EXHIBIT A Facility Constructionand Reimbursement Agreement Between Regency Intrastate Gas LP ("RIGS")and E&Pco, LLC ( "E&Pco") RESPONSIBILITY MATRIX

Contract Categories: Business Finance - Facility Agreements
EX-10.3 6 v356293_ex10-3.htm EXHIBIT 10.3

 

2001 Bryan Street

Suite 3700

Dallas, Texas 75201

www .regenyenergy.com

 

January 25, 2010

 

Osman Kaldirim, Jr.

E&Pco, LLC

2500 Tanglewilde

Suite 260

Houston, Texas 77063

 

  Re: Regency Intrastate Gas LP
    Facility Construction and Reimbursement Agreement
    Tap, Valve and Meter Installation
    IPCO #1 Interconnect, Section 21-T14N-R5E
    Caldwell Parish, Louisiana

 

Dear Mr.Kaldirim:

 

This Facility Agreement shall indicate the mutual agreement of Regency Intrastate Gas LP ('RIGS"), and E&Pco, LLC ("E&Pco") to install a tap, valve and metering facilities for the receipt of gas by RIGS from E&Pco under the following terms and conditions:

 

1.Facilities: Prior to the construction of any facilities contemplated hereunder, RIGS must obtain all permits and approvals as required by any agencies having jurisdiction over RIGS. Upon receipt of all necessary permits or regulatory approvals, RIGS will install, own, and maintain on or a new meter station consisting of a 6" tap and a 3" meter tube and associated piping, valves, flow control, over pressure protection valve, flanges and fittings ("Meter Station") to be located near Section 21-Tl4N-R5E on Regency's existing 30" pipeline in Caldwell Parish, Louisiana (the "Facilities"). Exhibit A attached hereto sets forth in detail the responsibilities of Regency Intrastate and E&Pco.

 

  2. Reimbursement: E&Pco shall reimburse RIGS for all costs actually incurred by RIGS associated with the construction of the Facilities. All costs and charges shall be paid in advance of any work performed by RIGS. RIGS has estimated the total costs hereunder to be $221,000 ("Estimate"). E&Pco and RIGS recognize that the Estimate may not be equivalent to the total actual RIGS costs and, that E&Pco shall be solely responsible for and shall reimburse RIGS for the total actual RIGS costs, if any, that exceed the Estimate. RIGS shall promptly notify E&Pco in writing if RIGS reasonably anticipates that the actual costs will exceed the Estimate. Within sixty (60) days after completion of the installation of the Facilities, RIGS shall either (a) invoice E&Pco for the total actual costs incurred by RIGS in excess of the Estimate if actual costs exceed the Estimate or (b) refund to E&Pco any amounts paid that exceeded the actual costs if the actual costs were less than the Estimate; provided, however, that RIGS shall not be obligated to invoice or refund amounts less than $100. E&Pco shall pay the full Estimate prior to installation of the Facilities.

 

 

 
 

 

3.Operations and Maintenance: RIGS shall have the on-going right to perform, or to have performed, any future construction, inspections, repairs, additions, modifications, upgrades, replacements, removal, disconnect, abandonment, and, if necessary, retirement of the Facilities deemed necessary by RIGS, and any associated costs shall be reimbursed by E&Pco. E&Pco shall provide RIGS or its representatives full access, rights, permission, and authority for ingress to and egress from the.Facilities as long as such Facilities are in service.

 

If E&Pco materially fails to comply with any provision of this Agreement (excluding by reason of force majeure), then RIGS shall have the right, upon reasonable notification to E&Pco and subject to any necessary regulatory authorizations , to suspend the flow of gas through the Facilities. E&Pco shall reimburse RIGS for any costs incurred as a result of such suspension, and for reestablishing the flow of gas through the Facilities. RIGS shall not be required to resume gas flow through the Facilities until E&Pco has corrected, in RIGS's reasonable judgment , the area(s) of noncompliance with this Agreement.

 

4.Other Agreement(s): Nothing in this Agreement shall be construed to grant E&Pco any transmission rights on RIGS pipeline system. RIGS' receipt of Gas at the new receipt point will be subject to the terms and conditions of the applicable Transportation Agreement(s) and the Operating Statement of Regency Intrastate Gas LP ("RIGS Operating Statement").

