MASTER PURCHASE & SALES AGREEMENT
Enron Energy Services, Inc., a Delaware corporation ("EESI"), and EMW Energy
Services Corp., a Delaware corporation ("EMW"), referred to individually as a
"PARTY" and collectively as the "PARTIES," enter into this Master Purchase &
Sales Agreement (together with all Transactions, collectively, this
"AGREEMENT") effective as of December 23, 1999, (the "EFFECTIVE DATE"). The
General Provisions set forth in Appendix "1" will apply to this Agreement.
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ARTICLE 1 TERM
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This Agreement will govern all Transactions, be effective as of the Effective
Date and continue for a period of two (2) years from the Services
Commencement Date (the "PRIMARY TERM"); provided, however, EMW will have the
option to extend the term for an additional two (2) year period (the
"SECONDARY TERM") by providing EESI written notice of such election at least
ninety (90) Days prior to the second (2nd) anniversary of the Services
Commencement Date; provided further, however, that in the event any
Transaction provides for a Period of Delivery extending beyond the Primary
Term, or if applicable, the Secondary Term of this Agreement, then this
Agreement will continue to apply to all such Transactions until all such
Transactions are completed. Termination of this Agreement in all instances
will be subject to Article 10.4.
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ARTICLE 2 SCOPE OF AGREEMENT
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2.1. CONTRACT FORMATION. EESI and EMW from time to time during the term
hereof may, but are not obligated to, enter into Transactions for the
purchase or sale of Gas to which this Agreement will apply. Each
Transaction will (a) be formed, effectuated and evidenced by a written
paper-based Transaction Agreement executed by the Parties, including by
facsimile and/or counterparts; (b) constitute a part of this Agreement;
(c) be valid and enforceable as a result of the use of these procedures
for the mutual benefit of the Parties; (d) be resolved, in the case of
any conflict between the provisions of this Agreement and those
contained in a Transaction Agreement, in favor of the Transaction
Agreement and (e) govern all Transactions between the Parties from and
after the Effective Date.
2.2. PARTIES BOUND. The Parties will be legally bound by each Transaction
upon execution of the Transaction Agreement in accordance with this
Article 2 and acknowledge that each Party will rely thereon in doing
business related to the Transaction.
2.3. INTERRUPTIBLE OR FIRM. Each Transaction Agreement will indicate whether
Gas purchased or sold, and delivered under this Agreement for each
Transaction is interruptible or firm as set forth in Article 3. If a
Transaction is not designated as interruptible or firm, it will be
deemed to be interruptible. When the sale and purchase of Gas under
this Article 2.3 is deemed interruptible by the Parties as set forth in
Article 3, nothing herein will obligate Seller to sell and deliver or
Buyer to purchase and receive any quantity of Gas.
2.4. TRANSACTION AGREEMENTS. The Parties agree that a Transaction will be
confirmed by the execution of a Transaction Agreement. Upon execution
of a Transaction Agreement, the Transaction Agreement shall be (a)
conclusive evidence of the Transaction made the subject matter thereof,
(b) binding and enforceable against Seller and Buyer, and (c) the final
expression of all the terms of such Transaction.
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ARTICLE 3 QUANTITY OBLIGATIONS
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3.1. SALES BY EESI TO EMW
A. EESI'S SALES OBLIGATION. Subject to the conditions and requirements
of the section entitled "Operations and Delivery" set forth in
Appendix "1", EESI and EMW will Schedule, or cause to be Scheduled,
at the Delivery Point(s) on an interruptible or firm basis, as the
Parties so elect, each Gas Day a quantity of Gas for (a) requested
Periods of Delivery equal to or in excess of one (1) Month (a
"FORWARD TRANSACTION") and (b) for any Gas Day for which EMW has
not requested that EESI provide either the Full Management Services
or the Imbalance Management Services, requested Periods of Delivery
during a Month (an "INTRA-MONTH TRANSACTION"), in both cases equal
to the quantity requested by EMW pursuant to the terms of this
Agreement (the "REQUESTED QUANTITY"); provided, however, in no
event will EESI be obligated to sell or deliver an aggregate
quantity of Gas (i) under all Transactions in excess of 800,000
MMBtus per
Gas Day (the "MAXIMUM AGGREGATE QUANTITY") or (ii) under any one
Transaction in excess of 40,000 MMBtus per Gas Day (the "MAXIMUM
DAILY QUANTITY").
B. EESI'S FAILURE TO SCHEDULE. If EESI and EMW have elected in a
Transaction for the sale and purchase and delivery of Gas on a firm
basis, and if on any Gas Day EESI fails to Schedule the Requested
Quantity, then such occurrence, unless excused by Force Majeure or
EMW's failure to perform, will constitute an "EESI DEFICIENCY
DEFAULT" and the "EESI DEFICIENCY QUANTITY" will be the numerical
difference between the Requested Quantity and the quantity of Gas
Scheduled for such Gas Day, stated in MMBtus. In the event of an
EESI Deficiency Default, EESI will pay EMW the sum of the
following: (i) an amount equal to the product of the EESI
Deficiency Quantity and the Replacement Price Differential, PLUS
(ii) liquidated damages equal to the product of $0.15 per MMBtu and
the EESI Deficiency Quantity, to compensate EMW for its
administrative and operational costs. During any Month in which
EESI's nonperformance under this Article 3.1 B continues for a
period of 5 consecutive Gas Days EMW may elect upon written notice
to EESI, without liability, not to recommence Scheduling Gas
hereunder for the remainder of such Month, but for no longer
period. Subject to netting pursuant to Article 3.4, payment to EMW
will be made upon receipt of an invoice by EESI pursuant to this
Article 3.1 B and otherwise in accordance with the terms of the
Financial Matters provision set forth in Appendix 1 of this
Agreement.
C. EMW'S FAILURE TO SCHEDULE. If EESI and EMW have elected in a
Transaction for the sale and purchase, and delivery of Gas on a
firm basis, and if on any Gas Day EMW fails to Schedule the
Requested Quantity, then such occurrence, unless excused by Force
Majeure or EESI's failure to perform, will constitute an "EMW
DEFICIENCY DEFAULT" and the "EMW DEFICIENCY QUANTITY" will be the
numerical difference between the Requested Quantity and the
quantity of Gas Scheduled for such Gas Day, stated in MMBtus. In
the event of an EMW Deficiency Default, EMW will pay EESI the sum
of the following: (i) an amount equal to the product of the EMW
Deficiency Quantity and the Replacement Price Differential, PLUS
(ii) liquidated damages equal to the product of $0.15 per MMBtu and
the EMW Deficiency Quantity, to compensate EESI for its
administrative and operational costs. During any Month in which
EMW's nonperformance under this Article 3.1 C continues for a
period of 5 consecutive Gas Days EESI may elect, upon written
notice to EMW, without liability, not to recommence Scheduling Gas
for the remainder of such Month, but for no longer period. Subject
to netting pursuant to Article 3.4, payment to EESI will be made in
accordance with the Financial Matters provisions set forth in
Appendix "1."
3.2. PURCHASES BY EESI FROM EMW.
A. EESI'S PURCHASE OBLIGATION. Subject to the conditions and
requirements of the section entitled "Operations and Delivery" set
forth in Appendix "1", EESI and EMW will Schedule, or cause to be
Scheduled, at the Delivery Point(s) on an interruptible or firm
basis as the Parties so elect, each Gas Day a quantity of Gas for
(a) Forward Transactions and (b) for any Gas Day for which EMW has
not requested that EESI provide either the Full Management Services
or the Imbalance Management Services, Intra-Month Transactions, in
both cases equal to the quantity offered by EMW pursuant to the
terms of this Agreement (the "OFFERED QUANTITY"); provided,
however, in no event will EESI be obligated to purchase or receive
an aggregate quantity of Gas in excess of Maximum Aggregate
Quantity or Maximum Daily Quantity.
B. EESI FAILURE TO SCHEDULE. If EESI and EMW have elected in a
Transaction for the sale and purchase, and delivery of Gas on a
firm basis, and if on any Gas Day EESI fails to Schedule the
Offered Quantity, then such occurrence, unless excused by Force
Majeure or EMW's failure to perform, will constitute an "EESI
PURCHASE DEFAULT" and the "EESI DEFAULT QUANTITY" will be the
numerical difference between the Offered Quantity and the quantity
of Gas Scheduled for such Gas Day, stated in MMBtus. In the event
of an EESI Purchase Default, EESI will pay EMW the sum of the
following: (i) an amount equal to the product of the EESI Default
Quantity and the Replacement Price Differential, PLUS (ii)
liquidated damages equal to the product of $0.15 per MMBtu and the
EESI Default Quantity, to compensate EMW for its administrative and
operational costs. During any Month in which EESI's nonperformance
under this Article 3.2 B continues for a period of 5 consecutive
Gas Days, EMW may elect upon written notice to EESI, without
liability, not to recommence Scheduling Gas for the remainder of
the Month, but for no
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longer period. Subject to netting pursuant to Article 3.4, payment
to EMW will be made in accordance with the Financial Matters
provisions set forth in Appendix "1."
C. EMW'S FAILURE TO SCHEDULE. If EESI and EMW have elected in a
Transaction for the sale and purchase, and delivery of Gas on a
firm basis, and if on any Gas Day EMW fails to Schedule the Offered
Quantity, then such occurrence, unless excused by Force Majeure or
EESI's failure to perform, will constitute an "EMW SALES DEFAULT"
and the "EMW DEFAULT QUANTITY" will be the numerical difference
between the Offered Quantity and the quantity of Gas Scheduled for
such Gas Day stated in MMBtus. In the event of an EMW Sales
Default, EMW will pay EESI the sum of the following: (i) an amount
equal to the product of the EMW Default Quantity and the
Replacement Price Differential, PLUS (ii) liquidated damages equal
to the product of $0.15 per MMBtu and the EMW Default Quantity, to
compensate EESI for its administrative and operational costs.
During any Month in which EMW's nonperformance under this Article
3.2 C continues for a period of 5 consecutive Gas Days EESI may
elect, upon written notice to EMW, without liability, not to
recommence Scheduling Gas hereunder for the remainder of the Month,
but for no longer period. Subject to netting pursuant to Article
3.4, payment to EWSI will be made upon receipt of an invoice by EMW
pursuant to Article 3.2 B and otherwise in accordance with the
Financial Matters provisions set forth in Appendix "1".
3.3. SCHEDULING QUANTITIES AND DELIVERY POINTS. Unless otherwise agreed,
nothing in this Agreement, and in particular this Article 3, will
require or permit either Party to Schedule Gas at a point other than at
a Delivery Point or in quantities in excess of the Requested Quantity
or Offered Quantity.
3.4. NETTING.
A. INTRAAGREEMENT. In the event that EMW and EESI are each required
to pay an amount to the other Party in the same Month under this
Agreement, then such amounts with respect to each Party may be
aggregated and the Parties may discharge their obligations to pay
through netting, in which case the Party, if any, owing the
greater aggregate amount may pay to the other Party the difference
between the amounts owed.
B. INTERAGREEMENT. In the event that a Termination Event occurs under
either this Agreement or that certain Master Energy Purchase and
Sale Agreement between the Parties under even date herewith (the
"MASTER ENERGY AGREEMENT") and EMW and EESI are each required to
pay an amount to the other Party in the same Month pursuant to
this Agreement and/or the Master Energy Agreement, then such
amounts with respect to each Party may be aggregated and the
Parties may discharge their obligations to pay through netting, in
which case the Party, if any, owing the greater aggregate amount
may pay to the other Party the difference between the amounts owed.
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ARTICLE 4 MANAGEMENT SERVICES
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4.1. INITIAL SERVICES. For a period commencing as of the Services
Commencement Date and extending for a period of six (6) months (the
"INITIAL PERIOD"), EESI will provide EMW, at no cost, the following
services (collectively referred to as the "FULL MANAGEMENT SERVICES"):
A. LOAD FORECASTING. EESI will estimate the full Gas requirements each
Gas Day for those customers which EMW has notified EESI that it has
acquired and for whom EMW desires to purchase Gas each Gas Day from
EESI (the "LOAD FORECAST") pursuant to Article 3.1. (the "LOAD
FORECASTING SERVICE").
