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HomeMy WebLinkAboutRESO 9451Resolution No. 9451 Resolution of the Council of the City of Palo Alto Authorizing the City's Participation in a Future Natural Gas Purchase from Municipal Gas Acquisition and Supply Corporation for the City's Entire Retail Load, an Amount Estimated to be Approximately $150 Million over Ten Years, Waiving. the City's Choice of Law and Venue Requirements, and Authorizing the City Manager to Execute all Associated Agreements Required to Effect the Natural Gas Purchase RECITALS A. The City of La Grange (the "Sponsor'') and its instrumentality, the Municipal Gas Acquisition and Supply Corporation ("MuniGas"L have offered to sell natural gas to one or more municipalities pursuant to a joint purchasing program at prices substantially below prevailing market prices. B. Joint gas purchasing programs, or gas prepay transactions, are a mechanism for municipal utilities to utilize their tax-exempt status to achieve a discount on the market price of gas. Staff recommends that the City participate in a gas prepay transaction by purchasing gas from MuniGas at a discounted price, and taking delivery of the gas from one of the City's existing suppliers that also participates in the MuniGas program. C. The City of Palo Alto (the "City'') desires to purchase gas via the gas prepay transaction on such terms to reduce the cost of gas commodity supplies, for the benefit of Palo Alto Gas Utility customers. D. The City currently purchases its gas requirements from JP Morgan Ventures Energy Corporation, Shell Energy North America, L.P., ConocoPhillips Company, BP Energy Company, and Powerex Corporation (the "Suppliers") and desires to amend three to five of those agreements to enable the City to purchase gas pursuant to such program. E. On June 4, 2014, the Utilities Advisory Commission voted unanimously (4-0, with Commissioners Chang, Foster and Hall absent) to recommend that City Council approve the City's participation in a natural gas purchase from Municipal Gas Acquisition and Supply Corporation for the City's entire retail load, an amount estimated to be approximately $150 million over ten years, waive the City's choice of law and venue requirements, and authorize the City Manager to execute all associated agreements required to effect the natural gas purchase. F. On August 5, 2014, the Finance Committee voted unanimously (4-0) to recommend that City Council approve the City's participation in a natural gas purchase from Municipal Gas Acquisition and Supply Corporation for the City's entire retail load, an amount estimated to be approximately $150 million over ten years, waive the City's choice of law and venue requirements, and authorize the City Manager to execute all associated agreements required to effect the natural gas purchase. 140519 jb 6053050 1 The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council authorizes the City's participation in a natural gas purchase from Municipal Gas Acquisition and Supply Corporation for the City's entire load, amount estimated to be approximately $150 million over ten years. SECTION 2. The terms of the Purchase Contract with the Sponsor and MuniGas, a Participant Addendum with MuniGas and BP Energy Company, and a Supplier Addendum with the Supplier and BP Energy Company, each attached to this Resolution as Exhibits A, Band C, are hereby approved as presented. SECTION 3. The City Manager of Palo Alto is authorized to execute and deliver such Purchase Contract and Supplier Addendum, making any such changes not affecting the essential terms of the Purchase Contract and Supplier Addendum as the Council may approve, on behalf of the City. SECTION 4. The Sponsor is authorized to purchase gas on behalf of the City solely in accordance with the terms of such Purchase Contract and Supplier Addendum, as required to deliver gas in the amounts and on the terms to be purchased by the City under such Purchase Contract from and after its execution. SECTION 5. The Council hereby waives the choice of law and venue requirements of Section 2.30.340(c) of Palo Alto's Municipal Code, to permit the City to purchase gas via the terms of the Purchase Contact with the Sponsor and MuniGas, and the Supplier Addendum with the Supplier and BP Energy Company, under Texas law. SECTION 6. The City Manager of the City is authorized to take any and all action required to observe and perform the obligations of the City under such Purchase Contract and Supplier Addendum from and after its execution. SECTION 7. The Council's approval of a gas purchase from MuniGas, including Council's approval of all related documents required to affect the Gas Prepay Transaction, does not meet the definition of a project, pursuant to section 21065 of the California Environmental 140519 jb 6053050 2 Quality Act (CEQA). In the alternative, Council's authorization of a gas purchase from MuniGas is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines because it can be seen with certainty that there is no possibility of significant environmental effects occurring as a result. INTRODUCED AND PASSED: September 15, 2014 AYES: BERMAN, BURT, HOLMAN, KLEIN, KNISS, PRICE, SCHARFF, SCHMID, SHEPHERD NOES: ABSENT: ABSTENTIONS: APPROVED AS TO FORM: APPROVED: ~ Attachments: A. Purchase Contract B. Participant Addendum C. Supplier Addendum 140519 jb 6053050 3 PURCHASE CONTRACT 1. Joint Purchase Contract. The Buyer specified below hereby becomes a party to and, except to the extent described herein, assumes all rights and obligations of a "Buyer" under the Joint Gas Purchase Contract, dated as of January I, 2006 (the "Joint Contract'), among MuniGas (specified below), the Agent (specified below), and Local Governments and State Agencies, as therein defined, who become parties thereto, and MuniGas and the Agent hereby consent thereto. The terms of the Joint Contract are hereby incorporated herein by reference. 2. Category of Purchaser. The Buyer is [check and complete one or more]: D a Requirements Buyer described in Section 6.03A(__j of the Joint Contract, D a Conditional Buyer described in Section 6.03A(_j of the Joint Contract, and/or D an Exempt Gas Buyer, because it will accept Exempt Gas to satisfy all or any part of its Requirements without further action on its part. 3. Purchase of Gas. The Buyer agrees to receive and buy from the Agent, and the Agent agrees to sell and deliver to the Buyer, at the Delivery Point, the Buyer's Nominated Quantities of Gas during the term of this Purchase Contract, which shall not exceed the Buyer's Requirements in any Contract Year. The Buyer agrees to nominate Gas for purchase so that it will buy from the Agent not less than the Buyer's Requirements in any Contract Year (subject to the next paragraph), to the extent Gas is available for delivery to the Buyer under the Joint Contract and except as otherwise provided therein, at the price specified below. 4. Maximum Annual Quantity. The Maximum Annual Quantity of Gas that the Buyer agrees to nominate for purchase hereunder, up to its Requirements and subject to the conditions provided in the Joint Contract, in each Contract Year is: D its Requirements or D as specified in Schedule A attached hereto. 5. Price. The Buyer will pay for all Gas purchased and received by it hereunder in any period at a price equal to the Gross Price identified herein for such period less the Discount determined by MuniGas in accordance with the Joint Contract and then in effect. The Buyer will be entitled to a partial rebate of such payments when, as, and to the extent that rebates are declared by MuniGas under the Joint Contract. 6. Delivery and Gross Price. A Balancing Agreement between MuniGas and a Balancer will be used by MuniGas to deliver Gas to the Buyer, unless otherwise agreed by MuniGas and the Buyer. One or more of the Buyer's existing Suppliers is expected to execute a Supplier-Exchanger Agreement with such Balancer. For so long as such or any replacement Balancing Agreement and Supplier-Exchanger Agreement are in effect in respect of the Buyer, the Buyer's Gross Price for each Day and Month will be the weighted average prices payable by the Buyer (if a Requirements Buyer) under its Supply Contract with each such Supplier (or substitute Supplier which has so agreed) or payable by the Balancer with the consent of the Buyer under a Supplier-Exchanger Agreement (if a Conditional Buyer), for Gas delivered to the Buyer in such Day or Month, and the Buyer's Delivery Points will be the points specified in such Supply Contracts with such Suppliers (if a Requirements Buyer) or in such Supplier-Exchanger Agreements (if a Conditional Buyer), unless otherwise agreed by MuniGas and the Buyer. Thereafter, the Buyer's Delivery Points and Gross Price will be as provided in the Joint Contract or as agreed to between them in writing. 46166195.2 Palo Alto Purchase Contract 7. Use. The Buyer will use all Gas purchased hereunder (or Gas exchanged therefor) [check one or more]: 0 in its electric utility system to generate electric power and/or 0 in its gas utility system or enterprise and/or 0 to secure a discount in the electric energy charges paid by it or (in the case of a political subdivision corporation) its member buyers and/or 0 for consumption in its (or for resale to other Local Governments and State Agencies for consumption in their) other public facilities. The Buyer agrees that all Exempt Gas sold and delivered to it under the Joint Contract will be consumed in, or to produce electric energy consumed in, qualified service areas and qualified annexed areas and that no such Exempt Gas will be used in a private trade or business or to make a private loan, as provided more fully and except as permitted by Article Ten of the Joint Contract. 8. Address. The address of the Buyer for notices received under the Joint Contract is: 9. Special Provisions. Telephone No. L_) ______ _ Facsimile No. (__J -------- Internet: ------------ (A) The Buyer shall forecast, nominate, and sell or burn Gas such that all such Gas is (1) furnished to customers of the Buyer who purchase such Gas other than for resale or to produce electricity for sale and are located in either (a) an area throughout which the Buyer provided natural gas transmission or distribution services at all times during the 5-year period ending on the date of issue of the bonds issued by MuniGas or an affiliate to finance the acquisition of such Gas or (b) an area recognized as the natural gas service area ofthe Buyer under state or federal law, or (2) used by the Buyer to produce electricity that is furnished to electric customers of the Buyer who purchase such electricity other than for resale and are located in either (a) an area throughout which the Buyer provided electricity distribution service at all times during such 5-year period or (b) an area recognized as the electricity service area of the Buyer under state or federal law, all determined in accordance with written explanations provided by MuniGas to the Buyer from time to time, or (3) used by the Buyer to produce electricity that (a) is sold to a utility owned by a state or local government and is furnished by such utility to electric customers of such utility who purchase such electricity other than for resale and are located in either (i) an area throughout which such utility provided electricity distribution service at all times during such 5-year period or (ii) an area recognized as the electricity service area of such entity under state or federal1aw, all determined in accordance with written explanations provided by MuniGas to such entity from time to time, or (b) is sold to a local government or state agency that subsequently sells such electricity as described in clause 3(a), or ( 4) sold to a utility owned by a state or local government that furnishes or uses such gas solely as described in the immediately preceding clauses (1 ), (2), and (3), applied as if references to "the Buyer" therein were to such utility, or (5) used to fuel the pipeline transportation of such Gas. The Buyer shall not sell electricity that is produced using Gas to a local government or state agency pursuant to clause 3(b) above unless such local government or state agency has agreed in writing to use such electricity in accordance with this Section 9(A), and has agreed, upon request from MuniGas, to provide evidence from the utilities owned by state or local governments to whom it sells electricity that such electricity is furnished to its customers in accordance with the requirements set forth in this Section 9(A). (B) In no event shall any Gas produced from mineral interests located in the State of Texas and owned by the Agent, MuniGas, or any affiliated corporation, or exchanged for any Gas so produced, be available for sale by MuniGas through the Agent to the Buyer. 