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HomeMy WebLinkAboutAGMT - Clean Energy (CNG Fueling Station Agmt & License) • . • • • COMPRESSED NATURAL GAS VEHICLE FUELING STATION AGREEMENT & LICENSE THIS AGREEMENT (the "Agreement ") is made and entered into as o 1998 by and between The City of Seal Beach ( "Customer") and PICKENS FUEL C ., a California corporation ( "PFC "). In consideration of the mutual promises, covenants, and agreements herein contained, the parties hereto (the "Parties ") agree as follows: ARTICLE 1 SCOPE OF AGREEMENT AND DEFINITIONS 1.1 Intent. This Agreement, together with any and all Exhibits and Schedules attached hereto, expresses the teens and conditions pursuant to which Customer authorizes PFC to construct and maintain a Compressed Natural Gas ( "CNG ") motor vehicle fueling station (the "Station ") on property (the "Premises ") owned or controlled by Customer for the use of Customer and other authorized users. 1.2 Definitions. As used in this Agreement, the following terms and expressions shall have the indicated meanings: "Agreement" means this document and any and all exhibits and schedules hereto. "CNG" means pipeline quality natural gas, compressed for vehicle use. "CNG Vehicle(s)" means motor vehicles powered by internal combustion engines, which have been manufactured or modified to use CNG as a primary fuel. As used herein, CNG Vehicles shall refer to CNG fueled vehicles owned or operated by Customer and those owned or operated by third parties authorized to use the Station. "Customer" means the Party identified in the first sentence of this Agreement, acting by and through its officers, employees and authorized agents and its permitted successors in interest as owners of the Premises. "Party" or "Parties" means PFC and Customer, in their respective capacities as parties to this Agreement. "PFC" means Pickens Fuel Corp., a California corporation, or a limited liability company under the same controlling interest as such corporation, acting by and through its employees, officers and authorized agents. "Premises" means that portion of the property owned by Customer upon which the Station will be operated. The Premises are indicated on the plot plan (showing the location of the Station) attached as Exhibit A hereto. -1- • "Station" means the facility for refueling CNG Vehicles operated by Customer and maintained by PFC. ARTICLE 2 RESPONSIBILITIES OF PFC • 2.1 Station. PFC shall design, construct, operate and maintain a Station on the Premises. PFC shall make reasonable efforts to have the Station in operation on or prior to Customer's initial scheduled CNG vehicle delivery date (the "Initial Delivery"); provided, that Customer shall notify PFC in writing no less than one hundred eighty (180) days prior to the Initial Delivery. Such Station shall include, a compressor and controls equipment with a dispensing capacity of at least 75 cubic feet per minute, 30,000 standard cubic feet of storage capacity, a two-hose dispenser capable of fueling two vehicles simultaneously at a minimum rate of two gallons per minute per vehicle, and a magnetic card reader which is capable of communicating with PFC's billing system. The CNG dispenser shall be designed for public, as well as Customer, access (the "Public Dispenser "). In the event that PFC, in its reasonable judgment, determines that the size of Customer's fleet requires additional compressor capacity, PFC shall add such facilities within one hundred eight (180) days. 2.2 CNG Service. PFC shall provide the Station with CNG service and bill Customer therefor at the rate set in accordance with the terms of Article 7 hereof. 2.3 Maintenance. PFC shall endeavor to maintain the Station in accordance with the following principles: 2.3.1 Routine Maintenance. PFC shall provide scheduled, routine maintenance service for the term of Station ownership and shall repair or, at its option, replace, any defective materials or workmanship at the Station at its own expense. At Customer's expense, PFC shall perform all other maintenance and shall repair or replace parts damaged by abuse or neglect on Customer's part. The customer is not liable for other third -party negligence. 2.3.2 Scheduling. To the extent reasonably possible, maintenance will be performed during such hours as to minimize Customer's "downtime ". PFC and the Customer shall mutually agree on such times. 2.3.3 Service Calls. In the event of an emergency (such as fire or a dangerous situation involving substantial risk of injury or material property damage) at the Station, PFC shall respond as soon as reasonably possible, but not more than one hour, following notification by Customer. In the event of other serious operational difficulties, PFC shall respond within a commercially reasonable period of time, but not more than four hours, following notification by Customer. Repairs shall be undertaken and completed with reasonable commercial diligence, considering the nature and extent of the relevant problem(s). Costs shall be borne by Customer or PFC in accordance with Section 2.3.1. 