Exhibit 10.7
June 23, 1998
LSP Energy Limited Partnership
000 Xxxxx Xxxx; Xxxxx #000 -
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxxx
Re: Facilities Agreement
Install Hot Taps, EGM & Inspect
Tennessee's M.P. 63-3+6.8 and
M.P. 63-4+6.8
TGP Contract: TGPLPMRRM3475
Facility No.: 1214
Gentlemen:
This Facilities Agreement ("Agreement") constitutes the agreement between
TENNESSEE GAS PIPELINE COMPANY ("Tennessee") and LSP Energy Limited Partnership
("LSP") concerning the establishment of Tap Facilities and Connecting Facilities
for a new point of delivery at a proposed point of interconnection on
Tennessee's system at or near Tennessee's M.P. 63-3+6.8 and M.P. 63-4+6.8 in
Panola County, Mississippi, which shall occur in three phases: the
"Preconstruction Phase" which shall consist of certain preliminary activities
including preliminary design, detail design, engineering, environmental studies,
cost estimating and preparation and submittal of regulatory filings required to
obtain all necessary certificates, approvals and permits; the "Material
Acquisition Phase" which shall consist of the acquisition of materials,
including certain long lead-time materials; and the "Construction Phase" which
shall consist of the construction, installation and testing of facilities as
well as post-construction compliance monitoring. All three phases shall be
referred to collectively herein as the "Project." Tennessee and LSP are each a
"Party" and together are the "Parties" to this Agreement. Exhibit "A",
graphically representing the responsibilities under this Agreement, is attached
hereto and incorporated herein for all purposes. In consideration of the mutual
covenants, promises and agreements herein contained, Tennessee and LSP agree as
follows:
SECTION I - TAP FACILITIES
1-1 Tap Facilities. The "Tap Facilities" shall consist of the following: two
(2) 12" hot tap assemblies designed for a maximum volume of 216,000
Mcf/day assuming a gas pressure of 550 psig and a gas flow velocity not to
exceed 100 feet per second, electronic gas measurement and communications
equipment ("EGM"), gas chromatograph equipment, EGM/chromatograph
building, valving and appurtenant facilities.
LSP Energy Limited Partnership
July 23, 1998
Page 2
1.2 Tennessee's Rights and Obligations.
(a) Tennessee or its designee shall design, install, construct, inspect
and test the Tap Facilities, in accordance with "Tennessee's
Specifications" which shall include, but not be limited to, those
specifications stated in Tennessee's Meter Station Design Specifications
and Measurement Practices and Design Specifications for Dry Land Minor
Facilities (Less Than 12" Piping) to be Built by Others, as may be revised
from time to time, in accordance with sound and prudent natural gas
industry practice, and in accordance with all laws, rules, regulations,
orders and directives of any applicable authority having jurisdiction.
Tennessee shall be responsible for applying for and obtaining any
applicable regulatory or environmental approvals required for
construction, operation and maintenance of the Tap Facilities.
(b) Tennessee shall own the Tap Facilities at all times, and the Tap
Facilities shall be subject to Tennessee's sole discretion as to the
standards and requirements of engineering, safety and method of use.
(c) Tennessee agrees to make reasonable effort to complete and place
in-service the Tap Facilities by October 1, 1999, provided that LSP has
complied with and made payment to Tennessee pursuant to Section 3.1(c)
herein by March 1, 1999, or by such other completion date mutually
agreeable to the parties, provided however that such date may be extended
pursuant to Section 6.17 hereunder.
1.3 LSP's Rights and Obligations.
(a) LSP shall reimburse Tennessee for the costs incurred by Tennessee
associated with the Tap Facilities in accordance with the provisions of
Section 3 hereunder.
(b) LSP shall provide support for any regulatory authorization or
permitting requirements necessary for the Tap Facilities at any duly
authorized federal, state or government agency having jurisdiction
including, but not limited to, support for all exhibits required by an
application for FERC authorization.
(c) LSP shall maintain responsibility for the acquisition of all necessary
rights-of-way and permits for the site upon which any portion of the Tap
Facilities located outside of Tennessee's right-of-way will be located.
