EX-10.11 2 a14-7691_1ex10d11.htm EX-10.11 OPERATIONAL AGENCY AGREEMENT
Exhibit 10.11
This Agency Agreement (the “Agreement”) is made and entered into this 2nd day of October, 2013, (the “Effective Date”) by and among Cubic Asset LLC (“Counterparty”), a Delaware limited liability company, and BP Energy Company (“BP”), a Delaware corporation. Counterparty and BP are sometimes referred to herein individually as a “Party” or collectively as the “Parties”.
ARTICLE I. DEFINITIONS AND INTERPRETATION
1.1 Definitions. The following terms when used herein shall have the meanings set forth below.
“Bankruptcy” means with respect to any Party, (i) the filing by such Party of a petition or the commencement of, or the acquiescence in the commencement of, a proceeding or cause of action under any bankruptcy, insolvency or similar law providing for the protection from its creditors, or a Party having any such proceeding or cause of action filed or commenced against it and such proceeding shall continue undismissed for fifteen (15) days or an order or decree approving or ordering any of the foregoing shall be entered; (ii) the seeking by such Party of the appointment of a trustee, receiver, liquidator, custodian or other similar official over it or any substantial part of its property, or consenting to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it; (iii) the making of an assignment or any general arrangement for the benefit of its creditors, (iv) such Party admitting its inability to pay its debts as they fall due, or (v) such Party becoming bankrupt or insolvent (however documented or evidenced), or (vi) such Party making an general assignment for the benefit of its creditors.
“Business Day” means all Days except Saturdays, Sundays or Federal Reserve Bank holidays.
“Commodity Charges” shall mean all commodity charges, ACA surcharges, GRI surcharges and other tariff charges assessed by a Pipeline pursuant to the approved tariff or governing documents of such Pipelines as a result of the actual transportation of Gas.
“Day” means a period of 24 consecutive hours, starting at 9:00 a.m. central prevailing time on any calendar day.
“Delivery Point(s)” shall mean the delivery point(s) specified in the Transportation Agreements.
“Demand Charges” shall mean any and all demand/reservation charges assessed by a Pipeline pursuant to the approved tariff of such Pipeline.
“Fuel” means the quantity of Gas consumed by a Pipeline in transporting Gas and includes any provision by such pipeline for lost and unaccounted for Gas, as determined in accordance with the approved tariff or governing documents of such Pipeline.
“Gas” means any mixture of hydrocarbons and non-combustible gases in a gaseous state consisting primarily of methane.
“Gas Supply Contract(s)” means the contract for the sale of Gas from Counterparty to BP; as such contracts are identified on Exhibit A.
“Gas Supply Obligations” means any Gas purchased by BP from the Counterparty under the Gas Supply Contract(s).
“Imbalance Charges” means any fees, penalties, costs or charges, (in cash or in kind) assessed by a Pipeline as a result of any differences between the actual measured quantities and scheduled quantities at a receipt or delivery point on any Day, whether as a result of a failure to satisfy the Pipeline’s balance and/or nomination requirements, a violation of a volumetric condition imposed by the Pipeline on any point, or any other conditions/restraints allowing for any such assessment under the applicable tariff or governing documents.
“Month” means the period beginning on the first Day of the calendar month and ending immediately prior to the commencement of the first Day of the next calendar month.
“Pipelines” means any one, as applicable, of the pipelines (or storage facilities), including local distribution companies (LDCs), identified in the applicable Transportation Agreement(s).
“Pipeline Capacity” means the capacity on the applicable Pipeline as contracted for by Counterparty pursuant to the applicable Transportation Agreement(s).
“Receipt Point(s)” shall mean the receipt point(s) identified in the Transportation Agreements where the Counterparty delivers Gas under the Gas Supply Contracts.
“Term” shall have the meaning as set out in Section 6.1 of this Agreement.
“Transportation Agreements” means a contract for transportation or storage service to be entered into by and between Counterparty and each Pipeline, the details of which are to be provided by Counterparty to BP in accordance with Section 3.2(h).
ARTICLE II. APPOINTMENT OF AGENT
2.4 Standard of Care. BP will perform its duties under this Agreement with the same standard of care that a similarly situated reasonably prudent party would perform the same duties for a similarly situated counterparty.
ARTICLE III. PERFORMANCE OBLIGATIONS
3.1 BP’s Specific Responsibilities. BP shall satisfy the following responsibilities under the terms of this Agreement:
(a) based on the timely instructions received from the Counterparty with respect to the Gas Supply Obligations, prepare and submit daily and monthly nominations, as applicable, to facilitate the transport of Counterparty’s Gas using the Pipeline Capacity from the Receipt Point(s), less Fuel, to the Delivery Point(s);
(b) on each Day, manage the applicable Pipeline Capacity on the Pipelines so as to minimize Imbalance Charges, if possible, related to the receipt and delivery of the Gas; and
(c) balance gas transportation activities in accordance with the election, if any, set forth in Section 3.3 of this Agreement, and provide daily, weekly or monthly reports of such activities as requested by the Counterparty.
