Exhibit 10.10

 

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210 Park Avenue, Suite 1600

 

Oklahoma City, OK 73102

 

Phone: (405) 239-7191

 

FAX: (405) 602-1251

FORM OF ENTERPRISE CRUDE OIL LLC

CRUDE OIL PURCHASE CONFIRMATION

 

Enterprise Contract   Mid-Con Energy Operating, Inc. Contract
#:                                 Enterprise Contact:   (Please Supply)
Company:   Mid-Con Energy Operating, Inc. Marketer:   Rhonda Stacy   2431 E.
61st Street, Suite 850   Tulsa, OK 74136 FAX Number:   (918) 743-8859

Mid-Con Energy’s Sale and Delivery to Enterprise

This confirms the verbal agreement made between             of Enterprise Crude
Oil LLC (“Enterprise”) and             of Mid-Con Energy Operating, Inc.
(“Mid-Con Energy”) on             .

 

1. Quality:    Oklahoma Sour Crude Oil 2. Quantity:    Equal to the production
from leases shown on Exhibit A, approximately barrels per day 3. Delivery:   
Into Enterprise trucks, at the lease 4. Price:    The arithmetic average of the
settlement prices for the nearby Light Sweet Crude Oil Futures Contract on the
New York Mercantile Exchange (“NYMEX”) during the month of delivery business
days only. The price will be the NYMEX price as calculated above plus the amount
as shown on the attached Exhibit A. 5. Term:    Commencing through 6. Payment:
   Payment shall be made by electronically deposited check on or before the 20th
of the month following delivery 7. General Terms and Conditions:    All other
terms and conditions not specifically stated shall be governed by Enterprise
Crude Oil LLC’s General Provisions, dated March 25, 2010

Unless we receive from you written notice of objection within three (3) business
days of your receipt of this Confirmation, the terms and conditions stated
herein shall constitute an agreement binding upon both parties and shall
supersede all prior written and oral communications by either party and between
the parties regarding the subject matter of this agreement and cannot be
modified unless in writing. If you have any questions, please call .

If the parties subsequently both sign a written agreement covering the subject
matter of this Confirmation, such written agreement shall, as of its effective
date, supersede this Confirmation.

Enterprise Crude Oil LLC

By Enterprise Crude GP LLC

its sole manager

By:                                             

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ENTERPRISE CRUDE OIL LLC

EXHIBIT A

  

MID-CON ENERGY OPERATING, INC.

CONTRACT DATED:

CONTRACT NO.:

 

ENTERPRISE

LEASE #

   LEASE NAME    COUNTY    SEC    LEGAL
TWN    RNG    AMOUNT    LEASE
EFFECTIVE
DATE

NYMEX CALENDAR AVERAGE TRADING DAYS ONLY, DEEMED 40° API GRAVITY, DELIVERED IN
EQUAL DAILY QUANTITIES, PLUS AMOUNT SHOWN PER BARREL.

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ENTERPRISE CRUDE OIL LLC

(Formerly TEPPCO Crude Oil, LLC)

GENERAL PROVISIONS

CRUDE OIL AGREEMENTS

Revised March 25, 2010 due to Entity Name Change

A. Measurement and Tests: All measurements hereunder shall be made from static
tank gauges on 100 percent tank table basis or by positive displacement meters.
All measurements and tests shall be made in accordance with the latest ASTM or
ASME-API (Petroleum PD Meter Code) published methods then In effect, whichever
apply. Volume and gravity shall be adjusted to 60 degrees Fahrenheit by the use
of Table 6A and 5A of the Petroleum Measurement Tables ASTM Designation D1260 in
their latest revision. The crude oil delivered hereunder shall be marketable and
acceptable in the applicable common or segregated stream of the carriers
involved but not to exceed 1% S&W. Full deduction for all free water and S&W
content shall be made according to the API/ASTM Standard Method then In effect.
Either party shall have the right to have a representative witness all gauges,
tests and measurements. In the absence of the other party’s representative, such
gauges, tests and measurements shall be deemed to be correct.