Unless mutually agreed otherwise, such site shall be adjacent to
Tennessee's right-of-way, and LSP shall perform the necessary site
preparations, site maintenance and improvements, including installation of
site fencing and, if Tennessee deems it to be necessary, both electrical
and telephone service. LSP shall provide, if not already existing, and
shall maintain an all-weather road to access the Tap Facilities site for
performance of the obligations hereunder. Tennessee shall have free and
unrestricted use of such all-weather road at all times to access the Tap
Facilities. Provisions for the necessary property-related document(s)
shall be coordinated with Xx. Xxxxx Xxxxx, Senior Property Rights
Specialist, at (000) 000-0000, Ext.-2035.
LSP Energy Limited Partnership
June 23, 1998
Page 3
1.4. Operation and Maintenance. Tennessee or its designee shall, at its own
cost and expense, operate, repair, replace and maintain the Tap
Facilities, in accordance with Tennessee's Specifications, in accordance
with Article X of the General Terms and Conditions of Tennessee's FERC Gas
Tariff, in accordance with sound and prudent natural gas industry
practice, and in accordance with all laws, rules, regulations, orders and
directives of any applicable authority having jurisdiction. Exhibit "B",
specifying Tennessee's and LSP's separate responsibilities under
Tennessee's Operation and Maintenance Policy, is attached hereto and
incorporated herein for all purposes.
1.5. EGM. Measurement will be in accordance with Article IV of the General
Terms and Conditions of Tennessee's FERC Gas Tariff. LSP shall change
measurement charts, furnished by Tennessee, if utilized temporarily prior
to implementation of the EGM, and shall mail such charts to Tennessee for
first integration. Tennessee shall maintain responsibility for the
volumetric determination and thermal (Btu) analysis. The Parties hereby
agree to utilize Tennessee's EGM for volumetric determination and custody
transfer purposes, and Tennessee shall grant access to the electronic
signal to LSP; provided however, Tennessee shall not be liable or
responsible to LSP in any action or claim for consequential, direct or
special damages, loss of use, loss of profits or loss of product as a
result of LSP's use of such electric signal output data made available to
LSP.
1.6 Title. Title to the Tap Facilities shall be in Tennessee's name, and shall
be owned by Tennessee.
1.7 Gas Quality. The applicable gas quality standards shall be in accordance
with Article 11 of the General Terms and Conditions of Tennessee's FERC
Gas Tariff.
SECTION 2 - CONNECTING FACILITIES
2.1 Connecting Facilities. The "Connecting Facilities" shall consist of the
following: measurement facilities, and interconnecting pipeline and
appurtenant facilities.
2.2 Tennessee's Rights and Obligations.
(a) Tennessee has the right, but not the obligation, to inspect the
Connecting Facilities at all reasonable times to assure compliance with
Tennessee's Specifications.
(b) Tennessee or its designee, has the right of access to the Connecting
Facilities installed by LSP at all reasonable times to install Tap
Facilities , and to inspect, test and witness LSP's testing of the
Connecting Facilities to ensure that such facilities are, as applicable,
constructed, installed, operated, maintained, inspected and tested in
accordance with Tennessee's Specifications.
(c) In the event that LSP desires Tennessee to install any Connecting
Facilities to effectuate compliance hereunder, upon written notification
to and acceptance by Tennessee, such Connecting Facilities shall be
installed subject to all terms and conditions of this Agreement, as
applicable.
LSP Energy Limited Partnership
June 23, 1998
Page 4
(d) Upon the request of LSP Tennessee will advise, and provide input and
recommendations to LSP regarding the design of the Connecting Facilities
to facilitate compliance with Tennessee's Specifications and operational
flexibility of LSP's downstream facilities; provided, however, Tennessee
makes no representation or warranty as to the outcome of such
participation in the design of the Connecting Facilities, nor does
Tennessee's participation relieve LSP of its obligation to comply with the
provisions of this Agreement.
2.3 LSP's Rights and Obligations.
(a) LSP shall design, install, construct and test the Connecting
Facilities in accordance with Tennessee's Specifications in accordance
with sound and prudent natural gas industry practice, and in accordance
with all laws, rules, regulations, orders and directives of any applicable
authority having jurisdiction.
