<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
AMENDMENT NO. 2
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13, or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
YANKEE ENERGY SYSTEM, INC.
(Exact name of registrant as specified in charter)
The undersigned registrant hereby amends the following
items, financial statements, exhibits, or other portions of
its annual report on Form 10-K for the fiscal year ended
September 30, 1993:
Part IV: Index to Exhibits and Exhibit 10.71, 10.72 and
10.73.
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to
be signed on its behalf by the undersigned, thereunto duly
authorized.
YANKEE ENERGY SYSTEM, INC.
(Registrant)
By /s Mary J. Healey
______________________________
(Signature)
Secretary & Assistant General Counsel
Date: March 10, 1994
<PAGE>
Part IV Exhibits, Financial Statements, Schedules and Reports on
8-K.
The Company files herewith an amended Index to Exhibits and
Exhibits 10.71, 10.72 and 10.73 in compliance with its Request for
Approval of an Application for Confidential Treatment of these
Exhibits pursuant to 17 C.F.R. 240-24b-2 and 17 C.F.R. 200.83.
<PAGE>
INDEX TO EXHIBITS
The following exhibits are filed as part of this Form 10-K
or incorporated by reference herein:
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
(3)
<S> <C>
3.1 Restated Certificate of Incorporation of
Yankee Energy System, Inc. (the "Company")
(Filed in Form 10 Registration Statement
dated April 14, 1989 and amendments thereto
("Form 10")).
3.2 Amended Bylaws of the Company (Filed in Form
10).
(4) See Exhibit 3
4.1 Specimen of the Company's Common Stock (Filed
in Form 10).
4.2 Rights Agreement between the Company and The
Connecticut Bank and Trust Company, N.A., as
Rights Agent, dated November 20, 1989 (Filed
in Form 8-A Registration Statement dated
December 7, 1989).
4.3 Amendment to Rights Agreement dated May 10,
1990 (Filed in Form 8 dated May 30, 1990).
4.4 Amendment to Rights Agreement dated January
23, 1991 (Filed in Form 8 dated January 31,
1991).
4.5 Guaranty of the Company dated June 30, 1989
with Credit Agreement between Housatonic
Corporation ("Housatonic") and Bankers Trust
Company ("Bankers Trust") dated June 30, 1989
(Filed Form 10).
4.6 Amendment to Credit Agreement between
Housatonic and Bankers Trust dated June 9,
1992. (Filed in 1992 Form 10-K)
4.7 Bond Purchase Agreement dated July 1, 1989
between Yankee Gas Services Company ("Yankee
Gas") and the Purchasers identified therein
(Filed in Form 10).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
<S> <C>
4.8 Indenture of Mortgage and Deed of Trust dated
July 1, 1989 between Yankee Gas and The Con-
necticut National Bank, as Trustee (Filed in
Form 10).
4.9 Guaranty of the Company with Term Loan Agree-
ment dated July 20, 1989 between United Bank
& Trust Company, as Trustee of the Trust of
the Company's 401(k) Employee Stock Ownership
Plan and The First National Bank of Boston
(Filed in 1989 Form 10-K).
(10)
10.1 First Supplemental Indenture of Mortgage and
Deed of Trust dated April 1, 1992 between
Yankee Gas and The Connecticut National Bank,
as Trustee (Filed in Form S-3 Registration
Statement #33-52750 dated October 2, 1992
("Form S-3")).
10.2 Second Supplemental Indenture of Mortgage and
Deed of Trust dated December 1, 1992 between
Yankee Gas and The Connecticut National Bank,
as Trustee. (Filed in 1992 Form 10-K).
10.3 Bond Purchase Agreement dated April 1, 1992
between Yankee Gas and the Purchasers identi-
fied therein (Filed in Form S-3).
10.4 Bond Purchase Agreement dated December 1,
1992 between Yankee Gas and Purchaser identi-
fied therein. (Filed in 1992 Form 10-K).
10.5 Asset Transfer Agreement among Northeast
Utilities Service Company ("NUSCO"), The
Connecticut Light and Power Company ("CL&P"),
the Company, Yankee Gas and Housatonic dated
June 30, 1989 (Filed in Form 10).
