Resolution No. 76361 RESOLUTION NO. 7636
2
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
3 VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
NATURAL GAS SALES AGREEMENT BY AND BETWEEN THE CITY
4 OF VERNON AND TXU ENERGY SERVICES, INC.
5
6 WHEREAS, decisions of the California Public Utilities
7 Commission before July 1991 increased the availability of natural gas
8 supplies and transportation to users such as the City of Vernon; and
9 WHEREAS, the City of Vernon desires to purchase certain
10 quantities of natural gas for its combustion turbines at the Vernon
11 Power Plant which TXU Energy Services, Inc. desires to sell; and
12 WHEREAS, the City of Vernon desires to enter into a Natural
13 Gas Sales Agreement with TXU Energy Services, Inc. under which TXU
14 Energy Services, Inc. agrees to sell natural gas on favorable terms to
15 the City of Vernon during a one-year period from October 1, 2000 to
16 September 30, 2001; and
17 WHEREAS, the term, price, quantity and point(s) of delivery
18 are set forth in the Agreement; and
19 WHEREAS, the City Council of the City of Vernon finds that it
20 is beneficial to the City that said Agreement be approved.
21 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
22 CITY OF VERNON AS FOLLOWS:
23 SECTION 1: The City Council of the City of Vernon hereby
24 finds and determines that the recitals contained hereinabove are true
25 and correct.
26 SECTION 2: The City Council of the City of Vernon hereby
27 approves the Natural Gas Sales Agreement with TXU Energy Services,
28 Inc., a copy of which is attached hereto as Exhibit "A" and made a
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part hereof.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor and the City Clerk to execute said Agreement for,
and on behalf of, the City of Vernon.
SECTION 4: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send a fully executed
Agreement to:
TXU Energy Services
Attn: Kevin Hoffman, Contracts Administration
1301 Fannin St., Suite 2300
Houston, TX 77002
SECTION 5: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 19th day of September, 2000.
ATTE�ST •
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MAL URG, M yor
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
7636, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Tuesday,
September 19. 2000, and thereafter was duly signed by the Mayor of the
City of Vernon.
BRUCE V. MALKENHORST, City Clerk
(SEAL)
511
EXHIBIT
0
TXU Ener_gv Services
Natural Gas Sales Agreement # 15012
BUYER: City of Vernon
SELLER: TXU Energy Services
4305 Santa Pe Ave.
680 Andersen Drive #200
Vernon, CA 90058
Pittsburgh, PA 15220
Marketer Operations
Attn: John Sweeney
Attn: Gerard Worster Cathy Hawes
Phone: (323) 583-8811
Phone: (510) 226-5777 (510) 226-5777
Fax: (323) 583-1983
Fax: (510) 226-5778 (510) 226-5778
L
October 1, 2000 through September 30, 2001
TERM
II.
NOMINATION
Southern California Border
POINT(S)
III.
RECEIPT
Southern California Border
POINT(S)
Natural Gas Intelligence, Southern California Border Average, first of the month posting
IV
plus basis of $0.045/dth delivered to the Nomination Point. Total requirement for power
PRICE
plant requirements only.
INVOICE ADDRESS:
PAYMENT ADDRESS / INSTRUCTIONS:
V.
BILLINGS
City of Vernon
TXU Energy Services Chase Bank of Texas
AND
4305 Santa Fe Ave.
P 0 Box 910015 ABA#113000609
Vernon, CA 90058
Dallas, TX 75391-0015 TXU Energy Services
PAYMENTS
Attn: Director of Utilities
Acct#08805169610
VI.
SPECIAL
PRO VISIONS
THIS PURCHASE
IS SUBJECT TO THE TERMS AND CONDITIONS SET ON THE REVERSE SIDE.
I acknowledge that this represents the agreement reached between the BUYER and SELLER.
BUYER:
City of Vernon
`
Print Date:
LEONIS C. MALBURG
Title: ayor
SELLER:
TXU Energy Services
Print: Michael C. Gibbs Date: September 15, 2000
Title: Vice President
F ATTEST:
All transactions are subject to credit approval.