(b) Prior to the start of construction of the Connecting Facilities, LSP
or its designee shall submit to Tennessee for approval such drawings and
documentation as required by Tennessee to verify compliance with
Tennessee's Specifications, and LSP shall provide to Tennessee copies of
any required permits.
(c) In the event any Connecting Facilities installed by LSP are determined
not to be in accordance with Tennessee's Specifications, all necessary
changes and modifications shall be undertaken by LSP at no expense to
Tennessee prior to gas flow.
(d) LSP shall reimburse Tennessee for the costs incurred by Tennessee
associated with the inspection of the Connecting Facilities, and any
expenses incurred by Tennessee pursuant to Section 2.2(c), as applicable,
in accordance with the provisions of Section 3 hereunder.
(e) In the event Tennessee installs any Connecting Facilities pursuant to
Section 2.2(c), LSP shall provide support for any regulatory authorization
or permitting requirements necessary for such Connecting Facilities at any
duly authorized federal, state or government agency having jurisdiction
including, but not limited to, support for all exhibits required by an
application for FERC authorization.
(f) LSP shall maintain responsibility for the acquisition of all necessary
rights-of-way and permits for the Connecting Facilities and for the site
upon which the Connecting Facilities will be located. Unless mutually
agreed otherwise such site shall be adjacent to Tennessee's right-of-way,
and LSP shall perform the necessary site preparations, site maintenance
and improvements, including installation of site fencing, and if Tennessee
deems it to be necessary, both electrical and telephone service. LSP shall
provide, if not already existing, and shall maintain an all-weather road
to access the Connecting Facilities for performance of the obligations
hereunder. Tennessee shall have free and unrestricted use of such
all-weather road at all times to access the Connecting Facilities.
Provisions for the necessary property-related document(s) shall be
coordinated with Xx. Xxxxx Xxxxx, Senior Property Rights Specialist, at
(000) 000-0000, Ext.-2035.
LSP Energy Limited Partnership
June 23, 1998
Page 5
(g) LSP shall be responsible for providing pressure regulation and
over-pressure protection for LSP's facilities down stream of the
Connecting Facilities.
(h) At LSP's sole cost, expense and liability, LSP shall maintain
responsibility for the injection of all odorant, if any, at levels
required by all regulatory authorities.
2.4 Operation and Maintenance. LSP or its designee shall operate, repair,
replace and maintain the interconnecting pipeline and appurtenant
facilities, and shall repair, replace and maintain the measurement
facilities in accordance with Tennessee's Specifications, in accordance
with sound and prudent natural gas industry practice, and in accordance
with all laws, rules, regulations, orders and directives of any applicable
authority having jurisdiction. Tennessee or its designee shall operate the
measurement facilities in accordance with Tennessee's Specifications, in
accordance with Article X of the General Terms and Conditions of
Tennessee's FERC Gas Tariff, in accordance with sound and prudent natural
gas industry practice, and in accordance with all laws, rules,
regulations, orders and directives of any applicable authority having
jurisdiction. Exhibit "B," specifying Tennessee's and LSP's separate
responsibilities under Tennessee's Operation and Maintenance Policy, is
attached hereto and incorporated herein for all purposes.
2.5 Title. Title to the Connecting Facilities shall be in LSP's name, and
shall be owned by LSP.
SECTION 3 - PAYMENT TERMS
3.1 Payment. LSP shall pay Tennessee for all costs incurred by Tennessee for
the Project as described herein, including, but not limited to, all costs
and expenses associated with the following: the design, installation,
construction, inspection and testing of the Tap Facilities, the inspection
of the Connecting Facilities, and any expenses incurred by Tennessee
pursuant to Section 2.2(c) as applicable, including any overhead charges,
gas losses and liability as provided in Section 4.2, subject to Sections
1.3(a) and 2.3(d). The incurrence of costs by Tennessee for the Project
shall be in a manner that is consistent with the standards adopted by
Tennessee in undertaking the construction of its own facilities of a
similar nature. It is estimated that the total costs to be paid to
Tennessee by LSP shall be Two Hundred Thirty-One Thousand Dollars
($231,000.00), but such estimate shall not be construed as limiting
payment by LSP. LSP shall pay Tennessee in accordance with the following:
(a) Tennessee estimates that the total costs Tennessee will incur to
complete the Preconstruction Phase, inclusive of overhead charges,
shall be Nineteen Thousand Five Hundred Seventeen Dollars
($19,517.00), but such estimate shall not be construed as limiting
payment by LSP. Within two (2) working days after Tennessee's
execution of this Agreement, Tennessee shall invoice LSP and prior
to the commencement of the Preconstruction Phase, LSP shall pay
Tennessee this estimated amount.
