Trunkline Open Season and Notice of Prearranged Deal

 

December 2, 2022

 

Trunkline Gas Company, LLC (TGC) is reviewing investments to provide incremental interim backhaul capacity of up to 400,000 MMBtu per day on its system prior to service to Lake Charles LNG.  Such service would be on an interim basis and is expected to be from late 2023 until the beginning of service to Lake Charles LNG, which is expected to be on or before 2028. 

 

TGC is hereby giving notice of a prearranged deal for a portion of the above-referenced capacity as detailed below, and soliciting binding bids from Shippers interested in acquiring firm transportation capacity for the prearranged deal, as well as the remaining capacity available as part of the interim period utilizing TGC’s Enhanced Firm Transportation Service (Rate Schedule EFT) that meets the following criteria:

 

Prearranged Deal Parameters:

 

Primary Receipt Point:                 ETC Tiger Pipeline

               

                Primary Delivery Points:               LA Storage – 100,000 Dth/d

                Transco Ragley – 50,000 Dth/d

                Henry Hub – 150,000 Dth/d

 

                Start Date:  Completion of construction of the subject interim facilities, expected to be late 2023

 

Term:  3 year Primary Term from the in-service of the expansion construction.  Prearranged deal also includes a mutual ten (10) year extension right beyond the Primary Term to be exercised by August 31, 2023.  If both parties do not agree to such extension, then the agreement will terminate pursuant to the Primary Term.  In the event that it is TGC that does not agree to such extension, then Shipper may exercise by January 31, 2024 a one-time discounted reservation rate option of $0.05 Dth/d on an MDQ of up to 150,000 Dth/d for up to ten (10) years after the end of the Primary Term subject to available capacity.  The Primary Receipt Point eligible for this rate option is the Henry Hub and eligible Secondary Receipt Points will be all existing and future interconnection TGC Field Zone REC LOCs and BI-DIR LOCs.  The Primary Delivery Point eligible for this rate option is the LA Storage Pipeline and eligible Secondary Delivery Points will be all existing and future interconnection TGC Field Zone DEL LOCs and BI-Dir LOCs.

               

                CQ:  300,000 Dth/d

               

Service:  Enhanced Firm Service will be during the primary term only, with no ROFR rights

 

                Rate:  $0.20/Dth/d.  (In addition, for the first year of the EFT agreement, this rate will apply to a Shipper requested change in the Primary Delivery Point, provided that such rate shall only be available for one change during the winter season and one change during the summer season and that the new Primary Delivery Point is in the same service area/zone as the original Primary Delivery Point and the request is subject to available capacity.)

 

 

 

Any interested party must complete the attached binding bid form and return it to TGC via email or fax as directed below.  In addition, any interested party must execute and submit the attached Precedent Agreement as part of its bid without changes to the form of Precedent Agreement other than filling in the blanks.  The deadline for submitting bids is 12:01 PM CST on December 19, 2022.

 

All bids shall be deemed to be binding on Shippers upon the conclusion of the bidding period.   TGC reserves the right to reject any and all bids, including non-conforming bids.  Bids that do not meet the criteria set forth above, are incomplete or would require changes to the EFT Form of Service Agreement set forth in TGC’s Tariff or the attached form of Precedent Agreement will be deemed non-conforming bids.  TGC’s discretion to reject or accept a bid, including any non-conforming bid, shall be exercised on a not unduly discriminatory basis.

 

After the close of this Open Season, TGC will evaluate all conforming and acceptable bids.  Awards of capacity will be governed by GT&C Section 10.10 of TGC’s Tariff and will be subject to TGC’s receipt of necessary regulatory approvals.  Regulatory approvals pertaining to potential system modifications must be acceptable to TGC, at its sole discretion.

 

Please direct questions and bids to:

Joey Colton

VP – Marketing & Business Development

Phone: (713) 989-7266

Fax:        (713) 989-1191

Email:    joey.colton@energytransfer.com

 

 

 

Trunkline Gas Company

Binding Bid Sheet for Available Firm Capacity

 

Bidder Name & Address (print or type):

                                                                                                                                               

                                                                                                                                               

                                                                                                                                               

                                                                                                                                               

 

Contact Name:                                                                                                                 

Contact Email:                                                                                                                  

Contact Phone:                                                                                                                

Contact Fax:                                                                                                                      

Primary Receipt Pt	Primary Delivery Pt	Volume (MMBtu/d)	Reservation Rate ($/MMBtu/d)	Term

 

Reservation rate is applicable only to Primary Receipt Point(s) and Primary Delivery Point(s) referenced above.

Is Shipper willing to accept a pro-rata share of capacity?                                 (yes or no)

The deadline to submit bids is 12:01 PM CST, December 19, 2022.

Fax or email bids to Joey Colton at 713-989-7266 or joey.colton@energytransfer.com

 

 

 

 

PRECEDENT AGREEMENT

 

This PRECEDENT AGREEMENT (“Precedent Agreement”) is made and entered on this ____ day of December 2022 by and between Trunkline Gas Company, LLC (“Trunkline” or “Transporter”) and ___________________ (“Shipper”).  Transporter and Shipper are sometimes referred to herein individually as a “Party,” or collectively as the “Parties.” In consideration of the mutual promises of the Parties, Transporter and Shipper agree as follows:

WHEREAS, on September 9, 2022, Trunkline posted a notice on its Electronic Bulletin Board entitled, “Posting of Capacity that may be Available in the Future – Interim Trunkline Backhaul Capacity” (the “Capacity Notice”);

WHEREAS, the Capacity Notice informed that Trunkline was considering an early in-service date for a portion of its FERC-certificated Pipeline Modifications Project in order to provide interim service of up to 400,000 MMBtu per day prior to the service planned to the Lake Charles LNG facility (the “Interim Project”);

WHEREAS, on December 2, 2022, Trunkline posted an Open Season and Notice of Prearranged Deal relating to the Interim Project (the “Prearranged Open Season”);

WHEREAS, Shipper desires to submit a binding bid in accordance with the terms and conditions of the Prearranged Open Season and, as part of that bid, execute and submit this Precedent Agreement; and

WHEREAS, Transporter is willing to proceed with seeking the necessary governmental approvals and authorizations to construct and operate the Interim Project (including performing pipeline modification work necessary to reverse the direction of gas flow on the Epps, Pollock, Shaw and Longville compressor stations in Transporter’s Zone 1A) and provide the firm transportation service contemplated herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, Transporter and Shipper agree to the following:

 

1.                  Prearranged Open Season. 

This Precedent Agreement, including the commercial terms and conditions contained in Shipper’s bid and Exhibit 1 hereto, is intended to constitute a binding bid in the Prearranged Open Season pursuant to Section 10.10 of the GT&C of the Tariff and subject to the prearranged shipper’s right to match any higher bid and retain the capacity in accordance with the procedures and requirements of Section 10.10. 

2.                  Government Approvals, Shipper Support and Notification. 

A.                Subject to the terms and conditions of this Precedent Agreement, Transporter agrees to proceed, using reasonable efforts, to obtain from all state and federal governmental and regulatory authorities having competent jurisdiction over the siting, development, construction, and operation of the Interim Project, including, but not limited to, state and federal environmental approvals, other state approvals and FERC approvals or authorizations that Transporter determines are necessary for Transporter to: construct, install, own, operate, and maintain the Interim Project to provide the firm transportation service for Shipper as contemplated herein, and to perform its other obligations as contemplated in this Precedent Agreement (the “Approvals”). 

B.                 Transporter reserves the right to file and to prosecute any and all applications for such Approvals, any supplements or amendments thereto, and, if necessary, any court review, in a manner that is consistent with this Precedent Agreement and that Transporter deems to be in its best interest. 

C.                 Subject to the terms and conditions of this Precedent Agreement, as long as Transporter complies with its obligations under this Section 2, Shipper expressly agrees to reasonably support and cooperate with, and to not oppose the efforts of, Transporter to obtain all Approvals and the acquisition of right of way necessary for Transporter to construct, own, operate, and maintain the Interim Project and to provide the firm transportation service contemplated in this Precedent Agreement.

3.                  Commercial Terms and Rates. 

The Parties agree that within ten (10) days after the satisfaction or waiver of all of the Conditions Precedent described in Section 4 below, Shipper and Trunkline shall execute a Rate Schedule Enhanced Firm Transportation Service Agreement and Negotiated Rate Agreement (together the “EFT Agreement”), in a form substantially similar to that attached as Exhibit 1 hereto, including the terms, rates, points and quantities contained therein.

4.                  Conditions Precedent to Transporter’s Obligations.

Transporter’s obligations under this Precedent Agreement and the execution of the EFT Agreement are expressly made, as applicable, subject to the following Conditions Precedent, which are solely for the benefit of Transporter and only Transporter shall have the right to waive such Conditions Precedent:

i.                    The final award of Interim Project capacity to Shipper pursuant to and in accordance with the Tariff, including the procedures and requirements of Section 10.10, by December 21, 2022;

 

ii.                  Transporter’s receipt and acceptance of all necessary Approvals related to the Interim Project, on terms and conditions acceptable to Transporter in its sole discretion, to construct, own, operate and maintain the Interim Project, and provide the firm service for Shipper contemplated herein; and

iii.                Transporter’s procurement of all necessary materials, right-of-way, easements and other surface rights necessary for the construction and operation of the Interim Project on terms acceptable to Transporter in its sole discretion.

 

5.                  Term and Termination. 

 

A.        This Precedent Agreement shall be effective on the date hereof and, unless terminated earlier in accordance with the terms hereof, shall remain in effect until the date on which service commences pursuant to the EFT Agreement.

