Sample Business Contracts
Electric Service Agreement - City of Coffeyville, Kansas, and Coffeyville Resources Nitrogen Fertilizers LLC
|COFFEYVILLE RESOURCES NITROGEN FERTILIZERS, LLC|
|ELECTRIC SERVICE AGREEMENT|
|DATED January 13, 2004|
NITROGEN FERTILIZERS, LLC
ELECTRIC SERVICE AGREEMENT
TABLE OF CONTENTS
|ARTICLE I.|| ||DEFINITIONS|
ELECTRIC SERVICE CUSTOMER INFORMATION
ELECTRIC POWER AND ENERGY
RATES AND CHARGES
BILLINGS AND PAYMENTS: TERMINATION OF SERVICE
ELECTRIC STANDARDS FOR THE FACILITY
RIGHTS-OF-WAY AND ACCESS
LIABILITY: LEGAL REMEDIES
AMENDMENT(S) AND RESERVATION OF POWERS
MOTORSSTARTING PROCEDURES AND ALLOWABLE CURRENTS
ELECTRIC SERVICE AGREEMENT
This AGREEMENT FOR ELECTRIC SERVICE (The "Agreement" or the "Terms and Conditions of Service") is made and entered into as of the day of February, 2004, by and between the City of Coffeyville, Kansas ("City"), a municipal corporation organized and existing under the laws of the State of Kansas, and Coffeyville Resources Nitrogen Fertilizers, LLC (together with its successors and permitted assigns, "Coffeyville Resources"), a Delaware Limited Liability Company.
W I T N E S S E TH:
WHEREAS, the City purchases wholesale power and energy, and transmission capacity; and owns and operates its own generation, transmission, and distribution facilities to furnish retail electric service to the geographic area identified as the City's Certified Electric Service Territory pursuant to K.S.A. 66-1, 170, et seq.; and
WHEREAS, Coffeyville Resources owns a nitrogen fertilizer facility (together with the associated BOC Air Separation Unit and any other related facilities, as further defined in Section 1.14 hereof, the "Facility") in the City's Certified Electric Service Territory(1), which is a retail customer of the City's municipal electric utility; and
WHEREAS, Coffeyville Resources and the City entered into that certain Memorandum of Agreement dated October 23, 2003 in which the parties set forth the general principles and terms and conditions to be incorporated into this Agreement; and
WHEREAS, the City and Coffeyville Resources have agreed that these Terms and Conditions of Service shall govern the supplying by the City and taking by the Facility of the City's municipal electric service for the Facility within the City's Certified Electric Service Territory(1); and
- As modified by the Kansas Corporation Commission on June 26, 2000, to include that portion of the Facility which originally was situated beyond the City's Certified Electric Service Territory at the time the City entered into that certain Electric Service Agreement with Farmland Industries, Inc.
WHEREAS, the City and Coffeyville Resources have agreed that these Terms and Conditions of Service supersede and cancel all previous terms and conditions of service pertaining to the supplying and taking of the City's electric service by the Facility;
NOW, THEREFORE, the City and Coffeyville Resources agree as follows:
ARTICLE I. DEFINITIONS
The following terms included in this Agreement shall be defined as follows:
- "AEP" shall mean the American Electric Power Company, Inc., a New York corporation, and the facilities of any electric company division, affiliate, and/or subsidiary of AEP and any purchaser, successor, or transferee of AEP or any of AEP's division, affiliates and/or subsidiaries.
- "AEP Charges" shall mean the transmission charges and the ancillary services charges for power and energy transferred through the CSWS Transmission Service Agreement for the Facility, as set forth in Item 2 of the Rate Schedule.
- "City" shall have the meaning given in the introductory paragraph.
- "City Certified Electric Service Territory" shall mean the geographic area in which the City has the responsibility and exclusive right to supply retail electric service pursuant to K.S.A. 66-1,170, et seq.
- "Coffeyville Resources" shall mean Coffeyville Resources Nitrogen Fertilizers, LLC, a limited liability company organized and existing under the laws of the State of Delaware, together with its successors and assigns.
- "CSWS Transmission Service Agreement" shall mean the "Firm Point to Point Transmission Service Agreement" between the City and Central South West Services, Inc. (CSWS subsequently purchased by AEP) attached hereto as Exhibit 1.
