SECOND AMENDING AGREEMENT
THIS AMENDING AGREEMENT made effective as of January 1, 1997.
BETWEEN:
SAN DIEGO GAS & ELECTRIC COMPANY, an Enova Company, a
California corporation with its principal place of
business in San Diego, California ("SDG&E")
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HUSKY OIL OPERATIONS LTD., an Alberta corporation, with
its principal place of business in Calgary, Alberta
("Seller")
WHEREAS SDG&E and Seller are parties to a Natural Gas Purchase
Agreement made as of March 12, 1991, and amended as of November 1,
1994 (the "Gas Purchase Agreement"); and
WHEREAS the parties wish to amend the Gas Purchase Agreement in
the manner hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Section 22.6 of the Gas Purchase Agreement is deleted and
replaced with the following:
"Section 22.6 Governing Law
This Agreement shall be governed by and
construed according to the laws of the Province of
Alberta excluding however any conflict of laws rule
that would apply the law of another jurisdiction. The
parties hereby attorn to the jurisdiction of the
Courts of Alberta at Calgary which shall have
exclusive jurisdiction in respect of all disputes and
other matters relating to this Agreement with the
exception of those disputes and other matters
referable to arbitration under this Agreement."
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2. Sections 11.0(a), (c) and (f) of Appendix A to the Gas
Purchase Agreement are deleted and replaced with:
(a) Subject to any other provisions of this Appendix:
(i) if in the reasonable opinion of either party any
published index or price, or any rate or tariff or
other provision of the Gas Purchase Agreement,
including this Appendix, which is required to
determine the Base Price:
(A) ceases to be available or ascertainable; or
(B) assumes a measure or value that is wholly
inconsistent with the measure or value
represented by the component in December, 1994;
or
(ii) if in the reasonable opinion of either party the
Base Price no longer represents a price which is
competitive with SDG&E's alternative southwest gas
supplies
(any of the circumstances described in (i) or (ii) shall,
subject to section 11.0 (b), be referred to as a "Pricing
Event"),
then that party shall have the right by notice in writing
("Pricing Event Notice"), which can be given to the other
party ("Recipient") at any time following the occurrence
of the Pricing Event, to require the other party to meet,
within thirty (30) days of the Recipient's receipt of the
Pricing Event Notice, to attempt in good faith to
negotiate a replacement index, price, rate, tariff or
mechanism in order that the Base Price will be:
(iii) competitive with the cost of SDG&E's alternative
southwest gas supplies; and
(iv) insofar as possible, consistent with the pricing
structure as set out in this Appendix;
((iii) and (iv) herein shall be referred to as the
"Standard").
If the Recipient disputes the occurrence of a Pricing
Event, the parties shall nevertheless meet within thirty
(30) days of the Recipient's receipt of the Pricing Event
Notice. For the then remaining portion of the ninety
(90) day period following the Recipient's receipt of the
Pricing Event Notice ("Determination Period"), the
parties shall meet regularly to review and discuss the
relevant issues and events in a good faith effort to
agree upon whether or not a Pricing Event has occurred.
During the Determination Period, neither party shall
commence any legal
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proceedings of any kind whatsoever which pertain in any
way to the Pricing Event Notice or the alleged occurrence
of a Pricing Event. If during the Determination Period
the parties determine that a Pricing Event has not
occurred, the Pricing Event Notice shall be deemed not to
have been issued. If during the Determination Period the
parties determine that a Pricing Event has occurred
("Consensus"), then the parties shall meet, within ten
(10) days of the Consensus, in a good faith attempt to
negotiate a replacement index, price, rate, tariff or
mechanism consistent with this section 11.
(c) If the parties are unable to negotiate a replacement
index, price, rate, tariff or mechanism within ninety
(90) days following the Recipient's receipt of the
Pricing Event Notice, the parties shall proceed to
arbitration pursuant to the following provisions of this
section. However, if a Consensus has occurred, the
parties shall not proceed to arbitration until thirty
(30) days following the date of the Consensus (during
which period the parties shall meet regularly in a good
faith attempt to negotiate a replacement index, price,
rate, tariff or mechanism as stipulated in section
11(a)).
(f) Upon a replacement index, price, rate, tariff, mechanism
or Base Price being determined by negotiation or
arbitration, the Base Price, the Reference Price and
Contract Price shall be adjusted to reflect the
difference, if any, for:
(i) each Day, during the Month in which the Recipient
received the Pricing Event Notice ("Receipt
Month"), that the Pricing Event occurred or was in
effect,
(ii) each Day, during the 3 Month period immediately
preceding the Receipt Month, that the Pricing Event
occurred or was in effect, and
(iii) each Month following the Receipt Month, and any
payment adjustment will be recovered in the first
payment period immediately following that
determination and shall include interest accrued as
if the adjustment was a Disputed Amount (determined
to be owing) under Article 7 of the Gas Purchase
Agreement.
3. None of the amendments made to the Gas Purchase Agreement in
this Amending Agreement are intended to either support or detract
from any argument or position respecting the authority or proper
jurisdiction of either an arbitrator or a court to determine the
issue (if the parties are unable to agree) of whether or not a
Pricing Event has occurred.
4. This Amending Agreement was prepared with each of the parties
having access to its own counsel and the parties waive any claim
they may have now or in the future
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based on this Amending Agreement not having been prepared jointly
by the parties or by either to the exclusion of the other.
5. This Amending Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be
an originally executed copy, and it shall not be necessary in
making proof of the Amending Agreement to produce all of such
counterparts.
6. Each party represents and warrants that the officer or
officers signing this Amending Agreement on its behalf is
authorized to do so.
7. This Amending Agreement shall be governed by and construed
according to the laws of the Province of Alberta excluding however
any conflict of laws rule that would apply to the law of another
jurisdiction. The parties hereby attorn to the jurisdiction of
the Courts of Alberta at Calgary which shall have exclusive
jurisdiction in respect of all disputes and other matters relating
to this Amending Agreement with the exception of those disputes
and other matters referable to arbitration under the Gas Purchase
Agreement.
IN WITNESS WHEREOF this Amending Agreement is executed in multiple
originals effective as of the date and year first above written.
SAN DIEGO GAS &
ELECTRIC COMPANY HUSKY OIL OPERATIONS LTD.
By: ______________________ By: ______________________
Name:______________________ Name:______________________
Title: ____________________ Title:_____________________
By: ______________________
Name:______________________
Title:______________________
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