10.6 Lease Agreements among Yankee Gas, NUSCO and
CL&P dated June 30, 1989 (Filed in Form 10).
10.7 Environmental Liability Sharing and Indemnity
Agreement dated June 30, 1989 between Yankee
Gas and CL&P (Filed in Form 10).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
<S> <C>
10.8 Post-Divestiture Tax Indemnification Agree-
ment dated June 30, 1989 Between Yankee Gas
and CL&P (Filed in Form 10).
10.9 Agreement modifying Yankee Gas' Schedule A
Interruptible Sales Tariff dated May 29, 1990
(Filed in Form S-1 Registration Statement
#33-40758 dated May 22, 1991 and amendment
thereto dated June 18, 1991 ("Form S-1")).
10.10 Rate Case Settlement Agreement dated Septem-
ber 21, 1990 (Filed in Form 8-K dated Septem-
ber 27, 1990).
10.11 Rate Case Decision dated August 26, 1992.
(Filed in 1992 Form 10-K).
10.12 Lease Agreement between Yankee Gas and
NorConn dated October 1, 1990 (Filed in Form
S-1).
10.13 Note Purchase Agreement among NorConn Proper-
ties, Inc. (NorConn), the Company and the
Knights of Columbus dated November 9, 1990
(Filed in Form S-1).
10.14+ Long-Term Incentive Compensation Plan adopted
December 5, 1990 (Filed in Proxy Statement
dated December 24, 1990).
10.15+ Annual Incentive Compensation Plan adopted
December 5, 1990 (Filed in 1991 Form 10-K).
10.16+ Non-Employee Directors' Stock Compensation
Plan adopted March 21, 1991 (Filed in 1991
Form 10-K).
</TABLE>
* Filed herewith.
+ Management contract or compensatory plan required to be
filed as an exhibit to this form pursuant to Item 14c of
this report.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
<S> <C>
10.17 Lease Agreement between Yankee Gas and Ven-
ture V Limited Partnership dated September
10, 1991 (Filed in 1991 Form 10-K).
10.18 Severance Pay Plan adopted October 17, 1991
(Filed in 1991 Form 10-K).
GAS PURCHASE AGREEMENTS
Algonquin Gas Transmission Company
10.19* Service Agreement #93009 dated May 24, 1993,
applicable to Rate Schedule AFT-1 (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
10.20* Service Agreement #93103E dated May 24, 1993,
applicable to Rate Schedule AFT-E (No-Notice
Firm Transportation) between Algonquin Gas
Transmission Company ("Algonquin") and Yankee
Gas Services Company ("Yankee").
10.21* Service Agreement #93209 dated May 24, 1993,
applicable to Rate Schedule AFT-1 (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
10.22* Service Agreement #9W011E dated May 24, 1993,
applicable to Rate Schedule AFT-E (No-Notice
Firm Transportation) between Algonquin Gas
Transmission Company ("Algonquin") and Yankee
Gas Services Company ("Yankee").
10.23* Service Agreement #93309 dated May 24, 1993,
applicable to Rate Schedule AFT-1 (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
<S> <C>
10.24* Service Agreement #93409 dated May 24, 1993,
applicable to Rate Schedule AFT-1 (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
10.25* Service Agreement #9B106 dated May 24, 1993,
applicable to Rate Schedule AFT-1 (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
10.26* Service Agreement #9S103 dated May 24, 1993,
applicable to Rate Schedule AFT-1 (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
10.27* Service Agreement #931011S dated May 24,
1993, applicable to Rate Schedule AIT-1
(Interruptible Transportation) between Algon-
quin Gas Transmission Company ("Algonquin")
and Yankee Gas Services Company ("Yankee").
10.28* Service Agreement #931012B dated May 24,
1993, applicable to Rate Schedule AIT-
1(Interruptible Transportation) between Al-
gonquin Gas Transmission Company ("Algon-
quin") and Yankee Gas Services Company ("Yan-
kee").
10.29* Service Agreement #93306 dated May 24, 1993,
applicable to Rate MDQ Schedule PSS-T (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
10.30* Service Agreement #934006 dated May 24, 1993,
applicable to Rate MDQ Schedule FTP (Firm
Transportation) between Algonquin Gas Trans-
mission Company ("Algonquin") and Yankee Gas
Services Company ("Yankee").
