EXHIBIT A-10
(Designated as EX-10 for XXXXX purposes)
PRECEDENT AGREEMENT
This Precedent Agreement ("Agreement"), is made and entered into
as of this 23rd day of September, 1997, by DirectLink Gas Marketing
Company, a general partnership formed under the laws of the State of
Delaware ("Shipper"), and Independence Pipeline Company, a general
partnership formed under the laws of the State of Delaware
("Independence") (hereinafter Shipper and Independence are sometimes
referred to individually as a "Party" or collectively as the
"Parties").
WITNESSETH:
WHEREAS, Independence has filed with the Federal Energy
Regulatory Commission ("FERC") in Docket Nos. CP97-315-000 et al., an
application for authorizations to construct, own and operate, and to
provide firm transportation services utilizing a natural gas pipeline
system that will extend from an interconnection with the facilities
of ANR Pipe Line Company ("ANR") near Defiance, Ohio to an
interconnection with the facilities of Transcontinental Gas Pipe Line
Corporation ("Transco") near Xxxxx, Pennsylvania ("Independence
Project"); and
WHEREAS, Independence conducted an "open season" from April 2,
1997, through May 30, 1997, to accept requests for firm
transportation service to be made available through the Independence
Project; and
WHEREAS, Shipper has requested firm transportation service from
Independence on the Independence Project; and
WHEREAS, subject to the terms and conditions set forth in this
Agreement, Independence is willing to provide such firm
transportation service on the Independence Project and proceed with
obtaining all necessary governmental and regulatory authorizations;
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and intending to be bound, Shipper and
Independence agree as follows:
1. Regulatory Authorizations. Subject to the terms and
conditions of this Agreement, Independence will proceed with due
diligence to apply for and attempt to obtain all governmental and
regulatory authorizations, including without limitation
authorizations from the FERC, which Independence determines are
necessary to: (i) construct, own and operate (or cause to be
constructed and operated) the Independence Project and render the
firm transportation services contemplated in this Agreement and
precedent agreements with other shippers for transportation services
to be provided utilizing the Independence Project; and (ii) perform
its obligations as contemplated in this Agreement. Independence
reserves the right to file and prosecute any and all applications for
such authorizations (and any supplements and amendments thereto) and,
if necessary, any court review, in such manner as it deems to be in
its best interest. Shipper agrees to support and cooperate in the
efforts of Independence to obtain all authorizations which
Independence determines are necessary for Independence to construct,
own and operate the Independence Project and to render the
transportation services contemplated in this Agreement, including but
not limited to filing an intervention or other pleading in support of
the Independence Project. If the FERC determines that information
related to Shipper's markets, gas supply, or upstream or downstream
transportation or storage arrangements is required from Independence,
Shipper agrees to provide Independence with such information in a
timely manner to enable Independence to respond within the time
required by FERC. Independence will request a protective order from
the FERC for any commercially sensitive or confidential information
identified by Shipper.
2. Shipper's Other Transportation Arrangements. Within thirty
(30) days after Shipper executes this Agreement, Shipper will advise
Independence in writing of the upstream and downstream transportation
arrangements, including arrangements for the construction of any new
facilities, necessary for Shipper to utilize the transportation
services contemplated in this Agreement. Subject to the terms and
conditions of this Agreement, Shipper shall proceed with due
diligence to apply for and attempt to obtain from all governmental
and regulatory authorities having jurisdiction all authorizations
necessary for Shipper to: (i) construct and operate (or cause to be
constructed and operated) any facilities necessary to enable Shipper
to utilize the transportation services contemplated in this
Agreement; and (ii) perform its obligations as contemplated in this
Agreement. Shipper will not take any action that would obstruct,
interfere with or delay the receipt by Independence of the
authorizations contemplated hereunder or otherwise jeopardize
development of the Independence Project. Subject to its receipt of
all such necessary authorizations, Shipper agrees to proceed with due
diligence to construct, or cause to be constructed, all facilities
necessary for Shipper to utilize the transportation services
contemplated herein.