- "Demand" shall mean the rate at which electric energy is delivered expressed in kilowatts, megawatts, or other suitable unit at a given instant.
- "Demand Charge" shall be that portion of the charge for electric service based upon the electric power (kW or kVA) consumed and billed under the Rate Schedule on the basis of the Demand Reading, taking into account any minimum demand requirement pursuant to the then applicable Power and Energy Supply Contract.
- "Demand Reading" shall mean the highest or maximum demand for electricity the Facility registers in a given 30 minute interval during each billing period, but not less than forty (40) megawatts except as otherwise provided in the applicable Power and Energy Supply Contract. The Demand Reading, if applicable pursuant to the then existing Power and Energy Supply Contract, sets the Demand Charge for each billing period.
- "Distribution Facilities" shall mean any electric line used to furnish retail electric service, including any line from a Substation to an electric consuming facility, but such term does not include any transmission facilities (including the Transmission Facilities as defined in this Agreement). There are no Distribution Facilities used to furnish retail electric service to the Facility Delivery Point(s) pursuant to this Agreement.
- "Effective Date" shall mean that date upon which the sale of assets authorized by that certain Sale Order issued by the United States Bankruptcy Court in the Western District of Missouri on November 14, 2003, in connection with the jointly administered Case No. 02-50557-JWV of Farmland Industries, Inc. in Bankruptcy Proceedings under Chapter 11, are concluded.
- "Energy Charge" shall mean that portion of the charge for electric service based upon the electric energy (kWh) consumed or billed under the Rate Schedule, taking into account any minimum energy, load factor, or Energy Lost and Unaccounted For requirement pursuant to the then applicable Power and Energy Supply Contract.
- "Energy Lost and Unaccounted For" shall mean the difference between total net wholesale energy purchased by the City for the Facility in kilowatt-hours and the sum of kilowatt-hour sales to the Facility.
- "Facility" shall mean any piece of land or real estate or any building, structure, or improvement or portion thereof that make up the Coffeyville Resources nitrogen fertilizer facility, the associated BOC Air Separation Unit, and any other related facilities or enhancements within the City Certified Electric Service Territory and within the area highlighted on the attached Exhibit 10 that receives or may receive power through the Facility Delivery Point(s) as defined in 1.15.
- "Facility Delivery Point(s)" shall mean the 13.8 kV metering location(s) in 138/13.8 kV Substation B, as depicted on Exhibit 3, attached hereto.
- "Force Majeure" shall mean "acts of God," including but not limited to, flood, earthquake, storm, lightning or fire. Force Majeure shall also include labor strikes, slow downs, or walkouts, war, riot, civil disturbance, sabotage, or restraint by a court or public authority, which by the exercise of due diligence and foresight could not reasonably have been avoided.
Force Majeure shall also include the temporary interruption or reduction in electric service, which, in the reasonable opinion of the City, is necessary to prevent severe system overload, or for the purpose of necessary maintenance, repairs, replacements, or installation of equipment. Except in the case of emergency, the City will give Coffeyville Resources as much prior notice as is reasonably possible of such temporary interruptions or reductions and will perform any necessary, replacements, repairs, or installation of equipment in accordance with a mutually agreeable schedule so as to cause the least inconvenience to the City and Coffeyville Resources.
- "Meter" shall mean any device or devices used to measure or register electric power and energy.
- "Operation & Maintenance Charges" shall mean the actual City cost of operating, maintaining, repairing, replacing and insuring the Transmission Facilities serving the Facility plus the overhead mark-up, all as set forth in the Rate Schedule.
- "Payment Security Instrument" shall mean the instrument furnished pursuant to Article III hereof.
- "Power and Energy Supply Contract" shall mean the City's July 1, 1999 through December 31, 2002 "Firm Partial Requirements Electric Power and Energy Contract" with the Grand River Dam Authority, as amended on April 9, 2002 to extend the term through December 31, 2007, attached hereto as Exhibit 2, or any subsequent Power and Energy Supply Contracts executed by the City to serve the Facility.
- "Power Factor" shall mean the ratio of real power (kW) to apparent power (kVA) for any given load and time. Generally, it is expressed as a percentage ratio.