2.4 Training. PFC shall offer reasonable training programs to educate Customer's operating personnel as to procedures for the safe and efficient use of the Station, including, without limitation, procedures relating to vehicle fueling, troubleshooting and emergencies. -2- • • 2.5 Compliance with Law. In performing its obligations under this Agreement, PFC shall comply in all material respects with all applicable federal, state and local laws, regulations, ordinances and rulings, including (but not Limited to) those pertaining to health, safety, employment, construction and environmental matters. 2.6 PFC's Costs. PFC shall not charge Customer for the materials or labor utilized in providing the services specified in this Article 2. In the event that additional services are required involving the expansion of the station, Customer and PFC will negotiate any additional charges. 2.7 Subcontractors. PFC agrees that all subcontractors used by PFC in the construction of the Station will be licensed and bonded by the State of California and will be required to provide proof of insurance prior to such subcontractor undertaking any work. ARTICLE 3 CUSTOMER'S RESPONSIBILITIES 3.1 Maintenance of Premises. Customer shall maintain the Premises and the real property in the immediate vicinity of the Station in a clean, safe, and commercially reasonable condition suitable for vehicle refueling use. 3.2 Protection of PFC Equipment. Customer shall use reasonable commercial care in storing and protecting PFC's property, including spare parts for the Station and the Station itself; provided, that Customer shall have no obligation to insure the same or to indemnify PFC for loss or damage thereof, except as expressly provided in Articles 10 and 11 of this Agreement. 3.3 Refueling Vehicles. Customer shall refuel CNG Vehicles and provide competent Station operating personnel by employing personnel qualified to operate the Station in accordance with safe procedures and the requirements of law, and by providing appropriate training and supervision, including (but not limited to) scheduling such employees' attendance at any training sessions which may be provided by PFC pursuant to Section 2.4 of this Agreement. Notwithstanding the foregoing, Customer shall not be obligated to refuel CNG Vehicles or provide Station operating personnel in connection with PFC's operation of Public Dispenser. 3.4 Compliance with Law. In performing its obligations under this Agreement, Customer shall comply with all applicable federal, state and local laws, regulations, ordinances and rulings, including (but not limited to) those pertaining to health, safety, employment and environmental matters. 3.5 Payment of PFC Billings. Customer shall pay all bills submitted by PFC within thirty (30) days following receipt of invoice by Customer. For billing purposes, PFC shall provide Customer with individual fueling cards for each of Customer's CNG vehicles which will enable Customer to track individual fuel transactions for each CNG vehicle. 3.6 Customer's Costs. Except as otherwise specified in this Article 3 or as may be -3- . • separately agreed to in writing by PFC, Customer shall not charge PFC for the materials or labor utilized in providing the services specified in this Article 3. Customer shall be responsible for all taxes, maintenance and repair costs not expressly assumed by PFC under Article 2. 3.7 Permits. Customer shall provide, as promptly as possible, such permits as may be required by PFC to accomplish the installation of the Station, including, but not limited to, the compressor, the fuel dispenser, the magnetic card reader, underground piping, electrical service and natural gas supply line. 3.8 Reimbursement by Customer. Customer shall reimburse PFC for all costs incurred by PFC relating to site preparation and paving, including costs for permit fees (if any), driveways, utility installation (not user fees) and foundations for compressor equipment, fuel dispenser and magnetic car reader. PFC shall seek competitive bids for such work and agrees with Customer that such costs shall not exceed $50,000. The reimbursement can consist of Customers funds or other grant funds that the Customer submits for or PFC submits on behalf of the Customer. Customer agrees to reimburse PFC $45,000 at the completion of construction and the balance of $5,000 by the first anniversary of this agreement. ARTICLE 4 LICENSE TO USE PREMISES 4.1 Permitted Use. To enable PFC to fulfill its obligations as set forth in Article 2, Customer hereby licenses PFC to use the Premises for the purposes of constructing (as may be necessary, in PFC's reasonable discretion), owning, maintaining, and abandoning or removing the Station in accordance with the terms and conditions of this Agreement. Customer shall not, and shall not permit others to, levy any rent, charge, lien or encumbrance not expressly provided for in this Agreement against PFC for the use of the Premises or the Station. 