1
Exhibit 10.8
GAS SERVICES AGREEMENT (Crossroads)
THIS AGREEMENT, entered into this 3rd day of April, 1995, by and
between Crossroads Pipeline Company ("Crossroads"), 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 transportation service in
connection with that facility; and
WHEREAS, Crossroads is able to provide such service;
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 No.
9T, 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 parties 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
2
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 Crossroads, 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
Crossroads shall furnish, and SDI shall purchase, interruptible gas
transportation service through the NIFL transmission system 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
interconnection with the NIFL system near Butler, Indiana ("NIFL Connection").
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.
-2-
3
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 Crossroads or its designated representative
(hereinafter "Crossroads") a monthly service fee equal to the maximum tariff
rate for transportation service by Crossroads approved by the Federal Energy
Regulatory Commission ("FERC"), not to exceed 11.57 cents per dekatherm
($.1157/Dth) for all quantities of SDI's gas delivered to the NIFL Connection.
2. Penalties and Charges Relating to Interstate Pipeline and Other
Suppliers. To the extent that SDI actions or inaction cause Crossroads to be
assessed any penalties and/or charges by or related to interstate pipeline
suppliers or other suppliers of gas or services, SDI or its designated
representatives ("SDI") shall reimburse Crossroads 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
Crossroads cause SDI to be assessed any penalties and/or charges by or related
to interstate pipeline suppliers or other suppliers of gas or services,
Crossroads shall reimburse SDI for such penalties and charges upon being
provided written documentation summarizing the actions causing the penalties or
charges.
-3-
4
ARTICLE IV
CURTAILMENT
In the event of a gas supply or operational curtailment on the
Crossroads system which affects Crossroad's ability to provide Natural Gas
Service, SDI's receipt of such service shall be subject to curtailment at the
same time and rate as the curtailment of other Crossroads interruptible gas
transportation customers .
ARTICLE V
BILLING
Crossroads will cause to be provided 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 Crossroads 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:
INVOICES PAYMENTS
SDI Crossroads
CIO Accounts Payable Xxxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx 59 000 X. 00xx Xxxxxx
Xxxxxx, Xxxxxxx 00000 Xxxxxxxxxxxx, 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
-4-
5
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
Crossroads.
In the event SDI fails to make timely and full payment of any invoice
rendered by Crossroads, and except as provided in the next paragraph, Crossroads
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 Crossroads
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 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 Crossroads with reasonable prior notification, during
regular business hours and on regular business days, SDI, or its agent, shall
have the right to examine
-5-
6
relevant books, records, contracts and charts of Crossroads 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 VI
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 Crossroads
Xxxxx Xxxxxxxxxxxx Xxxxxxx X. Xxxxxx
Vice President 000 X. 00xx Xx.
0000 Xxxxxx Xxxx 00 Xxxxxxxxxxxx, Xxxxxxx 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.
ARTICLE VII
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
-6-
7
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 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.
-7-
8
ARTICLE VIII
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 IX
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 standards of service for gas public utilities of
the IURC and FERC, 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 X
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
-8-
9
one (1) year after the cause of action has accrued. The exclusive remedy for
wrongful nondelivery of gas by Crossroads, in the absence of Crossroads' wilful
misconduct or gross negligence, is, at Crossroads' 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 Crossroads 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 Crossroads' wilful
misconduct or gross negligence. The parties agree this exclusion of
consequential damages is not unconscionable.
ARTICLE XI
INDEMNIFICATION
SDI agrees to indemnify, defend and hold harmless Crossroads 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
Crossroads 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 Crossroads 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 .
-9-
10
Crossroads 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 Crossroads, or its employees or agents,
occurring in the performance of this Agreement.
In the event any loss, damage, expense, or claim occurs for which SDI
and Crossroads are ultimately each found to have been at fault in proximately
causing the loss, damage, expense, or claim, Crossroads 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.
-10-
11
ARTICLE XII
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 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 XIII
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,
-11-
12
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 Crossroads, where Crossroads or
an affiliate took title as agent for or otherwise on behalf of SDI.
ARTICLE XIV
DISCLAIMER OF WARRANTIES
Except as provided in ARTICLE XIII, Crossroads disclaims and excludes
all warranties implied and express, including all warranties of fitness for a
particular purpose and all warranties of merchantability. SDI agrees its
attention has been drawn to this exclusion of warranties.
ARTICLE XV
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.
-12-
13
ARTICLE XVI
ENTIRE AGREEMENT
This Agreement constitutes the entire understanding of Crossroads 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 XVII
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.
ARTICLE XVIII
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.
-13-
14
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
------------------------- ------------------------------------
CROSSROADS PIPELINE COMPANY
Date: 4/18/95 By: /s/ Xxxxxxx X. Xxxxxx
------------------------- ------------------------------------
-14-
15
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.
16
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
-2-
