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HomeMy WebLinkAboutContracts & Agreements_166-2003_CCv0001.pdf ALT USA,LLC—City of Redlands 05AUG03 LA40 Supply Contract AGREEMENT FOR THE SALE AND PURCHASE OF LIQUEFIED METHANE GAS This Agreement for the Sale and Purchase of Liquefied Methane Gas (the "Agreement") is entered into as of the second (2nd) day of September, 2003 (the "Commencement Date") by and between Applied LNG Technologies USA, L.L.C. ("Seller")and City of Redlands, CA("Buyer"). RECITALS A. Seller is in the business of producing, selling and transporting Liquefied Methane Gas ("LMG"). B. Buyer is seeking a source of LMG for Buyers direct consumption at Buyer's Point of Delivery (POD) (hereinafter defined); C. Seller wishes to sell LMG to Buyer, and Buyer wishes to purchase LMG from Seller on the terms and conditions expressed in this Agreement. NOW, THEREFORE, in consideration of the above-referenced premises, the bargained-for exchange of promises contained in this Agreement and other valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties to this Agreement, Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase, receive and pay for LMG in the quantities and under the terms and conditions specifically set forth in this Agreement. ARTICLE I Definitions The following terms shall have the followingt,meanings in this Agreement L_ a. The term "Gallon" shall mean the volume of LMG equal to 3.55lbs. b. The term "Effective Date" shall mean the date as defined on the respective Exhibit A for each Point of Delivery. c. The term or "LMG" shall mean the liquid methane sold by Seller and delivered to Buyer which meets the product specifications described in Article V. d. The term "Contract Year", shall mean a twelve-month period beginning at 7:00 am Pacific Standard Time on the Commencement Date and each anniversary thereof. e. The term "Reserved Amount" shall mean, for each POD, the amount of LMG that Seller has reserved for sale to Buyer in each Purchase Period for such POD. f. "Purchase Period" shall mean, for each POD, each period of one(1)calendar month, commencing upon the Effective Date for such POD. The term "Reserve Period" shall mean the three-month period defined in Exhibit A Page I / I I ALT USA,LLC—City of Redlands 05AUG03 LA46 Supply Contract 4.1 Price. The LMG Base Unit Price is set forth in the Exhibit A for each Point of Delivery. For all LMG delivered hereunder in each Purchase Period, Buyer shall pay to Seller the LMG Base Unit Price (as it may be.adjusted each month for changes in feedstock as described in Exhibit A) plus the Cost of Transportation as set forth in Exhibit A. Beginning with the first(V)anniversary of the Effective Date of each Exhibit A, Seller may adjust the LMG Base Unit Price (including the monthly adjustment provision) and the Cost of Transportation at any time by.providing written notice to Buyer at least thirty (30) days prior to the Effective Date of any adjustment and each such adjustment shall apply to all LMG delivered to Buyer on and after the effective date of such notice; provided, however, that if such adjustment (including any prior adjustments for the same Contract Year) would result in an increase in the LMG Base Unit Price plus the Cost of Transportation during the Contract Year in which such adjustment takes affect of more than five percent (5%) over the prior Contract Year's LMG Base Unit Price and Cost of Transportation, and Buyer, within forty-five (45) days after receipt of such notice, furnishes Seller with credible written evidence that Buyer can purchase LMG from a single source in quantities at least equal to the amount sold in the prior Contract Year at average effective aggregate pricing lower than that to be in effect under this Agreement after said adjustment and with other commercial terms comparable to this Agreement and if Seller does not agree to(i) meet said lower price, or(ii)reduce price to the LMG Base Unit Price and Cost of Transportation prior to adjustment, whichever results in a higher price, within thirty (30) days thereafter, Buyer shall have the right to terminate this Agreement by giving Seller not less than ten (10)days prior written notice. 4.2 Quality. Buyer shall have no obligation hereunder to accept delivery of or to purchase or pay for LMG which is not in compliance with the quality specifications set forth herein, provided that Buyer has provided timely notice of such noncompliance pursuant to Section 5.4 hereof. Seller, at its sole expense, shall replace all such LMG that fails to meet the quality specifications immediately upon Buyer's providing notice of the same pursuant to Section 5.4. 4.3 LMG Source. LMG supplied under this Agreement may be produced at any plant of Seller or other supply source of Seller. Seller shall attempt to provide Buyer with the most economical supply of LMG based on availability at the time of Buyer's order, If LMG is not produced from Seller's facility or contracted supply source as described in Exhibit A, then the price charged hereunder shall be revised to reflect additional charges incurred by Seller in acquiring LMG for delivery to Buyer from other sources and delivering such LMG. ARTICLE V Qualit 5.1 SMcifications. LMG sold and delivered by Seller hereunder shall contain no less than ninety-seven percent (97%) methane and, unless otherwise agreed to by the parties, no more than one percent(I %)ethane and one-half percent(V2 %) other hydrocarbons, with the balance to be inert gases. 