EXHIBIT ▇▇.▇▇
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CAMDEN POWER MARKETING AGREEMENT
BETWEEN
EL PASO MERCHANT ENERGY, L.P.
AND
MESQUITE INVESTORS, L.L.C.
DATED AS OF
OCTOBER 1, 2001
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CAMDEN POWER MARKETING AGREEMENT
THIS CAMDEN POWER MARKETING AGREEMENT (the "Agreement"), made and
entered into this 1st day of October, 2001, by and between EL PASO MERCHANT
ENERGY, L.P. ("Marketer") and MESQUITE INVESTORS, L.L.C., a Delaware limited
liability company ("Mesquite"). Marketer and Mesquite are hereafter sometimes
referred to individually as a "Party" and collectively as the "Parties."
W I T N E S S E T H:
WHEREAS, Camden ▇▇▇▇▇ ▇.▇. (the "Company") owns a natural gas-fired
combined cycle electric generation facility having a nominal capacity of
approximately 143 MW located in Camden, New Jersey (the "Facility");
WHEREAS, Marketer is a power marketer engaged in the purchase, sale and
marketing of electric energy and capacity;
WHEREAS, Marketer and Company have entered into the Camden Power
Purchase/Sale Transaction Confirmation, dated as of the date hereof, pursuant to
which Marketer has agreed to purchase Energy from the Company as provided
therein (the "Camden Transaction Confirmation");
WHEREAS, Mesquite desires to induce Marketer to enter into the Camden
Transaction Confirmation; and
WHEREAS, the Parties desire to set forth certain terms and conditions
applicable to such management of the purchases and sales of the Power of the
Facility pursuant to the Camden Transaction Confirmation.
NOW, THEREFORE, in consideration of the mutual agreements, covenants
and conditions herein contained, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.1 Definitions - Unless otherwise provided to the contrary in this
Agreement, capitalized terms in this Agreement shall have the meanings set forth
in Section 1.1 of Exhibit A.
1.2 Interpretations - Unless expressly provided to the contrary in this
Agreement, this Agreement shall be interpreted in accordance with the provisions
set forth in Section 1.2 of Exhibit A.
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ARTICLE II
PURCHASE AND SALE OF POWER
2.1 Marketing Obligation - Subject to the other provisions of this
Agreement, Marketer shall be obligated to use all commercially reasonable
efforts to schedule Power under the Camden Transaction Confirmation and to sell
all of the available Power made available to it under the Camden Transaction
Confirmation in a manner to maximize the net revenues obtained for the sale of
such Power.
2.2 Terms and Conditions for all Sales - The terms and conditions
applicable to sales of Power shall be in accordance with the provisions of the
PJM Agreement and the contracts entered into by parties pursuant to the PJM
Agreement for the sale of Power ("PJM Contracts"), as such agreement and
contracts may change from time to time.
(a) Limitation of Liability - The Parties acknowledge that the
market for the purchase and sale of Power is often a volatile and fluctuating
market and that, despite use of commercially reasonable efforts, Marketer may
not always obtain the maximum net revenues for the Power.
2.3 Negotiation of Bilateral Contracts - Marketer shall use all
commercially reasonable efforts to identify opportunities for the sale of the
Power purchased by Marketer from Company under the Camden Transaction
Confirmation pursuant to Bilateral Contracts with third parties that Marketer
believes would be on terms more favorable than selling the Power under short
term arrangements. Depending on the term of the proposed Bilateral Contract, the
Parties agree as follows:
(a) Long-Term Bilateral Contracts - With regard to any
proposed Bilateral Contract with a term of three (3) months or more ("Long-Term
Bilateral Contract"), Marketer shall submit such Long-Term Bilateral Contract
opportunity to Mesquite for its review and approval. Marketer shall provide all
information that is reasonably requested by Mesquite to assist in Mesquite's
review and analysis of the opportunity. Without limiting the above, Marketer
shall provide Mesquite the form of the Bilateral Contract to be entered into for
the sale of the Power in accordance with such opportunity. Marketer shall
provide such information and details regarding the Long-Term Bilateral Contract
opportunity to Mesquite, to the extent possible, at least ten (10) days prior to
the anticipated date of execution of the associated Bilateral Contract. If
Mesquite approves the opportunity and the execution of the Bilateral Contract,
then Marketer shall use all commercially reasonable efforts to enter into the
Bilateral Contract substantially in the form of the Bilateral Contract submitted
to Mesquite for its approval. If Mesquite does not approve the Long-Term
Bilateral Contract opportunity or does not provide a response in sufficient time
to permit the execution of the associated Bilateral Contract or Marketer is
unable to enter into such Bilateral Contract
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following receipt of Mesquite's approval, then the sale of Power subject to such
opportunity shall be made pursuant to the terms set forth in Section 2.2.
