EXHIBIT 10.15
CONTRACT FOR INDUSTRIAL GAS SERVICE
LONE STAR GAS COMPANY, called "Company", agrees to sell and deliver natural
gas to TYSON FOODS, INC. called "Customer," whose mailing address is P. O. Xxx
000000, Xxxxxxx, Xxxxx 75046-2368 and Customer agrees to purchase and receive
such gas from Company to meet Customer's natural gas requirement at Customer's
premises located in Dallas County, State of Texas, and more fully described as:
Frozen meat products plant located at 000 Xxxxx Xxxxx in Garland, Texas subject
to and in accordance with all the terms and conditions contained in this
contract.
This contract shall be effective as of February 14, 1996, and shall cover
service for a period extending to the end of the first contract year and from
year to year thereafter; provided, that either party may terminate this contract
at the end of any contract year by giving written notice to the other party at
least fifteen (15) days prior to the end of any contract year. The first
contract year shall commence on the first official meter reading date after the
date gas is first delivered to Customer hereunder and shall terminate at the end
of the twelfth (12th) monthly billing period thereafter.
This contract covers Customer's entire natural gas requirements in the
aforesaid premises, and Customer shall not use gas under this contract for
service other than that classified by Company as industrial. Customer has
elected to receive and pay for gas under this contract during the first contract
year in accordance with Rate 3 within the attached Schedule of Industrial Rates
which is incorporated herein and made a part of this contract; provided,
however, it is understood the Rate Schedule applicable to such service may be
changed from time to time as provided in Article I of the General Terms. For
any succeeding contract year Customer may, at his option, and upon written
notice to Company of his intent to do so, elect to receive service under this
contract at any rate within the Company's then applicable Schedule of Industrial
Rates, provided Customer makes such election and gives such notice within twenty
(20) days after the beginning of such contract year.
Bills rendered for gas delivered hereunder shall be payable at Company's
office located at X.X. Xxx 000000, Xxxxxx, Xxxxx 00000-0000
This contract includes the additional terms, provisions and conditions
contained in Articles I through VII, entitled "General Terms," which are
attached hereto and shall be a part of this agreement and such "General Terms"
shall be applicable to the service rendered hereunder.
This contract shall be binding upon Company, its successors and assigns,
but shall not be assignable by Customer without the written consent of Company.
WITNESS THE EXECUTION HEREOF as of the 14th day of February, 1996
TYSON FOODS, INC. LONE STAR GAS COMPANY
By: /s/ By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Title: EVP Finance Title: Attorney-in-Fact
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"CUSTOMER' "COMPANY"
GENERAL TERMS
I.
(a) Company's Schedule of Industrial Rates may be revised from time to time
in the future and any such revised or new Schedule of Industrial Rates, when
lawfully established, shall be applicable to gas purchased and sold under this
contract commencing with gas delivered after the effective date of such change.
Company shall give Customer written notice of any such change, together with a
copy of the revised Schedule of Industrial Rates, and Customer may cancel this
contract by written notice to Seller within thirty (30) days following the date
of Company's notice, which cancellation shall be effective fifteen (15) days
after receipt of such notice by Company; provided the new or revised rate shall
be payable for gas service during any applicable period before cancellation. If
Customer fails to give the Company such notice of cancellation, this contract
shall continue. The notices herein provided for shall be deemed to have been
given when forwarded by the party giving the same addressed to the other party
at the address shown in this contract by first class mail, postage prepaid.
(b) At Company's request Customer shall from time to time deposit with
Company such amount of money as Company may determine is reasonably necessary to
guarantee the payment of gas bills hereunder and all other bills due by Customer
to Company. All money deposited by Customer with Company shall bear interest at
the rate prescribed by law. Interest shall be payable annually at Company's
office from which bills are rendered under this contract. Upon the termination
of this contract, said deposit, plus any accrued interest thereon, less any
amount due Company by Customer, shall be refunded to Customer.
II.
(a) The gas shall be measured at a single meter location by standard meter
or meters furnished and installed by and at Company's expense at a place
mutually agreed upon. Customer shall provide, in accordance with Company's
specifications, the necessary service line on Customer's premises to connect
with Company's line and suitable space and easement for Company's lines and
other equipment. Customer shall use due care to protect Company's property
which is located on Customer's premises from damage and shall permit no person
other than an agent of Company, or a person otherwise lawfully authorized, to
tamper with, inspect or remove same. All property belonging to Company and
located on Customer's premises shall be removable by Company at any time during
the term of this contract and within a reasonable time after its termination or
after reasonable notice of Customer's desire to have such property removed,
title thereto remaining in Company at all times. Company shall have full and
free ingress to and egress from Customer's premises for the construction,
inspection, maintenance, repair and removal of Company's property thereon or for
any purpose connected with the service of gas hereunder.
(b) Customer agrees to keep the gas-burning equipment and appurtenances
which may be located on the aforesaid premises in good condition and in
conformity with the requirements of any applicable city ordinance, state law,
rule, order or regulation of any governmental authority having jurisdiction and
to comply with all of Company's reasonable rules and regulations.
(c) For the purpose of this contract the unit of measurement shall be 1,000
cubic feet of gas at a base pressure of 14.65 pounds per square inch absolute
and a base temperature of 60 degrees Fahrenheit. All volumes of gas measured
shall be adjusted by computation in accordance with the Ideal Gas Laws,
corrected for deviation from the pressure and temperature conditions set forth
in the immediate preceding sentence. In such computations, a value of 60
degrees Fahrenheit shall be used for the flowing temperature of the gas;
however, Company, at its sole option, may install standard temperature recording
instruments on Company's meter and correct the volume measured based on the
actual flowing temperature of the gas.
(d) Meter measurements computed by Company according to its standard
operating practices shall be conclusive except where meter is found to be
inaccurate by as much as 1 per cent fast or slow or failed to register, in
either of which cases Company shall repair or replace the meter. The quantity
of gas delivered while the meter was inaccurate or failed to register shall be
determined by correcting the error if the percentage of error is ascertainable
by calibration test or mathematical calculation. If not so ascertainable, then
it shall be determined by estimating the quantity on a basis of deliveries under
similar conditions when the meter was registering accurately. No adjustment or
correction for meter inaccuracy or failure shall be made for a period longer
than 90 days.
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SCHEDULE OF INDUSTRIAL RATES -- N
STATE OF TEXAS
Availability:
The rates hereinafter set out are available to gas customers who can be
served from, and without exceeding the capacity of, Company's existing system
upon the terms, conditions, and limitations recited herein, in the contract of
which this Schedule of Industrial Rates forms a part, and in reasonable rules
and regulations adopted by Company. These rates shall not be available for
standby use. The gas delivered hereunder is for the individual use of Customer
and shall not be resold.
These rates shall not be available to residential customers and shall be
available to schools, churches, rooming or boarding houses, orphanages, homes
for the elderly, dormitories, hospitals, motels, hotels, apartment buildings or
other buildings used primarily as living quarters, or any other use which may be
considered human need, only if Customer has standby equipment for the use of
other fuel of at least equal capacity to that normally required by the Customer,
and fuel in storage in an amount adequate to fulfill Customer's fuel
requirements during periods of curtailment, interruption and discontinuance of
gas service. Company shall not be responsible for determining the type or
amount of standby fuel or equipment; such determination shall be the sole
responsibility of Customer.
This Schedule of Industrial Rates is based on Customer's use of gas service
for twelve full months during the contract year. This Schedule of Industrial
Rates may be applicable to service to a Customer's temporary facilities for less
than twelve full months during a contract year by the payment by Customer to
Company, upon execution of such temporary contract, of a non-refundable amount
which shall be the estimated cost of installing and removing facilities
necessary to provide such service.
Measurement and Billing:
The gas shall be measured at a single meter location and shall not be
combined with gas measured through any other meter location for the purpose of
billing under this schedule. Amounts billed shall be due and payable within ten
(10) days from monthly billing date.
The first step of each rate shall be applicable when the service period for
which xxxx is rendered is for 16 days or more. Whenever the initial service
period is for 15 days or less during a billing period, the Customer's
consumption shall be carried forward and added to Customer's consumption during
the next succeeding monthly service period for billing purposes.
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Curtailment:
Subject to governmental regulation, gas service under this Schedule of
Industrial Rates shall be subject to curtailment, interruption or discontinuance
in a particular service area when necessary in the judgment of the Company for
it to maintain Residential and Commercial Rate service and Industrial service
having a higher priority. Service shall be furnished by Company and received by
Customer in accordance with the following order of priority:
Adjustment For Heat Content:
This Schedule of Industrial Rates is based upon the delivery of gas having
an average total heat value of 1,000 British thermal units (Btu) per cubic foot.
