EXHIBIT 10(o)-1
PORTIONS OF THIS EXHIBIT IDENTIFIED BY "***" HAVE BEEN DELETED PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND THE FREEDOM OF INFORMATION ACT.
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of this 15th day
of May, 1995 by and between MOBILE GAS SERVICE CORPORATION, an Alabama
corporation with a mailing address of P. O. Xxx 0000, Xxxxxx, Xxxxxxx 00000,
herein called "Mobile Gas," and TUSCALOOSA STEEL CORPORATION, an Alabama
corporation with a mailing address of 0000 Xxxx Xxxx, X.X., Xxxxxxxxxx,
Xxxxxxx 00000-0000, herein called "Customer."
WHEREAS, Customer desires to use natural gas for the operation of Customer's
planned direct iron reduction units and associated plant equipment to be
located at Customer's proposed plant on its "XxXxxxxx Island" site in Mobile,
Alabama (the "Plant"); and
WHEREAS, Mobile Gas operates a system for the distribution of natural gas from
natural gas transmission pipelines and processing plants, through which Mobile
Gas can transport to the Plant gas purchased by Customer or its agents from
third parties ("Customer's Shippers") and delivered by Customer's Shippers to
Mobile Gas, and the parties desire that Mobile Gas provide such
transportation services to Customer and construct certain pipeline facilities
for such purpose.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE I - TERM OF AGREEMENT
1.1 The term of this Agreement shall be fifteen Contract Years, beginning on
the Commencement Date, as defined in Article IV. "Contract Years" shall mean
the consecutive twelve-month calendar periods commencing with the first day of
the month beginning after the Commencement Date (provided that if the
Commencement Date is the first day of a month, the first Contract Year shall
commence on such date, and if the Commencement Date is not the first day of a
month, the first Contract Year shall also include the period from the
Commencement Date to the first day of the month beginning after the
Commencement Date).
1.2 So long as Customer is not in default hereunder at the expiration of the
initial term hereof, as the same may be extended pursuant to Section 9.3 (the
"Expiration Date"), either Customer or Mobile Gas may extend this Agreement
for an additional term of fifteen Contract Years immediately following the
Expiration Date (the "Renewal Term") by notifying the other of its intent to
so extend not less than 90 days prior to the Expiration Date. The Rate for
such Renewal Term is set forth on Exhibit "A."
1.3 Notwithstanding the provisions of Section 1.1, this Agreement shall become
effective as of the date hereof with respect to the obligations of the parties
specified in ARTICLE III hereof, and payment obligations arising prior to
expiration or termination of this Agreement shall remain in effect after the
term of this Agreement.
1.4 This Agreement may only be terminated prior to the expiration of the
initial term or the Renewal Term hereof, if any, as the case may be:
(a) by Mobile Gas
(i) in accordance with Section 8.4,
(ii) in accordance with Section 9.4(b), or
(iii) after occurrence of any material breach by Customer in
the performance of its obligations hereunder and the continuance of such
breach 90 days after notice by Mobile Gas to Customer of such breach and
demand by Mobile Gas that Customer cure same;
(b) by Customer
(i) in accordance with Section 9.4(a), or
(ii) in accordance with Exhibit A, or
(iii) after occurrence of any material breach by Mobile Gas
in the performance of its obligations hereunder and the continuance of such
breach 90 days after notice by Customer to Mobile Gas of such breach and
demand by Customer that Mobile Gas cure same. In the event of termination by
Customer under this clause (iii), Customer shall not owe any further minimum
xxxx payments or termination payments in lieu thereof as provided for in
Exhibit A.
ARTICLE II - TRANSPORTATION SERVICE
2.1 Mobile Gas will transport up to a volume of *** MMBtu per day, not to
exceed *** MMBtu per hour ("Contract Demand Volume") to the Point of
Redelivery, as hereinafter defined, for use at the Plant. Customer will pay
Mobile Gas for all gas transported by Mobile Gas to the Plant and agrees to
accept transportation service from Mobile Gas subject to the terms and
conditions hereof. As used herein the term "MMBtu" shall mean 1,000,000
British Thermal Units (which means the amount of heat required to raise the
temperature of one pound of distilled water one degree Fahrenheit at 60
degrees Fahrenheit at a constant pressure of 14.73 pounds per square inch
absolute).
2.2 The effective Rates for the initial term, and any renewal term, if any,
and certain other terms pertaining to such transportation service are
specified in Exhibit "A" which is attached hereto and made part of this
Agreement. Customer agrees that Mobile Gas shall be the sole transporter of
natural gas to the Plant during the term of this Agreement.
