Exhibit 10.17**AMENDED AND RESTATED****NATURAL GAS PURCHASE AGREEMENT**By and BetweenTARGA GAS MARKETING LLC(“Buyer”)AndTARGA TEXAS FIELD SERVICES LP(“Seller”)Effective as of December 1, 2005
 

 
**AMENDED AND RESTATED NATURAL GAS PURCHASE AGREEMENT**This Amended and Restated Natural Gas Purchase Agreement is executed on October ___, 2007, buteffective as of December 1, 2005, by and between TARGA GAS MARKETING LLC (“Buyer”) and TARGA TEXASFIELD SERVICES LP (“Seller”) (each a “Party,” and together, the “Parties”), and sets forth theterms and conditions pursuant to which Seller will sell to Buyer, and Buyer will purchase fromSeller, certain Gas (as hereinafter defined). This Agreement amends and restates in its entiretythat certain Natural Gas Purchase Agreement executed on February 1, 2007 and effective as ofDecember 1, 2005.**1.****Definitions.**As used in this Agreement, the following terms shall have the following meaning:“Affiliate” means any Person that directly or indirectly through one or moreintermediaries, controls or is controlled by or is under common control with the Person specified,with the term “control” (including the terms “controlled by” or “under common control with”)meaning the possession, directly or indirectly, of the power to direct or cause the direction ofthe management and policies of a Person, whether through ownership, by contract, or otherwise. AnyPerson shall be deemed to be an Affiliate of any specified Person if (i) such Person owns fiftypercent (50%) or more of the voting securities of the specified Person, if the specified Personowns fifty percent (50%) or more of the voting securities of such Person, or if fifty percent (50%)or more of the voting securities of the specified Person and such Person are under common control,or (ii) such Person has operational control of the specified Person pursuant to an operatingagreement, management agreement or other contractual rights.“Buyer’s Adjustments” means, for each Delivery Point, (i) all transportation costs incurredby Buyer, including pipeline tariff charges, imbalance charges, cash-out charges and other similarimbalance-related charges attributable to the Gas, (ii) all other costs and charges reasonablyincurred by Buyer in connection with its sale of Gas to its customers, and (iii) all cost andcharges reasonably incurred by Buyer in connection with its purchase and transportation ofReplacement Gas.“Business Day” means any day except Saturday, Sunday or Federal Reserve Bank holidays.“Claims” means any and all claims, liabilities, losses, damages, demands, penalties, fines,causes of action, remediation expenses, suits, judgments, arbitration awards, court orders,directives, injunctions, decrees or awards of any jurisdiction, and any costs and expenses relatedto the same (including court costs, reasonable attorneys’ fees, and other reasonable expenses oflitigation).“Confidential Information” means this Agreement and any other written data or information(or an oral communication if the Party requesting confidentiality for such oral communicationpromptly confirms such communication in writing) which is privileged, confidential or proprietary,except information which (i) is a matter of public knowledge at the time of its disclosure or isthereafter published in or otherwise ascertainable from any source available to the public withoutbreach of this Agreement, (ii) constitutes information which is obtained from a third party (who orwhich is not an Affiliate of one of the Parties) other than by or as a result of unauthorizeddisclosure, or (iii) prior to the time of disclosure had been independently developed by thereceiving Party or its Affiliates not utilizing improper means.
