EXHIBIT 2.A.1
AMENDMENT TO TRANSACTION AGREEMENT
This AMENDMENT TO TRANSACTION AGREEMENT ("AMENDMENT") is made this 22nd
day of January 2001 between East Coast Power Holding Company L.L.C., a Delaware
limited liability company ("SELLER"), ECTMI Trutta Holdings LP, a Delaware
limited partnership ("TRUTTA"), Enron Corp., an Oregon corporation ("ENRON"),
Mesquite Investors, L.L.C., a Delaware limited liability company ("BUYER"), and
El Paso Energy Corporation, a Delaware corporation ("EL PASO"). Capitalized
terms used, but not defined, herein shall have the meaning set forth in the
Agreement (defined below).
A. The parties hereto have entered into that certain Transaction
Agreement dated December 18, 2000 ("AGREEMENT"), pursuant to which
among other things Buyer shall acquire a 98.01% Sharing Ratio of
the Company, Buyer Affiliate shall acquire a 0.99% Sharing Ratio
of the Company and Seller shall have its interests in the Company
reduced to a 1.0% Sharing Ratio, all on the terms and subject to
the conditions set forth in the Agreement.
B. While the parties have proceeded diligently and in good faith to
effect the Closing, not all the conditions to Closing have or will
be met by the End Date.
C. The parties hereby desire to amend certain of the terms and
conditions of the Agreement as provided herein.
NOW, THEREFORE, for good and valuable consideration, the parties hereby
amend the Agreement as follows:
AGREEMENT
1. CLOSING. Section 2.03(a) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(a) Subject to the satisfaction of the conditions to the
Initial Closing set forth in Article 6, the closing (the "INITIAL
CLOSING") of the transactions contemplated by Section 2.01 of this
Agreement shall take place at the offices of Xxxxxx & Xxxxxx L.L.P.,
0000 Xxxxxx, Xxxxxxx, Xxxxx 00000, on a Business Day no later than
February 22, 2001 selected by Seller, provided that Seller gives Buyer
notice of such Initial Closing Date at least one Business Day prior to
such Initial Closing Date."
2. CLOSING CONDITIONS.
(a) Section 6.01(f) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(f) As of the Second Closing, the Company and ENA shall have
entered into the Transition Services Agreement in substantially the
form attached hereto as Annex 6.01;"
(b) Section 6.01(h) of the Agreement is hereby deleted in its
entirety.
(c) The form of Transition Services Agreement attached as
Exhibit A to this Amendment is hereby added as Annex 6.01 to the
Transaction Agreement.
3. END DATE. Section 7.01(b) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(b) by either Buyer or Seller if the Initial Closing shall
not have been consummated on or prior to February 22, 2001 or the
Second Closing shall not have occurred by February 23, 2001 (each, the
"END DATE"); provided, however, that Seller may not terminate this
Agreement pursuant to this Section 7.01(b) if the Initial Closing shall
not have been consummated by the End Date by reason of Seller's or
Trutta's failure to perform in all material respects any of its
respective covenants or agreements contained in this Agreement; and
provided, further, that Buyer may not terminate this Agreement pursuant
to this Section 7.01(b) if the Initial Closing shall not have been
consummated by the End Date by reason of Buyer's or El Paso's failure
to perform in all material respects any of their respective covenants
or agreements contained in this Agreement;"
4. EPME. All references in the Agreement and in any Annex thereto to
EPME shall be deemed to refer to El Paso Merchant Energy, L.P., a Delaware
limited partnership.
5. FAILURE TO MEET CONDITIONS BY FEBRUARY 9, 2001. If the Initial
Closing does not occur on or by February 9, 2001 due solely to a failure of the
parties to satisfy the condition set forth in Section 6.01(g) of the Agreement
(provided that such failure is not solely the fault of Enron or any of its
Affiliates) and for no other reason, then Buyer shall promptly pay to Seller a
nonrefundable deposit of $2,000,000, which amount shall either (i) be credited
against any cash payments due from Buyer to Seller at Closing or (ii) be
retained by Seller if the Agreement is terminated without the Initial Closing
occurring due solely to a failure of the parties to satisfy the condition set
forth in Section 6.01(g) of the Agreement (provided that such failure is not
solely the fault of Enron or any of its Affiliates).
6. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
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7. COUNTERPARTS. This Amendment may be executed by one or more of the
parties in any number of separate counterparts, and all of such counterparts
taken together shall be deemed to constitute one and the same instrument.
8. ENTIRE AGREEMENT. This Amendment shall constitute the entire
agreement among the parties with respect to the subject hereof. All prior
understandings, statements and agreements, whether written or oral, relating to
the subject hereof are superceded by this Amendment, provided that all other
terms and conditions of the Agreement not specifically amended hereby remain in
full force and effect.
[SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed individually or by their authorized representatives on the day and year
first above written.
EAST COAST POWER HOLDING COMPANY L.L.C.
By: Joint Energy Development
Investments II Limited Partnership,
its Managing Member
By: Enron Capital Management II Limited
Partnership, its General Partner
By: Enron Capital II Corp., its General
Partner
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
ECTMI TRUTTA HOLDINGS LP
By: Brook I LLC, general partner
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
MESQUITE INVESTORS, L.L.C.
By: Chaparral Investors, L.L.C., its sole
Member
By: El Paso Chaparral Investor, L.L.C.,
its managing Member
By: El Paso Chaparral Holding Company,
its sole Member
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President and Senior
Managing Director
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EL PASO ENERGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ENRON CORP.
By: /s/ Xxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxx X. Xxxxxxx, Xx.
Title: Managing Director, Finance and
Treasurer
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EXHIBIT A
FORM OF TRANSITION SERVICES AGREEMENT
--------------------------------------------------------------------------------
CAMDEN POWER MARKETING AGREEMENT
BETWEEN
EL PASO MERCHANT ENERGY, L.P.
AND
MESQUITE INVESTORS, L.L.C.
DATED AS OF
OCTOBER 1, 2001
--------------------------------------------------------------------------------
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 Xxxxx X.X. (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, (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
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for 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.
- 6 -
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.
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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 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.
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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 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
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(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 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.
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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 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.
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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.
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.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxx
MARKETER:
EL PASO MERCHANT ENERGY, L.P.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
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,
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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 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.
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IN WITNESS WHEREOF, this Agreement is executed in multiple
counterparts, each of which is an original, as of the date first written above.
MESQUITE INVESTORS, L. L.C.
By: El Paso Chaparral Management, L.P.
its Manager
By:
---------------------------------
Xxxxx X. Xxxxx
President
EL PASO MERCHANT ENERGY, L.P.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxx
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 Xxxxx X.X.
"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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