2.3 If this Agreement is renewed for a Renewal Term, if at any time and from
time to time during Contract Years *** through *** the volume transported
pursuant to this Agreement is less than an average volume of *** MMBtu per day
for any consecutive *** -month period (with force majeure days excluded from
the calculation), then Mobile Gas may, by not less than 30 days' written
notice to Customer, reduce the Contract Demand Volume to a Contract Demand
Volume equal to *** of such average daily volume during such *** -month
period. Such reduction shall not affect the applicable Rate or the minimum
xxxx provisions set forth in Exhibit "A".
2.4 If this Agreement is renewed for a Renewal Term, if during any Contract
Year during the Renewal Term the average volume of gas transported is below
*** MMBtu per day (with force majeure days and up to two weeks of Customer
scheduled maintenance excluded from the calculation), Mobile Gas may, by not
less than 30 days' written notice to Customer, cause the Rate for
transportation of gas to thereafter be the rate set forth in the T-1 Tariff of
Mobile Gas, or any tariff which is a successor thereto, and such Rate shall
remain in effect during the remainder of the Renewal Term. Any such rate
change shall not affect the minimum xxxx provisions set forth in Exhibit "A".
2.5 During Contract Years *** through *** , Customer may, by not less than 30
days' written notice to Mobile Gas, elect once to reduce the Contract Demand
Volume to *** MMBtu, and in such event, the annual minimum xxxx amount for the
following Contract Years shall be reduced to *** through the end of Contract
Year ***. In such event, such reduced Contract Demand Volume would remain
in effect during any Renewal Term, and the minimum xxxx during such Renewal
Term would be as specified in Exhibit "A".
ARTICLE III - ACTIONS PRIOR TO COMMENCEMENT DATE; NOTICE OF FACILITIES
COMPLETION
3.1 Customer shall be responsible for construction of its pipeline from the
Point of Redelivery to the Plant, and for construction of the Plant. Promptly
after the execution of this Agreement, Customer shall provide to Mobile Gas an
easement in form reasonably acceptable to Mobile Gas for construction of that
portion, if any, of the Facilities, as hereinafter defined, as shall cross
property owned or leased by Customer, as well as for construction and
maintenance of a metering station on the Plant premises.
3.2 Promptly after the execution of this Agreement and receipt of all required
regulatory approvals, easements and rights-of-way as may be required, Mobile
Gas shall begin construction of the facilities necessary to deliver natural
gas to the Point of Redelivery specified herein (the "Facilities"). Mobile
Gas will proceed with reasonable dispatch to obtain required regulatory
approvals, easements and rights of way as may be required hereunder. Mobile
Gas shall at its expense complete such construction of the Facilities as is
required to enable Mobile Gas to deliver gas to Customer at the Point of
Redelivery at the Contract Demand Volume ("Facilities Completion") not later
than 18 months after the execution of this Agreement. Not more than 60 nor
less than 20 days prior to such Facilities Completion, Mobile Gas shall
provide notice to Customer of the date that Facilities Completion will occur.
ARTICLE IV - COMMENCEMENT DATE
4.1 The "Commencement Date" shall be the earlier of (i) the date Customer
first takes natural gas from the Facilities into the Plant, or (ii) 30 days
after the date of Facilities Completion, provided that the Commencement Date
pursuant to this subsection 4.1(ii) shall not be earlier than 18 months after
the execution of this Agreement.
ARTICLE V - QUALITY
5.1 The volumes of natural gas delivered by Customer's Shippers and
redelivered by Mobile Gas hereunder shall be measured at an equivalent
pressure base of 14.73 pounds per square inch absolute ("psia") and an assumed
atmospheric pressure of 14.7 psia, and at a temperature base of 60 degrees
Fahrenheit. The volume of natural gas determined hereunder shall be adjusted
to give effect to Xxxxx'x Law in accordance with standard procedure.
5.2 The quality of the gas delivered by Customer's Shippers to Mobile Gas and
redelivered by Mobile Gas to Customer shall be pipeline quality, and:
(a) Shall be dehydrated and shall in no event have a water content in
excess of seven (7) pounds of water per million (1,000,000) cubic feet of gas
measured at a pressure base of 14.73 psia and at a temperature base of 60
degrees Fahrenheit, as determined by dew point or other moisture measuring
equipment in general use in the industry.
(b) Shall not contain more than one (1) grain of hydrogen sulfide per one
hundred (100) cubic feet as determined by quantitative methods in general use
in the industry.