- "Power Factor Adjustment" shall mean an adjustment in the billing under the Rate Schedule if the Facility's Power Factor varies from the specified range of percentages set forth herein.
- "PSO" shall mean the Public Service Company of Oklahoma.
- "PSO Interconnection Agreement" shall mean the Interconnection Agreement between the City and Public Service Company of Oklahoma (PSO), attached hereto as Exhibit 4.
- "Rate Schedule" shall mean the schedule, attached hereto as Exhibit A, setting forth the amount to be paid by Coffeyville Resources to the City for electric service.
- "Substation B" shall mean the 138/13.8 kV Substation as depicted on Exhibit 9, attached hereto.
- "SWEPCO" shall mean Southwestern Electric Power Company.
- "Transmission Capacity" shall mean the 90 megawatts of transmission capacity available for the use and benefit of the Facility over the Transmission Facilities and provided by the CSWS Transmission Service Agreement.
- "Transmission Facilities" shall mean the City owned transmission facilities, inclusive of but not limited to, the two 138 kV transmission lines from the City/PSO Interconnection Point to and including Substation B used for the bulk transfer of energy from the City/PSO interconnection point to the Facility Delivery Point(s), but such term does not include any Distribution Facilities.
- "Transmission Wheeling Charge" shall mean the wheeling charge to Coffeyville Resources for energy transferred across the transmission system and/or through the CSWS Transmission Service Agreement, as set forth in the Rate Schedule.
ARTICLE II. ELECTRIC SERVICE CUSTOMER INFORMATION
- Coffeyville Resources shall provide customer information to the City Finance Department for service to the Facility through the Facility Delivery Points. This information shall include the name of the individuals who will be responsible for processing the account payment and local operations, with their mailing addresses, fax and phone numbers.
ARTICLE III. PAYMENT SECURITY
- Coffeyville Resources shall furnish the City with a Payment Security Instrument, which shall be (a) an irrevocable Letter of Credit from a bank or financial institution acceptable to the City, (b) a Payment Security Bond from an insurance company acceptable to the City, (c) such other equivalent instrument or instruments from an entity or entities acceptable to the City, or (d) an interest-bearing, cash collateralized trust account with a financial institution in trust of the City, in each case in the amount of three million dollars ($3,000,000), to cover Coffeyville Resources' obligations with respect to payment of the minimum Transmission Wheeling Charges and of monthly electric use billings. In the event Coffeyville Resources expands the Facility, and such expansion increases the average monthly electric charges by more than $125,000 per month measured at one hundred twenty (120) day intervals following the expansion, Coffeyville Resources shall increase the amount of the Payment Security Instrument by two (2) times the amount of the average increase.
- In the event Coffeyville Resources breaches its requirement to make any of the payments or portions thereof as they become due for payment for the charges outlined in Section 3.1 above, and such breach has not been cured or corrected by Coffeyville Resources within ten (10) days after its receipt of written notice by the City to Coffeyville Resources of such breach, all of the remaining aggregate of payments shall immediately become due and payable. If said payment is not made by Coffeyville Resources within ten (10) days after its receipt of written notice by the City to Coffeyville Resources as set forth above, then the City will make demand for all of the remaining aggregate of payments against the issuer of the Payment Security Instrument.
- The Payment Security Instrument identified above is attached hereto as Exhibit 5. As of the date of this Agreement, the form of the Payment Security Instrument is in the full amount of $3,000,000 and is acceptable in form to the City for its term thereof.
- If the Payment Security Instrument furnished pursuant to this Article III expires or is terminated prior to the expiration of the term of this Agreement, then Coffeyville Resources shall furnish a substitute Payment Security Instrument acceptable to the City no later than forty-five (45) days prior to the expiration or termination date of the Payment Security Instrument, or pay the aggregate unpaid balance of the amounts secured and owing. If the full amount owing is not paid in full by Coffeyville Resources or an acceptable substitute Payment Security Instrument is not furnished within thirty-five (35) days prior to the expiration or termination date of the Payment Security Instrument, then the City will make demand for payment due and owing against the issuer of the Payment Security Instrument.