B.        If any Conditions Precedent set forth in Section 4 above have not been fully satisfied or waived by Transporter, then Transporter may thereafter terminate this Precedent Agreement, without liability of any kind to the Shipper, by giving ten (10) days’ advance written notice of such termination; provided, however, if Shipper is not awarded any capacity subject to the Prearranged Open Season, this Precedent Agreement, including all exhibits hereto, shall automatically terminate.

6.                  Creditworthiness. 

Contemporaneously herewith, Shipper shall enter into and thereafter comply with, and provide to Transporter sufficient evidence of Shipper’s compliance with the Credit Agreement under Exhibit 2 hereto.  

7.                  Succession and Assignment.

Either Party may assign its rights and obligations under, and interests in, this Precedent Agreement to a trustee or trustees or its lenders, individual or corporate, as security for bonds or other financing arrangements, obligations or securities.  Otherwise, except with respect to Transporter (who may assign this Precedent Agreement to an affiliate without consent) or to Shipper (who may assign this Precedent Agreement to an affiliate without consent, provided that such affiliate meets the creditworthiness requirements or provides credit support in accordance with Section 6, including executing a Credit Agreement in the same form as attached hereto under Exhibit 2), any assignment by either Party shall require the written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that the intended assignee must also comply with the creditworthiness requirements of Section 6, including executing a Credit Agreement in the same form as attached hereto under Exhibit 2.  Notwithstanding anything to the contrary herein, Transporter may refuse to provide its consent (and same shall not be deemed unreasonable) if the intended assignee fails to meet the Transporter’s creditworthiness requirements or fails to provide credit support in accordance with the Credit Agreement.  For the purpose of this Paragraph, the term “Affiliate” shall mean, an individual, entity, or division that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another individual, entity, or division.  The terms “controls,” “controlled,” and “control” in the preceding sentence shall mean the possession, direct or indirect, of the power to direct the management and policies of an entity, whether through the ownership of voting securities or otherwise.  The assignor shall provide written notice of the assignment to the non-assigning Party to this Precedent Agreement as soon as practicable after such assignment.  After execution of the Transportation Agreement, any transfer of capacity rights pertaining to the executed EFT Agreement must be accomplished in accordance with the capacity release provisions of Transporter’s Tariff and FERC regulations or an approved waiver thereof.

8.                  Third Party Beneficiary. 

Except as expressly provided for in this Precedent Agreement, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person not a party hereto any rights, remedies or obligations under or by reason of this Precedent Agreement.

9.                  Drafting. 

Each and every provision of this Precedent Agreement shall be considered as prepared through the joint efforts of the Parties and shall not be construed against either Party as a result of the preparations or drafting thereof.  It is expressly agreed that no consideration shall be given or presumption made on the basis of which Party drafted this Precedent Agreement or any specific provision hereof.

10.              Notice. 

Except as herein otherwise provided, any notice, request, demand, statement, or bill provided for in this Precedent Agreement, or any notice which either Party desires to give to the other, must be in writing and will be considered duly delivered only if delivered by hand, by E-mail, by nationally recognized overnight courier service, or by certified mail (postage prepaid, return receipt requested) to the other Party’s address set forth below:

Transporter:                             Trunkline Gas Company, LLC

                                                1300 Main St.

Houston, Texas 77002-6803

Attention: Joey Colton

E-Mail: Joey.Colton@energytransfer.com

 

 

Shipper:                                   _____________________________

                                                _____________________________

                                                _____________________________

Telephone:      _________________

Attention:  ____________________

E-Mail:  ______________________

________________________________

                                                                                               

or at such other address as either Party designates by written notice.  Delivery shall be deemed to occur at the time of actual receipt; provided, however, that if receipt occurs after normal business hours or on a weekend or national holiday, then delivery shall be deemed to occur on the next business day.

11.              Modifications. 

Except as provided otherwise in this Precedent Agreement, no modification of the terms and provisions of this Precedent Agreement shall be effective unless contained in writing and executed by both Transporter and Shipper.

12.              Headings. 

The headings contained herein are for informational purposes only and shall not affect the meaning or interpretation of this Precedent Agreement.

13.              Counterparts. 

This Precedent Agreement may be executed in multiple counterparts or by other electronic means (including by PDF), each of which, when so executed, shall be deemed an original, but all of which shall constitute one and the same agreement.

14.              Severance. 

If a court or other governmental authority of competent jurisdiction declares any provision of this Precedent Agreement unenforceable, then that provision shall be severed from this Precedent Agreement, which shall otherwise remain in full force and effect and be construed as if it did not contain the severed provision; provided, however, that if severing such provision from this Precedent Agreement has a material adverse effect on the rights or obligations of either Party as set forth in this Precedent Agreement, then the Parties agree to negotiate in good faith replacement terms that are consistent with the court’s declaration or directive and that maintain the relative economic positions of, and risks to, the Parties as reflected in this Precedent Agreement as of the date first set forth above; and provided further, that if either party in its sole discretion is unable to agree to any replacement terms or modification, then this Precedent Agreement will terminate upon notice in a form consistent with the notice provisions in Section 10 of this Precedent Agreement.

15.              Choice of law. 

THIS PRECEDENT AGREEMENT SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICT OF LAW RULES THAT MAY REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 

16.              WAIVER OF JURY TRIAL. 

EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS PRECEDENT AGREEMENT.

17.              WAIVER OF CONSEQUENTIAL DAMAGES. 

IN NO EVENT SHALL ANY PARTY OR ITS RESPECTIVE AFFILIATES, OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES, BE LIABLE HEREUNDER AT ANY TIME FOR EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES OF ANY OTHER PARTY, INCLUDING LOSS OF PROFIT, LOSS OF REVENUE OR ANY OTHER SPECIAL OR INCIDENTAL DAMAGES, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.

18.              Rules and Regulations. 

This Precedent Agreement and the obligations of the Parties hereunder are subject to all applicable laws, rules, orders and regulations of governmental authorities having jurisdiction and, in the event of conflict, such laws, rules, orders and regulations of governmental authorities having jurisdiction shall control.

19.              Force Majeure

A.       If, by reason of force majeure, either Party is rendered unable, wholly or in part, to carry out its obligations under this Precedent Agreement (other than an obligation to make payments when due), and if such Party gives prompt notice and reasonably full particulars of such force majeure in writing or by electronic mail to the other Party after the occurrence of the cause relied on, then the Party giving such notice, so far as and to the extent that it is affected by such force majeure, will be relieved of its performance obligations under this Precedent Agreement affected by such force majeure event and will not be liable in damages to the other Party for its failure to carry out its obligations affected by force majeure during the continuance of any inability so caused; provided, however, that such cause will be remedied with all reasonable dispatch.

 

B.                 As used in this Precedent Agreement, the term "force majeure" means acts of God, strikes, lockouts or other industrial disturbances; acts of public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods or washouts; arrests and restraints imposed by the government, either federal, state or local, civil or military; the binding order of any court, legislative body or governmental authority having jurisdiction (a “Governmental Authority”), including denial, suspension or revocation of any Approval; vandalism, sabotage, acts of terrorism or civil disturbances; relocation of facilities required by a Governmental Authority; breakage or accidents to machinery, surface equipment or lines of pipe that could not have been reasonably prevented through the use of prudent practices; the necessity for testing of facilities (as required by Governmental Authority or as deemed necessary by the testing Party for the safe operation thereof) or for making repairs to machinery or lines of pipe; the inability of a Party to obtain necessary material, supplies, permits, rights-of way or labor to perform or comply with any obligation or condition of this Precedent Agreement; and any other causes, whether of the kind enumerated in this Precedent Agreement or otherwise, that are not reasonably within the control of the Party claiming suspension.  The Parties agree that settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty, and the requirement that any force majeure will be remedied with all reasonable dispatch will not require the settlement of strikes or lockouts by acceding to the demands of the opposing Party when such course is inadvisable in the discretion of the Party having the difficulty.  Notwithstanding the above, a loss of downstream markets or upstream supply will not constitute a force majeure event.

20.              No Joint Venture. 

Except as otherwise set forth herein, nothing in this Precedent Agreement shall be construed to create a joint venture or partnership between the Parties or to constitute one Party as the agent of the other for any purpose.

21.              Waiver. 

Unless otherwise specifically indicated herein (including Section 5.B.), any waiver, consent or approval of any kind or character by any Party of any term or condition set forth in this Precedent Agreement, or of any breach or default hereunder, shall be given or withheld in the sole discretion of the waiving, consenting or approving Party and all such waivers, consents or approvals shall be in writing.  No delay or omission to exercise any right, power or remedy accruing to any Party as the result of any breach or default hereunder shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed or otherwise constitute a waiver of any other breach or default theretofore or thereafter occurring. 

22.              Entire Agreement. 

The terms and provisions contained in this Precedent Agreement, including the Exhibits incorporated herein, constitute the entire agreement of the Parties, and there are no prior or contemporaneous agreements, understandings, warranties, representations, covenants, obligations, promises, assurances or conditions precedent or subsequent or otherwise, except those expressly set out in this Precedent Agreement.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Precedent Agreement to be duly executed by their duly authorized officers as of the day and year first above written.