B. Warranty: The Seller warrants good title to all crude oil delivered hereunder
and warrants that such crude oil shall be free from all royalties, liens,
encumbrances and all applicable foreign, federal, state and local taxes.

Seller further warrants that the crude oil delivered shall not be contaminated
by chemicals foreign to virgin crude oil Including, but not limited to
chlorinated and/or oxygenated hydrocarbons and lead. Buyer shall have the right,
without prejudice to any other remedy available to Buyer, to reject and return
to Seller any quantities of crude oil which are found to be so contaminated,
even after delivery to Buyer.

C. Rules and Regulations: The terms, provisions and activities undertaken
pursuant to this Original Agreement shall be subject to all applicable laws,
orders and regulations of all governmental authorities. If at any time a
provision hereof violates any such applicable laws, orders or regulations. Such
provision shall be voided and the remainder of the Original Agreement shall
continue in full force and effect unless terminated by either party upon giving
written notice to the other party hereto. If applicable, the parties hereto
agree to comply with all provisions (as amended) of the Equal Opportunity Clause
prescribed in 41 C.F.R. 60-1.4; the Affirmative Action Clause for disabled
veterans and veterans of the Vietnam Era prescribed in 41 C.F.R. 60-250,4; the
Affirmative Action Clause for Handicapped Workers prescribed in 41 C.F.R.
60-741.4; 48 C.F.R. Chapter I Subpart 19.7 regarding Small Business and Small
Disadvantaged Business Concerns; Executive Order 12138 and regulations
thereunder regarding subcontracts to women-owned business concerns; Affirmative
Action Compliance Program (41 C.F.R. 60-1.40): annually file SF-100 Employer
Information Report (41 C.F.R. 60-1.7); 41 C.F.R. 60-l.8 prohibiting segregated
facilities; and the Fair Labor Standards Act of 1938 as amended, all of which
are incorporated in this Original Agreement by reference.

D. Hazard Communication: Seller shall provide its Material Safely Data Sheet
(“MSDS”) to Buyer. Buyer acknowledges the hazards and risks in handling and
using crude oil. Buyer shall read the MSDS and advise its employees, its
affiliates, and third parties, who may purchase or come Into contact with such
crude oil, about the hazards of crude oil, as well as the precautionary
procedures for handling said crude oil, which are set forth in such MSDS and any
supplementary MSDS or written warning(s) which Seller may provide to Buyer from
time to time.

E. Force Majeure: Except for payment due hereunder, either party hereto shall be
relieved from liability for failure to perform hereunder for the duration and to
the extent such failure is occasioned by war, riots, insurrections, fire,
explosions sabotage, strikes, and other labor or Industrial disturbances, acts
of God or the elements, governmental laws, regulations, or requests, acts in
furtherance of the International Energy Program, disruption or breakdown of
production or transportation facilities, delays of pipeline carrier in receiving
and delivering crude oil tendered, any disruption in the market for crude oil of
a quality the same as or similar to the quality of the crude oil that is the
subject of this Original Agreement or by any other cause, whether similar or
not, reasonably beyond the control of such party (“Force Majeure”). Any such
failures to perform shall be remedied with all reasonable dispatch, but neither
party shall be required to supply substitute quantities from other sources of
supply. Failure to perform due to events of Force Majeure shall not extend the
terms of this Original Agreement.

Notwithstanding the above, and in the event that the Original Agreement is an
associated purchase/sale, or exchange of crude oil, the parties shall have the
rights and obligations described below in the circumstances described below:

 

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(1) If, because of Force Majeure, the party declaring Force Majeure (the
“Declaring Party”) is unable to deliver part or all of the quantity of crude oil
which the Declaring Party is obligated to deliver under the Original Agreement
or associated contract, the other party (the “Exchange Partner”) shall have the
right but not the obligation to reduce its deliveries of crude oil under the
same Original Agreement or associated contract by an amount not to exceed the
number of barrels of crude oil that the Declaring Party fails to deliver.

