Fill and Sign the Storage of Gas Preliminary Works Form

GAS STORAGE AGREEMENTDated ______________________ Page 2 of 24 TABLE OF CONTENTS Article Title 1. DEFINITIONS 2. STORAGE OF GAS; PRELIMINARY WORKS 3. DELIVERIES AND REDELIVERIES 4. GAS REDELIVERIES AFTER TERMINATION OR EXPIRATION 5. TERM 6. STORAGE FEE; ADDITIONAL PAYMENTS 7. MEASUREMENT FACILITIES 7.1 Measurement Facilities 7.2 Check Measuring Equipment 7.3 Gas Measurement Statements 7.4 Access 8. QUALITY OF GAS 9. FORCE MAJEURE 10. INDEMNIFICATION AND RISK OF LOSS 11. RIGHT TO USE STORAGE WELL AND RELATED FACILITIES 12. NOTICES 12.1 Written Notices 12.2 Dispatching Notices 13. TAXES 14. TRANSFER AND ASSIGNMENT 15. REGULATION 16. NON-DISCLOSURE 17. MAINTENANCE; SUBSTANTIAL INOPERABILITY 18. INDEPENDENT CONTRACTOR 19. CHOICE OF LAW 20. ENTIRE AGREEMENT 21. GENERAL EXHIBIT “A” - PIPELINE FACILITIES 1. Description of Pipeline 2. Requirements for Facilities (Section 2.2) Page 3 of 24 EXHIBIT “B” – MEASUREMENT FACILITIES A. Access to Measurement Facilities, Tests and Charts B. Failure of Measurement Facilities C. Measurement Facilities Tests D. Preservation of Records E. Unit of Volume F. New Measurement Methods and Techniques EXHIBIT “C” – QUALITY AND SPECIFICATIONS FOR DELIVERED GAS Page 4 of 24 GAS STORAGE AGREEMENT (Between Facility Owner and Producer) This Gas Storage Agreement (the “Agreement”) is dated ____ (the “Effective Date”). It is between ____, having its principal office at _____ (the “Owner”), and _____, having its principal office at _____ (the “Customer”); Owner and Customer are sometimes collecti vely referred to in this Agreement as the “Parties,” or individually as a “Party.” Owner owns and operates underground gas storage facilities in the vicinity of ____. Customer desires storage service for natural gas to serve its____ Plant, and Owner is willing to provide storage services. In consideration of the mutual covenants and agreements contained in this Agreement, Owner and Customer agree as follows: ARTICLE 1.Definitions 1.1 The following terms shall have the meanings set forth below (whether or not capitalized in this Agreement): (a) “Base Storage Gas” shall mean that volume of gas which is delivered by Customer to Owner and injected into the underground cavern associated with the Storage We ll pursuant to paragraph 2.4 below, and is necessary to maintain sufficient underground cavern pressure to provide for the withdrawal of Working Storage Gas and to maintain the structural integrity of the cavern. Until technical studies, based on reservoir performance, are comple ted by Owner, the Parties stipulate that a minimum wellhead pressure of ____ psig is required to maintain the structural pressure integrity. The technical studies will be performed by Owner as soon as practicable following commencement of the storage service provided for in this Agreement. (b) “____ Storage Facilities” or “Storage Facilities” shall mean those underground caverns equipped or capable of being equipped for storage of liquid or gaseous hydrocarbons, owned and operated by Owner, underlying lands located in _____ County, _____. (c) “Contract Year” shall mean a period of 365 consecutive calendar days (366 consecutive calendar days in any yearly period in which a date of February 29 occurs), with the first period commencing on the first day of the month following the Service Notification Date. (d) “Day” or “Daily” shall mean a period of twenty-four (24) consecutive hours beginning and ending at 8 a.m., local time at the location of the Storage Facil ities, or at such other hour as may be agreed on by the Parties. The reference date for any day shall be the date of the beginning of the day. (e) “Delivery Point” shall mean the inlet flange of the Measurement Facilitie s with Page 5 of 24 the direction of flow to the Storage Well.(f) “Maximum Daily Injection Quantity” shall mean the maximum daily quantity of natural gas that can be transported through the Pipeline Facilities and injecte d into the underground cavern associated with the Storage Well and Storage Well Equipment, consistent with the design of the facilities and their safe operation. On completion of the joi nt design procedure described in paragraph 2.1, the Parties shall specify the Maximum Daily Injection Quantity. (g) “Maximum Daily Withdrawal Quantity” shall mean maximum daily quantity of natural gas that can be withdrawn from the underground cavern associated with the Storage Wel l and Storage Well Equipment and transported through the Pipeline Facilities, consistent with the design of the facilities and their safe operation. On completion of the joint design procedure described in paragraph 2.1, the Parties shall specify the maximum Daily Withdrawal Quantity. (h) “MCF” shall mean a quantity of gas necessary to fill a thousand cubic feet of space when the gas is at an absolute pressure of 14.73 pounds per square inch saturated with water vapor and at a temperature of 60 degrees Fahrenheit. (i) “Measurement Facilities” shall mean the bi-directional filters, mete rs, meter runs, densitometers, manifolding, valves, piping, pressure controllers, and any other equipment located on the premises of the Storage Facilities which is necessary to measure the gas to be stored in the Storage Well with an accuracy commonly attainable in the industry. (j) “Month” shall mean the period beginning on the first “day” of a calendar month and ending at the same hour on the first “day” of the next succeeding calendar month. (k) “Pipeline Facilities” shall mean a pipeline, associated compressors, and pressure reduction devices to transport the gas bi-directionally from the ____ Plant to the Delivery Point and from the Redelivery Point to the ____ Plant as further described in Exhibit “A.” Custom er shall build and install the Pipeline Facilities at its own cost, risk, and expense. (l) “_____ Plant” shall mean that certain petrochemical complex near ____ , owne d and operated by Customer, which complex currently produces ethylene, propylene, vinyl chloride, and derivatives of those products, as the complex may be modified from time to time. (m) “Redelivery Point” shall mean the outlet flange of the Measurement Facili ties with the direction of flow to the Pipeline Facilities. (n) “Service Notification Date” shall mean the date Owner provides notice to Customer pursuant to paragraph 2.4, that Owner is ready to provide storage service as provided for in this Agreement. (o) “Storage Well” shall mean Well No. _____ located on the premises of the Storage Facilities at (Description of Location of Well), which Owner will convert, clean, wash, and equip with the Storage Well Equipment for storage of natural gas exclusively by Customer. Page 6 of 24 (p) “Storage Well Equipment” shall be all casing, tubing, piping, wellheads, safety devices, measuring devices, and other facilities located in the premises of the St orage Facilities to be used in connection with the operation of the Storage Well. (q) “Working Storage Gas” shall mean