46166195.2 Palo Alto Purchase Contract 2 (C) Notwithstanding the Effective Date established in Section 10 of this Purchase Contract, the Buyer agrees that neither MuniGas nor the Agent shall be obligated to commence initial gas deliveries under this Purchase Contract until MuniGas, in MuniGas' sole determination, has acquired sufficient additional Production Rights to enable MuniGas to sell and Buyer to purchase the Maximum Annual Quantity specified in Schedule A without adversely affecting its ability to meet the full requirements of all other Buyers that have equal or better priority to allocations of Gas under the terms of the Joint Contract and have become a party thereto prior to the execution of this Purchase Contract. (D) The Buyer may terminate this Purchase Contract after 180 days after the Effective Date established in Section 10, in the Buyer's sole discretion, on at least 75 days prior written notice of termination to MuniGas and the Agent specifying the termination date, unless prior to the specified date, MuniGas and the Agent have become obligated to commence initial deliveries of Gas in accordance with paragraph 9(C) of this Purchase Contract. (E) The Buyer represents that: (1) the obligations of the Buyer under this Purchase Contract, and any renewal or extension hereof are payable as maintenance and operation costs of the Buyer's gas utility system, and all such payments are payable prior to the debt obligations of the Buyer, (2) at the time of entering into this Purchase Contract, and each annual or other renewal and extension hereof, the Buyer has not defaulted in payment of the Buyer's obligations under any natural gas purchase contract in the immediately preceding 10 years due to circumstances reflecting adversely on such Buyer's credit, and (3) in the event the representations described in the immediately preceding clauses (1) or (2) cannot be satisfied at the time as of which the Buyer may elect not to extend the term of this Purchase Contract, the Buyer will notify MuniGas of such fact and exercise such election not to extend, unless otherwise agreed by MuniGas. (F) All amounts to be paid to or deposited with MuniGas hereunder shall be paid to or deposited with The Bank of New York Mellon Trust Company, N.A. (or any successor trustee designated by MuniGas in writing) by wire transfer of immediately available funds to such trustee in accordance with the following instructions or such other instructions as may be designated to the Buyer by MuniGas in writing: The Bank ofNew York Mellon, Dallas, Texas ABA# 021 000 018 GLA# 111-565, T AS# 224385 Attn: Jully Jiang (713) 483-7062 Ref: MuniGas (G) MuniGas and the Agent consent to the assignment of this Purchase Contract by Buyer to any Local Government or State Agency, whether within or outside the State of Texas, pursuant to the provisions of and with the effect described in Section 11.04 of the Joint Contract, provided that any change in Delivery Point shall be subject to MuniGas' consent which shall not be unreasonably withheld in accordance with such Section and any assignment by Buyer shall be subject to the approval by MuniGas of the credit standing of the assignee as determined by MuniGas in its sole discretion. (H) MuniGas and Agent acknowledge that Buyer is subject to the California Constitution Article 1, Section 3, and the California Public Records Act, Cal. Gov. Code§ 6250 et seq. ("Public Records Acf') in regard to this Purchase Contract, the Joint Contract and related documents (the "Disclosed Documents"), which may constitute public records subject to inspection and copying by the public under the authority of the California Constitution and the Public Records Act. Buyer shall, consistent with those laws, use reasonable efforts to provide MuniGas and/or the Agent with notice of any third party request to inspect and copy any of the Disclosed Documents, which MuniGas and/or the Agent might deem confidential and exempt from disclosure, in order that MuniGas and/or the Agent may timely seek to protect those documents from disclosure to the third party. MuniGas and the Agent acknowledge and agree that Buyer shall not be liable to MuniGas or the Agent if Buyer makes disclosure in accordance with the California Constitution and/or the Public Records Act before MuniGas and/or the Agent has timely obtained an order to prevent Buyer from making the requested disclosure to the third party. MuniGas and the Agent further agree that each shall defend, indemnify and hold Buyer harmless against any claim, 46166195.2 Palo Alto Purchase Contract 3 action or litigation (including, but not limited to, all judgments, costs, fees and attorneys' fees (including on appeal)) that may result from denial by Buyer of a Public Records Act request. 10. Term. This Purchase Contract shall commence on the Effective Date hereof, which is the latest of the effective dates of the Balancing Agreement and initial Supplier-Exchanger Agreement referred to above and May 1, 2014, and shall extend to December 31, 2023. The term of this Purchase Contract shall automatically be extended by one year on each December 31, unless the Buyer, MuniGas, or the Agent has given written notice to the other two parties of its election not to extend the term of this Purchase Contract prior to such December 31, but in no event shall the term of this Purchase Contract be extended beyond December 31, 2045, except by written amendment executed by the parties hereto. This Purchase Contract may be phased out at the election of the Buyer as described in the Joint Contract. [Signature page follows] 46166195.2 Palo Alto Purchase Contract 4 The parties hereto have caused this Purchase Contract to be duly executed, effective as of the Effective Date described above. Attest/Countersign: Name: ................................................. . Title: ................................................... .. Attest/Countersign: Name: Lisa Oltmann Title: City Secretary Attest: Name: Janetta Morris Title: Secretary 46166195.2 Palo Alto Purchase Contract BUYER: CITY OF PALO ALTO, CALIFORNIA By: ............................................................................................. . Name: ...................................................................................... .. Title: ......................................................................................... . AGENT: CITY OF LA GRANGE, TEXAS By: ............................................................................................ .. Name: Janet Moerbe Title: Mayor MUNIGAS: MUNICIPAL GAS ACQUISITION AND SUPPLY CORPORATION By: ............................................................................................. . Name: Glen Pape Title: President 5 Schedule A to Purchase Contract The Buyer's Maximum Annual Quantity, if any, and projected Requirements (each expressed in MMBtus) in each Contract Year are as follows: Maximum Annual Quantity Year (if applicable) Projected Requirements 2014 N/A 2015 N/A 2016 N/A 2017 N/A 2018 N/A 2019-2045 N/A 46166195.2 Palo Alto Purchase Contract 6 ADDENDUM TO GAS SUPPLY CONTRACT This Addendum to Gas Supply Contract (this "Addendum"), dated as of _, 2014, among , (hereinafter referred to as the "Buyer"), (hereinafter referred to as the "Supplier"), and BP Energy Company, a Delaware corporation (hereinafter referred to as the "Dealer"), WITNESSETH: WHEREAS, the Buyer and the Supplier have entered into a contract dated as of _____ _ (hereinafter, together with extensions and replacements thereof and amendments thereto entered into by the Buyer and the Supplier, referred to as the "Supply Contract"), under which, for the term, on the conditions, and up to the maximum amount specified therein, the Supplier has agreed to sell and deliver to the Buyer, at the point or points designated therein or pursuant thereto (hereinafter referred to as the "Buyer's Point of Receipt"), a portion of the Buyer's requirements for natural gas in accordance with transactions agreed to by them from time to time; WHEREAS, Municipal Gas Acquisition and Supply Corporation (hereinafter referred to as "MuniGas'') has offered to admit the Buyer as a party to a Joint Gas Purchase Contract, dated as of January 1, 2006 (hereinafter, as amended from time to time, referred to as the "Cooperative Contract") under which MuniGas would sell and deliver through the City of La Grange, Texas (herein referred to as the "Agenf') to the Buyer, and the Buyer would receive and purchase from the Agent, at the Buyer's Point of Receipt certain quantities of gas at a lower price than the price of gas delivered to the Buyer by or on behalf of the Supplier pursuant to the Supply Contract; WHEREAS, in order to enable MuniGas to perform its obligations under the Cooperative Contract without excessive transportation costs for (and to accommodate seasonal imbalances in supply of and demand for) all or a portion of the gas to be sold and delivered to the Buyer pursuant to the Cooperative Contract, MuniGas and the Dealer have entered into a Gas Exchange and Annual Balancing Agreement, dated as of January 1, 2006 (as amended from time to time, herein referred to as the "Exchange Agreement") under which the Dealer is required to deliver certain quantities of gas to MuniGas at the Buyer's Point of Receipt, from and to the extent of gas sold and delivered to the Dealer by the Supplier pursuant hereto, in exchange for gas delivered by MuniGas to the Dealer at one or more other locations; WHEREAS, the Supplier is willing to enter into this Addendum to sell and deliver gas to the Dealer at the Buyer's Point of Receipt and to reduce the quantities of gas required to be received and purchased by the Buyer from the Supplier at the Buyer's Point of Receipt pursuant to the Supply Contract; and WHEREAS, although the gas sales agreement between the Supplier and the Dealer and the amendment to the Supply Contract between the Buyer and the Supplier, respectively, are being documented together in this Addendum for convenience, they are independent two-party transactions for which other parties to this Addendum bear no liability (except only as expressly stated herein); NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants, agreements, conditions, and undertakings herein set forth, the parties hereto agree as follows: 1. Sale and Delivery to the Dealer. On each day while the Supply Contract and this Addendum are in effect, the Supplier shall sell and deliver to or for the account of the Dealer, and the Dealer shall receive or cause to be received and purchased from the Supplier, at the Buyer's Point of [Non-BPEC] Supplier Addendum 1 Receipt and for the same price as the price for gas sold and delivered by the Supplier to the Buyer pursuant to the Supply Contract, quantities of gas equal to the Supplier's Share of the quantities of gas nominated and confirmed for delivery to the Buyer at the Buyer's Point of Receipt on such day pursuant to the Cooperative Contract, but not more than the lesser of (a) the maximum quantity of gas then required to be sold and delivered by the Supplier to the Buyer at the Buyer's Point of Receipt pursuant to the Supply Contract, determined without giving effect to Section 2 hereof, or (b) the Supplier's Share of the quantity of gas which MuniGas schedules for delivery to the Buyer on such day at the Buyer's Point of Receipt. Such sale and purchase of gas between the Supplier and the Dealer shall be made on the same terms (including warranties and indemnities of the Supplier and the effect of force majeure) and subject to the same conditions as the terms and conditions of the Supply Contract to the same extent and for all purposes as if the Supplier and the Dealer had entered into the Supply Contract, except as otherwise provided herein and except that the Dealer shall not make (and shall not be deemed to have made) any representations, warranties, covenants, or certifications of the Buyer or the Supplier under the Supply Contract and the Supplier shall not have the right to audit the Dealer's books and records. If more than one price is set forth in the Supply Contract for gas sold and delivered thereunder by the Supplier (e.g., due to graduated volume discounts), the price for gas sold to the Dealer pursuant to this paragraph shall be the weighted average price (determined in accordance with Section 3 hereof) for gas sold and delivered by the Supplier to the Buyer pursuant to the Supply Contract. The Buyer and the Supplier acknowledge that the net amounts payable by the Buyer to the Supplier pursuant to the Supply Contract (as amended by this Addendum) shall equal the amounts payable by the Buyer to the Supplier pursuant to the Supply Contract (determined as if not amended by this Addendum), less the amounts payable by the Dealer to the Supplier pursuant to this Addendum. As used herein, the "Supplier's Share" for any day or month is equal to a fraction, the numerator of which is equal to quantity of gas then required to be sold and delivered by the Supplier to the Buyer at the Buyer's Point of Receipt pursuant to the Supply Contract, determined without giving effect to Section 2 hereof, and the denominator of which is equal to the aggregate quantities of gas then required to be sold and delivered to the Buyer at the Buyer's Point of Receipt by the Supplier and all other gas producers and dealers who have entered into Addenda with the Buyer and the Dealer substantially similar to this Addendum (determined without giving effect to such Addenda). If the Buyer specifies a Supplier's Share that causes the limitations described in this Section to be exceeded, then such confirmation shall be deemed to confirm a sale from the Supplier to the Buyer, rather than to the Dealer, to the extent of any such excess. The Buyer shall receive from MuniGas at the Buyer's Point of Receipt all gas there delivered by the Supplier to the Dealer hereunder, and the Dealer shall be obligated to receive gas from the Supplier hereunder only to the extent of such receipt by the Buyer. 