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EXHIBIT 10(f)
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MOBIL NATURAL GAS INC.
00000 XXXXXXXXXXX XXXXX
XXXXXXX, XXXXX 00000-0000
August 10, 1995
CONFIDENTIAL
Xx. X. Xxxxxx Xxxxxx
Mobile Gas Service Corporation
P. 0. Box 2248
0000 Xxxxxxx Xx.
Xxxxxx, Xxxxxxx 00000
AGREEMENT FOR SALE AND
PURCHASE OF GAS
MOBILE PLANT
S-6650
Ladies and Gentlemen:
This letter shall confirm the agreement between Mobil Natural Gas Inc.
("Mobil") and Mobile Gas Service Corporation ("Buyer") for the sale and
purchase of gas for a [***proprietary information omitted***] year price
renegotiation and term extension through close of [***proprietary information
omitted***], in accordance with provisions of the Letter Agreement dated
November 1, 1991. When executed by both parties, this Letter Agreement shall
constitute a binding agreement between Mobil and Buyer.
Mobil agrees to sell, and Buyer agrees to purchase, natural gas during the term
hereof in accordance with the following provisions and the terms and provisions
of Appendices A, B, C, and D, attached to and made part of this letter
Agreement:
1. NATURE OF SALE: Warranty. Mobil warrants that it will deliver gas in
accordance with Section 4 of Appendix B, or pay damages, pursuant to
Section 5 thereof, for its failure to deliver such quantity, except to
the extent of any gas which Mobil is unable to deliver pursuant to
Xxxxxxx 0, Xxxxx Xxxxxxx, of Appendix B.
2. QUANTITY: The Maximum Contract Quantity (MCQ) for each day during the
term of this Agreement shall be the quantity set out on Appendix A.
3. SALES POINT(S): Title to and possession of gas delivered shall pass from
Mobil to Buyer at the Sales Point(s) listed on Appendix A.
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Mobile Gas Service Corporation
August 10, 1995
Page 2
4. COMMODITY CHARGE: Buyer agrees to pay Mobil the Commodity Charge
indicated on Appendix A for each MMBtu of gas nominated by Buyer with
adjustment to actuals to follow.
5. RESERVATION CHARGE: Regardless of the amount of gas actually taken by
Buyer in any month, Buyer agrees to pay Mobil the Reservation Charge
indicated on Appendix A in consideration for Mobil's agreement to make
a quantity of gas, up to the MCQ, available each day.
This Letter Agreement, and Appendices A, B, C, and D constitute the parties'
entire agreement as to the matters covered hereby.
If the foregoing correctly reflects your understanding of our agreement, please
execute both of the enclosed originals of this Letter Agreement and return one
fully executed original to the undersigned.
Very truly yours,
MOBIL NATURAL GAS INC.
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Area Sales Manager
ACCEPTED AND AGREED TO
This 14th day of September 1995
BUYER: MOBILE GAS SERVICE CORPORATION
By: /s/ Xxxxxx X. Xxxx
Name (Printed): Xxxxxx X. Xxxx
Title: Vice President
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APPENDIX A
WARRANTY LETTER AGREEMENT
Attached to and forming part of the Letter Agreement dated November 1, 1991
between Mobil Natural Gas Inc. and Mobile Gas Service Corporation.
PART I
MCQ SALES POINT(S)
EFFECTIVE PERIOD (MMBtu/D) Location Meter No.
---------------- --------- -------- ---------
[***proprietary information omitted***] Mobil Mobile Bay 2460
Alternate: Xxxx Gateway
Pipeline Co.
At Whistler
PART II
COMMODITY CHARGE MMBtu (Dry)1 RESERVATION CHARGE
---------------------------- ------------------
[***proprietary information omitted***] Calculated monthly, according to the formula R
=[***proprietary information omitted***], where P equals the
commodity Charge; MCQ equals the Maximum Contract Quantity
([***proprietary information omitted***] MMBTU/D); and D
equals the number of gas days in the month.
AGREED AND ACCEPTED this 14th day of September, 1995.
BUYER: SELLER:
MOBILE GAS SERVICES CORPORATION MOBIL NATURAL GAS
INC.
By: /S/ Xxxxxx X. Xxxx By: /S/ Xxxxx X. Xxxxxx
1 The Commodity charge includes all taxes, transportation
charges, and other add-ons, aftributable to the gas prior to delivery,
excluding only sales, use, and gross receipts taxes arising at the time of
delivery and/or title passage. Buyer shall pay all sales, use, and gross
receipts taxes unless Buyer is exempt, by law, from such taxes. Buyer agrees
to provide Seller copies of any applicable exemption certificates.