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“Damage Payments” means all liquidated damages or other payments received by Buyer orSeller from any Person as a result of such Person’s failure to take Gas from Buyer or deliver Gasto Seller, as applicable, minus any amounts of such liquidated damages or other payments receivedby Buyer or Seller, as applicable, that are payable to any un-Affiliated third parties inconnection with such event.“Delivery Point” is defined in Section 6.1.“Early Termination Date” is defined in Section 14.2(i).“Gas” means residue natural gas, and includes Plant Gas, Third Party Gas, and ReplacementGas, as applicable.“Intercompany Gas” means Plant Gas sold by Seller to Buyer for sale and delivery to anAffiliate of Buyer.“Intercompany Gas Price” means, with respect to each Delivery Point, (a) for Plant Gas thatis designated by Buyer as Intercompany Gas for delivery beginning on the first day of any Month,the price per MMBtu, as reported in the first publication of *Inside FERC’s Gas MarketReport* for such Month for the geographic location closest to such Delivery Point, less Buyer’sAdjustments, or (b) for Plant Gas that is designated by Buyer as Intercompany Gas for delivery atany time after the first day of any Month, the price per MMBtu, equal to the “Daily Midpoint” priceas reported in the “Daily Price Survey” of Platts’ *Gas Daily* for the relevant day, lessBuyer’s Adjustments. Notwithstanding the foregoing, if there is no single price published for suchday, but there is published a range of prices, then the Intercompany Gas Price for such day will bethe average of the high and low prices in that range. If no price or range of prices is publishedfor such day, the Intercompany Gas Price will be the be the average of the following: (i) the price(determined as stated above) for the first day for which a price or range of prices is publishedthat next precedes the relevant day; and (ii) the price (determined as stated above) for the firstday for which a price or range of prices is published that next follows the relevant day.“MMBtu” means 1,000,000 British thermal units.“Month” shall mean the period beginning at 7:00 AM Central Standard Time (as adjusted forCentral Daylight Time) on the first day of a calendar month and ending at 6:59 AM on the last dayof such calendar month.“Nominated Quantity” means the quantity of Plant Gas nominated by Seller or Third Party Gasnominated by Buyer, as applicable, to be delivered at the applicable Delivery Point during theapplicable period.“Person” means any individual, corporation, partnership, limited liability company,association, joint venture, trust, or other organization of any nature or kind.“Plant” or “Plants” means one or more natural gas processing plants that are now orhereafter owned or operated by Seller, including but not limited to the plants identified onExhibit “A,” attached hereto and incorporated herein by reference.“Plant Gas” means all residue gas owned or controlled by Seller that is produced fromand/or processed at the Plants and is not now or hereafter committed by Seller for sale to thirdparties.
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“Plant Gas Proceeds” means, for each Delivery Point, the aggregate proceeds received byBuyer from its sales of Plant Gas delivered at such Delivery Point to Buyer’s customers, includingthird parties and Affiliates of Buyer.“Receiving Transporter” means the transporter receiving Gas at a Delivery Point.“Replacement Gas” means, for each Delivery Point, Gas purchased by Buyer from a party otherthan Seller to replace any Plant Gas for sale to Buyer’s customers or Affiliates in the event thatthe quantity of Plant Gas reasonably anticipated by Buyer to be available for delivery at suchDelivery Point during any period is less than the Nominated Quantity.“Replacement Gas Acquisition Cost” means, for each Delivery Point, the sum of (i) actualcosts paid by Buyer for Replacement Gas attributable to such Delivery Point, and (ii) Buyer’sAdjustments attributable to such Replacement Gas.“Replacement Gas Adjustment” is defined in Section 5.“Replacement Gas Proceeds” means, for each Delivery Point, the aggregate proceeds receivedby Buyer from its sales of Replacement Gas attributable to such Delivery Point to Buyer’sAffiliates and third parties, less Buyer’s Adjustments.“Seller’s Adjustments” means, for each Delivery Point, (i) all transportation costsincurred by Seller, including pipeline tariff charges, imbalance penalties, cash-out costs andother similar imbalance-related charges attributable to Third Party Gas and paid by Seller and (ii)any other costs and charges reasonably incurred by Seller in connection with its purchase of ThirdParty Gas.