2. Sale and Delivery to Buyer. The quantity of gas to be sold and delivered by the Supplier to the Buyer and received and purchased by the Buyer from the Supplier at the Buyer's Point of Receipt pursuant to the Supply Contract on each day shall be reduced by the quantity of gas sold and delivered by the Supplier to or for the account of the Dealer at the Buyer's Point of Receipt pursuant to Section 1 hereof, and the Buyer and the Supplier release each other from all obligations under the Supply Contract relating to such quantity of gas, other than the representations, warranties, covenants, and certifications of the Buyer in respect thereofthat are not made by the Dealer hereunder. If more than one price is set forth in the Supply Contract for gas sold and delivered thereunder by the Supplier, then the price at which such reduced quantity of gas shall be sold to and purchased by the Buyer thereunder shall be equal to the weighted average price referred to in Section 1 hereof. 3. Payments. The Buyer shall send (or shall cause the Supplier to send) a copy of each transaction confirmation to MuniGas when and as issued or received, and the Buyer shall also compute and, on or before the last business day of each month, shall notify MuniGas and the Supplier of the Supplier's Share of all gas confirmed for delivery by MuniGas to the Buyer at the Buyer's Point of Receipt in such month pursuant to the Cooperative Contract. MuniGas shall provide a copy of the [Non-BPEC] Supplier Addendum 2 transaction confirmation to Dealer upon request. To the extent of gas delivered by the Supplier at the Buyer's Point of Receipt in such month, the Supplier's Share of the quantities so notified by MuniGas shall be deemed to be delivered to the Dealer, rather than to the Buyer, in such month, subject to the further provisions of this paragraph. The Supplier shall cause such deliveries to be invoiced to the Dealer, at the price referred to in Section I hereof, by the 1Oth day of the following month, and the Dealer shall pay for such deliveries by the later of the 25th day of such following month or 10 days after receipt of such invoice or, if the day for such payment is not a Business Day, then on the next Business Day. All other gas delivered by the Supplier at the Buyer's Point of Receipt in such month shall be deemed to be delivered and shall be invoiced by the Supplier to the Buyer at the same price in accordance with the provisions of the Supply Contract. Solely for purposes of computing any applicable weighted average price, all gas sold and delivered by the Supplier to the Buyer or the Dealer at the Buyer's Point of Receipt in such month pursuant to this Addendum or the Supply Contract shall be deemed to have been sold and delivered to the Buyer. The Dealer shall be entitled to net and set off amounts owing to Supplier hereunder against any other amounts owed by the Supplier to the Dealer under any other agreement between the Supplier and the Dealer. The Buyer does not guaranty and shall not be liable for any payment owed by any other party hereto to any other party hereto. 4. No Liability; Indemnity. The Supplier and the Buyer agree that the Dealer shall not be liable under any theory to the Supplier or the Buyer for (a) any breach by the Buyer of any term of the Supply Contract, the Cooperative Contract, this Addendum, or any other contract to which the Buyer is a party, (b) any breach by the Supplier of any of the terms of the Supply Contract, this Addendum, or any other contract to which it is a party, or (c) any breach by either the Supplier or the Buyer, or their agents, of any duty of care, law, regulation, or other legal obligation applicable to it, for gas sold and delivered by the Supplier to the Buyer (or to the Dealer hereunder) pursuant to the Supply Contract or any other supply arrangement applicable to any third party seller of gas to the Buyer (or to the Dealer hereunder). The Dealer and the Buyer agree that the Supplier likewise shall not be liable under any theory to the Buyer or the Dealer for (a) any breach by the Buyer of any term of the Supply Contract, the Cooperative Contract, or any other contract to which the Buyer is a party, (b) any breach by the Dealer of any ofthe terms of the Exchange Agreement or any other contract to which it is a party, or (c) any breach by either the Dealer or the Buyer of any duty of care, law, regulation, or other legal obligation applicable to it, for gas sold or exchanged and delivered by the Dealer pursuant to the Exchange Agreement. In addition, the Dealer shall have no obligation to nominate or confirm for delivery any quantity of gas for any period. Except for the obligations to receive and purchase gas at the price described in Section I, the Dealer shall have no obligations or liabilities in favor of the Supplier or any other person hereunder or under the Supply Contract (whether or not in the context of force majeure), including, without limitation, obligations or liabilities (i) for taxes, warranties of title or merchantability, royalties, indemnities, scheduling fees, imbalance charges, overpull or unauthorized gas penalties or charges, operational flow order penalties or charges, or similar costs, or losses resulting from the liquidation of hedge positions or (ii) to maintain or operate any measurement or transportation facilities, to manage transportation contracts or pipeline capacity, to enter into financial hedge transactions with the Buyer, to provide risk management services or consulting services of any type (including, but not limited to, hedging strategies, projecting gas supply costs and fuel requirements, or regulatory services), to pay any early termination damages or cover damages, to provide security or collateral, to provide any type of fixed price, trigger price, or other risk management products to Buyer, or to act as agent in any capacity for Buyer or Supplier under the Supply Contract. The obligations of the Dealer to the Supplier hereunder shall not be affected by any failure by MuniGas to observe and perform its obligations under the Exchange Agreement or any imbalance existing thereunder. The Supplier acknowledges that any event which constitutes force majeure or otherwise excuses performance by the Buyer under the Supply Contract or by MuniGas under the Exchange Agreement or Cooperative Contract with respect to any receipt or purchase of gas supplied pursuant to this Addendum, including any breach by contractual counterparties under any related contract that has such effect, shall excuse performance by the Dealer hereunder. [Non-BPEC] Supplier Addendum 3 The Supplier shall indemnify the Dealer and hold it harmless from and against any loss, cost or liability accruing to the Dealer resulting from (a) any claim by the Buyer or any other person of breach by the Supplier of, or negligence or misconduct by the Supplier in performance under, the Supply Contract or this Addendum, or breach of any duty of care, law, regulation, or other legal obligation applicable to the Supplier in connection therewith or herewith, (b) any claim which attaches before title to gas sold and delivered by the Supplier to the Dealer hereunder passes to the Dealer, and (c) any failure of gas sold and delivered by the Supplier to the Dealer hereunder to meet quality standards under the Supply Contract. 5. Nondisclosure by Dealer. The Dealer shall not disclose to any person the terms of the Supply Contract (the "Confidential Information") except for disclosures of such terms (i) to Municipal Energy Resources Partners, Ltd. ("MERP'), Municipal Energy Resources Corporation ("MERC'), MuniGas, and directors, officers, employees, contractors, auditors, agents, and representatives of and counsel to the Dealer and the Dealer's parent companies and affiliates (the "Representatives"), MERP, MERC, or MuniGas who need the Confidential Information for purposes of performing the services provided under this Addendum, the Exchange Agreement, and all other documents executed by Dealer in connection herewith and therewith or (ii) that are requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand, or other similar process) to be disclosed or otherwise are required to be disclosed by law or in connection with legal proceedings regarding this Addendum, or the Exchange Agreement or the enforcement hereof or thereof. Notwithstanding the foregoing, the following will not constitute Confidential Information for purposes of this Addendum, or the Exchange Agreement: (i) information which is or becomes generally available to the public other than as a result of a disclosure by the Dealer or its Representatives; (ii) information which was already known to the Dealer on a nonconfidential basis prior to being furnished to the Dealer by the Supplier or the Buyer; and (iii) information which becomes available to the Dealer on a nonconfidential basis from a source other than the Supplier or the Buyer or a representative of the Supplier or the Buyer, if such source was not subject to any prohibition against transmitting the information to the Dealer and was not bound by a confidentiality agreement with the Supplier or the Buyer. 6. Governing Law. This Addendum shall be governed by and construed in accordance with the Jaws of the State of Texas. 7. Notices. Except as otherwise provided in this Addendum, any notice, request, demand, statement, bill, or other document required to be given to any party by this Addendum, and any notice which any party hereto may desire to give any other party hereto, shall be in writing and will be considered duly delivered when mailed by registered mail, return receipt requested, or sent by facsimile or electronic transmission with receipt acknowledged, to the address or number of the receiving party listed opposite its signature below or to any other address or number previously furnished in writing for such purpose by the receiving party to the other parties hereto. 8. Successors and Assigns. The provisions of this Addendum shall be binding upon and inure to the benefit of the successors and assigns of each of the parties hereto. No party hereto may assign any of its rights or obligations hereunder without the consent of the other parties hereto, except to a trustee, individual or corporate, as security for bonds, securities, or other contractual obligations. No such consent shall be unreasonably withheld, provided that any party may refuse so to consent if the assignee does not meet such party's credit requirements. Upon such consent and assignment, the assigning party shall be released from all further liability hereunder, unless otherwise agreed by it. 9. Waivers. No waiver by any party hereto of any default by any other party hereto in the observance or performance of any provision of this Addendum shall operate as a waiver of any future default, whether of a like or of a different character. [Non-BPEC] Supplier Addendum 4 10. Relationship Between the Parties. In connection with the negotiation of, the entering into, and the confirming of the execution of this Contract, each party acknowledges and agrees: (i) it is acting as principal (and not as agent or in any other capacity, fiduciary or otherwise); (ii) the other party is not acting as a fiduciary or financial or investment advisor for it; (iii) it is not relying upon any representations (whether written or oral) of the other party; (iv) the other party has not given to it (directly or indirectly through any other person) any advice, counsel, assurance, guaranty, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of this Contract; ( v) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisors to the extent it has deemed necessary, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any advice from such advisors as it has deemed necessary, and not upon any view expressed by the other party; (vi) all trading decisions have been the result of arm's length negotiations between the parties; and (vii) it is entering into this Contract with a full understanding of all of the risks hereof and thereof (economic and otherwise), and it is capable of assuming and willing to assume those risks (economic and otherwise). 11. Entire Addendum. This Addendum and the Supply Contract contain the entire agreement among the parties, and except as stated herein or therein there are no oral promises, agreements, warranties, obligations, or conditions, precedent or otherwise, affecting it. 12. Amendments. Any change, modification, or alteration of this Addendum shall be in writing, signed by the parties hereto, and no course of dealing between or among any parties hereto shall be construed to alter any term hereof, except as expressly stated herein. No amendment to the Supply Contract shall affect the rights and obligations of the Dealer hereunder (other than changing the price at which gas is to be purchased by it hereunder) unless approved in writing by the Dealer. The Buyer shall provide the Dealer and MuniGas with a copy of each such amendment promptly after execution thereof. 13. Severability. Except as otherwise stated herein, if any provision hereof or application thereof shall be declared or rendered unlawful by a court of law or regulatory agency with jurisdiction over any party hereto or deemed unlawful because of a statutory change, the remaining applications thereof and provisions of this Addendum shall nevertheless remain valid and enforceable. 