EXHIBIT 10.8
GAS SERVICE AGREEMENT
(Service for Firm Transportation)
between
K N WESTEX GAS SERVICES COMPANY
"COMPANY"
and
ENERMART TRUST
(Large Volume Industrials)
"CUSTOMER"
Dated: January 1, 1996
INDEX
SECTION TITLE PAGE
I Definitions 1
II Customer Order 3
III Representation, Warranties, Title
and Indemnities 3
IV Force Majeure 4
V Nominations and Scheduling 4
VI Quality of Gas 7
VII Term 7
VIII Remedies Upon Material Default 8
IX Measurement and Pressure 8
X Xxxxxxxx, Payments and Audit 9
XI Communications 9
XII Miscellaneous 11
GAS SERVICE AGREEMENT
(ENERMART)
THIS AGREEMENT, effective on January 1, 1996, between K N WESTEX GAS SERVICES
COMPANY, (Company), and ENERMART TRUST, a Pennsylvania Business Trust,
(Customer), and for the consideration stated, the parties agree as follows:
RECITALS
1. Customer and Company from time to time will enter into certain
arrangements whereby Company will provide Customer firm transportation service
as set forth in a "Customer Order".
2. Company has entered into contracts with various transporters,
marketing companies, storers, and other companies (Entity(ies)) in order to
effectuate the services which will be performed under any Customer Order.
3. Customer understands and agrees that any services provided by Company
are subject to the various governmental filings by each Entity, including,
without limitation, compliance statements filed in accordance with Part 284 of
the Federal Energy Regulatory Commission's (FERC) regulations under the Natural
Gas Policy Act of 1978, as amended from time-to-time.
SECTION I
DEFINITIONS
1. "Firm Transportation" means, subject to force majeure, transportation
service on a non-interruptible basis.
2. "Day" means the period of twenty-four (24) consecutive hours,
commencing at 7:00 a.m. Central Time (CT) on one calendar day and ending at
7:00 a.m. CT on the next day. The reference date for any day is the calendar
date when the twenty-four (24) hour period began. "Business day" means a day
consisting of Monday through Friday.
3. "Delivery Point(s)" means the outlet flange of Company's transporter's
facilities at the interconnection point with the facilities of Customer or
Customer's designee described in a Customer Order.
4. "Gas" means natural gas with or without the removal of any hydrocarbon
or inert constituents after it is produced from a well, and includes gas
produced from a well producing gas only, from a well producing gas with
condensate, or from a well producing gas in association with oil.
5. "Customer Order" means a form described in general which is attached
as Exhibit A, and which evidences the agreement
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as to the terms of a particular transaction for the service(s) provided under
this Agreement.
6. "MCQ" or "Maximum Contract Quantity" means the maximum total contract
quantity of gas that may be received and delivered by Company during the term in
a Customer Order.
7. "MDQ" or "Maximum Daily Quantity" means during the term of a Customer
Order, the maximum daily quantity of gas that may be received and delivered by
Company during any day.
8. "Measuring Party" means a mutually agreeable party who will measure
the gas under an executed Customer Order. If no Measuring Party is designated,
then the Transporter immediately downstream of the Receipt Point(s) or upstream
of the Delivery Point(s) will be the Measuring Party.
9. "Month" means a period beginning at 7:00 a.m. CT on the first day of a
calendar month and ending at 7:00 a.m. CT on the first day of the next month.
10. "Overrun" means any quantity of gas that exceeds the MDQ, MSQ and/or
MCQ, as agreed to between Company and Customer, and described in a Customer
Order.
11. "Receipt Point(s)" means the inlet flange of Company's transporter's
facilities at the interconnection point with the facilities of Customer or
Customer's designee, described in a Customer Order.
12. "Transporter(s)" means any pipeline on which any gas under this
Agreement is transported.