 

5.Indemnity

 

a.Indemnity by E&Pco: E&Pco shall defend, indemnify and hold harmless RIGS, its parent, subsidiaries and affiliates, and their respective agents, officers, directors, representatives and employees (collectively "RIGS Indemnified Parties") from and against any and all claims, demands, causes of action, settlements, liabilities, losses, costs, damages, fines, judgments or expenses (including without limitation, fees and disbursements of counsel incurred by the RIGS Indemnified Parties in any action or proceeding between the indemnifying party and the RIGS Indemnified Parties or between the RIGS Indemnified Parties and any third party or otherwise) (collectively "Claims") arising from or related in any way to (i) an actual or asserted failure of E&Pco or its designee to comply with this Agreement and/or any law, ordinance, code, rule or regulation of any governmental body, or (ii) injury to or death of persons arising in whole or in part and directly or indirectly out of the acts or omissions of E&Pco or its designees, agents, or contractors , but excepting, in the case of either clause (i) or clause (ii) above, injury or death of persons or damage to or loss of property to the extent caused by the gross negligence or willful misconduct of the RIGS Indemnified Parties.

 

b.Indemnity by RIGS: RIGS shall defend, indemnify and hold harmless E&Pco, its parent , subsidiaries and affiliates, and their respective agents, officers, directors, representatives and employees (collectively "E&Pco Indemnified Parties") from and against any and all claims, demands, causes of action, settlements, liabilities, losses,costs, damages, fines, judgments or expenses (including without limitation, fees and disbursements of counsel incurred by the E&Pco Indemnified Parties in any action or proceeding between the indemnifying party and the E&Pco Indemnified Parties or between the E&Pco Indemnified Parties and any third party or otherwise) (collectively "Claims") arising from or related in any way to (i) an actual or asserted failure of RIGS or its designee to comply with this Agreement and/or any law, ordinance, code, rule or regulation of any governmental body, or (ii) injury to or death of persons arising in whole or in part and directly or indirectly out of the acts or omissions of RIGS or its designees, agents, or contractors, but excepting, in the case of either clause (i) or clause (ii) above, injury or death of persons or damage to or loss of property to the extent caused by the gross negligence or willful misconduct of the E&Pco Indemnified Parties.

 

 

 

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6.Insurance: E&Pco will carry or cause to be carried and maintained in force throughout the entire term of this Agreement insurance as described below with reliable insurance companies. The limits set forth are minimum limits and will not be construed to limit E&Pco's liability.

 

Workers' Compensation insurance with statutory limits in compliance with all applicable state and federal laws having jurisdiction over each employee and Employer's Liability insurance with limits of $1,000,000 each accident, $1,000,000 disease each employee and $1,000,000 disease policy limit.

 

Commercial General Liability insurance on an occurrence form with a combined single limit of $1,000,000 each occurrence and annual aggregates of $1,000,000, for bodily injury and property damage, including coverage for contractual liability, independent contractors, broad form property damage, products/completed operations and explosion, collapse and underground.

 

Automobile Liability insurance with a combined single limit of $1,000,000 each occurrence for bodily injury and property damage to include coverage for all owned, non-owned and hired vehicles.

 

Excess or Umbrella Liability insurance with a combined single limit of $1,000,000 each occurrence, and annual aggregates of $1,000,000 for bodily injury and property damage covering excess of Employer's Liability, General Liability, and Automobile Liability insurance described above.

 

In each policy of the above-described insurance, E&Pco, with respect to its obligations, agrees to waive and will require its insurers to waive any rights of subrogation or recovery they may have against RIGS.

 

E&Pco agrees to submit a certificate(s) of insurance evidencing compliance with the insurance requirements set forth in this article.

 

 

 

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7.Force Majem:e: In the event of either Party hereto being rendered unable, wholly or in part, by force majeure to carry out its obligations under this Agreement , the obligations (other than the obligation to pay money) of such Party, so far as they are affected by such force majeure, shall be suspended during the continuance of any inability so caused, but for no longer period, and such cause shall be remedied with all reasonable dispatch. It is agreed that such Party shall give notice and full particulars of such force majeure in writing by U.S. mail, e-mail or by facsimile to the other Party as soon as reasonably possible after the occurrence of the cause relied on.

 

The term "force majeure" as employed herein shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of .the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, arrests and restraints of governments and people, civil disturbances, explosions, breakage or accident to natural gas processing and/or treating facilities, wells, machinery or lines of pipe, the necessity for making repairs or alterations to wells, equipment or lines of pipe, freezing of wells or lines of pipe, or any other causes, whether of the kind herein enumerated or otherwise, not within the control of the Party claiming suspension, and which by the exercise of reasonable diligence, such Party is unable to prevent or overcome. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the Party experiencing the strike or lockout.