BRUCE V. MALKENHORST, City Clerk
APPROVED AS TO FORM:
EDUARDO OLIVO, City Attorney
Gas, Rev. 980730 Page I of 5
TERMS & CPNDITIONS
1. SUBJECT MATTER AND QUANTITY: Subject to the terms and conditions herein, Seller shall sell and deliver and Buyer shall purchase
and receive that portion of Buyer's plant's entire daily natural gas requirements that Buyer is not required to purchase from its primary natural
gas pipeline supplier plus any related transportation retention volumes (i.e., quantities approximately equal to those set forth in the attached
Exhibit "A" ). In the event Buyer takes quantities of gas in any month which are in excess of one hundred percent (100%) of the quantities
listed in Exhibit "A" hereof, such quantities may be priced by Seller at current market value, plus all reasonable costs, including
transportation. If Buyer, (provided such is not the result of a force majeure event), takes quantities of natural gas during any month of the
term hereof which are less than one hundred percent (100%) of the quantities listed in Exhibit "A" hereof, Buyer agrees to reimburse Seller
for all reasonable costs which Seller incurs as a result of such reduced takes; provided, however, Seller shall use reasonable commercial
efforts to minimize such costs.
2. ACCEPTANCE, CREDIT TERMS AND SECURITY:
2.1 If the terms of Seller's offer are acceptable to Buyer, Buyer shall confirm those terms by signing and returning to Seller the Natural Gas
Sales Agreement ("Agreement") to which these Terms and Conditions are attached and made a part thereof. Unless rejected in writing
Within five (5) business days of receipt from Seller by Buyer, this Agreement shall be deemed to be conclusive evidence of the transaction
and the final expression of its terms.
2.2 Seller's execution of this Agreement will constitute acceptance by Seller of Buyer's credit status. If during the term hereof, Seller, in its
sole good faith opinion, determines that there has been a material change in Buyer's credit status or financial condition, or if Buyer exceeds
its credit limit with Seller, Seller may require Buyer to secure each payment hereunder by obtaining an irrevocable standby letter of credit for
the benefit of Seller, in a form and issued by an institution acceptable to Seller and available no later than ten (10) business days prior to the
next scheduled delivery date. Notwithstanding anything to the contrary under this Agreement, the failure of Buyer to secure such a letter of
credit when required by the Seller for any payment due hereunder shall obligate Buyer to prepay the Seller by wire transfer, in immediately
available funds, no later than two (2) business days prior to the delivery date, book transfer date, or nomination date, whichever the case
may be. Buyer and Seller shall bear the costs of such wire transfer at their respective banks. If Buyer fails to prepay Seller in accordance
with this section, Seller may suspend deliveries of gas hereunder and/or may terminate this Agreement upon five (5) days prior notice to
Buyer.
3. TERM: This Agreement shalt be effective for the primary term as set forth in Article I on the front of this Agreement. The parties
specifically understand and agree that at the end of the term of this Agreement or in the event either party terminates this Agreement
pursuant to the terms hereof, Seller shall be afforded the opportunity to review and is granted the right of first refusal to undertake the
continued sale of natural gas to Buyer under the bona fide terms and conditions, including price, that Buyer is able to obtain from a third
party. This Agreement will supersede and replace any and all prior agreements between Buyer and Seller serving the facilities covered
hereby.
4. RECEIPT POINT(S) AND TRANSPORTATION:
4.1 The Nomination Point(s) and Receipt Point(s) are shown in Articles II and III, respectively, on the front of this Agreement. Seller is
hereby appointed and shall act on behalf of Buyer as Buyer's agent to arrange and pay for transportation of the gas from the Receipt
Point(s) to the Nomination Point(s), and to cause deliveries to be made at the Nomination Point(s). Buyer is responsible for communicating
to Seller all material changes in the quantities of natural gas it intends to purchase from Seller as soon as possible in order for Seller, acting
as agent for Buyer, to acquire necessary transportation capacity on Buyer's behalf and to make the appropriate nomination changes with
transporting pipelines and/or local distribution companies in a timely manner. Buyer shall reimburse Seller for all pooling penalties, "cash -
out" costs, and all other related transportation penalties, balancing fees or any other charges imposed on Seller as a result of Buyer's failure
to timely notify Seller of such changes or to take quantities of gas as required by this Agreement.
