EXHIBIT 10.14
GAS SALES AGREEMENT
THIS AGREEMENT, made and entered into effective as of the lst day of
December, 1995, by and between Tyson Foods, Inc. ("Purchaser") and U S Gas
Services LLC ("Seller"),
RECITALS
WHEREAS, Seller desires to sell gas; and
WHEREAS, Purchaser desires to purchase said gas from Seller;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties do hereby covenant and agree as
follows:
I. DEFINITIONS
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As used herein, the following terms shall be construed to have meanings as
follows:
1. The term "day" shall mean a period of twenty-four (24) consecutive
hours beginning and ending at 8:00 o'clock a.m., Central Time (CT).
2. The term "month" shall mean a period beginning at 8:00 o'clock a.m., on
the first day of a calendar month and ending at 8:00 o'clock a.m., on the first
day of the next succeeding calendar month.
3. The term "natural gas" shall mean natural gas including both gas well
gas and casinghead gas and the residue gas therefrom.
4. The term "Mcf" shall mean one thousand (1,000) cubic feet at a
temperature of sixty degrees (60 degrees) Fahrenheit and at a pressure base of
14.73 psia.
5. The term "Btu" shall mean British Thermal Unit and the term "MMBtu"
shall mean one million British Thermal Units.
II. SCOPE OF AGREEMENT
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Purchaser agrees to Purchase and Seller agrees to sell natural gas during
the Term of this Agreement in the quantities at the prices, at the time and
delivered to the location specified in the Sales Specification sheet (see
Exhibit "A" attached hereto).
III. TERM
This Agreement shall be effective as of December 1, 1995 and shall continue
and remain in full force and effect until November 30, 2005. This Agreement
shall further continue year to year thereafter unless terminated by the parties
by giving at least ninety (90) days written notice prior to any anniversary date
of this Agreement.
IV. QUANTITY, POINT(S) OF DELIVERY, PRICE, AND PERIOD
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1. Purchaser and Seller shall agree upon (a) the quantity of gas to be
delivered by Seller and received by Purchaser, (b) the point(s) of delivery to
be utilized, (c) the price per MMBtu to be paid by Purchaser to Seller for all
gas delivered including measurement conditions (i.e., saturated/dry and pressure
base), and (d) the period during which the specified quantity, point(s) of
delivery, and price shall be effective. Upon such agreement, Purchaser and
Seller shall execute a Sales Specification Agreement (See Exhibit "A" attached
hereto) specifying the quantity, point(s) of delivery, price, and period agreed
upon, after which Seller will commence deliveries as agreed. Purchaser agrees
to pay Seller for all gas requested by Purchaser and delivered by Seller in
accordance with the terms and conditions of the Agreement.
2. Any change in daily quantities desired by Purchaser shall be
communicated to Seller no later than 11:00 a.m., CT two (2) days preceding the
desired date of change and shall be followed by written confirmation to Seller.
Should Purchaser desire a daily quantity which exceeds that specified in the
Sales Specification Agreement referenced in Paragraph 1 above, Seller shall
advise Purchaser of the availability or non-availability of such gas, and, if
available, when deliveries can commence.
3. In the event that Seller's transportation costs to the Point of
Delivery referred to in the attached Sales Specification Sheet are increased or
decreased during the effective pricing period, the Price per MMBtu will be
adjusted by a like amount Such transportation costs should be independently
verified by a party of the Purchaser's choice.
V. TRANSPORTATION
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Transporter's rules, guidelines, and policies as may be changed from time
to time shall define and set forth, among other things, the manner in which gas
purchased and sold under this Agreement is transported. Purchaser and Seller
agree that the receipt and delivery of gas purchased and sold under this
Agreement shall always be subject to the operational and nomination procedures
established by Transporter(s). Purchaser shall be responsible for any under or
over delivery charges assessed by Transporter(s) which are caused by variances
in Purchaser's receipts/takes from quantities requested/nominated by Purchaser
to Seller for the effective period agreed upon in the Sales Specification
Agreement referenced in Article IV above.
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VI. QUALITY AND MEASUREMENT
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Transporter's rules, guidelines and policies as may be changed from time to
time, shall define and set forth, among other things, the units of measurement,
measurement specifications, quality, heating value, testing specifications,
required delivery pressure and specifications of the gas to be delivered to
Purchaser pursuant hereto unless stated otherwise in Article IV above. All such
definitions, specification, procedures and terms and all other terms and
provisions of Transporter(s) relating to the delivery of gas are hereby
expressly incorporated herein by reference.
VII. XXXXXXXX
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1. By the tenth day of the month following the month in which deliveries
actually occurred, Seller shall provide Purchaser an invoice, based upon
Purchaser's nominations for the month in which deliveries actually occurred.
Said invoice shall detail the total nominations by Purchaser and the price per
MMBtu agreed to for the month in which deliveries actually occurred. Purchaser
shall pay said invoice by the twenty fifth (25th) day of the month in which said
invoice was received.