 

TRANSPORTER:

 

Trunkline Gas Company, LLC                                                      

                                                                                                               

By: _____________________________                

Name: Beth Hickey                         

Title: SVP – Commercial Operations

Date: _______________________

 

 

SHIPPER:

______________________

 

By: _____________________________

Name: ___________________________

Title: ____________________________

Date: ___________________________

 

EXHIBIT 1

 

RATE SCHEDULE EFT

ENHANCED FIRM TRANSPORTATION SERVICE

FORM OF SERVICE AGREEMENT

 

 

CONTRACT NO. __________

 

 

                THIS AGREEMENT is made effective as of the ______ day of _________________________, _________, by and between:

 

 

                TRUNKLINE GAS COMPANY, LLC, (hereinafter called "Trunkline"), a Delaware Limited Liability Company,

 

And

                ___________________

 

                (hereinafter called "Shipper").

 

 

Shipper represents and warrants that Shipper conforms to the requirements of 18 C.F.R.

 

Section 284.102  (284B   -  Intrastate Pipelines or Local Distribution Companies)   ______

Section 284.221  (284G  -  Interstate Pipelines and Others)                                         __X___

 

In consideration of the mutual covenants and agreements as herein set forth, both Trunkline and Shipper covenant and agree as follows:

 

ARTICLE 1 - SERVICE

 

                Trunkline agrees to receive at the Points of Receipt and deliver at the Points of Delivery, on a firm basis, Quantities of Natural Gas up to the daily Quantity (Dt), which shall constitute the Maximum Daily Quantity, stated on Exhibit A.

 

                The Maximum Daily Quantity is stated in delivered Quantities, for which received Quantities must be adjusted for fuel usage and lost or unaccounted for Gas as set out in the then-effective, applicable rates and charges under Trunkline's Rate Schedule EFT. 

 

                Exhibit A hereto states the Points of Receipt and Points of Delivery.  Exhibit A may be revised from time to time by written agreement between Trunkline and Shipper and, as may be revised, is by this reference incorporated in its entirety into this Agreement and made an integral part hereof.  Shipper's Maximum Daily Quantity shall be assigned among the primary Points of Receipt set out on Exhibit A, as well as among the primary Points of Delivery set out on Exhibit A.  Such assignment may be changed, subject to the availability of capacity, in accordance with the General Terms and Conditions.

 

ARTICLE 2 - TERM

 

                Trunkline shall provide firm Transportation service for Shipper pursuant to this Agreement for the term stated below.

 

                The primary term shall begin on the In-Service Date (defined below) of the Interim Project, as described in the Parties’ Precedent Agreement dated ________, __, 2022 (the “Effective Date”) and continue for three (3) years (the “Primary Term”).  The In-Service Date of the Interim Project shall be the first day of the calendar month following the day on which Trunkline is able to provide firm service under Rate Schedule EFT from the primary points of receipt (set forth in Exhibit A) to the primary point of delivery (set forth in Exhibit A).  Pursuant to Section 11.8 of the General Terms and Conditions of Trunkline’s Tariff, Trunkline and Shipper may mutually agree in writing by August 31, 2023 to a ten (10) year extension at the same contractual terms (the “Extension Right”) beyond the Primary Term (the “Extension Period”).  If Trunkline and Shipper do not mutually agree to exercise the Extension Right by August 31, 2023, such Extension Right shall expire, and this Agreement shall terminate pursuant to the Primary Term.

 

 

ARTICLE 3 - RATES AND CHARGES

 

                For the services provided or contracted for hereunder, Shipper agrees to pay Trunkline the then-effective, applicable rates and charges under Trunkline's Rate Schedule EFT filed with the Commission, as such rates and charges and Rate Schedule EFT may hereafter be modified, supplemented, superseded, or replaced generally or as to the service hereunder.  Trunkline reserves the right from time to time to unilaterally file and to make effective any such changes in the terms or rate levels under Rate Schedule EFT and the applicability thereof, the General Terms and Conditions or any other provisions of Trunkline's Tariff, subject to the applicable provisions of the Natural Gas Act and the Commission's Regulations thereunder. 

 

                From time to time Shipper and Trunkline may agree in writing on a level of discount of the otherwise applicable rates and charges hereunder pursuant to the effective applicable provisions of Rate Schedule EFT and subject to the Regulations and Orders of the Commission.  For example, Shipper and Trunkline may agree that a specified discounted rate shall apply:  (a) only to certain Quantities under this Agreement; (b) only if specified Quantity levels are actually achieved or only with respect to Quantities below a specified level; (c) only during specified time periods; (d) only to specified Points of Receipt, Points of Delivery, mainline segments, transportation paths or defined geographical areas; (e) in a specified relationship to the Quantities actually transported (i.e., that the rates shall be adjusted in a specified relationship to Quantities actually transported); or (f) based on published index prices for specific receipt or delivery points or other agreed upon pricing reference points for price determination (Such discounted rate may be based on the published index price point differential or arrived at by formula.  Any Service Agreement containing an index based discount will identify what rate component is discounted.  To the extent the firm reservation charge is discounted, the index price differential rate formula shall be calculated to state a rate per unit of Maximum Daily Quantity.); provided, however, that any such discounted rate set forth above shall be between the Maximum Rate and Minimum Rate applicable to the service provided under this Agreement.  In addition, the discount agreement may include a provision that if one rate component which was at or below the applicable Maximum Rate at the time the discount agreement was executed subsequently exceeds the applicable Maximum Rate due to a change in Trunkline's Maximum Rates so that such rate component must be adjusted downward to equal the new applicable Maximum Rate, then other rate components may be adjusted upward to achieve the agreed overall rate, so long as none of the resulting rate components exceed the Maximum Rate applicable to that rate component.  Such changes to rate components shall be applied prospectively, commencing with the date a Commission order accepts revised Currently Effective Rates.  However, nothing contained herein shall be construed to alter a refund obligation under applicable law for any period during which rates which had been charged under a discount agreement exceeded rates which ultimately are found to be just and reasonable.  Any discount shall be effective only on a prospective basis and as specified in the written agreement between Trunkline and Shipper.

 

                From time to time Shipper and Trunkline may agree to a Negotiated Rate for a specified term for service hereunder.  Provisions governing such Negotiated Rate and term shall be set forth on Exhibit C to this Service Agreement.

 

 

ARTICLE 4 - FUEL REIMBURSEMENT

 

                In addition to collection of the rates and charges provided for in Article 3, Trunkline shall retain, as Fuel Reimbursement, the percentage of the Quantities received from Shipper hereunder, as provided pursuant to Rate Schedule EFT.

 

ARTICLE 5 - GENERAL TERMS AND CONDITIONS

 

                This Agreement and all terms for service hereunder are subject to the further provisions of Rate Schedule EFT and the General Terms and Conditions of Trunkline's Tariff, as such may be modified, supplemented, superseded or replaced generally or as to the service hereunder.  Trunkline reserves the right from time to time to unilaterally file and to make effective any such changes in the provisions of Rate Schedule EFT and the General Terms and Conditions, subject to the applicable provisions of the Natural Gas Act and the Commission's Regulations thereunder.  Such Rate Schedule and General Terms and Conditions, as may be changed from time to time, are by this reference incorporated in their entirety into this Agreement and made an integral part hereof.

 

ARTICLE 6 - CANCELLATION OF PREVIOUS CONTRACTS

 

                This Agreement supersedes, cancels, and terminates, as of the date(s) stated below, the following Agreement(s) (if any) with respect to the Transportation of Natural Gas between Trunkline and Shipper:

ARTICLE 7 - NOTICES

 

                The Post Office addresses of both Trunkline and Shipper are as follows:

 

                                                                                                                TRUNKLINE

 

Nomination and Scheduling:                                       Trunkline Gas Company, LLC

                                                                                                Attn:  Marketing Operations

                                                                                                P. O. Box 4967

                                                                                                Houston, Texas 77210-4967

                                                                                                Phone:  (713) 962-9862

                                                                                                Fax:        (713) 286-5402

 

Pipeline Emergencies:                                                    Trunkline Gas Company, LLC

(Not to be used for                                                          Attn:  Gas Control

any other purpose)                                                         P. O. Box 4967

                                                                                                Houston, Texas 77210-4967

                                                                                                Phone:         (713) 627-5621

                                                                                                Toll Free:     1-800-225-3913

                                                                                                Texas only:  1-800-221-1084

 

All Other:                                                                            Trunkline Gas Company, LLC

                                                                                                Attn:  Customer Services

                                                                                                P. O. Box 4967

                                                                                                Houston, Texas 77210-4967

                                                                                                Phone:  (713) 627-4272 or

                                                                                                                1-800-275-7375

                                                                                                Fax:        (713) 989-1178

 

                                                                                                              SHIPPER

 

Billing:                                                                                   ___________________

                                                                                                ___________________

                                                                                                ___________________

                                                                                                Attn:  ______________

                                                                                                Phone:  _____________

 

Nomination and Scheduling: (1)                                 ____________________

                                                                                                ____________________

                                                                                                ____________________

                                                                                                Attn:  _______________

                                                                                                Phone:  _____________

 

 

Emergency:                                                                        ____________________

                                                                                                ____________________

                                                                                                ____________________

                                                                                                Attn:  _______________

                                                                                                Phone:  _______________

 

 

All Other:                                                                            ______________________

                                                                                                ______________________

                                                                                                ______________________

                                                                                                Attn:  _________________

                                                                                                Phone:  _______________

 

 

 

(1) Please provide street address in addition to mailing address.

 

                                                                                                                                                                Contract No. ________

 

 

 

                IN WITNESS WHEREOF, both Trunkline and Shipper have caused this Agreement to be executed in several counterparts by their respective officers or other persons duly authorized to do so.

