Natural Gas Facilities Agreement
Exhibit 99.1
STATE OF GEORGIA
COUNTY OF XXXXXXXX
COUNTY OF XXXXXXXX
THIS AGREEMENT, made this 23 day of January, 2007, by and between the CITY OF
CAMILLA, a municipal corporation of the State of Georgia located in Xxxxxxxx County, Georgia,
herein referred to as “City”, and FIRST UNITED ETHANOL, LLC, a Georgia limited liability company,
herein referred to as “FUEL”.
WITNESSETH THAT:
WHEREAS, FUEL and the City entered into a certain Natural Gas Supply and Capacity Agreement,
dated January 23 , 2007, providing for certain natural gas services; and
WHEREAS, the City owns and operates a natural gas distribution system for the purpose of providing
natural gas service to its citizens and customers; and
WHEREAS, FUEL is constructing and will operate a corn-based ethanol manufacturing facility in
Xxxxxxxx County, Georgia (the “Plant”) and desires to purchase natural gas from the City; and
WHEREAS, the City is a member of the Municipal Gas Authority of Georgia (“MGAG”); and
WHEREAS, the City holds certain natural gas pipeline transportation rights with Southern Natural
Gas Company (“Southern”); and
WHEREAS, FUEL has requested that the City build a new high pressure gas main to serve the Plant;
and
WHEREAS, City estimates the cost of said high pressure gas main to be Two Million Eight Hundred and
Eighteen Thousand ($2,818,000) Dollars, itemized as follows (collectively, the “Facilities”):
Gas Line Install and Labor: |
$ | 1,978,000 | ||
Regulators, Meters and Cuts: |
180,000 | |||
New Meter Station: |
300,000 | |||
Odorant and Cathodic Systems: |
40,000 | |||
3” Line Relocation: |
320,000 | |||
Total Costs (Estimated): |
$ | 2,818,000; | ||
WHEREAS, the City intends to enter into a lease purchase arrangement with MGAG (the “Lease”) to
finance the estimated $2,818,000 cost of acquisition, construction and installation of the
Facilities; and
WHEREAS, FUEL has agreed to pay the cost of the acquisition, construction and installation of the
Facilities at the times and in the amounts hereinafter specified in this Agreement.
NOW THEREFORE, in the consideration of the premises and mutual covenants hereinafter expressed, the
parties do contract and agree as follows:
| 1. | The City agrees to construct its new gas main from Southern’s pipeline to the
Plant, including all necessary meters and regulators. |
| 2. | FUEL agrees to pay the City an additional facilities charge each month without
regard to its level of gas consumption and without regard to FUEL’s continued operation
or use of the Plant, as hereinafter provided. The additional facilities charge will be
based upon the proceeds of the assignment by MGAG to a commercial bank of the right to
receive payments under the Lease and shall be determined upon the closing of the Lease.
It is the intent of the parties that FUEL’S additional facilities charge shall be
equal to the rental payments due under the Lease. It is estimated that the rental
payments due under the Lease will be $33,900 per month (the “Estimated Rental
Payments”). |
| 3. | FUEL agrees to pay to the City the additional facilities charge equal to the
amount of the Estimated Rental Payments, commencing March 1, 2007, and continuing month
to month thereafter for 120 months or until the closing of the Lease. Upon the closing
of the Lease, the additional facilities charge shall be recalculated by the City to
account for the actual rental payments due under the Lease. After such recalculation,
FUEL agrees to pay to the City such recalculated additional facilities charges,
commencing upon the closing of the Lease, and continuing month to month thereafter for
the term of the Lease. Upon the closing of the Lease, the City shall cause a schedule
of such recalculated additional facilities charges to be prepared and delivered to
FUEL. |
||
FUEL shall pay the City such additional facilities charges in arrears in equal
semi-monthly installments on or before the 1st and 15th day of
each month. [FUEL shall execute such authorization as may be required to allow the
City to draft its bank account within one (1) day after the 1st and
15th day of each month. If FUEL fails to make payment as herein
provided, a late penalty of two percent (2%) of the invoice amount will be assessed.
