
continue to purchase its
Page 1 of 4
gas
requirements from Seller under the terms and conditions of this
Agreement, and Buyer shall be required to reject said third party
bid. Notwithstanding anything hereinabove contained to the
contrary, Buyer and Seller will come to mutual agreement on any
Delivered Price reduction, if during the term of this Agreement,
Buyer is unable to recover any portion of the Delivered Price from
its customers.
RIGHT OF
LAST REFUSAL At the
completion of the Term of this Agreement, Buyer agrees to grant to
Seller the right of last refusal to match any bona fide written
offer received by Buyer from another supplier to supply the volumes
of gas hereunder upon the same terms as offered by such other
supplier. Buyer shall forward to Seller a copy of such bona fide
offer together with all particulars relating thereto. In the event
Seller determines to meet such bona fide offer within fifteen
(15) days of receipt of such other offer from Buyer,
Buyer’s cancellation of this Agreement shall be deemed
ineffective and this Agreement shall continue in full force and
effect, subject to the revised terms set forth in the third party
bona fide offer accepted by the Seller.
BILLING
AND PAYMENT Seller
shall invoice Buyer for gas delivered pursuant to this Agreement
every thirty (30) days. Buyer shall pay the amounts invoiced
within ten (10) days of the invoice date. Seller’s
invoice statement shall report the total volumes of gas sold and
delivered to Buyer during the period covered.
A finance
charge of one and one-half percent (1 1 / 2
%) per month shall be due and
payable on all invoices that are not paid within fifteen
(15) days of the invoice date. The quantities invoiced by
Seller will be based on the quantities delivered by Seller or
Seller’s agent and measure at the Delivery Point. In the
event the actual quantities delivered to Buyer are unavailable, the
estimated volumes of gas tendered for delivery by Seller to Buyer
shall be invoiced to Buyer. Any appropriate adjustment shall be
made in the following billing period. In addition, Seller shall
have the option to discontinue delivering gas to Buyer if payment
is not received within thirty (30) days of the invoice
date.
QUALITY
AND MEASUREMENT Seller warrants
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