 

 

SHIPPER:     _______________________

 

 

By:          __________________________________________________________________

 

 

                __________________________________________________________________

                                                                (Please type or print name)

 

 

Title:      __________________________________________________________________

 

 

EXECUTED  ___________________________, _________

                                      (Date)

 

 

 

TRUNKLINE GAS COMPANY, LLC

 

 

By:          _________________________________________________________________

 

 

                _________________________________________________________________

                                                                (Please type or print name)

 

 

Title:      _________________________________________________________________

 

 

EXECUTED  __________________________, __________

                                     (Date)

 

                                                                                                                                                                Contract No. ________

                                                                                                                                                                Amendment No. _____

 

EXHIBIT A

Transportation Agreement

For

Enhanced Firm Service

Under Rate Schedule EFT

Between

Trunkline Gas Company, LLC

 

and ________________________

 

Contract No.  __________

 

 

Effective Date:  The In-Service Date of the Interim Project

Supersedes Exhibit A dated:  ___________________________

 

Maximum Daily Quantity for each specified period of the Agreement:

 

Effective from the Effective Date through three (3) years:  _______________Dt.

 

 

SHIPPER:

 

BY: _________________________________________________________________

 

       _________________________________________________________________

                                (Please type or print name)

 

Title:________________________________________________________________

 

Executed: _____________________________________

 

 

TRUNKLINE GAS COMPANY, LLC

 

BY:  _________________________________________________________________

 

       _________________________________________________________________

                                (Please type or print name)

 

Title:  _______________________________________________________________

 

Executed:_____________________________________

                                                                                                                                                                Contract No. ________

                                                                                                                                                                Amendment No. _____

 

EXHIBIT A

 

Transportation Agreement

For

Enhanced Firm Service

Under Rate Schedule EFT

 

 

Primary Points of Receipt

                                                                                                                                                                              MDRO

                                                                                                                                            Meter               (Net of Fuel

Seq. No.               Received From        Location        County      State                No.             Reimbursement)

 

Effective from: the Effective Date Through: Three (3) Years

 

1              TIGER INTERCONNECT 22                              RICHLAND           LA           82752                    __________

                - ETC TIGER PIPELINE 

 

 

 

 

 

 

 

 

Description of Facilities

                                                                                                                                                                                 Atmos.

                                                Existing/                                                               Operated and                      Pres.

Seq. No.                               Proposed                            Zone                      Maintained by                     (Psia)

 

Effective from: the Effective Date Through: Three (3) Years

 

1                                              EXISTING                             Z1A        TRUNKLINE GAS COMPANY, LLC                14.4

 

 

 

 

 

 

Secondary Points of Receipt

 

Shipper shall have secondary Points of Receipt as set forth in Section 2.1 of Trunkline's Rate Schedule EFT.

 

                                                                                                                                                                Contract No. ________

                                                                                                                                                                Amendment No. _____

 

EXHIBIT A

 

Transportation Agreement

For

Enhanced Firm Service

Under Rate Schedule EFT

 

 

Primary Points of Delivery

 

Seq. No.               Delivered To           Location           County                 State         Meter No.           MDDO

 

Effective from: the Effective Date Through:  Three (3) Years

 

1                 HENRY HUB HIGH PRESSURE                    VERMILION        LA               80721                    _______

2                 RAGLEY EXCHANGE – TRANSCO              BEAUREGARD    LA               80277                    _______

3                 LA STORAGE                                                   BEAUREGARD    LA               93084                    _______

 

 

 

 

Description of Facilities

                                                                                                                                                                                 Atmos.

                                                Existing/                                                               Operated and                      Pres.

Seq. No.                               Proposed                            Zone                      Maintained by                     (Psia)

 

Effective from: the Effective Date Through:  Three (3) Years

 

 

1                                              EXISTING                             ELA         TRUNKLINE GAS COMPANY, LLC                14.7

2                                              EXISTING                             WLA       TRUNKLINE GAS COMPANY, LLC                14.7

3                                              EXISTING                             WLA       TRUNKLINE GAS COMPANY, LLC                14.7

 

 

 

 

 

 

Secondary Points of Delivery

 

Shipper shall have secondary Points of Delivery as set forth in Section 2.2 of Trunkline's Rate Schedule EFT.

 

 

EXHIBIT B

 

 

Reserved for Future Use

                                                                                                                                                                Contract No. ________

                                                                                                                                                                Amendment No. _____

 

EXHIBIT C

 Transportation Agreement

For

Enhanced Firm Service

Under Rate Schedule EFT

Contract No. _____________

 

NEGOTIATED RATE AGREEMENT

 

Shipper agrees to the Negotiated Rate option in accordance with Section 3.10 of Rate Schedule EFT and notifies Trunkline that it desires to be billed, and agrees to pay, the charges specified below for the period commencing on the Effective Date and continuing through the Primary Term and any Extension Period.  Shipper acknowledges that this election is an alternative to the billing of charges set forth on the Currently Effective Rates for Rate Schedule EFT, as revised from to time.  Shipper also acknowledges that its election constitutes waiver of its reliance on and its right to use the recourse rates which are available to it under the Rate Schedule EFT.

 

 Specification of Negotiated Rate:

 

     Reservation Rate:                                       $0.2000/MMBtu

 

     Usage, Fuel, and Surcharge Rate:         Tariff Rates

 

     CQ:                                                                   _________ MMBtu/day

 

Primary Receipt Point(s):  Tiger Interconnect 22 – ETC Tiger Pipeline (82752)        

                                                                                                                               

Secondary Receipt Point(s):  All existing and future interconnecting Trunkline Z1A, Z1A Pool and Trunkline field Zone REC LOCs and BI-DIR LOCs.

               

Primary Delivery Point(s):  Henry Hub High Pressure (80721), Transco Ragley (80277), LA Storage (93084)

               

Secondary Delivery Point(s):  All existing and future interconnecting Trunkline Field Zone DEL LOCs and BI-DIR LOCs.

                               

Term:    Beginning on the Effective Date and continuing through the Primary Term and any Extension Period.

 

Rate Applicable to Change in Primary Delivery Point(s):  For the first year (365 Days) following the In-Service Date of Shipper’s Rate Schedule EFT Agreement, Trunkline agrees that the negotiated reservation rate will apply to  change in the Primary Delivery Point requested by Shipper in accordance with Tariff procedures, provided that such rate shall only be available for one change during the winter season (November 1 through March 31) and one change during the summer season (April 1 through October 31); provided further, however, that the new Primary Delivery Point is in the same service area/zone as the original Primary Delivery Point and the request is subject to available capacity at the time of the request.  For example, subject to available capacity, Shipper’s timely and eligible request to change its Henry Hub High Pressure Primary Delivery Point with a MDDO of 150,000 MMBtu/day to a different Primary Delivery Point in the East Louisiana Service Area will be subject to the above negotiated reservation rate of $0.2000/MMBtu.  The reservation rate applicable to any other requests to change Primary Delivery Points that are not eligible for the negotiated reservation rate as set forth above (regardless if such requested new Primary Delivery Point is in the same service area) shall be subject to the maximum tariff rate or further negotiation between Trunkline and Shipper.

 

RATE OPTON:

 

Shipper has requested that Trunkline provide a one-time discounted rate option (the “Rate Option”), as described below, for firm transportation service under Trunkline’s Rate Schedule FT.  Trunkline is willing to provide the Rate Option; however, it is understood and agreed that Trunkline may not and will not reserve capacity for the Rate Option.  Moreover, Shipper’s ability to exercise the Rate Option is subject to available capacity at the time Shipper may exercise it, the terms and conditions of this Rate Option, Trunkline’s FERC Gas Tariff, as in effect from time to time, and applicable rules, regulations and policies of the Federal Energy Regulatory Commission (“FERC”). Accordingly, subject to the terms and conditions set forth herein, the parties further agree as follows:

1.      In the event that Trunkline does not agree in writing to the Extension Period, as defined in Article 2 the EFT Service Agreement, Trunkline agrees to provide the following one-time discounted Rate Option:  a discounted reservation rate of $0.05 per Dth/day, plus usage charges, fuel, ACA and other applicable surcharges, on an MDQ of up to 150,000 Dth/day of firm capacity (the “Rate”) for a Primary Term of up to ten (10) years starting on the day after the end of the Primary Term of the above-described EFT Service Agreement, subject to paragraph 3 below.  The Primary Receipt Point eligible for the Rate Option is the Henry Hub and eligible Secondary Receipt Points will be all existing and future interconnection Trunkline Field Zone REC LOCs and BI-DIR LOCs. The Primary Delivery Point eligible for the Rate Option is LA Storage Pipeline and the eligible Secondary Delivery Points will be all existing and future Trunkline Field Zone DEL LOCs and BI-Dir LOCs.

 

2.      Shipper shall have until January 31, 2024 to exercise the Rate Option.  This Rate Option shall automatically terminate on February 1, 2024 if Shipper has not exercised the Rate Option by or on January 31, 2024.

 

3.      If Shipper submits by or on January 31, 2024 a properly executed service request form containing the Rate Option terms and complies with the related provisions of Section 2 of the General Terms and Conditions (“GT&C”) of Trunkline’s FERC Gas Tariff, then Trunkline agrees to award existing, available capacity and tender the resulting Rate Schedule FT Service Agreement for signature, subject to and in accordance with GT&C Section 10 of Trunkline’s FERC Gas Tariff.  This Rate Option shall automatically terminate upon an award of existing, available capacity to Shipper pursuant to the terms hereof.  If Shipper has exercised the Rate Option by or on January 31, 2024, but existing capacity is not available or Shipper does not match any bids that are received by Trunkline for such capacity during the open season pursuant to the Tariff, then this Rate Option shall automatically terminate. 