B. NOMINATION. EESI will utilize (i) the Load Forecast during any
Month for which EMW has requested that EESI provide the Full
Management Services or the Imbalance Management Services and (ii)
the amount specified by EMW during any period for which EMW has not
requested that EESI provide the Full Management Services or the
Imbalance Management Services for each Month during the Period of
Delivery as EMW's nomination for said Month ("ORIGINAL NOMINATION")
in lieu of EMW nominating the Requested Quantity for the applicable
Month by the Nomination Due Date as required pursuant to the
section entitled "Operations and Delivery" in the "General Terms &
Conditions" attached as Appendix "1" to this Agreement (the
"NOMINATION SERVICE").
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C. SCHEDULING. EESI will Schedule (i) the Requested Quantity for
delivery by EMW's Transporter from the Delivery Point to EMW's
customers and (ii) the Offered Quantity for receipt by EESI's
Transporter at the Delivery Point under each Transaction, as
applicable, each Gas Day, provided, however, in no event will such
quantity of Gas exceed the Maximum Daily Quantity or be permitted
if it would cause EMW to exceed the Maximum Aggregate Quantity (the
"SCHEDULING SERVICE").
D. POSITION REPORTING. EESI will regularly monitor the actual Gas
usage of EMW's customers during the Period of Delivery and track
developing variances between the actual Gas consumption of EMW's
customers and the quantity of Gas Scheduled on EMW's behalf,
including any applicable gas bank and back up balances
("VARIANCE"), referred to as the "POSITION REPORT SERVICE").
E. IMBALANCE MANAGEMENT SERVICE. EESI will, during any Month for which
EMW has requested that EESI provide the Full Management Services
(other than the Invoicing Services), adjust as deemed necessary the
quantity then currently Scheduled with all Transporters, perform
imbalance trades and settlements and all other activities deemed
necessary to assure compliance with the Scheduling tolerances of
the Transporters (the "IMBALANCE MANAGEMENT SERVICES"). In the
event a Transporter(s) assess any charge and/or penalty for
Variances, including the cost of replacement Gas or cash outs (the
"SERVICE PENALTIES"), EESI will be responsible for all Service
Penalties properly imposed pursuant to the terms and conditions of
such Transporters rates and tariffs, as long as (i) such Service
Penalties are not due to deviations in the actual Gas consumption
from the Gas consumption data obtained by EESI from or through EMW
or the telemetering facilities of EMW's customers, as applicable
(ie, the Load Forecasting Services that EMW is required to receive
to obtain the Imbalance Management Services), other than those data
deviations occurring from the gross negligence, willful misconduct
or bad faith of EESI; and (ii) EMW promptly complied with any and
all OFO's.
F. INVOICING SERVICE. EESI will prepare the written statement setting
forth Gas Scheduled during the preceding Month, and other charges
due EMW, including, without limitation, deficiency or default
charges under Article 3 of this Agreement, as required under the
Financial Matters provisions set forth in Appendix "1" for all
purchases of Gas by EESI pursuant to Article 5.2 hereof (the
"INVOICING SERVICES").
G. OTHER ACTIONS. EESI will take such actions and enter into such
additional agreements as may be required from time to time by EMW
or third parties so as to enable EESI to perform the above
referenced actions.
4.2. SUBSEQUENT SERVICES. EESI will provide EMW the Full Management Services
or any or all of the individual services referenced in Sections A, B, C,
D or F of Article 4.1 above (it being specifically recognized and agreed
that EMW may not elect to receive the Imbalance Management Services,
except as a part of the Full Management Services) commencing as of the 6
Month anniversary of the Services Commencement Date and extending for
the Primary Term (plus any Secondary Term) of this Agreement at the
following prices:
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TIME PERIOD SERVICE COSTS
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A period from the six (6) Month anniversary of the Services The actual costs incurred (including
Commencement Date and extending until the first anniversary of the out-of-pocket, general and administrative,
Services Commencement Date; provided, however if an initial firm employee and employee benefit and any
commitment underwritten public offering of shares of common stock of reasonable internal allocations received in
EMW registered under the Securities Act of 1933, as amended, has not connection with the provision of the Full
been consummated on or prior to six (6) Months following the Effective Management Services) by EESI in providing the
Date, then EMW may elect to extend this period for an additional six services selected by EMW, but in no event
(6) Months beyond the first anniversary of said Services Commencement will such cost of service exceed an amount
Date by giving EESI written notice of such election at least ten (10) equal to $0.30 per MMBtu.
Days prior to said first anniversary date.
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A period from the first anniversary of the Services Commencement Date An amount equal to $0.25 per MMBtu.
(or the eighteen (18) month anniversary in the event EMW has extended
the above period pursuant to the above provisions) and extending
through the Primary Term of this Agreement.
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A period from the expiration of the Primary Term and extending through An amount mutually agreed to by the Parties,
the Secondary Term, if any, of this Agreement. not to exceed $0.50 per MMBtu.
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4.3. EMW'S OBLIGATION. To enable EESI to perform any or all of the services
specified as a component of Full Management Services:
A. LIMITED NON-EXCLUSIVE AGENT. EMW appoints and authorizes EESI as
its limited, non-exclusive agent to take actions necessary to
perform the Full Management Services during the Initial Period and
any individual service comprising the Full Management Services
thereafter; provided, however such appointment is a limited agency
wherein the duties of EESI are specifically limited to the subject
matter thereof and will not create or result in the imposition on
EESI of any other duties of any kind, including without limitation
any duties that otherwise may arise by operation of law. Nothing
herein will cause EESI to be or to be deemed a party to any
transportation agreement with EMW's Transporter(s) and
particularly, without limitation, EESI does not hereby assume any
obligation, liability or responsibility of EMW to EMW's
Transporter(s) in connection with the obligation to pay
transportation invoices.
B. AGGREGATION SERVICES. EMW authorizes EESI, as its limited,
non-exclusive agent, during the Initial Period and any Month
thereafter in which EMW has elected to receive the Full Management
Services or Imbalance Management Services, to include EMW's
customers in an aggregation pool (either EMW's or EESI's) defined
by the relevant utility and include EMW's customer's existing
volume banking and balancing service, full requirements service
and/or partial requirements service levels, as applicable, in said
aggregation pool. EMW or its customers will be responsible for
installing, maintaining and operating all equipment and related
services required by the applicable utility to receive service
hereunder. Upon termination of any Transaction Agreement, if EESI
has billed EMW based on the actual consumption of EMW's customer's,
then (i) any balance EMW or its customers have in a storage account
relative to that Transaction Agreement ("STORAGE BALANCE") will be
settled pursuant to the tariff provisions of the applicable
Transporter and (ii) EMW and EESI will settle any Storage Balance
based upon the actual cost of the Gas in the relevant storage
account, including charges for transportation and fuel.
Notwithstanding EMW's authorization to allow the inclusion of its
customers in EESI's aggregation pools, nothing herein shall be
construed so as to disqualify those aggregated customers from EMW's
customer base.
C. UPSTREAM CAPACITY.
1. Under any Transaction Agreement providing for service in which
EMW has elected to receive the Full Management Services or
Imbalance Management Services, EESI may elect, as EMW's
limited, non-exclusive agent, to contract for voluntarily
released Pipeline capacity and/or storage and/or to elect an
assignment of firm transportation and storage capacity upstream
of EMW's Delivery Points (the "UPSTREAM CAPACITY"). Upon such
election, EESI may utilize such Upstream Capacity so assigned
and/or released to serve parties other than EMW or its
customers, including, but not limited to other parties in
EESI's aggregation pool, if any, and to re-release such
Upstream Capacity and to retain all proceeds therefrom for
EESI's own account, subject to recall only in the event of an
EESI Deficiency Default or an EESI Purchase Default, EMW's
customer's election to return to their utility sales service
program or termination of this Agreement; provided, however,
EESI will be responsible for and pay all transportation,
unutilized capacity charges and other charges associated with
the Upstream Capacity.
2. Under any Transaction Agreement providing for service in which
EMW has not elected to receive the Full Management Services or
Imbalance Management Services, EMW may elect to contract for
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Xxxxxxxx Xxxxxxxx and to re-release such Upstream Capacity and
to retain all proceeds therefrom for EMW's own account;
provided, however, EMW will be responsible for and pay all
transportation, unutilized capacity charges and other charges
associated with the Upstream Capacity.
3. In the event EMW is obligated to take Upstream Capacity
pursuant to a mandatory release program from any utility
subsequent to entering into a Transaction Agreement, then EMW
may request that EESI amend such Transaction Agreement to
provide for a new Delivery Point at the "receipt point" for the
Upstream Capacity, in which event EMW will reimburse EESI for
any and all "net unwind" costs associated with the change of
such Delivery Point, and a new Contract Price will be
established pursuant to the provisions of Article 5.2 of this
Agreement; provided, however, EMW will be responsible for and
pay all transportation, unutilized capacity charges and other
charges associated with the Upstream Capacity.
D. GAS CONSUMPTION DATA. EMW will provide EESI (or allow EESI access to
on a weekly basis during the applicable Period of Delivery) the
actual Gas consumption data for EMW's customers for such week;
and/or provide or allow EESI to obtain the actual real-time Gas
consumption data of such customers through existing telemetering
facilities connected to the natural gas distribution facilities of
EMW's customer's transporter. Said data consumption information is
subject to the operational requirements of EMW's customer's
transporter and will be deemed confidential information pursuant to
Article 10.7 of this Agreement;
E. SERVICE PENALTIES. Be responsible for Service Penalties to the
extent such Service Penalties are due to deviations in the actual
Gas consumption from the Gas consumption data obtained by EESI from
or through EMW on a weekly basis and/or the telemetering facilities
connected to the Gas distribution facilities of EMW's customer's
utility, as applicable (other than those data deviations occurring
from the gross negligence, willful misconduct or bad faith of EESI);
or EMW's failure to promptly comply with any and all OFO's.
F. OTHER ACTIONS. EMW will take such actions and enter into such
additional agreements as may be required from time to time by EESI
or third parties so as to enable EESI to perform the above
referenced actions.
4.4. LIABILITY FOR PERFORMANCE OF FULL MANAGEMENT SERVICES. EESI WILL BE
LIABLE FOR ANY ACT OR OMISSION BY EESI IN CONNECTION WITH EESI'S
PERFORMANCE OF THE FULL MANAGEMENT SERVICES OR ANY INDIVIDUAL SERVICE
COMPRISING THE FULL MANAGEMENT SERVICES DUE TO OR ARISING OUT OF EESI'S
NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED, HOWEVER, IN THE EVENT THE
PARTIES ARE CONCURRENTLY NEGLIGENT, EESI'S LIABILITY WILL BE LIMITED TO
THAT PERCENTAGE ASSOCIATED WITH ITS NEGLIGENCE; PROVIDED FURTHER,
HOWEVER, IN NO EVENT WILL EESI BE LIABLE FOR ANY CLAIM RESULTING, IN
WHOLE OR PART, FROM THE WILLFUL MISCONDUCT OR BAD FAITH OF EMW.