Should the average total heating value of gas delivered in any monthly period be
more or less than 1,000 Btu per cubic foot, the measured volume for such period
shall be increased or decreased, respectively, in the percentage by which the
average heating value of such gas is greater or less than 1,000 Btu per cubic
foot. The monthly average total heating value of the gas at a pressure of four
ounces plus 14.4 pounds per square inch and at a temperature of 60 degrees
Fahrenheit shall be determined at Company's expense by the use of standard
methods and procedures.
Adjustment for Gas Cost:
The foregoing rates are based upon a weighted average cost of gas purchased
by Lone Star Gas Company of $1.00 per 1,000 cubic feet (Mcf) based on a pressure
of four ounces per square inch above an assumed atmospheric pressure of 14.4
pounds per square inch and at a temperature of 60 degrees Fahrenheit. The
"weighted average cost of gas purchased," as used herein, shall be computed by
dividing the total amount paid or accrued by Company (as reflected by Company's
Gas Purchase Accounts), including any production, severance, dedication or
gathering tax paid or accrued by Company directly or by way of reimbursement to
its gas suppliers, to producers, processors, transporters, or other sellers of
gas in the latest available fiscal month by the total volume of pipeline quality
gas in Mcf purchased by Company during said period.
Whenever the weighted average cost of gas purchased is more or less than
$1.00 per Mcf, the amount billed under this schedule shall be increased or
decreased by the amount of such difference multiplied by the consumption in Mcf,
without adjustment for heating value. In applying the gas cost adjustment
clause, the adjustment shall be computed to the nearest one-hundredth of one
cent.
Company, from time to time, may be required by the terms of a gas purchase
contract (including an agreed settlement of a disputed claim) or by a
determination of a regulatory body or court to make additional payments with
respect to gas previously purchased by Company. In such case, appropriate
adjustments to compensate therefor
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shall be made in the price payable for gas hereunder as soon as practicable
after the time of such payment so that Customer shall bear a proportionate part
of any such payment which has not been previously included in the weighted
average cost of gas purchased as defined above.
Adjustment for Taxes, Licenses, Fees, Charges, And Rentals:
Customer shall pay Company an amount equivalent to a proportionate part of
all taxes or rentals which now are or which may be levied, charged or imposed by
any governmental body under authority of any law, ordinance or contract for the
use of the public streets, alleys and thoroughfares in the conduct of Company's
business, or because of Company's occupation; and Customer shall pay Company an
amount equivalent to a proportionate part of any new tax or increased tax or any
other governmental imposition, rental, fee or charge levied or charged after
July 1, 1976, (except state, county, city, and special district ad valorem
taxes, taxes on net income and any production or similar tax included in the
weighted average cost of gas as provided in the gas cost adjustment clause).
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AMENDMENT OF CONTRACT FOR INDUSTRIAL GAS SERVICE
THIS AMENDMENT, made and entered into as of the 14 day of February 1996 by
and between LONE STAR GAS COMPANY, a Division of ENSERCH Corporation, a Texas
corporation, hereinafter referred to as "Company", and TYSON FOODS, INC., a
Delaware corporation, hereinafter referred to as "Customer";
W I T N E S S E T H:
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WHEREAS, Company and Customer entered into a Contract for Industrial Gas
Service dated February 14, 1996 (hereinafter referred to as the "Contract") for
the sale and purchase of natural gas to Customer's frozen meat products plant
located in Garland, Texas (hereinafter referred to as "Customer's plant"); and
WHEREAS, Customer qualifies for Company's Industrial Rate 1, 2, or 3 class
of gas sales service and desires to purchase a portion of its fuel requirements
from Company and to purchase certain volumes of gas from third parties and have
Company transport such third party gas; and
WHEREAS, Company and Customer mutually desire to amend such Contract;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Company and Customer hereby agree to amend the aforesaid
Contract as provided below, effective the first day of the month following the
latest of (i) February 29, 1996, (ii) the date Company receives this Amendment
after execution by Customer or (iii) the date Customer provides, at Customer's
expense, a telephone connection to, and a compatible and operational telephone
line for, Company's automatic meter reading system(s) located at the meter(s) at
or near Customer's plant:
I.
The second paragraph of the signatory page shall be deleted, and the
following paragraph shall be substituted in lieu thereof:
"This contract shall cover service for a primary term ending February 28,
2001 and from year to year thereafter, provided that either party may
cancel this contract at the end of the primary term, or at the end of any
contract year subsequent to the primary term, by giving written notice to
the other party at least thirty (30) days prior to the effective date of
such cancellation. Each contract year hereunder shall begin February 28th
and shall consist of twelve (12) monthly billing periods (billing months)."
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II.
The fourth paragraph of the signatory page shall be deleted, and the
following paragraph shall be substituted in lieu thereof:
"Bills rendered for gas sold and delivered hereunder shall be payable at P.
O. Xxx 000000, Xxxxxx, Xxxxx 00000-0000, or such other address as may be
from time to time designated by Company on reasonable notice. Company's
mailing address for notices hereunder is 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx:
Gas Marketing, Contract Administration, Xxxxxx, Xxxxx 00000."
III.
The Roman Numeral "VII" in the fifth paragraph of the signatory page shall
be deleted, and the Roman Numeral "IX" shall be substituted in lieu thereof.
IV.
The first sentence of Article V of the General Terms shall be deleted, and
the following three (3) sentences shall be substituted in lieu thereof:
"In the event Customer fails to timely pay any amount(s) due hereunder,
Customer agrees to pay interest at the rate of eighteen percent (18%) per
annum, or the highest rate allowed by law, whichever is less, on such past
due amount(s). Should litigation on any amount(s) due under this contract
be required, Customer agrees to reimburse Company for its reasonable
attorneys fees. Additionally, if Customer shall fail to pay bills for
service within twenty (20) days from the date they are rendered hereunder
or shall otherwise default under this contract, Company may suspend service
and deliveries of gas and such suspension shall not prevent enforcement by
Company of any other of its legal rights."
V.
The following new Article VIII shall be added to the General Terms of the
Contract:
"VIII.
(a) Customer may purchase natural gas from other suppliers to cover any
portion of Customer's plant's natural gas requirements, subject to the
other terms and conditions contained herein. To provide for transportation
of such gas volumes to Customer's plant, the Addendum attached hereto
entitled Interruptible Gas Transportation Agreement (hereinafter referred
to as the "Transportation Agreement") is hereby incorporated into this
contract and made a part hereof by this reference. During the term of the
Transportation Agreement, Customer may purchase and have transported
pursuant to the terms thereof during each billing month a total aggregate
volume of gas from such other suppliers of up to nine
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hundred seventy (970) Mcf per day on an average daily basis, provided,
however, Customer pays Company under this contract at least the minimum
amount for the applicable rate at which Customer has elected to receive
service hereunder ($202.39 per month for Rate-1 service to Customer,
$905.26 per month for Rate-2, or $1,748.12 per month for Rate-3) during
such time period. Company and Customer hereby recognize and agree that
Customer shall purchase from Company hereunder and/or have Company
transport under the Transportation Agreement as provided herein, Customer's
plant's entire natural gas requirements during the term hereof.
(b) Customer agrees to purchase and receive from Company under this
contract any volumes of gas used at Customer's plant which are in excess of
the transportation volumes delivered to Customer by Company during each
billing month, except for any imbalances that are timely corrected as
provided in Article 1, subparagraph 1.2(c) of the Transportation Agreement.
(c) It is understood and agreed that it will be necessary for Company to
install an automatic meter reading system for each meter hereunder at or
near Customer's plant in order to comply with the various measurement and
monitoring provisions herein. Customer hereby agrees it shall, upon
Company's invoicing, pay to Company the sum of $2,300.00 to cover the
initial cost of such system(s) and related set-up expenses, unless such
system(s) were installed by Company and paid for by Customer prior to the
effective date of the Transportation Agreement. Additionally, Customer
agrees to provide and maintain, at Customer's expense, a telephone
connection to, and a compatible and operational telephone line for,
Company's automatic meter reading system(s); provided further, in the event
Customer fails to maintain such telephone line in an operational state and
Company directly or indirectly provides repair service(s) thereto, then
Customer agrees to reimburse Company, upon Company's invoicing, the total
cost for each such repair service which is performed or caused to be
performed by Company. Such automatic meter reading system(s) shall be the
sole property of Company and shall be operated and maintained by Company at
Company's expense.
(d) Customer understands that in order to provide the transportation
service as described herein, Company will incur additional costs for which
Customer hereby agrees to provide compensation by paying to Company each
month hereunder a fee (for gas cost equalization) equal to eleven and one-
half cents (11.5c) for each MMBtu which Customer, as allowed under this
contract, purchases from such other suppliers and receives under the
Transportation Agreement during each billing month.