4.2 If Buyer or Seller receives an invoice for penalties, cashouts or other charges relating to an Operational Flow Order, Emergency
Flow Order, or similar order, both parties shall be obligated to determine the validity, as well as the cause and the party responsible, of
such penalty, cashout or charge. If any penalty, cashout or charge results from the action or inaction of a party hereto (the "Responsible
Party") then the Responsible Party shall pay the penalty or charge. If the penalty, cashout or charge is billed to and paid by the party
who is not the Responsible Party, that Party may in its discretion set off all amounts so paid against any amounts it then owes to the
Responsible Party or bill the Responsible Party.
S. PRICE: Buyer agrees to pay and Seller agrees to accept the Price set forth in Article IV on the front of this Agreement for all gas actually
delivered at the Nomination Point(s) in accordance with this Agreement. Buyer also agrees to reimburse Seller, acting as agent on behalf of
Buyer, for all costs (including, but not limited to, pooling fees) incurred on Buyer's behalf associated with the transportation of the gas from
the Receipt Point(s) to the Nomination Point(s).
6. PRICE RENEGOTIATION: Notwithstanding anything contained herein to the contrary, zero (0) days prior to the end of the primary term
and in all subsequent periods during the term hereof, either party may request a price renegotiation for gas to be sold and purchased during
the succeeding one (1) year period. If the parties cannot agree on a renegotiated price during such zero (0) day period, either party may
terminate this Agreement effective as of the end of such zero (0) day period.
7. QUALITY AND MEASUREMENT: Measurement of heating value (MMBtu) of the natural gas purchased and sold hereunder will be made
at the Receipt Point(s) in accordance with the quality specifications of the transporting pipeline(s). Buyer is not obligated to purchase any
gas, which does not meet all specifications of the transporting pipeline(s).
8. BILLINGS AND PAYMENT: On approximately the 15th day of each month during the term(s) hereof, Seller will invoice Buyer for gas
delivered the previous month, for transportation charges incurred to deliver the gas to the Nomination Point(s), and for any other amounts
due from Buyer to Seller hereunder. Buyer shall pay Seller based upon the invoice within ten (10) days of receipt of Seller's invoice. If Buyer
Gas, Rev. 981017 Page 2 of 5
TERMS & CONDITIONS
fails to pay the entire amount of the invoice when due, at Seller's option: (1) Seller may suspend deliveries until Seller receives payment in
full; and/or (2) interest will accrue on the unpaid portion at a rate equal to three percent (3%) above the prime rate charged by Chase Bank of
Texas, Dallas, from time to time, or the highest rate allowed by law, whichever is the lesser, from the date such payment is due until the
same is paid. No party receiving proceeds under this Agreement may request any adjustment or correction of any statement or payment
unless written notice of such request for adjustment or correction is fumished within twelve (12) months of the date of the statement or
payment for which such adjustment or correction is requested.
9. FORCE MAJEURE: Except as specifically provided to the contrary herein, inability or failure of Seller to deliver or of Buyer to receive gas
or of either party to perform pursuant to this Agreement will not be the basis of claims for damages sustained by either party or for breach of
contract when due to causes or contingencies reasonably beyond the control of either party hereto, including but not limited to Acts of God
or governmental authority; the elements; labor disputes; fires, accidents, breakage, repair or change of or obstruction in pipelines, equipment
or machinery; lack of available firm transportation capacity; depletion or failure of gas supply; fluctuations in gas pressure, or demands in
excess of the capacity of transporter's equipment or pipelines. The party suffering the event of force majeure shall give notice of such event
of force majeure in reasonably full particulars to the other party, as soon as reasonably possible. Any such event of force majeure shall, so
far as possible, be remedied with all reasonable dispatch. It is understood and agreed that the settlement of strikes or lockouts will be
entirely within the discretion of the party having the difficulty, and that the above requirement of the use of diligence in restoring normal
operating conditions will not require the settlement of strikes or lockouts by acceding to the terms of the opposing party when such course is
inadvisable in the discretion of the party having the difficulty.