the volume of gas which is delivered by Customer to Owner for storage in the cavern associated with the Storage Well, other tha n Base Storage Gas, and which is intended to be withdrawn and redelivered to Customer pursuant to the terms of this Agreement. (r) “Working Storage Gas Balance” shall mean the quantity of Working Storage Gas carried at any particular time for the account of Customer on the records maintained by Owner. ARTICLE 2. Storage of Gas; Preliminary Works 2.1 Owner and Customer shall jointly develop the design of the Storage Well, Storage Well Equipment, and the Measurement Facilities. On completion of the joint design of the Storage Well, Storage Well Equipment, and Measurement Facilities, and after receiving at least _____ (_____) days prior notice from Customer, Owner shall commence and proceed with due diligence, in a workmanlike manner, to convert and equip the Storage Well for gas storage operations and to install the Storage Well Equipment and Measurement Facilities. The constructed and installed Storage Well, Storage Well Equipment, and Measurement Fac ilities will substantially conform to the specifications stated in design documents develope d by Customer and Owner. However, notwithstanding paragraph 21.5 or any provision of this Agreement to the contrary, Owner makes no warranty that the Storage Well, Storage Well Equipment, or Measurement Facilities, on completion, will perform in accordance with any express or implied specification or other standard that may be contained or referenced in any design document that may be generated by Customer and Owner or otherwise communicated to Customer by Owner or any agent of Owner. 2.2 On or before _____ (____) days before furnishing its notice to Owner pursuant to paragraph 2.1, Customer shall commence and proceed with due diligence, in a workmanlike manner, to install and build, at Customer’s sole cost, risk, and expense, the Pipeline Faci lities. The Pipeline Facilities shall conform to the requirements set forth in Exhibit “A” to this Agreement. Customer shall give Owner the opportunity to review and comment on the design of the Pipeline Facilities prior to construction. Owner may observe the construction. The Pi peline Facilities shall deliver gas to be stored at the Delivery Point at daily ra tes not to exceed the Maximum Daily Injection Quantity, and receive redelivery of gas at the Redelivery Point at daily rates not to exceed the Maximum Daily Withdrawal Quantity. Owner shall grant Custome r all necessary access to the Storage Facilities for the laying, operation, and maintena nce of the Pipeline Facilities by Customer and the connection of the Pipeline Facilitie s with the Measurement Facilities to be installed by Owner. 2.3 Customer shall own, maintain, and operate the Pipeline Facilities, and pay a ll related Page 7 of 24 operating and maintenance costs. Owner shall own, maintain, and operate the Storage Well, Storage Well Equipment, and Measurement Facilities, and pay all related operati ng and maintenance costs. 2.4 On completion of the conversion of the Storage Well by Owner, the building and installation of the Storage Well Equipment and Measurement Facilities, and, the completion by Customer of the building and installation of the Pipeline Facilities, industry acce pted tests, including, but not limited to a nitrogen pressure test, will be conducted by Customer and Owner to determine whether the Storage Well, Storage Well Equipment, Pipeline Faci lities, and Measurement Facilities are adequately operational and capable of safe operation. Once Owner and Customer make determination, Owner shall notify Customer that Owner is ready to commence deliveries of Base Storage Gas at such times and at such rates Owner may direct. 2.5 In the event any of the facilities tested, in accordance with paragraph 2.4, are dete rmined not be adequately operational or not capable of safe operation, Customer and Owner shall joi ntly determine a remediation program. Owner shall present Customer with an authorization for expenditure (“AFE”) setting forth the cost of the remediation program. Within ____ (____) days after receipt of the AFE, Customer shall notify Owner whether Customer elects for Owner t o proceed with the remediation program. If Customer notifies Owner that it elects Owne r to proceed with the remediation program at Customer’s expense, Owner shall commence and proceed with due diligence and in a workmanlike manner to undertake the remediation program. On completion, as demonstrated by successful testing under the procedures described in paragraph 2.4, Customer shall reimburse Owner for the lesser of the actual cost of the remediation program or the cost set forth in the AFE. If Customer notifies Owner that it does not elect that Owner proceed with the remediation program at Customer’s expense, Owner may, within ____ (____) days after receipt of Customer’s notification, notify Customer that Owner will undertake the remediation program at its own expense, in which event Owner shall commence and proceed with due diligence and in a workmanlike manner to undertake t he remediation program to completion, as demonstrated by successful testing under the procedures described in paragraph 2.4 If Owner elects not to undertake the remediation program at it s own expense, this Agreement shall automatically terminate in its entirety, and nei ther Party shall have the obligation to reimburse the other Party for any sums expended by the other Party. 2.6 Owner dedicates, for the sole and exclusive use of Customer and its assignees, if any, during the term of this Agreement: (i) the Storage Well and Storage Well Equipment for the storage of gas delivered by Customer; and, (ii) the Measurement Facilities for the mea surement of Customer’s gas in accordance with the terms and conditions of this Agreement.2.7 During the term of this Agreement, Customer dedicates the Pipeline Facilities for their sole and exclusive use as a conduit between the Plant and the Storage Facilities.2.8 Owner and Customer shall provide for regular consultation and communication between representatives from both Parties to discuss technical matters related to the const ruction and installation of facilities and performance under this Agreement. Page 8 of 24 ARTICLE 3. Deliveries and Redeliveries 3.1 Following Owner’s notification to Customer that Owner is ready to commence service under this Agreement, as provided in paragraph 2.4, Customer shall have the right to deliver to Owner for storage, and Owner shall accept volumes of Working Storage Gas, at daily rates not to exceed the Maximum Daily Injection Quantity. 3.2 Owner shall have no obligation to accept delivery of volumes at daily rates in exc ess of the Maximum Daily Injection Quantity or any volumes in the event Customer’s has notifie d Owner of its desire to withdraw gas. Owner may at its sole option, and at Customer’s reque st, accept delivery of volumes at daily rates in excess of the Maximum Daily Injection Quantity.3.3 Owner shall redeliver to Customer, at the daily rate Customer may request up to the Maximum Daily Withdrawal Quantity, the volumes of gas Customer may request until the Working Storage Gas Balance is exhausted. 