(e) Both Company and Customer recognize that if Customer's volumes of gas
purchased from the aforesaid suppliers and transported under the
Transportation Agreement are interrupted for any period of time, Company
shall supply standby gas to Customer's plant under this contract at the
industrial rate in effect hereunder
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during such time period (provided, however, nothing shall prevent Company
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from exercising its contractual rights to curtail gas as specified in
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Article IV hereof), and Customer hereby agrees to pay Company each and
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every month an amount computed by multiplying Customer's applicable standby
fee, as set forth below, times the volume of all gas, on a MMBtu basis (as
determined by the method described in the paragraph "Adjustment for Heat
Content" in the attached Schedule of Industrial Rates), which Customer, as
allowed under this contract, purchases from such other suppliers and
receives under the Transportation Agreement during such billing month,
regardless of whether or not Company is actually called upon to supply
standby gas to Customer during such billing month. Customer's standby fee
shall be an amount equal to fifteen cents (15c) per MMBtu if Customer has
elected to receive Rate-1 service hereunder, ten cents (10c) for Rate-2
service and five cents (5c) for Rate-3 service.
(f) Customer also agrees to pay Company, by way of reimbursement, all
taxes imposed upon the gross receipts accruing to Company under paragraphs
(c), (d) and (e) above and any other taxes Company pays relative to such
paragraphs. Company shall invoice Customer monthly for any amounts due
under said paragraphs for the preceding billing month, and such amounts
will be due and payable within ten (10) days of the billing date.
(g) Upon termination of the aforementioned Transportation Agreement, this
Article VIII shall simultaneously therewith be null and void except for the
requirement to make payment of any amount(s) due hereunder."
VI.
The following new Article IX shall be added to the General Terms of the
Contract:
"IX.
Pursuant to the Federal Arbitration Act, the parties hereby agree that any
controversy, claim, or alleged breach, including but not limited to torts
and statutory claims, arising out of or related to this contract shall be
settled by binding arbitration administered by the American Arbitration
Association ("AAA") in accordance with its Commercial Arbitration Rules.
Demand for arbitration may be made no later than the time that such act
would be permitted under the applicable Texas statute of limitation. Any
disputes regarding the timeliness of the demand for arbitration shall be
decided by the arbitrator(s). Judgment upon the award rendered by the
arbitrator(s) may be entered in any Court having jurisdiction thereof in
order to obtain compliance therewith. Any case in which any claim, or
combination of claims, exceeds $500,000 shall be subject to the AAA's Large
Complex Case Procedures and decided by the majority of a panel of three (3)
neutral arbitrators. In rendering the award, the arbitrator(s) shall
determine the rights and obligations of the parties according to
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the laws of the State of Texas. The arbitration proceedings and hearings
shall be conducted at the Dallas Regional Office of the AAA or at such
other place as may be selected by mutual agreement. No party nor the
arbitrator(s) may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of all parties."
This Amendment and all operations hereunder are subject to the applicable
federal and state laws and the applicable ordinances, orders, rules and
regulations of any local, state or federal governmental authority having or
asserting jurisdiction; but nothing contained herein shall be construed as a
waiver of any right to question or contest any such law, ordinance, order, rule
or regulation in any forum having jurisdiction in the premises.
Except as modified or changed hereby, all other terms and conditions of the
Contract shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed in duplicate originals
by the parties hereto as of the day and year first herein written.
TYSON FOODS, INC. LONE STAR GAS COMPANY, a
Division of ENSERCH Corporation
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxxx Xxxxxxxx Name: Xxxxx X. Xxxxx
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Title: EVP Finance Title: Attorney-in-Fact
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"CUSTOMER" "COMPANY"
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ADDENDUM TO AMENDMENT OF CONTRACT FOR INDUSTRIAL GAS SERVICE
THIS AGREEMENT is attached to and made a part of that certain "Amendment of
Contract for Industrial Gas Service" dated February 14, 1996 between LONE STAR
GAS COMPANY, a Division of ENSERCH Corporation, a Texas corporation, and TYSON
FOODS, INC., a Delaware corporation.
INTERRUPTIBLE GAS TRANSPORTATION AGREEMENT
THIS AGREEMENT, made and entered into February 14, 1996, by and between
LONE STAR GAS COMPANY and LONE STAR PIPELINE COMPANY, Divisions of ENSERCH
Corporation, a Texas corporation, hereinafter collectively or singularly
referred to as "Transporter" and TYSON FOODS, INC., a Delaware corporation,
hereinafter referred to as "Shipper";
W I T N E S S E T H:
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WHEREAS, Lone Star Gas Company and Shipper entered into a Contract for
Industrial Gas Service dated February 14 , 1996 (hereinafter referred to as the
"Contract for Industrial Gas Service") for the sale and purchase of natural gas
to Shipper's plant as described in the Contract for Industrial Gas Service; and
WHEREAS, Shipper qualifies for Lone Star Gas Company's Industrial Rate 1,
2, or 3 class of gas sales service and desires to purchase a portion of its fuel
requirements from Lone Star Gas Company and to purchase certain volumes of gas
from third parties and have Transporter transport such third party gas; and
WHEREAS, Lone Star Gas Company and Shipper have amended the Contract for
Industrial Gas Service to allow for such transportation hereunder; and
WHEREAS, Shipper owns or controls certain quantities of natural gas which
are not subject to the jurisdiction of the Federal Energy Regulatory Commission
(the "FERC") under either the Natural Gas Act of 1938, as amended, (the "NGA"),
or the Natural Gas Policy Act of 1978, as amended, (the "NGPA"), and Shipper
desires that Transporter (a) receive gas from Shipper (or its designee) at the
Point(s) of Receipt hereinafter set forth and (b) deliver equivalent quantities
of gas to the Point of Delivery hereinafter set forth; and
WHEREAS, Transporter owns and operates pipeline transmission and
distribution systems and is willing to transport gas for Shipper under the terms
and conditions hereinafter set forth;
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NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions herein contained, the adequacy and sufficiency of which are hereby
acknowledged, Transporter and Shipper hereby agree as follows:
ARTICLE I.
QUANTITY
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1.1(a) Shipper represents that from time to time it may desire for
Transporter to receive and deliver the above described gas at the points
hereinafter set forth in quantities as agreed to by the parties. It is agreed
that the volume of gas to be transported under this Agreement shall be in
accordance with the provisions set forth in Article VIII of the Contract for
Industrial Gas Service. It is further hereby agreed that the calculation of all
quantities of gas received and delivered hereunder shall, for all purposes,
including, but not limited to, payment and determination of imbalance and
retention volumes, be on an MMBtu basis. Transporter's receipt and delivery of
such gas volumes will be on a wholly interruptible basis and subject to: (i) the
most efficient and economic utilization of Transporter's pipeline capacity as
determined by Transporter in its reasonable sole discretion, (ii) pipeline
capacity necessary to serve existing or future sales customers under tariffs
filed with applicable regulatory authorities as determined by Transporter in its
reasonable sole discretion and (iii) the other terms and conditions contained
herein.
(b) Shipper hereby acknowledges that the transportation service to be
performed hereunder by Transporter will be on a wholly interruptible basis as
provided herein. Shipper agrees that such service may be interrupted, in whole
or in part, from time to time, without notice; however, Transporter's dispatcher
will endeavor to advise (by telephone) Shipper's dispatcher or authorized
representative of an interruption as soon as practicable, either before or after
such interruption, but Transporter shall have no liability for any failure to
give such notice. In no event shall an interruption of service pursuant to the
terms, conditions and contingencies of this Agreement constitute a breach of
this Agreement, and Transporter shall not be liable to Shipper or third parties
in damages or otherwise because of any interruption of service. Shipper agrees
to indemnify and hold harmless Transporter for any damages, causes of actions or
claims asserted by any third parties as a result of any termination, suspension,
or interruption of services hereunder by Transporter.
1.2(a) It is recognized that a day-to-day balance of gas received by
Transporter and delivered to Shipper may not be possible due to the inability of
the parties to control precisely such receipts or deliveries. However,
Transporter, to the extent practicable, will deliver to Shipper each day a
quantity of gas equivalent to ninety-eight and one-half percent (98.5%) of the
quantity of gas received by Transporter from Shipper (or its designee) on such
day and Transporter shall retain the one and one-half percent (1.5%) balance of
the quantity of gas received as normal gas lost, gas used as fuel and gas used
in day-to-day pipeline operations (the "Retention Volume").