(b) Short-Term Bilateral Contracts - With regard to any
proposed Bilateral Contract with a term of less than three months ("Short-Term
Bilateral Contract"), Marketer shall use all commercially reasonable efforts to
enter into a Bilateral Contract without the need to obtain the approval of
Mesquite.
(c) Terms and Conditions of Bilateral Contracts - If Marketer
is able to enter into either a Long-Term Bilateral Contract or a Short-Term
Bilateral Contract, then the following terms and conditions shall apply to such
sales of Power pursuant to this Section 2.3:
(i) Power Revenues - Each month Marketer shall pay
Mesquite Power Revenues equal to (A) until and including December 31, 2003, the
product of (x) three thousand three hundred and forty dollars ($3,340.00) per MW
and (y) 145 MW during the months of June through September or 150 MW during the
months of October through May, as applicable, and (B) beginning January 1, 2004,
all revenues from the sale of Power resold by Marketer pursuant to Bilateral
Contracts or PJM Contracts equal to the amounts paid to Marketer pursuant to
such Bilateral Contracts or PJM Contracts. Marketer may also provide Bilateral
Contracts from the next day or forward markets to maximize trading margins.
Notwithstanding the foregoing, all profits and losses from such transactions
shall be taken into account in the computation of Power Revenues and Power
Costs.
(ii) Power Costs - Each month Mesquite shall pay
Marketer Power Costs equal to (A) all amounts paid by Marketer to Company under
the Camden Transaction Confirmation (exclusive of amounts paid by Marketer in
respect of "Energy Price" as set forth in the Camden Transaction Confirmation),
(B) all other costs paid by Marketer to purchasers of Power under the applicable
Bilateral Contracts or PJM Contracts or for the transmission of Power to the
applicable delivery point under such Bilateral Contracts or PJM Contracts and
(C) taxes or other charges paid by Marketer arising from the sale of Power.
(iii) Indemnification - Marketer shall indemnify and
hold Mesquite harmless for any costs, expenses, claims or liabilities incurred
by Mesquite arising from or associated with the resale of Power pursuant to the
Long-Term Bilateral Contracts and the Short-Term Bilateral Contracts as a result
of Marketer's failure to perform in accordance with such contracts, except to
the extent that Marketer's failure to perform in accordance with such contracts
was the result of Company's failure to perform in accordance with the Camden
Transaction Confirmation.
2.4 Alternative Structures - In addition to the sales made in
accordance with Sections 2.2 and 2.3 above, Marketer shall use all commercially
reasonable efforts to identify other opportunities to maximize the net revenues
for
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Power. Without limiting the above, Marketer shall review and analyze the
following other opportunities:
(a) fixed price arrangements or pricing that is tied in whole
or in part to the market prices for the purchase of natural gas supplies for the
Facility;
(b) the sale of Power pursuant to the terms of power pools
other than PJM; and
(c) the use of financial derivatives to mitigate price
volatility.
Marketer shall submit such other opportunities to Mesquite for its review and
approval, which shall include Marketer's proposal regarding the terms and
conditions that are applicable to such transactions, including, without
limitation, any proposed sharing of the risks and benefits of such transactions.
2.5 Taxes - Mesquite shall reimburse Marketer for any taxes, fees or
charges (other than an income tax or taxes, fees or charges that are recovered
by Marketer in the PJM Contracts or Bilateral Contracts) which is levied by a
governmental or regulatory body on the Power sold by Marketer under this
Agreement. The Parties shall cooperate to obtain and to provide any available
certificates of exemption or other evidence of exemption from taxes that might
otherwise apply.
ARTICLE III
POWER MARKETING FEE
3.1 Power Marketing Fee - In consideration of the power sales and
management services, commencing on the Effective Date, Mesquite shall pay
Marketer a power marketing fee ("Power Marketing Fee"). The Power Marketing Fee
shall be equal to eight thousand three hundred and thirty-three dollars
($8,333.00) per month, escalated at the beginning of each calendar year by CPI.