 

8.Pressure and Quality: Deliveries of gas to RIGS by E&Pco shall be at a pressure sufficient to allow gas to enter RIGS's pipeline against the pressure existing therein from time to time, provided that the pressure of the gas delivered to RIGS at the point of interconnection shall not exceed the maximum allowable operating pressure ("MAOP") set forth in RIGS Operating Statement. E&Pco warrants that the quality of the gas that will flow through the Facilities will conform to the gas quality specifications of the RIGS Operating Statement. If gas delivered through the Facilities at any time fails to conform to any of the specifications set forth in RIGS Operating Statement, RIGS shall give notice to E&Pco of such nonconforming gas and may, in its discretion, immediately discontinue receiving gas at the Facilities until such nonconforming gas is remedied. E&Pco shall be liable for and pay all costs that the RIGS incurs as a result of any nonconforming gas and any penalties imposed on RIGS for any nonconforming gas. E&Pco shall be liable for and pay all costs arising from any damage caused by the nonconforming gas to RIGS's facilities or the facilities of third parties directly connected to RIGS. Failure to give such notice or discontinue service relating to nonconforming gas shall not constitute a waiver of RIGS's rights hereunder.

 

9.Governing Law: This Agreement, and all terms and provisions contained herein, and the respective obligations of the Parties are subject to valid laws, orders, rules, and regulations of duly constituted authorities having jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the state of Texas without regard to conflicts of law provisions . The Parties irrevocably submit to the exclusive jurisdiction of the state and federal courts located in Dallas, Texas in any action or proceeding arising out of or relating to this Agreement and waive any objection to such jurisdiction on the grounds that it is an inconvenient forum or any similar grounds.

 

10.Assignment: This Agreement may not be assigned without prior written consent of the other Party, such consent not to be unreasonably withheld. All the terms, covenants and agreements hereof shall run in favor of and be binding upon the Parties hereto, their successors and assigns.

 

 

 

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11.Term: This Agreement shall extend from the date of full execution hereof until the Facilities are removed, disconnected, or abandoned . The indemnification provisions, however, shall survive any termination hereof.

 

12.Entire Agreement: This Agreement contains the entire agreement between the Parties and except as stated herein there are no oral promises, agreemnts or warranties affecting it.

 

13.Waiver: The failure of either Party hereto at any time to require performance by the other Party of any provision hereof shall in no way affect the right of such Party thereafter to enforce the same, nor shall the waiver by any Party hereto of any breach of any provision hereof by the other Party be taken or held to be a waiver by such Party of any succeeding breach of such provision, or as a waiver of the provisions itself.

 

If you are in agreement with the foregoing please so indicate by signing and returning one copy of this Facility Construction and Reimbursement Agreement along with payment of the Estimate.

 

Sincerely,

 

REGENCY INTRASTATE GAS LP

By: RIGS GP LLC, its general partner

By: RIGS Haynesville Partnership Co., its sole member

 

 

L. Patric

Executive Vice President         

 

Agreed To and Accepted

This 26 day of January, 2010

 

E&Pco, LLC

 

By: /s/ Charles E. Edwards   By: /s/ Osman Kaldirim
Name: Charles E. Edwards   Name: Osman Kaldirim, Jr.
Title: EC Member   Title: Vice President

 

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EXHIBIT A

 

Facility Construction and Reimbursement Agreement

Between

Regency Intrastate Gas LP ("RIGS") and E&Pco, LLC ( "E&Pco")

 

RESPONSIBILITY MATRIX

 

DESCRIPTION   OWN   DESIGN/INSTALL   OPERATE   MAINTAIN
                 
Interconnect Site   RIGS   RIGS   RIGS   RIGS
                 
Regency Intrastate Hot Tap(s)   RIGS   RIGS   RIGS   RIGS
                 
Connecting Pipeline/Lateral {If required)RIGS taps to Meter Station Outlet   RIGS   RIGS   RIGS   RIGS
                 
Meter (Custody Transfer)   RIGS   RIGS   RIGS   RIGS
                 
EFM(Including Gas Chromatograph, Moisture Analyzer & H2S Monitor)   RIGS   RIGS   RIGS   RIGS
                 
Flow Control Valve   RIGS   RIGS   RIGS   RIGS
                 
OPP Valve   RIGS   RIGS   RIGS   RIGS
                 
Filter-Separator/Coalescer   E&Pco   E&Pco   E&Pco   E&Pco
                 
Connecting  Pipeline/Lateral TBD taps to Meter Station Inlet   E&Pco   E&Pco   E&Pco   E&Pco
                 
Site prep.Fencing,& Lighting   RIGS   RIGS   RIGS   RIGS
                 
AC power, Telephone   E&Pco   E&Pco   E&Pco   E&Pco

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

 

 

 

 
 

  

SPECIAL PROVISIONS ATTACHED TO AND FORMING PART OF THE BASE CONTRACT FOR SALE AND PURCHASE OF NATURAL GAS

 

Dated November 20, 2009

By and between

Regency Gas Marketing LLC

And

E & P Co.,., LLC

 

Regency Gas Marketing LLC and E & P Co., LLC hereby agree to amend the Base Contract for Sale and Purchase of Natural Gas referenced above to incorporate t17e modifications set forth below.

