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Exhibit 10.7
GAS SERVICES AGREEMENT (NITCO)
THIS AGREEMENT, entered into this 3rd day of April, 1995, by and
between Northern Indiana Trading Co. ("NITCO"), an Indiana corporation, and
Steel Dynamics, Inc. ("SDI"), an Indiana corporation, WITNESSES that:
WHEREAS, SDI intends to construct a steel manufacturing facility near
Butler, Indiana ("SDI Facility") and needs natural gas service in connection
with that facility, which Northern Indiana Fuel & Light Company, Inc. ("NIFL") ,
Crossroads Pipeline Company ("Crossroads") and NITCO, all affiliates of NIPSCO
Industries, Inc., an Indiana corporation, collectively are able to provide; and
WHEREAS, the parties desire to expand industry and create additional
jobs in NIFL's service territory, and the SDI Facility represents an opportunity
to do so;
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the parties agree that:
ARTICLE I
TERM OF CONTRACT
This Agreement shall be effective on the first day of the month
following the month in which the Indiana Utility Regulatory Commission ("IURC")
approves the NIFL economic development interruptible gas transportation rate
schedule attached hereto as Exhibit A ("NIFL Rate") and shall terminate on
December 31, 2000 ("Term"). At the end of the Term, it shall be extended unless
a party hereto gives written notice to the other
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party that the Agreement will not be renewed, which notice must be provided at
least six (6) months prior to the end of the Term and any extension thereof. If
such notice is not provided at least six (6) months prior to the end of the
Term, the Term shall be extended until the last day of the month which is at
least six (6) months after the provision of written notice by either party to
the other parties that this Agreement will be terminated.
If the IURC does not approve the NIFL Rate, as submitted. this
Agreement, shall be terminable by either SDI or NITCO, upon thirty (30) days
written notice to the other party. A failure to timely terminate this Agreement
by either party shall result in this Agreement remaining in full force and
effect.
ARTICLE II
NATURAL GAS SERVICE
NITCO will provide services ancillary to interruptible gas
transportation service to be provided by Crossroads and NIFL, under separate
agreements with SDI ("Crossroads and NIFL Agreements") for the SDI Facility, on
the terms and conditions hereinafter described (all such services herein
referred to collectively as "Natural Gas Service"). Such transportation service
provided by Crossroads will be interruptible transportation of SDI's gas from
the point at which it is delivered to the Crossroads system to the Crossroads
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interconnection with the NIFL system near Butler, Indiana ("NIFL Connection").
The transportation service provided by NIFL will be from the NIFL Connection to
SDI's on-site regulating station. Such transportation service shall be in
accordance with the nominating procedures described in Exhibit B hereto. NITCO
shall also make arrangements for balancing service in connection with SDI gas,
as described in Exhibit B. On and after January 1, 1996, SDI's minimum average
volume of Natural Gas Service at the SDI Facility shall be one thousand five
hundred dekatherms per day (1,500 Dkt/d). Prior to that date SDI shall endeavor
to meet such minimum, but shall not be required to do so, because of start-up
conditions. At SDI's request, NITCO will act as SDI's agent for the purchase of
natural gas to be owned by SDI and transported to the SDI Facility.
ARTICLE III
RATES AND CHARGES FOR GAS SERVICE
1. For the Natural Gas Service rendered during the first five (5) years
of the Term, SDI shall pay to NITCO a monthly service fee of twenty cents per
dekatherm ($.20/Dth) less any amounts paid directly by SDI under the Crossroads
and NIFL Agreements for the billing month, on a per dekatherm basis, for all
quantities of SDI's gas delivered by NIFL to the SDI Facility. Such fee shall be
in full payment for all service rendered by NITCO except for the charges set
forth in Exhibit B hereto.
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2. Penalties and Charges Relating to Interstate Pipeline and Other
Suppliers. To the extent that SDI actions or inaction cause NITCO to be assessed
any penalties and/or charges by or related to interstate pipeline suppliers or
other suppliers of gas or services, SDI shall reimburse NITCO for such penalties
and charges upon being provided written documentation summarizing the actions
causing the penalties or charges. To the extent that actions or inaction of
NITCO cause SDI to be assessed any penalties and/or charges by or related to
interstate pipeline suppliers or other suppliers of gas or services, NITCO shall
reimburse SDI for such penalties and charges upon being provided written
documentation summarizing the actions causing the penalties or charges.