3. Transportation Service.
(a) Service Agreement. Shipper and Independence agree to
execute, within thirty (30) days after the date Independence receives
and accepts a FERC order authorizing Independence to construct, own
and operate the Independence Project and to render the transportation
services contemplated herein, the Firm Transportation Service
Agreement attached hereto and incorporated herein by this reference
as Exhibit A, as such Agreement may be amended from time to time to
conform to changes approved by the FERC to Independence's FERC Gas
Tariff ("Service Agreement"). Service under the Service Agreement
will commence as provided under Paragraph 3(b) below.
(b) Commencement and Term of Service. Service under the
Service Agreement will commence on the date specified by Independence
in the written notice to be provided to Shipper pursuant to Paragraph
3(c) below, which date will be the later of: (i) November 1, 1999; or
(ii) the date Independence completes the construction of all
facilities necessary to provide service to Shipper and such
facilities are available for the provision of such transportation
service and will extend for a primary term of ten (10) years and year
to year thereafter subject to termination in accordance with the
terms of the Service Agreement. As of the date for commencement of
service under the Service Agreement, Independence will stand ready to
provide firm transportation service for Shipper pursuant to the
provisions of the Service Agreement, and Shipper will pay
Independence for all applicable charges associated with the Service
Agreement.
(c) Notice of Commencement of Firm Service. Prior to
commencement of service pursuant to the Service Agreement,
Independence shall notify Shipper in writing that all of the
conditions precedent set forth in Paragraph 5 have been satisfied,
and that service under the Service Agreement will commence on a date
certain, which date will not be prior to November 1, 1999.
Notwithstanding the foregoing, Independence agrees to provide written
notice to Shipper by no later than March 1, 1999, if it does not
expect to provide Shipper with the full level of firm transportation
service contemplated herein by November 1, 1999, and inform Shipper
of its best estimate of the revised in-service date for the
Independence Project.
4. Construction of Facilities. Upon satisfaction of the
conditions precedent set forth in Paragraph 5 below, Independence
will proceed with due diligence to construct the authorized
Independence Project pipeline facilities necessary to implement the
firm transportation service contemplated in this Agreement on or
about November 1, 1999. Notwithstanding Independence's due
diligence, if Independence is unable to commence the transportation
service for Shipper as contemplated herein by November 1, 1999,
Independence will continue to proceed with due diligence to complete
construction of the necessary pipeline facilities, and commence
transportation service for Shipper at the earliest practicable date
thereafter. Independence will not be liable to Shipper if
Independence is unable to complete the construction of such
authorized and necessary Independence Project pipeline facilities and
commence the firm transportation service contemplated herein by
November 1, 1999.
5. Conditions Precedent. The commencement of service under
the Service Agreement, and Independence's and Shipper's respective
rights and obligations under the Service Agreement, are expressly
made subject to the satisfaction of each of the following conditions
precedent:
(a) Receipt and acceptance by Independence of all necessary
certificates and other authorizations required by the FERC and all
other necessary authorizations and approvals from other governmental
or regulatory agencies having jurisdiction, for the construction,
ownership and operation of the Independence Project by Independence
and the provision of transportation services consistent with the
terms and conditions of this Agreement; and
(b) Receipt of the requisite affirmative vote of the Management
Committee of Independence approving the construction of the
Independence Project; and
(c) Completion by Independence of construction of the pipeline
facilities required to provide firm transportation service for
Shipper pursuant to the Service Agreement; and
(d) Availability to Shipper of upstream capacity on ANR's
SupplyLink Expansion Project proposed in FERC Docket No. CP97-319
prior to or contemporaneously with the facilities contemplated herein
being placed into service.
6. Authorizations and Rate Methodology.
(a) Satisfactory Regulatory Authorizations. All governmental
permits, certificates, and other authorizations required in Paragraph
5(a) must be obtained in form and substance satisfactory to
Independence, in the exercise of its sole discretion. All
governmental and regulatory approvals required by this Agreement must
be duly granted by the FERC, or other governmental or regulatory
agency having jurisdiction, and must be final and non appealable;
provided that Independence may waive the condition that any such
approval be final and non appealable.
(b) Rates and Rate Design Methodology. Shipper expressly
agrees: (i) with the rate design methodology (including but not
limited to the capital structure, cost of service, rate base, rate
design determinants, and rate of return) set forth in the FERC
Application; (ii) to support such rate design methodology; and (iii)
to pay Independence the rates as approved by FERC from time to time.