ARTICLE IV. ELECTRIC TRANSMISSION
- Subject to receipt by the City of the Payment Security Instrument required by Article III hereof, the City will have available for the use and benefit of the Facility ninety (90) megawatts of firm Transmission Capacity from the PSO/City Interconnection Point to the Facility Delivery Points and ninety (90) megawatts of Transmission Capacity provided by the CSWS Transmission Service Agreement, throughout the term of this Agreement.
ARTICLE V. ELECTRIC POWER AND ENERGY
- Within sixty (60) days after the Effective Date, Coffeyville Resources will deliver to the City a written forecast of its estimated monthly power and energy requirements for the Facility for the time period beginning January 1, 2004 and ending December 31, 2007. Upon receipt of
ARTICLE VI. RATES AND CHARGES
- Coffeyville Resources agrees to pay the City monthly during the term of this Agreement for electric service provided hereunder, in accordance with the Rate Schedule.
ARTICLE VII. BILLINGS AND PAYMENTS: TERMINATION OF SERVICE
- The City's electric meters shall normally be read at approximately monthly intervals and bills for electric service shall normally be submitted to Coffeyville Resources on monthly intervals. Whenever it is not possible with reasonable diligence to read a meter for a billing period, the City may submit an estimated bill based upon previous usage and other available information, with the amount of such bill to be subsequently adjusted as necessary when the next actual reading is obtained.
- The City will mail and fax on the billing date a bill for electric service to the Facility at the address and facsimile number of the Facility, or at such other address and facsimile number designated by Coffeyville Resources pursuant to Article II herein. Failure to receive a bill in no way exempts Coffeyville Resources from liability for payment for electric service. Each bill will separately set out the AEP Charges due for the month.
- Failure of Coffeyville Resources to either pay the aggregate unpaid balance of the amounts secured and owing or furnish a substitute Payment Security Instrument as provided in Section 3.4.
- The City may discontinue electric service without advance notice to Coffeyville Resources for any of the reasons set forth below:
- Existence of a dangerous or defective condition related to the wiring or equipment at the Facility;
- When a defective condition of wiring or equipment at the Facility results, or is likely to result, in danger to life or property or interference with proper service to others;
- Fraudulent use of electricity; or
- Tampering with the City's regulating and measuring equipment or other property.
- Coffeyville Resources shall be responsible for all damage to, misuse of, or loss of the City's property located at the Facility, unless caused by an act of God or the negligence of the City and its agents, Coffeyville Resources shall not authorize anyone to change, remove, or tamper with the City's property.
- No regulating or measuring equipment, or other property or equipment owned by the City, wherever situated, whether located at the Facility or elsewhere, shall be tampered with or interfered with for the purpose of adjustment, fraudulent adjustment or otherwise. In the event the City's electrical equipment has been tampered with, the City will follow the same procedures as for fraudulent use of electricity as outlined in these Terms and Conditions of Service.
- For the purpose of these Terms and Conditions of Service, the term "Fraudulent Use of Electricity" shall include any unauthorized use of the City's electric service and facilities by Coffeyville Resources.
- In the event fraudulent use of electricity or evidence of attempted fraudulent use of electricity is discovered, or where the City's regulating or measuring equipment or other property has been tampered with, electric service may be discontinued by the City without advance notice to the Facility. Electric service to the Facility will not be resumed until Coffeyville Resources shall have paid all bills including:
- The charge for the estimated amount of electricity fraudulently consumed;
- The cost of replacement or repair of any damaged City equipment; and
- A re-connection charge of Ten Thousand Dollars ($10,000).
ARTICLE VIII. SERVICE CHARACTERISTICS
- Service hereunder shall be at alternating current, 3-phase, 4-wire, 60 Hertz, 13.8Y/7.97 kV, 75 MVA with an allowable variation of 10% above or below nominal voltages.
- The City will use its best efforts in good faith to supply continuous electric service at the Facility Delivery Points. It shall be the responsibility of Coffeyville Resources to install and maintain protective devices, which will protect the Facility's equipment or process during abnormal service conditions or the failure of part or all of the electric service. The provisions of the latest edition of the National Electrical Code and the National Electric Safety Code shall be considered as the minimum acceptable standard for the protection and safeguarding of persons, wiring and/or equipment of the Facility. In no event will the City be liable for any damages to Coffeyville Resources if the Facility equipment or process is not protected or
safeguarded in conformity with such minimum code requirements, nor shall the City be liable for any service interruption, irregularities, or any other causes or abnormalities not caused by the sole negligence of the City.