(c) Shall not contain more than twenty (20) grains of total sulphur,
including hydrogen sulfide, per one hundred (100) cubic feet as determined by
quantitative methods in general use in the industry.
(d) Shall not contain in excess of:
(i) Three percent (3.0%) by volume carbon dioxide.
(ii) Two percent (2.0%) by volume oxygen.
(iii) Three percent (3.0%) by volume nitrogen.
(e) Shall be commercially free from dust, gum, gum-forming constituents
or other liquid or solid matter which might become separate from the gas in
the course of transportation through pipelines.
(f) Shall be commercially free of water and other objectionable liquids
at the temperature and pressure at which the gas is delivered and the gas
shall not contain any hydrocarbons which might condense to free liquids in
the pipeline under normal pipeline conditions.
ARTICLE VI - POINT OF DELIVERY AND REDELIVERY
6.1 Customer's Shipper shall deliver gas (at a pressure sufficient to enter
into the interconnection at the Point of Delivery) to be transported by Mobile
Gas hereunder to Mobile Gas' presently existing interconnections with (a)
***, (b) *** , (c) ***, or (d) *** (each a "Point of Delivery"). Any
additional Point of Delivery shall only be designated by mutual written
agreement of Mobile Gas and Customer.
6.2 No more than *** MMBtu per hour, nor more than *** MMBtu per day shall be
delivered to the *** interconnection; no more than *** MMBtu per hour, nor
more than *** MMBtu per day shall be delivered to *** interconnection; and no
more than *** MMBtu per hour, nor more than *** MMBtu per day shall be
delivered to the *** interconnection. These allocations are subject to the
daily and hourly volume restrictions in Section 2.1.
6.3 Upon Customer's request, which shall include an undertaking satisfactory
to Mobile Gas that Customer will reimburse Mobile Gas for all costs reasonably
incurred (including all taxes, whether income tax or otherwise, incurred as a
result of receipt of such reimbursement), Mobile Gas shall install at any one
or more Points of Delivery additional metering capacity which will allow
Customer increased allocations at the Points of Delivery specified in Section
6.2.
6.4 In the event that the metering capacity at any Point of Delivery specified
in Section 6.2 is increased by Mobile Gas (other than as described in Section
6.3), Mobile Gas may, in its sole discretion, determine whether or not to
increase Customer's allocation at such Point of Delivery.
6.5 The Point of Redelivery of natural gas by Mobile Gas to Customer hereunder
shall be the flange outlet of the Mobile Gas metering station, which shall be
located at or near the boundary of and on the Plant premises property.
ARTICLE VII - PRESSURE AT POINT OF REDELIVERY
7.1 Mobile Gas shall deliver gas to the Point of Redelivery at the highest
operating pressure available from time to time in the Mobile Gas system for
deliveries at the point of Redelivery, but at not less than *** pounds per
square inch gauge (psig) nor more than *** pounds per square inch gauge
(psig).
ARTICLE VIII - BILLING
8.1 On or before the seventh (7th) working day of each calendar month, Mobile
Gas shall render to Customer a statement of the amount of gas transported
hereunder by Mobile Gas to Customer during the preceding calendar month (and
with respect to the first such statement, for the portion of a month, if any,
between the Commencement Date and the first full calendar month) and shall
also render a xxxx for all gas so transported. Customer shall make payment to
Mobile Gas at P. O. Xxx 0000, Xxxxxx, Xxxxxxx 00000, or at such other address
as may be provided by Mobile Gas by notice to Customer, on or before the
twenty-fifth (25th) day of that month or 15 days after the date the xxxx is
rendered, whichever is later.
8.2 On or before the seventh (7th) working day after the end of each
consecutive Contract Year, Mobile Gas shall render to Customer a statement of
the amount, if any, by which the aggregate xxxxxxxx by Mobile Gas to Customer
during the preceding Contract Year were less than the minimum annual xxxx
specified on Exhibit "A" (the "Minimum Xxxx Balance"), and if there exists a
Minimum Xxxx Balance, shall also render a xxxx for such amount in accordance
with Section 8.1. Customer shall make payment to Mobile Gas of the Minimum
Xxxx Balance, if any, in accordance with Section 8.1.
8.3 In the event that Customer fails to pay any amounts due hereunder when
due, interest shall accrue on all unpaid amounts from the date due until paid
at a rate of interest equal to 2% in excess of the rate of interest reported
as the "prime rate" in the "Money Rates" section of The Wall Street Journal or
any successor thereto.