(2) If, because of Force Majeure, the Declaring Party is unable to take delivery
of part or all of the quantity of crude oil to be delivered by the Exchange
Partner under the Original Agreement or associated contract, the Exchange
Partner shall have the right but not the obligation to reduce Its receipts of
crude oil under the same Original Agreement or associated contract by an amount
not to exceed the number of barrels of crude oil that the Declaring Party fails
to take delivery of.

F. Payment: Unless otherwise specified in the Special Provisions of this
Original Agreement, Buyer agrees to make payment against Seller’s Invoice for
the crude oil purchased hereunder to a bank designated by Seller in U.S. dollars
by telegraphic transfer in immediately available funds. Unless otherwise
specified in the Special Provisions of this Original Agreement, payment will be
due on or before the 20th of the month following the month of delivery. If
payment due date is on a Saturday or New York bank holiday other than Monday,
payment shall be due on the preceding New York banking day. If payment due date
is on a Sunday or a Monday New York bank holiday, payment shall be due on the
succeeding New York banking day.

Payment shall be deemed to be made on the date good funds are credited to
Seller’s account at Seller’s designated bank.

In the event that Buyer fails to make any payment when due, Seller shall have
the right to charge interest on the amount of the overdue payment at a per annum
rate which shall be two percentage points higher than the published prime
lending rate of JPMorgan Chase Bank, National Association on the date payment
was due, but not to exceed the maximum rate permitted by law.

G. Financial Responsibility:

(1) Notwithstanding anything to the contrary in this Original Agreement, should
Seller reasonably believe it necessary to assure payment, Seller may at any time
require, by written notice to Buyer, advance cash payment or satisfactory
security In the form of a Letter or Letters of Credit at Buyer’s expense in a
form and from a bank acceptable to Seller to cover any or all deliveries of
crude oil. If Buyer does not provide the Letter of Credit on or before the date
specified in Seller’s notice under this section, Seller or Buyer may terminate
this Original Agreement forthwith. However, if a Letter of Credit is required
under the Special Provisions of this Original Agreement and Buyer does not
provide same, then Seller only may terminate this Original Agreement forthwith.
In no event shall Seller be obligated to schedule or complete delivery of the
crude oil until said Letter of Credit is found acceptable to Seller. Each party
may offset any payments or deliveries due to the other party under this or any
other Original Agreement between the parties.

(2) If a party to this Original Agreement (the “Defaulting Party”) should
(a) become the subject of bankruptcy or other Insolvency proceedings, or
proceedings for the appointment of a receiver, trustee, or similar official,
(b) become generally unable to pay Its debts as they become due, or (c) make a
general assignment for the benefit of creditors, the other party to this
Original Agreement may withhold shipments without notice.

H. Liquidation:

(1) Right to Liquidate. At any time after the occurrence of one or more of the
events described in paragraph (2) of Section G, Financial Responsibility, the
other party to the Original Agreement (the “Liquidating Party”) shall have the
right, at its sole discretion, to liquidate this Original Agreement by
terminating this Original Agreement. Upon termination, the parties shall have no
further rights or obligations with respect to this Original Agreement, except
for the payment of the amount(s) (the “Settlement Amount” or “Settlement
Amounts”) determined as provided in Paragraph (3) of this section.

(2) Multiple Deliveries. If this Original Agreement provides for multiple
deliveries of one or more types of crude oil in the same or different delivery
months, or for the purchase or exchange of crude oil by the parties, all
deliveries under this Original Agreement to the same party at the same delivery
location during a particular delivery month shall be considered a single
commodity transaction (“Commodity Transaction”) for the purpose of determining
the Settlement Amount(s). If the Liquidating Party elects to liquidate this
Original Agreement, the Liquidating Party must terminate all Commodity
Transactions under this Original Agreement.