2 The Inside FERC Index shall be determined monthly by
calculating the arithmetic average of the 30 day spot prices for gas delivered
into the following pipeline systems at the identified supply areas:
[***proprietary information omitted***], as reported in the publication "Inside
FERC's Gas Market Report (McGraw Hill) under the heading of "Index", for the
first Day of the Month or the earliest Day in that Month for which such prices
are reported.
3 Should implications of FERC Order 636 change the value of the
commodity, both parties agree to attempt to renegotiate said commodity for the
remaining term of the contract.
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APPENDIX B
TERMS & CONDITIONS
WARRANTY LETTER AGREEMENT
1. DEFINITIONS:
a. MMBtu: The unit of measurement shall be one million British Thermal
Units (MMBtu), determined on the basis of gross heating value (determined at
60degreesF when saturated with water vapor at an absolute pressure of 14.73
psia, adjusted for water content as delivered).
b. Day: A period from 7:00 A.M. at the Sales Points until 7:00 A.M. on the
following day.
c. Month: A period from 7:00 A.M. on the first Day of the calendar month
and ending at 7:00 A.M. on the first Day of the following month.
2. DECONTROL: Buyer and Seller agree, to the extent they are legally
empowered to do so, that gas sold under this Agreement shall not be subject to
control by any governmental agency. Instead, the parties intend to have their
negotiated price govern.
3. BUYER'S OBLIGATIONS: Buyer will notify Mobil, in writing, on or before
the 20th Day of each Month, of the quantity of gas Buyer willt purchase each
Day during the next Month (Purchase Quantity). Buyer may request any quantity,
including zero, up to the MCQ. Except to the extent prevented by Force
Majeure, it is Buyer's intention to take each day at least 80% of all gas
nominated at the Sales Point(s). As to any failure to take at least 80% of the
monthly nominated quantity at the delivery point, or take during any month at
least 80% of the nominated quantity at the delivery point, Buyer shall pay
Seller, in addition to the commodity price set forth on Appendix A, the
difference between 80% of the nominated quantity and the quantities actually
delivered multiplied by 20% of the commodity price.
4. SELLER'S OBLIGATIONS: Mobil agrees to deliver each Day at the Sales
Point(s) a quantity of gas within +- 10% of the Purchase Quantity (Daily
Operating Tolerance), up to the MCQ. Mobil's obligation to deliver gas during
any Month shall be met by deliveries within +- 5% (Monthly Operating Tolerance)
of the Monthly Purchase Quantity (the sum of the Purchase Quantities in effect
each Day during such Month).
5. DAMAGES: If Mobil tenders a quantity of gas which is less than the
Purchase Quantity and outside the Daily Operating Tolerance and is not excused
by Mobil's force majeure or an act or omission of Buyer or Buyer's transporter,
Mobil shall pay damages for such failure in an amount equal to the increased
costs which Buyer demonstrates it paid for replacement Gas. Such increased
costs, if any, shall be measured by comparing: (i) the total costs paid by
Buyer for the replacement gas and Buyer's costs to have such gas delivered to
the Sales Point(s) to (ii) the total costs which would otherwise have been paid
by Buyer to purchase gas hereunder and have such gas delivered to its
facilities, provided that it is understood that Buyer will purchase the least
expensive replacement gas consistent with consideration of reliability of
supply. If, however, any such shortfall does not result in Buyer receiving
less gas at its facilities than required, but rather results in an imbalance
under Buyer's transportation agreement(s), Mobil shall have no obligation to
pay damages for such shortfall; provided that Mobil, upon written demand and
after having failed to make-up such imbalance within the maximum period
prescribed in Buyer's transportation agreement(s), shall reimburse Buyer for
any imbalance penalties caused by Mobil's shortfall and paid by Buyer under its
transportation agreement(s). Buyer's written demand for damages or
reimbursement for imbalance penalties must be received within sixty (60) Days
after the end of the Month for which damages or imbalance penalties are claimed
or Buyer shalt be deemed to have waived any right to seek damages or
reimbursement for imbalance penalties for such Month.
6. BILLING & PAYMENT: Mobil will provide Buyer an invoice by the 10th Day
of each Month showing the quantity of gas tendered at the Sales Points during
the preceding Month and the amount due therefor. If actual measurement data is
not available, Mobil will estimate the volume delivered using the best
information available. Payment shall be made by electronic transmission of
funds, or other means agreeable to the parties, within ten (10) Days of the
date of the date of Mobil's posting its invoice in the U.S. mails or other
delivery mechanism or service. A revised invoice will be prepared as soon as
actual data is available, and any additional payment, or refund, will be made
within 10 days after the posting of Mobil's invoice in the U.S. mails or other
delivery mechanism or service. Buyer's obligation to pay for gas received will
not be excused for force majeure, and wiII survive the termination hereof. If
Buyer faiIs to pay any amount when due, interest thereon shat I accrue at the
lesser of the average prime commercial rate being charged during the period of
delinquency by Citibank, N.A., New York, N.Y. or the effective maximum legal
rate. Each party has the right, at its expense and during business hours, to
examine the pertinent records and books of the other to verify the accuracy of
any invoice, charge, or computation.
