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Exhibit 10.6
GAS SERVICES AGREEMENT (NIFL)
THIS AGREEMENT, entered into this 3rd day of April, 1995, by and
between Northern Indiana Fuel & Light Company, Inc. ("NIFL") and Steel Dynamics,
Inc. ("SDI"), both Indiana corporations, WITNESSES that:
WHEREAS, SDI intends to construct a steel manufacturing facility near
Butler, Indiana ("SDI Facility") and needs natural gas service in connection
with that facility, which NIFL is able to provide; and
WHEREAS, the parties desire to expand industry and create additional
jobs in NIFL's service territory, and the SDI Facility represents an opportunity
to do so;
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the parties agree that;
ARTICLE I
TERM OF CONTRACT
This Agreement shall be effective on the first day of the month
following the month in which the Indiana Utility Regulatory Commission ("IURC")
approves the NIFL economic development interruptible gas transportation rate
schedule attached hereto as Exhibit A ("NIFL Rate") and shall terminate on
December 31, 2000 ("Term"). NIFL shall be ready to serve SDI's Facility by
mid-March, 1995. At the end of the Term, it shall be extended unless a party
hereto gives written notice to the other party that the Agreement will not be
renewed, which notice must be provided at least six (6) months prior to the end
of the Term
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and any extension thereof. If such notice is not provided at least six (6)
months prior to the end of the Term, the Term shall be extended until the last
day of the month which is at least six (6) months after the provision of
written notice by either party to the other party that this Agreement will be
terminated.
NIFL shall promptly submit the NIFL Rate for approval by the IURC,
which rate shall, by its terms, be coterminous with this Agreement. If the IURC
does not approve the NIFL Rate, as submitted, this Agreement, shall be
terminable by either SDI or NIFL, 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
NIFL shall furnish, and SDI shall purchase, interruptible gas
transportation service 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 will be interruptible
transportation of SDI's gas from NIFL's interconnection with Crossroads Pipeline
Company near Butler, Indiana ("NIFL Connection") to SDI's on-site regulating
station. 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
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shall not be required to do so, because of start-up conditions. Except (i) in
those instances when energy service other than natural gas is required during
periods of curtailment," as provided in Article IV of this Agreement, or (ii)
when gas supplies to SDI are interrupted due to any condition or occurrence
beyond SDI's control, SDI shall not bypass the NIFL system by means of a direct
or indirect connection with any other entity or supplier of natural gas service
or supersede or diminish NIFL as the provider of gas transportation service to
the SDI Facility through the use of an energy service or services other than
natural gas.
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 NIFL or its designated representative hereinafter
("NIFL") a service fee in accordance with NIFL Rate No. 9T for all quantities of
SDI's gas delivered to the SDI Facility.
2. Penalties and Charges Relating to Interstate Pipeline and other
Suppliers. To the extent that SDI actions or inaction cause NIFL to be assessed
any penalties and/or charges by or related to interstate pipeline suppliers or
other suppliers of gas or services, SDI shall reimburse NIFL for such penalties
and charges upon being provided written documentation summarizing the actions
causing the penalties or charges. To the extent that
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actions or inaction of NIFL cause SDI to be assessed any penalties and/or
charges by or related to interstate pipeline suppliers or other suppliers of gas
or services, NIFL shall reimburse SDI for such penalties and charges upon being
provided written documentation summarizing the actions causing the penalties or
charges.
ARTICLE IV
CURTAILMENT
In the event of a gas supply or operational curtailment on the NIFL
system which affects NIFL's ability to provide Natural Gas Service to the SDI
Facility, its receipt of such service shall be subject to curtailment before the
curtailment of NIFL customers receiving firm sales service.