13. For payment purposes, the quantity of gas delivered and received
hereunder will be stated in Mcf. For balancing purposes the quantity of gas
will be stated in MMBtu. For measurement purposes, the quantity of gas
delivered and received hereunder stated in MMBtu and Mcf, is derived by taking
the measured volumes of gas in cubic feet multiplied by their Gross Heating
Value divided by one million (1,000,000). The pertinent terms are as follows:
(a) "Cubic foot of gas" means the volume of gas which occupies one (1)
cubic foot of space at a temperature of sixty degrees (60 degrees) Fahrenheit
and the referenced pressure base as set forth by the Measuring Party.
(b) "Mcf" means one thousand (1,000) cubic feet of gas and "Bcf" means
one billion (1,000,000,000) cubic feet of gas.
(c) "Btu" means the amount of heat required to raise the temperature
of one avoirdupois pound of pure water from fifty-eight and five tenths degrees
(58.5 degrees) Fahrenheit to fifty-nine and five tenths degrees (59.5 degrees)
Fahrenheit at a constant
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pressure of fourteen and sixty-five hundredths (14.65) pounds per square inch
absolute.
(d) "MMBtu" means one million (1,000,000) Btu.
(e) "Gross Heating Value" means the number of Btu liberated by the
complete combustion, at constant pressure, of one (1) cubic foot of gas, at a
base temperature of sixty (60) degrees Fahrenheit and a referenced pressure base
as set forth by the Measuring Party, with air of the same temperature and
pressure of the gas, after the products of combustion are cooled to the initial
temperature of the gas, and after the water resulting from combustion is
condensed to the liquid state. The Gross Heating Value of the gas is to be
corrected for the water vapor content of the gas being delivered; provided, that
if the water vapor content of the gas is seven (7) pounds or less per one
million (1,000,000) cubic feet, the gas will be assumed to be dry and no
correction will be made.
(f) "Referenced pressure base" for measurement and determination of
gas volume and Gross Heating Value will be established by the Measuring Party;
however, the referenced pressure base is always to be the same for gas volume
and Gross Heating Value.
14. "Operating Agreement" means the agreement between Westar Transmission
Company and Energas Company, dated December 1, 1996, covering measurement
equipment and testing, measurement specifications, pressures, quality,
maintenance of facilities, and other operational matters.
SECTION II
CUSTOMER ORDER
1. Customer Order. The parties may enter into one or more agreements for
firm transportation service hereunder from time to time, and each such agreement
will be reflected in a Customer Order executed by both parties which will
constitute a supplement to and form a part of this Agreement, so that each
transaction involving this Agreement and a Customer Order constitutes a single,
entire agreement between Customer and Company. Each Customer Order will contain
provisions regarding price, Receipt Point(s), Delivery Point(s), quantity, term
and any other obligations of Customer and Company.
2. Conflict. If a conflict exists between a Customer Order and this
Agreement, the terms of the Customer Order will govern the applicable
transaction. If a conflict exists between two or more Customer Orders under
this Agreement, the Customer Order with the latest effective date will govern
the applicable transaction period.
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SECTION III
REPRESENTATIONS, WARRANTIES, TITLE AND INDEMNITIES
1. Company. Company represents that it has, or will have, all contracts
in place necessary to provide the services described in each Customer Order,
subject to Paragraph 3 of the RECITALS and Paragraph 10. Operating Conditions
and Agreements. of Section XI MISCELLANEOUS.
2. Customer. Customer warrants that it has good title to or good right
to the gas delivered to Company under each applicable Customer Order, and that
the gas is free and clear of all liens, encumbrances, or adverse claims of any
kind. Customer indemnifies, saves and holds harmless, Company from all claims,
losses, causes of action, damages and expenses (including, but not limited to
attorney's fees and court costs) due to any adverse claims against the Company
for the gas delivered to Company by Customer. Customer warrants that all gas
delivered to Company for transportation hereunder is eligible for transportation
under any governmental authority having jurisdiction.
3. Control and Possession. Customer is in control and possession of the
gas and is responsible for and indemnifies Company against any injury or any
damage caused thereby until the gas is delivered to Company or its designee at
the Receipt Point(s), except for any injury or damage caused by Company.
Responsibility for the gas passes to Company at the Receipt Point(s), and then
Company is in control and possession of the gas and is responsible for, and
indemnifies Customer against injury or damage caused thereby, except for injury
or damage caused by Customer. Likewise, responsibility for the gas passes to
Customer at the Delivery Point(s), and then Customer is in control and
possession of the gas.