 

 

 

 

 

 

Negotiated Rate Agreement Signature Page

 

 

 

  

SHIPPER:              _____________________

 

           BY:             ___________________________________________________

 

                                ___________________________________________________

                                                                (Please type or print name)

 

 

TRUNKLINE GAS COMPANY, LLC

 

          BY:               ___________________________________________________

 

                                ___________________________________________________

                                                               (Please type or print name)

 

DATED:                 ___________________________________

 

 

SUPERSEDES EXHIBIT C DATED:  ______________________

 

 

EXHIBIT 2

 

Creditworthiness  

 

Trunkline Gas Company, LLC

RATE SCHEDULE EFT

TRANSPORTATION AGREEMENT NO. __________

DATED __________

 

CREDIT AGREEMENT

 

This Credit Agreement, dated as of this 22nd day of November, 2022, (“Credit Agreement”) is by and between Trunkline Gas Company, LLC (“Transporter”) and ______________ (“Shipper”).  Transporter and Shipper may sometimes be referred to herein individually as a “Party”, or together as the “Parties”.

                WHEREAS, contemporaneously herewith, Transporter and Shipper have entered into a Precedent Agreement concerning an early in-service date for a portion of the previously FERC-certificated facilities for its Pipeline Modifications Project in order to provide interim service prior to the service planned to the Lake Charles LNG facility (the “Interim Project”), and pursuant to which the Parties, subject to certain terms and conditions set forth in the Precedent Agreement, will enter into an EFT Agreement (the “EFT Agreement”); and

                WHEREAS, pursuant to paragraph 6 of the Precedent Agreement, Shipper is required to comply with the requirements set forth in this Credit Agreement relating to its obligations and the level of interim capacity subscribed under the Precedent Agreement and the EFT Agreement.

                NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and intending to be legally bound, Transporter and Shipper agree to the following:

                1.            Shipper, at all times, must satisfy the creditworthiness criteria, or otherwise provide such Credit Support (as defined below), as set forth under this Credit Agreement:

(A) Shipper shall be deemed “Creditworthy” hereunder as of the execution of the Precedent Agreement and during the term of the Precedent Agreement and any extension thereof if:

   (i) its long-term senior unsecured debt securities, at such time, are rated at least ‘BBB-’ by Standard & Poor’s or its successor (“S&P”) and rated at least ‘Baa3’ by Moody’s Investors Service, Inc. or its successor (“Moody’s”) (any such debt rating, irrespective of the actual rating, a “Debt Rating”), provided however, that if Shipper is rated by either S&P or Moody’s alone, that Debt Rating alone shall be determinative. If the Shipper has no Debt Rating(s), the S&P Issuer Credit Rating and/or Moody’s Long Term Issuer Rating will be substituted, and as such, these ratings are included in the defined term, “Debt Rating”. In the event the Debt Rating(s) issued by S&P and Moody’s are assigned at levels that are not equivalent, the lower rating shall apply to determine whether such entity is Creditworthy.

     For the avoidance of doubt, in the event Shipper does not have Debt Rating(s) assigned by S&P or Moody’s at the time of execution of the Precedent Agreement, but subsequently receives a Debt Rating(s), then for purposes of determining creditworthiness pursuant to Section 1(A)(i) above, such Debt Rating(s) shall serve as original Debt Rating(s) effective as of the execution of the Precedent Agreement.

(B) If Shipper is deemed not or no longer “Creditworthy” pursuant to Section 1(A)(i) above, then Shipper shall thereafter maintain any of the following credit support instruments (Guaranty, cash deposit, Letter of Credit or cash proceeds thereof, all individually or collectively, known as “Credit Support”) as set forth below:

 

                                   (i)       an absolute, irrevocable, unconditional guaranty in the form set forth in  Exhibit A (“Guaranty”), from a direct or indirect parent or affiliate of Shipper or other third party that is deemed “Creditworthy” pursuant to Section 1(A)(i) above and that is otherwise acceptable to Transporter, in Transporter’s sole judgment (such third party, “Guarantor”), which Guaranty shall guarantee the full and faithful performance and payment of all of Shipper’s obligations under this Precedent Agreement and the EFT Agreement, including but not limited to damages, and any such Guaranty will remain outstanding for the benefit of the Transporter throughout the term of the Precedent Agreement and EFT Agreement and any extension thereof.

 

                                  (ii)  a cash deposit or an irrevocable standby letter of credit that is in the form set forth in Exhibit B  hereto (“Letter of Credit”) and issued by a bank which is a U. S. bank or the U.S. branch of a foreign bank deemed “Creditworthy” pursuant to Section 1(A)(i) and otherwise acceptable to Transporter, in Transporter’s sole judgment, in either case securing the full and faithful performance and payment of all of Shipper’s obligations for the entire term under this Precedent Agreement and the EFT Agreement, as may be extended from time to time, and in either case such cash deposit or Letter of Credit, or any combination thereof, shall equal to the total aggregate dollar value of 12 months of reservation charges due from Shipper for the Contract MDQ under the EFT Agreement, as may be extended from time to time. If Shipper’s Creditworthy parent company provides a Guaranty to Transporter pursuant to Section 1(B)(i) above, subject to Section 1(B)(iii) below, Shipper shall not be required to provide a cash deposit or Letter of Credit upon execution of the Precedent Agreement.

 

                  (iii) At any time during the term of this Precedent Agreement and the EFT Agreement, in the event any of the Debt Rating(s) assigned to Shipper, Shipper’s Guarantor or parent company, as applicable, is assigned a negative outlook, then the amount of Letter of Credit or cash deposit shall increase to the lesser of (i) 18 months of reservation charges due from Shipper for the Contract MDQ or (ii) the number of months of reservation charges remaining in the term under the EFT Agreement, as may be extended from time to time.  Furthermore, in the event that any of the Debt Rating(s) assigned to Shipper, Shipper’s Guarantor, or parent company, as applicable, no longer complies with the Creditworthy standard as set forth above, then the amount of Letter of Credit or cash deposit shall increase to the lesser of (i) 24 months of reservation charges due from Shipper for the Contract MDQ or (ii) the number of months of reservation charges remaining in the term under the EFT Agreement, as may be extended from time to time.

 

                  In the event the Shipper or its parent company is not rated by either S&P and/or Moody’s and the Shipper or its parent company has experienced a material deterioration in its financial condition, including but not limited to, either as evidenced by audited financial statements provided by Shipper or its parent company to Transporter or as evidenced by a material adverse change to Shipper or its parent company, as determined in Transporter’s sole discretion, then the amount of Letter of Credit or cash deposit previously posted by Shipper shall be increased to the lesser of (i) 36 months of reservation charges due from Shipper for the Contract MDQ or (ii) the number of months of reservation charges remaining in the term under the EFT Agreement, as may be extended from time to time.

              

(C)          At any time while either this Precedent Agreement or the EFT Agreement, as may be extended from time to time, is effective, if Transporter determines that, as of such time, (i) any Guarantor of Shipper or (ii) any bank that issued a Letter of Credit in favor of Transporter is no longer deemed “Creditworthy”, then Transporter may submit a written notice of such determination to Shipper (which notice shall provide Transporter’s basis for such determination), and within five (5) business days after Shipper’s receipt of such notice from Transporter, Shipper shall deliver to Transporter, and shall thereafter maintain, alternative Credit Support in accordance with Section 1(B)(ii).

 

(D)          For any irrevocable standby Letter of Credit, whether an original or replacement Letter of Credit, that is provided to Transporter such Letter of Credit shall permit partial draws and shall have an expiry date no earlier than (a) twelve (12) calendar months after issuance thereof and (b) ninety (90) days after the end of the term of the Precedent Agreement and the Primary Term of the EFT Agreement or any extension thereof.  With respect to any Letter of Credit, Shipper shall furnish extensions or replacements of such Letter of Credit at least ninety (90) days prior to the expiration thereof, from time to time until the expiration of both the Precedent Agreement and EFT Agreement, as may be extended from time to time. All extensions or amendments of the Letter of Credit shall be delivered to Transporter in a form and from a bank deemed Creditworthy and otherwise acceptable to Transporter; provided, however, that any automatic renewal or extension of a Letter of Credit in accordance with the terms thereof shall be deemed to satisfy Shipper’s obligation to furnish extensions or replacements of such Letter of Credit.  Transporter shall have the right to draw against any outstanding Letter of Credit upon: (a) Shipper’s failure to make any payment when due under either the Precedent Agreement and/or the EFT Agreement; or (b) Shipper’s failure or refusal to timely deliver any applicable extension, amendment or replacement of an outstanding Letter of Credit as provided herein; or (c) the rejection, repudiation, or breach of the Precedent Agreement, the EFT Agreement and/or any related agreement under any bankruptcy, insolvency or similar debtor relief law now or hereinafter in effect; or (d) the filing of a petition by or against Shipper seeking to adjudicate Shipper as bankrupt or insolvent or otherwise commencing, authorizing, or acquiescing in the commencement of a case under any bankruptcy, insolvency or similar debtor relief law now or hereafter in effect. If Transporter draws on a Letter of Credit in part or in whole, Shipper shall immediately, and in no event later than three (3) business days thereafter, provide a replacement Letter of Credit in, or increase an existing Letter of Credit to, the amount required by Section 1(B)(ii) or Section 1(B)(iii), as applicable.  Any draw made by Transporter under a Letter of Credit shall not relieve Shipper of any liabilities, deficiencies, costs, expenses or damages beyond what is drawn under such Letter of Credit.  The Letter of Credit (representing any undrawn portion thereof), to the extent it still remains, or any cash deposit held by Transporter shall be returned to Shipper, at the Transporter’s election, on or before the sixtieth (60th) day after the later to occur of (a) the date on which both the Precedent Agreement and the EFT Agreement have terminated or expired and (b) the date on which all of Shipper’s performance and payment obligations under the Precedent Agreement and the EFT Agreement (including, without limitation, any damages arising from either such agreement) have been fulfilled as determined by the Transporter.