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ARTICLE 5 PRICING OPTIONS
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5.1. CONTRACT PRICE ELECTION FOR SALES BY EESI TO EMW. The Contract Price
for all quantities of Gas sold by EESI to EMW pursuant to this
Agreement will be specified on the applicable Transaction Agreement
pursuant to one of the following options:
A. FORWARD TRANSACTIONS IN EXISTING MARKETS. EMW may elect, subject to
the maximum Transaction size specified in Article 3.1 A, to receive
a Contract Price for the purchase of Gas from EESI for any Forward
Transaction in the markets and at the Delivery Points specified on
Exhibit "C" (an "EXISTING MARKET") equal to either of the following:
1. EMW may request EESI's then current sales price per MMBtu
applicable to wholesale transactions for the Existing Markets
based on the applicable index specified for such Existing
Market for the specified Period of Delivery and adjusted for
the applicable load shape and applicable locational basis
adjustment from the Delivery Point to EMW's customers (but
specifically excluding any premiums for the Full Management
Services, any individual service comprising the Full Management
Services or
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associated with the Requested Quantity, such as small quantity,
odd lot or illiquidity premiums or any costs or ancillary charges
associated with EESI's delivery of the Gas to the Delivery
Point), the "QUOTED CURVE PRICE", by contacting EESI between
the hours from 8:00 a.m. to 4:00 p.m. C.T. of each Business Day
(the "PRICING HOURS") requesting any such price for a specified
quantity of Gas to be Scheduled during selected Months within a
selected Period of Delivery; provided, such request must be
made prior to 11:00 a.m. C.T. of the last trading day of the
New York Mercantile Exchange ("NYMEX") natural gas futures
contract for the selected Month (the "MONTHLY DEADLINE"). If
EMW accepts the Quoted Curve Price within the time period
specified by EESI, EESI will promptly prepare a Transaction
Agreement documenting such Transaction. If EMW fails to accept
the Quoted Curve Price within the time period specified by
EESI, EMW will be deemed to have declined the Quoted Curve
Price and no Transaction will be formed and effectuated; or
2. EMW may request EESI's final sales price per MMBtu applicable
to wholesale transactions for the Existing Markets based on the
applicable index specified for such Existing Market for the
specified Delivery Point for the specified Period of Delivery
and adjusted for the applicable load shape and applicable
locational basis adjustment from the Delivery Point to EMW's
customers (but specifically excluding any premiums for the Full
Management Services, any individual service comprising the Full
Management Services or associated with the Requested Quantity,
such as small quantity, odd lot or illiquidity premiums or any
costs or ancillary charges associated with EESI's delivery of
the Gas to the Delivery Point), as of the end of the applicable
Business Day (the "SETTLED CURVE PRICE") by contacting EESI
during the Pricing Hours requesting any such price for a
specified quantity of Gas to be Scheduled during selected
Months within a selected Period of Delivery; provided, such
request must be made prior to the Monthly Deadline. Upon
receipt of EMW's request, EESI will promptly prepare a
Transaction Agreement documenting such Transaction and the
applicable Settled Curve Price. If EMW fails to request the
Settled Curve Price within the Pricing Hours, then EMW will be
deemed to have declined the Settled Curve Price and no
Transaction will be formed and effectuated.
B. FORWARD TRANSACTIONS IN NEW MARKETS.
1. For any market in the United States that EMW proposes to enter
that is not specified on Exhibit "C" (a "NEW MARKET"), EMW may
request, in writing, that EESI provide an applicable index and
Delivery Point for each New Market upon which the Contract
Price for sales of Gas by EESI in a Forward Transaction in the
New Market would be based. EESI will propose such index and
associated Delivery Point within 10 Business Days of receipt of
EMW's written request.
2. If EMW accepts the proposed index and Delivery Point, then the
Contract Price for any purchases of Gas by EMW for a Forward
Transaction in a New Market will be the amount determined
pursuant to the procedures identified in Article 5.1. A. 1. or
2. above, as elected by EMW, utilizing the index and Delivery
Point identified by EESI. Upon establishment of the Contract
Price for the sale of Gas by EESI in the applicable New Market,
Exhibit "C" will be amended to reflect such New Market, index
and Delivery Point
3. If EMW rejects the proposed index and Delivery Point, then the
Parties will use all commercially reasonable efforts to
determine a mutually agreeable substitute index and Delivery
Point for the applicable New Market; provided, however, if the
Parties are unable to determine such mutually acceptable index
and Delivery Point within a reasonable time period, then the
Parties will use the Alternate Price Redetermination procedures
provided in Appendix "1".
4. EESI will determine the index and Delivery Point for each New
Market based on EESI's operational market analysis.
C. INTRA-MONTH QUANTITIES. For any Gas Day for which EMW has not
requested that EESI provide either the Full Management Services or
the Imbalance Management Services for an Existing Market or New
Market, as applicable, the Contract Price for the sale of Gas by
EESI in an Intra-Month Transaction will be the cash price offer per
MMBtu by EESI for delivery at the applicable delivery point.
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D. SETTLED CURVE PRICE STATEMENTS. EESI will provide, on a Monthly
basis, a statement for any Existing Market and those mutually
agreeable New Markets in which EESI is actively engaged in the sale
of Gas specifying the Settled Curve Price for the current forward
twelve Month period for each Business Day.
5.2. CONTRACT PRICE FOR PURCHASES BY EESI FROM EMW. Purchases of Gas by EESI
subsequent to the expiration of the Initial Period for any Market that
EMW has not requested that EESI provide either the Full Management
Services or the Imbalance Management Services, the Contract Price for
all quantities of Gas purchased by EESI from EMW pursuant to this
Agreement will be specified on the applicable Transaction Agreement
pursuant to one of the following options:
A. FORWARD TRANSACTIONS IN EXISTING MARKETS. EMW may elect to receive
a Contract Price for the sale of Gas to EESI for any Forward
Transaction in an Existing Market equal to either of the following:
1. EMW may request EESI's then current purchase price per MMBtu
applicable to wholesale transactions for the Existing Markets
based on the applicable index specified for such Existing
Market for the specified Period of Delivery and adjusted for
the applicable load shape and applicable locational basis
adjustment from the Delivery Point to EMW's customers (but
specifically excluding any premiums for the Full Management
Services, any individual service comprising the Full Management
Services or associated with the Offered Quantity, such as small
quantity, odd lot or illiquidity premiums or any costs or
ancillary charges associated with EESI's delivery of the Gas to
the Delivery Point), the "PURCHASE CURVE PRICE" by contacting
EESI during the Pricing Hours requesting any such price for a
specified quantity of Gas to be Scheduled during selected
Months within a selected Period of Delivery; provided, such
request must be made prior to the Monthly Deadline. If EMW
accepts the Purchase Curve Price within the time period
specified by EESI, then EESI will promptly prepare a
Transaction Agreement documenting such Transaction. If EMW
fails to accept the Purchase Curve Price within the time period
specified by EESI, then EMW will be deemed to have declined the
Purchase Curve Price and no Transaction will be formed and
effectuated; or
2. EMW may request EESI's final purchase price per MMBtu
applicable to wholesale transactions for the Existing Markets
based on the applicable index specified for such Existing
Market for the specified Delivery Point for the specified
Period of Delivery and adjusted for the applicable load shape
and applicable locational basis adjustment from the Delivery
Point to EMW's customers (but specifically excluding any
premiums for the Full Management Services, any individual
service comprising the Full Management Services or associated
with the Offered Quantity, such as small quantity, odd lot or
illiquidity premiums or any costs or ancillary charges
associated with EESI's delivery of the Gas to the Delivery
Point), as of the end of the applicable Business Day (the
"SETTLED PURCHASE CURVE PRICE") by contacting EESI during the
Pricing Hours requesting any such price for a specified
quantity of Gas to be Scheduled during selected Months within a
selected Period of Delivery; provided, such request must be
made prior to the Monthly Deadline. Upon receipt of EMW's
request, then EESI will promptly prepare a Transaction
Agreement documenting such Transaction and the applicable
Settled Purchase Curve Price. If EMW fails to request and
accept the Settled Purchase Curve Price within the Pricing
Hours, then EMW will be deemed to have declined the Settled
Purchase Curve Price and no Transaction will be formed and
effectuated.
B. FORWARD TRANSACTIONS IN NEW MARKETS.
1. In the event EMW has proposed to enter a New Market and has
requested that EESI provide an index and Delivery Point for
each New Market upon which the Contract Price for sales of Gas
by EESI in a Forward Transaction in the New Market would be
based, then EMW may additionally request, in writing, that EESI
utilize such index and Delivery Point in the establishment of
the Contract Price for purchases of Gas by EESI in a Forward
Transaction in such New Market.
2. If EMW thereafter elects to sell Gas to EESI in a Forward
Transaction in the specified New Market, then the Contract
Price for any purchases of Gas by EESI for a Forward
Transaction in such New Market will be the amount determined
pursuant to the procedures identified in Article 5.2. A. 1 or
2. above, as elected by EMW, utilizing the index and Delivery
Point identified by EESI. Upon
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establishment of the Contract Price for the purchase of Gas by
EESI in the applicable New Market, Exhibit "C" will be amended
to reflect such New Market, index and Delivery Point.
C. INTRA-MONTH QUANTITIES. The Contract Price for the purchase of Gas
by EESI in an Intra-Month Transaction will be equal to the cash
price bid per MMBtu by EESI for receipt at the applicable Delivery
Point.
5.3. SETTLED PURCHASE CURVE PRICE STATEMENTS. EESI will provide, on a Monthly
basis, a statement for any Existing Market and those mutually agreeable
New Markets in which EESI is actively engaged in the purchase of Gas
specifying the Settled Purchase Curve Price for the current forward
twelve (12) Month period for each Business Day.
5.4. INTENT. The intent of Articles 5.1 and 5.2 is to give EMW the benefit of
access to EESI's wholesale Gas pricing for retail loads without the
premiums associated with odd lot or new market illiquidity.
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ARTICLE 6 DEFAULTS AND REMEDIES
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6.1. EARLY TERMINATION. If a Triggering Event (defined in Article 6.2) occurs
with respect to either Party at any time during the term of this
Agreement, the other Party (the "NOTIFYING PARTY") may (i) upon two (2)
Business Days' written notice to the Affected Party (defined in Article
6.2), which notice will be given no later than sixty (60) Days after the
discovery of the occurrence of the Triggering Event, establish a date on
which all Transactions and this Agreement in respect thereof will
terminate ("EARLY TERMINATION DATE") except as provided in Article 10.4,
and (ii) withhold any payments due in respect of such Transactions;
provided, however, upon the occurrence of any Triggering Event listed in
item (i) of Article 6.2 as it may apply to any Party, all Transactions
and this Agreement in respect thereof will automatically terminate,
without notice, as if an Early Termination Date had been immediately
declared except as provided in Article 10.4. If an Early Termination
Date occurs, the Notifying Party will in good faith calculate its Gains,
Losses and Costs, resulting from termination of each Transaction in the
manner described above, and aggregate such Gains, Losses and Costs for
all such terminated Transactions into a single net amount (the
"TERMINATION PAYMENT"). The Termination Payment will be determined by
(i) comparing the value of (a) the remaining term, quantities and prices
under each such Transaction had it not been terminated to (b) the
equivalent quantities and relevant market prices for the remaining term
either quoted by a bona fide third party offer or which are reasonably
expected to be available in the market under a replacement contract for
each such Transaction and (ii) ascertaining the associated costs and
attorneys' fees; provided, however, if the Termination Payment is due to
a Triggering Events listed in item (i) of Article 6.2, then in the event
the Termination Payment would result in a Gain to the Notifying Party,
the Termination Payment will be the absolute value of such Gain and in
the event the Termination Payment is due to a Triggering Events listed
in item (ii), (iii), (iv), or (v) of Article 6.2, then in the event the
Termination Payment would result in a Gain to the Notifying Party, the
Termination Payment will be zero (0). To ascertain the market prices of
a replacement contract the Notifying Party may consider, among other
valuations, any or all of the settlement prices of NYMEX natural gas
futures contracts, quotations from leading dealers in natural gas swap
contracts and other bona fide third party offers, all adjusted for the
length of the remaining term and the basis differential. The Notifying
Party will give the Affected Party written notice of the amount of the
Termination Payment, inclusive of a statement showing the basis for its
calculation and determination. The Affected Party will pay the
Termination Payment to the Notifying Party within ten (10) Days of
receipt of such notice. At the time for payment of any amount due under
this Article 6, each Party will pay to the other Party all additional
amounts payable by it pursuant to this Agreement, but all such amounts
will be netted and aggregated with any Termination Payment payable
hereunder. If the Affected Party disagrees with the calculation of the
Termination Payment, the issue will be submitted to arbitration in
accordance with this Agreement and the resulting Termination Payment
will be due and payable within three (3) Business Days after the award.