4.2 Clear Title. Except as may be indicated on Schedule 4.2 hereto, Customer is, and at all times during the term of this Agreement shall remain, the sole owner of the Premises, free and clear of • all liens and encumbrances affecting the Station or PFC's performance hereunder; provided that, notwithstanding the foregoing, PFC shall have the right to grant a lien or encumbrance against its right, title and interest in that portion of the Premises on which the Station is constructed, or on which equipment relating to the Station is utilized or stored to a third party without the prior consent of Customer: Customer shall, as a condition of PFC's obligations hereunder, provide PFC with satisfactory evidence of Customer's clear, unencumbered title to the Premises and/or obtain the written consent to this Agreement, in form and substance satisfactory to PFC, of all other purported owners or encumbrances of the Premises (such as any lessor, lessee or mortgagee). Such consents shall be in recordable form and may be recorded at PFC's request and expense. 4.3 Memorandum of Agreement. Upon PFC's request, Customer shall execute a memorandum of this Agreement in recordable form, which may be recorded at PFC's request and expense. 4.4 Abandonment or Removal. Unless otherwise agreed to by the Parties in writing, upon termination of this Agreement PFC shall have the right, but not the obligation, at its sole expense, to either (i) remove the Station (including any and all merchandise, equipment, furnishings, fixtures, machinery and tools relating to the Stations, together with all additions, substitutions, replacements and improvements -4- • • to the same) from the Premises, or (ii) abandon the same in place by quitclaiming all of its right, title and interest therein to Customer; and thereafter PFC shall have no further rights or obligations under this Agreement with respect to the Station or the Premises. ARTICLE 5 TERM AND TERMINATION 5.1 Term. The initial term of this Agreement shall be for ten (10) years commencing on the date hereof. This Agreement shall automatically renew under the same terms and conditions for consecutive five (5) year terms unless (i) PFC gives notice of any changes in such terms or conditions to Customer at least two (2) weeks prior to such renewal or (ii) Customer gives PFC written notice of termination at least one (1) month prior to such renewal. In the event of changes in the terms or conditions hereof, such changes shall be agreed to in writing between the Parties. 5.2 Premature Removal. Customer agrees to (a) use the Station as its exclusive fuel source for CNG Vehicles during the term of this Agreement (b) have in operating not less than six (6) dedicated CNG vehicles by the second anniversary of this Agreement and (c) purchase dedicated CNG vehicles for all subsequent years of this Agreement when gasoline or diesel vehicles are replaced; provided, suitable original equipment manufacture vehicles are available. However, that in the event of an emergency, Customer shall be entitled to purchase CNG at locations other than the Station. If Customer's CNG vehicles deviate from the requirements set forth above, PFC shall have the option, notwithstanding any other provision in this Agreement to the contrary, to remove the Station and Customer agrees to pay for the cost of such removal. ARTICLE 6 PFC'S AND THIRD PARTIES' USE OF STATION 6.1 Fleet Access. PFC shall pay Customer the amount of $0.01 per gasoline gallon equivalent (125,000 BTU /gallon) of CNG (a "GGE ") sold at the Station's public access CNG dispenser. Payments relating to this Article 6 shall be made by PFC on a quarterly basis within ten (10) business days following the end of each calendar quarter. 6.2 Additional Fleet Users. Notwithstanding anything contained herein to the contrary, use of the Station by any new or additional fleets shall be subject to PFC's prior credit review, and the appropriate officials of such new or additional fleets shall sign insurance and indemnification agreements with Customer and PFC prior to using the Station; provided, that this Section 6.2 shall not apply to reasonable public usage of the Public Dispenser. ARTICLE 7 PURCHASE OF CNG 7.1. Pricing of CNG. Subject to Section 7.2 below, PFC shall provide Customer with CNG at a price of $.95 per GGE during the first year of this Agreement. Thereafter, the price per GGE -5- • • charged by PFC shall be as determined from time to time by PFC: provided, however, that in no event shall such price during any subsequent year exceed the amount by which the Consumer Price Index, as published in the Wall Street Journal, has increased from the date hereof through the date in question. In addition to the forgoing, Customer shall pay any and all applicable taxes and similar charges (including, but not limited to, any real property taxes related to the Premises). 