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NATURAL GAS AGREEMENTS (036) , I I INTERRUPTIBLE GAS CONTRACT AGREEMENT GENERAL TERMS AND CONDITIONS AS OF THIS DATE ~~1~ ~1 ,1992, Reliance Gas Marketing Company, a corporation, of the State of Delaware ("Seller") and CITY OF CLEARWATER, a municipal corporation, of the State of Florida ("Buyer") which may hereinafter be referred to collectively as "Parties) or individually as "Party": lilT.IiE.S.S.E.T.H. WHEREAS, Buyer and Seller wish to enter into an Interruptible Agreement covering the sale, delivery, and purchase of natural .' gas. NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the Parties agree as follows: ARTICLE I. DEFINITIONS 1.l "Agreement" shall mean these General Terms and Conditions and the Exhibit "A" hereto, both of which have been completed and executed by the Parties. 1.2 "Interruptible, Interrupt, or Interruption" shall mean that Buyer has no obligation to purchase or take delivery of natural gas that Buyer, for any reason, does not desire to purchase from Seller, and that Seller has no obligation to sell or deliver natural gas that Seller, for any reason, does not desire to sell to Buyer. Neither Buyer nor Seller shall be liable to the other for not selling, delivering, or purchasing any natural gas pursuant to this Agreement and failure to do so . e(J:~ V:m~ 1 . / " I I any natural gas pursuant to this Agreement and failure to do so shall not constitute a breach of this Agreement by either Buyer. or Seller. l.3 "Transporter" shall mean the transporting pipeline downstream of the Point(s) of Sale. 1.4 "Point(s) of Sale" shall mean the point(s) at which natural gas is first delivered to the first Transporter, which point(s) are designated in the Transportation Agreement(s) to be executed by such Transporter and Buyer with respect to the transportation of the natural gas purchased. ARTICLE II. QUANTTTY 2.1 By executing Exhibit "A" Buyer shall have agreed to maximum daily and monthly quantities of natural gas that Buyer may desire to purchase from Seller. To permit Seller to schedule delivery Df natural gas supplies for Buyer in an orderly manner, Buyer shall provide Seller with oral notice of both daily and monthly nominated quantities provided by Buyer to the first Transporter for all deliveries of natural gas and shall confirm that notice by providing Seller with a duplicate copy of the completed gas nomination formes) used by Buyer to make nominations to the first Transporter by no later than one (l) working day prior to the date(s) required by the first Transporter for such nominations. 2.2 Buyer may decrease or Interrupt the nominated quantity established pursuant to Paragraph 2.1, from time to time, upon 2 1 I twenty-four (24) hour notice to any Transporter and Seller, which notice of decrease or Interruption of such nomin~ted quantity may. be oral but which notice must be confirmed in writing. Buyer may increase its nominated quantity within the maximums on Exhibit "A" from time to time upon (i) twenty-four (24) hour not ice to any Transporter and Seller, which notice of increase of such nominated quantity initially may be oral, and (ii) Seller's written confirmation and approval of said increase in writing. Seller may decrease or Interrupt sales of natural gas for any time and from time to time upon twenty-four (24) hour notice to Buyer, which notice of decrease or Interruption of nominated quantity initially may be oral, but which notice must be confirmed in writing. Buyer and Seller may also at any time request an increase or decrease in the maximum daily and/or monthly quantities, which proposed increase or decrease shall become effective only according to the terms of a newly executed Exhibit "A." 2.3 The Parties agree that if any penalties are imposed upon a Party hereto by the transporting pipeline(s), in accordance with the provisions of its applicable Federal Energy Regulatory Commission approved transportation tariff(s), as a result of other Party's failure to deliver or accept an agreed upon, nominated quantity or as a result of the other Party's failure to perform any of its obligations hereunder, the failing Party shall, upon receipt of an invoice from the non-failing Party reasonably detailing such penalties, reimburse the non- 3 1 t failing Party the dollar amount of such penalties (or the failing Party's portion thereof) within thirty (30) days following receipt of said invoice. ARTICLE III. PRICE OF NATURAL GAS 3.1 Exhibit "A" shall state the price for the natural gas that is sold by Seller to Buyer. The price of natural gas includes all charges and costs of compressing, gathering, processing, treating, liquefying, or transporting the natural gas, or other similar cost, and taxes (except taxes described in Paragraph 3.3), which are incurred prior to the Point(s) of Sale. Seller shall compress, gather, process, treat, liquefy, or transport the natural gas, or cause the same, as necessary to deliver the natural gas. Buyer shall compensate Seller for all costs of compressing, gathering, liquefying, or transporting such gas, processing, treating, or other similar costs, as allowed pursuant to s 110 of the Natural Gas Policy Act of 1978 (NGPA) or l8 C.F.R. sS 270.202 and 271.l104 or as otherwise allowed by law, to the extent such costs are incurred by Seller or by Seller's suppliers; provided, however, the price shall not exceed the price stated on Exhibit "A." The price shall remain in effect until Buyer and Seller have agreed upon a new price and have executed a new Exhibit "A." 3,2 (a) "Regulated Gas" means gas subject to a maximum 4 1 I lawful price. (b) "Contract Price" means under this Agreement in the absence lawful price. (c) In the event that Seller delivers and Buyer purchases Regulated Gas under this Agreement which is subject to a maximum lawful price lower than the Contract Price, Buyer shall, to the extent lawfully permitted, pay Seller for other gas delivered and purchased hereunder a price (not to exceed any the price payable for gas. of any applicable maximum applicable maximum lawful price) which is sufficiently in excess of the Contract Price to cause the weighted average price of gas delivered and purchased hereunder to equal the Contract Price as nearly as practicable, but the weighted average price of all gas delivered and purchased hereunder shall never exceed the Contract Price. 