EXHIBIT 10.14
GAS SERVICE AGREEMENT
(Service for Firm Transportation)
between
K N WESTEX GAS SERVICES COMPANY
"COMPANY"
and
ENERGAS COMPANY,
a division of Atmos Energy Corporation
"CUSTOMER"
Dated: January 1, 1996
INDEX
SECTION TITLE PAGE
I Definitions.......................................... 1
II Customer Order....................................... 4
III Representation, Warranties Title and Indemnities..... 5
IV Force Majeure........................................ 6
V Nominations and Scheduling........................... 7
VI Quality of Gas....................................... 11
VII Term................................................. 11
VIII Remedies Upon Material Default....................... 12
IX Measurement and Pressure............................. 12
X ▇▇▇▇▇▇▇▇, Payments and Audit......................... 13
XI Communications....................................... 14
XII Miscellaneous........................................ 16
Signatures........................................... 18
Customer Order
GAS SERVICE AGREEMENT
(ENERGAS)
THIS AGREEMENT, effective on January 1, 1998, between K N WESTEX GAS SERVICES
COMPANY, (Company), and ENERGAS COMPANY, a division of Atmos Energy Corporation
(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, and other companies (Entity(ies)) in order to effectuate the services
which will performed under any Customer Order.
3. Customer understands and agrees that any services provided under this
Agreement 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, excluding federal holidays.
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 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. "HMDQ" 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, and/or MCQ,
as agreed to between Company and Customer, and described in a Customer Order.
11. "Underdelivered" means a quantity of gas delivered by the Company to
the Delivery Point(s) for the Customer's account that is in excess of the amount
of gas received by the Company from the Customer at the Receipt Point(s).
12. "Overdelivered" means a quantity of gas delivered by the Customer at
the Receipt Point(s) for the Customer's account that is in excess of the amount
of gas delivered by the Company for the Customer's account at the Delivery
Point(s).
13. "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.
14. "Transporter(s)" means any pipeline on which any gas under this
Agreement is transported.
15. For payment purposes, the quantity and measurement of gas delivered
and received hereunder, will be stated in Mcf. For balancing purposes the
quantity for gas will be stated in MMBtu. For measurement purposes, the quantity
of gas delivered and received hereunder, will be stated in Mcf and in MMBtu. The
MMBtu quantity will be 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) 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) Fahrenheit to fifty-nine and five tenths degrees
(59.5) Fahrenheit at a constant 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 degrees (60) Fahrenheit and a
referenced pressure base as set fort by the Measuring Party, wit 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 Measurement
Party; however, the referenced pressure base is always to be the same
for gas volume and Gross Heating Value.
16. "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.
17. "Imbalance" means the difference between the confirmed gas volumes
received at the Receipt Point(s) and the confirmed gas volumes delivered at the
Delivery Point(s).
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 Term, Type of Service, Rate, Receipt Point(s), Delivery
Point(s), Quantity and any other obligations of Customer and Company.
2. Customer. 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.
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 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.
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 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.
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 facsimile, 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 facsimile,
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 (defined below). The volumes will be allocated through the meters in
the following order (i) Imbalance Payback Quantity, (ii) Base Load Requirements
- Energas transportation, (iii) Base Load Requirements- Energas/KN Marketing,
L.P. sales, (iv) Swing Load Requirements- Energas/KN Marketing, LP. sales.
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 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. Rate of Flow. The gas to be received by Company's Transporter
hereunder shall be delivered by Customer at uniform hourly and 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. However, the Company reserves the right to reduce the
confirmed nomination at the Delivery Point(s) in the event Customer's nominated
gas at the Receipt Point(s) is not concurrently made available to Company or its
Transporter.
Furthermore, in addition to the notices required under Section V,
paragraph 2 above, Company and Customer shall immediately inform each other of
any changes to deliveries at the Delivery Point(s) and the Company reserves the
right to reduce the confirmed nomination at the Receipt Point(s) to a quantity
that is ratable to the then current volumes being delivered at the Delivery
Point(s), provided that the Customer can nominate volumes at the Receipt
Point(s) Imbalance Payback Quantity.
4. Imbalances. 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 less than or equal to a ten
percent (10%) variance with the confirmed quantities at the Receipt Point(s)
and/or Delivery Point(s) is an Imbalance Quantity". Company shall provide a
monthly statement to Customer showing the previous month's volume activity
confirmed at the Receipt Point(s) and the Delivery Point(s) and the resulting
Imbalance Quantity. Customer will then have until forty-five (45) days following
the receipt of such notification (Payback Period) to schedule with Company Fe
volumes necessary to reduce the Imbalance Quantity to zero (Imbalance Payback
Quantity).