7.2 Discount Pricing. Notwithstanding the provisions of Section 7.1 above, the price per GGE applicable to Customer pursuant to the provisions of Section 7.1 above shall be subject to certain volume incentive discounts described in this Section 7.2. During any calendar month during the teen of this Agreement, the price per GGE shall be reduced with respect to such month's purchases in accordance with the following table: Number of GGE Amount of Reduction Purchased by Customer In Price During month Less than 2,000 No Reduction 2,000 — 2,499 $0.01 2,500 — 2,999 0.02 3,000 — 3,499 0.03 3,500 — 3,999 0.04 4,000 and above 0.05 ARTICLE 8 CALIFORNIA USE FUEL TAX In accordance with the California Use Fuel Tax Law, PFC is currently required to collect and remit certain state taxes, including use fuel taxes, on CNG sold or delivered by the Station, subject to certain exceptions, as specified in Regulation 1318 of the California Board of Equalization. If Customer qualifies for one of these exceptions, Customer shall furnish to PFC appropriate certification authorizing non - payment of tax as specified in Use Fuel Tax Regulations 1319, 1320 and 1323. If .Customer fails to maintain its exception status, or for any other reason Customer's certification becomes invalid without Customer notifying PFC thereof, Customer agrees to indemnify PFC for all taxes, penalties and interest on underpayments pursuant thereto. Notwithstanding anything contained herein to the contrary, PFC shall be responsible for collecting and remitting all state and federal fuel taxes payable by Customer and relating to the terms of this Agreement. ARTICLE 9 PUBLICITY 9.1 Demonstration. At the request of PFC, Customer shall assist PFC in hosting demonstrations and seminars for interested members of the public, press and other fleet operators. As part of such demonstration, CNG Vehicles shall be driven over a short route by Customer drivers. • -6- • • 9.2 Mutual Approval. Customer and PFC shall each secure the prior written consent of the other before using the other Party's name in any publication or advertisement, which consent shall not be unreasonably withheld. ARTICLE 10 INDEMNIFICATION AND LIMITATION OF LIABILITY 10.1 Customer. Customer agrees to defend, indemnify and hold PFC harmless from and against any and all liability, loss, expense, attorneys' fees, or claims (including claims by third parties) for injury or damages arising out of the performance of this Agreement but only in proportion to and to the extent such liability, loss, expense, attomeys' fees or claims for injury or damages are caused by or result from the negligent or wrongful acts or omissions (including any material breaches of its obligations under this Agreement) of Customer, its officers, agents, or employees. 10.2 PFC. PFC agrees to defend, indemnity and hold Customer harmless from and against any and all liability, loss, expense, attorneys' fees, or claims (including claims by third parties) for injury or damages arising out of the performance of this Agreement but only in proportion to and to the extent such liability, loss, expense, attorney's fees or claims for injury or damages are caused by or result from the negligent or wrongful acts or omissions (including any material breaches of its obligations under this Agreement) of PFC, its officers, agents, or employees. 10.3 Disclaimer of Implied Warranties - PFC. Except as expressly set forth in this Agreement, PFC makes no representations or warranties, express or implied, with respect to the Station and makes no warranties, express or implied, of merchantability or fitness for intended use. 10.4 Disclaimer of Implied Warranties - Customer. Except as expressly set forth in this Agreement, including the attached description of the Premises, Customer makes no representations or warranties, express or implied, regarding the Premises and makes no warranties, express or implied, of merchantability or fitness for intended use. 10.5 Limitation of Liability. Neither Party shall be liable to the other for damages to the extent caused or contributed to by matters beyond the respective Party's reasonable control or by the other Party; nor, in any event, for any consequential or punitive damages, or damages measured by loss of profits. 10.6 Dispute Resolution. Any dispute, controversy or claim arising out of or relating to this Agreement or any contract or agreement entered into pursuant hereto or the performance by the parties of its or their terms shall be settled by binding arbitration held in Los Angeles, Califomia, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect, except as specifically otherwise provided in this Section. One neutral arbitrator shall be appointed. The arbitrator shall have authority to award relief under legal or equitable principles, including interim or preliminary relief, and to allocate responsibility for the costs of the arbitration and to award recovery of attomeys' fees and expenses in such manner as is determined to be appropriate by the arbitrator. Judgment upon the award rendered by the arbitrator may be entered in any court having in personam and subject matter jurisdiction. All proceedings under this Section, and all evidence given or discovered pursuant hereto, shall be maintained in -7- • • confidence by the Parties. The fact that the dispute resolution procedures specified in this Section shall have been or may be invoked shall not excuse any Party from