10. TITLE AND INDEMNIFICATION: Title to the natural gas sold hereunder will pass from Seller to Buyer at the Receipt Point(s). Seller will
pay or cause to be paid all royalties, taxes and other sums due on production and transportation of the natural gas prior to delivery. Seller
will be in full control and possession of the natural gas and shall be fully responsible for and shall indemnify Buyer for any damage or injuries
caused thereby until the natural gas is delivered to Buyer at the Receipt Point(s), except for injuries and damage which are caused by the
negligence of Buyer. Buyer will likewise pay all taxes or other sums due on, at or after the Nomination Point(s) and be fully responsible and
shall indemnify Seller for damage or injury occurring after the natural gas is delivered to the Nomination Point(s), except for injuries and
damage caused by the negligence of Seller. Buyer shall reimburse Seller for any and all applicable taxes, including, but not limited to, gross
receipt tax, imposed by any state or local government upon any transaction or occurrence done pursuant to the terms of this Agreement.
11. WARRANTIES AND LIMITATIONS OF LIABILITIES:
11.1 Seller hereby warrants to Buyer that at the time of delivery of gas hereunder it will have good title and/or the right to sell such gas,
and that such gas will be free and clear of all Liens and adverse claims.
11.2 The liability of a party breaching the provisions of this Agreement shall be limited to direct actual damages only. Such direct actual
damages shall be the sole and exclusive remedy hereunder and all other remedies or damages at law or in equity are waived. Neither party
shall be liable for consequential, incidental, punitive, exemplary or indirect damages, lost profits or other business interruption damages, in
tort, contract, under any indemnity provision or otherwise.
12. NOTICES: All notices required or permitted under this Agreement shall be in writing and shall be deemed to be delivered when
delivered personally, by courier, by telefax or telecopier if received during normal business hours, or by mail if properly addressed and
deposited in the United States mail, first class postage prepaid, to the applicable address shown in Article V on the front of this Agreement,
or to such address as either party .may from time to time designate as the address for such purpose by like notice addressed to the other
party.
13. NON -WAIVER: Waiver by Buyer or Seller of a particular right or default hereunder will not be deemed a waiver of other rights or
defaults whether similar or dissimilar.
14. CHOICE OF LAW: This Agreement shall be governed according to the laws of the State of Texas. Venue on any action brought
hereunder shall be in Dallas, Dallas County, Texas.
15. APPLICABLE LAW AND REGULATIONS: Buyer and Seller agree that this Agreement will be subject to all applicable laws,
.regulations, rules and orders. In the event a regulatory or judicial decision or rate change shall have a detrimental economic impact upon
either party with respect to its performance under this Agreement, or in the event that compliance with such change by Seller shall result in a
material change in the method by which prices are calculated under this Agreement or a material change in the level of the components of
the pricing under this Agreement, then the party that suffers such detrimental economic impact or that is negatively affected by such material
change shall have the right to notify the other party, within thirty (30) days after becoming aware of such detrimental economic impact or
material change, in order to negotiate a modification to the terms of this Agreement so as to mitigate the impact of the event. If, after twenty
(20) days beyond the date of notice, the parties have been unable to negotiate a mutually satisfactory modification to the terms under this
Agreement, either party shall have the right to terminate this Agreement upon ten (10) days prior written notice to the other party. If such
right to terminate is not exercised within forty-five (45) days after the original date of notice hereunder, then the right to terminate this
Agreement shall be deemed to have been waived with respect to the particular event.
16. ASSIGNMENT: This Agreement may not be assigned by either party without the prior written consent of the other party, which consent
shall not be unreasonably withheld. This Agreement shall inure to and be binding upon the parties hereto and upon their respective
successors, heirs and assigns. In the event Buyer sells, leases or otherwise conveys the facilities in which the gas sold hereunder is
utilized, Buyer shall require its successor to assume the obligations of this Agreement.
Gas, Rev. 981017 Page 3 of 5
TERMS & C50NDITIONS
17. ENTIRE AGREEMENT: This Agreement, including the front page and any exhibits, constitutes the entire agreement between the
patties and there are no other representations, warranties, understandings or other agreements except as set forth herein. There will be no
modification of this Agreement except by written consent of all parties.