3.4 Although Owner shall have no obligation to redeliver daily volumes of gas in excess of the Maximum Daily Withdrawal Quantity, Owner may, at its sole option, and at Custom er’s request, redelivery daily volumes in excess of the Maximum Daily Withdrawal Quantity.3.5 Owner and Customer shall exercise continuous efforts to maintain control over the rates of flow and volumes of gas to be delivered or redelivered under the terms of this Agreement a nd all gas delivered or redelivered on each day shall be delivered at rates as const ant as reasonably practicable throughout such day.3.6 Under no circumstances shall Owner be required to accept or to redeliver gas at a ra te or pressure that, in the sole judgment of Owner could; (i) threaten the structural integrity of the underground storage cavern associated with the Storage Well; or, (ii) expose the Storage Wel l Equipment, Measurement Facilities, or Pipeline Facilities to the possibility of rupture, collapse, explosion, or other damage. ARTICLE 4. Gas Redeliveries after Termination or Expiration 4.1 During the _____ (_____) month period following termination or expiration of this Agreement, Owner shall deliver to Customer all Working Storage Gas still remaining in the underground cavern associated with the Storage Well. The redelivery of that volume shall be made at rates no higher than the Maximum Daily Withdrawal Quantity, consistent with the further limitations set out in paragraph 3.6. Any volumes of Working Storage Gas not received by Customer from Owner on the expiration of the _____ (_____) month period due to causes within the reasonable control of Customer shall automatically become the exclusive property of Owner. Page 9 of 24 4.2During the _____ (_____) month period following termination or expiration of this Agreement, Owner shall redeliver to Customer the Base Storage Gas delivered by Customer pursuant to paragraph 2.4, less any and all losses of the Base Storage Gas, including line losses and losses attributable to formation absorption and measurement discrepancies. The re delivery of that volume shall be at daily rates and times within the operational abil ity of Owner to deliver to Customer to receive, subject to the provision set out in paragraph 3.6. Any volumes of Base Storage Gas not received by Customer from Owner on the expiration of the ____ (____) month period due to causes within the reasonable control of Customer shall automatically be come the exclusive property of Owner. ARTICLE 5.Term 5.1 This Agreement shall become binding on its execution and shall remain in effect for a primary term ending on the earlier of: (i) the last Day of the _____ Contract Year fol lowing the Service Notification Date; or, (ii) (Specific Date). Subject to the provisions conta ined in paragraph 6.2, the primary term of this Agreement shall automatically be extended for t wo separate and successive extension terms of _____ (____) Contract Years each unless Customer gives written notice to Owner ____ (____) months before the expiration of the then ongoing primary or extension term that this Agreement shall terminate upon the expiration of that term. ARTICLE 6. Storage Fee; Additional Payments 6.1 a. With respect to each Contract Year of the primary term of this Agreement Customer shall pay Owner an annual storage fee of $_____. b. With respect to each Contract Year of any extension term of this Agreement, Customer shall pay Owner an annual storage fee, which shall be equal to the greater of: (i) $____ times A1/A; or, (ii) $____ times B1/B, where: A= Producer Price Index for Industrial Commodities (1982 = 100), as published by the Bureau of Labor Statistics, United States Department of Labor in “Wholesale Prices and Price Indexes,” for ____ . A1= The value of A for the month of February immediately preceding the Contract Year for which the annual storage fee is payable. B= The arithmetic average of the prices per MMBTU for “Burnertip Pricing Point -- ____ ,” as published in “Inside F.E.R.C.’s Gas Market Report, for the months of ____ , ____ , ____ , and ____ . Page 10 of 24 B1= The value of B for the consecutive months of ____ , ____ , ____ , and ____ immediately preceding the Contract Year for which the annual storage fee is payable. The annual storage fee shall be recomputed, as provided above, once each year and shall be effective as of the first month of each Contract Year of the applicable extension term. c. All annual storage fees described in this paragraph 6.1 shall be paid by Customer to Owner within ____ (____) days after the commencement of the Contract Year to which the payment applies. 6.2 In addition to the payments provided for in paragraphs 6.1, Customer shall pay Owner compensatory payment of $____ for each and every day occurring in the period commencing (Specific Date) through the Service Notification Date. This payment shall be payable on the ____ day of the month following each month in which any such compensatory payment accrues. 6.3In addition to payments provided for in paragraphs 6.1 and 6.2, Customer shall pay Owner an amount, in cash, corresponding to all capital costs and other expenses incurred by Owner in placing the Measurement Facilities, Storage Equipment, and Storage Well into service as required by this Agreement. Capital costs and expenses shall include, but not be lim ited to, costs of engineering, construction, equipment, metering, well conversion, and related permi tting, plus an allowance for reasonable overhead. As of the date of execution of this Agreement, the Parties estimate that the capital costs and expenses will amount to approximat ely $____ . Owner shall invoice Customer from time to time for all amounts due by Customer pursuant to this paragraph 6.3, and Customer shall pay those invoices within ____ (____) days of Customer receipt of each invoice. 6.4 Customer acknowledges that under the terms of the contract pursuant to which Owner conducts storage operations on the Storage Facilities, Owner must be pay the owners of the land in which the Storage Facilities are located a sum equal to ____% of any and all sums to be paid by Customer to Owner pursuant to paragraphs 6.1, 6.2, and 6.3 (the “Landowner Fee”). Concurrently with each payment to be made by Customer to Owner pursuant to paragraphs 6.1, 6.2, and 6.3, Customer agrees to pay Owner, as a reimbursement, a sum equal to the Landowner Fee applicable to each payment. 