6.2. TRIGGERING EVENT means, with respect to a Party (the "AFFECTED PARTY"),
a "MAJOR BREACH" which will occur upon (i) either Party (a) making an
assignment for the benefit of creditors, (b) filing a petition or not
opposing a proceeding under any bankruptcy or similar law, including,
without limitation, receivership or dissolution pursuant to federal or
state law, or has such petition filed against it which remains
undismissed for 30 days, or (c) becoming insolvent or is unable to pay
its debts when due;(ii) unless excused by Force Majeure, EESI
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fails to Schedule the Requested Quantity or EMW fails to Schedule the
Offered Quantity, as applicable, for five (5) consecutive Gas Days in any
three (3) cumulative Months in a twelve (12) cumulative Month period;
(iii) either Party's failing to make payment when due within five (5) days
of receipt of notice of such failure (except good faith disputes); (iv)
any Party's representation hereunder proving to be false or misleading in
a material respect, causing a material adverse effect on such Party's
ability to perform under this Agreement or (v) the happening of any other
event specified in any Transaction Agreement as a "Major Breach".
6.3. OTHER EVENTS. If either Party under a Transaction is regulated by a
federal, state or local regulatory body, and such body will disallow all or
any portion of any costs incurred or yet to be incurred by such Party under
any provision of this Agreement, such action will neither operate to excuse
such Party from performance of any obligation nor give rise to any right of
such Party to any refund or retroactive adjustment of the Contract Price
provided in any Transaction. Notwithstanding the foregoing, if either
Party's activities hereunder become subject to regulation of any kind
whatsoever under any law to a greater or different extent than that
existing on the Effective Date and such regulation either (i) renders this
Agreement illegal or unenforceable or (ii) materially adversely affects the
business of the Affected Party, with respect to its financial position or
otherwise, then in the case of (i) above, either Party, and in the case of
(ii) above, only the Party affected (for purposes of this Article only, the
"DEFAULTING PARTY"), will at such time have the right to declare an Early
Termination Date in accordance with the provisions hereof; provided,
notwithstanding the rights of the Parties to declare an Early Termination
Date as above stated, the Defaulting Party will be liable for payment of
the Termination Payment calculated by the other Party pursuant to Article
6.1.
6.4. OFFSET.
A. INTRAAGREEMENT. Each Party reserves to itself all rights, set-offs,
counterclaims and other remedies and defenses consistent with Article
10.3 (to the extent not expressly herein waived or denied) which such
Party has or may be entitled to arising from or out of this Agreement.
All outstanding Transactions and the obligations to make payment in
connection therewith or under this Agreement may be offset against
each other, set off or recouped therefrom.
B. INTERAGREEMENT. Each Party reserves, in the event that a Termination
Event occurs under either this Agreement or the Master Energy
Agreement, to itself all rights, set-offs, counterclaims and other
remedies and defenses consistent with Article 10.3 (to the extent not
expressly herein waived or denied) which such Party has or may be
entitled to arising from or out of this Agreement. All outstanding
Transactions and the obligations to make payment in connection
therewith or under this Agreement or the Master Energy Agreement may
be offset against each other, set off or recouped therefrom.
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ARTICLE 7 FORCE MAJEURE
-------------------------------------------------------------------------------
This Article 7 is the sole and exclusive excuse of performance permitted under
this Agreement and all other excuses at law or in equity are WAIVED to the
extent permitted by law. Except with respect to payment obligations, in the
event either Party is rendered unable, wholly or in part, by Force Majeure to
carry out its obligations hereunder, it is agreed that upon such Party's giving
notice and full particulars of such Force Majeure to the other Party as soon as
reasonably possible (such notice to be confirmed in writing), the obligations of
the Party giving such notice, to the extent they are affected by such event,
will be suspended from the inception and during the continuance of the Force
Majeure for a period not to exceed sixty (60) days in the aggregate during any
twelve (12) Month period, but for no longer period. The Party receiving notice
of Force Majeure may immediately take such action as it deems necessary at its
expense for the entire sixty (60) day period or any part thereof. The Parties
expressly agree that upon the expiration of the sixty (60) day period, the Force
Majeure will no longer apply to the obligations hereunder and both EMW and EESI
will be obligated to perform. The cause of the Force Majeure will be remedied
with all reasonable diligence and dispatch; provided, unless otherwise agreed,
no provision herein will require or permit EESI or EMW to Schedule quantities of
Gas (i) in excess of the Requested Quantity or Offered Quantity or (ii) at
points other than the Delivery Point(s).
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ARTICLE 8 TAXES
-------------------------------------------------------------------------------
8.1. TAXES. Buyer will be responsible for, pay, and/or reimburse Seller for
all Taxes and/or other charges imposed or levied by any taxing
authority on or related to any Gas sold and/or delivered to Buyer, all
other services or property provided in connection therewith or pursuant
to this Agreement, and any payments made under this Agreement or any
Agreement related hereto to the extent such Taxes are from time to time
customarily billed, imposed or levied on or against such Gas, services,
property or payments. Each Party will and does hereby indemnify,
release, defend and hold harmless the other Party from and against any
and all liability for Taxes that are the responsibility of such Party
pursuant to this Agreement. Either Party, upon request of the other
Party, will provide a certificate of exemption or other reasonably
satisfactory evidence of exemption if either Party or any Transaction
hereunder is exempt from Taxes, and each Party will use reasonable
efforts to (1) obtain and cooperate in obtaining any exemption or
reduction of such Taxes and (2) administer this Agreement and implement
the provisions in accordance with the intent to minimize such Taxes.
Buyer will not be liable for any Tax for which a valid exemption
certificate in a form acceptable to the applicable state or local
taxing authorities is timely completed and timely furnished by Buyer to
Seller. Buyer may provide Seller additional reasonable Tax instructions
as are allowed by law (or will provide such if requested by Seller)
including, but not limited to, Buyer's accrual and payment of Taxes
and/or special jurisdictional exemptions. However, Seller will proceed
on the assumption that any applicable Taxes are due unless and until
Buyer presents Seller satisfactory proof that Buyer is entitled to any
claimed exemption or reduction in Taxes. Upon presentation of such
proof, no retroactive adjustments will be made, but Seller will assign
to Buyer, to the extent assignable, any Claims for refund Seller has
with respect to any prior payments of Taxes. Seller and Buyer agree to
cooperate with each other and provide such information to each as is
reasonably necessary to facilitate the filing of any returns for Taxes
which are directly related to and imposed on the Gas, services,
property or payments to be provided under this Agreement. EESI agrees
to assume Tax liability if it has the benefit of an exemption, which
said exemption would not otherwise exist for EMW if it had the
liability, but in no event will EESI assume such liability if the
exemption is lost or repealed; provided, however, in the event EESI
fails to qualify for the exemption for any reason, then EMW will
reimburse EESI for any Tax liability so incurred.
8.2. TAX RECORDS. During the term of this Agreement and for seven (7) full
calendar years thereafter, Seller, as limited Tax agent of Buyer, will
retain on Buyer's behalf, possession of Buyer's Tax records related to
the Gas sold and/or delivered to Buyer, all other services or property
provided in connection therewith or pursuant to this Agreement, and any
payments made under this Agreement or any Agreement related hereto (the
"TAX RECORDS"). Buyer will have the right to inspect and make copies of
these Tax Records during normal business hours, in connection with Tax
returns, reports, audits and litigation with respect to such
activities, services, materials, equipment, items or payments. Should
Seller or Buyer become involved in an audit or contest with respect to
sales, use or other Taxes resulting from this Agreement, they will
cooperate in the defense of the same.
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ARTICLE 9 TITLE, RISK OF LOSS, INDEMNITY AND BALANCING
-------------------------------------------------------------------------------
9.1. TITLE, RISK OF LOSS AND INDEMNITY. As between the Parties, Seller will
be deemed to be in exclusive control and possession of Gas Scheduled
hereunder and responsible for any damage or injury caused by Gas
Scheduled and delivered to Buyer prior to the Delivery Point. After
delivery of the Gas at the Delivery Point(s), Buyer will be deemed to
be in exclusive control and possession thereof and responsible for any
injury or damage caused thereby. Title and risk of loss related to the
Gas Scheduled hereunder will pass from Seller to Buyer at the point of
transfer to Buyer's Transporter at the Delivery Point(s). Seller and
Buyer each assumes all liability for and will indemnify, defend and
hold harmless the other Party from any Claims, including injury to and
death of persons, arising from any act or incident occurring when title
to Gas is vested in the Indemnifying Party. IT IS THE INTENT OF THE
PARTIES THAT THIS INDEMNITY AND THE LIABILITY ASSUMED UNDER IT BE
WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING, WITHOUT
LIMITATION, THE NEGLIGENCE OF ANY INDEMNIFIED PARTY, WHETHER SUCH
NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE;
PROVIDED, NEITHER PARTY WILL BE LIABLE IN RESPECT OF ANY CLAIM TO THE
EXTENT THE CLAIM RESULTED FROM THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR BAD FAITH OF THE INDEMNIFIED PARTY.
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9.2. CORRECTION OF IMBALANCES, CASHOUTS AND PENALTIES. Differences between
Scheduled quantities and actual quantities delivered and received
hereunder ("IMBALANCES") will be corrected or settled in cash or Gas or
by offset as the Parties agree within forty-five (45) Days from the
date of notice of the Imbalance. Additionally, if (i) an Imbalance on
Buyer's Transporter's system caused by Seller or Seller's Transporter's
delivery of less or more than the Scheduled quantity for any Gas Day
(in which case Seller will be the "RESPONSIBLE PARTY") or (ii) an
Imbalance on Seller's Transporter's system caused by Buyer or Buyer's
Transporter's receipt of more or less than the Scheduled quantity for
any Gas Day (in which case Buyer will be the "RESPONSIBLE PARTY"), the
Responsible Party will be liable for and reimburse to the other Party
any associated Transporter cashout costs and losses or penalties
incurred by such other Party to the relevant Transporter. If the tariff
of either Buyer's or Seller's Transporter provides for cashouts on the
basis of the aggregation of all over deliveries and under deliveries
between such Transporter and Buyer or Seller, respectively ("AGGREGATE
TRANSPORTER IMBALANCE"), and the nature of the Imbalance (over delivery
or under delivery) attributable to the Responsible Party is the same as
the Aggregate Transporter Imbalance (over or under delivery), the
Responsible Party will participate in the other Party's cashout
settlement of the Aggregate Transporter Imbalance on the basis of only
the Responsible Party's pro-rata share thereof.
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ARTICLE 10 MISCELLANEOUS
-------------------------------------------------------------------------------
10.1. NOTICES. All notices, including, without limitation, consents, and
communications made under this Agreement will be made as specified in
Exhibit "A." Notices required to be in writing will be delivered in
written form by letter, facsimile or other documentary form. Notice by
facsimile or hand delivery will be deemed to have been received by the
close of the Business Day on which it was transmitted or hand delivered
(unless transmitted or hand delivered after close of the Business Day
in which case it will be deemed received at the close of the next
Business Day) or such earlier time confirmed by the receiving Party.
Notice by overnight mail or courier will be deemed to have been
received 2 Business Days after it was sent or such earlier time
confirmed by the receiving Party. Any notices given hereunder in
respect of the declaration of an Early Termination Date will be also
sent to the address or facsimile number so specified in Exhibit "A."
Any Party may change its addresses by providing notice of same in
accordance herewith.
10.2. TRANSFER. This Agreement, including, without limitation, each
indemnification, will inure to and bind the successors and permitted
assigns of the Parties; provided, neither Party will transfer this
Agreement without the prior written approval of the other Party, which
approval may not be unreasonably withheld or delayed. Any Party's
transfer in violation of this Article 10.2 will be void.