ARTICLE IV
BILLING
NITCO will provide to SDI, on or before the seventh (7th) day of every
calendar month, by facsimile transmission, followed by the mailing of a copy, a
detailed invoice for all services rendered under this Agreement. Each month SDI
shall issue and send to NITCO payment of these invoices on SDI's "25th of the
month check run" for the prior month's service. In the absence of written notice
otherwise, these invoices and payments shall be sent to:
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INVOICES PAYMENTS
SDI NITCO
C/O Accounts Payable C/O H.P. Xxxxxx
0000 Xxxxxx Xxxx 00 X.X. Xxx 000
Xxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
Interest on delinquent and unpaid amounts shall accrue at the published
prime commercial lending rate established from time to time by National City
Bank, Indiana, or its successor ("Prime Rate"), and is payable from the date due
until the date upon which payment is made. Interest on any overpaid amounts
shall accrue at the Prime Rate and is payable from the date paid by SDI until
the date repaid by NITCO.
In the event SDI fails to make timely and full payment of any invoice
rendered by NITCO, and except as provided in the next paragraph, NITCO may
terminate or suspend the provision of further Natural Gas Service. Such
suspension or termination shall be without prejudice to any other rights any
party may have with respect to its provision of Natural Gas Service to SDI. Such
termination or suspension may be undertaken only if SDI has been given ten (10)
days written notice, via telefax or hand delivery, of the intent by NITCO to
terminate or suspend the provision of Natural Gas Service.
Notwithstanding the foregoing paragraph, in the event SDI wishes to
contest a portion of a billed amount, SDI shall pay the portion not contested
and interest shall accrue at the rate specified in this ARTICLE on the unpaid
portion while resolution of contested amounts is pending. However, the
provisions of the
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preceding sentence shall not be applicable where SDI has failed to make timely
payment of an invoice and has failed to provide adequate assurances, including
advance payments if requested, of SDI's continued solvency.
Upon providing NITCO with reasonable prior notification, during regular
business hours and on regular business days, SDI, or its agent, shall have the
right to examine relevant books, records, contracts and charts of NITCO to the
extent reasonably necessary to verify the accuracy of any invoice, statement,
test, chart, billing or computation made under or pursuant to any of the
provisions of this Agreement.
ARTICLE V
NOTICES
Except for matters pertaining to xxxxxxxx provided for in ARTICLE V
of this Agreement, all notices and other communications shall be provided to the
following:
SDI NITCO
Xxxxx Xxxxxxxxxxxx H.P. Xxxxxx
Vice President X.X. Xxx 000
0000 Xxxxxx Xxxx 00 Xxxxxx, XX 00000
Xxxxxx, Xxxxxxx 00000
A party may change the addresses stated above, as well as the recipient
of notices, by providing written notification of that change to the other party.
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ARTICLE VI
FORCE MAJEURE
No party hereto shall be liable to the other for any act, omission or
circumstance resulting from events beyond their reasonable control. Each party
will use reasonable efforts and diligence to remove the cause of a force majeure
condition and resume delivery or utilization of Natural Gas Service previously
suspended. Natural Gas Service withheld from SDI during a force majeure
condition will recommence upon the availability of such service and the end of
such circumstances. No force majeure condition will relieve SDI from paying any
invoice relating to Natural Gas Service previously rendered.
The term force majeure as used herein shall mean any act, omission or
circumstance occasioned by or as a consequence of any acts of God, acts of the
public enemy, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, washouts, vandalism, arrests and
restraints of rulers and peoples, any strike or work stoppage, civil
disturbances, explosions, breakage or accident to machinery or lines of pipe,
telecommunications failures or malfunctions, or computer failures or
malfunctions, which frustrates the intent of the parties hereto and which has
been resisted in good faith by all reasonable legal means, and any other cause,
whether of the kind enumerated or otherwise, not reasonably within the control
of the party claiming suspension
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and which by the exercise of due diligence such party is unable to prevent or
overcome. It is understood and agreed that the settlement of strikes or lockouts
shall be entirely within the discretion of the party having the difficulty, and
that the above requirement that any event of 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
deemed to be inadvisable or inappropriate in the discretion of the party having
the difficulty.
ARTICLE VII
ASSIGNMENT
The benefits and obligations of this Agreement shall inure to and be
binding upon successors and assigns, as the cause may be, of the original
parties hereto, respectively, for the full term thereof; provided that no
assignment thereof shall be made by either party without first obtaining the
other party's prior written consent, which consent will not be unreasonably
withheld. Unless expressly agreed to, no partial assignment of the Agreement can
be made.