 

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(3) Settlement Amount. With respect to each terminated Commodity Transaction,
the Settlement Amount shall be equal to the contract quantity of crude oil,
multiplied by the difference between the contract price per barrel specified in
this Original Agreement (the “Contract Price”) and the market price per barrel
of crude oil on the date the Liquidating Party terminates this Original
Agreement (the “Market Price”). If the Market Price exceeds the Contract Price
in a Commodity Transaction, the selling party shall pay the Settlement Amount to
the buying party. If the Market Price is less than the Contract Price in a
Commodity Transaction, the buying party shall pay the Settlement Amount to the
selling party. If the Market Price is equal to the Contract Price in a Commodity
Transaction, no Settlement Amount shall be due.

(4) Termination Date. For the purpose of determining the Settlement .Amount, the
date on which the Liquidating Party terminates this Original Agreement shall be
deemed to be (a) the date on which the Liquidating Party sends written notice of
termination to the Defaulting Party, if such notice of termination is sent by
electronic mail or facsimile transaction; or (b) the date on which the
Defaulting Party receives written notice of termination from the Liquidating
Party, if such notice of termination is given by United States mail or a private
mail delivery service.

(5) Market Price. Unless otherwise provided in this Original Agreement, the
Market Price of crude oil sold or exchanged under this Original Agreement shall
be the price for crude oil for the delivery month specified in this Original
Agreement and at the delivery location that corresponds to the delivery location
specified in this Original Agreement, as reported in Platt’s Oilgram Price
Report (“Platt’s”) for the date on which the Liquidating Party terminates this
Original Agreement. If Platt’s reports a range of prices for crude oil on that
date, the Market Price shall be the arithmetic average of the high and low
prices reported by Platt’s. If Platt’s does not report prices for the crude oil
being sold under this Original Agreement, the Liquidated Party shall determine
the Market Price of such crude oil in a commercially reasonable manner, unless
otherwise provided in this Original Agreement.

(6) Payment of Settlement Amount. Any Settlement Amount due upon termination of
this Original Agreement shall be paid in immediately available funds within two
business days after the Liquidating Party terminates this Original Agreement.
However, if this Original Agreement provides for more than one Commodity
Transaction, or if Settlement Amounts are due under other agreements terminated
by the Liquidating Party, the Settlement Amounts due to each party for such
Commodity Transactions and/or agreements shall be aggregated. The party owing
the net amount after such aggregation shall pay such net amount to the other
party in immediately available funds within two business days after the date on
which the Liquidating Party terminates this Original Agreement.

(7) Miscellaneous. This section shall not limit the rights and remedies
available to the Liquidating Party by law or under other provisions of this
Original Agreement. The parties hereby acknowledge that this Original Agreement
constitutes a forward contract for purposes of Section 556 of the U.S.
Bankruptcy Code.

I. Equal Daily Deliveries: For pricing purposes only, unless otherwise specified
In the Special Provisions, all crude oil delivered hereunder during any calendar
month shall be considered to have been delivered in equal daily quantities
during such month.

J. Exchange Balancing: If volumes are exchanged, each party shall be responsible
for maintaining the exchange in balance on a month-to-month basis, as near as
pipeline or other transportation conditions will permit. In all events upon
termination of this Original Agreement and after all monetary obligations under
this Original Agreement have been satisfied, any volume imbalance existing at
the conclusion of this Original Agreement of less than 1,000 barrels will be
declared in balance. Any volume imbalance of 1,000 barrels or more, limited to
the total contract volume, will be settled by the underdelivering party making
delivery of the total volume imbalance In accordance with the delivery
provisions of this Original Agreement applicable to the underdelivering party,
unless mutually agreed to the contrary. The request to schedule all volume
imbalances must be confirmed in writing by one party or both parties. Volume
imbalances confirmed by the 20th of the month shall be delivered during the
calendar month after the volume Imbalance is confirmed. Volume imbalances
confirmed after the 20th of the month shall be delivered during the second
calendar month after the volume imbalance Is confirmed,

K. Delivery, Title, and Risk of Loss: Delivery, title, and risk of loss of the
crude oil delivered hereunder shall pass from Seller to Buyer as follows: For
lease delivery locations. delivery of the crude oil to the Buyer shall be
effected as the crude oil passes the last permanent delivery flange and/or meter
connecting the Seller’s lease/unit storage tanks or processing facilities to the
Buyer’s carrier. Title to and risk of loss of the crude oil shall pass from
Seller to Buyer at the point of delivery.