4. Damages. Notwithstanding anything in this Agreement to the contrary,
neither party will be responsible to the other party for any incidental,
consequential, lost profit, punitive or exemplary damages for a breach of this
Agreement.
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SECTION IV
FORCE MAJEURE
1. Force Majeure. In the event that either Company or Customer is
rendered unable, wholly or in part, by reason of an event of force majeure, to
perform its obligations under this Agreement, other than to make payment due
hereunder, and such party has given notice and full particulars of such force
majeure in writing to the other party as soon as possible after the occurrence
of the cause relied on, then the obligations of the parties, insofar as they are
affected by such force majeure, shall be suspended during the continuance of
such inability, but for no longer period, and such cause shall, insofar as
possible, be remedied with all reasonable dispatch.
The term "force majeure" in this Agreement means, without limitation, acts
of God, strikes, lockouts or other industrial disturbances, acts of the public
enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, storms, floods, washouts, arrests and restraints of the
government, either federal or state, civil or military, civil disturbances,
explosions, breakage, breakdown or accident to machinery, equipment or lines of
pipe, the necessity of repairing, altering, maintaining, inspecting, replacing,
changing the size of, substituting or removing machinery, equipment, pipelines,
storage or plant facilities, and any other causes, whether of the kind herein
enumerated or otherwise, not reasonably within the control of the party claiming
suspension. Such term likewise includes (i) in those instances where Customer
or Transporter is required to obtain servitudes, right-of-way grants, permits,
exceptions or licenses to enable such party to fulfill its obligations, the
inability of such party to acquire, or the delays on the part of such party in
acquiring, at reasonable cost and after the exercise of reasonable diligence,
such servitudes, rights-of-way grants, permits, exceptions or licenses, and (ii)
in those instances where Customer or Transporter is required to furnish
materials and supplies for the purpose of constructing or maintaining facilities
or is required to secure permits or permission from any governmental agency
(federal, state or municipal, civil or military) to enable such party to fulfill
its obligations hereunder, the inability of such party to acquire or the delays
on the part of such party in acquiring, at reasonable cost and after the
exercise of reasonable diligence, such material and supplies, permits and
permissions. It is understood and agreed that the settlement of strikes or
lockouts shall be entirely within the discretion of the party or a Transporter
having the difficulty and that the above requirement that any force majeure
shall be remedied with all reasonable dispatch shall not require the settlement
of strikes or lockouts by acceding to the demands of the opposing party when
such course is inadvisable in the discretion of the party having the difficulty.
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SECTION V
NOMINATIONS AND SCHEDULING
1. Nomination. For all quantities of gas that are to be scheduled
beginning on the first day of any month, Customer will provide written notice,
in a form to be provided by Company, either via the Company's electronic
bulletin board or via telefacsimile, no later than eleven (11:00) am CT three
(3) business days prior to the month of delivery. For all quantities that are
to be scheduled or changed any day after the first day of any month, Customer
will provide either via the Company's electronic bulletin board or via
telefacsimile, notice by eleven (11:00) am CT on the day prior to the day of the
proposed change. Company may waive any part of the notice requirement upon
request if, in Company's sole judgment, operating conditions permit such waiver.
In addition to the information required on the nomination form, Customer will
specify whether the gas scheduled is current month deliveries or imbalance
payback quantities.
2. Confirmation Notice. Company shall provide Customer notice, by
Company's electronic bulletin board or by telefacsimile, of all quantities of
gas requested by Customer that Company has "confirmed" with Customer's
suppliers, designees, and/or other transporters for flow. Such notice shall be
provided not later than 4:00 p.m. CT on the day prior to the day of flow.
Company shall also provide Customer notice, by Company's electronic bulletin
board or by telefacsimile, of all quantities of gas received by Company for
Customer's account. Such notice shall be provided not later than 4:00 p.m. CT
on the day after the day of flow for only gas received at those Receipt Points
that are electronically monitored by Company.