8.4 Should Customer fail to pay to Mobile Gas any amount for which a xxxx has
been rendered and which is due to Mobile Gas by the time specified in Section
8.1, and such failure to pay continues for an additional five days, then
Mobile Gas may suspend deliveries of gas hereunder 10 days after written
notice given on or after the last day of such additional five days to Customer
of such failure to pay. In the event Mobile Gas has given the written notice
prescribed in the preceding sentence, it will at least 72 hours prior to
suspension of deliveries of gas pursuant to this Section 8.4, send notice by
facsimile to two separate individuals designated by Customer by notice to
Mobile Gas. Mobile Gas will also endeavor to give further personal or
telephonic notice to such person or office at the Plant as Customer may
specify by notice to Mobile Gas, at least 72 hours prior to suspension
of deliveries of gas pursuant to this Section 8.4. In the event written
notice has been given as provided above, and payment has not been received for
a period of 90 days, such period commencing on the date of the written notice
described above,then Mobile Gas may, in its sole discretion, terminate this
Agreement. Such termination shall not relieve Customer from the termination
payment obligations set forth in Exhibit A(2).
8.5 In the event that Customer disputes any amount shown on a statement
issued by Mobile Gas to Customer, such disputed amount shall be paid.
Notwithstanding such payment, Customer shall have the right to claim from
Mobile Gas such disputed amount. Upon receipt by Mobile Gas of any claim
from Customer for a disputed amount, Mobile Gas and Customer shall endeavor to
amicably resolve the disputed amount prior to institution of arbitration by
Customer. The parties are not obligated to pursue amicable resolution for
more than ten (10) days.
ARTICLE IX - FORCE MAJEURE
9.1 In the event of either party hereto being rendered unable, wholly or in
part, by force majeure to carry out its obligations under this Agreement,
other than to make payments hereunder (except as provided below), the
obligations of the party, as far as they are affected by such force majeure,
shall be suspended during the continuance of any inability so caused, but for
no longer period, and such cause shall as far as possible be remedied with all
reasonable dispatch. The party so affected by such event of force majeure
shall give written notice, with reasonably full particulars of such force
majeure, including without limitation measures to be taken to alleviate such
force majeure, in writing or by fax to the other party as soon as possible
after the occurrence of the causes so relied upon.
9.2 The term "force majeure" as employed herein shall mean, without
limitation, acts of God, strikes, lockouts, or other industrial disturbances,
acts of the public enemy, sabotage, wars, blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, floods, storms, fires,
washouts, arrests and restraints of rulers and peoples, civil disturbances,
explosions, breakage or accident to lines of pipe, hydrate obstructions of
lines of pipe, repairs, failure of adequate supply pressures to any Point of
Delivery or other operational constraints affecting the Mobile Gas system,
inability of either party to obtain necessary permits or regulatory
approvals or to obtain easements or rights of way, freezing of a well or
plant, well blowouts, craterings, and the act of any court or governmental
authority, or any other cause, whether of the kind herein enumerated or
otherwise, not within the control of the party claiming suspension or which,
by the exercise of due diligence, such party is unable to prevent or
overcome; provided however, that the settlement of strikes or lockouts shall
entirely be within the discretion of the party engaged in such labor dispute,
and the requirement that any force majeure shall be remedied with the
exercise of diligence shall not require the settlement of strikes or lockouts
by acceding to the demands of opposing parties when such course is inadvisable
in the discretion of the party engaged in such labor dispute.
9.3 In the event Mobile Gas is, due to an event of force majeure as herein
defined, unable to provide transportation services under this Agreement for a
consecutive ninety-day period, then the obligation of Customer to make payment
hereunder shall thereafter be suspended until service is again made available
hereunder, and the term of this Agreement shall be automatically extended for
a period equal to the period during which payment is so suspended.
9.4 (a) In the event a force majeure condition claimed by Mobile Gas is not
corrected within *** days, Customer may, at its discretion, elect to
terminate this Agreement upon *** days written notice, and this Agreement
shall terminate at the end of such *** day period without relieving either
party from any obligations due on the date of such termination.
(b) In the event a force majeure condition claimed by Customer is not
corrected within *** days, Mobile Gas may, at its discretion, elect to
terminate this Agreement upon *** days written notice, and this Agreement
shall terminate at the end of such *** day period without relieving either
party from any obligations due on the date of such termination, except that
Customer shall not owe any further minimum xxxx payments or termination
payments in lieu thereof as provided for in Exhibit "A".