ARTICLE VIII
APPLICABLE LAW AND REGULATION
This Agreement shall be governed by the laws of the State of Indiana.
Natural Gas Service under this Agreement shall be subject to the applicable
rules, regulations, orders and
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standards of service for gas public utilities of the IURC and the Federal Energy
Regulatory Commission, as the same may be in effect from time to time, and all
applicable state and federal laws, administrative orders, and regulations,
including 170 IAC 5-1-22, as the same may be in effect from time.
ARTICLE IX
LIMITATION OF REMEDIES AND ACTIONS
Any claim pertaining to this Agreement must be commenced and litigated
or otherwise resolved in Indiana. An action for breach of this Agreement must be
commenced within one (1) year after the cause of action has accrued. The
exclusive remedy for wrongful nondelivery of gas by NITCO, in the absence of
NITCO's wilful misconduct or gross negligence, is, at NITCO's election, (a)
actual damages caused by the nondelivery which are economic and incidental and
subject to establishment by clear and convincing evidence, or (b) the price
value of the gas which was not delivered, or (c) the cost for NITCO to deliver a
replacement quantity of such gas. No consequential damages arising from a breach
of this Agreement shall be recoverable, in the absence of NITCO's wilful
misconduct or gross negligence. The parties agree this exclusion of
consequential damages is not unconscionable.
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ARTICLE X
INDEMNIFICATION
SDI agrees to indemnify, defend and hold harmless NITCO from all loss,
damage or expense arising out of or in any way connected with the claims of any
person, except claims for injuries and/or death of employees of NITCO arising
out of and in the course of their employment, for injuries to person or property
or for injury to or death of any person or persons due to the sole negligence of
NITCO, in the event that such loss, damage, injury or death shall be proximately
caused by any act or omission, or any breach of any statutory duty of SDI, or
its employees or agents, occurring in the performance of this Agreement.
NITCO agrees to indemnify, defend and hold harmless SDI from all loss,
damage or expense arising out of or in any way connected with the claims of any
person, except claims for injuries and/or death of employees of SDI arising out
of and in the course of their employment with SDI, for injuries to person or
property occasioned by the provision of Natural Gas Service, except for any
liability for loss or damage to property or for injury or death of any person or
persons due to SDI's sole negligence, in the event that such loss, damage,
injury or death shall be proximately caused by any act or omission, or any
breach of any statutory duty of NITCO, or its employees or agents, occurring in
the performance of this Agreement.
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In the event any loss, damage, expense, or claim occurs for which SDI
and NITCO are ultimately each found to have been at fault in proximately causing
the loss, damage, expense, or claim, NITCO and SDI shall both bear their own
separate costs of defense and the proportionate share of such liability.
This ARTICLE is severable from the other portions of this Agreement. A
breach of this ARTICLE is not a breach of the entire Agreement. If this ARTICLE
is found to be unenforceable, the remaining portions of this Agreement shall
remain in force and effect.
ARTICLE XI
FAILURE TO PERFORM
Except as otherwise provided for herein, if any party fails to perform
any of the covenants or obligations imposed upon it under this Agreement
(except where such failure is excused under other provisions hereof), then in
such event a party not in default may, at its option (without waiving any other
remedy for breach thereof), notify in writing the party in default, stating
specifically the nature of the default and declaring it to be the intention of
the party giving such notice to cancel the Agreement if the default is not cured
as hereinafter provided. Cancellation under this ARTICLE shall require a
substantial and material default. The party in default will have thirty (30)
days after receipt of the aforesaid notice is which to remedy such default as
stated in the notice, and if within said
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thirty (30) days the party in default does so remove said cause or causes and
fully indemnifies the party not in default for any and all consequences
resulting from that default, then this Agreement shall remain in force and
effect.
ARTICLE XII
WARRANTY OF TITLE
Each party warrants to the other party that it will, at the time and
place of delivery of gas asserted to be owned by it under this Agreement, have
good title or good right to all volumes delivered on its behalf and further
warrants for itself, its successors and assigns that such gas shall be free and
clear of all liens, encumbrances, and claims of those not parties hereto; and
that it will indemnify and save the other party harmless for all suits, actions,
debts, accounts, damages, costs, losses or expenses (including reasonable
attorney's fees) arising from or out of the adverse claims arising from or out
of the same. This paragraph shall not apply to gas redelivered by NIFL to SDI,
where NITCO or an affiliate took title as agent for or otherwise on behalf of
SDI.