- In order to make necessary repairs to or replacements in the City's facilities for supplying electric service, the City reserves the right in accordance with prudent utility practices, without incurring any liability therefor, to suspend service without notice to Coffeyville Resources for such periods as may be reasonably necessary. When conditions permit an attempt will be made to notify Coffeyville Resources of such an outage. Insofar as is practicable, any interruption shall be made at a time, which will cause least reasonable inconvenience to the Facility.
- The City also reserves the right to discontinue service to the Facility without advance notice, when a defective condition of wiring or equipment at the Facility results, or is likely to result, in danger to life or property or interference with proper service to others. Electric service to the Facility will not be resumed until the defective condition has been remedied to the satisfaction of the City. If such defective condition is the result of tampering with City equipment, the provisions related to the fraudulent use of electricity shall also apply.
- The City will endeavor at all times to maintain and operate its electrical system with minimal interruption and voltage fluctuations consistent with economically realistic operations and with prudent utility standards of other electric utilities.
- Whenever high or low voltage problems are suspected the City will check the voltage. If necessary, corrective adjustment to the voltage will be made without delay.
- Electric service shall be provided to the Facility by two 13.8Y/7.97 kV, 75 MVA services.
- Coffeyville Resources hereby authorizes agents of the City to enter the Facility at all times for any purpose incidental to the supplying of electric service, including, but not limited to, inspecting the Facility's equipment and connections; repairing, replacing or removing City property; or tree trimming and tree removal. Refusal on the part of Coffeyville Resources to provide reasonable access for the above purposes shall be deemed to be sufficient cause for discontinuance of service.
- Any and all equipment, apparatus and devices placed or installed, or caused to be placed or installed by the City on or in the Facility's premises shall be and remain the property of the City, regardless of the mode or manner of annexation or attachment to real property. Upon the termination of this Agreement, the City shall, within a reasonable time, remove such equipment, apparatus, or devices.
- City liability is limited as provided in Article XVI hereof.
ARTICLE IX. ELECTRIC STANDARDS FOR THE FACILITY
- All of the Facility's electrical wiring and apparatus connected or to be connected to the City's Electric Service shall be at Coffeyville Resources' expense and shall be installed and maintained by Coffeyville Resources in accordance with the National Electrical Code and the National Electrical Safely Code. In the event of a conflict between the National Codes and an applicable municipal code, the latter shall govern. The City reserves the right to refuse to connect to any wiring or apparatus which does not meet these Code requirements and the City may, without advance notice, discontinue service to the Facility when a defective condition of wiring or equipment is discovered at the Facility.
- Facility electric power wiring, equipment and apparatus shall not produce harmonic currents and voltages which exceed the limitations set forth in IEEE Standard 519-1992 or the latest
ARTICLE X. METERING
- All meters shall be furnished, installed and maintained by the City and remain its property. All meter bases, enclosures and other associated equipment shall be furnished and maintained by the City and remain its property. No metering equipment shall be by-passed for any reason, without prior approval of the City.
- The City will test the accuracy of the Facility's meter(s) within twenty (20) days after a written request has been received from Coffeyville Resources. If the meter(s) tested is found to be more than one percent (1%) incorrect, the City will not charge for such test. If the meter(s) is found to be within the accuracy limits of plus or minus one percent (1%), the City will charge Coffeyville Resources its cost to cover the costs to perform such test, plus a ten percent (10%) overhead mark-up.
- If the results of a meter(s) test shows the average error to be more than one percent (1%) fast or more than one percent (1%) slow, the City will adjust the bill as follows:
- Fast Meters: The City shall refund Coffeyville Resources the overcharge based on the corrected meter reading for a period equal to one-half of the time elapsed since the last previous meter test, but not to exceed six months, or such shorter time period set forth in the applicable Power and Energy Supply Contract or the CSWS Transmission Service Agreement.