ARTICLE X - CONDITIONS OF TRANSPORTATION INTERRUPTION
10.1 All nominated gas (up to the Contract Demand Volume) delivered by
Customer's Shipper to the Point of Delivery in compliance herewith shall be
considered an authorized volume of gas, and shall be transported to the Point
of Redelivery by Mobile Gas, subject to the terms hereof.
10.2 Notwithstanding any other provision of this Agreement, the transportation
service to be provided by Mobile Gas hereunder is subject to interruption in
any amount (up to and including one hundred percent interruption) at any time
if, in the exercise of its sole discretion, Mobile Gas determines such
interruption is necessary only (a) due to maintenance, improvement,
replacement or alterations to plants, lines of pipe or related facilities of
Mobile Gas, provided, however, that interruptions for such purposes shall not
exceed *** days during the initial fifteen year term of this Agreement, with
there being no such limitation associated with any renewal term hereunder,
(b) due to force majeure conditions as defined in Article IX, or
(c) pursuant to any Curtailment Plan in effect from time to time applicable to
Mobile Gas customers and approved by the Alabama Public Service Commission
("APSC").
10.3 In the event of circumstances giving rise to interruption or curtailment
under Section 10.2(a) or (c), Mobile Gas shall exert its best efforts to
provide as early a prior notice of interruption or curtailment as is
practicable under the circumstances, and shall (unless prevented by force
majeure), if reasonably possible, provide at least eight hours' notice of the
time and extent of such interruption or curtailment.
10.4 Mobile Gas shall use reasonable dispatch to restore transportation
service after an interruption pursuant to Section 10.2 of this Agreement.
10.5 Mobile Gas and Customer shall each have sole discretion in scheduling
their respective maintenance, improvements, replacements or alterations to
plants. However, the parties do agree to communicate with one another in an
effort to schedule maintenance, improvements, replacements or alterations to
plants in such a way as to minimize any interference with Customer's
operations.
ARTICLE XI - NOMINATION PROCEDURE
11.1 Customer or Customer's agents shall provide to Mobile Gas a daily
confirming nomination to match the nomination made by Customer's Shipper.
Confirmation shall be made by voice or fax prior to 3 P.M., Mobile, Alabama
time, the day before a weekday delivery to Mobile Gas and by 3 P.M., Mobile,
Alabama time, on the Friday before any weekend delivery.
ARTICLE XII - NOTICES
12.1 Whenever any notice, request, demand or statement is required or
permitted to be given under any provision of this Agreement, unless expressly
provided otherwise herein, such shall be in writing, signed by or on behalf of
the person giving the same, and shall be deemed to have been given when mailed
by first class mail, sent by Federal Express, Express Mail, or similar
overnight delivery or courier service, or delivered in person, or sent by
facsimile transmission with the transmission confirmed by the transmitting
equipment of the sender, to the address of such party as hereinafter set
forth:
Mobile Gas Service Corporation Tuscaloosa Steel Corporation
0000 Xxxxxxx Xxxxxx (36606) 0000 Xxxx Xxxx, X.X.
P. O. Box 2248 Tuscaloosa, Alabama 00000-0000
Xxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000)000-0000
or to such other address or facsimile number as one party may specify by
written notice to the other.
ARTICLE XIII - LAW GOVERNING
13.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Alabama.
ARTICLE XIV - ENTIRE AGREEMENT
14.1 This instrument embodies the entire Agreement and understanding between
the parties hereto. There are no Agreements, understandings, conditions,
warranties, or representations, oral or written, express or implied, with
reference to the subject matter hereof that are not merged herein or
superseded hereby.
ARTICLE XV - SPECIAL PROVISIONS
The following Special Provisions are made a part hereof:
15.1 Mobile Gas may, but shall not be obligated to, transport or provide
volumes in excess of the Contract Demand Volume if requested by Customer. If,
on any day, the Customer takes an Unauthorized Volume of gas, the Customer
shall, upon written request, pay to Mobile Gas, as damages, any costs incurred
by Mobile Gas. An "Unauthorized Volume" is a volume in excess of the
authorized volume described in Section 10.1 or any volume taken by Customer in
excess of permitted volume during a period of curtailment described in a
notice of interruption given by Mobile Gas in accordance with Section 10.2.
The payment of costs incurred by Mobile Gas for unauthorized volumes taken by
Customer shall not under any circumstances be considered as giving Customer
the right to take unauthorized volumes, nor shall such payment be considered
as a substitute for or exclusive of any other remedies available to Mobile Gas
against Customer for failure to respect its obligations to adhere to the
provisions of this Agreement.