7. Term. This Agreement shall become effective when executed
by both Independence and Shipper, and shall remain in effect unless
and until terminated as hereinafter provided.
(a) Termination of Precedent Agreement. This Agreement may be
terminated by either Party by giving sixty (60) days prior written
notice of its intention to terminate to the other Party if any of the
events set forth below occur; provided, however, that such
termination shall not be effective if during the sixty (60) days
notice period, the event that gave rise to the right to terminate
this Agreement is remedied:
(i) Independence has not received and accepted the
necessary FERC authorizations for the Independence Project on or
before November 1, 1999.
(ii) Independence has not completed the construction of the
authorized Independence Project pipeline facilities necessary to
provide transportation service for Shipper by November 1, 2000.
(b) Commencement of Service. If this Agreement is not
terminated pursuant to Paragraph 7(a) above, then this Agreement will
terminate by its express terms on the date of commencement of service
under the Service Agreement, and thereafter Independence's and
Shipper's respective rights and obligations related to the
transactions contemplated herein shall be determined pursuant to the
terms and conditions of the Service Agreement and the terms and
conditions of Independence's FERC Gas Tariff, as amended from time
to time.
8. Assignment. This Agreement shall be binding upon
Independence, Shipper and their successors and assigns; and neither
Party shall assign this Agreement or any rights or obligations
hereunder without first obtaining the prior written consent of the
other Party (which consent shall not be unreasonably withheld) and
subject to the receipt of any necessary governmental and regulatory
authorizations. Nothing contained herein shall prevent either Party
from pledging, mortgaging or assigning its rights as security for its
indebtedness and either Party may assign to the pledgee or mortgagee
(or to a trustee for a holder of such indebtedness) any monies due or
to become due under any Service Agreement.
9. Modification or Waiver. No modification or waiver of the
terms and conditions of this Agreement shall be made except by the
execution by the Parties of a written amendment to this Agreement.
10. Notices. All notices, requests, demands, instructions and
other communications required or permitted to be given hereunder
shall be in writing and shall be delivered personally or mailed by
certified mail, postage prepaid and return receipt requested or by
facsimile, as follows:
If to Independence:
Independence Pipeline Company
0000 Xxxx Xxx Xxxx.
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
If to Shipper:
DirectLink Gas Marketing Company
0 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
or to such other place within the United States of America as either
Party may designate by written notice to the other Party. All notices
given by personal delivery or certified mail shall be effective on
the date of actual receipt at the appropriate address. Notice given
by facsimile shall be effective upon actual receipt if received
during recipient's normal business hours or at the beginning of the
next business day after receipt if received after the recipient's
normal business hours.
11. Limitation of Liability. Shipper agrees that any and all
claims, demands and causes of action that it may bring against
Independence shall be limited to the assets of Independence.
Execution of this Agreement does not bind any affiliate of
Independence or require any affiliate of Independence to undertake
any obligation in connection with this Agreement. Accordingly,
Shipper hereby waives its rights to proceed against any affiliates of
Independence. Shipper and Independence further agree that neither
Party shall be liable to the other Party for incidental,
consequential or indirect damages under this Agreement, whether
arising in contract, tort or otherwise.
12. No Third Person Beneficiary. This Agreement shall not
create any rights in third parties, and no provision hereof shall be
construed as creating any obligations for the benefit of, or rights
in favor of, any person or entity other than Independence and Shipper.
13. Governing Law. THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF DELAWARE, EXCLUDING ANY CONFLICT OF LAW OR RULE WHICH WOULD
REFER ANY MATTER TO THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF DELAWARE.
14. Multiple Counterparts. This Agreement may be executed by
the Parties in any number of counterparts, each of which shall be
deemed an original instrument, but all of which shall constitute but
one and the same agreement.
15. Effect of Invalid Provision. Except as otherwise expressly
stated herein, in the event any provision contained in this Agreement
shall for any reason be held invalid, illegal or unenforceable by a
court or regulatory agency of competent jurisdiction by reason of a
statutory change or enactment, such invalidity, illegality or
unenforceability shall not affect the remaining provisions of this
Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed in multiple originals by their duly authorized officers
as of the date first written above.