 

(E)  Credit Support in the form of a cash deposit or proceeds from draws under a Letter of Credit may be applied by Transporter, in its sole discretion, against any unpaid invoices due from Shipper, losses, costs, expenses or damages as a result of a breach by Shipper of any of its obligations (including a breach arising out of the rejection, repudiation or breach of either the Precedent Agreement or the EFT Agreement under the U.S. Bankruptcy Code, insolvency or similar debtor relief law) under either the Precedent Agreement or the EFT Agreement for which Transporter is legally entitled to receive payment.  If the application of a cash deposit or proceeds from draws under a Letter of Credit fully extinguishes such Credit Support and the Precedent Agreement or the EFT Agreement is still in effect, Shipper shall immediately thereafter provide a replacement Letter of Credit, or replacement cash deposit in the amount required by Section 1(B)(ii) or Section 1(B)(iii), as applicable.  Any application of a cash deposit or proceeds from draws made by Transporter under a Letter of Credit shall not relieve Shipper of any liabilities, deficiencies, costs, expenses or damages beyond what is drawn under such Letter of Credit or application of such cash deposit. 

(F)  Notwithstanding anything in Section 1(B) hereof, in the event Shipper provides credit support pursuant to Section 1(B)(ii) or Section 1(B)(iii) hereof, but thereafter satisfies Section 1(A)(i), Shipper’s Guaranty, Letter of Credit (representing any undrawn portion thereof, to the extent it still remains), or any cash deposit held by Transporter, as applicable, shall be returned to Shipper’s bank or Shipper’s Guarantor, as applicable, within thirty (30) days after written demand is received by Transporter; provided, however, that the provisions of Section 1(B) shall again apply should Shipper fail to be “Creditworthy” at any time thereafter.

(G)  Except to the extent of any amounts paid to the Transporter, the use, application or retention of credit support, or any portion thereof, by Transporter shall not (subject to any applicable limitations on damages to which Transporter has agreed in writing) prevent Transporter from exercising any other right or remedy provided under the Precedent Agreement, the EFT Agreement, Transporter’s FERC Gas Tariff, or which Transporter may have at law or in equity, by statute or regulation, and shall not operate as a limitation on any recovery to which Transporter may otherwise be entitled.  For the avoidance of doubt, Transporter shall not be permitted any additional or duplicative recovery for any damages, payments, or other amounts for which Transporter has received payments or other compensation pursuant to the terms of this Credit Agreement or any Credit Support.

 

                2.            Notice.  Except as herein otherwise provided, any notice, request, demand, statement, or bill provided for in this Credit Agreement, or any notice which either Party desires to give to the other, must be in writing and will be considered duly delivered if delivered by hand, by nationally recognized overnight courier service, electronic transmission (E-mail) or by certified mail (postage prepaid, return receipt requested) to the other Party’s address set forth below:

Transporter:                                       Trunkline Gas Company, LLC

                                                                1300 Main St.

Houston, Texas 77002-6803

Attention:  Credit Risk Management

Phone No.: 713-989-7023

Email: regcreditrisk@energytransfer.com

 

With copy to:

Trunkline Gas Company, LLC

                                                                1300 Main St.

Houston, Texas 77002-6803

Attention: Legal Department

Email:  GeneralCounsel.mailbox@energytransfer.com

 

Shipper:                                               ______________________

                                                                ______________________

                                                                ______________________

Attention:  _____________

Email :  _______________

               

or at such other address as either Party designates by written notice. Notice given by courier, certified mail, or E-mail shall be deemed to occur at the time of actual receipt; or, if receipt is refused or rejected, upon attempted delivery, provided, however, that if receipt occurs after normal business hours or on a weekend or national holiday, then delivery shall be deemed to occur on the next business day.

                3.            Modifications.  Except as provided otherwise in this Credit Agreement, no modification of the terms and provisions of this Credit Agreement shall be effective unless contained in writing and executed by both Transporter and Shipper.

                4.            Choice of law.  THIS CREDIT AGREEMENT SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICT OF LAW RULES THAT MAY REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT.

                5.            Capacity Release or Assignment. This Credit Agreement and the obligations of the Parties hereunder shall apply to any subsequent permissible acquiring shipper(s) under the EFT Agreement or assignee(s) of the Precedent Agreement; provided, however, if Transporter determines, at its sole discretion, that an acquiring shipper or assignee is not “Creditworthy,” Transporter shall have the right to demand Credit Support to secure the acquiring shipper’s full payment obligations under the replacement EFT Agreement. In the event that Shipper (or its successors) desires to assign or release its interest in the Precedent agreement or the executed EFT Agreement, as applicable, the assignee or acquiring shipper (under capacity release), shall be required to enter into a new Credit Agreement in its own name.

                6.            Rules and Regulations.  This Credit Agreement and the obligations of the Parties hereunder are subject to all applicable laws, rules, orders and regulations of governmental authorities having jurisdiction and, in the event of conflict, such laws, rules, orders and regulations of governmental authorities having jurisdiction shall control.

                7.            Counterparts.  This Credit Agreement may be executed by electronic means (including by PDF) and in multiple counterparts, each of which when so executed shall be deemed an original, but all of which shall constitute one and the same agreement.

[signature page follows]

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Credit Agreement to be duly executed by their duly authorized officers as of the day and year first above written.

                                                                               

TRUNKLINE GAS COMPANY, LLC                                               ________________________________

 

By: ___________________________                                      By: _____________________________

 

Name: Beth Hickey                                                                          Name:  __________________________

Title: SVP - Commercial Operations                                          Title:____________________________

Date: _____________________                                Date: ___________________________

 

 

 

 

 

 

EXHIBIT A

 

 

GUARANTY

 

 

THIS GUARANTY (this "Guaranty") is made and entered into and effective as of [DATE], (the “Effective Date”), by _________________., a ______________ corporation ("Guarantor"), in favor of Trunkline Gas Company, LLC, a Delaware limited liability company, (“Trunkline”).

WITNESSETH:

 

WHEREAS, ______________, a _______________, has entered into the Precedent Agreement, dated as of __________ (as such agreement may from time to time be modified, supplemented, amended, or extended, the "PA").  Except as otherwise defined herein, any capitalized term used herein and defined in the PA (as defined above) shall have the meaning given to such term by the PA;

 

WHEREAS, _________________ (including its successors and permitted assigns under Section 7 of the PA, "Shipper") is an affiliate of Guarantor;

 

WHEREAS, the PA contemplates that, subject to the satisfaction of certain conditions specified in the PA, Trunkline and Shipper will enter into a firm transportation service agreement and a negotiated rate agreement for firm transportation service in accordance with the PA (as such agreements may from time to time be modified, supplemented, amended, or extended (the “EFT Agreement”);

 

WHEREAS, Shipper has certain obligations to pay for firm transportation service in connection with the PA and the EFT Agreement (all such obligations of Shipper, including the obligation of Shipper to pay all amounts due under the EFT Agreement, including but not limited to, any damages that may be incurred or have been incurred by Trunkline, referred to as the "Guaranteed Obligations");

 

WHEREAS, Trunkline entered into the PA with Shipper on the condition that Trunkline receive certain assurances regarding payment of the Guaranteed Obligations, and Guarantor is willing to provide such assurances in accordance with the terms and conditions of this Guaranty; and

 

WHEREAS, Guarantor acknowledges that it will be substantially benefited by the execution and delivery of the PA.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, Guarantor hereby agrees as follows:

 

1.    Guarantor hereby absolutely, irrevocably, and unconditionally guarantees to Trunkline the payment by Shipper of any and all Guaranteed Obligations under the PA and the EFT Agreement due and payable from time to time during the Primary Term.  As a condition precedent to each payment under this Guaranty, a demand by Trunkline for payment hereunder shall be in writing, signed by a duly authorized representative of Trunkline and delivered to Guarantor pursuant to Section 16 “Notices” hereof, and shall (a) reference this Guaranty, (b) specifically identify Trunkline, the nature of the default, and the Guaranteed Obligations to be paid and (c) set forth payment instructions, including bank name, routing number and bank account number.  There are no other requirements of notice, presentment or demand. Guarantor shall pay, or cause to be paid, such Guaranteed Obligations within five (5) business days of receipt of such demand.

 

2.    This Guaranty shall constitute a guaranty of payment and not merely a guaranty of collection.  This Guaranty (i) is a continuing guaranty and shall remain in full force and effect until all of the Guaranteed Obligations and other expenses guaranteed pursuant to this Guaranty have been indefeasibly paid in full; and (ii) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded, avoided or rendered void as a preferential transfer, impermissible set-off, fraudulent conveyance or must otherwise be returned or disgorged by Trunkline upon the insolvency, bankruptcy or reorganization of either Shipper or Guarantor or otherwise, all as though such rescinded, avoided or voided payment had not been made, and notwithstanding any action or failure to act on the part of Trunkline in reliance on such payment.  Any prior release from the terms of this Guaranty shall be reinstated in full force and effect.