“Third Party Gas” means natural gas purchased by Seller on behalf of Buyer from a thirdparty that is not an Affiliate of Targa Resources, Inc.“Third Party Gas Acquisition Cost” means, for each Delivery Point, the total amount paid bySeller to suppliers of Third Party Gas delivered at such Delivery Point.“Taxes” means any or all ad valorem, property, occupation, severance, generation, firstuse, conversion, Btu or Gas, transport, transmission, utility, gross receipts, privilege, sales,use, consumption, excise, lease, transaction, and other taxes, governmental charges, regulatoryassessments by federal, state or local agencies or commissions (including, but not limited to, FERCassessments), license fees, permits or assessments or increases therein, other than taxes based onnet income or net worth.“Termination Payment” is defined in Section 14.2(i).“WASP Price” means, for each Delivery Point, a price per MMBtu for each Month equal to (i)Plant Gas Proceeds for such Month, less Buyer’s Adjustments for such Month, divided by (ii) thetotal number of MMBtus of Plant Gas delivered at such Delivery Point during such Month.“WAAC Price” means, for each Delivery Point, a price per MMBtu for each Month equal to (i)total Third Party Gas Acquisition Cost, plus total Seller’s Adjustments, for such Month, divided by(ii) the total number of MMBtus of Third Party Gas delivered at such Delivery Point during suchMonth.**2.****Term; Termination.**     **2.1**This Agreement shall commence on December 1, 2005 and shall continue in full force andeffect for a term of fifteen (15) years (the “Initial Term”). At the expiration of the Initial
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Term, this Agreement shall be automatically extended for consecutive sixty (60) Month terms, unlesseither Party shall have given written notice of termination to the other Party least one hundredtwenty (120) days prior to the expiration of (i) the Initial Term, or (ii) the then-current five(5) year extension, as applicable.      **2.2**In the event that either Party ceases to be an Affiliate of Targa Resources, Inc., theneither Party may, at its sole discretion, elect to terminate this Agreement upon one hundred twenty(120) Days notice to the other Party.**3.****Quantity.**Subject to the terms and conditions of this Agreement, for each Month during the Term, Selleragrees to sell and deliver and Buyer agrees to purchase (i) all of Seller’s Plant Gas, and (ii) theportion of the Nominated Quantity of Third Party Gas that Seller is able to obtain usingcommercially reasonable efforts.**4.****Price.**     **4.1**The price per MMBtu for all Plant Gas delivered by Seller hereunder during each Month(other than Intercompany Gas) shall be the applicable WASP Price for such Month.     **4.2**Except as otherwise agreed by the Parties from time to time pursuant to a written addendumto this Agreement, the price for Intercompany Gas delivered by Seller hereunder during each Monthshall be the applicable Intercompany Gas Price for such Month.     **4.3**The price per MMBtu for all Third Party Gas delivered hereunder during each Month shall bethe applicable WAAC Price.**5.****Replacement Gas Adjustment.**The amount payable to Seller under this Agreement for any Month will be adjusted by an amount,determined for each Delivery Point, obtained by subtracting (i) the Replacement Gas Proceeds from(ii) the Replacement Gas Acquisition Cost (the “Replacement Gas Adjustment”). If the ReplacementGas Adjustment is a positive number, the amount payable to Seller for such Month will be decreasedby such amount, and if the Replacement Gas Adjustment is a negative number, the amount payable toSeller will be increased by such amount.**6.****Delivery Point; Transfer of Title.**The delivery point (“Delivery Point”) for Plant Gas shall be a point at or near the tailgate ofsuch Plant and the delivery point for Third Party Gas and Replacement Gas shall be at pointsmutually agreed upon between the Parties.**7.****Transportation; Nominations.**     **7.1**Seller shall have the sole responsibility for delivering the Gas to the Delivery Points.Buyer shall have the sole responsibility for transporting the Gas from the Delivery Points.     **7.2**Seller will nominate the total quantity of Plant Gas (in MMBtu per day) to be delivered toeach Delivery Point for such Plant during any Month, giving sufficient time to meet the applicablepipeline or gathering company’s nomination deadlines for such Month, and will