10.3. LIMITATION OF REMEDIES, LIABILITY AND DAMAGES AND MITIGATION. THE
PARTIES DO HEREBY CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF
DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES
HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR
MEASURE OF DAMAGES IS HEREIN PROVIDED, SUCH EXPRESS REMEDY OR MEASURE
OF DAMAGES WILL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, THE
OBLIGOR'S LIABILITY WILL BE LIMITED AS SET FORTH IN SUCH PROVISION AND
ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, THE
OBLIGOR'S LIABILITY WILL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH
DIRECT ACTUAL DAMAGES WILL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER
AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY WILL BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES,
LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, IN TORT, CONTRACT,
UNDER ANY INDEMNITY PROVISION OR OTHERWISE. NOTWITHSTANDING ANY OTHER
PROVISION IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE
FOR ANY PENALTIES OR CHARGES ASSESSED BY ANY TRANSPORTER OR OTHER
ENTITY FOR THE UNAUTHORIZED RECEIPT OF GAS BY THE OTHER PARTY (OTHER
THAN EESI'S RESPONSIBILITY FOR SERVICE PENALTIES PURSUANT TO ARTICLE
4.1 E). IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN
IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE
CAUSE OR CAUSES RELATED THERETO, INCLUDING,
-12-
WITHOUT LIMITATION, THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH
NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE
EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE
PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO
DETERMINE, OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND
THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE
HARM OR LOSS. BUYER ACKNOWLEDGES THAT IT HAS ENTERED INTO THIS
AGREEMENT AND IS CONTRACTING FOR THE GOODS TO BE SUPPLIED BY SELLER
BASED SOLELY UPON THE EXPRESS REPRESENTATIONS AND WARRANTIES HEREIN
SET FORTH AND SUBJECT TO SUCH REPRESENTATIONS AND WARRANTIES, ACCEPTS
SUCH GOODS "AS-IS" AND "WITH ALL FAULTS." SELLER EXPRESSLY NEGATES ANY
OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH
RESPECT TO CONFORMITY TO MODELS OR SAMPLES, MERCHANTABILITY, OR
FITNESS FOR ANY PARTICULAR PURPOSE. The Parties acknowledge the duty
to mitigate damages hereunder. The Parties recognize that the ability
to effectuate arrangements for the sale or purchase of Gas is
conditioned upon the volatility of Gas markets, the creditworthiness
and reliability of potential customers, the complexity and size of the
portfolios of contracts managed by each Party and the need to conduct
market business in an orderly manner. Therefore, the Parties agree
that (i) three (3) Business Days is a commercially reasonable period
to purchase or sell Gas in respect of an EESI Deficiency Default, EMW
Deficiency Default, EESI Purchase Default or EMW Sales Default and
(ii) three (3) Business Days after the end of the Month in which the
Early Termination Date occurs is a commercially reasonable period
after the establishment of an Early Termination Date to determine the
Termination Payment; provided, notwithstanding the foregoing, if Gas
volumes made the basis of an EESI Deficiency Default, EMW Deficiency
Default, EMW Sales Default or EESI Purchase Default or a Party's
determination of the Termination Payment are in excess of 20,000
MMBtu/Gas Day, the Parties recognize that a longer period may
ordinarily be required to effectuate cover or determine the
Termination Payment in an orderly manner so as not to adversely affect
the Gas market. Each Party may utilize its discretion, with
commercially reasonable foresight, to adjust the timing and staggering
of the purchases or sales of Gas volumes in its efforts to mitigate
damages. No claim that a Party failed to mitigate damages will be
grounded solely on the basis of counter Gas market movement.
10.4. WINDING UP ARRANGEMENTS. Upon the expiration or termination of the
Parties' sale and purchase obligations under this Agreement, any
moneys, penalties or other charges due and owing Seller or Buyer, as
applicable, will be paid, any corrections or adjustments to payments
previously made will be determined, and any refunds due Buyer or
Seller, as applicable, made, within 60 Days. Any Imbalances in receipts
or deliveries will be corrected to zero balance within 60 Days. All
indemnity, tax and confidentiality obligations and audit rights will
survive the termination of this Agreement for a period of two (2)
years. The Parties' obligations provided in this Agreement will remain
in effect for the purpose of complying herewith.
10.5. APPLICABLE LAW. THIS AGREEMENT AND EACH TRANSACTION AND THE RIGHTS AND
DUTIES OF THE PARTIES ARISING OUT OF THIS AGREEMENT WILL BE GOVERNED BY
AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
10.6. DOCUMENT, RECORD RETENTION AND EVIDENCE. This Agreement, the Exhibits
and Appendices hereto, if any, and each Transaction Agreement,
constitute the entire agreement between the Parties relating to the
subject matter contemplated by this Agreement. There are no prior or
contemporaneous agreements or representations (whether oral or written)
affecting the subject matter other than those herein expressed. No
amendment or modification to this Agreement will be enforceable, unless
reduced to writing and executed by both Parties. The provisions of this
Agreement will not impart rights enforceable by any person, firm or
organization not a Party or not bound as a Party, or not a successor or
permitted assignee of a Party bound to this Agreement. No waiver by a
Party of any default by the other Party will be construed as a waiver
of any other default. Nothing in this Agreement will be construed to
create a joint venture or partnership between the Parties. The term
"including" when used in this Agreement will be by way of example only
and will not be considered in any way to be in limitation. Except as
otherwise herein
-13-
stated, any provision, article or section declared or rendered
unlawful by a court of law or regulatory agency 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. The headings used for the Articles herein are for
convenience and reference purposes only. All Exhibits and Appendices
referenced in this Agreement, if any, are incorporated. Any original
executed Agreement or Transaction Agreement may be photocopied and
stored on computer tapes and disks (the "IMAGED AGREEMENT"). The
Imaged Agreement, if introduced as evidence on paper, the Transaction
Agreement, if introduced as evidence in automated facsimile form, and
all computer records of the foregoing, if introduced as evidence in
printed format, in any judicial, arbitration, mediation or
administrative proceedings, will be admissible as between the Parties
to the same extent and under the same conditions as other business
records originated and maintained in documentary form. Neither Party
will contest the admissibility of the Imaged Agreement under either
the business records exception to the hearsay rule or the best
evidence rule on the basis that such were not originated or maintained
in documentary form.
10.7. CONFIDENTIALITY & PUBLICITY. Each Party will not disclose the Contract
Price or any Gas consumption data of Buyer's customers under any
Transaction to a third party (other than the Party's and its Affiliates
employees, prospective purchasers of either Party, lenders, counsel or
accountants who have agreed to keep such terms confidential and use
such information solely in connection with this Agreement and the
Transaction Agreements) except in order to comply with any applicable
law, order, regulation or exchange rule; provided (except with respect
to tax matters) each Party will notify the other Party of any
proceeding of which it is aware which may result in disclosure and use
reasonable efforts to prevent or limit the disclosure. The provisions
of this Agreement other than the terms of any Transaction are not
subject to this confidentiality obligation and expressly include
revealing that there is a business relationship between the Parties.
The Parties will be entitled to all remedies available at law or in
equity to enforce, or seek relief in connection with, this
confidentiality obligation; provided, all monetary damages will be
limited in accordance with Article 10.3. Notwithstanding the foregoing,
from time to time as the Parties may mutually agree, in writing, each
Party may authorize the other Party use its name and to disclose the
existence and nature of this Agreement and any Transaction Agreement in
customer lists and other promotional materials that either Party may
develop from time to time.
10.8. UCC. Except as otherwise provided for herein, the provisions of the
Uniform Commercial Code ("UCC") of the state whose laws will govern
this Agreement will be deemed to apply to all Transactions and Gas will
be deemed to be a "good" for purposes of the UCC.
The Parties have executed this Agreement in multiple counterparts to be
construed as one effective as of the Effective Date.
ENRON ENERGY SERVICES, INC. EMW ENERGY SERVICES CORP
By: /s/ XXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXXXX
---------------------------- ----------------------------
Name: XXXX X. XXXXXX Name: Xxxxxx X. Xxxxxxxx
---------------------------- ----------------------------
Attorney-in-Fact Title: Vice President
----------------------------
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APPENDIX "1"
GENERAL PROVISIONS
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- USAGE AND DEFINITIONS
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All references to Articles and Sections are to those set forth in this
Agreement. Reference to any document means such document as amended from time
to time and reference to any Party includes any successor or permitted
assignee thereof. The following definitions and any terms defined internally
in this Agreement will apply to this Agreement and all notices and
communications made pursuant to this Agreement.
"AFFILIATE" means, with respect to any person or entity, any other entity or
person that directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, such person or
entity. For this purpose, "CONTROL" means the direct or indirect ownership of
10% or more of the outstanding capital stock or other equity interests having
ordinary voting power of the entity or person.
"BTU" means the amount of energy required to raise the temperature of one
pound of pure water one degree Fahrenheit from 59 degrees Fahrenheit
(59(Degree)F) to 60 degrees Fahrenheit (60(Degree)F).
"BUSINESS DAY" means a Day on which Federal Reserve member banks in New York
City are open for business and a Business Day will open at 8:00 a.m. and
close at 5:00 p.m. local time for each Party's principal place of business.
"BUYER" means, (a) EMW for Transactions providing for the sale of Gas by EESI
pursuant to Article 3.1 and (b) EESI for Transactions providing for the
purchase of Gas by EESI pursuant to Article 3.2.
"CLAIMS" means all claims or actions, threatened or filed and whether
groundless, false or fraudulent, that directly or indirectly relate to the
subject matters of the indemnity, and the resulting losses, damages,
reasonable expenses, reasonable attorneys' fees and court costs, whether
incurred by settlement or otherwise, and whether such claims or actions are
threatened or filed prior to or after the termination of this Agreement.
"CONTRACT PRICE" means the price in U.S. dollars per MMBtu, as established
pursuant to Article 5, payable by Buyer to Seller for the purchase of Gas
pursuant to a Transaction pursuant to Article 3.
"COSTS" means, with respect to a Party, brokerage fees, commissions and other
similar transaction costs and expenses reasonably incurred by such Party
either in terminating any arrangement pursuant to which it has hedged its
obligations or entering into new arrangements which replace a Transaction and
attorneys' and consultants fees, if any, reasonably incurred in connection
with enforcing its rights under a Transaction.
"C.T." means Central Time.
"DAY" means a period of twenty-four (24) consecutive hours, beginning at
midnight C.T. on any calendar Day.
"DELIVERY POINT(S)" means the agreed point(s) of delivery, generally into the
utility providing distribution service to EMW's customers, pursuant to a
Transaction and identified in Exhibit "C".
"FORCE MAJEURE" means an event not anticipated as of the Effective Date,
which is not within the reasonable control of the Party, or in the case of
third party obligations or facilities, the third party, claiming suspension,
and which by the exercise of due diligence such Party, or third party, is
unable to overcome or obtain or cause to be obtained a commercially
reasonable substitute performance therefor; provided, neither (i) the loss of
Buyer's markets nor Buyer's inability economically to use or resell Gas
purchased hereunder nor (ii) the loss of Seller's Gas supply nor Seller's
ability to sell Gas to a market at a more
advantageous price, will constitute an event of Force Majeure. "Force
Majeure" will include an event of Force Majeure occurring with respect to the
facilities or services of Buyer's or Seller's Transporter.
"GAAP" means generally accepted accounting principles, consistently applied.
"GAINS" means, with respect to a Party, an amount equal to the present value
of the economic benefit (exclusive of Costs), if any, to such Party resulting
from the termination of its obligations with respect to a Transaction
determined in a commercially reasonable manner.
"GAS" means methane and other gaseous hydrocarbons meeting the quality
standards and specifications and pressure requirements of Seller's
Transporter for acceptance of Gas into its system at the applicable receipt
point.
"GAS DAY" means a period of 24 consecutive hours beginning at the time of the
applicable Transporter's gas day.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" means the Party receiving and
providing an indemnity, respectively.
"INTEREST RATE" means, for any date, 2% over the per annum rate of interest
announced as the "Prime Rate" from time to time for commercial loans by
Citibank, N. A. as established by the administrative body of such bank
charged with the responsibility of establishing such rate, as same may change
from time to time; provided, the Interest Rate will never exceed the maximum
lawful rate permitted by applicable law.
"LOSSES" means, with respect to a Party, an amount equal to the present value
of the economic loss (exclusive of Costs), if any, to such Party resulting
from the termination of its obligations with respect to a Transaction
determined in a commercially reasonable manner.
"MMBTU" means one million (1,000,000) Btu's.
"MONTH" means a period of time beginning at midnight C.T. on the first Day of
any calendar Month and ending at midnight C.T. on the first Day of the
following calendar Month.
"PERIOD OF DELIVERY" means the period from the date Scheduling obligations
are to commence to the date Scheduling obligations are to terminate under a
Transaction.