3.2 Renegotiation of Power Marketing Fee - Within ninety (90) days
prior to the beginning of the fourth Annual Period, Marketer or Mesquite may
request in writing a redetermination of the Power Marketing Fee. Following the
receipt of such request, Marketer and Mesquite shall negotiate in good faith to
attempt to mutually agree upon a revised Marketing Fee, taking into
consideration, among other things, any changes in (a) the staffing and costs
associated with providing the marketing services under this Agreement (including
the ability of the staff assigned to administering this Agreement to also
provide similar services to sales of Power under other power marketing
arrangements with Affiliates of Mesquite) and (b) the risks that Marketer
assumes in purchasing the Power and other services under this Agreement. If the
Parties are unable to mutually agree upon a revised Power Marketing Fee, then
Mesquite shall have the right to
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terminate this Agreement at the beginning of the fourth Annual Period upon
providing Marketer written notice on or before the beginning of the fourth
Annual Period. Marketer agrees to (a) continue to market the Power under the
terms of this Agreement and (b) to provide transitional support to any
replacement marketer of the Power, in each case, for a period of up to three (3)
months following the termination of this Agreement if requested by Mesquite.
3.3 Offset Right - Marketer shall be entitled to offset (a) the Power
Marketing Fee against (b) any obligation of Marketer to make payments under this
Agreement.
ARTICLE IV
OPERATIONAL MATTERS
4.1 Provision of Information - RESERVED
4.2 Dispatch and Scheduling Services - Marketer shall be responsible
for and shall make all arrangements necessary to receive the Power from the
Facility under the Camden Transaction Confirmation, obtaining any necessary
approvals, including entering into any transmission contracts with the
Transmitting Utility downstream from the Delivery Point and administering such
agreements, including all dispatch and scheduling coordination with PJM.
4.3 Reliability Guidelines - Marketer is responsible for adhering to
accepted electric industry practice and specifically adhere to the applicable
operating policies, criteria and/or guidelines of PJM and any regional,
subregional or interconnecting utility requirements.
ARTICLE V
TERM OF AGREEMENT
5.1 Primary Term - This Agreement shall become effective on the
Effective Date (as defined in the Camden Transaction Confirmation and defined
hereinafter as the "Effective Date") and shall continue in full force and effect
until and including March 5, 2013, unless earlier terminated pursuant to another
provision in this Agreement. Notwithstanding anything herein to the contrary,
after December 31, 2003, this Agreement may be terminated by Mesquite upon
thirty (30) days' written notice to Marketer.
5.2 Extension - This Agreement shall remain in full force and effect
from year to year after the primary term, unless and until terminated by either
Party upon giving six (6) months' prior written notice to the other Party.
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ARTICLE VI
BILLING AND PAYMENT
6.1 Statements - On or before the tenth (10th) day of each month,
Marketer shall render to Mesquite a statement setting forth a calculation of
Power Revenues and Power Costs for the preceding month and the amounts owed to
or by Marketer pursuant to Section 6.2 of this Agreement with respect to the
preceding month. Within five (5) days following receipt of such statement,
Mesquite shall provide Marketer any objections thereto.
6.2 Payments - If Power Revenues for a month exceed Power Costs for a
month, Marketer shall pay Mesquite an amount equal to such excess. If Power
Costs for a month exceed Power Revenues for a month, Mesquite shall pay Marketer
an amount equal to such excess. The Payment Due Date for such payments is the
fifth (5th) business day after receipt of the invoice. If payment is not made by
the Payment Due Date, interest shall be due on the unpaid balance from the
Payment Due Date until the date paid. Interest shall accrue on each calendar day
at the Interest Rate. Notwithstanding the above, if Marketer is not paid for the
resale of the Power sold pursuant to Section 2.2 within thirty (30) days after
the payment by Marketer for such Power, then Marketer shall be reimbursed for
such unpaid amounts or shall be entitled to offset such unpaid amounts against
amounts owed under this Agreement.
6.3 Disputed Payments - If any portion of a statement is in dispute,
then the undisputed amount of the invoice shall be paid when due. The Party
disputing payment shall provide the other Party formal written notice of the
amount in dispute and a detailed description of the specific basis of the
dispute. Upon determination of the correct amount, any amount due shall be
promptly paid (but in any event, within thirty (30) days of the resolution of
the dispute) after such determination with interest calculated at the Interest
Rate from the Payment Due Date to the date the payment is made. Acceptance of a
partial payment shall not be deemed (i) a release or (ii) waiver of Mesquite's
rights under Section 6.4.
6.4 Audit - Each Party or any third-party representative of a Party
may, at its sole expense and during normal working hours, examine the records of
the other Party to the extent reasonably necessary to verify the accuracy of any
statement, charge or computation made pursuant to the provisions of this
Agreement. No adjustments shall be made after the lapse of one (1) year from the
rendition of such statement, charge or computation. This Section 6.4 will
survive any termination of this Agreement for a period of one (1) year from the
date of such termination for the purpose of such statement and payment
adjustments. Payment together with interest at the Interest Rate shall be made
to correct any inaccuracy within thirty (30) days after discovery.