3.3 Buyer warrants that the gas purchased hereunder is purchased for resale and Buyer believes that no federal, state, or local sale, use, consumption, or similar tax or franchise fee will be levied at and after the Point(s) of Sale on any gas sold hereunder. However, Buyer is responsible for and hereby agrees to pay all such taxes or charges arising out of or that may be levied upon any gas sold under this Agreement. Buyer recognizes that Seller is relying on Buyer's representation of exemption, and Buyer agrees to indemnify and hold Seller harmless from any and all costs, charges, and expenses of any nature incurred by Seller as a result of Seller's reliance on Buyer's 5 I 1 representation. ARTICLE IV. TE.EIi 4.1 This Agreement shall be effective as of the date written herein above and shall remain in effect for one (1) month, and month to month thereafter subject to the other ~rovisions hereof, and shall furthermore remain in effect until terminated by either Party upon at lAast writtAn notioe given to the other Party; ten (10) days prior such termination to be effective as of the first day of the month following the month of the receipt of the termination notice. ARTICLE V POINTS OF SALE: TITLE: RIGHTS OF POSSESSION 5.1 Title and right of possession to all natural gas delivered and sold hereunder shall ~ass to Buyer at the Point(s) of Sale. Seller shall be deemed to be in exclusive control and possession of the natural gas and shall be fully res~onsible for and shall defend and indemnify Buyer, its successors and assigns, against any damages or injury resulting from the transportation, handling, or use of, or caused by the natural gas or the o~eration of facilities used to deliver natural gas to the Point(s) of Sale. Buyer shall be deemed to be in exclusive control and ~ossession of the natural gas and shall be fully responsible for and shall defend and indemnify Seller, its successors and assigns, against any damages or injury resulting from the transportation, handling, or use of, or caused by the 6 1 I natural gas or the operation of facilities used to receive natural gas after the Point(s) of Sale. ARTICLE VI TRANSPORTATION 6.1 Seller shall be responsible for arranging and paying for all transportation of the natural gas to the Point(s) of Sale. Buyer shall be responsible for arranging and paying for all transportation of the natural gas from the Point(s) of Sale, Buyer shall provide to Seller a copy of any transportation agreement(s) entered into pursuant to this paragraph. ARTICLE VII QUALITY OF GAS 7,1 The natural gas sold hereunder shall conform to the quality specifications set forth in the Transportation Agreement governing the transportation of the natural gas by the Transporter, as measured and/or calculated by the Transporter. ARTICLE VIII. BILLING AND PAYMENT 8.1 On or before the twelfth (l2th) day of each month during the term of this Agreement, Seller shall render a statement to Buyer for the total volume of natural gas nominated or delivered to Buyer during the preceding month. Buyer shall pay to Seller, on or before the twentieth (20th) day of each month, the amount due on Seller's statement. All such payments shall be made to Seller by wire transfer directed to: 7 I I To the extent that supporting data is not available to Seller by. the twelfth (l2) day of each month, Seller may bill Buyer based on nominated volumes, subject to reduction for any known periods when nominated volumes were not delivered and subject to later correction based on actual supporting data. If a statement is rendered based on nominated volumes rather than actual deliveries, Seller shall promptly render a corrected statement as soon as possible after actual volumes are know. 8.2 Buyer and Seller shall have the right during normal business hours to examine the books, records, and charts of the other Party to the extent necessary to verify any statement, charge, or computation made pursuant to this Agreement. 8.3 If Buyer fails to pay when due the amount of any statement rendered by Seller, interest thereon shall accrue from the due date until the date of payment, at the then current prime rate of interest charged by CitiBank, N.A. to its commercial and industrial borrowers. This Paragraph 8.3 shall not bar either Party from asserting any other remedy it may have at law or in equity. 8,4 If presentation of a statement by Seller is delayed after the twelfth (l2th) day of the month, then the time for payment shall be extended correspondingly. 