"PIPELINE" means a company authorized to ship Gas on behalf of itself or
others on physical Gas transmission facilities.
"REPLACEMENT PRICE DIFFERENTIAL" means the following:
1. In the event of (a) an EESI Deficiency Default, the positive difference, if
any, obtained by subtracting the Contract Price FROM the GREATER of (i) the
cost to EMW, including incremental transportation costs and other basis
adjustments, to replace the EESI Deficiency Quantity for such Gas Day (but
excluding penalties, other than commercially reasonable purchases from the
applicable utility or provider of last resort which might otherwise be
labeled a penalty, or charges for unauthorized receipts of Gas by EMW), in
no event exceeding the sum of the Contract Price plus the emergency service
tariff rate for imbalance or replacement Gas per MMBtu, or (ii) the Spot
Price per MMBtu for the Gas Day in which the EESI Deficiency Default
occurred, and (b) in the event of an EMW Deficiency Default, the positive
difference, if any, obtained by subtracting the LESSER of (i) the price
obtained by EESI in an incremental, arms-length sale(s) to a third party of
a quantity equal to the EMW Deficiency Quantity for such Gas Day, less
incremental transportation charges to EESI, and including other basis
adjustments (but excluding penalties, other than commercially reasonable
purchases from the applicable utility or provider of last resort which
might otherwise be labeled a penalty), or (ii) the Spot Price per MMBtu for
the Gas Day in which the EMW Deficiency Default occurred, FROM the Contract
Price.
Appendix 1 -- 2
2. In the event of (a) an EESI Purchase Default, the positive difference, if
any, obtained by subtracting the LESSER of (i) the price obtained by EMW in
an incremental, arms-length sale(s) to a third party of a quantity equal to
the EESI Default Quantity for such Gas Day, less incremental transportation
charges to EMW, and including other basis adjustments per MMBtu (but
excluding penalties, other than commercially reasonable purchases from the
applicable utility or provider of last resort which might otherwise be
labeled a penalty), or (ii) the Spot Price per MMBtu for the Gas Day in
which the EESI Purchase Default occurred, FROM the Contract Price and (b)
in the event of an EMW Sales Default, the positive difference, if any,
obtained by subtracting the Contract Price FROM the GREATER of (i) the cost
to EESI, including incremental transportation costs and other basis
adjustments, to replace the EMW Default Quantity for such Gas Day (but
excluding penalties, other than commercially reasonable purchases from the
applicable utility or provider of last resort which might otherwise be
labeled a penalty, or charges for unauthorized receipts of Gas by EESI), in
no event exceeding the sum of the Contract Price plus the emergency service
tariff rate for imbalance or replacement Gas per MMBtu, or (ii) the Spot
Price for the Gas Day in which the EMW Sales Default occurred.
"SERVICES COMMENCEMENT DATE" means the earlier of (i) the date, subsequent to
EMW obtaining all licenses and permits required to enter into a Transaction
under this Agreement, the Parties first Schedule Gas pursuant to first
Transaction Agreement entered into pursuant to this Agreement or (ii)
December 31, 2000.
"SCHEDULING" or "SCHEDULE," when used in reference to Seller, means to make Gas
available, or cause Gas to be made available, at the Delivery Point(s) for
delivery to or for the account of Buyer, including making all Pipeline
nominations, and when used in reference to Buyer, means to cause Buyer or
Buyer's Transporter to make available at the Delivery Point(s) transportation
capacity sufficient to permit Buyer or Buyer's Transporter to receive on a firm
or interruptible basis, as designated in the applicable Transaction Agreement,
the quantities Seller has available at such Delivery Point(s), including making
all Pipeline nominations. Gas will be deemed to have been Scheduled when
confirmed by Transporter.
"SELLER" means (a) EESI for Transactions providing for the sale of Gas by EESI
pursuant to Article 3.1 and (b) EMW for Transactions providing for the purchase
of Gas by EESI pursuant to Article 3.2.
"SPOT PRICE" means the sum of (a) the price set forth in
GAS DAILY-Registered Trademark- (Pasha Publications, Inc.), or successor
publication, in the column "Daily Price Survey" under the listing applicable
to the geographic location agreed pursuant to a Transaction for the relevant
Gas Day, PLUS (b) all incremental transportation costs and other basis
adjustments necessary to effect delivery of the Gas from the above specified
geographic location to the Delivery Point. If there is no single price
published for that particular Gas Day, but there is published a range of
prices under the above column and listing, then the Spot Price will be the
arithmetic average of such high and low prices. In the event that no price or
range of prices is published for that particular Gas Day, then the Spot Price
will be the arithmetic average of the following: the price (determined as
stated above) for each of the first Gas Day immediately preceding and
following the Gas Day in which the default occurred for which a Spot Price
can be determined.
"TAXES" means any or all government or quasi governmental taxes, assessments,
levies, duties, fees, charges and withholdings of any kind or nature whatsoever
and howsoever described, including gross receipts, franchise, sales, use,
excise, property, capital, value added, stamp, transfer, intangible, employment,
occupation, generation, privilege, utility, Btu, gathering, energy, consumption,
lease, permit, license, filing, custom and recording tax, together with any and
all penalties, fines, additions or interest thereon, other than taxes based on
net income or net worth.
"TRANSACTIONS" means an agreement and any amendment or modification thereof made
in accordance herewith for the purchase or sale of Gas to be performed
hereunder.
"TRANSACTION AGREEMENT" means a written paper-based agreement executed by the
Parties to form and effectuate a Transaction which may be substantially in the
form set forth in Exhibit "B."
Appendix 1 -- 3
"TRANSPORTER" means the Pipeline delivering Gas on behalf of Seller prior to
the Delivery Point in a Transaction or receiving Gas on behalf of Buyer at or
downstream of a Delivery Point in a Transaction.
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- REPRESENTATIONS AND WARRANTIES
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As a material inducement to entering into this Agreement, including each
Transaction, each Party, with respect to itself, hereby represents and
warrants to the other Party continuing throughout the term of this Agreement
as follows: (i) there are no suits, proceedings, judgments, rulings or orders
by or before any court or any governmental authority that materially
adversely affect its ability to perform this Agreement or the rights of the
other Party under this Agreement, (ii) it is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its formation, and
it has the legal right, power and authority and is qualified to conduct its
business, and to execute and deliver this Agreement and perform its
obligations under the same and each Transaction Agreement, and all regulatory
authorizations have been maintained as necessary for it to legally perform
its obligations hereunder, (iii) the making and performance by it of this
Agreement is within its powers, has been duly authorized by all necessary
action on its part, and does not and will not violate any provision of law or
any rule, regulation, order, writ, judgment, decree or other determination
presently in effect applicable to it or its governing documents, (iv) each of
this Agreement and each Transaction when entered into constitutes a legal,
valid and binding act and obligation of it, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, reorganization
and other laws affecting creditor's rights generally, and with regard to
equitable remedies, to the discretion of the court before which proceedings
to obtain same may be pending, (v) there are no bankruptcy, insolvency,
reorganization, receivership or other arrangement proceedings pending or
being contemplated by it, or to its knowledge threatened against it, (vi)
BUYER WAIVES ITS RIGHTS, IF ANY, UNDER THE TEXAS DECEPTIVE TRADE PRACTICES -
CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ., BUSINESS AND COMMERCE CODE,
A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION
WITH AN ATTORNEY OF ITS OWN SELECTION, BUYER VOLUNTARILY CONSENTS TO THIS
WAIVER.
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- OPERATIONS AND DELIVERY
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SCHEDULING REQUESTS.
A. REQUESTED QUANTITIES. EESI and EMW will Schedule the Requested
Quantity for each Gas Day of each Month during a Period of Delivery.
Scheduling requests to EESI will be accepted at the telephone number
and will be confirmed by facsimile as set forth in Exhibit "A." Each
Party will designate authorized representatives to effect the
Scheduling of the Requested Quantity of Gas.
B. OFFERED QUANTITIES. EMW and EESI will Schedule the Offered Quantity
for each Gas Day of each Month during a Period of Delivery. Scheduling
requests to EMW will be accepted at the telephone number and will be
confirmed by facsimile as set forth in Exhibit "A." Each Party will
designate authorized representatives to effect the Scheduling of the
Offered Quantity of Gas.
C. CHANGES. If the Parties have deemed a Forward Transaction to be firm,
no later than ten (10) Days prior to the first Day of each Month of
the Period of Delivery, Seller will provide to Buyer nominations of
the Requested Quantity or Offered Quantity, as applicable, Seller
expects to Schedule during each Month of the Period of Delivery and
Buyer will confirm such quantities to Seller prior to the first Day of
each Month of the Period of Delivery. If EMW has not elected to
receive Full Management Services or Imbalance Management Services from
EESI pursuant to Article 4 of this Agreement, then should either Party
desire to change the Requested Quantity or Offered Quantity for a
Forward Transaction, the Parties will promptly enter into an
additional Transaction to reflect the desired change, either an
IntraMonth Transaction for desired changes during a Month or a Forward
Transaction for desired changes for an ensuing Month. In either case,
the Party desiring such change will provide notice to the other Party
not later than twelve (12) hours prior to the applicable Transporter's
nomination deadline for the applicable Gas Day (the "NOMINATION DUE
DATE") and the Parties will thereafter consummate such Transaction in
a
Appendix 1 -- 4
timely manner. If the nomination or Scheduling deadline of a
Transporter conflicts with these notification dates, EMW and EESI
agree to modify the notification dates accordingly. If the Parties
have deemed a Transaction to be interruptible or otherwise non-firm
in a Transaction Agreement, then either Party may, in its sole
discretion and without liability, except as provided in Section 9.2
of this Agreement, interrupt, in whole or in part, the Scheduling
of Gas at any time for any reason upon prior notice by telephone
and confirmed by facsimile to the other Party specifying the amount
and duration of the interruption sufficient to allow the notified
Party to make changes to its Transporter nominations in accordance
with its Transporter's procedures. No notice of interruption may be
retroactive to a prior time. Should an interruption occur without
the notice herein required and such interruption is not otherwise
excused by Force Majeure, the notifying Party shall be liable and
pay for all associated penalties and cashout costs and losses
charged by all Transporters, if any, as provided in Section 9.2 of
this Agreement.
D. NO MAKE-UP RIGHTS. Buyer will have no rights to make up any Gas
tendered hereunder by Seller but not taken by Buyer. In addition,
Buyer shall have no recourse nor any right, title, or interest in any
Gas paid for but not taken under this Agreement. Imbalances will be
treated pursuant to Article 9.2 of this Agreement.
TRANSPORTATION. Seller will obtain, or cause to be obtained, and pay for
transportation to the Delivery Point, and Buyer will obtain, or cause to be
obtained, and pay for transportation from the Delivery Point.
GAS SPECIFICATIONS. Seller represents that all Gas delivered hereunder will
meet or exceed the quality specifications and pressure requirements of EMW's
Transporter for acceptance of Gas into its pipeline system at the applicable
receipt point. In the event Gas tendered by Seller to its Transporter does
not meet or exceed the Transporter's quality specifications, Buyer, in
addition to all other remedies allowed hereunder, shall have the right to
refuse to accept Gas until such time as Seller is again able to tender Gas
complying with such Transporter's quality specifications.
OPERATIONAL FLOW ORDERS. Should either Party receive an operational flow
order or other order or notice from a Transporter requiring action to be
taken in connection with this Agreement or Gas flowing under this Agreement
("OFO"), such Party will immediately notify the other Party of the OFO and
provide the other Party a copy of same by facsimile. The Parties will take
all actions required by the OFO within the time prescribed. Each Party will
indemnify, defend and hold harmless the other Party from any Claims,
including, without limitation, all non-compliance penalties and reasonable
attorneys' fees, associated with an OFO (i) of which the Indemnifying Party
failed to give the Indemnified Party the notice required hereunder or (ii)
under which the Indemnifying Party failed to take the action required by the
OFO within the time prescribed.