15.2 In the event Mobile Gas incurs any cost, expense and/or penalties
resulting from Customer being over-or under-nominated for any period of time,
Customer shall, upon written request, reimburse Mobile Gas for such cost,
expenses and/or penalties.
15.3 When Mobile Gas becomes aware that costs will be incurred by Customer as
a result of the Customer's non-compliance with the provisions of Sections 15.1
or 15.2, Mobile Gas will endeavor to advise Customer as soon as practicable of
such event.
15.4 A "day" when used in this Agreement shall mean a twenty-four (24) hour
period ending at 8:00 A.M., Mobile, Alabama time.
15.5 (a) The unit of volume for measurement of gas delivered hereunder shall
be one (1) cubic foot of gas at base temperature of sixty (60) degrees
Fahrenheit and at an absolute pressure of fourteen and seventy-three
hundredths (14.73) pounds per square inch. All fundamental constants,
observations, records, and procedures involved in determining and/or verifying
the quantity and other characteristics of gas delivered hereunder shall,
unless otherwise specified herein, be in accordance with industry standards,
as exist now and may from time to time be amended or supplemented. All
measurements of gas shall be determined by calculation into terms of such
unit. All quantities given herein, unless expressly stated otherwise, are in
terms of such unit. Notwithstanding the foregoing, it is agreed that, for all
purposes, the Btu content of the gas received and delivered by Mobile Gas
hereunder shall be measured on an "as delivered" basis rather than a fully
saturated or "wet" basis.
(b) Mobile Gas shall inst all, maintain and operate, or cause to be
installed, maintained and operated, the measurement facilities required
hereunder. Said measurement facilities shall be so equipped with meters,
gauges, and other instruments of standard make and design commonly acceptable
in the industry, as to accomplish the accurate measurement of gas delivered
hereunder. The calibrating and adjustment of meters shall be done by Mobile
Gas or its agent. The accuracy of Mobile Gas measuring equipment shall be
verified at appropriate intervals, for instance, orifice meters shall be
calibrated at least once in each thirty (30) day period, and turbine meters
onceeach year. Mobile Gas shall keep all meters accurate and in repair.
Mobile Gas shall give Customer reasonable notice of all tests conducted on
measuring equipment in order that, if Customer desires, Customer may have its
representative present. If either party desires a special test of any
measuring equipment, it will promptly notify the other party and the parties
shall then cooperate to secure a prompt verification of the accuracy of such
equipment. The expenses of any such special test, if requested by Customer,
shall be borne by Customer if the measuring equipment tested is found to be
accurate within the limits of plus or minus two percent (2%) of error. For
the purposes of measurement and meter calibration, the atmospheric pressure
shall be assumed to be fourteen and seventy-three hundredths (14.73) pounds
per square inch, irrespective of variations in natural atmospheric pressure
from time to time.
(c) Customer may, at its option and expense, install and operate a check
meter on its premises to check Mobile Gas's meter, but measurement of gas
delivered toCustomer for the purpose of this Agreement shall be by Mobile
Gas's operated metering only. Any check meter installed shall be of a
standard type and shall be subject at all reasonable times to inspection or
examination by Mobile Gas, but the reading, calibration and adjustment
thereof and changing of charts shall be done only by the employees or agents
of Customer.
(d) If upon any test the mete ring equipment in the aggregate is found to
be inaccurate, by more than two percent (2%), either plus or minus,
registration thereof and any payment based upon such registration shall be
corrected at the rate of such inaccuracy for any period of inaccuracy which
is definitely known or agreed upon, or if not known or agreed upon, then for a
period extending back one-half (1/2) of the time ela psed since the day of the
last calibration. Following any test, any metering equipment found to be
inaccurate to any degree shall be adjusted immediately to measure accurately;
however, if any inaccuracy is two percent (2%) or less, all prior readings and
measurements shall be deemed to be accurate and no adjustments to any prior
reading shall be made.
(e) If for any reason, any meter is out of service or out of repair so
that the quantity of gas delivered through such meter cannot be ascertained or
computed from the readings thereof, the quantity of gas so delivered during
such period shall be estimated and agreed upon by the parties hereto upon the
basis of the best available data, using the first of the following methods
which is feasible:
(i) by using the registration of any check measuring equipment, if
installed and registering accurately;
(ii) by correcting the error if the percentage of error is
ascertainable by calibration, test, or mathematical calculation; or
(iii) by estimating the quantity of gas deliveries by deliveries
during preceding periods under similar conditions when the meter was
registering accurately.