- Slow Meters: The City shall charge Coffeyville Resources for the electricity consumed but not included in bills previously rendered, based on the corrected meter reading for a period equal to one-half of the time elapsed since the last previous meter test, but not to exceed six months, or such shorter time period set forth in the applicable Power and Energy Supply Contract or the CSWS Transmission Service Agreement
- If a meter is found not to register or to have been registering intermittently for any period, the City may charge an estimated amount of electricity used, which shall be calculated from interchange meter readings, or by averaging the amounts registered over corresponding periods in previous years, or in the absence of such information, over similar periods of known accurate measurement preceding or subsequent thereto.
- If a meter is found to have an incorrect register, connection, multiplier, or constant the error shall be corrected. Where the error is adverse to Coffeyville Resources, the City will refund the excess charged for the amount of electricity incorrectly metered for the period of time not to exceed 6 months the meter was used for billing Coffeyville Resources, or such shorter time period set forth in the applicable Power and Energy Supply Contract or the CSWS Transmission Service Agreement. Where the error is adverse to the City, the City will charge Coffeyville Resources the undercharge for the amount of electricity incorrectly metered for the period of time not to exceed 6 months the meter was used for billing Coffeyville Resources, or such shorter time period set forth in the applicable Power and Energy Supply Contract or the CSWS Transmission Service Agreement.
ARTICLE XI. FORCE MAJEURE
- Neither Coffeyville Resources nor the City shall be considered to be in default in respect to any obligation hereunder (other than obligations to pay costs and expenses due) pursuant to this Agreement, if either the City or Coffeyville Resources is prevented from fulfilling such obligation under this Agreement by reason of Force Majeure.
- If either party is prevented from performing or hindered in performing any of its obligations by reason of Force Majeure, then it will make performance as soon as is reasonably feasible thereafter.
- Force Majeure shall not relieve Coffeyville Resources of its obligations to pay those amounts identified as Items 1A, 2, 3 and 4 of the Rate Schedule, or to pay any costs of energy consumed prior to the Force Majeure event; provided, however, that to the extent the City has been relieved of the City's obligation(s) under the CSWS Transmission Service Agreement or the Power and Energy Supply Contract as a result of Force Majeure thereunder, Coffeyville Resources shall be relieved of the corresponding obligation(s) identified as Items 1A and 2 of the Rate Schedule.
ARTICLE XII. RIGHTS-OF-WAY AND ACCESS
- When requested by the City, Coffeyville Resources shall provide to the City, at no cost to the City, necessary rights-of-way, easements, warranty deeds, or licenses on or across Coffeyville Resources owned real estate, at reasonable locations thereon, for the proper location upon such Coffeyville Resources real estate of City owned electric facilities, including Transmission Facilities that are reasonably utilized by the City for the delivery of power and energy at the Facility Delivery Point(s).
- Authorized employees of the City shall have reasonable access to Facility premises at all reasonable times to inspect, repair, replace, or remove City facilities.
ARTICLE XIII. DELIVERY POINTS
- The Facility Delivery Point(s) are set out on Exhibit 3, attached hereto.
- Where a service connection cannot be made or maintained with adequate clearances without being interfered with by trees or other obstructions on the Facility's Premises, it will be the responsibility of Coffeyville Resources to provide whatever corrective measures are required.
ARTICLE XIV. TERM
- This Agreement shall become effective on the execution of the same, and shall continue from that date of execution until July 1, 2019.
ARTICLE XV. ASSIGNMENT
- Except as otherwise provided herein; the rights and privileges of Coffeyville Resources under this Agreement are not assignable without the written consent of the City; such consent not to be unreasonably withheld.
- The sale, subleasing or assignment by Coffeyville Resources of any interest in the Facility or this Agreement shall not relieve Coffeyville Resources or any successors or assigns from the performance of the covenants and conditions contained herein, without the written consent of the City as approved by the City's Governing Body. Such consent shall not be unreasonably withheld.