For delivery locations other than lease/unit delivery locations, delivery of the
crude oil to the Buyer shall be effected as the crude oil passes the last
permanent delivery flange and/or meter connecting the delivery facility
designated by the Seller to the Buyer’s carrier. If delivery is by in-line
transfer, delivery of the crude oil to the Buyer shall be effected at the
particular pipeline facility designated In this Original Agreement. Title to and
risk of loss of the crude oil shall pass from the Seller to the Buyer upon
delivery.

 

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L. Term: Unless otherwise specified In the Special Provisions, delivery months
begin at 7:00 am. on the first day of the calendar month and end at 7:00 a.m. on
the first day of the following calendar month.

M. Governing Law: This Original Agreement and any disputes arising hereunder
shall be governed by the laws of the State of Texas.

N. Necessary Documents: Upon request, each party agrees to furnish all
substantiating documents incident to the transaction, including a Delivery
Ticket for each volume delivered and an invoice for any month in which the sums
are due.

O. Waiver: No waiver by either party regarding the performance of the other
party under any of the provisions of this Original Agreement shall be construed
as a waiver of any subsequent performance under the same or any other
provisions.

P. Assignment: Neither party shall assign this Original Agreement or any rights
hereunder without the written consent of the other party unless such assignment
is made to a person controlling, controlled by or under common control of
assignor, in which event assignor shall remain responsible for nonperformance.

Q. Entirety of Original Agreement: The Special Provisions and these General
Provisions contain the entire Original Agreement of the parties; there are no
other promises, representations or warranties. Any modification of this Original
Agreement shall be by written Instrument. Any conflict between the Special
Provisions and these General Provisions shall be resolved in favor of the
Special Provisions. The section headings are for convenience only and shall not
limit or change the subject matter of this Original Agreement.

R. Definitions: When used in this Original Agreement, the terms listed below
have the following meanings:

“API” means the American Petroleum Institute.

“ASME” means the American Society of Mechanical Engineers.

“ASTM” means the American Society for Testing Materials.

“Barrel” means 42 U.S. gallons of 231 cubic inches per gallon corrected to 60
degrees Fahrenheit.

“Carrier” means a pipeline, barge, truck, or other suitable transporter of crude
oil.

“Crude Oil” means crude oil or condensate, as appropriate.

“Day”, “month”, and “year” mean, respectively, calendar day, calendar month, and
calendar year, unless otherwise specified.

“Delivery Ticket” means a shipping/loading document or documents stating the
type and quality of crude oil delivered, the volume delivered and method of
measurement, the corrected specific gravity, temperature, and S&W content.

“Invoice” means a statement setting forth at least the following information:
The date(s) of delivery under the transaction; the location(s) of delivery; the
volume(s); price(s); the specific gravity and gravity adjustments to the
price(s) (where applicable); and the term(s) of payment.

“S&W” means sediment and water.

S. No Consequential Damages. Each party waives and releases any claim or action
against the other party for, and agrees to indemnify and hold harmless the other
party from, any claim, demand, or cause of action against the other for
punitive, exemplary, consequential, special and indirect damages including, but
not limited to loss of revenue, loss of profit, loss of use of capital, business
interruption, loss of use, loss resulting from failure to meet other contractual
commitments or deadlines, howsoever caused and whether based on negligence,
unseaworthiness, breach of warranty, breach of contract, strict liability or
otherwise.

 

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