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(b) It shall be the responsibility of Shipper to monitor, and if
necessary, adjust, or cause to be adjusted, (i) deliveries of gas to Transporter
for transportation and (ii) receipts of transportation gas from Transporter, in
order to maintain a daily balance of receipts and deliveries. Transporter shall
not be obligated to receive or deliver quantities of gas on any day in excess of
those quantities nominated by Shipper, in accordance with Section 1.3 hereof,
for transportation hereunder on such day, nor shall Transporter be obligated to
deliver to Shipper at the Delivery Point quantities of gas in excess of those
quantities of gas received from Shipper on such day at the Receipt Point(s),
less the Retention Volume. Shipper shall monitor, to the best of its and its
designee's ability, receipts and deliveries hereunder and shall advise
Transporter of any situation wherein an imbalance has occurred or may occur
unless corrective action is taken. Shipper shall be obligated to adjust its
receipts and/or deliveries of transportation gas to the extent necessary to
correct or avoid any imbalance and to notify Transporter of such adjustments,
Any adjustments to receipts and/or deliveries by Shipper, whether or not
pursuant to notification from either party, shall be coordinated with
Transporter's gas control personnel.
(c)(1) In the event of a monthly imbalance [as described in paragraph
(c)(3) below] which Shipper fails to make up during the next month and Shipper's
deliveries to Transporter at the Receipt Point(s) during such two (2) month
period are in excess of, or deficient by, more than ten percent (10%) of the
transportation quantities delivered by Transporter to Shipper at the Delivery
Point during said two (2) month period, then (i) in the case of any cumulative
imbalance, as hereinafter defined, due Transporter ("underdeliveries by
Shipper"), Transporter shall have the right to require Shipper to purchase such
cumulative imbalance volume(s) from Transporter as industrial rate sales gas
under the Contract for Industrial Gas Service; or (ii) in the case of any
cumulative imbalance, as hereinafter defined, due Shipper ("overdeliveries by
Shipper"), Transporter shall have the right to collect from Shipper an amount
equal to the product of twenty-five cents (25c) multiplied by the number of
MMBtus in such cumulative imbalance volume(s). In the event Shipper is required
to purchase from Transporter any cumulative imbalance(s), as provided in (i)
above, Transporter agrees to credit Shipper for transportation fees paid by
Shipper to Transporter hereunder on such cumulative imbalance volume(s). For
the purposes of this paragraph, the term "cumulative imbalance" shall mean the
sum of (1) any imbalance carried forward from an immediately preceding month to
the next succeeding month, plus (2) any imbalance based on the delivery and
receipt of gas hereunder during such succeeding month.
(2) Notwithstanding the preceding paragraph, Transporter expressly reserves
the right, at any time in the future upon at least ninety (90) days written
notice given prior to the beginning of any contract year(s) hereunder, to
institute, and from time to time revise, a cash out balancing process.
Transporter may from time to time apply the process to all Shippers, or just
certain categories of Shippers, on a non-discriminatory basis, and may apply the
process on a daily or monthly basis. Any such cash out balancing process shall
be similar to what other pipelines are then using. Upon such cash out balancing
notice by Transporter, Shipper shall have the right to cancel this Agreement by
giving at
-13-
least thirty (30) days written notice to Transporter prior to the beginning of
such contract year.
(3) An imbalance shall exist hereunder where, during any applicable period
of the term hereof, there is a numerical difference between the quantity of gas,
exclusive of the total of those volumes of gas delivered under the Contract for
Industrial Gas Service and the Retention Volume, delivered by Transporter to
Shipper and the quantity of gas received by Transporter from Shipper (or its
designee) during such applicable period.
(d) Notwithstanding anything contained herein which might be construed to
the contrary, Transporter shall always have the total and unrestricted right,
but with no obligation whatsoever, to at any time and from time to time
restrict, interrupt, or reduce its receipt and/or delivery of gas in order to
maintain a daily balance or to correct an imbalance hereunder.
1.3 At least five business days prior to the first calendar day of each
month during the term hereof, Shipper shall notify Transporter of the volumes of
gas Shipper nominates for transportation at the Receipt and Delivery Points
under this Agreement for such month. Each such transportation nomination shall
contain Shipper's nominated quantities for the Receipt and Delivery Points,
designation of the appropriate contract(s) covering such gas, and the identity
by name and telephone number of individual(s) who have authority to confirm the
nominated gas volumes at each Receipt Point and the Delivery Point. Timely
nominations may be given by verbal notice; provided, however, Shipper shall
furnish written confirmation thereof within five (5) business days of the date
of such verbal notice. Shipper may change nominated quantities on any business
day upon verbal notice of any such reduction of nominated quantities, but such
verbal notice must be received by Transporter prior to 12:00 noon Central time
of any business day to be effective the next succeeding business day. If
Shipper fails to furnish transportation nominations as required herein for any
month during the term hereof, Transporter may suspend transportation hereunder
for such month and such interruption of service shall not prevent enforcement by
Transporter of any other of its legal rights or remedies nor be construed as a
breach of Transporter's obligations hereunder. Shipper understands that with
regard to Receipt Point nominations, Transporter at any time and from time to
time and for any specified or unspecified time period(s), may for operational
reasons prorate and/or totally refuse to accept new nominations or honor then
existing nominations at certain then existing and/or newly proposed Receipt
Points; however, Transporter will endeavor to notify Shipper or Shipper's
designee of such refusal as soon as practicable, but Transporter shall not be
liable for any failure to do so.
ARTICLE II.
LOCATIONS OF POINTS OF RECEIPT AND DELIVERY
-------------------------------------------
2.1 Receipt Point(s): Gas delivered by Shipper (or its designee) to
Transporter hereunder shall be delivered at points which are sometimes herein
referred to as the
-14-
"Transporter Receipt Point(s)" or "Point(s) of Receipt" and which shall be
located at mutually agreeable points on Transporter's intrastate pipeline
transmission system, and any such mutually agreeable points shall be set forth
and identified in writing signed by both Transporter and Shipper. It is agreed
that (i) all points to be established hereunder will be subject to Transporter's
prior approval, (ii) certain points may require that Shipper pay a compression
fee and/or additional retention, with such requirements for any specific
point(s) to be provided to Shipper by Transporter prior to the incurment of
liability for same, and (iii) for each MMBtu received by Transporter from
Shipper (or its designee) at any Receipt Point(s) located on Transporter's Line
X, an additional five cents (5c) per MMBtu shall be added to the transportation
rate hereunder and Transporter shall retain an additional one percent (1%) of
such gas over and above the standard one and one half percent (1 1/2%) retention
referenced in Article 1.2(a) above. Notwithstanding anything contained in this
Agreement which might be construed to the contrary, in the event of unfavorable
operating conditions or a change of ownership of specific Receipt Point(s) or
appurtenant facilities, or if, in Transporter's sole opinion, the receipt of gas
from a specific Receipt Point(s) hereunder ever becomes uneconomical for any
reason whatsoever, then Transporter shall have the right (i) to immediately
discontinue the receipt of gas from any such Receipt Point(s) and/or (ii) upon
thirty (30) days' prior written notice to Shipper, to delete any such Receipt
Point(s) from this Agreement. Furthermore, Transporter reserves the right, at
any time in the future upon at least ninety (90) days written notice given prior
to the beginning of any contract year hereunder, to require that Shipper
install, or caused to be installed, telemetering equipment reasonably
satisfactory to Transporter at all then existing as well as future Receipt
Points hereunder. In the event Shipper fails to comply, Transporter may refuse
to accept gas at any such Receipt Point(s) and may delete, or refuse to add,
such point(s) from/to this Agreement.
2.2 Delivery Point: Gas transported by Transporter hereunder shall be
delivered to Shipper where gas first passes from Transporter's metering
equipment into Shipper's equipment at or near Shipper's plant as described in
the Contract for Industrial Gas Service (sometimes herein referred to as the
"Point of Delivery").
2.3 Additional Receipt Points: It is understood by both parties that
Shipper and Transporter may mutually agree in writing to establish other Receipt
Points hereunder; provided, however, that Transporter shall not be obligated to
establish new Receipt Points more frequently than once every six (6) months,
unless, due to circumstances beyond Shipper's control, Shipper (or its designee)
is unable to supply gas to the original Receipt Point(s) hereunder. In such
event, and upon receipt by Transporter of documentation satisfactory to
Transporter verifying such event and Shipper's inability to remedy same,
Transporter may, in its sole discretion, agree to establish an additional
Receipt Point. In the event Shipper desires that Transporter receive gas at a
proposed point(s), Shipper shall notify Transporter in writing of such proposed
point(s), including in such notice estimated daily delivery volume(s) at such
point(s) and the location(s) thereof and Shipper shall therein warrant that the
quality of gas to be received at such proposed point(s) meets the quality
specifications as defined herein and all other applicable terms and conditions
contained in this Agreement. Transporter will promptly evaluate each point and,
within
-15-
thirty (30) days of Transporter's receipt of Shipper's notice, notify Shipper
whether or not Transporter is able to accept gas from Shipper's proposed new
Receipt Point(s). Failure to respond within thirty (30) days shall not be
construed as Transporter's acceptance of any proposed new point(s). If
Transporter agrees to establish any additional Receipt Point(s) pursuant hereto,
such agreement shall be evidenced in writing signed by both Shipper and
Transporter.