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
Texas Eastern Transmission Company
<S> <C>
10.31* Service Agreement dated October 7, 1993,
applicable to Rate Schedule AIT-1
(Interruptible Transportation of LNG) between
Algonquin Gas Transmission Company ("Algon-
quin") and Yankee Gas Services Company ("Yan-
kee").
10.32* Service Agreement dated October 7, 1993,
applicable to Rate Schedule FST-LG (Firm
Storage of LNG) between Algonquin LNG
("ALNG") and Yankee Gas Services Company
("Yankee").
10.33* Dispatching Agreement dated October 1, 1993,
applicable to Rate Schedule CDS and FT-1,
between Texas Eastern Transmission Company
("Texas Eastern") and Yankee Gas Services
Company ("Yankee").
10.34* Service Agreement #800355 dated October 1,
1993, applicable to Rate Schedule FT-1 (Firm
Transportation) between Texas Eastern Trans-
mission Company ("Texas Eastern") and Yankee
Gas Services Company ("Yankee").
10.35* Service Agreement #800107 dated June 1, 1993,
applicable to Rate Schedule FT-1 (Firm Trans-
portation) between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.36* Service Agreement #800308 dated June 1, 1993,
applicable to Rate Schedule FT-1 (Firm Trans-
portation) between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
<S> <C>
10.37* Service Agreement #800307 dated June 1, 1993,
applicable to Rate Schedule CDS (Firm Trans-
portation) between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.38* Service Agreement #800311 dated June 1, 1993,
applicable to Rate Schedule FT-1 (Firm Trans-
portation) between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.39* Service Agreement #800315 dated June 1, 1993,
applicable to Rate Schedule FT-1 (Firm Trans-
portation) between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.40* Service Agreement #800316 dated June 1, 1993,
applicable to Rate Schedule FT-1 (Firm Trans-
portation) between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.41* Service Agreement #800108 dated June 1, 1993,
applicable to Rate Schedule FT-1 (Firm Trans-
portation) between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.42* Service Agreement #331063 dated June 1, 1993,
applicable to Rate Schedule IT-1
(Interruptible Transportation) between Texas
Eastern Transmission Company ("Texas East-
ern") and Yankee Gas Services Company ("Yan-
kee").
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
<S> <C>
10.43* Service Agreement #331064 dated June 1, 1993,
applicable to Rate Schedule IT-1
(Interruptible Transportation) between Texas
Eastern Transmission Company ("Texas East-
ern") and Yankee Gas Services Company ("Yan-
kee").
Consolidated Natural Gas Transmission Company
10.44* Service Agreement dated October 1, 1993,
applicable to Rate Schedule FTNN (Firm Trans-
portation) between CNG Transmission Corp.
("CNG") and Yankee Gas Services Company
("Yankee").
Tennessee Gas Pipeline Company
10.45* Service Agreement #2121 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
10.46* Service Agreement #2503 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
10.47* Service Agreement #2652 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
10.48* Service Agreement #1596 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
<S> <C>
10.49* Service Agreement #2120 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
10.50* Service Agreement #1641 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
10.51* Service Agreement #128 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
10.52* Service Agreement #333 dated September 1,
1993, applicable to Rate Schedule FT-A (Firm
Transportation) between Tennessee Gas Pipe-
line ("Tennessee") and Yankee Gas Services
Company ("Yankee").
10.53 Service Agreement #4552 dated February 7,
1991, applicable to Firm Transportation be-
tween Tennessee Gas Pipeline ("Tennessee")
and Yankee Gas Services Company ("Yankee").
Iroquois Gas Transmission Company
10.54 Transportation Agreement dated February 7,
1991 between Iroquois Gas Transmission System
("Iroquois") and Yankee Gas for transporta-
tion of Canadian gas purchased. (Filed in
Form S-1).
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
Transcontinental Gas Pipeline Company
<S> <C>
10.55* Service Agreement dated June 1, 1993, appli-
cable to Rate Schedule FT (Firm Transporta-
tion) between Transcontinental Gas Pipeline
Corp. ("Transco") and Yankee Gas Services
Company ("Yankee").