14. Corporate Obligations. No recourse under or upon any obligation, covenant, or agreement contained in this Addendum, or for any claim based thereon or otherwise arising in respect thereof, shall be had against any incorporator or sponsor, or against any past, present, or future director, officer, employee, or member of the governing body, as such, of any party hereto or of any successor, or against any person or entity with whom any such party has contracted for goods or services, either directly or through such party, whether by virtue of any constitution or statute or rule of law, or by the enforcement of any assessment, judgment, or penalty, or otherwise; it being expressly understood that this Addendum is solely a corporate obligation, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, sponsors, directors, officers, or employees, as such, of such party or any successor, or any member of its governing body, or any such contracting person, or any of them, by reason of the obligations, covenants, or agreements contained in this Addendum or implied therefrom, and that any and all such personal liability either at common law or equity or by constitution or statute of, and any and all such rights and claims against, every such incorporator, sponsor, member, director, officer, employee, or person, as such, are hereby expressly waived and released as a condition of, and in consideration for, the execution of this Addendum. [Non-BPEC] Supplier Addendum 5 15. Government Regulation. The delivery and receipt of gas by the Dealer, the Buyer, and the Supplier or their designees hereunder are subject to all valid laws with respect to the subject matter . hereof and to all valid present and future orders, rules, and regulations of duly constituted governmental authorities having jurisdiction. 16. Benefits of Contract. Nothing in this Addendum, expressed or implied, shall give any benefit or any legal or equitable right, remedy, or claim under this Addendum to any person or entity other than the parties hereto, MuniGas, and their successors and assigns permitted hereby. 17. Effective Date. Notwithstanding the date hereof, this Addendum shall not become operative or effective until the first day of the month following the later of (1) the effective date for qualification of the Buyer as a "Participant" under the Exchange Agreement and (2) first effective date for designation of a "Dealer's Point of Receipt" under the Exchange Agreement. 18. Term and Termination. This Addendum shall extend for a period of 30 years unless sooner terminated pursuant to this Section. This Addendum shall terminate on the earliest of (a) the cancellation, termination, or expiration of the Supply Contract, (b) the extension, renewal, modification, amendment, or replacement of the Supply Contract in a manner that adversely affects the rights and obligations of the Dealer hereunder (other than by changing the price at which gas is to be purchased by it hereunder) without the prior written approval ofthe Dealer, or (c) cancellation, termination, or expiration of the Exchange Agreement or of the rights and obligations of the Buyer under the Cooperative Contract. The Buyer, the Supplier, and the Dealer shall give the other parties notice of any such event which is known to it and would result in the termination of this Addendum. In addition, the Supplier may terminate this Addendum on account of any default by the Dealer in paying its obligations hereunder on the same terms and conditions as the Supplier may terminate the Supply Contract on account of any such default by the Buyer in paying its obligations thereunder. No such termination shall affect the obligations of the Supplier to indemnify the Dealer. [Signature page follows] [Non-BPEC] Supplier Addendum 6 IN WITNESS WHEREOF, the parties hereto have duly authorized and caused this Addendum to be executed as of the date first hereinabove written in multiple originals. Supplier's Addresses and Nos.: Telephone: ( ) - Facsimile: ( ) Internet: _________ _ Dealer's Addresses and Nos.: BP Energy Company 201 Helios Way Houston, Texas 77079 For Confirmations: Telephone: (713) 323-1866 Facsimile: (713) 323-4934 For invoices and payments: Attn: Gas Accounting Telephone: (713) 323-4919 Facsimile: (713) 323-5935 For all other communications: Attn: Contract Administration Telephone: (713) 323-2000 Facsimile: (713) 323-0203 Buyer's Addresses and Nos.: Telephone: ( ) - Facsimile: ( ) - Internet: _________ _ [Non-BPEC] Supplier Addendum ------------'as Supplier By: ........................................................................... . Name: .................................................... . Title: .................................................... . BP ENERGY COMPANY, as Dealer By: ........................................................................... . Name: ...................................................................... . Title: ........................................................................ . _______________ ,as Buyer By: ........................................................................... . Name: .................................................... . Title: ...................................................... . 7 PARTICIPANT ADDENDUM NO. 1 This Addendum to that certain Gas Exchange and Annual Balancing Agreement, dated as of January 1, 2006 (as amended from time to time, the "Exchange Agreement"), between Municipal Gas Acquisition and Supply Corporation ("MuniGas'') and BP Energy Company, a Delaware corporation (the "Dealer"), is entered into by such parties and the Participant designated herein to designate a Participant, or one or more of such Participant's Buyer's Points of Receipt or a new Supply Contract and Supplier for such Participant, all of which shall be as follows effective with the Day that commences on the Effective Date specified below: Participant: Participant's Address: Participant's Buyer's Point(s) of Receipt: Effective Date: Supplier: Supplier's Address: Supply Contract: Supply Contract Expiration Date: [Insert name of the Participant] [Insert the Participant's address] [Insert description ofstation(s) where Supplier sells and delivers gas to the Participant] [Insert effective date of change] [Insert name of Participant's Supplier] [Insert Supplier's address] [Describe, by name and date, the .Supply Contract. A copy of the Supply Contract is to be attached as Exhibit A] [Insert last day of term of Supply Contract] This Addendum supersedes all prior addenda to the Exchange Agreement designating the same Participant. [Name of Participant] Participant Addendum 1 Executed and delivered to be effective as of the above Effective Date. BP ENERGY COMPANY MUNICIPAL GAS ACQUISITION AND SUPPLY CORPORATION By: ........................................................................... By: .......................................................................... . Name: . . .... ................ .... ............ .... ...... ...................... Name: Glen Pape Title: . ... .......... ..... ..... .............. .......... ........................ Title: President [NAME OF PARTICIPANT) By: .......................................................................... . Name: ..................................................................... . Title: ....................................................................... . [Name of Participant] Participant Addendum 2 ADDENDUM TO GAS SUPPLY CONTRACT This Addendum to Gas Supply Contract (this "Addendum"), dated as of January 1, 2015, among The City Palo Alto, California, (hereinafter referred to as the "Buyer"), ConocoPhillips Company (hereinafter referred to as the "Supplier"), and BP Energy Company, a Delaware corporation (hereinafter referred to as the "Dealer"), WIT NE S SETH: WHEREAS, the Buyer and the Supplier have entered into a Base Contract for the Sale and Purchase of Natural Gas dated as of March 12, 2007 (hereinafter, together with extensions and replacements thereof and amendments thereto entered into by the Buyer and the Supplier, referred to as the "Supply Contract"), under which, for the term, on the conditions, and up to the maximum amount specified therein, the Supplier has agreed to sell and deliver to the Buyer, at the point or points designated therein or pursuant thereto (hereinafter referred to as the "Buyer's Point of Receipt"), a portion of the Buyer's requirements for natural gas in accordance with transactions agreed to by them from time to time; WHEREAS, Municipal Gas Acquisition and Supply Corporation (hereinafter referred to as "MuniGas") has offered to admit the Buyer as a party to a Joint Gas Purchase Contract, dated as of January 1, 2006 (hereinafter, as amended from time to time, referred to as the "Cooperative Contract") under which MuniGas would sell and deliver through the City of La Grange, Texas (herein referred to as the "Agent") to the Buyer, and the Buyer would receive and purchase from the Agent, at the Buyer's Point of Receipt certain quantities of gas at a lower price than the price of gas delivered to the Buyer by or on behalf of the Supplier pursuant to the Supply Contract; WHEREAS, in order to enable MuniGas to perform its obligations under the Cooperative Contract without excessive transportation costs for (and to accommodate seasonal imbalances in supply of and demand for) all or a portion of the gas to be sold and delivered to the Buyer pursuant to the Cooperative Contract, MuniGas and the Dealer have entered into a Gas Exchange and Annual Balancing Agreement, dated as of January 1, 2006 (as amended from time to time, herein referred to as the "Exchange Agreement'') under which the Dealer is required to deliver certain quantities of gas to MuniGas at the Buyer's Point of Receipt, from and to the extent of gas sold and delivered to the Dealer by the Supplier pursuant hereto, in exchange for gas delivered by MuniGas to the Dealer at one or more other locations; WHEREAS, the Supplier is willing to enter into this Addendum to sell and deliver gas to the Dealer at the Buyer's Point of Receipt and to reduce the quantities of gas required to be received and purchased by the Buyer from the Supplier at the Buyer's Point of Receipt pursuant to the Supply Contract; and WHEREAS, although the gas sales agreement between the Supplier and the Dealer and the amendment to the Supply Contract between the Buyer and the Supplier, respectively, are being documented together in this Addendum for convenience, they are independent two-party transactions for which other parties to this Addendum bear no liability (except only as expressly stated herein); NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants, agreements, conditions, and undertakings herein set forth, the parties hereto agree as follows: 1. Sale and Delivery to the Dealer. On each day while the Supply Contract and this Addendum are in effect, the Supplier shall sell and deliver to or for the account of the Dealer, and the Dealer shall receive or cause to be received and purchased from the Supplier, at the Buyer's Point of Receipt and for the same price as the price for gas sold and delivered by the Supplier to the Buyer pursuant to the Supply Contract, quantities of gas equal to the Supplier's Share of the quantities of gas ConocoPhillips/Palo Alto Supplier Addendum 1 nominated and confirmed for delivery to the Buyer at the Buyer's Point of Receipt on such day pursuant to the Cooperative Contract, but not more than the lesser of (a) the maximum quantity of gas then required to be sold and delivered by the Supplier to the Buyer at the Buyer's Point of Receipt pursuant to the Supply Contract, determined without giving effect to Section 2 hereof, or (b) the Supplier's Share of the quantity of gas which MuniGas schedules for delivery to the Buyer on such day at the Buyer's Point of Receipt. Such sale and purchase of gas between the Supplier and the Dealer shall be made on the same terms (including warranties and indemnities of the Supplier and the effect of force majeure) and subject to the same conditions as the terms and conditions of the Supply Contract to the same extent and for all purposes as if the Supplier and the Dealer had entered into the Supply Contract, except as otherwise provided herein and except that the Dealer shall not make (and shall not be deemed to have made) any representations, warranties, covenants, or certifications of the Buyer or the Supplier under the Supply Contract and the Supplier shall not have the right to audit the Dealer's books and records. If more than one price is set forth in the Supply Contract for gas sold and delivered thereunder by the Supplier (e.g., due to graduated volume discounts), the price for gas sold to the Dealer pursuant to this paragraph shall be the weighted average price (determined in accordance with Section 3 hereof) for gas sold and delivered by the Supplier to the Buyer pursuant to the Supply Contract. The Buyer and the Supplier acknowledge that the net amounts payable by the Buyer to the Supplier pursuant to the Supply Contract (as amended by this Addendum) shall equal the amounts payable by the Buyer to the Supplier pursuant to the Supply Contract (determined as if not amended by this Addendum), less the amounts payable by the Dealer to the Supplier pursuant to this Addendum. As used herein, the "Supplier's Share" for any day or month is equal to a fraction, the numerator of which is equal to quantity of gas then required to be sold and delivered by the Supplier to the Buyer at the Buyer's Point of Receipt pursuant to the Supply Contract, determined without giving effect to Section 2 hereof, and the denominator of which is equal to the aggregate quantities of gas then required to be sold and delivered to the Buyer at the Buyer's Point of Receipt by the Supplier and all other gas producers and dealers who have entered into Addenda with the Buyer and the Dealer substantially similar to this Addendum (determined without giving effect to such Addenda). If the Buyer specifies a Supplier's Share that causes the limitations described in this Section to be exceeded, then such confirmation shall be deemed to confirm a sale from the Supplier to the Buyer, rather than to the Dealer, to the extent of any such excess. The Buyer shall receive from MuniGas at the Buyer's Point of Receipt all gas there delivered by the Supplier to the Dealer hereunder, and the Dealer shall be obligated to receive gas from the Supplier hereunder only to the extent of such receipt by the Buyer. 