ARTICLE III.
PRESSURES AT POINTS OF RECEIPT AND DELIVERY
-------------------------------------------
3.1 Shipper (or its designee) shall deliver gas to Transporter at the
Receipt Point(s) at pressures sufficient to enter Transporter's intrastate
pipeline transmission system at such point; provided, however, that Shipper's
delivery pressure into Transporter's system at the Receipt Point(s) shall not
exceed Transporter's maximum allowable operating pressure, as such may vary from
time to time, at any such point(s) or cause the pressure at such point(s) to
exceed Shipper's (or its designee's) maximum allowable operating pressure.
3.2 Transporter shall deliver gas to Shipper at Transporter's operating
pressure, as such may vary from time to time, at the Delivery Point.
ARTICLE IV.
RATES
-----
4.1 Shipper shall pay Transporter, for services rendered hereunder, at the
rate set forth below, commencing with initial deliveries of gas hereunder:
(a) Shipper shall pay Transporter each month for the transportation of gas
by Transporter hereunder during such month an amount equal to fifty-eight
cents (58c) for each MMBtu delivered hereunder at the Delivery Point. Such
rate shall be allocated as follows: (i) fifty percent (50%) of such rate
shall represent the charge per MMBtu for the use of Transporter's
transmission system and (ii) the remaining fifty percent (50%) of such rate
shall represent the charge per MMBtu for the use of Transporter's
distribution system serving Garland.
(b) It is agreed by the parties hereto that the fifty-eight cents (58c) fee
charged in paragraph (a) above shall be escalated one cent (1c) per MMBtu
at the beginning of the second contract year of the Contract for Industrial
Gas Service and each contract year thereafter during the term of this
Agreement.
(c) Should the appropriate regulatory agency find such rates to be
unreasonable for any reason or in any way in violation of any provision of
law, and determine a rate lower than that provided for herein, Transporter
may terminate
-16-
this Agreement by giving Shipper thirty (30) days' prior written notice of
such termination within thirty (30) days of such rate decrease or finding.
Should the agency determine a rate higher than that provided for herein,
Shipper may terminate this Agreement by giving Transporter thirty (30)
days' prior written notice of such termination within thirty (30) days of
such rate increase or finding.
ARTICLE V.
TERM
----
5.1 This Agreement shall be effective as of the effective date of the
above referenced Amendment of Contract for Industrial Gas Service, and this
Agreement shall thereafter remain in full force and effect, subject to the terms
and provisions hereof, for a primary term contemporaneous with the primary term
of the Contract for Industrial Gas Service, and contract year to contract year
thereafter until canceled by either party giving the other party thirty (30)
days prior written notice; provided, however, notwithstanding anything contained
herein to the contrary, if this Agreement is still in effect when the
termination, expiration or cancellation of the Contract for Industrial Gas
Service occurs, then this Agreement shall thereupon automatically terminate
simultaneously therewith. Notwithstanding the above, if an imbalance in
deliveries exists on the date of termination hereof between the quantities
theretofore delivered at the Receipt Point(s) and Delivery Point, the term of
this Agreement shall be extended for a period sufficient to allow the party
whose deliveries are in arrears to promptly eliminate any imbalance. Provided
further, any termination, cancellation, or expiration of this Agreement shall
never operate to extinguish the obligation to make payment for monies due
hereunder.
ARTICLE VI.
LAWS AND REGULATIONS
--------------------
6.1 This Agreement shall be subject to all applicable State and Federal
laws, and orders, directives, rules and regulations of any governmental body,
official or agency having jurisdiction over Transporter or this Agreement;
therefore, Transporter's obligations and liabilities hereunder shall be limited
accordingly.
6.2 Each party warrants to the other that its or its agent's facilities
utilized for the delivery and acceptance of gas hereunder are not subject to the
NGA, as heretofore amended. As a material representation, without which both
parties would not have been willing to agree to this Agreement, each party
warrants to the other party that it and its agents will take no action nor
commit any act of omission which will subject its facilities, this transaction
or the other party's facilities, to jurisdiction of the FERC or its successor
governmental agency under the terms of the NGA or NGPA. The gas delivered and
accepted hereunder shall not have been nor shall be sold, transported, or
otherwise utilized in interstate commerce in a manner which will subject either
party to the terms of the NGA or NGPA. In addition to and without excluding any
remedy the aggrieved party
-17-
may have at law or in equity, the party who breaches the above warranties and
representations shall be liable to the aggrieved party for all damages, injury
and reasonable expense the aggrieved party may sustain by reason of any breach
hereof. Further, should either party or its agents perform any act, or cause any
action to be performed, at any time, that results in any gas covered hereunder
becoming regulated by or subject to jurisdictional authority of the FERC, or
successor governmental authority, under the terms of the NGA or NGPA contrary to
this Agreement, this Agreement shall be deemed of its own terms to terminate on
the day before the date of such occurrence; provided, however such termination
shall never be construed to impair any right under this paragraph. Shipper
hereby waives any defense for breach of this paragraph that Transporter could
avoid NGA jurisdiction under the provisions of Section l(c) of such Act.
ARTICLE VII.
GENERAL TERMS AND CONDITIONS
----------------------------
7.1 The GENERAL TERMS AND CONDITIONS attached hereto as APPENDIX "A" are
incorporated herein and made a part hereof by this reference.
ARTICLE VIII.
MISCELLANEOUS
-------------
8.1 All notices, requests, demands, statements and payments provided for
in this Agreement must be given in writing directed to the party to whom given,
and mailed to or delivered at such party's address as follows:
(Notices) (invoices)
Xxx Xxxx Tyson Foods, Inc.
Tyson Foods, Inc. X.X. Xxx 000000
X.X. Xxx 0000 Xxxxxxx, XX 00000-0000
Xxxxxxxxxx, XX 00000
(Notices) (Payments)
Lone Star Pipeline Company Lone Star Gas Company
000 X. Xxxxxxx Xxxxxx P.O. Box 910255
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000-0000
ATTN: Transportation Contract
Administration
or at such address as each party may by like notice give to the other. Such
mailed notices shall be deemed to have been given when deposited in the United
States mail (first class,
-18-
registered or certified), postage prepaid, or in the case of hand delivery, when
delivered to a representative of either party by a representative of the other
party.
8.2 This Agreement and the Contract for Industrial Gas Service
constitute the entire agreement between the parties covering the subject matter
hereof, and there are no agreements, modifications, conditions or
understandings, written or oral, express or implied, pertaining to the subject
matter hereof which are not contained herein.
8.3 Modifications of this Agreement shall be or become effective only
upon the mutual execution of appropriate supplemental agreements or amendments
hereto by duly authorized representatives of the respective parties.
8.4 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be transferred or assigned by Shipper without the
prior written consent of Transporter, and any purported transfer or assignment
without such consent shall be null and void and shall not operate to release
Shipper's obligations hereunder.
8.5 The captions or headings preceding the various parts of this
Agreement are inserted and included solely for convenience and shall never be
considered or given any effect in construing this Agreement or any part of this
Agreement, or in connection with the intent, duties, obligations or liabilities
of the parties hereto.
8.6 Transporter and Shipper acknowledge, agree and intend that this
Agreement is entered into solely for the respective benefit of Transporter and
Shipper and nothing contained in this Agreement, either express or implied,
shall be interpreted or construed as conferring any rights, remedies or claims
under or in respect to this Agreement or any provision hereof upon any person or
entity not a party hereto, other than the successors or assigns of the Parties
hereto.
In Witness Whereof, this Agreement has been executed in duplicate
originals by the parties hereto as of the day and year first herein written.
LONE STAR GAS COMPANY TYSON FOODS, INC.
LONE STAR PIPELINE COMPANY,
Divisions of ENSERCH Corporation
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx Xxxxxxxx
----------------------- --------------------
Xxxxxxx X. Xxxxxxx Name: Xxxxxx Xxxxxxxx
Vice President Title: EVP Finance
-19-
SHEET NO. 1
APPENDIX "A"
to
INTERRUPTIBLE GAS TRANSPORTATION AGREEMENT
GENERAL TERMS AND CONDITIONS
----------------------------
1. Measuring Equipment and Testing
-------------------------------
(a) The gas delivered to Transporter at the Receipt Point(s) shall be
measured by means of measuring devices of standard type which shall be
installed, operated and maintained by Transporter (or its designee) and gas
delivered to Shipper at the Delivery Point shall be measured by meters of
standard type which shall be installed, operated and maintained by Transporter
(or its designee). Measurement devices and equipment shall be tested and
adjusted for accuracy on a regular schedule by the party metering the gas (the
"metering party").