Gas, Rev. 981017 Page 4 of 5
EXHIBIT A
Attached to and made a part of the
Natural Gas Sales Agreement # 15012 between
TXU Energy Services (Seller)
and
City of Vernon (Buyer),
October 1, 2000 through September 30, 2001
Estimated Natural Gas Consumption for City of Vernon:
4305 Santa Fe Ave.
VERNON, CA 90058
MMBTU/month
MMBTU/month
Oct 2000
5,000
Apr 2001
4,000
Nov 2000
4,000
May 2001
5,000
Dec 2000
4,000
Jun 2001
5,000
Jan 2001
4,000
Jul 2001
5,000
Feb 2001
4,000
Aug 2001
5,000
Mar 2001
4,000
Sep 2001
5,000
Total Estimated Natural Gas Consumption for this Agreement is: 54,000 MMBTU
City of Vernon
Signature:���iL
EONIS C. MALBUfG, May
Date:
ATTEST:
BRUCE V. MALKENHORST, City Clerk
APPROVED AS TO FORM:
EDUARDO OLIVO, City Attorney
TXU Energy $.earvices
Signature: T j
Date:
Gas, Rev. 981017 Page 5 of 5
SUPPORTING
DOCUMENTS
t �
a.
TXi! eS Natural Gas Sales Agreement # 15012
BUYER: City of Vernon SELLER: TXU Energy Services
4305. Santa'Fe Ave. 680 Andersen Drive #200
Vernon, CA 90058 Pittsburgh, PA 15220
Marketer Operations
Attn: John Sweeney Attn: Gerard Worster Cathy Hawes
Phone: (510
Phone: (323) 583-8811 ) 226-5777 (510) 226-5777
Fax: 323 583-1983 Fax: 510 226-5778 510 226-5778
I October 1, 2000 through September 30, 2001
TERM
IL
NOMINATION Southern California Border
POINTS
III,
RECEIPT Southern California Border
CV1LY L L3
Natural Gas Intelligence,
Southern California Border Average, first of the month posting
IV
basis of $0.045/dth delivered to the Nomination Point. Total requirement for power
PRICE
plus
plant requirements only.
INVOICE ADDRESS:
PAYMENT ADDRESS / INSTRUCTIONS:
V x
City of Vernon
TXU Energy Services Chase Bank of Texas
gy
BILLINGS
4305 Santa Fe Ave.
P O Box 910015 ABA#113000609
AND
Vernon, CA 90058
Dallas, TX 75391-0015 TXU Energy Services
PAYMENTS
Attn: Director of Utilities
Acct#08805169610
VI
SPECIAL
PROVISIONS
'RCHASE IS SUBJECT TO THE T
I acknowledge that this represents the
BUYER: I City of Vernon
AND CONDITIONS SET ON THE REVER,
ent reached between the BUYER and SELLER.
Title:
IS C.
SELLER: TXU Energy Services Print: Michael C. Gibbs Date: September 15, 2000
Title: Vice President
All transactions are subject to credit approval
ATTEST:
APPROVED AS TO FO
BRUCE V. MALKENHORST, City Clerk - '1—
Gas, Rev. 980730
EDUARDO OLIVO, y Attorney Page Iof5
TERMS & CONDITIONS
1.SUBJECT MATTER AND QUANTITY: Subject to the terms and conditions herein, Seller shall sell and deliver and Buyer shall purchase
and receive that portion of Buyer's plants entire daily natural gas requirements that Buyer is not required to purchase from its primary natural
gas pipeline supplier plus any related`transportation retention volumes (i.e., quantities approximately equal to those set forth in the attached
Exhibit'W). In the event Buyer takes quantities of gas in any month which are in excess of one hundred percent (100%) of the quantities
listed in Exhibit "A" hereof, such quantities may be priced by Seller at current market value, plus all reasonable costs, including
transportation. If Buyer, (provided such is not the result of a force majeure event), takes quantities of natural gas during any month of the
term hereof which are less than one hundred percent (100%) of the quantities listed in Exhibit "A" hereof, Buyer agrees to reimburse Seller
for all reasonable costs which Seller incurs as a result of such reduced takes; provided, however, Seller shall use reasonable commercial
efforts to minimize such costs. ; r
2. ACCEPTANCE, CREDIT TERMS AND SECURITY:
*al If the terms of Seller's offer are acceptable to Buyer, Buyer shall confirm those terms by signing and returning to Seller the Natural Gas
Sales Agreement("Agreement") to which these Terms and Conditions are attached and made a part thereof. Unless rejected in writing
within five (5) business days of receipt from Seller by Buyer, this Agreement shall be deemed to be conclusive evidence of the transaction
and the final expression of its terms.