(f) The measurement hereunder shall be corrected to give effect to
Xxxxx'x Law at the pressure and temperature under which gas is delivered
hereunder.
(g) Mobile Gas will allow Customer access to all pulses and other data
from the Mobile Gas meters installed to provide service pursuant to this
Agreement.
(h) If at any time d uring the term of this Agreement a new method or
technique is developed with respect to gas measurement, or the determination
of the factors used in such gas measurement, such new method or technique may
be substituted for any method set forth herein which meets generally accepted
industry standards and practices and is acceptable to both parties.
15.6 Mobile Gas agrees to protect, defend, indemnify, and hold harmless the
Customer, its officers, directors, agents and/or employees from and against
any claims, demands, losses, damages, suits and expenses, for damages and/or
injury to persons and/or property which may be brought against the Customer,
its officers, directors, agents and/or employees arising out of, or resulting
from, the transportation of natural gas from the Point of Delivery to the
Point of Redelivery pursuant to the terms and conditions expressed herein.
15.7 Customer agrees to protect, defend, indemnify, and hold harmless Mobile
Gas, its officers, directors, agents and/or employees from and against any
claims, demands, losses, damages, suits and expenses, for damages and/or
injury to persons and/or property which may be brought against Mobile Gas, its
officers, directors, agents and/or employees arising out of, or resulting
from, the transportation of natural gas by the Customer or its agents to the
Point of Delivery and from the Point of Redelivery to and through its plant
and facilities.
15.8 Customer warrants for itself, its successors and assigns, that it will
have at the time of delivery of gas for transportation hereunder good title or
valid right to deliver such gas hereunder; that the gas it delivers hereunder
shall be free and clear of all liens, encumbrances, or claims whatsoever; and
that it will indemnify Mobile Gas and save it harmless from all claims, suits,
actions, damages, costs and expenses arising directly or indirectly from or
with respect to the title to gas tendered to Mobile Gas hereunder.
15.9 As between Customer and Mobile Gas, Customer shall be in control and
possession of the gas transported hereunder prior to delivery to Mobile Gas at
the Point of Delivery and after delivery by Mobile Gas to Customer at the
Point of Redelivery, and Mobile Gas shall be in control and possession of the
gas after the receipt of the same at the Point of Delivery and until delivery
by Mobile Gas to Customer at the Point of Redelivery. The risk of loss for
all gas transported hereunder shall be and remain with the party having
control and possession of the gas as herein provided.
15.10 Mobile Gas agrees to transport additional volumes of gas to Customer for
a period of up to thirty (30) days beyond the termination of this Agreement in
order to bring into balance any imbalance that exists at the termination of
this Agreement.
15.11 Customer may at its sole option and from time to time appoint an Agent,
and upon such appointment notify Mobile Gas of such appointment, to represent
Customer for purposes of making nominations, delivering gas to a Delivery
Point and adjusting balances. Customer acknowledges that Mobile Gas may rely
on instructions of Customer's duly appointed Agents as if such instructions
were made by Customer until such time as Customer sends Mobile Gas a notice
requiring Mobile Gas to no longer accept instructions from such Agent.
ARTICLE XVI - MISCELLANEOUS PROVISIONS
16.1 This Agreement may not be assigned by either party hereto without the
written consent of the other party hereto, such consent not to be unreasonably
withheld or delayed. Any assignment without prior consent shall be void and
without force and effect.
16.2 The effectiveness of this Agreement is subject to approval hereof by the
APSC.
ARTICLE XVII - ARBITRATION
17.1 Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled exclusively by arbitration pursuant to
the Commercial Arbitration Rules of the American Arbitration Association.
17.2 All arbitrations pursuant to this Agreement shall be held at Mobile,
Alabama.
17.3 There shall be three arbitrators. One of the arbitrators shall be
appointed by Mobile Gas, the second by Customer, and the third shall be a
neutral arbitrator selected by these two arbitrators. Such neutral arbitrator
shall be chairman of the arbitration panel.
17.4 The arbitration shall be decided by a majority vote of the arbitration
panel. The cost of arbitration, including the fees of the arbitrators, shall
be borne by the losing party, unless the arbitrators decide otherwise.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed
by its officer thereunto duly authorized as of the date first above written.