6.5 Except as provided otherwise in the following sentence, all amounts paid by Customer to Owner pursuant to this Article 6. shall under no circumstances be refundable to Customer or subject to abatement or credit, even if Owner is unable to perform its obligations duri ng the applicable Contract Year due to events described in paragraph 9.1, if Owner refuses to a ccept Customer’s gas pursuant to paragraph 8.3, or if Customer’s gas becomes subject to other supply allocation procedure implemented under state or local laws or regulations. However, if Customer requests Owner to accept delivery or make redelivery of gas, and Customer is then ready, willing, and able to tender or receive the gas, the annual storage fees paid by Customer to Owner pursuant to paragraphs 6.1 and 6.2 shall be refundable to Owner proportionately to the number of days in any given Contract Year in which Customer is prevented from making Page 11 of 24 deliveries or receiving redeliveries of gas solely due to physical inoperability of the Storage Well, Storage Well Equipment, or Measurement Facilities. ARTICLE 7. Measurement Facilities 7.1 Measurement Facilities: The volumes of gas delivered for storage by Customer to Owner, and redelivered by Owner to Customer shall be measured by the Measurement Faciliti es which Owner shall install, own, and operate in connection with the Storage Well. The Measurement Facilities shall include a meter or meters and appurtenances and other measurement devices necessary to comply with the provisions of this Agreement and shall be of types and kinds generally accepted by the natural gas industry for the measurement of natural gas at the rates of flow and pressures expected to exist at the Delivery Point and Re delivery Point. When orifice meters are used, they shall be of a type specified and recommended, a nd the construction and installation of the orifice meters shall be in accordance with t he applicable recommendations and specifications specified by the American Gas Association. 7.2 Check Measuring Equipment: Customer may install, maintain, and operate at Customer’s own cost, risk, and expense, check measuring or telemetering equipment as it shal l desire at a place mutually acceptable to Customer and Owner provided that the equipment shall be installed, maintained, and operated by Customer in a manner not to inte rfere with the operation or maintenance of the Measurement Facilities. Owner shall have unrestricte d access to the check measuring or telemetering equipment at all reasonable hours. The readi ng, calibrating, adjusting, and the changing of charts shall be done only by Customer, but Owner shall be given reasonable notice of these events in order that it may be present. 7.3 Gas Measurement Statements: On or before the ____ (____) day of each calendar month, during the term of this Agreement, Owner will render a statement of the (i) volum es of gas injected into storage and withdrawn from storage for Customer for each day of the prece ding month, and (ii) Working Storage Gas Balance of Customer at the beginning and the end of t he preceding month. 7.4 Access to the Measurement Facilities, tests, charts, and the manner to correct measurement failures shall be subject to the provisions of Exhibit “B.” ARTICLE 8. Quality of Gas 8.1 Definition: The term “gas” or “natural gas” as used in this Agreement and its exhibits shall mean natural gas or any mixture of hydrocarbons or of hydrocarbons and noncombustible gases in a gaseous state consisting predominantly of methane transported to the ____ Plant by one or more pipeline companies prior to injection into the Pipeline Facilities. Page 12 of 24 8.2The quality of the gas to be delivered for storage by Customer to Owner shall be of the quality and meet the specifications set forth in Exhibit “C” to this Agreement. 8.3 If any gas delivered by Customer for injection as Base Storage Gas or Working Storage Gas fails to conform to any of the quality specifications provided for in Exhibit “C,” Owner shall have the right to refuse to accept the non-conforming gas until the time Customer ac ts, at Customer’s sole expense, to correct the failure and resumes the delivery of conforming gas.8.4 All gas redelivered by Owner to Customer shall be in an “AS IS” condition and without any warranty as to quality. Owner DISCLAIMS ANY IMPLIED WARRANTIES CONCERNING THE REDELIVERED GAS, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ARTICLE 9. Force Majeure 9.1 Subject to the provisions contained in paragraph 9.2, neither Customer or Owner shall be liable in damages to the other for any act, omission, or circumstances occasioned by or i n consequences of, and neither Customer or Owner shall be required to perform under the terms of this Agreement by reason of and for the duration of any acts of God, strikes, lockouts, acts of the public enemy, wars, sabotage, blockages, insurrections, riots, epidemics, landslide, lightning, earthquakes, fires, storms, hurricanes, floods, washouts, civil disturbances, explosions, breakage or accident to machinery or lines or pipes, or the necessity to make repairs, tests or alterations to machinery or lines of pipes, line freeze-ups, temporary failure of gas supply, the binding order of any court or governmental authority which has been resisted in good faith by all reasonable legal means, or any other cause, whether of the kind enumerated, or otherwise, and whether caused or occasioned by or happening on the account of the act or omission of one of the Parties, or some person or concern not a Party to this Agreement, not within the control of the Party claimi ng suspension and which by the exercise of due diligence the Party is unable to prevent or overcome. A failure to settle or prevent any strike or other controversy with employees or with anyone purporting or seeking to represent employees shall not be considered to be a matter within the control of the Party claiming suspension. 9.2 The causes or contingencies set forth in paragraph 9.1 affecting the performance of this Agreement by either Party, shall not relieve a Party of liability in the event of its failure to use due diligence to remedy the situation and remove the cause in an adequate m anner and with all reasonable dispatch, nor shall the causes or contingencies affecting the performance of t his Agreement relieve Customer from its obligations to make payments of any amounts due Owner by the terms of this Agreement, or Owner from its obligations to refund Customer annual stora ge fees pursuant to paragraph 6.5, nor shall those causes or contingencies relieve either Party of liability unless the Party claiming relief from liability shall given writt en notice and full particulars of the same to the other Party as soon as possible after the occurrence relied on. 9.3 If either Party suspends its performance pursuant to the provisions set forth in paragraph 9.1 for a period of time exceeding ____ (____) months, the other Party shall then have the right Page 13 of 24 to terminate this Agreement upon ____ (____) days advance written notice to the first Party; provided the notice is given to the first Parties prior to the date the first Party again becomes capable of performing its obligations in full. ARTICLE 10. Indemnification and Risk of Loss 10.1 Customer agrees to protect, defend, indemnify, and hold Owner, its parent, subsidiary, and