2.2 Seller's execution of this Agreement will constitute acceptance by Seller of Buyer's credit status. If during the term hereof, Seller, in its
sole good faith opinion, determines that there has been a material change in Buyer's credit status or financial condition, or if Buyer exceeds
its credit limit with Seller, Seller may require Buyer to secure each payment hereunder by obtaining an irrevocable standby letter of credit for
the benefit of Seller, in a form and issued by an institution acceptable to Seller and available no later than ten (10) business days prior to the
next scheduled delivery date. Notwithstanding anything to the contrary under this Agreement, the failure of Buyer to secure such a letter of
credit when required by the Seller for any payment due hereunder shall obligate Buyer to prepay the Seller by wire transfer, in immediately
available funds, no later than two (2) business days prior to the delivery date, book transfer date, or nomination date, whichever the case
may be. Buyer and Seller shalt bear the costs of such wire transfer at their respective banks. If Buyer fails to prepay Seller in accordance
With this section, Seller may suspend deliveries of gas hereunder and/or may terminate this Agreement upon five (5) days prior notice to
Buyer.
3. TERM: This Agreement shall be effective for the primary term as set forth in Article I on the front of this Agreement. The parties
specifically understand and agree that at the end of the term of this Agreement or in the event either party terminates this Agreement
pursuant to the terms hereof, Seller shall be afforded the opportunity to review and is granted the right of first refusal to undertake the
continued sale of natural gas to Buyer under the bona fide terms and conditions, including price, that Buyer is able to obtain from a third
party. This Agreement will supersede and replace any and all prior agreements between Buyer and Seller serving the facilities covered
hereby.
4. RECEIPT POINT(S) AND TRANSPORTATION:
4.1 The Nomination Point(s) and Receipt Point(s) are shown in Articles II and III, respectively, on the front of this Agreement. Seller is
hereby appointed and shall act on behalf of Buyer as Buyer's agent to arrange and pay for transportation of the gas from the Receipt
Point(s) to the Nomination Point(s), and to cause deliveries to be made at the Nomination Point(s). Buyer is responsible for communicating
to Seller all material changes in the quantities of natural gas it intends to purchase from Seller as soon as possible in order for Seller, acting
as agent for Buyer, to acquire necessary transportation capacity on Buyer's behalf and to make the appropriate nomination changes with
transporting pipelines and/or local distribution companies in a timely manner. Buyer shall reimburse Seller for all pooling penalties, "cash -
out" costs, and all other related transportation penalties, balancing fees or any other charges imposed on Seller as a result of Buyer's failure
to timely notify Seller of such changes or to take quantities of gas as required by this Agreement.
4.2 If Buyer or Seller receives an invoice for penalties, cashouts or other charges relating to an Operational Flow Order, Emergency
Flow Order, or similar order, both parties shall be obligated to determine the validity, as well as the cause and the party responsible, of
such penalty, cashout or charge. If any penalty, cashout or charge results from the action or inaction of a party hereto (the "Responsible
Party") then the Responsible, Party shall pay the penalty or charge. If the penalty, cashout or charge is billed to and paid by the party
who is not the Responsible Party, that Party may in its discretion set off all amounts so paid against any amounts it then owes to the
Responsible Party or bill the Responsible Party.
5. PRICE: Buyer agrees to pay and Seller agrees to accept the Price set forth in Article IV on the front of this Agreement for all gas actually
delivered at the Nomination Point(s) in accordance with this Agreement. Buyer also agrees to reimburse Seller, acting as agent on behalf of
Buyer, for all costs (including, but not limited to, pooling fees) incurred on Buyer's behalf associated with the transportation of the gas from
the Receipt Point(s) to the Nomination Point(s).