 

3.    The liability of Guarantor hereunder is exclusive and independent of any security for or other guaranty of the payment by Shipper of the Guaranteed Obligations, whether executed by Guarantor, any other guarantor or any other party. This Guaranty shall automatically terminate and be of no more force and effect upon either (i) the full performance and full, final, and indefeasible payment or satisfaction in full of all Guaranteed Obligations or (ii) termination of the Precedent Agreement and/or the EFT Agreement.

 

4.    Guarantor’s obligations hereunder are independent of the obligations of any other guarantor, and a separate action or actions may be brought and prosecuted against Guarantor whether or not action is brought against any other guarantor and whether or not any other guarantor be joined in any such action or actions; provided, however, neither Guarantor nor Shipper shall be liable for any Guaranteed Obligations already fully and indefeasibly satisfied. If Shipper waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability under the PA, the EFT Agreement and/or Trunkline’s FERC Gas Tariff, Guarantor likewise waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by Shipper or other circumstance that operates to toll any statute of limitations as to Shipper shall operate to toll the statute of limitations as to Guarantor.  Notwithstanding anything herein to the contrary, Guarantor does not waive and retains and reserves to itself all rights, counterclaims and other defenses to which Shipper is or may be entitled to, including those arising from or out of the PA, EFT Agreement, and/or Trunkline’s FERC Gas Tariff, except for defenses arising out of the bankruptcy, receivership, reorganization, insolvency, dissolution, liquidation or similar status of Shipper, the power or authority of Shipper to enter into the PA and EFT Agreement and to perform its obligations thereunder, and the lack of enforceability of Shipper’s obligations under the PA or EFT Agreement or any transactions contemplated thereby (such retained and reserved and not waived or excluded rights, counterclaims and other defenses, the “Retained Defenses”).

 

5.    Guarantor hereby waives notice of acceptance of this Guaranty and notice of any liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by Trunkline against, and any other notice to, any party liable thereon (including Guarantor or any other guarantor). Guarantor assumes all responsibility for being and keeping itself informed of Shipper's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which Guarantor assumes and incurs hereunder, and Guarantor agrees that Trunkline shall have no duty to advise Guarantor of information known to it regarding such circumstances or risks.

 

6.    Trunkline, to the extent agreed to by Shipper or otherwise expressly allowed by the PA, the EFT Agreement and/or Trunkline’s FERC Gas Tariff and not restricted by applicable law, may (i) at any time and from time to time; (ii) upon or without any terms or conditions; (iii) in whole or in part; and (iv) without the consent of, or notice to, Guarantor, without incurring responsibility to Guarantor, and without impairing or releasing the obligations of Guarantor hereunder:

 

(a)    make any change, amendment, or modification in the terms of any Guaranteed Obligations, and the Guarantor’s guaranty herein made shall apply to the Guaranteed Obligations as so changed, amended or modified;

(b) take and hold security for the payment of the Guaranteed Obligations, and sell, exchange, release, surrender, impair, realize upon or otherwise deal with, in any manner and in any order, any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against, and/or release any person liable for all or any portion of the Guaranteed Obligations; and/or

(c)    take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of Guarantor from its liabilities under this Guaranty.

 

7.    Other than with respect to the Retained Defenses, no invalidity, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefor shall affect, impair or be a defense to this Guaranty, and this Guaranty shall be primary, absolute, irrevocable, and unconditional, notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except full, final, and indefeasible payment or satisfaction in full of the Guaranteed Obligations.

 

8.    This Guaranty is a continuing one.  All liabilities to which this Guaranty applies, or to which it may apply, under the terms hereof shall be conclusively presumed to have been created in reliance hereon. No failure or delay on the part of Trunkline in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which Trunkline would otherwise have. No notice to or demand on Guarantor in any case shall entitle Guarantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Trunkline to any other or further action in any circumstances without notice or demand. It is not necessary for Trunkline to inquire into the capacity or powers of Shipper or the officers, directors, partners or agents acting or purporting to act on its behalf.

 

9.    Guarantor hereby agrees with Trunkline that it will not exercise any right of subrogation that it may at any time otherwise have as a result of this Guaranty (whether contractual, under the United States Bankruptcy Code, 11 U.S.C. §§101 et seq., as amended or otherwise), until all Guaranteed Obligations have been fully, finally, and indefeasibly paid or satisfied in full (it being understood that Guarantor is not waiving any right of subrogation that it may otherwise have but is only waiving the exercise thereof as provided above).

 

10. (a) Guarantor waives any right (except as shall be required by applicable statute and cannot be waived) to require Trunkline to: (i) proceed against Shipper, any other guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any security held from Shipper, any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in Trunkline’s power whatsoever. Other than with respect to the Retained Defenses, Guarantor waives any defense based on or arising out of any defense of Shipper, Guarantor, any other guarantor of the Guaranteed Obligations or any other party other than full, final, and indefeasible payment or satisfaction in full of the Guaranteed Obligations, including, without limitation, other than with respect to the Retained Defenses, any defense based on or arising out of the disability of Shipper, Guarantor, any other guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of Shipper other than full, final, and indefeasible payment or satisfaction in full of the Guaranteed Obligations.

 

11. In order to induce Trunkline to enter into the Agreement, Guarantor represents, warrants, and covenants that:

 

(a)     Status. Guarantor (i) is a duly organized and validly existing corporation in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate power and authority to own or lease its property and assets and to transact the business in which it is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business requires such qualification, except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the results of operations or financial condition of Guarantor and its subsidiaries, taken as a whole.

 

(b)     Power and Authority. Guarantor has the corporate power and authority to execute, deliver and perform the terms and provisions of this Guaranty and has taken all necessary corporate action to authorize the execution, delivery and performance by it of this Guaranty. Guarantor has duly executed and delivered this Guaranty and this Guaranty constitutes the legal, valid and binding obligation of Guarantor enforceable in accordance with its terms, except to the extent that the enforceability hereof and thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law).

 

(c)  No Violation. Neither the execution, delivery, or performance by Guarantor of this Guaranty, nor compliance by it with the terms and provisions hereof and thereof (i) will contravene any applicable provision of any law, statute, rule, or regulation, or any order, writ, injunction, or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions, or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of the property or assets of Guarantor or any of its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, credit agreement, or loan agreement or any other material agreement, contract, or instrument to which Guarantor or any of its subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the certificate of incorporation, by-laws or similar documents, instruments, or certificates (including amendments thereto) executed, adopted or filed in connection with the creation, formation, or organization of Guarantor or any of its subsidiaries.

 

(d)   Governmental Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery, and performance of this Guaranty or (ii) the legality, validity, binding effect, or enforceability of this Guaranty.

 

(e) Litigation. There are no actions, suits, or proceedings pending or, to the best knowledge of Guarantor, threatened (i) which purport to affect the legality, validity, or enforceability of this Guaranty or (ii) that could reasonably be expected to have a material adverse effect on the results of operations or financial condition of Guarantor and its subsidiaries, taken as a whole.

 

(f)  The signatory party below has full authority to execute this Guaranty and to bind the Guarantor to its obligations herein.

 

 

12. This Guaranty shall be binding upon Guarantor and the successors and permitted assigns of Guarantor and shall inure to the benefit of and be enforceable by Trunkline and its successors and permitted assigns. Guarantor may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Trunkline which consent shall not be unreasonably withheld or delayed (and any such attempted assignment or transfer without such consent shall be null and void).  Notwithstanding anything to the contrary herein, Trunkline may refuse to provide its consent (and the same shall not be deemed unreasonable) if the proposed assignee fails to satisfy or comply with Trunkline’s financial assurance or credit requirements pursuant to a Credit Agreement, if applicable.

 

13. Except as otherwise provided herein, neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated except with the written consent of Guarantor and Trunkline.

 

14. Guarantor acknowledges that an executed (or conformed) copy of the PA and the EFT Agreement has been made available to Guarantor and Guarantor is familiar with the contents thereof.

 

15. All notices, requests, demands and other communications hereunder will be in writing and will be deemed to have been duly given when (i) delivered by hand (with written acknowledgment of receipt), (ii) sent by electronic transmission (“email”) with a copy sent via U.S. mail or overnight courier  or (iii) received by the addressee, if sent by a nationally recognized delivery service or other traceable method, in each case to the appropriate address set forth below (or to such other addresses and email addresses as a party may designate by notice to the others); provided that any such deliveries received after normal business hours in the place of business of the receiving party shall be deemed to be received on the next business day:

 

If to Guarantor, to:

                                               ____________________

                                               ____________________

                                               ____________________

                                               Attn: ________________

                                               Email:  ______________

 

If to Trunkline, to:

Trunkline Gas Company, LLC

Attn: Credit Risk Management

1300 Main St.

Houston, Texas 77002-6803

Email: regcreditrisk@energytransfer.com

 

With a copy to:

Trunkline Gas Company, LLC

Attn: Legal Department

1300 Main St.

Houston, Texas 77002-6803

Email: GeneralCounsel.mailbox@energytransfer.com

 

16.    

(a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF TRUNKLINE AND OF GUARANTOR HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH UNITED STATES FEDERAL LAW AND THE LAW OF THE STATE OF TEXAS WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS.