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also provide Buyerwith any other operational information which could have a significant effect on the quantity ofPlant Gas delivered from each Plant for the Month. Seller and Buyer will cooperate in communicatingthroughout each Month regarding any changes in the quantity of Plant Gas to be delivered at eachDelivery Point. Should Seller become aware that actual deliveries at any Delivery Point on any daywill be more or less than the Nominated Quantity, Seller shall promptly notify Buyer.     **7.3**With respect to Third Party Gas, Buyer will nominate the total quantity of Third Party Gas(in MMBtu per day) to be delivered at each Delivery Point during any Month, giving sufficient timeto meet the applicable pipeline or gathering company’s nomination deadline for such Month, andSeller will use commercially reasonable efforts to obtain the Nominated Quantity of Third Party Gasfor delivery to Buyer.     **7.4**In the event that (i) Buyer is unable to take all of the Nominated Quantity during aparticular Month due to any Person’s failure to take Gas from Buyer, and (ii) Buyer receives DamagePayments in connection with such event, Buyer will pay Seller its pro rata share of such DamagePayments based on the amount of nominated Gas not taken by Buyer from Seller and any otherAffiliates of Buyer as a result of such event.     **7.5**In the event that (i) Seller is unable to deliver all of the Nominated Quantity of ThirdParty Gas during a particular Month due to any Person’s failure to deliver Gas to Seller, and (ii)Seller receives Damage Payments in connection with such event, Seller will pay Buyer such DamagePayments.**8.****Quality; Delivery Pressure.**All Gas delivered by Seller hereunder shall meet the pressure, quality and heat contentrequirements of the Receiving Transporter. The unit of quantity measurement for purposes of thisAgreement shall be one MMBtu dry. Measurement of Gas quantities hereunder shall be in accordancewith the established procedures of the Receiving Transporter.**9.****Taxes, Royalties and Other Charges.**Seller is liable for and shall pay, or cause to be paid, all Taxes applicable to the purchase orsale of Gas at a particular Delivery Point arising prior to the Delivery Points. Seller willrelease, indemnify, defend and save Buyer harmless from and against all Claims for such Taxes. Inthe event Buyer is required to remit such Taxes, Seller shall reimburse Buyer for such amount.Buyer is liable for and shall pay or cause to be paid all Taxes applicable to the purchase or saleof Gas to a particular Delivery Point arising at or after the Delivery Points. Buyer shallrelease, indemnify, defend and save Seller harmless from and against all Claims for such Taxes. Inthe event Seller is required to remit such Taxes, Buyer shall reimburse Seller for such amount.**10.****Billing and Payments.**     **10.1**On or before the fifteenth (15th) day following each Month during the Term (and for thefirst Month following the expiration or termination of this Agreement), Buyer shall deliver toSeller a statement for the preceding Month showing the daily and total volume of Gas delivered toeach Delivery Point, the applicable price for such Gas, any Replacement Gas Adjustment, and anyother amounts and adjustments due hereunder, and the total amount due from Buyer to Seller. If theactual volume delivered is not available by such billing date, Buyer shall use an estimated volumebased on nominations. The estimated volume will then be
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corrected to the actual volume on thefollowing Month’s billing or as soon thereafter as transport information is available.     **10.2**On or before the twenty-fifth (25th) day of each Month, Buyer will pay Sellerat the notice address set forth in Section 11, in immediately available funds, for Gas deliveredduring the preceding Month.  In the event that either Party discovers any underpayment oroverpayment, such Party shall promptly notify the other Party, and Seller or Buyer, as applicableshall make a payment to the other Party in the amount of any undisputed overpayment orunderpayment, as applicable, no later than thirty (30) days after receipt of such notice. TheParties agree that, notwithstanding the provisions of this Section 10, no retroactive adjustmentshall be made for any overpayment or underpayment more than twenty-four (24) months from the dateof the original payment to which such overpayment or underpayment relates.  **11.****Notices.**     Every notice, request, statement or bill provided for in this Agreement shall be in writingdirected to the Party to whom given, made or delivered at such Party’s address as set forth belowand as such address may be changed from time to time with written notice to the other Party.**Buyer: TARGA GAS MARKETING LLC**Invoices and Statements:Targa Gas Marketing LLC