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- FINANCIAL MATTERS
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BILLING, INVOICE DATE, CHARGES AND PAYMENT. By the tenth Day of each calendar
Month following the Month in which Gas was Scheduled under a Transaction,
Seller will provide Buyer with a written statement setting forth Gas
Scheduled during the preceding Month, and other charges due Seller,
including, without limitation, deficiency or default charges under Article 3.
Billing and payment will be based on actual quantities of Gas delivered
hereunder, provided, that if actual quantities of Gas are not known at the
xxxx Xxxxxx issues its invoice, Seller will base its invoice on Scheduled
quantities of Gas and differences between Scheduled quantities and actual
quantities of Gas delivered hereunder will be corrected or settled in cash by
reflecting such settlement or correction in the invoice for the following
Month; provided further, however, that in the event EESI is providing the
Full Management Services or the Imbalance Management Services, billing and
payment may, upon mutual agreement of the Parties, be based on the actual
consumption quantities of EMW's customers, adjusted for applicable fuel and
shrinkage of the applicable utility. Within 5 Business Days of the request of
either Party, the other Party will provide, to the extent it has a legal
right of access thereto and/or such statement is then available, a copy of
the Transporter's allocation or imbalance statement applicable to Gas sold
hereunder for the requested period. The difference, if any, between Scheduled
and actual quantities delivered or accepted will be treated as
Appendix 1 -- 5
Imbalances under Article 9. Buyer will remit any amounts due on the
twenty-fifth Day of the Month in which Seller's statement was received. If
the due date for any payment to made under this Agreement is not a Business
Day, the due date for such payment will be the next Business Day following
the due date. Payment of all funds will be made by wire transfer on the due
date in U. S. currency. Each Party will take all actions necessary to effect
payments in accordance with the process stated in Exhibit "A". If EMW or EESI
should fail to remit any amounts in full when due hereunder, interest on the
unpaid portion will accrue from the date due at a rate equal to the Interest
Rate. Xxxxxxxx, payments and statements will be made to the accounts or the
addresses/facsimiles specified in Exhibit "A."
DISPUTES. If either Party fails to make a timely payment and such failure is
not remedied within five (5) Business Days after such Party receives written
notice of default, the non defaulting Party, in addition to other remedies,
may suspend the Scheduling of Gas until such amount, including interest at a
rate equal to the Interest Rate, is paid; provided, if the defaulting Party,
in good faith, will dispute the amount of any such billing or part thereof
and will pay such amounts as it concedes to be correct, no suspension will be
permitted. In the event any invoice is disputed by the Party receiving such
invoice, the receiving Party will pay the undisputed amounts and will, within
twenty (20) Days from the date of receipt of such invoice, give the invoicing
Party written notification setting forth the disputed amount and the basis
therefor. Buyer and Seller will use reasonable diligence to resolve disputed
amounts within thirty (30) Days following written notification. If the
undisputed amount is not paid when due, the undisputed amount will bear
interest at a rate equal to the Interest Rate. Any disputed amount which
later is determined to be due to the invoicing Party will bear interest at a
rate equal to the Interest Rate from the original due date.
AUDIT RIGHTS. During the term of this Agreement and for a period of two (2)
years from the date of termination of a Transaction, EMW or EESI or any third
party representative thereof will have the right, at is expense and upon
reasonable notice and at reasonable times, to examine the books and records
of the other Party to the extent reasonably necessary to verify the accuracy
of any billing statement, payment demand, charge, payment or computation made
under this Agreement. No adjustment or correction will be made and all
records and payments will be conclusively presumed to be final unless notice
specifying the error or inaccuracy is given within two (2) calendar years
from the end of the calendar year during which such error or inaccuracy
occurred. The records of the Parties will be retained in accordance with
Article 10.6 for a like period to facilitate the audit rights of the Parties.
FINANCIAL INFORMATION. If requested by EMW, EESI will deliver as soon as
available, but in any case (i) within 120 Days following the end of each
fiscal year, a copy of the annual report of Enron Corp. containing audited
consolidated financial statements for such fiscal year certified by
independent certified public accountants and (ii) within 60 Days after the
end of each of its first three fiscal quarters of each fiscal year, a copy of
the quarterly report of Enron Corp. containing unaudited consolidated
financial statements for such fiscal quarter. If requested by EESI, EMW will
deliver as soon as available, but in any case (i) within 120 Days following
the end of each fiscal year, a copy of its annual report containing
consolidated financial statements for such fiscal year certified by
independent certified public accountants and (ii) within 60 Days after the
end of each of its first three fiscal quarters of each fiscal year, a copy of
its quarterly report containing unaudited consolidated financial statements
for such fiscal quarter. In all cases the statements will be for the most
recent accounting period and prepared in accordance with GAAP; provided,
should any such statements not be timely due to a delay in preparation or
certification, such delay will not be considered a default so long as such
Party diligently pursues the preparation, certification and delivery of the
statements.
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- WARRANTY OF TITLE TO GAS
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Seller in any Transaction warrants that title to Gas to be Scheduled by
Seller is free from all production burdens, liens and adverse Claims (other
than Taxes not yet due and payable) and warrants its right to sell the same.
Seller agrees to indemnify, defend and hold harmless Buyer against all Claims
to or against the title of said Gas. In the event any Claim is asserted to
said Gas, Buyer, in addition to other remedies, may suspend its obligation to
pay for said Gas up to the amount of such Claim, without interest.
Appendix 1 -- 6
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- ALTERNATE PRICE REDETERMINATION
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If any or all of the indices used to determine the Spot Price or the Contract
Price are not available in the future, the Parties agree to promptly
negotiate a mutually satisfactory alternate index for the Spot Price or
Contract Price (each an "ALTERNATE PRICE"). If the Parties cannot agree by
the end of the first Month for which the Spot Price or Contract Price could
not be determined, then EESI and EMW will each prepare a prioritized list of
up to three (3) alternative published reference postings or prices
representative of spot prices for Gas delivered in the same geographic area.
Each Party will submit its list to the other within ten (10) Days after the
end of the first Month for which the price could not be determined. The first
listed index appearing in EESI's list that also appears in EMW's list will
constitute the replacement index. If no common indices appear on the lists,
each Party will submit a new list adding two indices within 10 Days. If
either Party fails to provide timely a list, such Party's list will not be
considered. From and after the "RENEGOTIATION DATE," which will be the date
the Spot Price or Contract Price, as applicable, calculated on the referenced
index is no longer available, until the Alternate Price is determined, the
Alternate Price will be the average of the Spot Price(s) or Contract Price(s)
in effect during the three (3) Months preceding the Month in which the
Renegotiation Date occurred, which price will be effective until the
Alternate Price is determined. Upon determination of a new Alternate Price,
the Spot Price or Contract Price, as applicable, will be adjusted
retroactively to the Renegotiation Date.
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- EFFECT OF WAIVER OR CONSENT
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No waiver or consent by either Party, express or implied, of any one or more
defaults by the other Party in the performance of any provision of this
Agreement will operate or be construed as a waiver or consent of any other
default or defaults whether of a like or different nature. Failure by a Party
to complain of any act of the other Party or to declare the other Party in
default with respect to this Agreement, regardless of how long that failure
continues (except as limited pursuant to Article 7 of this Agreement), will
not constitute a waiver by that Party of its rights with respect to that
default until the applicable statute of limitations period has run.
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- INDEMNIFICATION
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With respect to each indemnification included in this Agreement the indemnity
is given to the fullest extent authorized by applicable law and the following
provisions will be considered applicable. The Indemnified Party will promptly
notify the Indemnifying Party in writing of any Claim and the Indemnifying
Party will have the right to assume the investigation and defense thereof,
including the employment of counsel, and will be obligated to pay the related
reasonable attorneys' fees; provided, however, the Indemnified Party will
have the right to employ separate counsel at its expense and participate in
the defense of any Claim, however, the reasonable attorneys' fees of such
counsel will be paid by the Indemnified Party unless the Indemnifying Party
has failed to assume the defense and employ counsel in a timely manner;
provided further, if the named parties to any Claim include both Parties, and
the Indemnified Party will have been advised by counsel that there may be a
legal defense available to it which is different from those available to the
Indemnifying Party, the Indemnified Party may elect to employ separate
counsel at the expense of the Indemnifying Party, in which case the
Indemnifying Party will pay all reasonable attorneys' fees of such counsel
and will not have the right to assume the defense of the Claim on behalf of
the Indemnified Party. The Parties will use reasonable efforts to cooperate
in the defense of any Claim. The Indemnifying Party will not be liable for
any settlement of a Claim without its express written consent thereto. The
Indemnified Party will reimburse the Indemnifying Party for payments made or
costs incurred in respect of an indemnity with the proceeds of any judgment,
insurance, bond, surety or other recovery made with respect to a covered
event.
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- ARBITRATION
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DISPUTES TO BE ARBITRATED. Any and all Claims, counterclaims, demands, cause
of action, disputes, controversies, and other matters in question arising
under this Agreement or the alleged breach of any
Appendix 1 -- 7
provision hereof (all of which are referred to herein as "DISPUTED CLAIMS"),
whether such Disputed Claims arise at law or in equity, under state or
federal law, for damages or any other relief, shall be resolved by binding
arbitration in the manner set forth below.
ARBITRATION PROCEDURES.
A. THE PARTIES TO THIS AGREEMENT AGREE THAT ANY DISPUTE, CONTROVERSY
OR CLAIM THAT MAY ARISE BETWEEN OR AMONG THEM IN CONNECTION WITH OR
OTHERWISE RELATING TO THIS AGREEMENT OR THE APPLICATION,
IMPLEMENTATION, VALIDITY OR BREACH OF THIS AGREEMENT OR ANY
PROVISION OF THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, CLAIMS
BASED ON CONTRACT, TORT OR STATUTE), SHALL BE FINALLY, CONCLUSIVELY
AND EXCLUSIVELY SETTLED BY BINDING ARBITRATION IN WILMINGTON,
DELAWARE IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES (THE
"RULES") OF THE AMERICAN ARBITRATION ASSOCIATION OR ANY SUCCESSOR
THERETO ("AAA") THEN IN EFFECT. THE PARTIES TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVE THEIR RIGHT TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO TRIAL BY JURY, WITH RESPECT TO ANY MATTER
SUBJECT TO ARBITRATION PURSUANT TO THIS AGREEMENT. ANY PARTY TO
THIS AGREEMENT MAY BRING AN ACTION, INCLUDING, WITHOUT LIMITATION,
A SUMMARY OR EXPEDITED PROCEEDING IN ANY COURT HAVING JURISDICTION,
TO COMPEL ARBITRATION OF ANY DISPUTE, CONTROVERSY OR CLAIM TO WHICH
THE PROVISIONS HEREOF APPLY. EXCEPT WITH RESPECT TO THE FOLLOWING
PROVISIONS (THE "SPECIAL PROVISIONS") WHICH SHALL APPLY WITH
RESPECT TO ANY ARBITRATION PURSUANT HERETO, THE INITIATION AND
CONDUCT OF ARBITRATION SHALL BE AS SET FORTH IN THE RULES, WHICH
RULES ARE INCORPORATED IN THIS AGREEMENT BY REFERENCE WITH THE SAME
EFFECT AS IF THEY WERE SET FORTH IN THIS AGREEMENT.
B. In the event of any inconsistency between the Rules and the Special
Provisions, the Special Provisions shall control. Any references in
the Rules to a sole arbitrator shall be deemed to refer to the
tribunal of arbitrators provided for under paragraph (D) hereof.
C. The arbitration shall be administered by the AAA. If the AAA is
unable or legally precluded from administering the arbitration,
then the Parties shall agree upon an alternative arbitration
organization, provided that, if the Parties cannot agree, such
organization shall be selected by the Chief Judge of the United
States District Court for the District which includes Wilmington,
Delaware.