2. Sale and Delivery to Buyer. The quantity of gas to be sold and delivered by the Supplier to the Buyer and received and purchased by the Buyer from the Supplier at the Buyer's Point of Receipt pursuant to the Supply Contract on each day shall be reduced by the quantity of gas sold and delivered by the Supplier to or for the account of the Dealer at the Buyer's Point of Receipt pursuant to Section J hereof, and the Buyer and the Supplier release each other from all obligations under the Supply Contract relating to such quantity of gas, other than the representations, warranties, covenants, and certifications of the Buyer in respect thereof that are not made by the Dealer hereunder. If more than one price is set forth in the Supply Contract for gas sold and delivered thereunder by the Supplier, then the price at which such reduced quantity of gas shall be sold to and purchased by the Buyer thereunder shall be equal to the weighted average price referred to in Section 1 hereof. 3. Payments. The Buyer shall send (or shall cause the Supplier to send) a copy of each transaction confirmation to MuniGas when and as issued or received, and the Buyer shall also compute and, on or before the last business day of each month, shall notify MuniGas and the Supplier of the Supplier's Share of all gas confirmed for delivery by MuniGas to the Buyer at the Buyer's Point of Receipt in such month pursuant to the Cooperative Contract. MuniGas shall provide a copy of the transaction confirmation to Dealer upon request. To the extent of gas delivered by the Supplier at the Buyer's Point of Receipt in such month, the Supplier's Share of the quantities so notified by MuniGas shall be deemed to be delivered to the Dealer, rather than to the Buyer, in such month, subject to the further provisions of this paragraph. The Supplier shall cause such deliveries to be invoiced to the Dealer, ConocoPhillips/Palo Alto Supplier Addendum 2 at the price referred to in Section 1 hereof, by the 101h day of the following month, and the Dealer shall pay for such deliveries by the later of the 251h day of such following month or 10 days after receipt of such invoice or, if the day for such payment is not a Business Day, then on the next Business Day. All other gas delivered by the Supplier at the Buyer's Point of Receipt in such month shall be deemed to be delivered and shall be invoiced by the Supplier to the Buyer at the same price in accordance with the provisions of the Supply Contract. Solely for purposes of computing any applicable weighted average price, all gas sold and delivered by the Supplier to the Buyer or the Dealer at the Buyer's Point of Receipt in such month pursuant to this Addendum or the Supply Contract shall be deemed to have been sold and delivered to the Buyer. The Dealer shall be entitled to net and set off amounts owing to Supplier hereunder against any other amounts owed by the Supplier to the Dealer under any other agreement between the Supplier and the Dealer. The Buyer does not guaranty and shall not be liable for any payment owed by any other party hereto to any other party hereto. 4. No Liability; Indemnity. The Supplier and the Buyer agree that the Dealer shall not be liable under any theory to the Supplier or the Buyer for (a) any breach by the Buyer of any term of the Supply Contract, the Cooperative Contract, this Addendum, or any other contract to which the Buyer is a party, (b) any breach by the Supplier of any of the terms of the Supply Contract, this Addendum, or any other contract to which it is a party, or ( c) any breach by either the Supplier or the Buyer, or their agents, of any duty of care, law, regulation, or other legal obligation applicable to it, for gas sold and delivered by the Supplier to the Buyer (or to the Dealer hereunder) pursuant to the Supply Contract or any other supply arrangement applicable to any third party seller of gas to the Buyer (or to the Dealer hereunder). The Dealer and the Buyer agree that the Supplier likewise shall not be liable under any theory to the Buyer or the Dealer for (a) any breach by the Buyer of any term of the Supply Contract, the Cooperative Contract, or any other contract to which the Buyer is a party, (b) any breach by the Dealer of any of the terms of the Exchange Agreement or any other contract to which it is a party, or (c) any breach by either the Dealer or the Buyer of any duty of care, law, regulation, or other legal obligation applicable to it, for gas sold or exchanged and delivered by the Dealer pursuant to the Exchange Agreement. In addition, the Dealer shall have no obligation to nominate or confirm for delivery any quantity of gas for any period. Except for the obligations to receive and purchase gas at the price described in Section 1, the Dealer shall have no obligations or liabilities in favor of the Supplier or any other person hereunder or under the Supply Contract (whether or not in the context of force majeure), including, without limitation, obligations or liabilities (i) for taxes, warranties of title or merchantability, royalties, indemnities, scheduling fees, imbalance charges, overpull or unauthorized gas penalties or charges, operational flow order penalties or charges, or similar costs, or losses resulting from the liquidation of hedge positions or (ii) to maintain or operate any measurement or transportation facilities, to manage transportation contracts or pipeline capacity, to enter into financial hedge transactions with the Buyer, to provide risk management services or consulting services of any type (including, but not limited to, hedging strategies, projecting gas supply costs and fuel requirements, or regulatory services), to pay any early termination damages or cover damages, to provide security or collateral, to provide any type of fixed price, trigger price, or other risk management products to Buyer, or to act as agent in any capacity for Buyer or Supplier under the Supply Contract. The obligations of the Dealer to the Supplier hereunder shall not be affected by any failure by MuniGas to observe and perform its obligations under the Exchange Agreement or any imbalance existing thereunder. The Supplier acknowledges that any event which constitutes force majeure or otherwise excuses performance by the Buyer under the Supply Contract or by MuniGas under the Exchange Agreement or Cooperative Contract with respect to any receipt or purchase of gas supplied pursuant to this Addendum, including any breach by contractual counterparties under any related contract that has such effect, shall excuse performance by the Dealer hereunder. The Supplier shall indemnify the Dealer and hold it harmless from and against any loss, cost or liability accruing to the Dealer resulting from (a) any claim by the Buyer or any other person of breach by the Supplier of, or negligence or misconduct by the Supplier in performance under, the Supply Contract or this Addendum, or breach of any duty of care, law, regulation, or other legal obligation applicable to the Supplier in connection therewith or herewith, (b) any claim which attaches before title to gas sold and ConocoPhillips/Palo Alto Supplier Addendum 3 delivered by the Supplier to the Dealer hereunder passes to the Dealer, and (c) any failure of gas sold and delivered by the Supplier to the Dealer hereunder to meet quality standards under the Supply Contract. 5. Nondisclosure by Dealer. The Dealer shall not disclose to any person the terms of the Supply Contract (the "Confidential Information") except for disclosures of such terms (i) to Municipal Energy Resources Partners, Ltd. ("MERP'), Municipal Energy Resources Corporation ("MERC'), MuniGas, and directors, officers, employees, contractors, auditors, agents, and representatives of and counsel to the Dealer and the Dealer's parent companies and affiliates (the "Representatives"), MERP, MERC, or MuniGas who need the Confidential Information for purposes of performing the services provided under this Addendum, the Exchange Agreement, and all other documents executed by Dealer in connection herewith and therewith or (ii) that are requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand, or other similar process) to be disclosed or otherwise are required to be disclosed by law or in connection with legal proceedings regarding this Addendum, or the Exchange Agreement or the enforcement hereof or thereof. Notwithstanding the foregoing, the following will not constitute Confidential Information for purposes of this Addendum, or the Exchange Agreement: (i) information which is or becomes generally available to the public other than as a result of a disclosure by the Dealer or its Representatives; (ii) information which was already known to the Dealer on a nonconfidential basis prior to being furnished to the Dealer by the Supplier or the Buyer; and (iii) information which becomes available to the Dealer on a nonconfidential basis from a source other than the Supplier or the Buyer or a representative of the Supplier or the Buyer, if such source was not subject to any prohibition against transmitting the information to the Dealer and was not bound by a confidentiality agreement with the Supplier or the Buyer. 6. Governing Law. This Addendum shall be governed by and construed in accordance with the laws of the State of Texas. 7. Notices. Except as otherwise provided in this Addendum, any notice, request, demand, statement, bill, or other document required to be given to any party by this Addendum, and any notice which any party hereto may desire to give any other party hereto, shall be in writing and will be considered duly delivered when mailed by registered mail, return receipt requested, or sent by facsimile or electronic transmission with receipt acknowledged, to the address or number of the receiving party listed opposite its signature below or to any other address or number previously furnished in writing for such purpose by the receiving party to the other parties hereto. 8. Successors and Assigns. The provisions of this Addendum shall be binding upon and inure to the benefit of the successors and assigns of each of the parties hereto. No party hereto may assign any of its rights or obligations hereunder without the consent of the other parties hereto, except to a trustee, individual or corporate, as security for bonds, securities, or other contractual obligations. No such consent shall be unreasonably withheld, provided that any party may refuse so to consent if the assignee does not meet such party's credit requirements. Upon such consent and assignment, the assigning party shall be released from all further liability hereunder, unless otherwise agreed by it. 9. Waivers. No waiver by any party hereto of any default by any other party hereto in the observance or performance of any provision of this Addendum shall operate as a waiver of any future default, whether of a like or of a different character. 10. Relationship Between the Parties. In connection with the negotiation of, the entering into, and the confirming of the execution of this Contract, each party acknowledges and agrees: (i) it is acting as principal (and not as agent or in any other capacity, fiduciary or otherwise); (ii) the other party is not acting as a fiduciary or financial or investment advisor for it; (iii) it is not relying upon any representations (whether written or oral) of the other party; (iv) ConocoPhillips/Palo Alto Supplier Addendum 4 the other party has not given to it (directly or indirectly through any other person) any advice, counsel, assurance, guaranty, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of this Contract; ( v) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisors to the extent it has deemed necessary, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any advice from such advisors as it has deemed necessary, and not upon any view expressed by the other party; (vi) all trading decisions have been the result of arm's length negotiations between the parties; and (vii) it is entering into this Contract with a full understanding of all of the risks hereof and thereof (economic and otherwise), and it is capable of assuming and willing to assume those risks (economic and otherwise). 11. Entire Addendum. This Addendum and the Supply Contract contain the entire agreement among the . parties, and except as stated herein or therein there are no oral promises, agreements, warranties, obligations, or conditions, precedent or otherwise, affecting it. 12. Amendments. Any change, modification, or alteration of this Addendum shall be in writing, signed by the parties hereto, and no course of dealing between or among any parties hereto shall be construed to alter any term hereof, except as expressly stated herein. No amendment to the Supply Contract shall affect the rights and obligations of the Dealer hereunder (other than changing the price at which gas is to be purchased by it hereunder) unless approved in writing by the Dealer. The Buyer shall provide the Dealer and MuniGas with a copy of each such amendment promptly after execution thereof. 