ARTICLE V
BILLING
NIFL will cause to be provided to SDI, or its designated representative
("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 NIFL payment of these invoices on SDI's "25th of the month check run"
for the prior month's service. In the absence of written notice otherwise, these
invoices and payments shall be sent to:
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INVOICES PAYMENTS
-------- --------
SDI NIFL
C/O Accounts Payable C/O H.P. Xxxxxx
0000 Xxxxxx Xxxx 00 X.X. Xxx 000
Xxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
Interest on delinquent and unpaid amounts shall accrue at the published
prime commercial lending rate established from time to time by National City
Bank, Indiana, or its successor ("Prime Rate"), and is payable from the date due
until the date upon which payment is made. Interest on any overpaid amounts
shall accrue at the Prime Rate and is payable from the date paid by SDI until
the date repaid by NIFL.
In the event SDI fails to make timely and full payment of any invoice
rendered by NIFL, and except as provided in the next paragraph, NIFL may
terminate or suspend the provision of further Natural Gas Service to the SDI
Facility. 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 NIFL to terminate or suspend the provision of Natural Gas Service.
Notwithstanding the foregoing paragraph, in the event SDI wishes to
contest a portion of a billed amount, SDI shall pay the portion not contested
and interest shall accrue at the rate specified in this ARTICLE on the unpaid
portion while resolution of contested amounts is pending. However, the
provisions of the
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preceding sentence shall not be applicable where SDI has failed to make timely
payment of an invoice and has failed to provide adequate assurances, including
advance payments if requested, of SDI's continued solvency.
Upon providing NIFL with reasonable prior notification, during regular
business hours and on regular business days, SDI, or its agent, shall have the
right to examine relevant books, records, contracts and charts of NIFL 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 NIFL
--- ----
Xxxxx Xxxxxxxxxxxx H.P. Xxxxxx
Vice President X.X. Xxx 000
0000 Xxxxxx Xxxx 00 Xxxxxx, XX 00000
Xxxxxx, Xxxxxxx 00000
A party may change the addresses stated above, as well as the recipient
of notices, by providing written notification of that change to the other party.
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ARTICLE 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 condition will relieve SDI from paying any
invoice relating to Natural Gas Service previously rendered.
The term force Majeure as used herein shall mean any act, omission or
circumstance occasioned by or as a consequence of any acts of God, acts of the
public enemy, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, washouts, vandalism, arrests and
restraints of rulers and peoples, any strike or work stoppage, civil
disturbances, explosions, breakage or accident to machinery or lines of pipe,
telecommunications failures or malfunctions, or computer failures or
malfunctions, which frustrates the intent of the parties hereto and which has
been resisted in good faith by all reasonable legal means, and any other cause,
whether of the kind enumerated or otherwise, not reasonably within the control
of the party claiming suspension
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and which by the exercise of due diligence such party is unable to prevent or
overcome. It is understood and agreed that the settlement of strikes or lockouts
shall be entirely within the discretion of the party having the difficulty, and
that the above requirement that any event of force majeure shall be remedied
with all reasonable dispatch shall not require the settlement of strikes or
lockouts by acceding to the demands of the opposing party when such course is
deemed to be inadvisable or inappropriate in the discretion of the party having
the difficulty.
ARTICLE 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
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standards of service for gas public utilities of the IURC and the Federal Energy
Regulatory Commission, as the same may be in effect from time to time, and all
applicable state and federal laws, administrative orders, and regulations,
including 170 IAC 5-1-22, as the same may be in effect from time.
ARTICLE 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 one (1) year after the cause of action has accrued. The
exclusive remedy for wrongful nondelivery of gas by NIFL, in the absence of
NIFL's wilful misconduct or gross negligence, is, at NIFL's election, (a) actual
damages caused by the nondelivery which are economic and incidental and subject
to establishment by clear and convincing evidence, or (b) the price value of the
gas which was not delivered, or (c) the cost for NIFL 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 NIFL's wilful misconduct or
gross negligence. The parties agree this exclusion of consequential damages is
not unconscionable.
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ARTICLE XI
INDEMNIFICATION
SDI agrees to indemnify, defend and hold harmless NIFL 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 NIFL 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
NIFL in the event that such lose, 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.