6. PRICE RENEGOTIATION: .Notwithstanding anything contained herein to the contrary, zero (0) days prior to the end of the primary term
and in all subsequent periods during the term hereof, either party may request a price renegotiation for gas to be sold and purchased during
the succeeding one (1`) year period. If the parties cannot agree on a renegotiated price during such zero (0) day period, either party may
terminate this Agreement effective as of the end of such zero (0) day period.
7. QUALITY AND MEASUREMENT: Measurement of heating value (MMBtu) of the natural gas purchased and sold hereunder will be made
at the Receipt Point(s) in accordance with the quality specifications of the transporting pipeline(s). Buyer is not obligated to purchase any
gas, which does not meet all specifications of the transporting pipeline(s).
8. BILLINGS AND PAYMENT: On approximately the 15th day of each month during the term(s) hereof, Seller will invoice Buyer for gas
delivered the previous month, for transportation charges incurred to deliver the gas to the Nomination Point(s), and for any other amounts
due from Buyer to Seller hereunder. Buyer shall pay Seller based upon the invoice within ten (10) days of receipt of Seller's invoice. If Buyer
Gas, Rev. 981017 Page 2 of 5
Y , TERMS & tONUTIONS
fails to pay the entire amount of the invoice when due, at Seller's option: (1) Seller may suspend deliveries until Seller receives payment in
full; and/or (2) interest will accrue on the unpaid portion at a rate equal to three percent (3%) above the prime rate charged by Chase Bank of
Texas, Dallas, from time to time, or the highest rate allowed by law, whichever is the lesser, from the date such payment is due until the
same is paid. No party receiving proceeds under this Agreement may request any adjustment or correction of any statement or payment
unless written notice of such request for adjustment or correction is furnished within twelve (12) months of the date of the statement or
payment for which such adjustment or correction is requested.
9. FORCE MAJEURE: Except as specifically provided to the contrary herein, inability or failure of Seller to deliver or of Buyer to receive gas
or of either party to perform pursuant to this Agreement will not be the basis of claims for damages sustained by either party or for breach of
contract when due to causes or contingencies reasonably beyond the control of either party hereto, including but not limited to Acts of God
or governmental authority; the elements; labor disputes; fires, accidents, breakage, repair or change of or obstruction in pipelines, equipment
or machinery; lack of available firm transportation capacity; depletion or failure of gas supply; fluctuations in gas pressure, or demands in
excess of the capacity of transporter's equipment or pipelines. The party suffering the event of force majeure shall give notice of such event
of force majeure in reasonably full particulars to the other party, as soon as reasonably possible. Any such event of force majeure shall, so
far as possible, be remedied with all reasonable dispatch. It is understood and agreed that the settlement of strikes or lockouts will be
entirely within the discretion of the party having the difficulty, and that the above requirement of the use of diligence in restoring normal
operating conditions will not require the settlement of strikes or lockouts by acceding to the terms of the opposing party when such course is
inadvisable in the discretion of the party having the difficulty.
10. TITLE AND INDEMNIFICATION: Title to the natural gas sold hereunder will pass from Seller to Buyer at the Receipt Point(s). Seller will
pay or cause to be paid all royalties, taxes and other sums due on production and transportation of the natural gas prior to delivery. Seller
will be in full control and possession of the natural gas and shall be fully responsible for and shall indemnify Buyer for any damage or injuries
caused thereby until the natural gas is delivered to Buyer at the Receipt Point(s), except for injuries and damage which are caused by the
negligence of Buyer. Buyer will likewise pay all taxes or other sums due on, at or after the Nomination Point(s) and be fully responsible and
shall indemnify Seller for damage or injury occurring after the natural gas is delivered to the Nomination Point(s), except for injuries and
damage caused by the negligence of Seller. Buyer shall reimburse Seller for any and all applicable taxes, including, but not limited to, gross
receipt tax, imposed by any state or local government upon any transaction or occurrence done pursuant to the terms of this Agreement.
11. WARRANTIES AND LIMITATIONS OF LIABILITIES:
11.1 Seller hereby warrants to Buyer that at the time of delivery of gas hereunder it will have good title and/or the right to sell such gas,
and that such gas will be free and clear of all liens and adverse claims.