13. Severability. Except as otherwise stated herein, if any provision hereof or application thereof shall be declared or rendered unlawful by a court of law or regulatory agency with jurisdiction over any party hereto or deemed unlawful because of a statutory change, the remaining applications thereof and provisions of this Addendum shall nevertheless remain valid and enforceable. 14. Corporate Obligations. No recourse under or upon any obligation, covenant, or agreement contained in this Addendum, or for any claim based thereon or otherwise arising in respect thereof, shall be had against any incorporator or sponsor, or against any past, present, or future director, officer, employee, or member of the governing body, as such, of any party hereto or of any successor, or against any person or entity with whom any such party has contracted for goods or services, either directly or through such party, whether by virtue of any constitution or statute or rule of law, or by the enforcement of any assessment, judgment, or penalty, or otherwise; it being expressly understood that this Addendum is solely a corporate obligation, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, sponsors, directors, officers, or employees, as such, of such party or any successor, or any member of its governing body, or any such contracting person, or any of them, by reason of the obligations, covenants, or agreements contained in this Addendum or implied therefrom, and that any and all such personal liability either at common law or equity or by constitution or statute of, and any and all such rights and claims against, every such incorporator, sponsor, member, director, officer, employee, or person, as such, are hereby expressly waived and released as a condition of, and in consideration for, the execution of this Addendum. 15. Government Regulation. The delivery and receipt of gas by the Dealer, the Buyer, and the Supplier or their designees hereunder are subject to all valid laws with respect to the subject matter hereof and to all valid present and future orders, rules, and regulations of duly constituted governmental authorities having jurisdiction. ConocoPhillips/Palo Alto Supplier Addendum 5 16. Benefits of Contract. Nothing in this Addendum, expressed or implied, shall give any benefit or any legal or equitable right, remedy, or claim under this Addendum to any person or entity other than the parties hereto, MuniGas, and their successors and assigns permitted hereby. 17. Effective Date. Notwithstanding the date hereof, this Addendum shall not become operative or effective until the first day of the month following the later of (1) the effective date for qualification of the Buyer as a "Participant" under the Exchange Agreement and (2) first effective date for designation of a "Dealer's Point of Receipt" under the Exchange Agreement. 18. Term and Termination. This Addendum shall extend for a period of 30 years unless sooner terminated pursuant to this Section. This Addendum shall terminate on the earliest of (a) the cancellation, termination, or expiration of the Supply Contract, (b) the extension, renewal, modification, amendment, or replacement of the Supply Contract in a manner that adversely affects the rights and obligations of the Dealer hereunder (other than by changing the price at which gas is to be purchased by it hereunder) without the prior written approval of the Dealer, or (c) cancellation, termination, or expiration of the Exchange Agreement or of the rights and obligations of the Buyer under the Cooperative Contract. The Buyer, the Supplier, and the Dealer shall give the other parties notice of any such event which is known to it and would result in the termination of this Addendum. In addition, the Supplier may terminate this Addendum on account of any default by the Dealer in paying its obligations hereunder on the same terms and conditions as the Supplier may terminate the Supply Contract on account of any such default by the Buyer in paying its obligations thereunder. No such termination shall affect the obligations of the Supplier to indemnify the Dealer. [Signature page follows] ConocoPhillips/Palo Alto Supplier Addendum 6 IN WITNESS WHEREOF, the parties hereto have duly authorized and caused this Addendum to be executed as of the date first hereinabove written in multiple originals. ConocoPhillips/Palo Alto Supplier Addendum 7 Supplier's Addresses and Nos.: ConocoPhillips Company 600 North Dairy Ashford CH1040 Houston, TX 77079 Telephone: (281 )293-3196 Facsimile: (281 )293-6303 Internet: conocophillips.com Dealer's Addresses and Nos.: BP Energy Company 201 Helios Way Houston, Texas 77079 For Confirmations: Telephone: (713) 323-1866 Facsimile: (713) 323-4934 For invoices and payments: Attn: Gas Accounting Telephone: (713) 323-4919 Facsimile: (713) 323-5935 For all other communications: Attn: Contract Administration Telephone: (713) 323-2000 Facsimile: (713) 323-0203 Buyer's Addresses and Nos.: City of Palo Alto, California 250 Hamilton Ave Palo Alto, CA 94301 Attn: Sr. Assistant City Attorney/Utilities Telephone: (650) 329-2171 Facsimile: (650) 329-2946 Internet: city.attorney@cityofpaloalto.org ConocoPhillips!Palo Alto Supplier Addendum ::~LZZ;J;i)i)· :;~~~~---··············· Name: C;~i~.j~~~:·.'::·=·.·::·.' ................ .. Title: West Originator ............................. .. CITY OF PALO ALTO, CALIFORNIA, as ;2?-;;i1"·!k. ... ~ .................... . Ti~iGt~anager u--- CITY OF PALO ALTO, CALIFORNIA :pt::E~~~-Oi1!4.Mn) ....... . t:J.All. NamV; .. ~~ Bartell T ~ Title: Senior Deputy City Attorney 8 ADDENDUM TO GAS SUPPLY CONTRACT This Addendum to Gas Supply Contract (herein referred to as this "Addendum"), dated as of January 1, 2015, between The City Palo Alto, California, (herein referred to as the "Buyer"), and BP Energy Company, a Delaware corporation (herein referred to as "BPEC"), WITNESSETH: WHEREAS, the Buyer and BPEC have entered into a contract dated as of January 8, 2004 (hereinafter, together with extensions and replacements thereof and amendments thereto entered into by the Buyer and BPEC, referred to as the "Supply Contract"), under which, on the terms and conditions described in various Transaction Confirmations specified therein (capitalized terms used therein have the meanings ascribed to such terms in the Supply Contract), BPEC has agreed to sell and deliver to the Buyer, at an agreed point or points (herein referred to as the "Buyer's Point of Receipt"), quantities of natural gas in accordance with transactions agreed to by them from time to time; WHEREAS, Municipal Gas Acquisition and Supply Corporation (herein referred to as "MuniGas") has offered to admit the Buyer as a party to a Joint Gas Purchase Contract, dated as of January 1, 2006 (herein, as amended from time to time, referred to as the "Cooperative Contract') under which MuniGas would sell and deliver through the City of La Grange, Texas (herein referred to as the "Agent") to the Buyer, and the Buyer would receive and purchase from the Agent, at the Buyer's Point of Receipt certain quantities of gas at a lower price than the price of gas delivered to the Buyer by or on behalf of BPEC pursuant to the Supply Contract; WHEREAS, in order to enable MuniGas to perform its obligations under the Cooperative Contract without excessive transportation costs for (and to accommodate seasonal imbalances in supply of and demand for) all or a portion of the gas to be sold and delivered to the Buyer pursuant to the Cooperative Contract, MuniGas and BPEC have entered into a Gas Exchange and Annual Balancing Agreement, dated as of January 1, 2006 (as amended from time to time, herein referred to as the "Exchange Agreement'') under which BPEC is required to deliver certain quantities of gas to MuniGas at the Buyer's Point of Receipt in exchange for gas delivered by MuniGas to BPEC at one or more other locations; and WHEREAS, to the extent BPEC delivers gas to MuniGas at the Buyer's Point of Receipt pursuant to this Addendum and the Exchange Agreement, the parties desire to reduce the quantities of gas required to be sold and delivered by BPEC to the Buyer and received and purchased by the Buyer from BPEC at the Buyer's Point of Receipt pursuant to the Supply Contract; NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants, agreements, conditions, and undertakings herein set forth, the parties hereto agree as follows: 1. Deliveries by BPEC to MuniGas. On each day while the Supply Contract and this Addendum are in effect, BPEC shall deliver to MuniGas pursuant to the Exchange Agreement, at the Buyer's Point of Receipt, quantities of gas equal to BPEC's Share of the quantities of gas nominated and confirmed for delivery to the Buyer at the Buyer's Point of Receipt on such day pursuant to the Cooperative Contract, but not more than the lesser of (a) the maximum quantity of gas then required to be sold and delivered by BPEC to the Buyer at the Buyer's Point of Receipt pursuant to the Supply Contract, determined without giving effect to Section 2 hereof, or (b) BPEC's Share of the quantity of gas which Muni Gas schedules for delivery to the Buyer on such day at the Buyer's Point of Receipt. The Buyer and BPEC acknowledge that the net amounts payable by the Buyer to BPEC pursuant to the Supply Contract (as amended by this Addendum) shall equal the amounts payable by the Buyer to BPEC pursuant to the BPEC/Palo Alto Supplier Addendum 1 Supply Contract (determined as if not amended by this Addendum), less the "Value" credited by MuniGas to BPEC pursuant to the Exchange Agreement for gas delivered by BPEC to MuniGas pursuant to this Addendum, which shall be the price per MMBtu payable by the Buyer to BPEC pursuant to the Supply Contract for gas sold and delivered by BPEC to the Buyer thereunder in the same delivery period. As used herein, the "BPEC's Share" for any day or month is equal to a fraction, the numerator of which is equal to quantity of gas then required to be sold and delivered by BPEC to the Buyer at the Buyer's Point of Receipt pursuant to the Supply Contract, determined without giving effect to Section 2 hereof, and the denominator of which is equal to the aggregate quantities of gas then required to be sold and delivered to the Buyer at the Buyer's Point of Receipt by BPEC and all other gas producers and dealers who have entered into Addenda with the Buyer and BPEC substantially similar to this Addendum but providing for the sale of gas by such persons to BPEC for further delivery to Muni Gas (determined without giving effect to such Addenda). If the Buyer specifies a BPEC's Share that causes the limitations described in this Section to be exceeded, then such confirmation shall be deemed to confirm a sale from BPEC to the Buyer, rather than a delivery by BPEC to MuniGas, to the extent of any such excess. The Buyer shall receive from MuniGas at the Buyer's Point of Receipt all gas there delivered by BPEC to MuniGas pursuant to this Addendum and the Exchange Agreement. 2. Sale and Delivery by BPEC to Buyer. The quantity of gas to be sold and delivered by BPEC to the Buyer and received and purchased by the Buyer from BPEC at the Buyer's Point of Receipt pursuant to the Supply Contract on each day shall be reduced by the quantity of gas scheduled by MuniGas and delivered by BPEC to MuniGas pursuant to this Addendum and the Exchange Agreement at the Buyer's Point of Receipt on such day, and the Buyer and BPEC release each other from all obligations under the Supply Contract relating to such scheduled delivered quantity of gas, other than the representations, warranties, covenants, and certifications of the Buyer and BPEC in respect thereof that are not made by BPEC hereunder or by the Buyer to MuniGas under the Cooperative Contract. 3. Payments. The Buyer shall send (or shall cause BPEC to send) a copy of each transaction confirmation to MuniGas when and as issued or received, and the Buyer shall also compute and, on or before the last business day of each month, shall notify MuniGas and BPEC of BPEC's Share of all gas confirmed for delivery by Muni Gas to the Buyer at the Buyer's Point of Receipt in such month pursuant to the Cooperative Contract. If the quantity of gas delivered by BPEC to MuniGas at the Buyer's Point of Receipt in such month exceeds BPEC' s Share of the quantity of gas confirmed by Muni Gas for delivery to the Buyer at the Buyer's Point of Receipt in such month pursuant to the Cooperative Contract, the excess quantity shall be deemed to be sold and delivered by BPEC to the Buyer pursuant to the Supply Contract, rather than delivered to MuniGas under the Exchange Agreement. For that quantity, Buyer shall be invoiced by BPEC, in accordance with the provisions of the Supply Contract. 