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ARTICLE VII
FORCE MAJEURE
7.1 Suspension of Receipt and Delivery Obligations - If a Party is
rendered unable, wholly or in part, by Force Majeure to perform obligations
under this Agreement, other than the obligation to make payments when due, it is
agreed that the performance of the respective obligations of the Party under
this Agreement, so far as they are affected by Force Majeure, shall be excused
and suspended from the inception of any such inability until it is corrected,
but for no longer period. The Party claiming such inability shall give notice
thereof to the other Party as soon as practicable after the occurrence of the
Force Majeure. Such notice may be given orally or in writing, but, if given
orally, it shall be promptly confirmed in writing, giving reasonably full
particulars. Such inability shall be promptly corrected to the extent it may be
corrected through the exercise of reasonable diligence by the Party claiming
inability by reason of Force Majeure.
7.2 Liability During Force Majeure - Neither Party shall be liable to
the other for any losses or damages, regardless of the nature thereof and
however occurring, whether such losses or damages be direct or indirect,
immediate or remote, by reason of, caused by, arising out of or in any way
attributable to suspension of the performance of any obligation of either Party
to the extent that such suspension occurs because a Party is rendered unable,
wholly or in part, by Force Majeure to perform its obligations.
7.3 Definition of Force Majeure - The term "Force Majeure" as used
herein shall mean, cover and include acts of God, epidemics, landslides,
hurricanes, floods, washouts, lightning, earthquakes, storms, perils of the sea,
hurricane or storm warnings (to the extent that such warnings cause an
evacuation of facilities and restrict service under this Agreement), restraints
of any court or governmental or regulatory authorities, acts of civil disorder,
acts of industrial disorder which are part of a national or regional strike or
labor dispute, accidents to any transmission facilities, freezing of facilities
or other equipment, necessities for making repairs or alterations to machinery
or equipment, the failure of any governmental authority to grant or renew
authorizations to permit Marketer to resell Power under this Agreement, or any
cause, whether of the kind enumerated in this Agreement or otherwise, that in
the event of each of the above described events or circumstances (a) restricts
or prevents performance under this Agreement, (b) is not reasonably within the
control of the party claiming suspension and (c) by the exercise of due
diligence, such party is unable to prevent or overcome; provided, however, the
settlement of any labor dispute shall be within the sole discretion of the Party
to this Agreement involved in such labor dispute, and the above requirement that
an inability shall be corrected with reasonable diligence shall not apply to
labor disputes.
7.4 Termination - If a Force Majeure event continues for a period of
ninety (90) consecutive days, then the Parties will discuss the anticipated
length of the Force Majeure event and steps, if any, that are being taken to
resolve the Force Majeure event. If, despite these efforts, the Parties are
unable to resolve the Force
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Majeure event, then the Party which did not claim such Force Majeure may at any
time thereafter terminate this Agreement upon thirty (30) days' prior written
notice provided to the other Party to the extent the Force Majeure event has not
been corrected prior to the expiration of such notice period; provided that
Marketer will not terminate this Agreement pursuant to this Section 7.4 so long
as Marketer is being paid the Power Marketing Fee pursuant to Section 3.1
hereof.
ARTICLE VIII
ARBITRATION
8.1 Submission of Dispute for Arbitration - Any controversy pertaining
to matters expressly made subject to arbitration under this Agreement shall be
determined in accordance with the rules of the American Arbitration Association
by a board of arbitration, consisting of three (3) members, upon notice of
submission given by either Party, which notice shall also name one (1)
arbitrator. The Party receiving such notice, shall, by notice to the other Party
within ten (10) days thereafter, name the second arbitrator, or failing to do
so, the Party giving notice of submission shall name the second arbitrator. The
two (2) arbitrators so appointed shall name a third arbitrator, or, failing to
do so within ten (10) days, the third arbitrator shall be appointed by the
person who is the senior (in terms of service) actively sitting judge of the
United States District Court for the Southern District of Texas.
8.2 Qualifications of Arbitrators - The arbitrators shall be qualified
by education, experience and training in the electric industry to decide upon
the particular question in dispute.