 

(b)  WAIVER OF TRIAL BY JURY. EACH OF GUARANTOR AND TRUNKLINE (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

17.   Guarantor hereby confirms that it is its intention that this Guaranty does not constitute a fraudulent transfer or conveyance for purposes of any bankruptcy, insolvency or similar law, the Uniform Fraudulent Conveyance Act or any similar Federal, state or foreign law. To effectuate the foregoing intention, if enforcement of the liability of Guarantor under this Guaranty would be an unlawful or voidable transfer under any applicable fraudulent conveyance or fraudulent transfer law or any comparable law, then the liability of Guarantor hereunder shall be reduced to the maximum amount for which such liability may then be enforced without giving rise to an unlawful or voidable transfer under any such law.

 

18. Any provision of this Guaranty held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

19. This Guaranty reflects the whole and entire agreement of the parties and, with the exception of the Precedent Agreement and EFT Agreement, supersedes all prior agreements related to the subject matter hereof.

 

20. In the event this Guaranty or the executed signature page of this Guaranty is delivered by e-mail delivery (including, without limitation, a “.pdf” format data file), such delivery shall create a valid and binding obligation of the Guarantor with the same force and effect as if this Guaranty and/or the executed signature page of this Guaranty were an original thereof.

 

[signature page follows]

 

 

 

 

 

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and delivered as of the Effective Date.

 

 

GUARANTOR:

 

By:______________________________________

 

Name:___________________________________

 

                                                            Title:__________________________________

EXHIBIT B

 

LETTER OF CREDIT FORMAT

 

IRREVOCABLE STANDBY LETTER OF CREDIT NO. _________

 

 

ISSUER:                       [ISSUING BANK MUST HAVE MINIMUM RATINGS OF A- BY S&P AND A3 BY MOODY’S AND BE HEADQUARTERED IN THE U.S. OR BE THE U.S. BRANCH OF A FOREIGN BANK ]

 

BENEFICIARY:              TRUNKLINE GAS COMPANY, LLC       

                                    ATTN:  CREDIT RISK MANAGEMENT

                                    1300 MAIN STREET

                                    HOUSTON, TX 77002-6803

                                       EMAIL: CREDITRISK@ENERGYTRANSFER.COM

 

                    

APPLICANT:                 ____________________________

     

AMOUNT:                     USD _______________________

 

EXPIRATION:                TWELVE (12) MONTHS FROM ISSUANCE DATE

 

WE HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT IN YOUR FAVOR BY ORDER OF AND FOR THE ACCOUNT OF (INSERT APPLICANT’S NAME) AVAILABLE BY YOUR DRAFT(S) DRAWN ON US AT SIGHT AND ACCOMPANIED BY ONE OR MORE OF THE FOLLOWING STATEMENTS PURPORTEDLY SIGNED BY AN AUTHORIZED REPRESENTATIVE OF BENEFICIARY.

 

1. “WE HEREBY CERTIFY THAT (INSERT APPLICANT’S NAME) HAS FAILED TO MAKE PAYMENT WHEN DUE TO BENEFICIARY OR IS OTHERWISE IN BREACH UNDER THE PRECEDENT AGREEMENT AND/OR THE FIRM TRANSPORTATION SERVICE AGREEMENT(S), IN EITHER CASE, BETWEEN BENEFICIARY AND APPLICANT. THEREFORE, WE HEREBY DEMAND PAYMENT OF USD $__________.” 

 

OR

 

2. “BENEFICIARY IS ENTITLED TO DAMAGES ARISING OUT OF THE REJECTION, REPUDIATION TERMINATION OR BREACH OF THE PRECEDENT AGREEMENT AND/OR THE FIRM TRANSPORT SERVICE AGREEMENT(S) (COLLECTIVELY, THE “AGREEMENTS”), IN EITHER CASE, UNDER THE U.S. BANKRUPTCY CODE, INSOLVENCY OR SIMILAR DEBTOR RELIEF LAW, AND BENEFICIARY HAS INCURRED LOSSES, COSTS, EXPENSES OR DAMAGES AS A RESULT OF SUCH BREACH BY APPLICANT OF ITS OBLIGATIONS UNDER THE AGREEMENT(S). THEREFORE, WE HEREBY DEMAND PAYMENT OF USD$____________.”

OR

3. “THE BENEFICIARY HAS RECEIVED NOTICE FROM [ISSUING BANK], AT LEAST NINETY (90) DAYS BEFORE THE EXPIRATION DATE OF THIS LETTER OF CREDIT, THAT [ISSUING BANK] HAS ELECTED NOT TO EXTEND OR RENEW THIS LETTER OF CREDIT FOR AN ADDITIONAL ONE YEAR PERIOD, AND APPLICANT HAS NOT PROVIDED TO THE BENEFICARY AN IRREVOCABLE STANDBY LETTER OF CREDIT ACCEPTABLE TO BENEFICIARY IN REPLACEMENT HEREOF.  THEREFORE, WE HEREBY DEMAND PAYMENT OF USD$__________.”

                                                                        OR

4. “THERE HAS OCCURRED THE FILING OF A PETITION BY OR AGAINST APPLICANT SEEKING TO ADJUDICATE APPLICANT AS BANKRUPT OR INSOLVENT OR OTHERWISE COMMENCING, AUTHORIZING OR ACQUIESCING IN THE COMMENCEMENT OF A CASE UNDER ANY BANKRUPTCY, INSOLVENCY OR SIMILAR DEBTOR RELIEF LAW NOW IN EFFECT. THEREFORE, WE HEREBY DEMAND PAYMENT OF USD$__________.”

 

 

SPECIAL CONDITIONS:

• IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE (1) YEAR FROM THE EXPIRATION DATE HEREOF OR ANY FUTURE EXPIRATION DATE OF THIS LETTER OF CREDIT UNLESS AT LEAST NINETY (90) DAYS PRIOR TO ANY SUCH EXPIRATION DATE, WE NOTIFY YOU BY COURIER THAT WE ELECT NOT TO EXTEND THIS LETTER OF CREDIT FOR ANY SUCH ADDITIONAL PERIOD.

 

• ALL BANKING CHARGES ARE FOR THE ACCOUNT OF THE APPLICANT.

 

• DRAW DOCUMENTS MAY BE PRESENTED IN PERSON OR BY COURIER TO [ISSUING BANK’S ADDRESS] OR BY ELECTRONIC TRANSMISSION TO [ISSUING BANK’S EMAIL ADDRESS] OR BY FACSIMILE TO ISSUING BANK’S FAX NUMBER.

 

• PARTIAL AND/OR MULTIPLE DRAWINGS ARE ALLOWED; HOWEVER, THE TOTAL AMOUNT   OF ALL DRAWINGS IS NOT TO EXCEED THE AMOUNT OF THIS CREDIT.

 

·         BENEFICIARY SHALL BE NOTIFIED VIA EMAIL TO CREDITRISK@ENERGYTRANSFER.COM WITHIN TWO (2) BUSINESS DAYS OF ISSUING BANK’S RECEIPT OF DRAWING OF ANY DISCREPANCIES NOTED BY ISSUING BANK ON DOCUMENTS PRESENTED.

 

·         PAYMENT OF ANY AMOUNT DRAWN UNDER THIS LETTER OF CREDIT SHALL BE MADE IN   IMMEDIATELY AVAILABLE UNITED STATES DOLLARS BY WIRE TRANSFER TO THE ACCOUNT OF BENEFICIARY IN ACCORDANCE WITH THE INSTRUCTIONS SUBMITTED WITH THE PRESENTATION OF DOCUMENTS, NO LATER THAN THE THIRD (3^rd) BANKING DAY FOLLOWING THE DATE SUCH DEMAND FOR PAYMENT IS PRESENTED OR FAXED IN ACCORDANCE WITH THE LETTER OF CREDIT TERMS.

 

·         THE OBLIGATION OF THE BANK UNDER THIS LETTER OF CREDIT IS THE INDIVIDUAL OBLIGATION OF THE BANK AND IS NO WAY CONTINGENT UPON REIMBURSEMENT WITH RESPECT THERETO, AND/OR UPON THE BANK’S ABILITY TO PERFECT A SECURITY INTEREST OR ANY OTHER REIMBURSEMENT.

 

·         IN THE EVENT OF AN ACT OF GOD, RIOT, CIVIL COMMOTION, INSURRECTION, WAR OR ANY OTHER CAUSE BEYOND THE BANK’S CONTROL THAT INTERRUPTS OUR BUSINESS (COLLECTIVELY, AN “INTERRUPTION EVENT”) AND CAUSES THE PLACE FOR PRESENTATION OF THIS LETTER OF CREDIT TO BE CLOSED FOR BUSINESS ON THE LAST DAY OF PRESENTATION, THE EXPIRY DATE OF THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED WITHOUT AMENDMENT TO A DATE THIRTY (30) CALENDAR DAYS AFTER THE PLACE FOR PRESENTATION RE-OPENS FOR BUSINESS. 

 

·            THE ELECTRONIC TRANSMISSION OR FACSIMILE OF THIS LETTER OF CREDIT SHALL SERVE AS THE OPERATIVE INSTRUMENT UNTIL THE ORIGINAL IS RECEIVED BY THE BENEFICIARY.

 

WE HEREBY ENGAGE WITH YOU THAT DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT WILL BE DULY HONORED UPON PRESENTATION AT OUR COUNTERS WITHIN THE VALIDITY DATE.

 

 

THIS STANDBY LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES 1998, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 590 (THE “ISP98”). ANY MATTERS NOT GOVERNED BY ISP98 SHALL BE GOVERNED IN ACCORDANCE WITH NEW YORK LAW WITHOUT REFERENCE TO ANY CHOICE OF LAW DOCTRINE. IN THE EVENT OF ANY CONFLICT, ISP98 SHALL CONTROL.