Independence Pipeline Company DirectLink Gas Marketing Company
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
_______________________ ________________________
Xxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxxxx
FORM OF AGREEMENT
Rate Schedule FTS
Date: _____________ Contract No. _____________
SERVICE AGREEMENT
This AGREEMENT is entered into by Independence Pipeline Company
(Transporter) and DirectLink Gas Marketing Company (Shipper).
WHEREAS, Shipper has requested Transporter to transport Gas on its
behalf and Transporter represents that it is willing to transport Gas
under the terms and conditions of this Agreement.
NOW, THEREFORE, Transporter and Shipper agree that the terms below,
together with the terms and conditions of Transporter's applicable
Rate Schedule and General Terms and Conditions of Transporter's FERC
Gas Tariff constitute the transportation service to be provided and
the rights and obligations of Shipper and Transporter.
1. Authority for Transportation Service will be under Section 284G.
2. Rate Schedule: FTS
3. Contract Quantities:
Receipt Point(s): Defiance, Ohio
Delivery Point(s): Xxxxx, Pennsylvania
Primary Route(s): Defiance, Ohio to Xxxxx, Pennsylvania
Contract Quantities:
FTS Annual: 500,000 Dth/d
FTS Winter: 62,500 Dth/d
Such Contract Quantities shall be reduced for scheduling
purposes, but not for billing purposes, by the Contract Quantities
that Shipper has released through Transporter's capacity release
program for the period of any release.
4. Term:
This agreement shall be effective _______, _____ and shall
remain in force and effect until 9:00 a.m. Central Standard Time
___________, _____ and thereafter until terminated by Transporter or
Shipper upon at least 2 years written notice, provided however, this
agreement shall terminate immediately and, subject to the receipt of
necessary authorizations if any, Transporter may discontinue service
hereunder if (a) Shipper, in Transporter's reasonable judgement fails
to demonstrate creditworthiness, and (b) Shipper fails to provide
adequate Security in accordance with Section 17.5 of the General
Terms and Conditions.
5. Rates:
Maximum rates, charges, and fees shall be applicable for the
entitlements and quantities delivered pursuant to this Agreement
unless Transporter has advised Shipper in writing at the address
below or by Transporter's EBB that it has agreed otherwise.
It is further agreed that Transporter may seek authorization
from the Commission and/or other appropriate body at any time and
from time to time to change any rates, charges or other provisions in
the applicable Rate Schedule and General Terms and Conditions of
Transporter's FERC Gas Tariff, and Transporter shall have the right
to place such changes in effect in accordance with the Natural Gas
Act. This Agreement shall be deemed to include such changes and any
changes which become effective by operation of law and Commission
order. Nothing contained herein shall be construed to deny Shipper
any rights it may have under the Natural Gas Act, including the right
to participate fully in rate or other proceedings by intervention or
otherwise to contest increased rates in whole or in part.
6. Incorporation by Reference
The provisions of Transporter's applicable Rate Schedule and the
General Terms and Conditions of Transporter's FERC Gas Tariff are
specially incorporated herein by reference and made a part hereof.
7. Notices:
All notice can be given by telephone or other electronic means,
however, such notice shall be confirmed in writing at the address
below or through Transporter's EBB. Shipper or Transporter may
change the addresses below by written notice to the other without the
necessity of amending this agreement:
Transporter:
Independence Pipeline Company
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Shipper:
DirectLink Gas Marketing Company
0 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
8. Further Agreement
None
9. Operational Flow Orders
Shipper hereby guarantees to Transporter that each contract it
has entered into in connection with the Gas to be transported under
this Agreement contains a provision that permits Transporter to issue
an effective Operational Flow Order pursuant to Section 10 of the
General Terms and Conditions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective Officers or Representative thereunto
duly authorized to be effective as of the date stated above.
SHIPPER: DirectLink Gas Marketing Company
By: ______________________
Title: ___________________
Date: ____________________
TRANSPORTER: Independence Pipeline Company
By: ______________________
Title: ___________________
Date: ____________________
