Exhibit 10.7
GAS SERVICE AGREEMENT
(Service for Firm Transportation)
between
WESTAR TRANSMISSION COMPANY
"COMPANY"
and
ENERMART TRUST
(Enermart Irrigation)
"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 9
VII Term 10
VIII Remedies Upon Material Default 10
IX Measurement and Pressure 11
X ▇▇▇▇▇▇▇▇, Payments and Audit 12
XI Communications 13
XII Miscellaneous 14
Signatures 17
Customer Order 18
GAS SERVICE AGREEMENT
(ENERMART-IRRIGATION)
THIS AGREEMENT, effective on January 1, 1996, between WESTAR TRANSMISSION
COMPANY, (Company), and ENERMART 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 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.
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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. "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.
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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. "Receipt Point(s)" means the inlet flange of Company's or
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 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 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 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
3
degrees (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.
15. "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
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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. 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.
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
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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 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
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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
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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 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 only for 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
8
nomination at the Receipt Point(s) to a quantity that is ratable to the then
current volumes being delivered at the Delivery Point(s).
4. Imbalances. In recognition that there may be an imbalance from time
to time the parties agree that prior to deliveries of gas hereunder, Company and
Customer shall agree on the balancing provisions of the transportation of gas
delivered hereunder at least sixty (60) days prior to January 1, 1999. The
parties shall first attempt to negotiate a "balancing service" to be provided by
the Company as mutually agreed by both parties. If the parties are unable to
agree on a "balancing service" provided by the Company, then Customer or
Customer's agent shall provide the "balancing service", in which case such
"balancing service" and all balancing of gas transported under a Customer Order
shall in accordance with the terms mutually agreed to by Company and Customer or
Customer's agent. In the event the parties are unable to agree on the terms for
balancing then, all balancing of gas transported under a Customer Order shall be
subject to the applicable balancing service rules of the Entity - Westar
Transmission Company as may be filed and in effect with a Regulatory Agency, or
in accordance with the filed compliance statement under Section 311 (a) (2) of
the Natural Gas Policy Act of 1978 ("NGPA") and the applicable regulations of
the Federal Energy Regulatory Commission. Nothing stated herein shall prevent
Customer from challenging or seeking to modify any such balancing service rules
filed with any such regulatory agency.
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
9
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 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 Specification, then Company may refuse to accept the receipt
of the gas and will notify Customer. Customer shall make a diligent effort to
10
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 (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 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
11
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
12
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 or its
Transporter at the pressure existing from time-to-time in Company's or
Transporter's pipeline. Company or 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 and 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
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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 WESTAR TRANSMISSION COMPANY
Norwest Banks Colorado, N.A.
Denver, CO
▇▇▇# ▇▇▇ ▇▇ 076
Acct.: # ▇▇▇-▇▇▇▇-▇▇▇
Notices and Correspondence:
WESTAR TRANSMISSION COMPANY
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: Transportation and Exchange
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Customer:
Notices and Correspondence:
ENERMART TRUST
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: Intrastate Gas Supply
Statements: ENERMART TRUST,
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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.
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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.
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,
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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, 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.
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 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.
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
17
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.
COMPANY CUSTOMER
WESTAR TRANSMISSION COMPANY ENERMART TRUST, 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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CUSTOMER ORDER
COMPANY SHALL CAUSE THE TRANSPORTATION OF GAS AS FOLLOWS:
(ENERMART-IRRIGATION)
This Customer Order entered into on January 1, 1996 between WESTAR TRANSMISSION
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: Firm transportation service as required under the Gas
Sales Agreement dated March 1, 1996 between K N Marketing , L.P.
and ENERMART TRUST
Receipt Point(s): Interconnection facilities with Westar Transmission
Company, "Westar" and other mutually agreed to points on Red
River Pipeline, L.P. and AOG Gas Transmission Company, L.P.,
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 irrigation
needs. Not to exceed 225,000 MMBtu per day.
Maximum Contract Quantity: Requirements to supply Customer's irrigation
needs as set forth in the Gas Sales Agreement effective March 1,
1996 between K N Marketing, L.P. and ENERMART TRUST
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 rate expressed on a per unit of actual throughput
basis for the capacity used to provide the firm transportation
service.
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COMPANY CUSTOMER
WESTAR TRANSMISSION COMPANY ENERMART TRUST
By: By:
Name: Name:
Title: Title:
Date: Date:
20