NIFL 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 NIFL, or its employees or agents, occurring in
the performance of this Agreement.
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In the event any loss, damage, expense, or claim occurs for which SDI
and NIFL are ultimately each found to have been at fault in proximately causing
the loss, damage, expense, or claim, NIFL and SDI shall both bear their own
separate costs of defense and the proportionate share of such liability.
This ARTICLE is severable from the other portions of this Agreement. A
breach of this ARTICLE is not a breach of the entire Agreement. If this ARTICLE
is found to be unenforceable, the remaining portions of this Agreement shall
remain in force and effect.
ARTICLE 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
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thirty (30) days the party in default does so remove said cause or causes and
fully indemnifies the party not in default for any and all consequences
resulting from that default, then this Agreement shall remain in force and
effect.
ARTICLE 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, its successors and assigns that such gas shall be free and
clear of all liens, encumbrances, and claims of those not parties hereto; and
that it will indemnify and save the other party harmless for all suits, actions,
debts, accounts, damages, costs, losses or expenses (including reasonable
attorney's fees) arising from or out of the adverse claims arising from or out
of the same. This paragraph shall not apply to gas redelivered by NIFL to SDI,
where NIFL 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, NIFL disclaims and excludes all
warranties implied and express, including all warranties of fitness for a
particular purpose and all warranties
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of merchantability. SDI agrees its attention has been drawn to this exclusion of
warranties.
ARTICLE 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.
ARTICLE XVI
ENTIRE AGREEMENT
This Agreement constitutes the entire understanding of NIFL 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.
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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.
This Agreement has been executed in duplicate by the duly authorized
representatives of the Parties.
STEEL DYNAMICS, INC.
Date: 04/03/95 By: /s/
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NORTHERN INDIANA FUEL AND LIGHT
COMPANY
Date: 4/5/95 By: /s/ H.P. Xxxxxx
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H.P. Xxxxxx
President
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Exhibit A
NORTHERN INDIANA FUEL & LIGHT CO., INC. Sheet No. __________
ECONOMIC DEVELOPMENT INTERRUPTIBLE GAS TRANSPORTATION RATE
AVAILABILITY Rate No._ 9T
Available to all customers who contract with the Company for gas transportation
service for a minimum of five (5) years and, together with any other customers
located on the site described below, for a minimum average aggregate volume of
not less than 15,000 therm's per day. Customers on this rate must
1. have an alternate capability;
2. be located on the Company's transmission main connecting to, and running
south from, the main east-west pipeline of Crossroads Pipeline Company
("Crossroads Pipeline") to a tract bordered on the north by County Road 42,
on the east by County Road 59, on the west by County Road 55 and on the
south by the Xxx Xxxxx Ditch;
3. have made arrangements by which volumes of gas owned by it can be delivered
into the Company's transmission system or the Crossroads Pipeline; and
4. require no additional facilities from the Company for the Company to
provide the transportation service to the customer.
CHARACTER OF SERVICE
Gas service purchased hereunder shall be interruptible and shall be subject to
complete or partial curtailment, at the option of the Company and upon the
giving of notice to the customer.
RATE
Facilities charge $200.00 per meter
Usage charge $0.0425 Dth
MINIMUM CHARGE
The minimum monthly charge shall be the facilities charge.
TERMS OF PAYMENT
All bills on this rate schedule shall be rendered and due monthly.
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RATE ADJUSTMENT
This rate shall be subject to any adjustment occasioned by "take-or-pay" or FERC
Order 636 transition costs passed through to the Company by other pipelines.
RULES AND REGULATIONS
Service Supplied under this rate schedule shall be governed by the Rules and
Regulations of the Company, as approved by the Indiana Utility Regulatory
Commission and in force from time to time.
Issued Dated: Effective:
Issued by: H.P. Xxxxxx, Jr.
President
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