(a) timely provide information to BP to facilitate BP’s nomination and scheduling obligations and other obligations under Sections 3.1 and 3.3 such that BP may timely nominate and schedule delivery of the Gas from the Receipt Point(s) to the Delivery Point(s);
(b) take all actions in a timely manner required to effectuate BP’s responsibilities, such as executing applicable agency agreements with the Pipelines, in order to enable BP to provide the services provided for under this Agreement;
(c) provide any relevant information, contracts or related documentation in respect of the Transportation Agreements as necessary;
(d) on each Day, take any action not expressly the responsibility of BP under this Agreement to receive or cause to be received at the applicable Receipt Point(s) under the Transportation Agreements, quantities of Gas in the aggregate equivalent to the timely instructions provided to BP regarding such quantity of Gas scheduled for delivery to BP under the Gas Supply Contracts at the Delivery Point(s) to ensure that Imbalances will not occur, such as updating and notifying BP of any operational changes or circumstances, if applicable, that may impact Counterparty’s Gas requirements as soon as possible;
(e) maintain in full force and effect during the Term, without suspension, the Gas Supply Contracts and the Transportation Agreements;
(f) communicate to BP any applicable Federal or state regulatory matters of which the Counterparty becomes aware which may impact the Gas Supply Contracts or the Transportation Agreements;
(g) hold title at all times during the Term of this Agreement to any Gas made the subject of BP’s agency services under this Agreement; and
(h) provide to BP a complete an accurate Exhibit A detailing the Transportation Agreements in writing on or before October 22nd, 2013.
1. Counterparty agrees that BP shall balance Counterparty’s Gas requirements on an individual basis and will not combine Counterparty’s daily Gas activities with those of any other BP counterparties.
2. When Counterparty has deficient Gas to meet the Minimum Baseload Amount requirement as set forth in the Transaction Confirmation pursuant to the Gas Supply Contract, the financial outcome of such deficient Gas shall be determined according to the Cover Standard as set forth in the Gas Supply Contract.
3. Economic gains and losses from Balancing Gas requirements shall be quantified for the Counterparty’s account and shall be invoiced to the Counterparty, with any payments being made by, or credit provided to, as the case may be, the Counterparty, with all of the foregoing being done in accordance with the terms of the Gas Supply Contract by and between BP and the Counterparty.
On or before the 10th Day of each Month, BP shall deliver to Counterparty a statement that sets out for the previous Month a detailed calculation showing the amounts owed under this Agreement whether for the reimbursement of transportation services paid to the Pipelines by BP on the Counterparty’s behalf or otherwise. On or before the later of the 20th Day of the Month or ten (10) Days subsequent to the date that the statement is delivered by BP, the net amount of each statement shall be paid by the Party owing such amount to the Party owed such amount. In the event that the payment date is not a Business Day, the payment shall be due on the next Business Day. If the invoiced party disputes an invoice in good faith, it shall nevertheless submit any undisputed portion of the invoice to the other Party. Provided further, that the disputing Party must, prior to disputing any invoice, provide supporting documentation for the dispute in accordance with industry practice to the other Party, The Parties shall attempt to resolve the dispute, and in the event they cannot, the Parties may exercise any and all rights and remedies available to such Party under this Agreement, at law or in equity. In addition to any such rights and remedies, if the disputing Party does not prevail in any subsequent litigation or proceeding with respect to such dispute, it shall also owe the other Party interest at a rate equal to the lower of (i) the then-effective prime rate of interest published under “Money Rates” by The Wall Street Journal, plus two percent (2%) per annum, or (ii) the maximum applicable interest rate allowed by law. All payments or reconciliations under this Agreement shall be made in United States currency. Payments under this Agreement shall be effected by wire transfer remittance as set forth in the Gas Supply Contract.
harmless as to any costs or liabilities claimed against or incurred by such other Party in connection with claims for Taxes made by third parties or entities, including governmental entities, arising out of the activities made the subject of this Agreement to the extent that such costs or liabilities arise from or relate to all or any portion of the obligations attributable to such Party. References to “costs” in connection with this section shall include all reasonable and necessary attorneys’ fees and expenses, consultants’ fees, travel expenses, and court costs, including costs incurred to enforce the indemnity obligations.