(b) Subject to Shipper's prior approval of costs, Shipper agrees to
reimburse Transporter, within ten (10) days from the date of receipt of
Transporter's invoice, for any tap valves, metering facilities and associated
equipment and all labor and overhead expenses, attributable to the installation
of such equipment, incurred by Transporter in effectuating the receipt of gas
hereunder. If the invoiced amount is not paid when due, interest on all unpaid
amounts shall accrue at the rate of one and one-half percent (1 1/2%) per month,
or the highest rate allowed by law, whichever is less, from the date such amount
is due Transporter. Failure of Transporter to receive total reimbursement
within thirty (30) days of Shipper's receipt of Transporter's invoice will allow
Transporter to suspend and/or terminate this Agreement. It is understood that
although Shipper shall reimburse Transporter for any tap valves, metering
facilities and all associated costs incurred by Transporter in establishing any
Receipt Point(s), Shipper shall receive ownership of only the metering
facilities and Transporter will be solely responsible for all activities in
connection with said metering facilities, including, but not limited to,
operation, testing, calibration, adjusting, repair and replacement (both at
Shipper's expense), and maintenance, necessary for performance hereunder until
Transporter disconnects and removes the metering facilities within a reasonable
time after termination of this Agreement. After said disconnection and removal,
Shipper will have the right within a reasonable period of time thereafter to
pick up the metering facilities from Transporter. Shipper's failure to so claim
the metering facilities within ninety (90) days of Transporter's disconnection
and removal thereof, shall constitute a waiver by Shipper of any right, title or
interest in and to such metering facilities and all right, title and interest
therein shall thereafter vest in Transporter. Transporter shall retain
ownership of all equipment associated with the tap and tap valve installation.
Notwithstanding the above, if adequate metering facilities are already in
existence at the Receipt Points hereunder, such existing metering facilities
shall be used and the party having title to such facilities shall retain title
to such facilities.
SHEET NO. 2
(c) The non-metering party shall have access to the metering party's
metering equipment at all times, but the maintenance, calibration and adjustment
thereof shall be done only by the employees or agents of the metering party.
Records from such metering equipment shall remain the property of the metering
party and shall be kept on file by said party for a period of not less than two
(2) years. However, upon request of the other party, the metering party shall
make available to the other party volume records from its metering equipment,
together with calculations therefrom, for inspection and verification, subject
to return by the other party to the metering party within thirty (30) days after
receipt thereof.
(d) The non-metering party may, at its option and expense, install and
operate meters, instruments and equipment, in a manner which will not interfere
with the metering party's equipment, to check the metering party's meters,
instruments and equipment, but the measurement of gas for the purpose of this
Agreement shall be by the metering party's meter only, except as hereinafter
specifically provided. The meters, check meters, instruments and equipment
installed by each party shall be subject at all reasonable times to inspection
or examination by the other party, but the calibration and adjustment thereof
shall be done only by the installing party.
(e) Transporter shall give to Shipper notice of the time of all tests of
the Delivery Point meter sufficiently in advance of such tests so that Shipper
may conveniently have its representatives present; provided, however, that if
Transporter has given such notice to Shipper and Shipper is not present at the
time specified, then Transporter may proceed with the test as though Shipper
were present. Transporter shall give notice to Shipper's Receipt Point Designee
(who is physically responsible for the delivery of gas at the point) of the time
of all tests of the Receipt Point meter sufficiently in advance of such tests so
that Shipper's Designee may conveniently be present; provided, however, that if
Transporter has given such notice to Shipper's Designee and Shipper's Designee
is not present at the time specified, then Transporter may proceed with the test
as though Shipper's Designee were present.
(f) Meter measurements computed by the metering party shall be deemed to
be correct except where the meter is found to be inaccurate by as much as one
percent (1%), fast or slow, or to have failed to register, in either of which
cases the metering party shall repair or replace the meter. The quantity of gas
delivered while the meter was inaccurate or failed to register shall be
determined by the readings of the other party's check meter, if installed and in
good operating condition, or, if not installed and in good operating condition,
then by correcting the error if the percentage of error is ascertainable by
calibration or mathematical calculation. If not so ascertainable, then it shall
be determined by estimating the quantity on a basis of deliveries under similar
conditions when the meter was registering accurately. Such adjustments or
corrections shall be made only for one-half (1/2) of the period which has
elapsed since the previous test; however, no such adjustment or correction shall
exceed a time period of ninety (90) days.
SHEET NO. 3
2. Measurements
------------
(a) In gas measurement computations, the metering party may use the
findings and rules of the Railroad Commission; with respect to flowing
temperature, the metering party shall at its expense properly install and
operate a device of standard make to continuously determine or record flowing
temperature. With respect to specific gravity, such shall be determined by "on-
site" sampling and laboratory analysis or any other mutually agreeable method
which is of standard industry practice (provided, however, that either party may
at its expense properly install and operate a recording specific gravity
instrument of standard make and in this event the specific gravity as recorded
shall be used).
(b) The meters for measurement of volumes at the Receipt Point(s) and
Delivery Point hereunder shall be installed and operated, and computations shall
be made, in accordance with current industry standards. The unit of measurement
of gas shall be one thousand (1000) cubic feet at a pressure base of fourteen
and sixty-five one hundredths (14.65) pounds per square inch absolute and at a
temperature base of sixty (60) degrees Fahrenheit. Meter measurements shall be
computed by the measuring party into such units in accordance with the Ideal Gas
Laws for volume variations due to metered pressure and corrected for deviation
using daily averages of recorded specific gravity and flowing temperature, or by
using the calculated specific gravity determined by the method mentioned in
paragraph (c) below.
(c) The daily average heating value and specific gravity of the gas
delivered hereunder by either party may be determined by the use of BTU
recording instruments of standard type, which may be installed and operated by
the metering party at the metering point, or at such other point or points as
are mutually agreeable to both parties; provided, however, if there is no BTU
recording instrument at a particular Receipt or Delivery Point specified herein
or agreed upon hereunder, then the heating value and specific gravity of the gas
at such point may be determined by "on-site" sampling and laboratory analysis or
any other mutually agreeable method which is of standard industry practice.
(d) The daily average meter pressure, specific gravity, flowing
temperature and heating value shall be determined only during periods of time
when the gas is actually flowing.
3. Quality
-------
(a) Each party shall deliver to the other party hereto natural gas which
is of merchantable quality and is commercially free from water, hazardous
substances, hydrocarbon liquids, bacteria, and other objectionable liquids,
solids or gas components. In addition, the gas delivered by each party shall
specifically contain (i) not more than five one hundredths of one percent (.05%)
oxygen, (ii) not more than five (5) grains of total sulphur consisting of not
more than one quarter (1/4) grain of hydrogen sulphide and one (1) grain of
mercaptan sulphur per one hundred (100) cubic feet of gas, (iii) not more than
SHEET NO. 4
three percent (3%) by volume of carbon dioxide, (iv) not more than six percent
(6%) by volume total non-hydrocarbon and inert gases (including carbon dioxide,
nitrogen, oxygen, helium, etc.), and (v) not more than seven pounds (7#) of
water vapor per one million (1,000,000) cubic feet of gas; provided, however, if
Shipper tenders gas for transportation upstream of a dehydration plant,
Transporter may waive Shipper's obligation to deliver dehydrated gas, subject to
Transporter's continuing right to withdraw such waiver at any time in the
future. The gas shall be at temperatures not in excess of one hundred twenty
(120) degrees Fahrenheit or less than forty (40) degrees Fahrenheit, provided
that the gas shall have a hydrocarbon dew point not to exceed forty (40) degrees
Fahrenheit at the delivery pressure, and shall have a heat content of not less
than nine hundred fifty (950) or more than eleven hundred (1,100) British
Thermal Units per cubic foot under the conditions of measurement contained
herein; provided, however, if Shipper tenders gas for transport on Transporter's
gathering system, such gas shall in addition to meeting the other quality
specifications described herein, have a minimum BTU content of one thousand
(1,000) British Thermal Units under the conditions of measurement contained
herein, but there shall not be a maximum BTU content or a minimum hydrocarbon
dewpoint requirement for such gas. Transporter shall not be obligated to accept
any gas delivered by Shipper (or its designee) hereunder which is not
interchangeable with other gas in Transporter's pipeline at the Point of Receipt
hereunder. Transporter's determination of such interchangeability shall be
based upon a factor which is equivalent to the quotient obtained by dividing the
total heating value of such gas, expressed in BTU's, by the square root of the
specific gravity of such gas. Such factor must be within plus/minus 7% of the
interchange factor established by Transporter for its system at the Receipt
Point hereunder; provided, however, if Shipper tenders gas for transport on
Transporter's gathering system, Transporter may waive Shipper's obligation to
meet these interchangeability conditions, subject to Transporter's right to
withdraw such waiver at any time in the future.