3. Monthly Balancing Requirements. The balancing provisions herein have
been established and are provided to Customer by Company in recognition that the
gas being transported by Customer will be delivered to markets that typically
have a uniform consumption of gas. In any given month, any quantities of gas
received by Company from Customer (or its designee) at the Receipt Point(s) or
delivered to Customer by Company at the Delivery Point(s) that is not equal to
the "confirmed" quantities at the respective Receipt Point(s) and Delivery
Point(s) is an "Imbalance Quantity". Company shall provide a monthly statement
to Customer showing the previous month's volume activity "confirmed" at both the
Receipt Point(s) and the Delivery Point(s) and the resulting Imbalance Quantity.
Customer will then have forty five (45) days following such statement (Payback
Period) to schedule with Company the quantities of gas necessary to reduce the
Imbalance Quantity to zero. Any imbalance remaining after the Payback Period,
will be cashed out as follows:
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For such remaining monthly Imbalance Quantity where receipts of gas at the
Receipt Point(s) are less than deliveries taken by Customer at the Delivery
Point(s), Company will invoice Customer and Customer shall pay for the
extra gas delivered to Customer one hundred and ten percent (110%) of the
"Index Basket", for the respective month of delivery, on a per MMBtu basis.
For such remaining monthly Imbalance Quantity where deliveries of gas at
the Delivery Point(s) are less than receipts of gas at the Receipt
Point(s), Company will pay Customer for the extra gas delivered by Customer
to Company ninety percent (90%) of the "Index Basket" for the month of
delivery, on a per MMBtu basis.
The "Index Basket" referred to in above shall be equal to the sum of the
"prices" stated in dollars per MMBtu of: (i) fifty percent (50%) of the
arithmetic average of the index prices listed in each edition of Natural Gas
Week, published during the applicable calendar month by Oil Daily Company in the
table titled "Gas Price Report", under the column labeled "Delivered to
Pipeline", "This Week" for Texas West Spot, and (ii) twenty-five percent (25%)
of the first publication in the applicable month of Inside F.E.R.C.'s Gas Market
Report, published by XxXxxx-Xxxx, Inc. for Panhandle Eastern Pipeline Co.,
Texas, Oklahoma (Mainline) under the heading "Prices of Spot Gas Delivered to
Pipeline" under the category labeled "Index", and (iii) twenty-five percent
(25%) of the index price published in the first edition of the month in Natural
Gas Intelligence Gas Price Index for the applicable calendar month, identified
in the table entitled "SPOT GAS PRICES" under the column entitled "Contract
Index", the "Intrastate Avg." for the "West Texas/Permian" gas.
4. Rate of Flow. The gas to be received by Company's transporter
hereunder shall be delivered by Customer at uniform daily rates of flow as
nearly as practicable, but it is recognized that due to operating conditions the
quantities of gas received and delivered may not be in balance on any one
particular day. On days when the quoted price from Enron Capital and Trade,
Texas Intrastate desk, for gas delivered to Company's system the same day in the
Waha supply area exceeds the price of the of the index price published in the
first edition of the month in Natural Gas Intelligence Gas Price Index for the
applicable calendar month, identified in the table entitled "SPOT GAS PRICES"
under the column entitled "Contract Index", the "Intrastate Avg." for the "West
Texas/Permian" by more than $0.50 per MMBtu, and there is a difference in the
quantity of MMBtu between the nominated and confirmed Receipt Point(s) daily
quantities and the actual quantities being delivered by Customer or its designee
at the Receipt Point(s), Company shall notify Customer by telephone and
telefacsimile of such difference, and Company shall have the right to request
Customer to correct the
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difference within twenty four (24) hours of notification. Customer may correct
such situation by adjusting its nominations to match actual Receipt Point(s)
daily quantities. If Customer fails to correct the situation within twenty four
(24) hours of such notification, then Company shall have the right to charge
Customer up to $0.50 per MMBtu on any remaining and continuing difference in the
quantity of MMBtu between the nominated and confirmed Receipt Point(s) daily
quantities and the actual quantities being delivered by Customer or its designee
at the Receipt Point(s), until such time that the difference is corrected.