affiliated companies, and its and their partners, joint ventures, co-owners, agents, officers, directors, employees, representatives, insurers, contractors, subcontractors and sub- subcontractors, and all agents, officers, directors, employees, representatives, insurers, and parent, subsidiary and affiliated companies of all of the foregoing (collectively the “Owner Group”) harmless from and against all claims, losses, costs, demands, damages, suits, judgments, penalties, liabilities, debts, expenses, and causes of action of whatever nature or cha racter, whether known or unknown, whether predating this Agreement or not and whether arising out of contract, tort, strict liability, misrepresentation, violation of applicable law and/or any cause whatever, including but not limited to reasonable attorney’s fees and other costs and expe nses, without limit and without regard to the cause or causes, which in any way arise out of or are related to this Agreement (including, without limitation, the performance or subject m atter of this Agreement or ingress, egress or presence on any premises, whether land, building or otherwise, in conjunction with this Agreement) and which are asserted by or arise in favor of Custom er or any of its agents, representatives, employees, contractors, subcontractors or sub-subcontractors (and/or their spouses or relatives), due to bodily injury, death or loss or damage to property (excluding claims for loss or gas owned by Customer, which are governed by paragraph 10.3), for any cause whatever, whether or not caused by the sole, joint, and/or concurrent negligenc e, fault or strict liability of Owner Group, or any other cause whatsoever, whether predating this Agreement or not. 10.2 Owner agrees to protect, defend, indemnify and hold Customer, its agents, officers, directors, employees, representatives, and their parent subsidiary and affiliated companies, and all of their respective agents, officers, directors, employees and representatives (colle ctively the “Customer Group”) harmless from and against all claims, losses, costs, demands, suits, judgments, damages, penalties, liabilities, debts, expenses and causes of action of whate ver nature or character, whether known or unknown, whether predating this Agreement or not, and whether arising out of contract, tort, strict liability, misrepresentation or violation of applicable law and/or any cause whatsoever, including but not limited to reasonable attorney’s fees a nd other costs and expenses, without limit and with regard to the performance, cause or causes thereof, which in any way arise out of or are related to this Agreement (including, without limitation, the performance or subject matter of this Agreement or ingress, egress or pre sence on any premises, whether land, buildings or otherwise, in conjunction with this Agreement) and which are asserted by or arise in favor of Owner or its agents, representatives, employees, contractors, subcontractors, and sub-subcontractors (and/or their spouses or relatives) due to bodily injury, death or loss or damage to property (excluding claims for loss of gas owned by Customer, which are addressed in paragraph 10.3) for any cause whatever, whether or not caused Page 14 of 24 by the sole, joint, and/or concurrent negligence, fault or strict liability of Customer Group, or any other cause, whether predating this Agreement or not. 10.3 Customer shall bear the exclusive risk of loss of: (i) the natural gas contained in or transported through the Pipeline Facilities, Storage Well Equipment, Measurement Fac ilities and Storage Well; and, (ii) the entire volume of Base Storage Gas and Working Storage Gas, whether or not any such loss is caused by the sold, joint, and/or concurrent negligence, fault or strict liability of Owner Group, or any other cause whatsoever, whether predating this Agreement or not. ARTICLE 11. Right to use Storage Well and Related Facilities 11.1 Owner represents and warrants that on the Service Notification Date, it will have good rights and full and exclusive authority to use the Storage Well and the associated underground cavern, and subject to obtaining all required governmental permits, it will have full authority to build, operate, and repair the Storage Well, the Storage Well Equipment and Mea surement Facilities for the purposes contemplated in this Agreement, and it will defend, inde mnify, and hold Customer harmless from and against any loss arising from a failure of that title or authority. 11.2 Customer represents and warrants that on the Service Notification Date it will own a nd have title to the Pipeline Facilities, that the Pipeline Facilities will be connected only with facilities owned by Customer on the premises of the ____ Plant and not with any facili ties that are located off those premises, or that are owned by a third Parties including any a ffiliate of Customer and, subject to obtaining all required governmental permits, it will have ful l authority to build, operate, and repair the Pipeline Facilities for the purposes contemplated by this Agreement and that it will defend, indemnify, and hold Owner harmless from and against any loss arising from the failure of that title or authority. Likewise, Customer warrants a nd represents that it will own and have title to all gas delivered for storage by Custom er and transported through the Pipeline Facilities, and will indemnify Owner and defend and save Owner harmless from suits, actions, debts, accounts, damages, costs, losses, and expenses, including attorney’s fees, arising from or out of adverse claims by any and all persons to said gas or to royalty, taxes, license fees or charges. ARTICLE 12.Notices 12.1 Written Notices: Notices to Customer under this Agreement shall be addressed as follows: Notices to Owner shall be addressed as follows: Page 15 of 24 Either Party may change its address under this Article by written notice to the other Party. A notice shall be deemed to have been effectively given on receipt by the Part y to whom addressed or on the ____ day after which it is addressed and placed, postpaid, in the United States mail, whichever comes first. 12.2 Dispatching Notices: Notices with respect to injections, withdrawals, limitation, or restoration of deliveries of gas or with respect to force majeure shall be sufficient if given in person, in writing, by telephone, by facsimile, or electronically to the person or persons designated from time to time as authorized to receive the same. When notices are not given in writing, a written confirmation of a notice shall be given as soon thereafter as practical. ARTICLE 13.Taxes 13.1 Customer shall be responsible for and hold Owner harmless from the payment of any tax or governmental charge on injection, withdrawal and/or storage of gas that may be imposed on Owner by any Federal, State, or Municipal authority. 