Should third party Transporters' statements reflect a difference in volumes
received or delivered and volumes nominated, the party to this Agreement who is
owed money as a result of said difference shall immediately notify the other
party of the discrepancy and provide supporting documentation for said claim.
The party so notified will pay any amounts due within thirty (30) days of
receipt of said notice. Any party not receiving payment within the above time
limits shall have the right to suspend any further transactions under this
Agreement until payment is received. Seller's statement shall be presumed to be
received by Purchaser within five (5) days of the postmark date on the envelope
containing the statement. Beginning on the first (lst) day of the second month
following the production month, interest shall accrue at the lesser of (a) the
prime rate published in the "Money Markets" section of The Wall Street Journal
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on the first business day of the month during which deliveries were made or (b)
the maximum lawful rate. Purchaser shall make payment by check to Seller's
account as noted below:
2. Each party shall have the right to reasonably examine the books,
records and charts of the other party to the extent necessary to verify the
accuracy of any statement, charge or computation made pursuant to the provisions
of any article hereof. In the event an error is discovered in the amount billed
in any statement rendered to Purchaser, such error shall be adjusted within
thirty (30) days of the determination thereof, provided that claim thereof shall
have been made within sixty (60) days from the date of discovery of such error.
No error will be adjusted after twenty-four (24) months from the date of such
statement.
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VIII.ADDRESSES
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Until Seller is otherwise notified in writing by Purchaser, the address of
Purchaser is and shall remain:
Tyson Foods, Inc.
P. 0. Xxx 0000
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
and unless Purchaser is otherwise notified in writing by Seller, the address of
Seller is and shall remain:
U S Gas Services LLC
P. 0. Xxx 00000
Xxxxx, XX 00000-0000
ALL notices required to be given in writing hereunder shall be given to the
respective parties at such addresses or such other addresses as the parties
respectively shall designate by written notice.
IX. FORCE MAJEURE
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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 make
payments due hereunder, the obligations of each party, so far as they are
affected by such force majeure, shall be suspended during the continuance of the
same. Such party shall give notice and full particulars at such force majeure,
in writing, to the other party as soon as reasonably possible after the
occurrence of the cause relied on. The term "Force Majeure" as employed herein
shall mean strikes, lockouts or other industrial disturbances, acts of the
public enemy, wars, blockades, riots, landslides, hurricanes, lightning,
earthquakes, fires, floods, washouts, unavoidable freezing of pipes and
explosions. Refusal of either Seller or Purchaser to accede to the demand of
laborers or labor unions which, in its sole discretion, it considers
unreasonable shall not deny that party the benefits of this provision.
X. DEFAULT OR TERMINATION
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1. If either party shall fail to perform any of the covenants or
obligations imposed upon it by the terms and conditions of this Agreement, the
other party may, at its option, terminate this Agreement by giving thirty (30)
days prior written notice and stating specifically the cause for terminating
this Agreement. Any termination of this Agreement shall be without waiver of
remedy to which the party not in default may be entitled for violations of this
Agreement. No waiver by either party hereto of any one or more
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defaults by the other in the performance of any provision of this Agreement
shall operate or be construed as a waiver of any future default or defaults,
whether of a like or of a different character.
2. Notwithstanding any other provision contained in this Agreement, in
the event this Agreement is terminated as to all or any portion of the gas
subject hereto or all or any portion of such gas is released from this
Agreement, such termination or release shall be without prejudice to any rights
or obligations of the parties accruing prior to such termination or release.
XI. POSSESSION AND WARRANTY OF TITLE
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1. As between the parties hereto, Seller shall be in exclusive control
and possession of the gas deliverable hereunder and responsible for any damage
or injury caused thereby until the same shall have been delivered to the
point(s) of delivery. After the gas has been delivered to the point(s) of
delivery, Purchaser shall be deemed to be in exclusive control and possession
thereof and the Purchaser shall be responsible for any injury or damage caused
thereby. Title to the gas delivered hereunder shall pass at the point(s) of
delivery.
2. Seller hereby warrants the title to all gas delivered by Seller to
Purchaser hereunder and the right to sell the same.
XII. ASSIGNMENTS
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This Agreement shall be binding upon and inure to the benefit of the heirs,
legal representatives, successors and assigns of the Seller and the Purchaser.
Neither party shall assign its rights under this Agreement or any obligations
hereunder without the prior consent in writing of the other party. Such consent
shall not be unreasonably withheld. Notwithstanding the foregoing, either party
may assign this Agreement or any of its rights or obligations hereunder to a
corporate affiliate of the party making the assignment without the prior consent
of the other party. It is further agreed, that nothing contained in this
Agreement shall in any manner prevent either party from pledging or mortgaging
its rights hereunder for security of any loan made by such party.