LSP Energy Limited Partnership
June 23, 1998
Page 6
(b) Tennessee estimates that the total costs Tennessee will incur to
complete the Material Acquisition Phase, inclusive of overhead
charges, shall be One Hundred Thirty Thousand, Six Hundred Forty
Dollars ($130,640.00), but such estimate shall not be construed as
limiting payment by LSP. Unless mutually agreed otherwise, Tennessee
shall be under no obligation to commence the Material Acquisition
Phase until LSP has notified Tennessee to proceed with the Material
Acquisition Phase, the Preconstruction Phase has been completed and
LSP has paid Tennessee this estimated amount. Tennessee shall not
invoice LSP for this estimated amount until LSP has notified
Tennessee to proceed with the Material Acquisition Phase.
(c) Tennessee estimates that the total costs Tennessee will incur to
complete the Construction Phase, inclusive of overhead charges,
shall be Eighty Thousand, Eight Hundred Fourty-three Dollars
($80,843.00), but such estimate shall not be construed as limiting
payment by LSP. Unless mutually agreed otherwise, Tennessee shall be
under no obligation to commence the Construction Phase until LSP has
notified Tennessee to proceed with the Construction Phase, the
Material Acquisition Phase has been completed and LSP has paid
Tennessee this estimated amount. Tennessee shall not invoice LSP for
this estimated amount until LSP has notified Tennessee to proceed
with the Construction Phase.
(d) If during any phase of the Project Tennessee anticipates that the
total cost of the Project will exceed the total estimated cost, as
shown in Section 3.1, by twenty percent (20%) or more, Tennessee
shall notify LSP in writing and include documentation to support
such increase. Unless LSP notifies Tennessee within three (3)
working days to discontinue work hereunder, Tennessee shall continue
with the work. If LSP elects to discontinue further construction
work and so advises Tennessee, LSP shall reimburse Tennessee for all
costs incurred up to the time of such notice and for all costs,
including demobilization, necessary to cease such work.
3.2 Reconciliation. As soon as practical after completion of the project as
described herein, Tennessee shall render an invoice or a credit, as the
case may be, for any variance between the prepayment and the total project
cost, including overheads. Within thirty (30) days after completion of
this project as described herein, Tennessee agrees to provide LSP
documentation setting forth in reasonable detail the expenditures and
costs incurred with respect to the Tap Facilities and Connecting
Facilities as applicable.
3.3 Remittance. LSP shall make payment to Tennessee at Houston, Texas within
thirty (30) days from the date such invoice(s) is rendered. Should LSP
fall to make timely payment of such invoice, Tennessee shall be entitled
to collect the amount of such invoice, together with interest, at a rate
equal to the lesser of one percent (1%) above the prime rate from time to
time charged by Chase Manhattan N.A., or the maximum applicable
non-usurious rate of interest. Such interest shall accrue on unpaid
amounts, including on unpaid interest, compounded daily, beginning on the
payment due date of Tennessee's invoice to LSP, and shall terminate when
such invoice is paid.
LSP Energy Limited Partnership
June 23, 1998
Page 7
3.4 Early Termination. In the event LSP elects to discontinue the project
described herein prior to completion of said project, LSP shall reimburse
Tennessee for all costs incurred by it in accordance with the terms of
this Agreement prior to such discontinuance.
3.5 Right to Audit. Each Party shall have the right, upon thirty (30) day
advance written notice, to examine, at any reasonable time during business
hours, the books and records of the other Party to the extent necessary to
verify the accuracy of any statement or computation made under or pursuant
to provisions hereunder. Any such audits may be initiated at any time
hereunder, but must be initiated not later than twelve (12) months after
the date of Requesting Party's receipt from Tennessee of written notice
that the project described herein has been completed. Should either Party
fail to initiate an audit within such 12-month period, the books and
records of account as prepared shall be presumed to be correct. In the
event an audit reveals discrepancies, errors, or that costs were not
incurred in accordance with the terms of this Agreement , the cost of the
Project shall be adjusted in accordance with the results of the audit and
a reconciliation shall be made in accordance with Section 3.2 hereof. All
costs incurred to conduct the audit shall be borne by the Party requesting
the audit.