- Prior to any sale, subleasing or assignment by Coffeyville Resources of any interest in the Facility or this Agreement, Coffeyville Resources and/or the transferee entity shall provide evidence reasonably satisfactory to the City that, at a minimum, the following conditions have been satisfied: (a) the transferee entity shall be knowledgeable in operations similar to the Facility, (b) the transferee entity shall be formed and existing as a legal entity under the laws of one of the states of the United States of America, and shall be qualified to do business in the State of Kansas, (c) the transferee entity shall expressly assume and agree to perform all of the obligations of Coffeyville Resources under this Agreement and any other agreement of Coffeyville Resources and the City relating to the Facility, and (d) that the Payment Security Instruments shall apply to the obligations of the transferee entity under this agreement. Copies of all transfer, sale, subleasing and assignment documents shall be delivered to the City.
- If a sale, sublease or assignment is made following approval by the City as provided in this Article, the provisions of this Article shall continue in full force and effect and no further such sale, sublease or assignment shall be made except in compliance with the provisions of this Article.
- Nothing contained herein shall prevent either the City or Coffeyville Resources from pledging, mortgaging, or assigning its rights under this Agreement as security for any indebtedness, and both the City and Coffeyville Resources may assign to the pledge or mortgagee (or to a trustee for the holder of such indebtedness), any money due or to become due and owing under this Agreement.
ARTICLE XVI. LIABILITY: LEGAL REMEDIES
- Prior to delivery to Coffeyville Resources through the City's Meter(s) at the Facility Delivery Point(s), Coffeyville Resources shall not be liable for any damages of any type whatsoever related to the power and energy sold/purchased under this Agreement, unless such damages are the result of the negligence or willful misconduct of Coffeyville Resources.
Subsequent to the delivery through the meter(s) of the City at the Facility Delivery Points, Coffeyville Resources shall be deemed to be in exclusive control of, and liable for any damages of any type whatsoever related to the power and energy sold/purchased under thus Agreement, unless such damages are the result of the negligence or willful misconduct of the City.
- If there is a breach of this Agreement by either the City or Coffeyville Resources, the non-breaching party shall have available to it all remedies available for breach of contract under the laws of the State of Kansas. However, neither the City nor Coffeyville Resources shall claim, nor shall the City or Coffeyville Resources be permitted to recover punitive damages from the other, as a result of the breach of this Agreement by either the City or Coffeyville Resources.
- In arriving at the determination of whether negligence was involved, accidents, acts of God, and other failures beyond the City's control, including but not limited to, Force Majeure events, shall not be considered negligence. Further, negligence may be determined against the City only if the City had prior actual notice of a system deficiency, and failed to initiate corrective measures within a reasonable time after receipt of such actual notice.
- Neither party shall be liable to the other for any special, indirect, consequential or punitive damages, including but not limited to loss of power, loss of product or loss of revenues, however caused.
- Notwithstanding anything herein to the contrary, it is expressly agreed between the parties that the City has not waived any rights it may be entitled to under the Kansas Tort Claims Act, K.S.A. 75-6101 et seq., as amended, and any agreements made by the City found to be inconsistent with the provisions of such Act are hereby declared to be null and void.
ARTICLE XVII. AMENDMENT(S) AND RESERVATION OF POWERS
- This Agreement may only be amended by a written amendment executed in writing by both the City and Coffeyville Resources.
- The City reserves to itself all of its governmental and proprietary powers not specifically limited by the provisions of this Agreement.
ARTICLE XVIII. MOTORSSTARTING PROCEDURES AND ALLOWABLE CURRENTS
- Starting of any motor in the Facility shall not create an electric utility system voltage drop that will affect other electric utility customers and/or equipment.
- Starting of the 37,000 HP synchronous motor will, for some 138 kV transmission configurations, require use of two 138 kV, 21.6 MVAR capacitor banks during the motor start mode. One or both 21.6 MVAR capacitor banks will normally be in-service for transmission VAR control. Use of the banks for motor starting will necessitate certain switching be accomplished to release the banks for motor starting, followed by additional switching for normal system operation.
- Coffeyville Resources and the City shall follow a defined procedure for:
- Preparation for motor start.
- Procedure for motor start.
- Switching following motor start.
- The above procedure is set forth on Exhibit 6, as part of this Agreement.
- The system effort required to start the motor may cause abnormally low voltages and abnormally high voltages; therefore, the City may be required to notify power users of the impending voltage variations. Coffeyville Resources shall give the City reasonable advance notice of any plans to start the motor. The failure of Coffeyville Resources to follow the complete starting procedure as set forth on Exhibit 6 shall cause Coffeyville Resources to be responsible for all resulting applicable damages.