4. Nondisclosure by BPEC. BPEC shall not disclose to any person the terms of the Supply Contract (the "Confidential Information") except that BPEC may disclose such terms (i) to Municipal Energy Resources Partners, Ltd. ("MERP''), Municipal Energy Resources Corporation ("MERC'), MuniGas, and directors, officers, employees, contractors, auditors, agents, and representatives of and counsel to BPEC and BPEC's parent companies and affiliates (the "Representatives"), MERP, MERC, or MuniGas who need the Confidential Information for purposes of performing the services provided under this Addendum, the Exchange Agreement, and all other documents executed by BPEC in connection herewith and therewith or (ii) that are requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand, or other similar process) to be disclosed or otherwise are required to be disclosed by law or in connection with legal proceedings regarding this Addendum, or the Exchange Agreement or the enforcement hereof or thereof. Notwithstanding the foregoing, the following will not constitute Confidential Information for purposes of this Addendum, or the Exchange Agreement: (i) information which is or becomes generally available to the public other than as a result of a disclosure by BPEC or its Representatives; (ii) information which BPEC/Palo Alto Supplier Addendum 2 was already known to BPEC on a nonconfidential basis prior to being furnished to BPEC by the Buyer; and (iii) information which becomes available to BPEC on a nonconfidential basis from a source other than the Buyer or a representative of the Buyer, if such source was not subject to any prohibition against transmitting the information to BPEC. 5. Governing Law. This Addendum shall be governed by and construed in accordance with the laws of the State of Texas. 6. Notices. Except as otherwise provided in this Addendum, any notice, request, demand, statement, bill, or other document required to be given to either party by this Addendum, and any notice which either party hereto may desire to give to the other party hereto, shall be in writing and will be considered duly delivered when mailed by registered mail, return receipt requested, or sent by facsimile or electronic transmission with receipt acknowledged, to the address or number of the receiving party listed opposite its signature below or to any other address or number previously furnished in writing for such purpose by the receiving party to the other parties hereto. 7. Successors and Assigns. The provisions of this Addendum shall be binding upon and inure to the benefit of the successors and assigns of each of the parties hereto. No party hereto may assign any of its rights or obligations hereunder without the consent of the other party hereto, except to a trustee, individual or corporate, as security for bonds, securities, or other contractual obligations. No such consent shall be unreasonably withheld, provided that either party may refuse so to consent if the assignee does not meet such party's credit requirements. Upon such consent and assignment, the assigning party shall be released from all further liability hereunder, unless otherwise agreed by it. 8. Waivers. No waiver by either party hereto of any default by the other party hereto in the observance or performance of any provision of this Addendum shall operate as a waiver of any future default, whether of a like or of a different character. 9. Relationship Between the Parties. In connection with the negotiation of, the entering into, and the confirming of the execution of this Agreement, each of BPEC and the Buyer acknowledges and agrees: (i) it is acting as principal (and not as agent or in any other capacity, fiduciary or otherwise); (ii) the other party is not acting as a fiduciary or financial or investment advisor for it; (iii) it is not relying upon any representations (whether written or oral) of the other party; (iv) the other party has not given to it (directly or indirectly through any other person) any advice, counsel, assurance, guaranty, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of this Addendum; (v) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisors to the extent it has deemed necessary, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any advice from such advisors as it has deemed necessary, and not upon any view expressed by the other party; (vi) all trading decisions have been the result of arm's length negotiations between the parties; and (vii) it is entering into this Addendum with a full understanding of all of the risks hereof and thereof (economic and otherwise), and it is capable of assuming and willing to assume those risks (economic and otherwise). 10. Entire Addendum. This Addendum and the Supply Contract contain the entire agreement among the parties, and except as stated herein or therein there are no oral promises, agreements, warranties, obligations, or conditions, precedent or otherwise, affecting it. 11. Amendments. Any change, modification, or alteration of this Addendum shall be in writing, signed by the parties hereto, and no course of dealing between or among the parties hereto shall BPEC/Palo Alto Supplier Addendum 3 be construed to alter any term hereof, except as expressly stated herein. The Buyer shall provide MuniGas with a copy of each amendment to the Supply Contract. 12. Severability. Except as otherwise stated herein, if any provision hereof or application thereof shall be declared or rendered unlawful by a court of law or regulatory agency with jurisdiction over either party hereto or deemed unlawful because of a statutory change, the remaining applications thereof and provisions of this Addendum shall nevertheless remain valid and enforceable. 13. Corporate Obligations. No recourse under or upon any obligation, covenant, or agreement contained in this Addendum, or for any claim based thereon or otherwise arising in respect thereof, shall be had against any incorporator or sponsor, or against any past, present, or future director, officer, employee, or member of the governing body, as such, of either party hereto or of any successor, or against any person or entity with whom either such party has contracted for goods or services, either directly or through such party, whether by virtue of any constitution or statute or rule of law, or by the enforcement of any assessment, judgment, or penalty, or otherwise; it being expressly understood that this Addendum is solely a corporate obligation, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, sponsors, directors, officers, or employees, as such, of such party or any successor, or any member of its governing body, or any such contracting person, or any of them, by reason of the obligations, covenants, or agreements contained in this Addendum or implied therefrom, and that any and all such personal liability either at common law or equity or by constitution or statute of, and any and all such rights and claims against, every such incorporator, sponsor, member, director, officer, employee, or person, as such, are hereby expressly waived and released as a condition of, and in consideration for, the execution of this Addendum. 14. Government Regulation. The delivery and receipt of gas hereunder are subject to all valid laws with respect to the subject matter hereof and to all valid present and future orders, rules, and regulations of duly constituted governmental authorities having jurisdiction. 15. Benefits of Contract. Nothing in this Addendum, expressed or implied, shall give any benefit or any legal or equitable right, remedy, or claim under this Addendum to any person or entity other than the parties hereto, MuniGas, and their successors and assigns permitted hereby. 16. Effective Date. Notwithstanding the date hereof, this Addendum shall not become operative or effective until the first day of the month following the later of (1) the effective date for qualification of the Buyer as a "Participant" under the Exchange Agreement and (2) first effective date for designation of a "Dealer's Point of Receipt" under the Exchange Agreement. 17. Term and Termination. This Addendum shall extend for a period of 30 years unless sooner terminated pursuant to this Section. This Addendum shall terminate on the cancellation, termination, or expiration of the Supply Contract, the Exchange Agreement, or the rights and obligations of the Buyer under the Cooperative Contract. Each party shall give the other party notice of any such event which is known to it and would result in the termination of this Addendum. [Signature page follows] BPEC/Palo Alto Supplier Addendum 4 IN WITNESS WHEREOF, the parties hereto have duly authorized and caused this Addendum to be executed as of the date first hereinabove written in multiple originals. Dealer's Addresses and Nos.: BP Energy Company 201 Helios Way Houston, Texas 77079 For Confirmations: Telephone: (713) 323-1866 Facsimile: (713) 323-4934 For invoices and payments: Attn: Gas Accounting Telephone: (713) 323-4919 Facsimile: (713) 323-5935 For all other communications: Attn: Contract Administration Telephone: (713) 323-2000 Facsimile: (713) 323-0203 Buyer's Addresses and Nos.: City of Palo Alto, California 250 Hamilton Ave Palo Alto, CA 94301 Attn: Sr. Assistant City Attorney/Utilities Telephone: (650) 329-2171 Facsimile: (650) 329-2946 Internet: city.attorney@cityofpaloalto.org BPEC/Palo Alto Supplier Addendum CITY OF PALO ALTO, CALIFORNIA APPROVED AS TO FORM By: ~ .. b ... $.?.:.!©?.V..~.~r.f.filt:\ .......... . 12.~-Name: AmyBartell ~ Title: Senior Deputy City Attorney 5 PURCHASE CONTRACT 1. Joint Purchase Contract. The Buyer specified below hereby becomes a party to and, except to the extent described herein, assumes all rights and obligations of a "Buyer" under the Joint Gas Purchase Contract, dated as of January I, 2006 (the "Joint Contract'), among MuniGas (specified below), the Agent (specified below), and Local Governments and State Agencies, as therein defined, who become parties thereto, and MuniGas and the Agent hereby consent thereto. The terms of the Joint Contract are hereby incorporated herein by reference. 2. Category of Purchaser. The Buyer is [check and complete one or more]: .,J a Requirements Buyer described in Section 6.03A(6) of the Joint Contract, D a Conditional Buyer described in Section 6.03A(_) of the Joint Contract, and/or .,J an Exempt Gas Buyer, because it will accept Exempt Gas to satisfy all or any part of its Requirements without further action on its part. 3. Purchase of Gas. The Buyer agrees to receive and buy from the Agent, and the Agent agrees to sell and deliver to the Buyer, at the Delivery Point, the Buyer's Nominated Quantities of Gas during the term of this Purchase Contract, which shall not exceed the Buyer's Requirements in any Contract Year. The Buyer agrees to nominate Gas for purchase so that it will buy from the Agent not less than the Buyer's Requirements in any Contract Year (subject to the next paragraph), to the extent Gas is available for delivery to the Buyer under the Joint Contract and except as otherwise provided therein, at the price specified below. 4. Maximum Annual Quantity. The Maximum Annual Quantity of Gas that the Buyer agrees to nominate for purchase hereunder, up to its Requirements and subject to the conditions provided in the Joint Contract, in each Contract Year is: .,J its Requirements or D as specified in Schedule A attached hereto. 5. Price. The Buyer will pay for all Gas purchased and received by it hereunder in any period at a price equal to the Gross Price identified herein for such period less the Discount determined by MuniGas in accordance with the Joint Contract and then in effect. The Buyer will be entitled to a partial rebate of such payments when, as, and to the extent that rebates are declared by MuniGas under the Joint Contract. 6. Delivery and Gross Price. A Balancing Agreement between MuniGas and a Balancer will be used by MuniGas to deliver Gas to the Buyer, unless otherwise agreed by MuniGas and the Buyer. One or more of the Buyer's existing Suppliers is expected to execute a Supplier-Exchanger Agreement with such Balancer. For so long as such or any replacement Balancing Agreement and Supplier-Exchanger Agreement are in effect in respect of the Buyer, the Buyer's Gross Price for each Day and Month will be the weighted average prices payable by the Buyer (if a Requirements Buyer) under its Supply Contract with each such Supplier (or substitute Supplier which has so agreed) or payable by the Balancer with the consent of the Buyer under a Supplier-Exchanger Agreement (if a Conditional Buyer), for Gas delivered to the Buyer in such Day or Month, and the Buyer's Delivery Points will be the points specified in such Supply Contracts with such Suppliers (if a Requirements Buyer) or in such Supplier-Exchanger Agreements (if a Conditional Buyer), unless otherwise agreed by MuniGas and the Buyer. Thereafter, the Buyer's Delivery Points and Gross Price will be as provided in the Joint Contract or as agreed to between them in writing. 46166195.2 Palo Alto Purchase Contract 7. Use. The Buyer will use all Gas purchased hereunder (or Gas exchanged therefor) [check one or more]: D in its electric utility system to generate electric power and/or ~ in its gas utility system or enterprise and/or D to secure a discount in the electric energy charges paid by it or (in the case of a political subdivision corporation) its member buyers and/or D for consumption in its (or for resale to other Local Governments and State Agencies for consumption in their) other public facilities. The Buyer agrees that all Exempt Gas sold and delivered to it under the Joint Contract will be consumed in, or to produce electric energy consumed in, qualified service areas and qualified annexed areas and that no such Exempt Gas will be used in a private trade or business or to make a private loan, as provided more fully and except as pennitted by Article Ten of the Joint Contract. 