SECTION 4 - INDEMNITIES
4.1 Tennessee's Indemnity. Notwithstanding any other provision in this
Agreement, Tennessee agrees to protect, defend, indemnify and hold LSP,
its directors, officers, employees, attorneys-in-fact, agents, and
affiliated companies, free and harmless from and against any and all
losses, claims, liens, demands, and causes of action of every kind and
character, including, but not limited to, the amounts of judgments,
penalties, interest, court costs, investigation expenses and costs and
legal fees incurred by LSP, its directors, officers, employees,
attorneys-in-fact, agents and affiliated companies, in defense of same
arising in favor of any governmental agencies, third parties, contractors
or subcontractors, on account of taxes, claims, liens, debts, personal
injuries, death or damages to property, and all other claims or demands of
every character occurring or in anywise incident to, in connection with,
or arising out of Tennessee's or its contractors or subcontractors
negligence, gross negligence or willful misconduct solely related to
activities performed under this Agreement. This indemnity provision may be
limited as necessary by applicable law.
4.2 LSP's Indemnity. Notwithstanding any other provision in this Agreement,
LSP agrees to protect, defend, indemnify and hold Tennessee, its
directors, officers, employees, attorneys-in-fact, agents, and affiliated
companies, free and harmless from and against any and all losses, claims,
liens, demands, and causes of action of every kind and character,
including, but not limited to, the amounts of judgments, penalties,
interest, court costs, investigation expenses and costs and legal fees
incurred by Tennessee, its directors, officers, employees,
attorneys-in-fact, agents and affiliated companies, in defense of same
arising in favor of any governmental agencies, third parties, contractors
or subcontractors, on account of taxes, claims, liens, debts, personal
injuries, death or damages to property, and all other claims or demands of
every character occurring or in anywise incident to, in connection with,
or arising out of LSP's or its contractors or subcontractor's negligence,
gross negligence or willful misconduct solely related to activities
performed under this Agreement. This indemnity provision may be limited as
necessary by applicable law.
4.3 Limitation on Liability Notwithstanding any other provision in this
Agreement, in no event shall either Party be liable to the other Party for
consequential, incidental or punitive
LSP Energy Limited Partnership
July 23, 1998
Page 8
losses, damages or expenses (including lost profits or savings) even if
advised of their possible existences, except to the extent caused by gross
negligence or willful misconduct.
SECTION 5 - TERM AND TERMINATION
5.1 Term and Termination. This Agreement shall be effective as of April 15,
1998 and shall remain in full force and effect thereafter until the final
removal and/or FERC approved abandonment of any Tap Facilities or Tap
Facilities and Connecting Facilities constructed hereunder is complete,
unless sooner terminated by either Party, as follows:
(a) In the event LSP desires to disconnect the Connecting Facilities
from Tennessee, LSP shall tender sixty (60) days advance written
notice to Tennessee of such intent, and upon such disconnection of
the Connecting Facilities, this Agreement shall terminate; or,
(b) Tennessee shall have the right to terminate this Agreement upon
sixty(60) days advance written notice to LSP (i) in the event LSP
has failed to make timely payment of the estimated amount in
accordance with the payment provisions hereunder, and LSP fails to
cure any such breach during the sixty(60) day period following its
receipt of notice from Tennessee, or (ii) LSP has not authorized
Tennessee by March 1, 1999 to proceed in accordance with Section
3.1(c) and LSP fails to authorize Tennessee to proceed during the
sixty(60) day period following its receipt of notice from Tennessee.
Otherwise, Tennessee shall have the right to terminate this
Agreement upon sixty (60) days advance written notice to LSP if gas
has not flowed through the Connecting Facilities for the previous
period of twelve (12) consecutive months, or if LSP or its designee
has caused the Connecting Facilities to be disconnected or removed.