5. Imbalance Exchanges. In the event Company establishes an imbalance
exchange service program in conjunction with the transportation services
provided under this Agreement, Customer will be eligible to participate in the
program under the terms thereof.
6. Upstream and Downstream Transporters. Customer shall make, or cause
to be made, all necessary arrangements with other pipelines or parties upstream
of the Receipt Point(s) or downstream of the Delivery Point(s) in order to
effectuate Company's receipt or delivery of Customer's gas. Company's
obligations are subject to Customer making such necessary arrangements set forth
in the immediately preceding sentence, and such arrangements must be coordinated
with Company.
7. Third Party Imbalance Penalties. If on any day Customer or Company's
Transporter receives or delivers, or causes to be received or delivered, a
quantity or Btu content of gas that is greater or less than that nominated and
scheduled for receipt or delivery at the Receipt or Delivery Point(s), and such
deliveries cause Customer or Company to incur a penalty(ies), cashout cost(s),
fee(s), forfeiture(s) or charge(s) as levied by any transporter or
Transporter(s), upstream or downstream of the respective receipt and Delivery
Point(s), the responsible party agrees to bear and pay such penalty(ies),
cashout cost(s), fee(s), forfeiture(s) or charge(s). Customer and Company agree
to provide one another all information necessary to determine what event, or
which party caused the imbalance resulting in the imposition of penalty(ies),
cashout cost(s), fee(s), forfeiture(s) or charge(s) by a transporter or
Transporter(s) at the Receipt or Delivery Point(s).
SECTION VI
QUALITY OF GAS
1. Specification. All natural gas delivered by Customer to Company(s)
Transporter at the Receipt Point(s) shall conform to the quality specifications
imposed from time to time by the most restrictive of the Transporter(s). All
natural gas
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redelivered by Company to Customer at the Delivery Point(s) shall be governed by
the Operating Agreement.
2. Failure to Conform. If the gas tendered for receipt by Company from
Customer fails at any time to conform to the quality specifications set forth in
the Section titled Specifications, then Company may refuse to accept the receipt
of the gas and will notify Customer. Customer shall make a diligent effort to
correct such failure within twenty-four (24) hours following any such notice,
and if Customer is not successful then Company in its sole discretion may (i)
request its Transporter to accept delivery of any non-conforming gas, or (ii)
continue to refuse to accept the non-conforming gas and Company's obligations
regarding such gas will be suspended. Non-conforming gas tendered by Company to
Customer at the Delivery Point(s) shall governed by the Operating Agreement.
3. Odorization. Odorization shall be governed by the Operating
Agreement.
SECTION VII
TERM
This Agreement is in effect on the effective date and will continue through
December 31, 2001; provided, that this Agreement and any Customer Order will
continue in effect until the later of (i) the expiration of any outstanding
Customer Order, or (ii) for so long as it takes to change any nominations to any
transporter or Transporter(s) reflecting the cessation of the receipt and
delivery of gas under any Customer Order.
SECTION VIII
REMEDIES UPON MATERIAL DEFAULT
1. If either party hereto shall fail to perform any material covenant or
obligation imposed upon it under this Agreement, than in such event the non-
defaulting party may, at its option, terminate this Agreement upon acting in
accordance with the procedures hereafter set forth in this Section. The non-
defaulting party shall cause a written notice to be served on the defaulting
party, which notice shall state specifically the cause of terminating this
Agreement and shall declare it to be the intention of the non-defaulting party
to terminate this Agreement if the default is not cured. The defaulting party
shall have ten (10) days after receipt of the aforesaid notice in which to
remedy or remove the cause or causes stated in the termination notice, and if
within such ten-day period, the defaulting party does so remedy or remove said
cause or causes and fully indemnifies the non-defaulting party for any and all
consequences of such breach, then such termination notice shall be withdrawn and
this Agreement shall continue in full force and
9
effect. In the event that the defaulting party fails to remedy or remove the
cause or causes or to indemnify the non-defaulting party for any and all
consequences of such breach within such ten-day period, this Agreement shall be
terminated and of no further force or effect from and after the expiration of
such ten-day period.