Interest at the then effective prime interest rate plus one percent (1%), as
published in the Wall Street Journal, shall accrue from the due date until the date
of payment not to exceed the maximum rate of interest permitted by applicable law.
In addition, if FUEL is delinquent in payment more than twice in any twelve (12)
month period the City may require a deposit, letter of credit or pre-payment.] |
| 4. | Should FUEL discontinue operation or use of the Plant for any reason prior to
the payment of the last additional facilities charge due hereunder, other than due to
the continued failure by the City to satisfy its obligation to construct the Facilities
pursuant to this Agreement, FUEL shall continue paying the additional facilities
charges due hereunder on a semi-monthly basis under the terms of this Agreement. This
Agreement shall terminate and FUEL will not be required to pay the City any prospective
additional facilities charge if the Facilities have not been acquired, constructed and
installed by October 1, 2008. |
| 5. | FUEL shall have the right, anytime during the lease term to make a lump sum
payment equal to the then present value of the uncollected remaining additional
facilities charges as calculated by the City, in its sole discretion, plus any early
payment or other penalty applicable under the lease. The City agrees that it shall
make available to FUEL any bids received for the financing of the facilities
construction and consult with FUEL as to the selection of the bid, specifically as to
bids with or without prepayment penalties. |
| 6. | The rates, fees, or other charges provided for hereunder may be adjusted with
respect to inflationary or deflationary factors, if any, affecting the provision of
service hereunder upon the agreement of the parties hereto. |
| 7. | The City of Camilla’s obligations hereunder are subject to the following
limitations: if, by reason of force majeure (defined hereinbelow), the City of Camilla
shall be unable in whole or in part to carry out any agreement on its part herein
contained, the City of Camilla shall not be deemed in default during the continuance of
such inability. The term “force majeure” as employed herein shall mean acts of God;
acts of the public enemy; war; catastrophe; strikes, lockouts or other industrial
disturbances; earthquakes; fires; storms; floods; washouts; other natural disasters;
civil disturbances; explosions; and other extraordinary events not within the control
of the parties that directly affects the ability of the claiming party to perform its
obligations hereunder, or any emergency creating conditions under which the City of
Camilla’s compliance with the contract would become impossible or create a substantial
financial burden upon the City of Camilla or its taxpayers. Neither party shall invoke
the provisions of force majeure for the purpose of attempting to avoid the obligations
entered into in good faith between the parties, for the purpose of gaining economic
benefit not contemplated by the parties or mitigating economic detriment not
specifically addressed herein. Both parties shall make reasonable efforts to avoid the
adverse impact of a force majeure and to resolve the event or occurrence once it has
occurred in order to resume performance. Parties will keep each other informed during
this period. |
| 8. | The City shall operate and maintain the Facilities in accordance with sound
industry standards. FUEL shall indemnify and hold the City harmless for any damages
and claims in connection with said maintenance and operation so long as the City
operates and maintains the system under sound industry standards. |
| 9. | This Agreement shall become effective as of the date of execution. |
| 10. |
| 11. | It is agreed that the various terms of this Agreement are severable and in the
event that any portion or portions of this Agreement shall be deemed to be unlawful or
unenforceable, the remainder of the Agreement shall be unaffected thereby and shall
remain in full force and effect. |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed in their respective
names and on their behalves by their proper officers or officials thereunto duly authorized as of
the day and year written below.
| CITY OF CAMILLA | ||||
| By: | /s/ Xxxxxx X. Xxxxxx, Xx. | |||
| Xxxxxx X. Xxxxxx, Xx. Mayor | ||||
| Attest: | /s/ Xxxxx X. Xxxxx | |||
| Xxxxx X. Xxxxx, City Clerk | ||||
| FIRST UNITED ETHANOL, LLC | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxx X Xxxxx, CEO | ||||
| Attest: | /s/ Xxxxxx Xxxxxx | |||