WITNESS: MOBILE GAS SERVICE CORPORATION
/s/ G. Xxxxx Xxxxxxx, Xx. By: /s/ Xxxx X. Xxxxx
--------------------------------
Its: President
--------------------------------
WITNESS:
/s/ X. X. Xxxxxx TUSCALOOSA STEEL CORPORATION
By: /s/ X. X. Xxxx
--------------------------------
Its: Vice President Finance
--------------------------------
EXHIBIT '"A"
XXXXXXXX ISLAND SITE
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION SERVICE CONDITIONS
1. *** Transportation Rate ***
(a) "Flat Rate" for first *** Contract *** per MMBTU for all
Years of this Agreement MMBtus transported
during the ***.
(b) "Flat Rate" for Renewal Term As specified below
of this Agreement (if renewed)
Note: The above "Flat Rates" are contingent upon Mobile Gas
receiving specified concessions from the State and/or entities as detailed in
Exhibit "B", and are subject to the provisions of Section 2.4 of this
Agreement. In the event any of such concessions are not obtained in a manner
acceptable to Mobile Gas, the Flat Rates shall be increased as set forth in
Exhibit B.
The Flat Rate for all Therms transported during any month in the
Renewal Term shall be equal to *** by the "Percentage Increase", if any. The
"Percentage Increase", if any, shall be calculated as follows:
First, there shall be determined a percentage equal to a fraction,
the numerator of which shall be the Index for the *** month of the ***
Contract Year less the Base Index, and the denominator of which shall be the
Base Index (such percentage being referred to herein as the "unadjusted
Percentage"). As used herein:
(i) the "Index" means the Consumer Price Index for All Urban
Consumers (1982-1984=100) specified for All Items for the United States issued
by the Bureau of Labor Statistics of the U.S. Department of Labor. If the
Index shall hereafter be converted to a different standard reference base or
otherwise revised, the determination of the Percentage Increase shall be made
with the use of such conversion factor, formula or Table for converting the
Index as may be published by such Bureau of Labor Statistics. If the Index
shall cease to be published, then for purposes of computing thE Percentage
Exhibit "A" - Page 1
Increase, there shall be substituted for such Index such alternative index as
the parties hereto may mutually agree upon, and if they are unable to so agree
within 90 days after the Index ceases to be published, such matter shall be
determined by arbitration in accordance with the terms hereof.
(ii) the "Base Index" shall mean the Index for the ***
immediately preceding the *** in which the *** occurs.
Second, the Percentage Increase, if any, shall be determined as
follows:
***
2. Minimum Billing
(a) Contract Years *** through ***.
(i) The minimum xxxx during *** shall be *** , and the
minimum xxxx for each of Contract Years *** through *** shall be ***,
subject to the provisions of clause (iii) below and the provisions of
Sections 1.4(b), 2.5 and 9.4(b).
(ii) Customer may terminate this Agreement *** .
Subject to the provisions of clause (iii) below and the provisions of
Section 1.4(b) and 9.4(b), in consideration of ***, the minimum annual xxxx
amounts set forth in clause (i) above shall be ***, provided that (a) in the
event of termination of this Agreement *** during *** , and (b) in the event
of termination of this Agreement *** during ***
Exhibit "A" - Page 2
(iii) if at any time during Contract Years *** through ***, Customer
shall have made *** payments pursuant to this Exhibit "A" equal to or
exceeding ***, ***.
(b) Contract Years *** through ***.
The minimum xxxx for each of Contract Years *** through *** shall
be *** per year. *** may terminate this Agreement without penalty during
Contract Years *** through *** by giving *** advance written notice of such
termination to ***.
3. Effective Date
The effective date of the Rate for the initial term of this Agreement is
the Commencement Date.
4. Taxes
This Special Transportation Rate is inclusive of current business license
taxes and state inspection supervision fees. This Rate shall be adjusted to
take into account any future increase or decrease in such taxes and fees, as
well as any additional fees or taxes which may be imposed on Mobile Gas with
respect to the services rendered hereunder.
Exhibit "A" - Page 3
EXHIBIT "B"
XXXXXXXX ISLAND SITE
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION SERVICE CONDITIONS
*** Construction in a Manner
Acceptable to Mobile Gas
***
1. Open cutting the Xxxxx Street crossing of I-10. ***
2. Routing pipeline along South service road between ***
Xxxxx Street and Washington Avenue. Mobile Gas is
provided an easement in the area provided by the
appropriate entity.
3. Mobile Gas is allowed to buy its pipeline directly across ***
Washington Avenue without a casing, with Mobile Gas
either boring or open trenching based on our preference.
4. State of Alabama and City of Mobile provide milling and ***
Washington Ave. repaving on:
4.1 Xxxxx between Houston Street and Michigan Avenue.
4.2 Xxxxx Street.
4.3 Raising manholes as required.
***
***