2. Any termination of this Agreement pursuant to the provisions of this
Article shall be (i) without prejudice to the rights of Company to collect any
amounts then due Company for gas delivered prior to the time of termination (ii)
without prejudice to the rights of Customer to receive any gas for which it has
paid but not received prior to the time of termination, and (iii) without waiver
of any other remedy to which the non-defaulting party may be entitled.
SECTION IX
MEASUREMENT AND PRESSURE
1. Measurement. Unless specified in a Customer Order to the contrary,
the measurement of gas and testing of measurement facilities will be governed by
the applicable measurement and testing provisions and procedures of the
Measuring Party. The parties agree to rely on correct information provided by
the Measuring Party as to the quantity of gas measured at the Receipt and
Delivery Point(s).
2. Pressure. The gas delivered by Customer at the Receipt Point(s) shall
be delivered at a pressure sufficient to overcome the operating pressure
existing in Company's or its Transporter's facility from time to time; however,
in no event shall such delivery pressure exceed the maximum operating pressure
of the system receiving the gas. The gas delivered at the Delivery Point(s)
shall be delivered by Company's Transporter at the pressure existing from time-
to-time in Company's or Transporter's pipeline. Company's Transporter shall not
be obligated to install or operate compression facilities in order to effect
receipt or delivery of gas. Customer (or Customer's designee), any transporter
and Company's Transporter are completely and solely responsible for the
installation and maintenance of overpressure protection equipment on their own
pipeline(s), valve(s) and any other interconnection equipment.
SECTION X
XXXXXXXX, PAYMENTS AND AUDIT
1. On or before the fifteenth (15th) day of each Month, Company shall
render a statement to Customer giving the total quantity of gas, expressed in
Mcf and in MMBtu's, received and delivered by Company's Transporter hereunder
during the preceding Month and the monies due therefor. Such statements are to
be rendered in accordance with this Agreement, and shall include any
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amounts due for tax reimbursement under the provisions of this Agreement. In the
event the total amount due Company cannot be determined on or before the
fifteenth (15th) day of the Month, Company shall nevertheless invoice Customer
for the amounts that are known and/or are nominated by Customer, and when the
information is available Company shall invoice for actual amounts (or refund any
payment as necessary) as soon as practicable after such amount is determined.
2. Ten (10) days after the statement is received by Customer, Customer
shall make payment to Company by wire transfer per the instructions set forth in
the Article titled "COMMUNICATIONS". If Customer disputes the amount of any
statement for any reason, Customer shall notify Company of such dispute and
shall be obligated to pay only the undisputed portion of such statement on the
due date. Customer shall pay the disputed portion of the statement which is
determined to be owing to Company within fifteen (15) days after the date the
dispute is resolved, together with interest on such amount at the rate set forth
in Paragraph 4 below, commencing on the original due date of the statement and
continuing until paid. If the statement shall have been paid in full and it
shall be determined that such disputed portion of the statement was paid in
error, Company shall refund such amount to Customer, together with interest at
the rate hereinafter set forth below over the period that Company had possession
of the money, within fifteen (15) days after resolution of the dispute.
3. All statements, bills, computations and payments shall be subject to
correction of any errors contained therein until two (2) years after date of
payment, and after such period any errors found will be deemed to be waived by
the affected party.
4. Any amounts due for gas delivered hereunder remaining unpaid after the
due date for such payment shall bear interest at the lesser of the highest
lawful interest rate or the prime rate charged by Norwest Bank of Denver plus
two percent (2%) until paid.
5. Each party shall have access to and the right to audit during regular
business days and business hours, upon reasonable notice, all measurement,
billing, computation and payment records maintained by the other party which
relate to gas received under this Agreement. All records will be maintained for
two (2) years after payment has been made for the month to which the records
pertain.
SECTION XI
COMMUNICATIONS
1. Notices and Addresses. Unless otherwise provided in this Agreement,
any notice (other than a Customer Order which may be sent by telefacsimile or
other electronic means), statement,
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demand, or payment called for is to be in writing and shall be considered
delivered when deposited in the U.S. Mail, postage prepaid,
telecopied/telefacsimilied or hand delivered to either party at the address
designated. Unless changed in writing, the addresses are:
Company:
Payments:
Wire Transfer K N WESTEX GAS SERVICES COMPANY
Norwest Banks Colorado, N.A.