13.2 Owner agrees to notify Customer promptly, in the manner provided in Article 12., if Owner becomes aware of any tax or governmental charge (including any new or additional taxes or charges) on injection, withdrawal and/or storage of gas imposed on Owner by a Federal, State, or Municipal authority after the date of this Agreement. Customer shall have a reasona ble time after receipt of the notice to determine whether the new or additional tax is due and payable. If the tax or charge is due and payable, Customer will remit the tax to Owner for paym ent to the taxing authority. Should Customer determine that the tax is not due and payable or othe rwise not applicable, Owner agrees not to pay the tax or charge and shall authorize Customer to contest at Customer’s sole expense) the tax in Owner’s name, in which event, Owner agrees to cooperat e and refrain from any acts which would jeopardize Customer’s legal remedies. If Owner has refrained from payment of any tax or charge at the direction of Customer, and the tax or c harge and/or the penalty for non-payment of the tax or charge is lawfully assessed against Owner, then Customer agrees to reimburse Owner for the amount of the tax or charge and penalty. 13.3 Customer shall render and pay and hold Owner harmless from all ad valorem or other tax owned on the gas stored for Customer’s account under this Agreement and on any equipment of property owned by Customer and which may be located with the ____ Storage Facilities. 13.4 Owner shall render and pay all ad valorem or other tax owed on the Storage Well, Storage Well Equipment and Measurement Facilities and any other equipment and property owned by Owner with the ____ Storage Facilities. Page 16 of 24 13.5Each Party shall be responsible for its own state and federal income taxes, corporate franchise taxes, business license taxes, and all similar charges. ARTICLE 14. Transfer and Assignment 14.1 Any company which shall succeed by purchase, merger, or consolidation to the properties, substantially or as an entirety, of Customer or of Owner, as the case may be, sha ll be entitled to the rights and shall be subject to the obligations of its predecessor in interest under this Agreement. Either Customer or Owner may, without relieving itself of its obligat ion under this Agreement, assign any of its rights or obligations to an entity with which it is affi liated at the time of assignment. Owner may assign any of its rights to receive payments to any ot her entity. Otherwise, no assignment of this Agreement or any of its rights or obligations shall be made by Customer or Owner without the written consent of the other Party, which consent shall not be unreasonably withheld. However, the provisions of this paragraph 14.1 shall not in any way prevent either Party to this Agreement from pledging or mortgaging its rights under this Agreement as security for indebtedness. This Agreement shall be binding on and inure to the benefit of the respective successors and assigns of Owner and Customer. ARTICLE 15Regulation 15.1 This Agreement and the respective obligations of the Parties are subject to all environmental and other laws, orders, rules, and regulations of duly constituted authorities having jurisdiction, applicable to each of the Parties, and are conditioned, unless wa ived by the Parties, on the issuance by the authorities of any authorization for performance under the t erms of this Agreement. 15.2 The Parties shall promptly file for and diligently pursue all governmental permits a nd authorizations necessary for the implementation of this Agreement.15.3 Owner agrees to indemnify and hold Customer harmless from and against all fines, charges, and/or assessments caused by or resulting from violations by Owner of environmental laws, regulations, rulings, or ordinances unless, and to the extent, such fines, charges and/or assessments are attributable to the negligence of Customer, its employees, agents, or results from the storage and handling of contaminated Customer’s gas. 15.4 Customer agrees to indemnify and hold Owner harmless from and against all fines, charges, and/or assessments caused by or resulting from violations by Customer of environmental laws, regulations, rulings or ordinances unless, and to the extent, the fine s, charges and/or assessments are attributable to the negligence of Owner, its agents or employees. 15.5 If at any time after the date this Agreement is entered into any governmenta l body requires the installation of facilities and/or require changes to Owner’s normal operati ng Page 17 of 24 procedure regarding the environmental impact of the storage and handling of Customer’s gas, Owner may present Customer with an authorization for expenditure (“AFE”) setting forth the additional cost of the installed facilities or the changed operating procedure. Within ____ (____) days after receipt of an AFE, Customer shall notify Owner whether Customer wishes Owner to proceed with the installation or changed operating procedure. If Customer notifies Owner it wishes Owner to proceed with the installation or changed operating procedure, Owner shall commence and proceed with due diligence and in a workmanlike manner to undertake t he installation and/or revised operating procedure for the cost set forth in the AFE. If Custome r notifies Owner it does not wish Owner to proceed with the installation and/or revised opera ting procedure at Customer’s expense, Owner may, within ____ (____) days after receipt of Customer’s notification, notify Customer that Owner will undertake the installation and/ or revised operating procedure at its own expense, in which event Owner shall commence and proceed with due diligence and in a workmanlike manner to undertake the installati on and/or revised operating procedure. If Owner elects not to undertake the installation and/or revised operating procedure at its own expense, this Agreement shall automatically terminate in its entirety, and neither Party shall have the obligation to reimburse the other Parties for any sums expended by the other Party. 15.6 Customer and Owner believe the actions to be performed under this Agreement do not require, under the laws and regulations existing as of the Effective Date, either Party to apply for or obtain a certificate or other authorization from any federal, state, or municipal agency or governmental unit that is empowered to exercise economic regulation over the transportat ion or storage of gas. The basis for the foregoing belief is that the Storage Well, Storage We ll Equipment, Measurement Facilities, and Pipeline Facilities are all facili ties that will, on construction or installation, constitute an integral part of the ____ Plant, and Customer re presents and covenants all volumes of Working Storage Gas and Base Storage Gas Will be owned exclusively by Customer (and not by any affiliate of Customer), and that the volumes of store d gas will be consumed exclusively at the ____ Plant. If, notwithstanding the foregoing, any federal, state, or municipal agency or governmental unit asserts that Owner must apply for and obtain a franchise, license, or certificate in