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. Cash Out. In the event there remains an Imbalance Quantity after the
Payback Period has expired, Company will cash out the remaining imbalance from
that transaction month for Underdelivered imbalances as set forth in Section
6A), and for Overdelivered imbalances as set forth in Section 6B). If
Customer's confirmed quantities of gas at the Delivery Point(s) are in excess of
ten percent (10%) of the confirmed quantities of gas at the Receipt Point(s)
(Underdelivery Quantities), or Customer's confirmed quantities of gas at the
Delivery Point(s) are less than ninety percent (90%) of the confirmed quantities
of gas at the Receipt Point(s) (Overdelivery Quantities), Company will invoice
and Customer will pay a cash out invoice as follows:
A) for Underdelivered imbalances or Underdelivery quantities the Cash Out
invoice shall be equal to the Underdelivered quantity times the "Index Basket"
plus:
(a) for 1996-$0.6742 per MMBtu plus the Westar Transmission Company
(Westar) transportation rate of $0.2858 per Mcf.
(b) for 1997-$0.6342 per MMBtu plus the Westar transportation rate of
$0.2858 per Mcf.
(c) for 1998-$.6042 per MMBtu plus the Westar transportation rate of
$0.2858 per Mcf.
(d) for 1999 through 2001-$0.3042 per MMBtu plus the Westar
transportation rate of $0.2858 per Mcf.
(e) In the event the approved rate for 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 rate expressed
on a per unit of actual throughput basis for the capacity used to
provide the firm transportation service.
B) for Overdelivered imbalances or Overdelivery Quantities the cash out
invoice shall be equal to the Overdelivered quantity times ninety percent (90%)
of the "Index Basket".
The "Index Basket" referred to 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 ▇▇▇▇▇▇-▇▇▇▇, 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.
C) Should any of the indices or publications above become unavailable,
Customer and Company will use their best efforts to locate another source of
this information, or in the event that the information cannot be obtained
through another source, Customer and Company shall agree upon another index to
replace the index which has become unavailable.
7. 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.
8. 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 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
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 title Specification, 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 be 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 and provided, that this Agreement and any Customer Order will
continue in effect until the later of O the expiration of any outstanding
Customer Order, or vi) 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 and iii) to resolve any outstanding
Imbalance Quantities.
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 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
▇▇▇▇▇▇▇▇, 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, received and delivered by Company's Transporter hereunder
during the preceding Month, any imbalances, and the monies due therefor. Such
statements are to be rendered in accordance with this Agreement, and shall
include any 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 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 dab. 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, 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
▇▇▇# ▇▇▇ ▇▇ 076
Acct: # ▇▇▇-▇▇▇▇-▇▇▇
Notices and Correspondence: K N WESTEX GAS SERVICES COMPANY
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Transportation and Exchange
Telecopier No. (▇▇▇) ▇▇▇ ▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇ ▇▇▇▇
Customer:
Notices and Correspondence: ENERGAS COMPANY,
a division of Atmos Energy Corporation
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: Intrastate Gas Supply
Statements: ENERGAS COMPANY,
a division of Atmos Energy Corporation
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: Intrastate Gas Supply
Telecopier No. (▇▇▇)▇▇▇ ▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇ ▇▇▇▇
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.
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.
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 ▇▇▇▇▇▇, 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. Minimal Creditworthiness. Company or Customer shall not be required to
perform, or continue to perform under this Agreement or a Customer Order in the
event (i) either party applies or has applied for bankruptcy, or (ii) one party
fails, in the good faith opinion of the other party, to demonstrate minimal
creditworthiness.
9. 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 ii 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.
10. 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 agreements, and general
operating conditions of the various Entities at and between the Receipt Point(s)
and the Delivery Point(s).
11. 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.
12. 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.
CUSTOMER ORDER
COMPANY SHALL CAUSE THE FIRM TRANSPORTATION OF GAS AS FOLLOWS:
(BASE LOAD)
This Customer Order entered into on January 1 1996 between K N WESTEX SERVICES
COMPANY (Company) and ENERGAS COMPANY a division of Atmos Energy Corporation
(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
(Agreement).
Term: January 1 1996 through December 31 2001
Type of Service: Company shall arrange for firm transportation
service.
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 as of the date of the Agreement, for
resale through certain of Customer's distribution
facilities.
Maximum Daily Quantity:
A. For the period beginning January 1, 1996
through December 31, ▇▇▇▇ - ▇▇ ,▇▇▇ ▇▇▇▇▇ per day.
B. For the period beginning January 1, 1997
through December 31, ▇▇▇▇ - ▇▇, ▇▇▇ ▇▇▇▇▇ per day.
C. For the remainder of the Term under this
Customer Order 30,000 MMBtu per day
D. Such Maximum Daily Quantities will not apply
to confirmed Imbalance Payback Quantities
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 Energas Company (Energas) and
Westar Transmission Company (Westar), and volumes
transported hereunder shall be included in the
determination of the Maximum Contract Quantity of
the Energas and Westar Customer Order.
Rate (as delivered): $0.2858 per Mcf
Special Provisions: In the event the approved rate for 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 rate expressed
on a per unit of actual throughput basis for the
capacity used to provide the firm transportation
service.
COMPANY CUSTOMER
KN WESTEX SERVICES ENERGAS COMPANY
a division of Atmos Energy Corporation
By: By:
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Name: Name:
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Title: Title:
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Date: Date:
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