8.3 Arbitration Proceedings - The arbitrators so appointed, after
giving the Parties due notice of the date of a hearing and reasonable
opportunity to be heard, shall promptly hear the controversy in Houston, Texas
and shall thereafter render their decision determining said controversy no later
than ninety (90) days after such board has been appointed. Any decision requires
the support of a majority of the arbitrators. If the board of arbitration is
unable to reach such decision, new arbitrators will be named and shall act
hereunder, at the request of either Party, in a like manner as if none had been
previously named. After the presentation of evidence has been concluded, each
Party shall submit to the arbitrators a final offer of its proposed resolution
of the dispute. The arbitrators shall approve the final offer of one Party,
without modification and reject that of the other. In considering the evidence
and deciding which final offer to approve, the arbitrators shall be bound by the
criteria described in the applicable section of this Agreement.
8.4 Arbitrator's Decision - The decision of the arbitrators shall be
rendered in writing and supported by written reasons. The decision of the
arbitrators shall be final and binding upon the Parties and will be complied
with by the Parties. The decision of the arbitrators shall be kept confidential
in accordance
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with Section 11.1 of this Agreement. Each Party shall bear the expenses of its
chosen arbitrator, and the expenses of the third arbitrator shall be borne
equally by the Parties. Each Party shall bear the compensation and expenses of
its legal counsel, witnesses and employees.
ARTICLE IX
DEFAULT
9.1 Default Remedies - If an Event of Default shall occur, then the
non-defaulting Party may (a) except to the extent such remedy is limited in this
Agreement, exercise any remedy it may have at law, in equity or as provided in
this Agreement, (b) in addition to its other remedies, elect to terminate this
Agreement in accordance with this Section 9.1 or (c) in the case of Marketer's
failure (i) to pay in accordance with Section 9.2(a) and (ii) to provide
reasonable assurances that it will be able to make payments under this Agreement
for future periods, Mesquite may terminate this Agreement upon thirty (30) days'
prior written notice. Prior to exercising any right to terminate this Agreement,
the non-defaulting Party shall provide the defaulting Party written notice of
the Event of Default.
9.2 Events of Default - An "Event of Default" shall mean:
(a) Failure to Pay - The failure of either Party to make
payments in full and when due pursuant to this Agreement, which failure is not
cured within twenty (20) days after written notice of such default by the
non-defaulting Party to the defaulting Party;
(b) Failure to Perform - Except with respect to the payment of
amounts owed under this Agreement which is governed by Section 9.2(a), the
failure of either Party to perform any of its material obligations under this
Agreement and such failure is not cured within forty-five (45) days after
written notice thereof by the non-defaulting Party provided to the defaulting
Party specifying the failure; provided that if the nature of the failure is such
that the Event of Default cannot be cured within such forty-five (45) Day period
and if the defaulting Party has commenced and is diligently pursuing such cure,
such period shall be extended for such further period not to exceed three (3)
months after the notice of the default, as shall be necessary for non-defaulting
Party to cure the failure;
(c) Voluntary Bankruptcy - Either Party files for voluntary
bankruptcy or similar proceedings; or
(d) Involuntary Bankruptcy - Either Party has filed against it
involuntary bankruptcy or similar proceedings and such proceedings are not
dismissed or stayed within ninety (90) days; provided, however, that the events
described in (c) and (d) of this Section 9.2 of this Agreement shall not
constitute an Event of Default if the debtor in possession, trustee, or other
party exercising
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control over the assets of the party in default affirms this Agreement within a
reasonable period of time and provides evidence reasonably satisfactory to the
non-defaulting Party, of the ability to continue the performance of the
defaulting party's obligations under this Agreement.
ARTICLE X
REGULATORY BODIES
10.1 Laws and Regulations - This Agreement shall be subject to all
valid applicable governmental laws and orders, regulatory authorizations,
directives, rules and regulations of any governmental body or official having
jurisdiction over the Parties, the Power or this Agreement or any provision
thereof or any Transaction under this Agreement; but nothing contained herein
shall be construed as a waiver of any right to question or contest any such law,
order, rule or regulation in any forum having jurisdiction. The rights and
obligations of the Parties associated with the purchase and sale of Power shall
not be effective until all Regulatory Approvals have been obtained; provided,
however, that if Regulatory Approvals are not issued by applicable governmental
authorities by the effective date of any Transaction, either Party may terminate
such Transaction without further obligation or liability to the other Party.
10.2 Reliance on Law - The Parties are entitled to act in accordance
with a law until such law is amended, reversed or otherwise disposed in a final
nonappealable order.