order to initiate or continue the storage of gas, Customer shall indemnify and hold Owner harmless from all reasonable cost of complying wit h the regulatory requirement, including Owner’s attorneys fees. In addition, if Customer or Owner considers that compliance with any regulatory requirement or any other governmental rule or regulation, would expose a Party to the prospect of continuing or burdensome governmental regulation (including but not limited to, limitation of the storage fee that Owner may collect from Customer or imposition on Owner of a service obligation or abandonment authorization requirement), the Party so exposed may terminate this Agreement effective on the e arlier of the ____ (____) day after giving notice to the other Party or the day immediately preceding t he first day the Party would be exposed to any continuing or burdensome regulation; provided the possible applicability of or compliance by either Party with any supply allocation procedure s implemented under state or local laws or regulations shall not constitute grounds for term ination under this paragraph 15.6. ARTICLE 16. Non-Disclosure Page 18 of 24 16.1Each Party agrees to use its best efforts to prevent disclosure to third parties of t his Agreement and all information of a business nature which was or is acquired as a result of this Agreement, except for disclosures by either Party to a governmental body or agency, prospective purchasers, or the actual purchaser of the stock or a substantial portion of the assets of that Party. In addition, Owner may disclose this Agreement to the owners of lands in which the ____ Storage Facilities are located, if and to the extent the disclosure is required unde r the terms of the agreements described in paragraph 21.6. These nondisclosure obligations shall cease ____ (____) months after the date this Agreement is terminated or expires. ARTICLE 17. Maintenance; Substantial Inoperability 17.1 Customer recognizes that Owner will from time to time require routine maintenanc e periods to overhaul and service the Storage Well, Storage Well Equipment, and Measurem ent Facilities. Owner shall advise Customer in advance and Customer shall cooperate in arranging a mutually convenient time to effect the repairs. Owner will make reasonable efforts in accomplishing routine repairs to have a minimum impact on Customer’s business. Owner will notify Customer of any condition or requirement that the Storage Well be emptied for t esting with as much advance notice as possible. 17.2 Owner shall always have the right, without prior notice to Customer, to discontinue acceptance of deliveries or the making of redeliveries of gas, if and for the duration that Owner may determine, in its sole judgment, those actions could threaten the structural i ntegrity of the underground cavern associated with the Storage Well or could expose the storage Well Equipment, Measurement Facilities, or Pipeline Facilities to the possibility of rupture, explosion, or other damage. 17.3 In the event the Storage Well becomes substantially inoperable due to casing coll apse, formation failure, or any other reason, Customer and Owner shall jointly determine a remediation program. Owner shall present Customer with an authorization for expenditure (“AFE”) setting forth the cost of the remediation program. Within ____ (____) days after receipt of AFE, Customer shall notify Owner whether Customer wishes Owner to proceed with the remediation program. If Customer notifies Owner it wishes Owner to proceed with the remediation program at Customer’s expense, Owner shall commence and proceed with due diligence and in a workmanlike manner to undertake the remediation program, and upon completion, as demonstrated by successful testing under the procedures described in paragraph 2.4, Customer shall reimburse Owner for the lesser of the actual cost of the remediation program or the cost set forth in the AFE. If Customer notifies Owner it does not wish Owner to procee d with such remediation program at Customer’s expense, Owner may, within ____ (____) days after receipt of Customer’s notification, notify Customer that Owner will undertake the remediation program at its own expense, in which event Owner shall commence and procee d with due diligence and in a workmanlike manner to undertake the remediation program to completion, as demonstrated by successful testing under the procedures described in paragraph 2.4. If Owner elects not to undertake the remediation program at its own expense, this Page 19 of 24 Agreement shall automatically terminate in its entirety, and neither Party shall have the obligation to reimburse the other Party for any sums expended by the other Party. ARTICLE 18. Independent Contractor 18.1 Owner is and shall remain an independent contractor in all respects and in the performance of all work and activities under this Agreement. The detailed methods and manner of conducting all work and activities shall be under the complete control and direct ion of Owner unless modified by another provision of this Agreement. Nothing in this Agreement shall limit or be interpreted as conflicting with the independent contractor status of Owner and its subcontractors. In the event of any conflict, the provision of this Article shall govern. ARTICLE 19. Choice of Law 19.1 THIS AGREEMENT IS TO BE GOVERNED BY THE LAWS OF THE STATE OF ____, EXCLUDING THAT STATE’S CONFLICT LAWS. ARTICLE 20. Entire Agreement 20.1 This Agreement constitutes the entire agreement between the Parties, and there a re no understandings, representations or warranties of any kind, expressed or implied, not expressly set forth in this Agreement. This Agreement shall not be amended except in writing exec uted by both Parties. ARTICLE 21.General 21.1 No Waiver by either Party of any one or more defaults by the other in the performance of any provisions of this Agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or of a different character. 21.2 Regardless of any provision of this Agreement: (i) Owner shall not be liable to Customer for any indirect, consequential, incidental, or punitive damages whether or not the dam ages in any way relate to the breach of this Agreement by Owner or are caused by the sole, joint , and/or concurrent negligence, fault or strict liability of Owner or any other cause, whether predati ng this Agreement or not; and, (ii) Customer shall not be liable to Owner for any indirect, conseque ntial, incidental, and punitive damages whether or not the damages in any way relate to the breach of this Agreement by Customer or are caused by the sole, joint, and/or concurrent negligence, fault or strict liability of Customer, or any other cause, whether predating this Agreement or not. Page 20 of 24 21.3All volumes of Base Storage Gas and Working Storage Gas redelivered by Owner to Customer shall be consumed exclusively at the ____ Plant. 21.4 In their respective operations under paragraph 2.3, and under Articles 3., 4., 7., and 17., Owner and Customer shall each perform as a reasonably prudent operator would perform under the same or similar circumstances. 