 

Section 1.        PURPOSES AND PROCEDURES

 

Section 1.2 is amended by replacing the first two sentences with the following:

 

'Theparties will use the following Transaction Confirmation procedure . Any Gas purchase and sale transaction may be effectuated in an EDI transmission or telephone conversation or a conversation using an instant messenger program ("JM Conversation"}, with the offer and acceptance constituting the agreement of the parties. "

 

Section 1.2 is further amended by add the word "in writing;" in the last sentence after the words "both parties" and before "provided" so that the sentence reads:

 

"such provisions shall not be deemed to be accepted pursuant to Section 1.3 but must be expressly agreed to by both parties in writing; provided that the foregoing shall not invalidate any transaction agreed to by the parties ."

 

Section 7        BILLING, PAYMENT,AND AUDIT

 

Section 7.5 is deleted in its entirety and replaced by the following:

 

"If the invoiced party fails to remit the full amount payable when due, a late fee shall be assessed on the unpaid portion and shall accrue from the date due until the date of payment in an amount equal to the then standard rate applied by Regency Gas Marketing LLC. 11

 

Section 10.        FINANCIAL RESPONSIBILITY

 

Section 10.1is hereby amended by (i) adding the word "or" in the second sentence, after the comma following the word "prepayment'' and before "a security interest'', and is further amended by deleting the final two sentences of the paragraph so that it reads:

 

"If either party ( "X ") has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party ("Y") (including, without limitation, the occurrence of a material change in the creditworthiness of Y or its

 

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Guarantor, if applicable}, X may demand Adequate Assurance of Performance. 'Adequate Assurance of Performance ' shall mean sufficient security in the form, amount, for a term, and from an issuer, all as reasonably acceptable to X, including, but not limited to cash, a standby irrevocable letter of credit, a prepa yment, or a security interest in an asset or guaranty. 11

 

Section 10.2 (vii) is amended by removing the words "but at least one Business Day" from the sentence, and by replacing the words "48 hours" with "72 hours" :

 “fail to give Adequate Assurance of Performance under Sect.ion 10.1 within 72 hours of a written request by the other party;"

 

Section 10.3.1is amended by deleting the final sentence and replacing it with the following sentence :

 

"The discount rate used in calculating net present value shall be determined by the Non Defaulting Party in a commercially reasonable manner.11

 

Section 10.4 is hereby amended by deleting the last sentence of the paragraph and replacing it with the following:

 

"Latefees on any unpaid portion of the Net Settlement Amount as adjusted by setoffs, shall accrue from the date due until the date of payment in an amount equal to the then standard rate ap plied by Regency Gas Marketing LLC."

 

Section 11.        FORCE MAJEURE

 

Section 11.3 (iv) is hereby amended by deleting subsection (iv) in its entirety and replacing it with the following:

 

"(iv) the loss of Buyer's market(s) or Buyer's inability to use or resell Gas purchased hereunder, except, in either case, as a result of events that qualify as a Force Majeure as provided in Section 11.2; or''

 

Section 11.3(v) is hereby amended by deleting subsection (v) in its entirety and replacing it with the following :

 

"(v) the loss orfailure of Seller's gas supply or depletion of reserves, except, in either case, as a result of events that qualify as a Force Majeure as provided in Section 11.2.11

 

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Section 12.        TERM

 

Section 12 is hereby amended by replacing the number "30" with the number "60" so the sentence reads as follow :

 

"This Contract may be terminated on 60 Day's written Notice, but shall remain in effect until the expiration of the latest Delivery Period of any transaction(s)."

 

Regency Gas Marketing LLC

By: Regency Gas Services LP, its sole member

By: Regency OLP GP LLC, its general partner

 

  By:    
  Pat Giroir  
  Vice President  
  Date:    
     
E & P Co., LLC  
     
  By: /s/ Charles E. Edwards  
  Name: Charles E. Edwards  
  Title: Member/Manager  
  Date: November 20, 2009  
     
  By: /s/ Osman Kaldirim, Jr  
  Name: Osman Kaldirim, Jr.  
  Title: Member/Manager Date: November 20, 2009  

 

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