11.2 The liability of a party breaching the provisions of this Agreement shall be limited to direct actual damages only. Such direct actual
damages shall be the sole and exclusive remedy hereunder and all other remedies or damages at law or in equity are waived. Neither parry
shall be liable for consequential, incidental, punitive, exemplary or indirect damages, lost profits or other business interruption damages, in
tort, contract, under any indemnity provision or otherwise.
12. NOTICES: All notices required or permitted under this Agreement shall be in writing and shall be deemed to be delivered when
delivered personally, by courier, by telefax or telecopier if received during normal business hours, or by mail if properly addressed and
deposited in the United States mail, first class postage prepaid, to the applicable address shown in Article V on the front of this Agreement,
or to such address as either party may from time to time designate as the address for such purpose by like notice addressed to the other
party.
13. NON -WAIVER: Waiver by Buyer or Seller of a particular right or default hereunder will not be deemed a waiver of other rights or
defaults whether similar or dissimilar.
14. CHOICE OF LAW: This Agreement shall be governed according to the laws of the State of Texas. Venue on any action brought
hereunder shall be in Dallas, Dallas County, Texas.
15. APPLICABLE LAW AND REGULATIONS: Buyer and Seller agree that this Agreement will be subject to all applicable laws,
regulations, rules and orders. In the event a regulatory or judicial decision or rate change shall have a detrimental economic impact upon
either party with respect to its performance under this Agreement, or in the event that compliance with such change by Seller shall result in a
material change in the method by which prices are calculated under this Agreement or a material change in the level of the components of
the pricing under this Agreement, then the party that suffers such detrimental economic impact or that is negatively affected by such material
change shall have the right to notify the other party, within thirty (30) days after becoming aware of such detrimental economic impact or
material change, In order to negotiate a modification to the terms of this Agreement so as to mitigate the impact of the event. If, after twenty
(20) days beyond the date of notice, the parties have been unable to negotiate a mutually satisfactory modification, to the terms under this
Agreement, either party shall have the right to terminate this Agreement upon ten (10) days prior written notice to the other party. If such
right to terminate is not exercised within forty-five (45) days after the original date of notice hereunder, then the right to terminate this
Agreement shall be deemed to have been waived with respect to the particular event.
16. ASSIGNMENT: This Agreement may not be assigned by either party without the prior written consent of the other party, which consent
shall not be unreasonably withheld. This Agreement shall inure to and be binding upon the parties hereto and upon their respective
successors, heirs and assigns. In the event Buyer sells, leases or otherwise conveys the facilities in which the gas sold hereunder is
utilized, Buyer shall require its successor to assume the obligations of this Agreement.
Gas, Rev. 981017
Page 3 of 5
TERMS & GONDTIONS
7. ENTIRE AGREEMENT. This Agreement, including the front page and any exhibits, constitutes the entire agreement between the
parties and there are no other, representations, warranties, understandings or other agreements except as set forth herein. There will be no
modification of this Agreement except by written consent of all parties.
Gas, Rev. 981017
Page 4 of 5
,
EXHIBIT A
Attached to and made a part of the
Natural Gas Sales Agreement # 15012 between
TXU Energy Services (Seller)
and
City of Vernon (Buyer)
October 1, 2000 through September 30, 2001
Estimated Natural Gas Consumption for City of Vernon:
4305 Santa Fe Ave.
VERNON, CA 90058
MMBTU/month
MMBTU/month
Oct 2000
5,000
Apr 2001
4,000
Nov 2000
4,000
May 2001
5,000
Dec 2000
4,000
Jun 2001
5,000
Jan 2001
4,000
Jul 2001
5,000
Feb 2001
4,000
Aug 2001
5,000
Mar 2001
4,000
1
1 Sep 2001
5,000
Total Estimated Natural Gas Consumption for this Agreement is: 54,000 MMBTU
City of Vernon
Signature:
I�EOI"NIS C.-MALBU�,Mayor
Date:
ATTEST* /
BRUCE V. MALKENHORST, City Clerk
APPROVED AS TO FORM:
r— �" -,I, rc a-,'_
EDUARDO OLIVO, City Attorney
TXU Energy Services
Signature: �v
Date: D
Gas, Rev. 981017
Page 5 of 5