Denver, CO
XXX# 000 00 076
Acct: # 000-0000-000
Notices and Correspondence:
K N WESTEX GAS SERVICES COMPANY
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attn: Contract Administration
Telecopier No. (000) 000-0000
Telephone No. (000) 000-0000
Customer:
Notices and Correspondence:
ENERMART TRUST
XX Xxx 000000
Xxxxxx, XX 00000-0000
ATTN: Intrastate Gas Supply
Statements: ENERMART TRUST
XX Xxx 000000
Xxxxxx, XX 00000-0000
ATTN: Intrastate Gas Supply
Telecopier No. (000)000-0000
Telephone No. (000)000-0000
2. Operating Communications. Operating communications by telefacsimile
will be considered as duly delivered the day after transmittal.
3. Telefacsimile/Telecopy Transmission. All communications, including
Customer Orders, may be sent by telefacsimile/telecopy, and signatures appearing
on the telefacsimile/telecopy are binding on the signatory party.
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SECTION XII
MISCELLANEOUS
1. Waiver of Default. No waiver by Company or Customer of any default of
the other under this Agreement or a Customer Order shall operate as a waiver of
any future default, whether of a like or different character. Company shall not
be required to perform any service on behalf of Customer, if Customer fails to
comply with all of the terms of this Agreement.
2. Assignment. This Agreement may not be assigned by either party
without consent of the other party, which consent shall not be unreasonably
withheld, unless assigned to an affiliate or subsidiary of a party. Such
assignment shall not relieve the assigning party of any of its obligations under
this Agreement.
3. Joint Preparation. This Agreement is deemed to be drafted and
prepared equally and jointly, regardless of which party prepared or submitted
the document to the other, and shall not be construed against one party or the
other as a result of the preparation, submittal or execution.
4. No Third-Party Beneficiary. Except for the parties, their successors
and assigns, no person, including without limitation, any joint operating
agreement party, any owner of a royalty interest, overriding royalty interest or
production right, any Transporter or Xxxxxx, shall have any rights as a third-
party beneficiary or otherwise under this Agreement or any Customer Order.
5. Severability. If any part of this Agreement or a Customer Order is
held to be void or unenforceable by any court or under any law, that part shall
be deemed stricken and all remaining provisions shall continue to be valid and
binding upon the parties.
6. Laws, Rules and Regulations. This Agreement and all Customer Orders
are subject to all valid applicable federal, state and local laws, rules and
regulations of any governmental body or official having jurisdiction. The
parties are entitled to treat all laws, orders, rules and regulations issued by
any federal or state regulatory body as valid and may act in accordance
therewith until such time the same may be invalidated by final judgment in a
court of competent jurisdiction.
7. Modification. Any modification of terms or amendment of provisions of
this Agreement or a Customer Order will become effective only by written
agreement between the parties.
8. Release of Dedication. Each of Customer's markets shall be released
from any requirement or dedication to transport gas on Company's system as
defined in the Amendment dated January 1, 1996 to the Gas Sales Agreement dated
January 1, 1992 between K N Marketing L.P. and Enermart Trust ninety (90) days
prior to the expiration date of that market's Gas Sales Order as defined in
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Exhibit A of the Amendment. Such release shall only apply to those expiration
dates which occur after January 1,1997.
9. Minimal Creditworthiness. Company or Customer shall not be required
to perform, or continue to perform, any service under this Agreement or a
Customer Order in the event either party (i) applies or has applied for
bankruptcy, or (ii) one party fails, in the good faith opinion of the other
party, to demonstrate minimal creditworthiness.
10. Taxes and Fees. To the extent permitted by law, Customer shall
reimburse Company for:
(a) any natural gas gathering, occupation, production, inventory,
severance or sales taxes, first use tax, gross receipt tax, or taxes similar in
nature or equivalent in effect which are now or hereafter imposed or assessed
against Company or any transporting entities by any lawful authority as a result
of the transportation of natural gas under this Agreement or the production or
gathering of such natural gas.