5.2 No Odorization.Seller shall have no obligation to odorize LMG sold and delivered hereunder, 5.3 Tests.Seller, at its own expense, shall conduct periodic quality and composition tests and analyses of LMG produced from Seller's facilities and will retain records of such tests and analyses for review by Buyer. Buyer shall have the fight at its sole cost to independently test or analyze LMG tendered for delivery by Seller, 5.4 Compliance.The quality of LMG delivered and sold hereunder shall be for all purposes conclusively deemed to be in full compliance with the quality specifications set forth herein when delivered into Buyer's containers or storage tanks at Buyer's point of delivery. Page 31 11 ALT USA,LLC—City of Redlands 05AUG03 LAG Supply Contract POD until such amount is paid unless Buyer in good faith disputes the amount claimed, or takes any such other action as may be allowed by law. 7.5 Delay. If rendering of an invoice by Seller is delayed beyond the date provided for in Section 7.1 hereof, then the time for payment shall be extended correspondingly unless Buyer is responsible for such delay. 0 7.6 Errors. In the event an error is discovered in any invoice rendered by Seller, the amount of such error shall be adjusted, provided that claim therefore shall have been made within twelve (12) months, from the date such invoice was rendered. All adjustments shall be made within thirty (30) day's of receipt of a timely claim. ARTICLE VIII Taxes 8.1 Taxes. It is agreed that any duty, tax, fee or other charge which Seller may be required to collect or pay under any municipal, state, federal, or other laws now in effect or hereafter enacted with respect to the delivery and sale of LMG by Seller to Buyer, including federal, state and local, excise, use and sales tax, shall be added to the prices to be paid by Buyer for LMG sold and delivered hereunder. ARTICLE IX Force Majeure 9.1 Notice. If either Seller or Buyer is prevented or rendered unable by Force Majeure to perform or comply with any obligation of this Agreement, upon giving written notice and reasonably full 'particulars of the Force Majeure event to the other party, the affected party's obligations shall be suspended during the continuance of the Force Majeure event and such party shall not be considered in default in the performance of its obligations under this Agreement but only with respect to the particular component of obligations affected by the event and only for the period during which the Force Majeure event exists; provided, however, obligations to make payment for LMG delivered prior to the onset of the Force Majeure event shall not be suspended. A party affected by a Force Majeure event shall take appropriate action to minimize the consequences of the event, to rectify the conditions brought about by the Force Majeure event and to resume performance under this Agreement as soon as is reasonably feasible. Settlement of strikes and lockouts shall be wholly within the discretion of the party subject to same. 1.2 Force Maieure. The term "Force Majeure" shall mean any event which is beyond the reasonable control and without the fault or negligence of the party affected and shall include but not be limited to acts of God, the public enemy and Governmental or regulatory agencies including, but not limited to, acts resulting in shut-down or curtailment of third party methane gas production and/or transportation facilities supplying Seller; or facilities supplying LMG to Seller-, any force majuere event declared by Seller's suppliers of LMG; acts resultinc, in shut-downs of Buyer's storage facilities or 17 equipment; the elements, such as lightning, fire, or abnormally severe weather which cause a complete or partial shut-down of Seller's LMG production facilities, Buyer's LMG storage facilities, Buyer's equipment, or the facilities of Seller's third party methane gas suppliers and transporters: breakage or accidents to wells, vehicles, machinery, equipment or lines of pipe which prevent either Buyer or Seller or the third party Suppliers of either Buyer or Seller from operating or delivering methane gas to Seller or which prevent Buyer from storing LMG; inability to obtain permits-, strikes (including strikes of shipping agents, dockers, and truck drivers) and other industrial, civil, or public disturbances preventing Seller from supplying LMG or Buyer from taking delivery of LMG hereunder, Page 5/ 11 ALT USA,LLC—City of Redlands 05AUG03 LMG Supply Contract ARTICLE XII Notices 12.1. Address. Any notice, request, demand, statement or payment provided for or required in this Agreement shall be sent to the parties hereto at the following addresses: Seller: APPLIED LNG TECHNOLOGIES USA,LLC P.O.51166 Amarillo,Texas 79159-1166 Attn: Stephanie Rugg Buyer: CITY OF REDLANDS Attn: City Manager 35 Cajon Street Redlands, CA 92373 12.2 Time. Except as may otherwise be provided for herein any notice, request or demand required under this Agreement shall be personally delis<�red or mailed by certified mail, postage prepaid, return receipt requested, or sent by reputable overnightcarrier to the parties' addresses above. Notice sent in the manner provided above shall be deemed given and received upon receipt. 