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1959-01AN AGREEMENT BY AND BETWEEN THE LAKE APOPKA NATURAL GAS DISTRICT AND THE CITY OF CLERMONT, FLORIDA, RELATING TO THE MAKING OF PAYMENTS BY THE DISTRICT TO THE SAID MUNICIPALITY IN CONSIDERATION OF A FRANCHISE GRANTED BY THE MUNICIPALITY TO THE DISTRICT. WHEREAS, THE LAKE APOPKA NATURAL GAS DISTRICT (hereinafter sometimes referred to as "District") has been, heretofore, duly, legally and validly created and established as a body corporate with perpetual existence by an act of the legislature of the State of Florida in session in 1959 (herein- after sometimes referred to as "Act"); and WHEREAS, the Act authorized the District to construct, acquire, own, finance, operate, maintain, extend and improve a gas system in portions of Orange and Lake Counties, Florida; and, WHEREAS, the Act authorizes any municipality, or agency of such municipality, or any agency of the state to enter into agreements, contracts and franchises with the District; and WHEREAS, the District contemplates and is now planning the construction and acquisition of a gas system or systems in said portions of Orange and Lake Counties, Florida, by means of which it will provide natural gas to customers in said Orange and Lake Counties" Florida, inc-luding customers within the incorporated areas of the various cities, towns, and other municipalities in said portions of Lake and Orange Counties, Florida; and WHEREAS, for the purpose of serving customers within the incorporated areas of the various cities, towns and other municipalities in said portions of Orange and Lake Counties, Florida, the District has been, or will be, granted franchises by such cities, towns and other municipalities permitting the District to own and operate a natural gas system within the incorporated areas of said municipalities; and WHEREAS, the City of Clermont, Florida, granted a franchise to the District by ordinance enacted on the 17th day of November, 1959; and WHEREAS, such franchise granted by the City to the District provides, that the City and District shall enter into an agreement providing for the making of payments by the District to the City in consideration of the granting of such franchise; and WHEREAS, the District contemplates or has issued revenue bonds to finance the cost of construction or acquisition of a gas system or systems in portions of Orange and Lake Counties, Florida, ~l- NOW, THEREFORE, THIS AGREEMENT WITNESSETH: Section I, That in consideration of the City granting to the District the franchise referred to in the preamble hereof, the District shall, as hereinafter provided, pay to the City out of revenues derived from the operation of its gas system or systems such sums of money as shall be. allocated to the City by virtue of the computation made pursuant to the provisions of Section 2 and Section 3 hereof. Section 2. All rates, fees, rentals or other charges or income derived by the District from the operation of its gas system or systems shall first be used by the District to pay all costs of operation and maintenance of such gas system or systems, to pay the principal of and interest on any revenue bonds issued by the District to finance the cost of construction or acquisition of such gas system or systems, to establish appropriate reserves for such revenue bonds, to establish an extension, removal, and replacement fund for such gas system or systems and to make all other proceedings authorizing such revenue bonds. The payments to the City of Clermont, Florida, by the District as set forth in Section 3 of this agreement are hereby construed to be a part of the cost of operation and maintenance of the gas system or systems and shall be paid to the City as an expense falling in that category and liable for payment by the District as such. Section 3. (a) The District shall pay to the City of Clermont, Florida, a sum representing six (6%) per cent of the gross revenues derived from the sale of natural gas fuel to all customers within the corporate limits of the City of Clermont, Florida, during the year in which such payment is due, after deducting therefrom the gross revenues derived from "interruptible gas customers" wi thin the corporate limits of said City. (b) The term "interruptible gas customers" as used herein is defined as those customers of the District within the City Limits of Clermont, Florida, who are supplied natural gas fuel by the District on an interruptible rate basis and who are further defined as those customers supplied with such fuel by the District purchased wholesale by the District at a preferred interruptible rate for resale solely to preferred interruptible gas customers. In no event shall a customer be considered an interruptible gas customer within the meaning of the franchise and this supplemental agreement whose average use of natural gas supplied by the District is less -2- sixty (60) therms per day when such use is averaged over the period of time such interruptible customer is billed for such use on an interruptible basis. The periods of time to be used for computing the average daily use of natural gas by an interruptible gas customer to determine whether or not such customer qualifies for the interruptible rate basis shall end on March 31st and October 1st of each year. (c) The District agrees that payment to the City of the City's share of the gross revenues derived from all customers within the corporate limits of the City of Clermont, Florida, payable to the City pursuant to the Franchise Ordinance and Agreement Supplemental thereto, shall be due and payable each year on April IS, (covering period from October 1 through March 31 of each year) and on October 15th (covering period from April 1 through September 30 of each year). Section 4. The District shall furnish annually to the City of Clermont a current and paid-up memorandum of insurance policy showing the District's abili ty to indemnify and save harmless the City from "damage claims" as contemplated by Section 4 of the Franchise Ordinance. Section 5. This agreement shall be in full force and effect from the date of granting of the said franchise by the City to the District and shall continue in full force and effect during the term of said franchise. IN WITNESS WHEREOF, the City of Clermont, Florida, a body corporate and politic of the State of Florida, has caused this agreement to be executed by its Mayor and its corporate seal to be hereunto affixed and attested by its Clerk and the LAKE APOPKA NATURAL GAS DISTRICT, a body corporate of the State of Florida, has caused this agreement to be executed by its Chairman of the Board of Directors and its corporate seal to be hereunto affixed and attested by the Secretary of said Board, all as of the 17th day of November, 1959. LAKE APOPKA NATURAL GAS DISTRICT