D. The arbitration shall be conducted by a tribunal of three (3)
arbitrators. Within ten (10) Days after arbitration is initiated
pursuant to the Rules, the initiating Party or Parties (the
"CLAIMANT") shall send written notice to the other Party or Parties
(the "RESPONDENT"), with a copy to the office of the AAA having
responsibility for Wilmington, Delaware, designating the first
arbitrator (who shall not be a representative or agent of any Party
but may or may not be an AAA panel member and, in any case, shall
be reasonably believed by the Claimant to possess the requisite
experience, education and expertise in respect of the matters to
which the Claim relates to enable such person to competently
perform arbitral duties). Within ten (10) Days after receipt of
such notice, the Respondent shall send written notice to the
Claimant, with a copy to the office of the AAA having
responsibility for Wilmington, Delaware and to the first
arbitrator, designating the second arbitrator (who shall not be a
representative or agent of any Party but may or may not be an AAA
panel member and, in any case, shall be reasonably believed by the
Respondent to possess the requisite experience, education and
expertise in respect of the matters to which the Claim relates to
enable such person to competently perform arbitral duties). Within
ten (10) Days after such notice from the Respondent is received by
the Claimant, the Respondent and the Claimant shall cause their
respective designated arbitrators to select any mutually agreeable
AAA panel member as the third arbitrator. If the respective
designated arbitrators of the Respondent and
Appendix 1 -- 8
the Claimant cannot so agree within said ten (10) Day period, then
the third arbitrator will be determined pursuant to the Rules.
Prior to commencement of the arbitration proceeding, each
arbitrator shall have provided the Parties with a resume outlining
such arbitrator's background and qualifications and shall certify
that such arbitrator is not and has not been a representative or
agent of any of the Parties. If any arbitrator shall die, fail to
act, resign, become disqualified or otherwise cease to act, then
the arbitration proceeding shall be delayed for fifteen (15) Days
and the Party by or on behalf of whom such arbitrator was appointed
shall be entitled to appoint a substitute arbitrator (meeting the
qualifications set forth in this paragraph (D) within such fifteen
(15) Day period; PROVIDED, HOWEVER, that if the Party by or on
behalf of whom such arbitrator was appointed shall fail to appoint
a substitute arbitrator within such fifteen (15) Day period, the
substitute arbitrator shall be a neutral arbitrator appointed by
the AAA arbitrator within fifteen (15) Days thereafter.
E. All arbitration hearings shall be commenced within ninety (90) Days
after arbitration is initiated pursuant to the Rules, unless, upon
a showing of good cause by a Party to the arbitration, the tribunal
of arbitrators permits the extension of the commencement of such
hearing; PROVIDED, HOWEVER, that any such extension shall not be
longer than sixty (60) Days.
F. All Claims presented for arbitration shall be particularly
identified and the Parties to the arbitration shall each prepare a
statement of their position with recommended courses of action.
These statements of position and recommended courses of action
shall be submitted to the tribunal of arbitrators chosen as
provided hereinabove for binding decision. The tribunal of
arbitrators shall not be empowered to make decisions beyond the
scope of the position papers.
G. The arbitration proceeding will be governed by the substantive laws
of the State of Delaware and will be conducted in accordance with
such procedures as shall be fixed for such purpose by the tribunal
of arbitrators, except that (i) discovery in connection with any
arbitration proceeding shall be conducted in accordance with the
Federal Rules of Civil Procedure and applicable case law, (ii) the
tribunal of arbitrators shall have the power to compel discovery,
and (iii) unless the Parties otherwise agree and except as may be
provided herein, the arbitration shall be governed by the Federal
Arbitration Act, 0 X.X. Xxxxxxx 0-00, to the exclusion of any
provision of state law or other applicable law or procedure
inconsistent therewith or which would produce a different result.
The Parties shall preserve their right to assert and to avail
themselves of the attorney-client and attorney-work product
privileges, and any other privileges to which they may be entitled
pursuant to applicable law. No Party to the arbitration or any
arbitrator may compel or require mediation and/or settlement
conferences without the prior written consent of all such Parties
and the tribunal of arbitrators.
H. The tribunal of arbitrators shall make an arbitration award as soon as
possible after the later of the close of evidence or the submission of
final briefs, and in all cases the award shall be made not later than
thirty (30) Days following submission of the matter. The finding and
decision of a majority of the arbitrators shall be final and shall be
binding upon the Parties. Judgment upon the arbitration award or
decision may be entered in any court having jurisdiction thereof or
application may be made to any such court for a judicial acceptance of
the award and an order of enforcement, as the case may be. The
tribunal of arbitrators shall have the authority to assess liability
for pre-award and post-award interest on the Claims, attorneys' fees,
expert witness fees and all other expenses of arbitration as
reasonably incurred by any Party as such arbitrators shall deem
appropriate based on the outcome of the Claims arbitrated. Unless
otherwise agreed by the Parties to the arbitration in writing, the
arbitration award shall include findings of fact and conclusions of
law. IT IS EXPRESSLY AGREED THAT NOTWITHSTANDING ANY OTHER PROVISION
HEREIN TO THE CONTRARY, THE ARBITRATORS SHALL HAVE ABSOLUTELY NO
AUTHORITY TO AWARD CONSEQUENTIAL DAMAGES (SUCH AS LOSS OF PROFIT),
TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY
CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE
Appendix 1 -- 9
UNDER DELAWARE LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW OR
UNDER ANY RULES OF ARBITRATION.
I. Notwithstanding any provision herein to the contrary, nothing
herein shall be construed to require arbitration of a Claim or
dispute brought by a person who is not a Party to this Agreement,
or affect the ability of any Party to interplead or otherwise join
another Party in a proceeding brought by a person who is not a
Party to this Agreement.
J. EACH PARTY UNDERSTANDS THAT THIS AGREEMENT CONTAINS AN AGREEMENT TO
ARBITRATE WITH RESPECT TO ANY DISPUTE OR NEED OF INTERPRETATION OF
THIS AGREEMENT. AFTER SIGNING THIS AGREEMENT, EACH PARTY
UNDERSTANDS THAT IT WILL NOT BE ABLE TO BRING A LAWSUIT GOVERNING
ANY DISPUTE THAT MAY ARISE WHICH IS COVERED BY THE ARBITRATION
PROVISION, EXCEPT TO COMPEL ARBITRATION OR SEEK INJUNCTIVE RELIEF.
INSTEAD, EACH PARTY AGREES TO SUBMIT ANY SUCH DISPUTE TO
ARBITRATION.
Appendix 1 -- 10
EXHIBIT "A"
MASTER PURCHASE & SALES AGREEMENT
DATED DECEMBER 23, 1999
BY AND BETWEEN
ENRON ENERGY SERVICES, INC.
AND
EMW ENERGY SERVICES CORP.
NOTICE, COMMUNICATION AND PAYMENT
NOTICE TO EESI: NOTICE TO EMW:
Enron Energy Services, Inc. EMW Energy Services Corp.
000 Xxxxx Xxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attn: Vice President, Operations Attn:
Facsimile No: (000) 000-0000 Facsimile No: (713) _________
PAYMENTS TO EESI: PAYMENTS TO EMW:
If by mail: If by mail:
Enron Energy Services, Inc. EMW Energy Services Corp.
P. O. Box 00000
Xxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000 Attn:
If by wire transfer: If by wire transfer:
Enron Energy Services, Inc.
Wire Transfer to Citibank New York, N.A. Wire Transfer to:
000-000-000 ABA Routing ________________ ABA Routing
4074-1022 Account Number ________________ Account Number
BILLING & ACCOUNTING MATTERS TO EESI BILLING & ACCOUNTING MATTERS TO EMW:
Enron Energy Services, Inc. EMW Energy Services Corp.
000 Xxxxx Xxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attn: Manager, Industrial Services Attn:
Facsimile No: (000) 000-0000 Facsimile No: (713) __________
NOMINATIONS TO EESI: NOMINATIONS TO EMW:
Attn: Manager, Logistics Attn:
Facsimile No: (000) 000-0000 Facsimile No: (713) _________
CONFIRMATIONS TO EESI: CONFIRMATIONS TO EMW:
Attn: Industrial Sales Attn:
Facsimile No: (000) 000-0000 Facsimile No: (713) ____________
OR TO SUCH OTHER ADDRESS AS EMW OR EESI WILL FROM TIME TO TIME
DESIGNATE BY LETTER PROPERLY ADDRESSED
A-1
EXHIBIT "B"
MASTER PURCHASE & SALES AGREEMENT
DATED DECEMBER 23, 1999
BY AND BETWEEN
ENRON ENERGY SERVICES, INC.
AND
EMW ENERGY SERVICES CORP.
SUGGESTED FORM OF TRANSACTION AGREEMENT
This Transaction Agreement (the "AGREEMENT") will form and effectuate the
current proposal between EMW Energy Services Corp., as "EMW", and Enron
Energy Services, Inc., as "EESI", regarding the purchase and sale of Gas
under the following terms and conditions. _________ to purchase and receive
and _______ to sell and deliver. Transaction No.______________.
REQUESTED [OFFERED] QUANTITY: ______________________
QUALITY OF SERVICE:
(FIRM OR INTERRUPTIBLE)
TRANSPORTATION SERVICE:
DELIVERY POINT(S): ______________________
CONTRACT PRICE (PER MMBtu): ______________________
PERIOD OF DELIVERY: ______________________
SPOT PRICE LOCATION: ______________________
SPECIAL CONDITIONS:
This Transaction Agreement is being provided pursuant to and in accordance
with the Master Purchase & Sales Agreement dated December 23, 1999 (the
"Agreement") between EMW and EESI, and constitutes part of and is subject to
all of the terms and provisions of such Agreement. Terms used but not defined
herein will have the meanings ascribed to them in this Agreement. Please
execute this Transaction Agreement and return an executed copy to EESI no
later than ____ a.m. on _____________, 19__ ("Notification Time"). Your
execution should reflect the appropriate party in your organization who has
the authority to cause EMW to enter into this Transaction. In the event EMW
fails to execute and deliver this Transaction Agreement by the Notification
Time or alters the terms of this Transaction Agreement in any manner, there
will be no Transaction pursuant to this Transaction Agreement.
ENRON ENERGY SERVICES, INC. EMW ENERGY SERVICES CORP.
By: NOT FOR EXECUTION By: NOT FOR EXECUTION
---------------------------- ----------------------------
Name: _________________________ Name: _________________________
Attorney-in-Fact Title:_________________________
B-1
EXHIBIT "C"
MASTER PURCHASE & SALES AGREEMENT
DATED DECEMBER 23, 1999
BY AND BETWEEN
ENRON ENERGY SERVICES, INC.
AND
EMW ENERGY SERVICES CORP.
APPLICABLE INDICES FOR EXISTING MARKETS
--------------------------- ----------------------------------- -------------------------------------------------------
MARKET LOCATION DELIVERY POINT INDEX
--------------------------- ----------------------------------- -------------------------------------------------------
Columbia Gas The point of interconnection The "Index Price" appearing in Inside F.E.R.C.'s
between the interstate Gas Market Report or successor publication in the
of Ohio Inc natural gas transmission table identified as "Prices of Spot Gas Delivered
system of Columbia Gas to Pipelines" for Columbia Gas Transmission Corp,
Transmission Corp. and the Appa.(VWA, Ohio, Pa), plus all incremental
natural gas distribution transportation costs and other basis adjustments
system of Columbia Gas of necessary to effect delivery of the Gas from the
Ohio Inc. above specified geographic location to the
Delivery Point
--------------------------- ----------------------------------- -------------------------------------------------------
Cincinnati Gas & Electric The point of interconnection The "Index Price" appearing in Inside F.E.R.C.'s
Co between the interstate Gas Market Report or successor publication in the
natural gas transmission table identified as "Prices of Spot Gas Delivered
system of Texas Gas to Pipelines" for Texas Gas Transmission Corp,
Transmission Corp. and the Zone SL, plus all incremental transportation
natural gas distribution costs and other basis adjustments necessary to
system of Cincinnati Gas & effect delivery of the Gas from the above
Electric Co. specified geographic location to the Delivery
Point
--------------------------- ----------------------------------- -------------------------------------------------------
APPLICABLE INDICES FOR NEW MARKETS
----------------------------------------------- ----------------------------------------------------------------------------
MARKET LOCATION INDEX
----------------------------------------------- ----------------------------------------------------------------------------
TO BE DETERMINED PURSUANT TO ARTICLE 5 TO BE DETERMINED PURSUANT TO ARTICLE 5
----------------------------------------------- ----------------------------------------------------------------------------
C-1