ARTICLE XIII
DISCLAIMER OF WARRANTIES
Except as provided in ARTICLE XII, NIPL disclaims and excludes all
warranties implied and express, including all warranties of fitness for a
particular purpose and all warranties
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of merchantability. SDI agrees its attention has been drawn to this exclusion of
warranties.
ARTICLE XIV
SEVERABILITY
If any provision hereof shall be found to be inoperative or in
violation of any law or regulation, only that provision shall be deleted from
the Agreement, and the remainder of the Agreement shall not be affected.
ARTICLE XV
ENTIRE AGREEMENT
This Agreement constitutes the entire understanding of NIFL, Crossroads
and NITCO and SDI with respect to the subject matter hereof and supersedes any
and all prior oral and written agreements. No modification or amendment of this
Agreement is binding on the parties unless in writing and executed by duly
authorized representatives of the parties.
ARTICLE XVI
WAIVER
No provision of this Agreement is waived and no breach consented to,
unless the waiver or consent is in writing and signed by the waiving or
consenting party. A waiver of or consent to a provision of breach is not a
waiver of, consent to or excuse for a different or subsequent breach. Failure to
enforce an obligation hereunder is not a waiver.
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ARTICLE XVII
AUTHORITY
Each party has full power and authority to enter into and perform this
Agreement, and the person signing this Agreement on behalf of each has been
properly authorized and empowered to enter into this Agreement. Each party
further acknowledges that it has read this Agreement, understands it and agrees
to be bound by it.
This Agreement has been executed in duplicate by the duly authorized
representatives of the Parties.
STEEL DYNAMICS, INC.
Date: 04/03/95 By: /s/ Xxxxx Xxxxxxxxxxxx
------------------------- ------------------------------------
NORTHERN INDIANA TRADING COMPANY, INC.
Date: 4/5/95 By: /s/ H.P. Xxxxxx, Jr.
------------------------- ------------------------------------
H.P. Xxxxxx
President
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Exhibit A
NORTHERN INDIANA FUEL & LIGHT CO., INC. Sheet No. ______
ECONOMIC DEVELOPMENT INTERRUPTIBLE GAS TRANSPORTATION RATE
Rate No. 9T
AVAILABILITY
Available to all customers who contract with the Company for gas transportation
service for a minimum of five (5) years and, together with any other customers
located on the site described below, for a minimum average aggregate volume of
not less than 15,000 therm's per day. Customers on this rate must
1. have an alternate capability;
2. be located on the Company's transmission main connecting to, and
running south from, the main east-west pipeline of Crossroads Pipeline
Company ("Crossroads Pipeline") to a tract bordered on the north by
County Road 42, on the east by County Road 59, on the west by County
Road 55 and on the south by the Xxx Xxxxx Ditch;
3. have made arrangements by which volumes of gas owned by it can be
delivered into the Company's transmission system or the Crossroads
Pipeline; and
4. require no additional facilities from the Company for the Company to
provide the transportation service to the customer .
CHARACTER OF SERVICE
Gas service purchased hereunder shall be interruptible and shall be subject to
complete or partial curtailment, at the option of the Company and upon the
giving of notice to the customer.
RATE
Facilities charge $200.00 per meter
Usage charge $0.0425 Dth
MINIMUM CHARGE
The minimum monthly charge shall be the facilities charge.
TERMS OF PAYMENT
All bills on this rate schedule shall be rendered and due monthly.
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RATE ADJUSTMENT
This rate shall be subject to any adjustment occasioned by "take-or-pay" or FERC
Order 636 transition costs passed through to the Company by other pipelines.
RULES AND REGULATIONS
Service supplied under this rate schedule shall be governed by the Rules and
Regulations of the Company, as approved by the Indiana Utility Regulatory
Commission and in force from time to time.
Issued Dated: Effective:
Issued by: H.P. Xxxxxx, Jr.
President
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Exhibit B
INTERRUPTIBLE GAS TRANSPORTATION NOMINATION
AND BALANCING PROCEDURES
The following nomination and balancing procedures shall apply to service under
the foregoing agreement for service between Northern Indiana Trading Co.