5.2 Survival. The indemnification provisions and payment obligations hereof
shall survive any termination relative to all losses, deaths, injuries,
claims, xxxxxxxx, liens, demands and causes of action of every kind and
character, discovered or undiscovered, arising out of, in connection with,
or as an incident to this Agreement.
SECTION 6 - MISCELLANEOUS
6.1 Liens. Each Party agrees to notify the other Party immediately of the
filing of all such claims and any liens including, without limitation,
laborers', materialmen's and mechanics' liens upon property of the other,
and upon which the work is located, arising out of the services, labor and
material furnished by either Party or its contractors or subcontractors
under this Agreement. Either Party may, upon receipt of notice of the
filing of any such liens, at its option, require a bond in an amount and
with such sureties as may be approved by such Party, conditioned to
indemnify and save harmless such Party from all such liens upon or against
its property. In the event such Party fails or refuses to furnish such
bond when so required, the other Party shall have the right to pay any
sums necessary to obtain the release of such liens and xxxx the costs to
the Party failing to keep the others property free of claims.
6.2 Drug and Alcohol Testing. Tennessee and LSP shall be in compliance with
the terms of the United States Department of Transportation Federal
Pipeline Safety Drug and Alcohol Testing regulations, as applicable.
LSP Energy Limited Partnership
June 23, 1998
Page 9
6.3 Reliance. All factual recitals, covenants, agreements, representations and
warranties made herein shall be deemed to have been relied on by the
Parties in entering into this Agreement.
6.4 Dispute Resolution. If a disagreement under this Agreement arises between
the Parties, prior to sending a formal demand letter from counsel or
filing a lawsuit, LSP and Tennessee will seek in good faith to resolve the
dispute by agreement. Agreement will not be considered unachievable until
the matter has been turned over to an executive officer of LSP and
Tennessee respectively and they are unable to resolve the matter.
Unreasonable delay on the part of an officer to attend to a dispute will
indicate that agreement is unachievable. Agreement between LSP and
Tennessee in a dispute may include disposition of the matter, agreement to
submit the dispute to arbitration or agreement upon a conciliatory method.
6.5 Legal Fees. If any legal action is brought by either of the Parties
hereto, it is expressly agreed that the Party in whose favor final
judgment shall be entered shall be entitled to recover from the other
Party reasonable attorney's fees in addition to any other relief which may
be awarded.
6.6 Governing Law. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF TENNESSEE AND
LSP SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL
LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF TEXAS.
LSP Energy Limited Partnership
June 23, 1998
Page 10
6.7 Notices. Any statements, payments or other communications provided for in
this Agreement shall be in writing and shall be given by personal delivery
or shall be deposited with the United States Postal Service, postage
prepaid, and addressed as follows:
(a) All notices to be sent to Tennessee shall be addressed to:
Tennessee Gas Pipeline Company
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Manager, Property Rights Services
Phone: (000) 000-0000
FAX: (000) 000-0000
For Invoice Matters:
Attention: Property Accounting Department (000) 000-0000
Re: Reimbursement Agreement No.: TGPLPMRRM3475
Facility Request No.: 1214
For Engineering Matters:
Attention: Xx. Xxxxx Xxxx
(000) 000-0000
For Measurement Matters (Operations, Equipment, Maintenance, etc.):
Attention: Operating Network
(000) 000-0000
(b) All notices to be sent to LSP shall be addressed to:
L.S. Power 655 LSP's 24-hr Contact & Phone:
Xxxxx Xxxx; Xxxxx #000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxxx
(000) 000-0000
FAX: (000) 000-0000
Either Party may change its address for notice by giving notice. LSP shall
provide to Tennessee LSP's 24-hour contact and phone number prior to
initial gas flow.
6.8 Governmental Laws and Regulations.
(a) This Agreement, and all the terms and conditions contained herein, are
subject to Tennessee's FERC Gas Tariff and to all valid and applicable
laws, orders, directives, rules and regulations of duly constituted
authorities having jurisdiction, as amended from time to time. This
Agreement is conditioned upon the receipt and acceptance of all regulatory
authorizations necessary to the rendering of this service by Tennessee on
terms acceptable to Tennessee in its sole discretion. No construction or
installation shall be commenced hereunder prior to the receipt and
acceptance of such regulatory authorizations.