21.5 It is understood that Owner is in negotiations with various owners of the land in which the ____ Storage Facilities are located to obtain the right, to convert the ____ Wel l to an underground storage well. If Owner fails to obtain execution by owners having a total combined fee interest in excess off____%, or agreement(s) granting storage rights to Owner by the earlier of ____ or the date Customer provides notice to Owner pursuant to paragraph 2.1, either Party may terminate this agreement by giving notice within ____ (____) days after the earlier date. 21.6 From time to time, Customer may propose to Owner the subleasing of its rights under this Agreement. Customer shall provide the full particulars of any such arrangement and shall in any event remain the primary obligor. Owner shall not withhold its approval of any subleasing, unless the subleasing would: (i) in the sole opinion of Owner’s counsel, require, under the laws and regulations existing as of the date of Customer’s request, Owner to apply for or obtain a certificate or other authorization from a federal, state, or municipal agency or gove rnmental unit that is empowered to exercise economic regulation over the transportation or storage of gas or expose Owner to the prospect of continuing or burdensome governmental regulation (including but not limited to, limitation of the storage fee that Owner may collect from Customer, or imposition on Owner of a service obligation or abandonment authorization requirement); (ii) result in the stored gas being consumed in other than purely industrial applications; (ii i) cause the ____ Storage Facilities to function other than as the primary source of stored gas for the ____ Plant; or, (iv) impose on Owner, in Owner’s sole opinion, significant additional costs with respect to utilities purchased for the ____ Storage Facilities and other operating expenses, contract administration, or accounting procedures. OWNER CUSTOMER Page 21 of 24 EXHIBIT “A” PIPELINE FACILITIES 1. Description of Pipeline Facilities. 2. Requirements for Facilities (Section 2.2). Page 22 of 24 EXHIBIT “B” MEASUREMENT FACILITIES A. Access to Measurement Facilities, Tests and Charts: Owner shall assure that Customer shall have access to and the right to inspect the Measurement Facilities at all reasonable hours, but the reading, calibrating, adjusting, and the changing of charts shall be done only by Owner. Customer shall have the right to be present at the time of any installing, readi ng, cleaning, changing, repairing, inspecting, calibrating or adjusting done in connection with the Measurement Facilities, and Customer shall be given reasonable prior notice in order that Customer may be present. The records and charts from the Measurement Facilities sha ll remain the property of Owner, but Owner, on request by Customer and subject to the provisions of Section D. below, shall submit to Customer such records and charts, together with calcula tions from them, for inspection and verification, subject to return within ____ (____) days after recei pt of the event. B. Failure of Measurement Facilities: If for any reason the Measurement Facilities are out of service or out of repair so that the quantity of gas delivered is not correctly indic ated by their reading, the gas delivered through the period the Measurement Facilities are out of se rvice or out of repair shall be estimated and agreed on on the basis of the best date avail able using the first of the following methods which is feasible: (a) by using the registration of any check measuring equipment if installed and accurately registering; (b) by correcting the error if the percentage of error is ascertainable by calibration, test, or mathematical calculation; or, (c) by estimating the quantity of delivery by deliveries during preceding periods under similar conditions when the Measurement Facilities were registering accurately. C. Measurement Facilities Tests: The accuracy of the Measurement Facilities shall be verified by test performed by Owner at its sole expense at reasonable intervals, not to e xceed one per calendar quarter. Customer may request a special test to verify accuracy; but Owne r shall not be required to make any special test more frequently than once in any ____ (____) day period. The cost of any special test shall be borne by Owner if the percentage of the inaccuracy is found to be more than ____ percent (____%) or less, the cost of the special test shall be borne by Customer. If on any test, the percentage of inaccuracy of the Measurement Faciliti es is found to be not more than ____ percent (____%), previous readings of such equipment shall be adjusted properly at once to record accurately. If upon any test, the percentage of inaccura cy of the Measurement Facilities is found to be in excess of ____ percent (____%), registrations shall be corrected for a period extending back to the time the inaccuracy occurred if that time is ascertainable, and if not ascertainable, then back one-half (1/2) of the time ela psed since the last date of calibration, but not exceeding a correction period of ____ (____) days. Page 23 of 24 D. Preservation of Records: Both Owner and Customer shall preserve or cause to be preserved for a period of ____ (____) years all test data, charts, and other similar records pertaining to the Measurement Facilities and check metering equipment, if a ny. Thereafter the information may be destroyed by the Party having custody of it. E. Unit of Volume: The unit of volume for gas measurement shall be one MCF as defined in paragraph 1.1 of the Agreement. F. New Measurement Methods and Techniques: If at any time during the term of this Agreement, a new method or technique is developed to measure gas or the determinat ion of factors used in measure gas, the new method or technique may be substituted for the gas measurement set forth in Article 7. of the Agreement on mutual agreement by Owner and Customer. Page 24 of 24 EXHIBIT “C” TO GAS STORAGE AGREEMENT All gas tendered by Customer to Owner for storage shall comply with the following specifications: (a) Be natural gas and be commercially free from dust, gum, gum-forming constituents, water, paraffin, and other objectionable solid and/or liquid matter, including toxic contaminants. (b) Contain not more than one grain of hydrogen sulfide per 100 cubic feet. (c) Contain not more than 20 grains of total sulfur per 100 cubic feet. (d) Contain not more than four percent by volume of nitrogen and carbon dioxide combined. (e) Contain not more than three percent by volume of carbon dioxide. (f) Contain not more than one percent by volume of oxygen. (g) Contain not more than seven pounds of water vapor per 1,000,000 cubic feet. (h) Have a gross heating value of not less than 950 Btu’s per cubic foot. (i) Have a temperature of not less than 40 degrees Fahrenheit and not more than ____ degrees Fahrenheit.