10.3 Cooperation - The Parties shall cooperate to ensure compliance
with all governmental regulation, including obtaining and maintaining all
necessary regulatory authorizations or any reasonable exchange or provision of
information needed for filing or reporting requirements. Without limiting the
above, Marketer represents that it has all Regulatory Approvals that are
required on the date of this Agreement to purchase and sell the Power pursuant
to the terms of this Agreement, except to the extent that the failure to have
obtained and maintained such Regulatory Approval could not reasonably be
expected to have a material adverse effect on Marketer or its ability to perform
its obligations under this Agreement. Marketer covenants that it will use all
commercially reasonable efforts to maintain such Regulatory Approvals for the
term of this Agreement and to obtain and maintain any additional Regulatory
Approvals that may be imposed following the date of this Agreement.
10.4 Changes in Law or Regulation - If any federal or state statute or
regulation or order by a court of law or regulatory authority directly or
indirectly (a) prohibits performance under this Agreement, (b) makes such
performance illegal or impossible or (c) effects a change in a substantive
provision of this Agreement which has a significant material adverse impact upon
the ability of either Party to perform its obligations under this Agreement,
then the Parties will use all reasonable efforts to revise this Agreement so
that (a) performance under this Agreement is no longer
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prohibited, illegal, impossible or is no longer impacted in a material adverse
fashion, and (b) this Agreement is revised in a manner that preserves, to the
maximum extent possible, the respective positions of the Parties. Each Party
will provide reasonable and prompt notice to the other Party as to any proposed
law, regulations or any regulatory proceedings or actions that could affect the
rights and obligations of the Parties. If the Parties are unable to revise this
Agreement in accordance with the above, then the Party whose performance is
rendered prohibited, illegal, impossible or is impacted in a material adverse
manner shall have the right, at its sole discretion, to suspend or terminate
this Agreement upon forty-five (45) days' prior written notice to the other
Party.
ARTICLE XI
MISCELLANEOUS
11.1 Confidentiality - Except as required to be disclosed to Lenders
and potential Lenders, Marketer and Mesquite agree to maintain the
confidentiality of this Agreement and each of the terms and conditions hereof
and any information provided pursuant to this Agreement, including, without
limitation, the information set forth in Section 4.1, and Marketer and Mesquite
agree not to divulge same to any third party except to the extent, and only to
the extent required by law, court order or the order or regulation of an
administrative agency having jurisdiction over Mesquite and Marketer, or the
subject matter of this Agreement. If required to be disclosed, then the Party
subject to the disclosure requirement shall (a) notify the other Party
immediately and (b) cooperate to the fullest extent in seeking whatever
confidential status may be available to protect any material so disclosed. The
Parties shall be entitled to all remedies available at law or in equity to
enforce or seek relief in connection with the confidentiality obligation.
11.2 Limitation of Liability - Unless expressly provided for in this
Agreement, the Parties waive any and all rights, claims, or causes of action
arising under this Agreement for incidental, consequential, exemplary, tortious
or punitive damages. Any damages resulting from a breach of this Agreement by
either Party shall be limited to actual damages incurred by the Party claiming
damages.
11.3 Third-Party Beneficiaries - Neither Mesquite nor Marketer intend
for the provisions of this Agreement to benefit any third party. No third party
shall have any right to enforce the terms of this Agreement against Mesquite or
Marketer.
11.4 Authorizations - The Parties represent that they have all
requisite corporate and governmental authorizations necessary or proper to
perform their obligations hereunder. The Parties agree that in no event shall
Marketer be required to make any sale of Power to any party that would subject
Marketer and/or its Affiliates to regulation under the Public Utility Holding
Company Act of 1935, 15 U.S.C. Section Section 79-79z-6.
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11.5 Recording of Transaction - The Parties agree that (i) each may
electronically record all telephone conversations between them relating to any
Transaction, (ii) each waives any further notice of such monitoring or
recording, and agrees to notify its officers and employees of such monitoring or
recording and to obtain any necessary consent of such officers and employees and
an electric recording of the oral agreement of the Parties may be used as
evidence of the terms to be set forth in a PJM Contract or a Bilateral Contract.
A Party may only take direction from a person or persons designated from time to
time in writing as having such authority.
11.6 Waiver of Default - No waiver by Mesquite or Marketer of any
default of the other under this Agreement shall operate as a waiver of any
future default, whether of a like or different character.
11.7 Notices - Except as otherwise expressly provided in this
Agreement, every notice, request, statement and invoice provided in this
Agreement shall be in writing directed to the Party to whom given, made or
delivered at such Party's address as follows:
MESQUITE:
MESQUITE INVESTORS, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
MARKETER:
EL PASO MERCHANT ENERGY, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President of Trading
Either Mesquite or Marketer may change one or more of its addresses for
receiving invoices, statements, notices and payments by notifying the other in
the manner as provided above. All written notices, requests, statements and
invoices shall be considered transmitted at the time of delivery, if hand
delivered, or, if delivered by mail, on the next working day after mailing; if
transmitted by telephone or other oral means or by telecopy or other form of
electronic or telegraphic communication, all such notices shall be considered
transmitted at the time of oral communication or at the time the telecopy or
other form of electronic or telegraphic communication was sent.