LSP Energy Limited Partnership
June 23, 1998
Page 11
(b) Tennessee shall not use the costs incurred and reimbursed hereunder
for the construction of the Tap Facilities and Connecting Facilities as
either revenues or costs in establishing its general system rates.
(c) Nothing herein shall require Tennessee to file an application for a
certificate of public convenience and necessity under Section 7(c) of the
Natural Gas Act.
6.9 Successors and Assigns.
(a) The rights and obligations contained in this Agreement shall not be
assigned by either Party without the express written consent of the
non-assigning Party being first obtained, except that either Party may
assign to any of its subsidiary or affiliated companies the performance or
exercise of its obligations or rights hereunder, and, to the extent its
obligations are so performed by its affiliate such performance shall be
applied to its obligation but no such designation or assignment shall
relieve Tennessee or LSP of any obligations hereunder except to the extent
the same are fully performed by such designee or assignee, and LSP may
assign this Agreement to its lenders in connection with its financing
without first obtaining that consent; provided further that LSP may assign
the rights but not the obligations under this agreement to a public or
governmental entity without first obtaining that consent.
(b) This Agreement shall bind and inure to the benefit of any successors
or assigns to the original Parties to this Agreement, but such assignment
shall not relieve either Party of any obligations incurred prior to such
assignment, nor shall any assignment be effective as to the non-assigning
Party until the aforementioned written consent is granted and a copy of
the recorded instrument of assignment together with written notice of
transfer is delivered to the non-assigning Party.
(c) The assigning Party must provide written notification to the
non-assigning Party of such assignment of this Agreement, complete with
signatures of both the assignor and the assignee. The recognition date of
any assignment for the purposes of this Agreement shall be the first day
of the month following the latter of: i) the date written notification of
assignment is delivered to the other Party; or, ii) the date written
consent is granted if required.
6.10 Severabilily. If any of the terms and conditions of this Agreement are
held by any court of competent jurisdiction to contravene, or to be
invalid under, the laws of any political body having jurisdiction over
this subject matter, that contravention or invalidity shall not invalidate
this entire Agreement. Instead, this Agreement shall be construed as
reformed as to the extent necessary to render valid the particular
provision or provisions held to be invalid, consistent with the original
intent of that provision and the rights and obligations of the Parties
shall be construed and enforced accordingly, and this Agreement shall
remain in full force and effect as reformed.
6.11 Entire Agreement. This Agreement, including any exhibits and any written
amendments expressly made a part of this Agreement, states the entire
understanding between the Parties concerning the subject matter of this
Agreement, and supersedes all prior oral and written communications. No
amendment to this Agreement shall be effective unless it is in writing and
signed by an authorized employee of each of the Parties hereto.
6.12 Counterpart Execution. This Agreement may be executed in any number of
counterparts with the same effect as if all the Parties had signed the
same document. All
LSP Energy Limited Partnership
June 23, 1998
Page 12
counterparts shall be construed together and shall constitute one and the
same instrument when executed by an authorized employee of each of the
Parties hereto.
6.13 Incorporation of Exhibits. Any Exhibit or Appendix attached to this
Agreement is incorporated into this Agreement as fully as if stated within
the body of this Agreement. In the event of a conflict between this
Agreement and any Exhibits or Appendices attached hereto, the terms of the
Agreement shall override.
6.14 Captions. The titles and captions to each of the various Sections in this
Agreement are inserted only for convenience and for reference and shall
not affect the construction or interpretation of this Agreement.
6.15 Drafting Party. This Agreement expresses the mutual intent of the Parties
to this Agreement. Accordingly, the rule of construction against the
drafting Party shall have no application to this Agreement.
6.16 Waiver of Rights. The respective rights and remedies of each Party to this
Agreement are cumulative, and no exercise or enforcement by either Party
or remedy hereunder shall preclude the exercise or enforcement by such
Party of any other night or remedy hereunder, or which such Party is
entitled by law to enforce. Each Party may waive any obligation of, or
restriction upon the other Party under this Agreement only in writing. No
failure, refusal, neglect, waiver, forbearance, or omission of either
Party to exercise any right under this Agreement or to insist upon full
compliance by the other with its obligations hereunder shall constitute a
waiver of any provision of this Agreement nor shall it impair the exercise
of any such right or of any other right to which it is entitled.