(b) any fees or charges by any Governmental agency which Company
incurs that are related to any service rendered to Customer under this
Agreement.
11. Operating Conditions and Agreements. The services provided by Company
to Customer under this Agreement are subject to the various tariffs, statements
of compliance, statements of operating conditions, general terms and conditions,
transportation agreements, exchange, agreement and general operating conditions
of the various Entities at and between the Receipt Point(s) and the Delivery
Point(s).
12. Choice of Law and Venue. THIS AGREEMENT WILL BE INTERPRETED AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT
RECOURSE TO THE RULES OF CONFLICT OF LAWS.
13. Confidentiality. The terms of this Agreement, including but not
limited to, price, rates or fees, the identified transporting pipelines,
Transporter(s), and cost of transportation, the quantities of gas, and all other
material terms shall be kept confidential by the parties, except to the extent
that any information must be disclosed to a third party as required by federal,
state or local law, regulation or governmental process, or for the purpose of
effectuating transportation of the gas hereunder or for obtaining regulatory
orders pertaining to the delivery or utilization of gas sold hereunder or for
regulatory filings or reports, or except to the extent that any information is
in the public domain, or which, through no breach by either party of its
obligations hereunder, ceases to be confidential.
14
COMPANY CUSTOMER
K N WESTEX GAS SERVICES COMPANY ENERMART TRUST, a division of
Atmos Energy Corporation
By: By:
------------------------ ------------------------
Name: Name:
------------------------ ------------------------
Title: Title:
------------------------ ------------------------
Date: Date:
------------------------ ------------------------
15
CUSTOMER ORDER
COMPANY SHALL CAUSE THE TRANSPORTATION OF GAS AS FOLLOWS:
(ENERMART-LARGE VOLUME INDUSTRIALS)
This Customer Order entered into on January 1, 1996 between K N WESTEX GAS
SERVICES COMPANY (Company), and ENERMART TRUST (Customer) is subject to, made a
part of and is incorporated by reference into the Gas Service Agreement dated
January 1, 1996, between Company and Customer.
Term: January 1, 1999 through December 31, 2001
Type of Service: Company shall arrange for firm transportation service
as required under the Gas Sales Agreement dated January 1, 1992,
but effective August 1, 1991 between K N Marketing , L.P.
(formerly Anthem Energy Company, L.P.) and ENERMART TRUST.
Receipt Point(s): Interconnection facilities with K N Energy, Inc.'s
Buffalo Wallow facilities, subject to the operating limitations
of these receipt facilities.
Delivery Point(s): All Points of Interconnection between Westar
Transmission Company and Customer where Customer receives gas for
resale through certain of its facilities
Maximum Daily Quantity: Requirements to supply Customer's industrial sales
needs. Not to exceed 5,000 MMBtu's per day.
Maximum Contract Quantity: For the term of this Customer Order the
Maximum Contract Quantity shall be limited by the Maximum
Contract Quantity set forth in the Customer Order entered into
between EnerMart Trust (EnerMart) and Westar Transmission Company
(Westar), and volumes transported hereunder shall be included in
the determination of the Maximum Contract Quantity of the
EnerMart and Westar Customer Order.
Rate (as delivered): $0.2858 per Mcf
Special Provisions: In the event that the approved rate for firm
transportation on the Westar system (as that system is described
in the Operating Agreement) changes, then the $0.2858 per Mcf
rate for transportation will be replaced with the new rate which
has been approved by the Railroad Commission of Texas, which
notwithstanding the structure of such approved rate shall be the
cost of service
1
rate expressed on a per unit of actual throughput basis for the
capacity used to provide the firm transportation service.
COMPANY CUSTOMER
K N WESTEX GAS SERVICES COMPANY ENERMART TRUST, a division of
Atmos Energy Corporation
By: By:
------------------------ ------------------------
Name: Name:
------------------------ ------------------------
Title: Title:
------------------------ ------------------------
Date: Date:
------------------------ ------------------------
2