7. MEASUREMENT, QUALITY & PRESSURE: The parties will agree which, as
between them, is responsible for measurement. Measurement requirements will be
those in effect on the pipeline system through which gas is transported to the
Sales Point(s). Gas tendered by Mobil will meet the quality and pressure
specifications of the pipeline and/or facilities at the Sales Point(s) into
which gas is delivered.
8. WARRANTY OF TITLE: Mobil warrants, at the time of delivery, Mobil's
title to all gas delivered, and that such gas will be free from liens, claims
or encumbrances. Mobil indemnifies Buyer against any direct loss, damage or
expense Buyer may sustain from a claim involving gas hereunder prior to
delivery at the Sales Point(s). Buyer agrees to indemnify Mobil against any
direct loss, damage, or expense Mobil may sustain from a claim involving gas
hereunder at or after delivery at the Sales Point(s). Neither party shall be
liable to the other for indirect, consequential, or special damages.
9. FORCE MAJEURE: Non-performance of any obligation hereunder, other than
the obligation to pay for gas taken, shall be excused if prevented by an
occurrence of force maieure, but only for so long as performance is prevented
by such force majeure. The party claiming excuse shall promptly advise the
other party of such force majeure event and shall, with reasonable efforts,
seek to remedy the occurrence. Force majeure as used herein shall mean any
event beyond the reasonable control of the party in question which prevents, in
whole or part, that party's performance of obligations hereunder, and shall
include, without limitation: floods, hurricanes, breakage or accident to
machinery, plants or pipelines, failure or inability of Mobil's or Buyer's
transporter(s) to transport gas made available hereunder, and the operation of
governmental authority (except at the request of the party claiming force
majeure), but shall not include Buyer's loss of markets or Mobil's inability to
secure gas at prices satisfactory to Mobil.
10. PROCESSING: Mobil reserves the right to process gas after delivery at
the Sales Point(s), and agrees to indemnify Buyer for any Btu losses and
transportation charges incurred by Buyer as a result of Mobil's processing.
11. NOTICE: All notices will be in writing and will be deemed delivered when
mailed by U.S. Mail to the address of the other party. Notice by telecopier
shall be effective when received provided a copy is mailed by the U.S. Mail
within two (2) working days.
12. MISCELLANEOUS: This Agreement may not be assigned, except to an
affiliate of the assigning party, without the prior written consent of the
other party, and shall be governed by the laws of the State of Texas without
recourse to the rules for conflicts of Laws.
13. ALABAMA PUBLIC COMMISSION APPROVAL: It is understood that Buyer will
seek approval of the Alabama Public Commission of this contract. If the
Alabama Public Commission issues an order disapproving this contract, or
otherwise indicates its disapproval, then Buyer may terminate this contract by
giving 30 days prior written notice. Should Buyer not so terminate the
contract, the terms and provisions of this contract shall remain in full force
and effect for the remaining term. In the event of any such termination, Mobil
shall not be obligated to refund any amounts received by Mobil for gas
delivered under this contract prior to termination.
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APPENDIX C
During a month, Buyer may request on 24 hours notice a change in the Purchase
Quantity for the portion of such Month remaining after the date of such a
request, upward by [***proprietary information omitted***] percent
([***proprietary information omitted***]%) of the MCQ not to exceed the MCQ, or
downward by [***proprietary information omitted***] percent([***proprietary
information omitted***]) of the MCQ, not less than zero, by notifying Seller
verbally (followed by written confirmation within 24 hours) of its desire for
such a change. This swing option is available on a [***proprietary information
omitted***] month basis ([***proprietary information omitted***]). If the
swing option is not utilized in any given month, that option becomes null and
void and is not available to be carried forward for use in future months (i.e.,
there is no accumulation of unused monthly swing options).
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APPENDIX D
STAND-BY SERVICE
Stand-by Service Mobil will provide an additional volume of gas up to
[***proprietary information omitted***] MMBtu/D
delivered into Mobile Gas Service if unsold gas is
available or if gas becomes available through the
curtailment of [***proprietary information
omitted***] on the Mobile Gas Service System, in the
event of an emergency shutdown at [***proprietary
information omitted***]. A service fee equal to
[***proprietary information omitted***] will be added
to the commodity cost then in effect.