6.17 Force Maieure Event. Neither Party shall be liable in damages to the other
Party for any act, omission or circumstances occasioned by or in
consequence of any force majeure events, including acts of God, strikes,
lockouts or other industrial disturbances, acts of the public enemy or
terrorists, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, explosions or accidents to
machinery or xxxxx or lines of pipe, line or well freeze-ups, inability to
obtain or unavoidable delay in obtaining materials, supplies, equipment,
permits or labor to perform or comply with any obligations or conditions
of an agreement, inability to obtain access to rights-of-way, the binding
order of any court or governmental authority which has been resisted in
good faith by all reasonable means, or any other act, omission or
circumstances occasioned by or in consequence of any other cause, whether
of the kind herein enumerated, or otherwise, beyond the reasonable control
of and without the fault or negligence of the affected Party. The Party
experiencing a force majeure event shall give prompt written notice of the
force majeure event, its expected duration, and its termination to the
other Party. The suspension of performance shall be no longer than the
duration of the force majeure event.
LSP Energy Limited Partnership
June 23, 1998
Page 13
If the foregoing correctly reflects your understanding of our agreement, please
evidence your acceptance in the space provided below and return both originals
to the attention of the undersigned (Suite E-619). The Agreement will then be
presented to Tennessee's management for acceptance and execution. This letter
shall not constitute an offer by Tennessee, and shall only become a Contract
after it is accepted by Tennessee upon execution by a Tennessee Officer or duly
appointed "Agent and Attorney-in-fact." Upon such acceptance and execution by
Tennessee, a fully executed original will be returned for your retention. In the
event the Agreement is not executed within ninety (90) days after the date of
submission, the terms and conditions set forth herein shall become null and
void.
Very truly yours,
TENNESSEE GAS PIPELINE
COMPANY
/s/ Xxxxx X. Xxxxx
-----------------------
Xxxxx X Xxxxx
Senior Contract Analyst
AGREED TO AND ACCEPTED THIS 24th DAY OF July, 1998.
---- ---- --
TENNESSEE GAS PIPELINE COMPANY
By:/s/ Wiaston X. Xxxxxxx
-----------------------------
Name: Wiaston X. Xxxxxxx XX
--------------------------
Title: Vice President
-------------------------
AGREED TO AND ACCEPTED THIS 17th DAY OF July, 1998.
---- ---- --
LSP ENERGY LIMITED PARTNERSHIP
BY: LSP ENERGY, INC., ITS GENERAL PARTNER
By: /s/ Xxxx X. Xxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxx
---------------------------
Title: Assistant Vice President
---------------------------
EXHIBIT "B"
-----------
TENNESSEE GAS MEASUREMENT DEPARTMENT
OPERATION/MAINTENANCE POLICY FOR NEW FACILITIES
-----
OPERATIONS
----------
BY TENNESSEE:
-------------
1) Volume and gas quality (BTU) determination
a) Electronic Custody Transfer:
- chromatographs or samplers and gas analysis
- electronic instrumentation (flow computer, xducers, etc.)
b) If Conventional Measurement:
- chart integration and gas analysis
- supply of charts
- supply of envelopes
2) Facility inspections and calibration tests
3) Plate changes
4) Flow/volume control
5) Hot taps
BY CUSTOMER:
------------
1) Chart changing, if utilized temporarily
2) Pressure regulation, over-pressure protection
3) Heating facilities
4) Plate changes
5) Interconnecting pipeline
MAINTENANCE
-----------
BY TENNESSEE:
-------------
1) Additional orifice plates (the complete initial set to be furnished by
customer)
2) Minor repairs
- ink and inking systems
- linkages
- instrument valves
3) Hot taps
BY CUSTOMER:
------------
1) Repair or replacement of major equipment
- valves
- orifice fittings
- valve actuators
- recorder bellows
- etc.
2) General site upkeep
- building
- painting
- yard and fences
- security
- all-weather access road
- etc.
3) Interconnecting pipeline
* Tennessee will ALWAYS operate and maintain Tennessee-installed electronic
equipment.