performing its obligations under this Agreement and during the pendency of any such procedure, the Parties shall continue to perform their respective obligations in good faith, subject to any rights to terminate this Agreement that may be available to each Party. ARTICLE 11 • INSURANCE • PFC understands that the Customer is self - insured and that the Customer shall maintain such insurance in full force and effect during the life of this Agreement Customer shall send certificates of self - insurance evidencing such coverage within thirty (30) days after the date of this Agreement to: Pickens Fuel Corp. 3030 Old Ranch Parkway Suite 280 Seal Beach, CA 90740 Attn: Mr. Andrew J. Litticfair or Mr. James N. Harger Fax: (562) 493-4532 and Dick Grant, Controller 8117 Preston Road, Suite 260 Dallas, TX 75225 Fax: (214) 750 -9773 ARTICLE 12 NOTICES 12.1 Representatives. Each Party hereby designates the following as its representatives for purposes of the administration of this Agreement. Such designations may be changed from time to time pursuant to Section 12.3: -8- • • • PFC: Andrew J. Littlefair or James N. Harger Telephone: (562) 493 -2804 Fax: (562) 493 -4532 Customer: Keith R. Till, City Manager Telephone: (562) 431 -2527 Fax: (562) 430-8763 or Telephone: Stephen G. Badum. Director of Public Works Fax: (562) 430-8763 12.2 Notices. Any notice provided for in this Agreement, or any notice, which either Party may desire to give to the other, shall be in writing and shall only be deemed to be duly delivered upon receipt. Such notice shall in each instance be sent (i) by a telefax, confirmed by a telephone call as soon as possible during common business hours, with a confirming "hard" copy of the telefax mailed within twenty- four hours with postage prepaid, or (ii) by certified mail, return receipt requested, to the address of the Party indicated below, as such may be changed pursuant to Section 12.3: PFC: Pickens Fuel Corp. 3030 Old Ranch Parkway Suite 280 Seal Beach, CA 90470 Attn: Mr. Andrew J. Littlefair or Mr. James N. Harger Fax: (562) 493 -4532 With a copy to: Dick Grant, Controller 8117 Preston Road, Suite 260 Dallas, TX 75225 Fax: (214) 750-9773 City of Seal Beach: 211 Eighth Street Seal Beach, CA 90740 Attention: Keith Till, City Manager With a copy to: 211 Eighth Street Seal Beach, CA 90740 Attention: Steve Badum, Director of Public Works -9- • • 12.3 Changes. Either Party may change its representative or address for notice by sending notice of such change to the other Party at the address specified in Section 12.2 (as the same may be changed from time to time). ARTICLE 13 MISCELLANEOUS 13.1 Assignment. Neither Party shall have the right to assign its rights or obligations hereunder without obtaining the prior written consent of the other (which consent shall not be unreasonably withheld), and any attempted assignment without such prior written consent shall be void. Permitted assigns and successors in interest shall have the benefit of, and shall be bound by, all terms and conditions of this Agreement. Notwithstanding anything contained herein to the contrary, (i) PFC shall have the right at any time, but not the obligation, to assign its rights and obligations under this Agreement to a limited liability company under the same controlling interest as PFC, and (ii) either. Party may assign this Agreement to such Party's parent corporation or a wholly -owned subsidiary of the Party. 13.2 Complete Understanding, Written Modifications. This Agreement (i) shall be governed and construed in accordance with the internal laws of the State of California, (ii) expresses the entire agreement of the Parties with respect to the subject matter hereof, and (iii) supersedes all prior understandings, arrangements, representations and agreements between the Parties regarding such subject matter. Except as provided in Section 13.2 hereof, no term or condition hereof shall be amended, modified or waived except through an instrument in writing, executed by the Party or Parties to be bound thereby, nor, in any event, through course of performance, course of dealing or usage of trade. 13.3 Headings. The headings in this Agreement are for convenience and reference only, and shall not affect the interpretation of this Agreement. 13.4 No Joint Venture. PFC shall perform its duties herein as an independent contractor. Nothing contained herein shall be considered to create the relationship of employer and employee, partnership, joint venture or other association between the Parties, except as principal and independent contractor agent. 13.5 Waiver. 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 other default or defaults, whether of a like or different character. No waiver or modification of this Agreement shall occur as the result of any course of performance or usage of trade. -10- 1 1 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed by their duly authorized representatives, effective as of the date first set forth above. PICKENS FUEL CO, City of Seal Beach • 1 i _l_. u..Lil Andrew J. Lit fair, Presi• nt Keith R Till, City Manager -11-