11.8 Choice of Law - THE PARTIES AGREE THAT THE INTERNAL LAWS OF THE
STATE OF TEXAS SHALL CONTROL CONSTRUCTION, INTERPRETATION, VALIDITY AND/OR
ENFORCEMENT OF THIS
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AGREEMENT, WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW PROVISIONS OF SUCH
STATE.
11.9 Assignment - No Party may assign this Agreement without the
written consent of the other Party, which shall not be unreasonably withheld or
delayed (it being acknowledged that Mesquite may withhold such consent to any
proposed assignee of Marketer that does not have material power marketing
experience); provided that either Party may assign this Agreement to an
Affiliate without the prior written consent of the other Party; provided that
with regard to Marketer any assignment to an Affiliate shall be limited to an
Affiliate that has all necessary Regulatory Approvals to perform the obligations
under this Agreement and has experience (or whose employees have experience) in
marketing power. All provisions of this Agreement shall extend to and be binding
on the successors and assigns of the Parties insofar as applicable to the rights
and obligations succeeded to or assigned, but no succession or assignment shall
relieve the assigning or succeeded to Party of its obligations without the
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed. Nothing in this Section 11.9 prevents either Party from
pledging or mortgaging all or any part of such Party's property as security.
11.10 Entire Agreement - The terms and conditions contained in this
Agreement (along with any PJM Contracts and Bilateral Contracts entered into
pursuant to Sections 2.2 and 2.3, schedules or other agreements entered into to
document the Parties' agreement as to Transactions) constitute the full and
complete agreement between the Parties, and any change to be made must be
submitted in writing and agreed to by both Parties.
11.11 Severability - Except as otherwise stated herein, any article or
section declared or rendered unlawful by a court of law or regulatory authority
with jurisdiction over the Parties or deemed unlawful because of a statutory
change will not otherwise affect the lawful obligations that arise under this
Agreement.
11.12 Enforceability - Each Party represents that it has all necessary
power and authority to enter into and perform its obligations under this
Agreement and that this Agreement constitutes a legal, valid and binding
obligation of that Party enforceable against it in accordance with its terms,
except as such enforceability may be affected by any bankruptcy law or the
application of principles of equity.
IN WITNESS WHEREOF, this Agreement is executed in multiple
counterparts, each of which is an original, as of the date first written above.
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MESQUITE INVESTORS, L.L.C.
By: El Paso Chaparral Management, L.P.
its Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President
EL PASO MERCHANT ENERGY, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
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EXHIBIT A
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Definitions - The following capitalized terms shall have
the following meanings when used in this Agreement, unless the context otherwise
requires:
"Affiliate" means, with respect to any person, any other person (other
than an individual) that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such person. For purposes of the foregoing definition, "control" means the
direct or indirect ownership of more than fifty percent (50%) of the outstanding
capital stock or other equity interests having ordinary voting power.
"Ancillary Services" means those ancillary services that are described
in the rules and regulations of PJM or the Open Access Transmission Tariff of
PSE&G, as filed with FERC.
"Annual Period" means the one (1) year period commencing on January 1
of each year; provided, however, that the first Annual Period shall commence on
the Effective Date and the last Annual Period shall end on the last day of the
term of this Agreement.
"Bilateral Contract" means a unit contingent contract (i.e. a contract
tied specifically to the Power of the Facility) to be entered into between
Marketer and a third party to sell a specifically determined or determinable
portion of the Power.
"Camden Capacity Supply Agreement" means the Camden Capacity Supply
Agreement, dated as of the date hereof, by and between Company and Marketer.
"Camden Transaction Confirmation" means the Camden Power Purchase/Sale
Transaction Confirmation, dated as of the date hereof, by and between Company
and Marketer.
"Capacity" means the maximum dependable load carrying ability in
Kilowatts of the Facility (exclusive of capacity required for use at the
Facility), as determined pursuant to the PJM Agreement.
"Company" means Camden ▇▇▇▇▇ ▇.▇.
"CPI" means the "Consumer Price Index" for all Items for the Houston
Metropolitan Area, as published monthly in the "Monthly Labor Review" of the
Bureau of Labor Statistics of the United States Department of Labor. If at any
time the Consumer Price Index is no longer used, the term "CPI" shall mean an
index
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comparable to the Consumer Price Index and published by the Bureau of Labor
Statistics of the United States of Labor.