(b) If at any time the gas fails to meet the quality specifications
enumerated herein, the party receiving such gas shall notify the party
delivering such gas, and the delivering party shall immediately correct such
failure. If the delivering party is unable or unwilling to deliver gas
according to such specifications, the party receiving such gas may refuse to
accept delivery of gas hereunder for so long as such condition exists.
4. Taxes
-----
(a) Shipper agrees to pay Transporter, by way of reimbursement, all Taxes
paid by Transporter with respect to the transportation services provided
hereunder and any associated facilities related to the performance of this
Agreement. If any such Taxes paid by Transporter to any governmental authority
are calculated based upon the value of or price paid for the gas transported
hereunder, Shipper shall disclose to Transporter the purchase price of such gas
to enable Transporter to calculate and pay all such fees and taxes to
appropriate governmental authorities in a timely manner. If Shipper fails or
refuses to disclose the purchase price of such gas, Transporter shall have the
right to terminate this Agreement by giving Shipper ten (10) days' prior written
notice. In any
SHEET NO. 5
event, Shipper hereby agrees to indemnify and hold Transporter harmless from and
against any and all claims, demands, losses or expenses, including attorneys'
fees, which Transporter may incur as a result of Shipper's failure or refusal to
disclose the purchase price of gas transported hereunder.
(b) The term "Taxes" as used above, shall mean all taxes and fees levied
-----
upon and/or paid by Transporter [other than ad valorem, capital stock, income or
excess profit taxes (except as provided herein), general franchise taxes imposed
on corporations on account of their corporate existence or on their right to do
business within the state as a foreign corporation and similar taxes),
including, but not limited to, gross receipts tax, street and alley rental fees
agreed upon in franchise ordinances, licenses, fees and other charges levied,
assessed or made by any governmental authority on the act, right or privilege of
transporting, handling or delivering gas, which taxes or fees are based upon the
volume, heat content, value or sales/purchase price of the gas, or
transportation fee payable hereunder and applicable federal income tax imposed
as a result of the installation of equipment at the Receipt Point(s) hereunder.
5. Billing, Accounting and Reports
-------------------------------
(a) On approximately the 15th day of each month, Transporter shall render
to Shipper a statement for the preceding month showing the Mcf and MMBtu
delivered at the Receipt Point(s) and Delivery Point; the amount of compensation
due to Transporter hereunder, including the tax reimbursement; and other
reasonable and pertinent information which is necessary to explain and support
same and any adjustments made by Transporter in determining the amount billed.
(b) Shipper shall pay Transporter ten (10) days from the date
Transporter's statement is deposited prepaid in the United States mail for gas
transported hereunder during the preceding month, or as to payment which is
otherwise due hereunder, according to the measurements, computations and rates
herein provided. Transporter hereby agrees, however, that Shipper may pay any
such statement by bank wire transfer by directing the bank wire transfer to Lone
Star Gas Company at Texas Commerce Bank, Dallas, Texas, ABA No. 000000000, for
deposit to Lone Star Gas Company Account No. 08805016795. To assure proper
credit, Shipper should designate the company name, invoice number and amount
being paid in the Fedwire Text Section. If the invoiced amount of any payment
due is not paid when due, interest on all unpaid amounts shall accrue at the
rate of one and one half percent (1-1/2%) per month, or the highest rate allowed
by law, whichever is less, from the date such amount is due Transporter;
provided, however no interest shall accrue on unpaid amounts when failure to
make payment is the result of a bona fide dispute between the parties hereto
regarding such amounts and Shipper timely pays all amounts not in dispute.
(c) Each party hereto shall have the right at all reasonable times to
examine the measurement records and charts of the other party, or its
agent/designee, if any, to the extent necessary to verify the accuracy of any
statement, charge, computation or demand
SHEET NO. 6
made under or pursuant to any of the provisions in this Agreement. If any such
examinations reveal any inaccuracy in such billing theretofore made, the
necessary adjustments in such billing and payment shall be made; provided, that
no adjustments for any billing or payment shall be made for any inaccuracy
claimed after the lapse of twenty five (25) months from the rendition of the
invoice relating thereto.
(d) If the credit worthiness or financial responsibility of Shipper
should, in Transporter's reasonable sale opinion, ever become unsatisfactory,
then upon request by Transporter at anytime and from time to time during the
term hereof, Shipper shall deposit with Transporter (i) such amount of money
requested by Transporter, or (ii) a letter of credit in a form acceptable to
Transporter from a financial institution acceptable to Transporter in an amount
requested by Transporter, to guarantee the payment of statements and invoices
hereunder, as well as any possible imbalances hereunder. Upon the termination
of this Agreement, any money so deposited, less any amount due Transporter by
Shipper, shall be refunded to Transporter.
6. Responsibility
--------------
Shipper shall be in control and possession of the gas and be responsible
for and shall indemnify and hold Transporter harmless from any damage or injury
caused thereby until the same shall have been delivered to Transporter at the
Receipt Point(s) and after such gas shall have been delivered at the Delivery
Point, except for injuries and damages caused by the negligence of Transporter.
Transporter shall be in control and possession of the gas and be responsible for
and shall indemnify and hold Shipper harmless from any damage or injury caused
thereby upon receipt of the gas at the Receipt Point(s) and until such gas shall
have been delivered to Shipper (or for its account) at the Delivery Point,
except for injuries and damages caused by the negligence of Shipper or Shipper's
Designee. Subject to the other terms and conditions of this Agreement, each
party shall have the right to treat, process and/or dehydrate the gas prior to
delivering said gas to the other party.
7. Title--Warranty & Indemnity
---------------------------
Shipper warrants to the Transporter that at the time of delivery of gas
hereunder to Transporter, Shipper will have good title or the right to deliver
such gas, and that such gas shall be free and clear of all liens and adverse
claims; and Shipper agrees to indemnify Transporter, with respect to the gas
delivered by it, against all suits, actions, debts, accounts, damages, costs
(including attorneys' fees), losses and expenses arising from or out of any
adverse claims of any and all persons to or against said gas.
8. Force Majeure
-------------
(a) In the event either party is rendered unable, wholly or in part, by
force majeure to carry out its obligations under this Agreement, except the
obligation to pay monies due hereunder, it is agreed that, on such party's
giving notice and reasonably full
SHEET NO. 7
particulars of such force majeure, in writing or by telecopy, to the other party
within a reasonable time after the occurrence of the cause relied on, the
obligations of the party giving such notice, so far as they are affected by such
force majeure, shall be suspended during the continuance of any inability so
caused, but for no longer period, and such cause shall, so far as possible, be
remedied with all reasonable dispatch.
(b) The term "force majeure", as employed herein, shall mean acts of God;
strikes, lockouts or other industrial disturbances; acts of the public enemy,
wars, blockades, insurrections, civil disturbances and riots, and epidemics;
landslides, lightning, earthquakes, fires, storms, floods and washouts; arrests,
orders, directives, restraints and requirements of the government and
governmental agencies, either federal or state, civil and military; and
application of governmental conservation rules and regulations; explosions,
breakage or accident to machinery or lines of pipe; outages (shutdowns) of power
plant equipment or lines of pipe for inspection, maintenance or repair; freezing
of xxxxx or lines of pipe; and any other causes, whether of the kind enumerated
or otherwise, not reasonably within the control of the party claiming
suspension. It is understood and agreed that the settlement of strikes or
lockouts shall be entirely within the discretion of the party having the
difficulty, and that the above reasonable dispatch shall not require the
settlement of strikes or lockouts by acceding to the demand of the opposing
party when such course is or is deemed to be inadvisable or inappropriate in the
discretion of the party having the difficulty.
9. Waiver of Breaches, Defaults or Rights
--------------------------------------
No waiver by either party hereto of any one or more breaches, defaults or
rights under any provisions of this Agreement shall operate or be construed as a
waiver of any other breaches, defaults or rights, whether of a like or of a
different character. By providing written notice to the other party, either
party may assert any right not previously asserted hereunder or may assert its
right to object to a default not previously protested. Except as specifically
provided herein, in the event of any dispute under this Agreement, the parties
shall, notwithstanding the pendency of such dispute, diligently proceed with the
performance of this Agreement without prejudice to the rights of either party.