8. Address. The address of the Buyer for notices received under the Joint Contract is: Attn: Sr. Assistant City Attorney/Utilities 250 Hamilton Ave gth Floor Palo Alto, CA 94301 9. Special Provisions. Telephone No. (650) 329-2171 Facsimile No. (650) 329-2946 Internet: city .attomey@cityofpaloalto.org (A) The Buyer shall forecast, nominate, and sell or bum Gas such that all such Gas is (1) furnished to customers of the Buyer who purchase such Gas other than for resale or to produce electricity for sale and are located in either (a) an area throughout which the Buyer provided natural gas transmission or distribution services at all times during the 5-year period ending on the date of issue of the bonds issued by MuniGas or an affiliate to finance the acquisition of such Gas or (b) an area recognized as the natural gas service area of the Buyer under state or federal law, or (2) used by the Buyer to produce electricity that is furnished to electric customers of the Buyer who purchase such electricity other than for resale and are located in either (a) an area throughout which the Buyer provided electricity distribution service at all times during such 5-year period or (b) an area recognized as the electricity service area of the Buyer under state or federal law, all detennined in accordance with written explanations provided by MuniGas to the Buyer from time to time, or (3) used by the Buyer to produce electricity that (a) is sold to a utility owned by a state or local government and is furnished by such utility to electric customers of such utility who purchase such electricity other than for resale and are located in either (i) an area throughout which such utility provided electricity distribution service at all times during such 5-year period or (ii) an area recognized as the electricity service area of such entity under state or federal law, all detennined in accordance with written explanations provided by MuniGas to such entity from time to time, or (b) is sold to a local government or state agency that subsequently sells such electricity as described in clause 3(a), or (4) sold to a utility owned by a state or local government that furnishes or uses such gas solely as described in the immediately preceding clauses (1), (2), and (3), applied as if references to "the Buyer" therein were to such utility, or (5) used to fuel the pipeline transportation of such Gas. The Buyer shall not sell electricity that is produced using Gas to a local government or state agency pursuant to clause 3(b) above unless such local government or state agency has agreed in writing to use such electricity in accordance with this Section 9(A), and has agreed, upon request from MuniGas, to provide evidence from the utilities owned by state or local governments to whom it sells electricity that such electricity is furnished to its customers in accordance with the requirements set forth in this Section 9(A). (B) In no event shall any Gas produced from mineral interests located in the State of Texas and owned by the Agent, MuniGas, or any affiliated corporation, or exchanged for any Gas so produced, be available for sale by MuniGas through the Agent to the Buyer. 46166195.2 Palo Alto Purchase Contract 2 (C) Notwithstanding the Effective Date established in Section 10 of this Purchase Contract, the Buyer agrees that neither MuniGas nor the Agent shall be obligated to commence initial gas deliveries under this Purchase Contract until MuniGas, in MuniGas' sole determination, has acquired sufficient additional Production Rights to enable MuniGas to sell and Buyer to purchase the Maximum Annual Quantity specified in Schedule A without adversely affecting its ability to meet the full requirements of all other Buyers that have equal or better priority to allocations of Gas under the terms of the Joint Contract and have become a party thereto prior to the execution of this Purchase Contract. (D) The Buyer may terminate this Purchase Contract after 180 days after the Effective Date established in Section 10, in the Buyer's sole discretion, on at least 75 days prior written notice of termination to MuniGas and the Agent specifying the termination date, unless prior to the specified date, MuniGas and the Agent have become obligated to commence initial deliveries of Gas in accordance with paragraph 9(C) of this Purchase Contract. (E) The Buyer represents that: (1) the obligations of the Buyer under this Purchase Contract, and any renewal or extension hereof are payable as maintenance and operation costs of the Buyer's gas utility system, and all such payments are payable prior to the debt obligations of the Buyer, (2) at the time of entering into this Purchase Contract, and each annual or other renewal and extension hereof, the Buyer has not defaulted in payment of the Buyer's obligations under any natural gas purchase contract in the immediately preceding 10 years due to circumstances reflecting adversely on such Buyer's credit, and (3) in the event the representations described in the immediately preceding clauses (1) or (2) cannot be satisfied at the time as of which the Buyer may elect not to extend the term ofthis Purchase Contract, the Buyer will notify MuniGas of such fact and exercise such election not to extend, unless otherwise agreed by MuniGas. (F) All amounts to be paid to or deposited with MuniGas hereunder shall be paid to or deposited with The Bank of New York Mellon Trust Company, N.A. (or any successor trustee designated by MuniGas in writing) by wire transfer of immediately available funds to such trustee in accordance with the following instructions or such other instructions as may be designated to the Buyer by MuniGas in writing: The Bank of New York Mellon, Dallas, Texas ABA# 021 000 018 GLA# 111-565, TAS# 224385 Attn: Jully Jiang (713) 483-7062 Ref: MuniGas (G) MuniGas and the Agent consent to the assignment of this Purchase Contract by Buyer to any Local Government or State Agency, whether within or outside the State of Texas, pursuant to the provisions of and with the effect described in Section 11.04 of the Joint Contract, provided that any change in Delivery Point shall be subject to MuniGas' consent which shall not be unreasonably withheld in accordance with such Section and any assignment by Buyer shall be subject to the approval by MuniGas of the credit standing of the assignee as determined by MuniGas in its sole discretion. (H) MuniGas and Agent acknowledge that Buyer is subject to the California Constitution Article 1, Section 3, and the California Public Records Act, Cal. Gov. Code§ 6250 et seq. ("Public Records Acf') in regard to this Purchase Contract, the Joint Contract and related documents (the "Disclosed Documents"), which may constitute public records subject to inspection and copying by the public under the authority of the California Constitution and the Public Records Act. Buyer shall, consistent with those laws, use reasonable efforts to provide MuniGas and/or the Agent with notice of any third party request to inspect and copy any of the Disclosed Documents, which MuniGas and/or the Agent might deem confidential and exempt from disclosure, in order that MuniGas and/or the Agent may timely seek to protect those documents from disclosure to the third party. MuniGas and the Agent acknowledge and agree that Buyer shall not be liable to MuniGas or the Agent if Buyer makes disclosure in accordance with the California Constitution and/or the Public Records Act before MuniGas and/or the Agent has timely obtained an order to prevent Buyer from making the requested disclosure to the third party. MuniGas and the Agent further agree that each shall defend, indemnify and hold Buyer harmless against any claim, action or litigation (including, but not limited to, all judgments, costs, fees and attorneys' fees (including on appeal)) that may result from denial by Buyer of a Public Records Act request. 46166195.2 Palo Alto Purchase Contract 3 10. Term. This Purchase Contract shall commence on the Effective Date hereof, which is the latest of the effective dates of the Balancing Agreement and initial Supplier-Exchanger Agreement referred to above and January 1, 2015, and shall extend to December 31, 2024. The term of this Purchase Contract shall automatically be extended by one year on each December 31, unless the Buyer, MuniGas, or the Agent has given written notice to the other two parties of its election not to extend the term of this Purchase Contract prior to such December 31, but in no event shall the term of this Purchase Contract be extended beyond December 31, 2045, except by written amendment executed by the parties hereto. This Purchase Contract may be phased out at the election of the Buyer as described in the Joint Contract. [Signature page follows] 46166195.2 Palo Alto Purchase Contract 4 The parties hereto have caused this Purchase Contract to be duly executed, effective as of the Effective Date described above. CITY OF PALO ALTO, CALIFORNIA APPROVED AS TO FORM ~~~klr-=·· ~.rJ.I'I'·.u.:r.1.9.N.Ir~ ..... . ~ Title: Senior Deputy City Attorney ~·'Z~P~~---·················· Name: Lisa Oltmann Title: City Secretary 46166195.2 Palo Alto Purchase Contract BUYER: CITY OF PALO ALTO, CALIFORNIA ~~~:jifp~f.:.L ......... ~ ............ . Title: · Manager AGENT: CITY OF LA GRANGE, TEXAS BY'·····················~········ Nam : J net Moerbe Title: 5 ... ~/.(~. me: Janetta Morris itle: Secretary 46166195.2 Palo Alto Purchase Contract MUNIGAS: MUNICIPAL GAS ACQUISITION AND SUPPLY CORPORATION By: ............ & ... ~ ..................... . Name: Glen Pape Title: President 6 Schedule A to Purchase Contract The Buyer's Maximum Annual Quantity, if any, and projected Requirements (each expressed in MMBtus) in each Contract Year are as follows: Maximum Annual Quantity Year (if applicable) Projected Requirements 2015 N/A 2,986,484 2016 N/A 3,009,030 2017 N/A 3,010,230 2018 N/A 3,011,159 2019 N/A 3,014,358 2020-2045 N/A 2,975,059 46166195.2 Palo Alto Purchase Contract 7 PARTICIPANT ADDENDUM NO. 1 This Addendum to that certain Gas Exchange and Annual Balancing Agreement, dated as of January 1, 2006 (as amended from time to time, the "Exchange Agreement"), between Municipal Gas Acquisition and Supply Corporation ("MuniGas'') and BP Energy Company, a Delaware corporation (the "Dealer"), is entered into by such parties and the Participant designated herein to designate a Participant, or one or more of such Participant's Buyer's Points of Receipt or a new Supply Contract and Supplier for such Participant, all of which shall be as follows effective with the Day that commences on the Effective Date specified below: Participant: Participant's Address: Participant's Buyer's Point(s) of Receipt: Effective Date: Supplier No. 1: Supplier No. 1 Address: Supply Contract No.1: Supplier No.2: Supplier No. 2 Address: Supply Contract No.2: Palo Alto Participant Addendum 1 City of Palo Alto, California 250 Hamilton Ave Palo Alto, California 94301 Malin, PG&E Citygate and Topock; and any other mutually agreeable points. January 1, 2015 BP Energy Company 201 Helios Way Houston, Texas 77079 Base Contract for Sale and Purchase of Natural Gas between BP Energy Company and the City of Palo Alto, California dated January 8, 2004. ConocoPhillips Company 600 North Dairy Ashford -CH1 03 0-B Houston, Texas 77079 Base Contract for Sale and Purchase of Natural Gas between ConocoPhillips Company and the City of Palo Alto, California dated March 12, 2007. This Addendum supersedes all prior addenda to the Exchange Agreement designating the same Participant. Executed and delivered to be effective as of the above Effective Date. BP ENERGY COMPANY CITY OF PALO ALTO, CALIFORNIA ~~1./······¥-········ Titl~f;fJ~~~ger Palo Alto Participant Addendum MUNICIPAL GAS ACQUISITION AND SUPPLY CORPORATION ~.;,;~;·~t.~ ....................... . Title: President CITY OF PALO ALTO, CALIFORNIA APPROVED AS TO FORM ~~~~-~ .. 9l.~qntm:a················ _;..;...-Title: Senior Deputy City Attorney 2 CERTIFICATE OF BUYER I, the undersigned City Manager of the City of Palo Alto, California (the "City"), acting in my official capacity, do hereby certify as follows: 1. This Certificate is given in connection with the execution and delivery by the City of a Purchase Contract (the ''Purchase Contract'') with the Municipal Gas Acquisition and Supply Corporation ("MuniGas"} and the City of La Grange, Texas (the "Sponsor"), by which the City became a party to the Joint Gas Purchase Contract, dated as of.:fMWtl.\..111 '200~among MuniGas, the Sponsor, and other local governments that become parties thereto. 2. Execution and delivery of the Purchase Contract by the City has been duly authorized by resolution (the "Resolution"} adopted at a meeting of the City Council of the City held on September 15, 2014 (Staff Report 5opto ). A true and correct copy of the Resolution is attached hereto. The Resolution was duly introduced and adopted at such meeting, such meeting was duly called and held, and notice of such meeting and of the proposed action on the Resolution was duly given, in accordance with applicable Jaw; and such action has been recorded in the minutes of such meeting. 3. The Purchase Contract has been authorized, executed, and delivered in accordance with a Illegal requirements established by any charter or ordinance of the City. 4. The Purchase Contract was duly executed on behalf of the City by the following person, who at the time of such execution held the office within the City specified opposite such person's name below, and the signature appearing opposite such person's name below is the true and genuine signature of such person: Signature James Keene City Manager 5. The Resolutions SIGNED and SEALED this Lday of Ja VI , 20)3 ····~:lf1~·M·~l;-······················ The person whose name is subscribed to the foregoing Certificate is the duly appointed and incumbent City Manager of the City, and the signature subscribed above is such p son's true and genuine signature. 140519 jb 6053046 r donna Grider, City Clerk APROVED AS TO FORM ~~~·s~~~~~~·-··· -