ARTICLE VIII. DEFAULT AND REMEDIES
(a) breach of any obligation under this Agreement (save and except for any breach by Counterparty of Sections 3.2(e) which is addressed hereinafter in subsections (c)-(f) or any breach by BP addressed in Section 3.4), if such breach is not cured by the Party in breach within ten (10) Business Days after written notice of such breach from the non-defaulting Party;
(b) the Bankruptcy of a Party;
(c) Counterparty allows a Gas Supply Contract or a Transportation Agreement to be suspended, for any reason other than force majeure, in whole or in part, for a period of greater than five (5) consecutive Days;
(d) Counterparty allows any Gas Supply Contract with BP to be terminated without having a replacement contract with BP for substantially the same quantity on the same material terms and conditions within three (3) Business Days after the original Gas Supply Contract with BP was terminated; or
(e) Counterparty allows any of the Transportation Agreements to be terminated without having a replacement agreement on substantially the same material terms and conditions within three (3) Business Days after the original Transportation Agreement was terminated, provided however that BP may suspend performance on written notice at any time following termination of the original Transportation Agreement, but agrees to resume performance if a new Transportation Agreement on substantially the same material terms and conditions is executed within three (3) Business Days after the original Transportation Agreement was terminated.
terminate this Agreement within twenty (20) Business Days of the Event of Default or recommence performance. During any time that BP suspends performance in accordance with this Section, it shall have no obligation to perform any services of any nature under this Agreement, until such time as the Counterparty has remedied the breach and provided notice thereof to BP. During any suspension hereunder, Counterparty may notify the Pipelines under the Transportation Agreements that a third party other than BP will handle daily nominations and scheduling of Gas until further notice. In the event BP resumes performance either as a result of not electing to terminate this Agreement or by informing the Counterparty in writing that it rescinds its suspension of performance, Counterparty shall take all necessary steps with the Pipelines under the Transportation Agreements to facilitate BP’s performance under this Agreement. Termination of this Agreement shall not preclude or limit the non-defaulting Party from pursuing any other remedy available at law or in equity in respect of the Event of Default under this Agreement, including the pursuit of damages.
9.5 Governing Law and Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Texas, without regard to its conflicts of laws rules or principles. The Parties hereby submit to the jurisdiction and venue of the courts in the State of Texas for purposes of any litigation related to the Agreement.
If to Counterparty: |
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If to BP: | ||
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Cubic Asset LLC 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 00000 |
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BP Energy Company 000 Xxxxxx Xxx Xxxxxxx, XX 00000 Attention: Senior Attorney – Gas | ||
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Phone: |
000 000-0000 |
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Phone: |
000 000 0000 |
Fax: |
000 000-0000 |
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Fax: |
000 000 0000 |
All notices and communications required or permitted to be delivered hereunder shall be in writing and shall be considered as properly delivered (i) when delivered in person, (ii) on the next delivery Day after placed with an overnight delivery service (including Federal Express, Xxxxx, DHL, Air Borne and other similar overnight delivery services) and designated for next-Day service with proof of delivery, or (iii) if delivered by facsimile, upon the sending Party’s transmission of such notice or communication with proof of successful transmission, provided that the Day on which such facsimile is transmitted is a Business Day. If the Day on which the facsimile is transmitted is not a Business Day or the transmission is made after 5:00 p.m. on a Business Day at the recipient’s location, then such facsimile shall be deemed to have been delivered and received on the next following Business Day. Any Party shall have the right to change its address for notices hereunder to any other location within the continental United States or Canada by giving thirty (30) Days notice to the other Parties in the manner set forth hereinabove.
9.7 Release and Indemnity. BP agrees to fully indemnify, defend and hold Counterparty harmless, including its respective directors, officers, employees, agents and representatives, from and against any and all claims, causes of action, disputes, demands, threats of litigation or arbitration, costs, expenses, damages, injuries, obligations, liabilities, losses, liens, encumbrances, judgments, settlements, interests, awards of every kind and character without limitation, including any and all reasonable attorney’s fees and expenses as well as costs of court or arbitration, arising from, under or as a result of claims related to title, personal injury (including death), and property damage, whether created by law, contract, strict liability, tort, judgment, voluntary settlement or in equity (collectively all of the foregoing being “Claims”), made by all persons or entities to the extent that such Claims are attributable to the negligence or willful misconduct of BP in performing its duties under this Agreement, unless BP is being indemnified for such Claims by Counterparty under this Agreement. Similarly, Counterparty agrees to fully indemnify, defend and hold BP harmless, including its respective directors, officers, employees, agents and representatives, from and against any and all Claims made by all persons or entities to the extent that such Claims are related in any manner to the Transportation
Agreements or the Gas Supply Contracts, unless the Counterparty is being indemnified for such Claims by BP under this Agreement.
CUBIC ASSET LLC |
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BP ENERGY COMPANY | ||
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By: |
/s/ Xxxxxx X. Xxxxxx, III |
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By: |
/s/ Xxxx X. Xxxxxxx |
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Name: |
Xxxxxx X. Xxxxxx, III |
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Name: |
Xxxx X. Xxxxxxx |
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Title: |
President |
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Title: |
Vice President |
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Date: |
October 2, 2013 |
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Date: |
October 2, 2013 |
[Signature page: Operational Agency Agreement]
Exhibit A
Gas Supply Contract(s)
1. ISDA Master Agreement with ISDA North American Gas Annex as Part 6 to the Schedule thereto dated as of September 30, 2013 between BP and Counterparty
Transportation Agreements