10. Remedy for Breach
-----------------
Except as otherwise specifically provided herein, if either party shall
fail to perform any of the covenants or obligations imposed upon it in this
Agreement (except where such failure shall be excused under the Force Majeure
provisions hereof), then, and in that event, the other party may, at its option
(without waiving any other remedy for breach hereof), by notice in writing
specifying wherein the default has occurred, indicate such party's election to
terminate this Agreement by reason thereof; provided, however, that Shipper's
failure to pay Transporter within a period of ten (10) days following Shipper's
receipt of written notice from Transporter advising of such failure to make
payment in full within the time specified previously herein, shall be a default
which shall give Transporter the right to immediately terminate this Agreement,
unless such failure to pay such amounts
SHEET NO. 8
is the result of a bona fide dispute between the parties hereto regarding such
amounts hereunder and Shipper timely pays all amounts not in dispute. With
respect to any other matters, the party in default shall have thirty (30) days
from receipt of such notice to remedy such default, and upon failure to do so,
this Agreement shall terminate from and after the expiration of such thirty (30)
day period. Such termination shall be an additional remedy and shall not
prejudice the right of the party not in default to collect any amounts due it
hereunder for any damage or loss suffered by it and shall not waive any other
remedy to which the party not in default may be entitled for breach of this
Agreement.
11. Dispute Resolution
------------------
Pursuant to the Federal Arbitration Act the parties hereby agree that any
controversy, claim, or alleged breach, including but not limited to torts and
statutory claims, arising out of or related to this Agreement shall be settled
by binding arbitration administered by the American Arbitration Association
("AAA") in accordance with its Commercial Arbitration Rules. Demand for
arbitration may be made no later than the time that such action would be
permitted under the applicable Texas statute of limitation. Any disputes
regarding the timeliness of the demand for arbitration shall be decided by the
arbitrator(s). Judgment upon the award rendered by the arbitrator(s) may be
entered in any Court having jurisdiction thereof in order to obtain compliance
therewith. Any case in which any claim, or combination of claims, exceeds
$500,000 shall be subject to the AAA's Large, Complex Case Procedures and
decided by the majority of a panel of three (3) neutral arbitrators. In
rendering the award, the arbitrator(s) shall determine the rights and
obligations of the parties according to the laws of the State of Texas. The
arbitration proceedings and hearings shall be conducted at the Dallas Regional
Office of the AAA or at such other place as may be selected by mutual agreement.
No party nor the arbitrator(s) may disclose the existence, content or results of
any arbitration hereunder without the prior written consent of all parties.
***END OF GENERAL TERMS AND CONDITIONS***
Lone Star Gas Company
000 X. Xxxxxxx Xx. , Xxxxxx, Xxxxx 00000-0000
March 21, 1996
Tyson Foods, Inc.
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Xx. Xxx Xxxx
Re: LS-MC-#1442
Gas Transportation Agreement
Dated: January 7, 1993
Gentlemen:
Please be advised that effective May 9, 1995 the Transmission Division of
Lone Star Gas Company was renamed Lone Star Pipeline Company and made a separate
division of Enserch Corporation. Therefore, the "Transporter" under the above
referenced agreement is now collectively or individually Lone Star Gas Company
and Lone Star Pipeline Company.
Pursuant to Article II, paragraph 2.3 of the referenced agreement, Lone
Star Gas Company and Lone Star Pipeline Company as "Transporter" and Tyson
Foods, Inc., as "Shipper" agree that effective April 1, 1996 the attached list
of receipt points shall be the "Points of Receipt" under the agreement.
Please sign both copies of this letter in the space below and return one
letter for our files.
If you should have any questions, please call Xxxxx Xxxxxxxxx at
(000) 000-0000.
Very truly yours,
LONE STAR GAS COMPANY
LONE STAR PIPELINE COMPANY
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Manager, Transportation Contract Administration
RHB:sr
Attachment
BY: /s/
-------------------
TITLE: Corp. Purchasing
-----------------
GAS TRANSPORTATION AGREEMENT
BETWEEN
LONE STAR GAS COMPANY
AND
TYSON FOODS, INC.
LS-MC-1442
TRANSPORTER RECEIPT POINT(S)
----------------------------
LOCATION COUNTY STATION NO.
-------- ------ -----------
1. Amoco/Hydrocarbon Xxxx 00-0000-00
2. Xxxxx & Xxxxxxxx/Xxxx Xxxxx C.P. Limestone 00-0000-00
3. Ram/Xxxxx X.X. Madison 00-0000-00
4. Texas Royalty/Xxxx X.X. Xxxx 00-0000-00
5. Mobil/Coyonasa Pecos 00-0000-00
6. Transok/Xxxxx Co. Xxxxx 00-0000-00
7. Xxxxxx Plant Outlet Palo Pinto 00-0000-00
8. Springtown Plt. Outlet Xxxxxx 00-0000-00
9. Oasis/Waha Pecos 00-0000-00
10. Springtown Plt. Outlet Xxxxxx 00-0000-00
[Lone Star Gas Company letterhead]
November 22, 1996
Xx. Xxxxxxxx X. Xxxxx
Xxxxx Foods, Inc.
2210 Oaklawn
Xxxxxxxxxx, Xxxxxxxx 00000
Subject: Consent of Assignment Agreement for Contract for Industrial Gas
Service, Amendment of Contract for Industrial Gas Service and Addendum
to Amendment of Contract for Industrial Gas Service, all dated
February 14, 1996 between Lone Star Gas Company (Lone Star) and Tyson
Foods, Inc. (Tyson)
Dear Xx. Xxxxx:
You have informed Lone Star that Tyson's frozen meat products plant located
at 209 Range in Garland, Texas has been sold in its entirety to Gorges/Quik-to-
Fix Foods, Inc., a Delaware corporation (hereinafter referred to as "Gorges").
Lone Star hereby gives its consent, as contemplated by the subject contract, for
Tyson to assign its rights and obligations under the subject contract to Gorges,
subject to the execution of this Letter Agreement by all of the undersigned
parties. Said assignment is to be effective as of November 22, 1996. This
consent in no way relieves Tyson from any obligations it has incurred pursuant
to the terms of the subject contract prior to the date of said assignment. Lone
Star hereby releases Tyson from any duties, obligations and liabilities under
the subject contract arising on or after the effective date of said assignment.
Gorges hereby agrees to be bound by all the terms and conditions contained
in the subject contract and agrees to perform all the duties and obligations set
forth therein in the same manner and to the same extent required in the subject
contract. It is agreed that Gorges shall succeed to all rights and benefits of
Tyson in the subject contract.
If the foregoing is acceptable, please indicate by signing all copies of
this Letter Agreement in the space provided and returning one copy to this
office.
Sincerely,
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Attorney-in-Fact
Agreed to and Accepted this Agreed to and Accepted this
22nd day of November, 1996 22nd day of November, 1996
TYSON FOODS, INC. GORGES/QUIK-TO-FIX, INC.
By /s/ Xxxxx X. XxxXxxxxx By /s/ Xxxxxxx X. Xxxxxx
Name Xxxxx X. XxxXxxxxx Name Xxxxxxx X. Xxxxxx
Title Assistant Secretary Title Vice President/Secretary
STATE OF ARKANSAS
COUNTY OF WASHINGTON
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State on this day personally appeared Xxxxx X. XxxXxxxxx, Assistant
Secretary of TYSON FOODS, INC., a Delaware corporation, known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to
me that he executed the same for the purposes and consideration therein
expressed, in the capacity therein stated, and as the act and deed of said
corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 22nd day of November,
A.D., 1996.
/s/ Xxxx X. Xxxxx
Notary Public in and for Washington County, Arkansas
My commission expires the 17th day of December, 0000
XXXXX XX XXXXXXX
XXXXXX XX XXXXXX
XXXXXX XX, the undersigned authority, a Notary Public in and for said
County and State on this day personally appeared Xx. Xxxxxxx X. Xxxxxx, Vice
President/ Secretary of GORGES/QUIK-TO-FIX FOODS, INC., a Delaware corporation,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 22nd day of November,
A.D., 1996.
/s/ Xxxxxxxx X. Xxxxxx
Notary Public in and for Xxxxxx County, Georgia
My commission expires the 29th day of February, 0000
XXXXX XX XXXXX
XXXXXX XX XXXXXX
XXXXXX XX, the undersigned authority, a Notary Public in and for said
County and State on this day personally appeared Xxxxx X. Xxxxxxx, Attorney-in-
Fact of LONE STAR GAS COMPANY, a division of ENSERCH Corporation, a Texas
corporation, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that she executed the same for the
purposes and consideration therein expressed, in the capacity therein stated,
and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 22nd day of November,
A.D., 1996.
/s/
Notary Public in and for the State of Texas