- Interference Producing Equipment (Harmonics): The Facility electric power distribution system on the load side of the 13.8 kV meters M3 and M4 may have nonlinear connected loads which could cause the flow of harmonic currents. These harmonic currents could cause interference with communication and other types of equipment and when coupled with reactive power compensation, could cause high levels of harmonic voltage and current distortion.
- Coffeyville Resources agrees to provide control of any non-linear connected loads through the use of (1) Shunt filters, (2) Phase multiplication, or (3) Harmonic compensation or injection so that harmonic currents and voltages produced do not exceed those defined in IEEE Standard 519-1992 or the latest revision thereof, "Recommended Practices and Requirements for Harmonic Control in Electrical Power Systems."
ARTICLE XIX. MISCELLANEOUS
- This Agreement is executed by a duly authorized representative of the City who is fully authorized to execute this Agreement on behalf of the City, as evidenced by the City Resolution adopted by the Governing Body of the City and attached hereto as Exhibit 7.
- This Agreement is executed by a duly authorized representative of Coffeyville Resources, who is fully authorized to execute this Agreement on behalf of Coffeyville Resources, as evidenced by the Secretary's Certificate of Coffeyville Resources, LLC attached hereto as Exhibit 8.
- Coffeyville Resources agrees to maintain the Facility in good condition, repair and working order; Coffeyville Resources agrees to pay, as the same respectively become due, all taxes, assessments and other governmental charges at any time lawfully levied or assessed upon or against the Facility or any part thereof; and Coffeyville Resources agrees to annually provide written documentation to the City that it has obtained and is maintaining all-risk casualty insurance on the Facility in an amount not less than the actual market value of the Facility, subject to reasonable deductibles or self-insured retentions.
- This Agreement is the entire and final expression of the Agreement and it may not be contradicted by evidence of any prior or contemporaneous written or oral agreements or negotiations of the parties.
- This Agreement shall be construed and enforced in accordance with the laws of the State of Kansas, in Kansas Courts.
- The covenants terms and conditions of this Agreement shall extend to and be binding upon the successors, assigns, trustees, and/or receivers of the respective parties thereto.
- The section headings hereof are for the convenience of referenced only and shall not be treated as a part of this Agreement or as affecting the true meaning of the provisions herein.
- This Agreement may be executed simultaneously in multiple counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
- This Agreement has been prepared from negotiations from all parties and no party shall be charged with having prepared this document in the event an ambiguity exists.
- Should any paragraph be declared unconstitutional or unenforceable, the validity of the remaining provisions shall be given full force and effect.
- Any waiver by the parties hereto of any breach of any parties' obligations under this Agreement shall not be deemed a continuing waiver and shall not prevent the parties hereto from exercising any remedy they may have for any succeeding breach of the same or other obligation.
- All notices and communications required to be in writing pursuant to this Agreement shall be effective only if delivered personally, or sent by facsimile or certified mail, or by overnight delivery service to the following:
Coffeyville Resources Nitrogen Fertilizers, LLC
ATTN: Plant Manager
P.O. Box 5000
Coffeyville, KS 67337
(620) 252-4357 (fax)
with a copy to:
Coffeyville Resources, LLC, c/o Pegasus Investors
99 River Road
Cos Cob, Connecticut 06807
Attention: Philip Rinaldi
(203) 869-4400 (fax)
City of Coffeyville, Kansas
ATTN: City Manager
P.O. Box 1629/102 W. Seventh
Coffeyville, KS 67337
(620) 252-6175 (fax)
(SIGNATURES ARE ON THE NEXT PAGE)
IN WITNESS WHEREOF, the City and Coffeyville Resources have executed this Agreement as of the day and year first written above.
| || ||CITY OF COFFEYVILLE, KANSAS|
/s/ DON W. EDWARDS
Name: Don W. Edwards
COFFEYVILLE RESOURCES NITROGEN FERTILIZERS, LLC
/s/ PHILIP L. RINALDI
Philip L. Rinaldi
Chief Executive Officer