12.3 Changes. Either party may change its at= Tress and provide a different address for specific notification purposes under this Article by giving written notice thereof to the other party. ARTICLE XIII General Provisions 13.1 Amendment. This Agreement may be amended at any time by the written agreement of the parties. All amendments, chang Cles, revisions and discharges of this Agreement, in whole or in part, made from time to time, shall be binding upon the parties despite any lack of legal consideration, so long Z.� as the same shall be in writing and executed by the parties hereto. See Exhibit B attached hereto. 13.2 Applicable Law. The existence, validity, construction and operational effect of this Agreement, any and all of its covenants, agreements, terms and conditions and the rights and obligations hereunder of each of the parties hereto shall be determined in accordance with the laws of the State of California. In the event that any dispute under this Agreement arises and a lawsuit is instituted, then, in addition to any other method that may be permitted by applicable law, service of process may be effected by means of United States mail, sent registered, postage prepaid to the address for notices set forth in Article XII. In the event that any lawsuit is instituted by a party to this Agreement growing out of a dispute that is related to this Agreement, then the parties to this Agreement hereby consent to the jurisdiction of the Federal,State and Local Courts for San Bernardino County,California. 13.3 Attorneys' Fees. If either party to this Agreement shall bring any action for any relief against the other,declaratory or otherwise, arising out of this Agreement, the losing party shall pay to the prevailing party a reasonable sum for attorneys' fees incurred in bringing such suit and/or enforcing any judgment granted therein, all of which shall be deemed to have accrued upon the commencement of such action and shall be paid whether or not such action is prosecuted to judgment. Any judgment or order entered in such action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such judgment. For the purpose of this section, attorneys' fees shall include, without limitation, fees incurred in the following: (1) post-judgment motions; (2) contempt proceedings; following: Z:� Page 7/ 11 ALT USA,LLC—City of Redlands 05AUG03 LNIG Supply Contract Buyer by expressly waiving Seller's immunity for injuries to Seller's employees and agrees that the obligation to indemnify, defend and hold harmless provided for in this Agreement extends to any claim brought by or on behalf of any employee of Seller. This waiver is mutually negotiated by the parties. This shall not apply to any damage resulting from the sole negligence of Buyer, its agents and employees. To the extent any of the damages referenced herein were caused by or resulted from the concurrent negligence of Buyer, its agents or employees, the obligations provided herein to indemnify, defend and hold harmless is valid and enforceable only to the extent of the negligence of Seller, its officers, agents and employees. 13.10.3 Comprehensive General Liability Insurance. Seller shall secure and maintain in force throughout the duration of this Agreement comprehensive general liability insurance with carriers acceptable to Buyer. Minimum coverage of one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) aggregate for public liability, property damage and personal injury is required. Seller shall obtain an endorsement that Buyer shall be named as an additional insured. 13.10.4 Business Auto Liability Insurance. Seller shall have business auto liability coverage, with minimum limits of I million ($1,000,000) per occurrence, combined single limit for bodily injury liability and property damage liability. This coverage shall include all Seller's owned vehicles used on the project, hired and non-owned vehicles, and employee non-ownership vehicles. Seller shall obtain an endorsement that Buyer shall be named as an additional insured. 13.10.5 Assignment and Insurance Requirements. Seller is expressly prohibited from subletting or assigning any of the services covered by this Agreement without the express written consent of Buyer. In the event of mutual agreement between parties to sublet a portion of the Services, the Seller will add the subcontractor as an additional insured and provide Buyer with the insurance endorsements prior to any work being performed by the subcontractor. Assignment does not include printing or other customary reimbursable expenses that may be provided in this Agreement. 