XIII.MISCELLANEOUS
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1. The Seller and Purchaser recognize that the Purchaser may be required
to obtain third-party transportation to enable Purchaser to purchase and receive
gas into its facilities. In the event Seller, in any manner, assists Purchaser
in seeking or arranging third-party transportation, the Purchaser hereby agrees
to indemnify and hold Seller harmless from any event, occurrence or failure
thereof arising directly or indirectly from the third-party transportation of
such gas.
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2. This Agreement may signed in counterpart, each of which shall
constitute an original and together which shall constitute one and the same
Agreement.
3. This Agreement shall be governed by the laws of the State of Arkansas.
4. This Agreement and the Purchaser's and the Seller's written
confirmation(s) of quantity, point(s) of delivery, price, and period as provided
for in Article IV shall constitute the sole and entire agreement between the
parties. Further, all prior oral and written agreements are hereby expressly
merged into the terms and conditions of this Agreement. No modification of the
terms and provisions this Agreement shall be or become effective except by the
execution of a supplementary written agreement executed by the party sought to
be charged.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective on the day and year first above written.
SELLER: PURCHASER:
By:/s/ By:/s/
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Title: President Title: VP Purchasing
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EXHIBIT "A"
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Sale Specification Sheet
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This Sale Specification Sheet is attached to and made a part of that
certain Gas Sales Agreement entered into as of the date and between the parties
set forth below. it is contemplated that this Sales Specification Agreement and
all the terms noted herein shall remain in full force and effect for the term
set forth herein. In the event the parties desire to extend or modify the terms
set forth in the Sales Specification Agreement, then an amended Sales
Specification Sheet shall be executed by the parties and appended to the
Contract.
Date of Agreement: December 1, 1995
Sales Specification Date: January 1, 1996
Seller: U S Gas Services L L C
Purchaser: Tyson Foods, Inc.
Quantity: up to 1000 MMBtu/Day
Price: $ 2.21 /MMBtu Dry Renegotiable at the end of each contract year.
Term: 1-1-96 Through 12-31-2001
Point(s) of Delivery: Into Lone Star Pipeline
Various Pool(s) and Interconnects
Transporter: Lone Star Pipeline
Credit Requirement: N/A
SELLER: PURCHASER:
U S Gas Services L L C Tyson Foods, Inc.
By:/s/ By:/s/
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Title: President Title: VP Purchasing
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November 11, 1996
Via FedEx - Priority
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Xx. Xxxxx Xxxxx, President
US GAS SERVICES LLC
00 X. 0xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
RE: SALE OF BEEF DIVISION OF TYSON FOODS, INC. ("Tyson")
Dear Xx. Xxxxx:
On October 17, 1996 Tyson entered into a definitive agreement (the
"Purchase Agreement") pursuant to which it agreed to sell its beef further
processing facilities and operations (the "Business") to Gorges/Quik-to-Fix
Foods, Inc. ("Buyer"), an entity formed by CGW Southeast Partners III, L.P.
("CGW") for the purpose of acquiring the Business. Under the terms of the
Purchase Agreement, the sale of the Business is expected to be consummated (the
"Closing") on November 22, 1996. Until such date, Tyson will own and operate
the Business. After the Closing, the Business will continue to be operated with
the same facilities employed by Tyson in its operation of the Business and will
be managed primarily by the people who now manage the Business for Tyson.
Pursuant to the Purchase Agreement, Tyson has agreed to assign all of its
rights, and Buyer has agreed to assume all of Tyson's obligations arising on or
after the Closing, under that certain Gas Sales Agreement (the "Contract") dated
December 1, 1995 by and between Tyson and US Gas Services LLC ("US Gas").
Pursuant to Section XII of the Contract, US Gas's consent is required in order
for Tyson to assign the Contract to Buyer.
On behalf of Tyson and Buyer, I am writing to request US Gas's consent to
Tyson's assignment of the Contract to Buyer. Please sign below where indicated
to confirm US Gas's consent to the assignment and return a copy of this letter
to my attention via fax (000-000-0000) and the original via the enclosed FedEx
envelope. By consenting to this assignment, US Gas acknowledges and affirms its
duties and obligations under the Contract as if the Contract were entered into
between US Gas and Buyer. This consent does not constitute a consent to further
assignment of the Contract and, except as set forth herein, the Contract remains
in full force and effect, enforceable against US Gas and Buyer.
US Gas Services LLC
November 11, 1996
Page 2
Your assistance in this matter is greatly appreciated. If you have any
questions, please contact Xxxxxxxx Xxxxx (501-290-7330) or Read Xxxxxx
(501-290-7023) in Tyson's legal department, or Xxx X'Xxxxxxx with Buyer
(404-816-3255).
TYSON FOODS, INC.
/s/Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
Corporate Counsel
The undersigned hereby consents to the assignment of the Contract (as
defined hereinabove) from Tyson Foods, Inc. to Gorges/Quik-To-Fix Foods, Inc.
US GAS SERVICES LLC
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
cc: Xxx Xxxx