"Delivery Point" means the existing point of physical connection of the
Facility to the PSE&G 230-Kv transmission system, as more fully described in the
Interconnection Agreement.
"Effective Date" shall have the meaning set forth in Section 5.1.
"Energy" means the power produced in the form of electricity, measured
in kilowatt hours or megawatt hours, or as otherwise defined in the PJM
Agreement.
"Event of Default" shall have the meaning set forth in Section 9.2.
"Facility" shall have the meaning set forth in the first recital to
this Agreement.
"FERC" means the Federal Energy Regulatory Commission or any regulatory
agency succeeding to substantially all of the authority of the Federal Energy
Regulatory Commission with respect to electric service.
"Force Majeure" shall have the meaning set forth in Section 7.3.
"Interconnection Agreement" means the Interconnection Agreement, dated
as of May 23, 2001, by and between Company and PSE&G.
"Interest Rate" means the then current prime rate of interest published
by Chase Manhattan Bank, N.A. plus 2.0%.
"Lenders" means any financial institutions or other lenders that
provide capital to Mesquite in connection with a financing or refinancing.
"Long-Term Bilateral Contract" shall have the meaning set forth in
Section 2.3.
"Marketer" means El Paso Merchant Energy, L.P.
"Mesquite" means Mesquite Investors, L.L.C.
"Payment Due Date" has the meaning given in Section 6.2.
"PJM" means the PJM Interconnection, L.L.C. or any successor to the
functions thereof.
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"PJM Agreement" means the PJM Operating Agreement governing PJM dated
June 2,1997, as amended December 31, 1997, as in effect form time to time,
together with all amendments or supplements thereto.
"PJM Contracts" shall have the meaning set forth in Section 2.2.
"Power" means all of the electric products of the Facility (including,
without limitation, Energy, Capacity and Ancillary Services, and electric
products of other power pools) supplied to Marketer by Company pursuant to the
Camden Transaction Confirmation and the Camden Capacity Supply Agreement.
"Power Costs" shall have the meaning set forth in Section 2.3.
"Power Marketing Fee" shall have the meaning set forth in Section 3.1.
"Power Revenues" shall have the meaning set forth in Section 2.3.
"PSE&G" means Public Service Electric and Gas Company.
"Regulatory Approvals" means, for any Transaction, all applicable state
and federal regulatory authorizations, consents, or approvals required for the
Transaction to occur.
"Short-Term Bilateral Contract" shall have the meaning set forth in
Section 2.3.
"Transaction" means a particular, specifically agreed to sale of Power
to be performed under this Agreement, as evidenced by a PJM Contract or a
Bilateral Contract.
"Transmitting Utility" means any transmission company that receives and
transmits the Power at or downstream of the Delivery Point.
1.2 Interpretations. Unless expressly provided for elsewhere in this
Agreement, this Agreement shall be interpreted in accordance with the following
provisions:
(a) Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine, or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.
(b) If a word or phrase is defined, its other grammatical forms have a
corresponding meaning.
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(c) A reference to a person, corporation, trust, partnership, or other
entity includes any of them.
(d) The headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
(e) All references in this Agreement to articles, sections or
subdivisions thereof shall refer to the corresponding article, section or
subdivision thereof of this Agreement unless specific reference is made to such
articles, sections, or subdivisions of another document or instrument.
(f) A reference to any agreement or document (including without
limitation a reference to this Agreement) is to the agreement or document as
amended, varied, supplemented, novated or replaced, except to the extent
prohibited by this Agreement or that other agreement or document.
(g) No waiver by either Party of any default by the other Party in the
performance of any provision, condition or requirement herein shall be deemed to
be a waiver of, or in any manner release the other Party from, performance of
any other provision, condition or requirement herein, nor shall such waiver be
deemed to be a waiver of, or in any manner a release of, the other Party from
future performance of the same provision, condition or requirement. Any delay or
omission of either Party to exercise any right hereunder shall not impair the
exercise of any such right, or any like right, accruing to it thereafter. The
failure of either Party to perform its obligations hereunder shall not release
the other Party from the performance of such obligations.
(h) A reference to any party to this Agreement or another agreement or
document includes the party's successors and assigns.
(i) A reference to legislation or to a provision of legislation
includes a modification or reenactment of it, a legislative provision
substituted for it and a regulation or statutory instrument issued under it.
(j) A reference to writing includes a facsimile transmission and any
means of reproducing words in a tangible and permanently visible form.
(k) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
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