("NITCO") and Steel Dynamics, Inc.
("Customer") .
I. NOMINATION PROCEDURES
A. At least seven business days prior to the end of each month
NITCO will quote SDI a price for any gas which it agrees to make available for
sale to SDI in the next following month. The Customer shall nominate to NITCO
for each month, at least six (6) business days prior to the end of the previous
month, the daily quantity of
1. the Customer's nomination to Crossroads Pipeline Co.
("Crossroads") through NITCO of Customer-owned gas to
be delivered on an interruptible basis that month to
Crossroads and Northern Indiana Fuel & Light Company,
Inc. ("NIFL") for delivery to the Customer ("Daily
Pipeline Nomination"), and
2. any interruptible NITCO-supplied gas service
requested by the Customer ("Daily Supply
Deliveries").
B. The Customer shall thereafter notify NITCO, in writing, of any
change in the Customer's Daily Pipeline Nomination or Daily Supply Deliveries by
submitting to the Company a new nomination no later than noon of
1. the workday next preceding the starting day of the
new Daily Pipeline Nomination, or
2. the second workday next preceding the starting day of
the new Daily Supply Deliveries.
Nominations submitted after the deadlines specified above may, but are not
required to, be accepted by NITCO
C. Each nomination to NITCO shall include the
1. start and end dates of nomination ("Nomination
Period");
2. daily quantity, in dekatherms (Dkt), of the
Customer's Daily Pipeline Nomination along with
a. the identity of the supplier(s) and the
transporting pipeline(s) to Crossroads; and
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b. any other information reasonably requested
by NITCO; and
3. daily quantity, in Dkt, of any interruptible
NITCO-supplied gas requested by the Customer.
D. NITCO reserves the right, in its reasonable discretion, to
reject the Customer's nominations for Daily Supply Deliveries if (1) economical
interruptible gas supplies are not available for sale to the Customer, (2) the
Customer's nominations fail to include Carryover Gas, or (3) the Customer's
nominations fail to equal the total of its Carryover Gas, Daily Pipeline
Nominations and Daily Supply Deliveries.
E. Until the Customer submits the required nominations, the
Customer's nominations of daily quantities shall be zero.
F. Because it is important that the quantities of gas to be
transported for SDI's account and the notice given thereof to interstate
pipelines and Crossroads be identical, the Customer shall cause its gas supplier
on a transporting pipeline to Crossroads to provide NITCO a written statement of
the Customer's daily nominations to that pipeline during each Nomination Period,
within five (5) business days following the end of the billing month. The
Customer shall pay the NITCO a NOMINATION CHARGE of $0.50 per Dkt on any
quantity difference between Customer's Daily Pipeline Nomination and the daily
amounts disclosed in the written statement from the transporting pipeline to
Crossroads.
II. BALANCING PROCEDURES
A. The Customer shall balance its usage with actual deliveries of
Customer-owned gas to Crossroads for delivery to NIFL (including Carryover Gas
made available to Customer on an average daily basis) and NITCO-supplied gas
requested by the Customer (collectively, "Total Deliveries").
B. An "Imbalance Quantity" will exist when the Customer's usage
is greater or less than Customer's Total Deliveries on a daily basis or during
the Nomination Period.
C. The Customer shall pay a DAILY IMBALANCE CHARGE of $0.50 per
Dkt on the portion of the daily Imbalance Quantity that is greater than 1,000
Dkt or one hundred percent (100%) of the Customer's Total Deliveries on a daily
basis, whichever is less.
D. If the quantity of Total Deliveries for the Customer's account
at the end of the billing month exceeds the Customer's monthly usage, the unused
gas shall be considered Carryover Gas to be carried over and consumed by the
Customer, for billing purposes, as the first gas through the Customer's meter
the next month.
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E. The Customer shall pay a CARRYOVER CHARGE of $0.25 per Dkt on
any quantity of Carryover Gas in excess of twenty-five percent (25%) of the
Customer's usage during the billing month.
F. If the quantity of Total Deliveries for the Customer's account
at the end of the billing month is less than the Customer's monthly usage, the
difference shall be considered Interruptible Commodity Overrun Gas.
G. The Customer shall pay an INTERRUPTIBLE COMMODITY OVERRUN
CHARGE of $0.25 per Dkt on any quantity of Interruptible Commodity Overrun Gas
in excess of twenty-five percent of Total Deliveries for the Customer's account
during the billing month.
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