13.10.6 Hold Harmless and Indemnification. Seller shall defend, indemnify and hold harmless Buyer, its elected officials, officers, employees and agents, from and against any and all actions,- claims, demands, lawsuits, losses and liability for damages to persons or property, including costs and attorney fees, that may be asserted or claimed by any person, firm, entity, corporation, political subdivision or other organization arising out of or in connection with Seller's negligent and/or intentionally wrongful acts or omissions under this Agreement; but excluding such actions, claims, demands, lawsuits and liability for damages to persons or property arising from the sole negligence or intentionally wrongful acts of Buyer, its officers, employees or agents_ 13.11 Each party has received independent legal advice from its attorneys with respect to the advisability of executing this Agreement and the meaning of the provisions hereof. The provisions of this Agreement shall be construed as to their fair meaning, and not for or against any party based upon any attribution to such party as the source of the language in question- Headings used in this Agreement are for convenience of reference only and shall not be used in construing this Agreement. Page 9 ALT LISA.LLC—City of Redlands 05AUG03 LMG Supply Contract 13.12 No Third Party Benefit. This Agreement is intended to benefit only the parties hereto and no other person or entity has or shall acquire any rights hereunder. 13.13 Relationship of Parties. The parties agree that their relationship is that of Seller and Buyer. Each party is and shall perform this Agreement as an independent contractor, and as such shall maintain complete control over all of its employees, agents and operations. Neither party nor anyone employed by it shall be, represent, act, , purport to act or be deemed to be the agent, representative, employee or legal representative of the other party. Nor shall this Agreement be deemed to create any form of business organization between the parties hereto, nor is either party granted any right or authority to assume or create any obligation or responsibility on behalf of the other party, nor shall either party be in any way liable for any debt of the other, 13.14 Severability. If any term, covenant, condition or provision of this Agreement., or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, covenants, conditions or provisions of this Agreement, or the application thereof to any person or circumstance,shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. 13.15 Waiver of Covenants, Conditions or Remedies. The waiver by one party of the performance of any covenant or condition under this Agreement shall not invalidate this Agreement nor shall it be considered a waiver by it of any other covenant or condition under this Agreement. The waiver by either or both parties of the time for performing any act under this Agreement shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives, effective as of the latest date set forth below. APPLIED LNG TECHNOLOGIES USA, L.L.C. ("Seller") By D Y ate 5/3 Steve Bartlett, Chief 4Operating (icer CITY OF REDLANDS, CA ("Buyer") By --t Date September 2, 2003 Mayor, Karl N. Haws ATTEST: LorriePovzer,Clty-061- Z paae 10 11 ALT USA,LLC—City of Redlands 05AUG03 LNIG Supply Contract EXHIBIT A Attached to and made a part of the Agreement for the Sale and Purchase of Liquefied Methane Gas made effective as of the 51'day of August, 2003, by and between Applied LNG Technologies USA. L.L.C. and City of Redlands, CA 41 Notwithstanding the provisions of Article 2 of this Agreement, the term of this Agreement with respect to the Point of Delivery listed below shall commence on the latter of the Commencement Date or the Date of First Delivery= specified below and shall continue in effect for the duration specified below and thereafter until terminated by giving not less than ninety(90)days prior written notice ol'such termination to the other party. Buyers Address—notices City of Redlands 35 Cajon Street, Suite 200 Redlands,CA 92373 Attn: City Manager Buyers Address for PDF Format Attn: Mike Sepulveda Billing—Invoices&Statements City of Redlands P.O. Box 3005 Redlands, CA 92373 At e-mail address: insepulvedaCacitvofrediands.org Point of Delivery AKA—City of Redlands Corporate Yard 1270 W. Park Ave Redlands,CA 92373 Date of First Delivery September 5,2003 Duration or Termination Date Three(3)years Origin -Primary ExxonMobil—Shute Creek.WY LMG Base Unit Price from Primary August 5,2003—August 4,2004 $32 Origin (includes freight & excludes Z� August 5, 2004—August 4, 2005 $335 taxes) August 5. 2005—August 4. 2006 $35 Transportation Price per trip from Included in LMG Base Unit Price Primary Origin Alternate Origin LMG Price NA Alternate Origin Transportation Price NA —Delivery Delay Fees $25,00 per one quarter(1/4)hour. Reserve Period: Q] Reserve Quantity: 30,000 gallons Reserve Period: Q2 Reserve Quantity: 30.000 gallons Reserve Period: 03 Reserve Quantity: 30,000 gallons Reserve Period: Q4 Reserve Quantity: 30,000 gallons SELLER APPLIED LNG ThC-UNOLOGIES USA,LLC BUYER CITY OF REDLANDS BY: Stev�� Bartlett 5 BY: IT'S: Chief Operating Officer Mayor, Karl N. Haws ATTEST �� L-Orric-,�oyzer.Ci(y leX Pa,,e I I I I Z