8.5, If Buyer finds within twenty-four (24) months after the date of any statement rendered by Seller that it has been overcharged and if Buyer pays and makes a claim within the 8 I I twenty-four (24) months, the overcharge, if verified by Seller or otherwise ordered, shall be refunded wi thin thir.ty (30) days with. interest at the then current prime rate of interest charged by CitiBank, N.A, to its best commercial and industrial borrowers, If Seller finds within twenty-four (24) months after the date of any statement rendered by it that there has been an undercharge in the amount billed in such statement, it may submit a statement for such undercharge to Buyer, and Buyer, upon verifying the same or otherwise ordered, shall pay the undercharge to Seller within thirty (30) days, with interest at the then current prime rate of interest charged by CitiBank, N.A. to its best commercial and industrial borrowers. ARTICLE IX WARRANTIES OF TITLE lO.! Seller warrants title to the natural gas sold and delivered to Buyer free and clear of all liens, encumbrances, and claims to the natural gas, for royalties, or taxes, except as provided in Paragraph 3.2. Seller shall indemnify Buyer and save it harmless from suits, actions, debts, accounts, damages, costs, losses, and expenses arising from or out of this warranty. ARTICLE XI CREDIT WORTHINESS ll.! Prior to the commencement of deliveries and sales of natural gas under this Agreement, and from time to time thereafter, Buyer shall furnish Seller with credit information as may be reasonably required to determine Buyer"s credit 9 I I worthiness. Buyer may be required to furnish Seller with a satisfactory letter of credit, guarantee, or other good and sufficient security of a continuing nature and in a satisfactory amount as determined by Seller in its sole discretion. ARTICLE XII. NOTICES l2.1 Notices to Buyer under this Agreement shall be addressed as follows: City of Clearwater Clearwater Gas System 400 N. Myrtle Avenue Clearwater, Florida 34615 Notices to Seller shall be addressed as follows: Reliance Gas Marketing Company III Bagby, Suite 2300 Houston, Texas, 77002 Either Party may change its address under this Article, or under the payment provisions of Article VIII, by written notice to the other Party. Unless otherwise provide, all notices given by one Party to the other shall be sent by registered mail, overnight mail service, or by telegraph, or telecopy and shall be effective upon receipt. However, routine communications, including monthly statements, shall be considered as delivered when mailed, properly addressed, by either registered, or ordinary mail. ARTICLE XIII 10 I I TRANSFER AND ASSIGNMENT 13.1 Any company that shall succeed by purchase, merger, or consolidation to the properties, substantially, or in their entirety, of either Party shall be entitled to the rights and shall be subject to the obligations of its predecessor in title under this Agreement. No assignment of this Agreement or of any rights or obligations hereunder shall be made by either Party without the written consent of the other Party, except that either Party may assign this Agreement to a financially capable affiliate upon written notice to the other Party. This Article XIII shall not prevent either Party from pledging or mortgaging its rights hereunder as security for its indebtedness. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Parties. ARTICLE XIV NON-WAIVER OF FUTURE DEFAULTS l4.1 No waiver by either Party of anyone or more defaults by the other Party in the performance of this Agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or unlike character. ARTICLE XV ENTIRE AGREEMENT 15.1 This Agreement constitutes the entire agreement between Seller and Buyer for the sale and delivery and purchase of natural gas. THIS AGREEMENT SUPERSEDES ALL PRIOR NEGOTIATIONS, REPRESENTATIONS, CONTRACTS, OR AGREEMENTS, EITHER WRITTEN, OR 11 . . I I ORAL REGARDING THE SUBJECT MATTER HEREOF, EXCEPT AS PROVIDED IN ARTICLE VII AND ARTICLE X, THERE ARE NO OTHER WARRANTIES EXPRESSED OR IMPLIED REGARDING THE PURCHASE AND SALE OF NATURAL GAS PROVIDED FOR HEREIN. Except as provided in Article II, no modification, alterations, amendments, instructions, or interpretations of this Agreement and/or Exhibit "Au shall be binding upon either Party unless executed in writing by the Party to be bound. ARTICLE XVI DAMAGES 16.1 Neither Party shall be liable for any damages for any breach of this Agreement unless a claim is presented in writing within two (2) years after the alleged damages occurred, or within two (2) years after the injured Party should have known of such damage by exercise of reasonably prudent care to discover same, whichever occurs later. The claim shall set forth in full the nature, character, cause, and amount of the damage. 12 I I ARTICLE XVII. 17 . 1 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA. IN WITNESS WHEREOF, the Parties have caused these presents to be executed by their proper officers duly authorized in that behalf as of the day and year first above written. Seller: RELIANCE GAS MARKETING COMPANY By: ~c-_ Cj.l. _ q~ ~' _ \ Dan K. Kiniry , Title: General Manaaer Buyer: WITNESS: CITY OF CLEARWATER a municipal corporation of the State of Florida l1MIUf)(J l1jj~ By: .~ Title: ATTEST: ~ 71J . ~ ..-, .- . [~: ~. .p.~ eyn ia H'. .~OUi[j;:';:;;.Cily_<:::t"rk .../- .-/-- 13 .~ . I I TO: Cindy Goudeau - City Clerk /" ~ t J~^1 FROM: J. Terry Neenan - Gas Superintendent COPIES: SUBJECT: Interruptible Gas Agreement - Reliance Gas Mrketg Co DATE: February 5, 1992 Please find enclosed one original Interruptible Gas Contract between Reliance Gas Marketing Company and the City of Clearwater. We have retained one copy for our files. JTN:nt . ',--.--"'--'--.'- ![~G ~6Ul~ rn @ I CITY CLERK DEPT.