National Fuel Pipeline Company
10.56* Service Agreement dated July 1, 1993, appli-
cable to Rate Schedule EFT (Enhanced Firm
Transportation) between National Fuel Gas
Supply Corporation ("National") and Yankee
Gas Services Company ("Yankee").
GAS STORAGE AGREEMENTS
10.57* Service Agreement #400179 dated June 1, 1993,
applicable to Rate Schedule SS-1 (Firm Stor-
age Service) between Texas Eastern Transmis-
sion Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.58* Service Agreement #400175 dated June 1, 1993,
applicable to Rate Schedule SS-1 (Firm Stor-
age Service) between Texas Eastern Transmis-
sion Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.59* Service Agreement #400176 dated June 1, 1993,
applicable to Rate Schedule SS-1 (Firm Stor-
age Service) between Texas Eastern Transmis-
sion Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
<S> <C>
10.60* Service Agreement dated October 1, 1993,
applicable to Rate Schedule GSS (Storage
Service) between CNG Transmission Corp.
("CNG") and Yankee Gas Services Company
("Yankee").
10.61* Service Agreement dated October 1, 1993,
applicable to Rate Schedule GSSII (Storage
Agreement) between CNG Transmission Corp.
("CNG") and Yankee Gas Services Company
("Yankee").
10.62* Service Agreement dated October 1, 1993,
applicable to Rate Schedule GSS (Storage
Service) between CNG Transmission Corp.
("CNG") and Yankee Gas Services Company
("Yankee").
10.63 Underground Storage Service Agreement dated
as of June 21, 1988 applicable to Rate Sched-
ule SS-2 between Penn York Energy Corporation
and Yankee Gas (Penn-York, SS-2) (Filed in
Form 10).
10.64* Service Agreement #637 dated September 1,
1993, applicable to Rate Schedule FS (Firm
Storage - Market Area) between Tennessee Gas
Pipeline Company ("Tennessee") and Yankee Gas
Services Company ("Yankee").
GAS PURCHASE AGREEMENTS
10.65* USA SALES Agreement dated October 1, 1993,
applicable to storage gas, between CNG Trans-
mission Corp. ("CNG") and Yankee Gas Services
Company ("Yankee").
</TABLE>
* Filed herewith.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
<S> <C>
10.66 Phase 2 Sales Agreement dated September 14,
1987 applicable to rate Schedule G-1 among
Boundary, Yankee Gas and other utilities
(Boundary, G-1), as amended September 14,
1988 and July 1, 1989 (Filed in Form 10).
10.67 Service Agreement dated February 7, 1991
between Alberta Northeast Gas Ltd. ("ANE")
and Yankee Gas Services Company for purchase
of gas from ATCOR Limited (Filed in Form S-
1).
10.68 Service Agreement dated February 7, 1991
between ANE and Yankee Gas Services Company
for purchase of gas from PROGAS Limited
(Filed in Form S-1).
10.69 Service Agreement dated February 7, 1991
between ANE and Yankee Gas for purchase of
gas from AEC Oil and Gas Company (Filed in
Form S-1).
10.70 Service Agreement dated February 7, 1991
between ANE and Yankee Gas Services Company
for purchase of gas from TransCanada Pipe-
lines Limited (Filed in Form S-1).
10.71* ** Gas Sales Agreement #437 dated November 1,
1992 between Chevron U.S.A. and Yankee Gas
Services Company for purchase of gas.
10.72* ** Gas Sales Agreement dated March 26, 1992
between Seller and Yankee Gas Services Compa-
ny for purchase of gas.
10.73* ** Gas Sales Agreement dated August 1, 1992
between Natural Gas Clearinghouse and Yankee
Gas Services Company for purchase of gas.
</TABLE>
* Filed herewith.
** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE DELETED INFORMATION
IN THESE EXHIBITS, AND FILED SEPERATELY WITH THE COMMISSION UNDER
FORM SE.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
OTHER AGREEMENTS
<S> <C>
10.74* Operation Balancing Agreement (OBA) dated May
24, 1993,between Algonquin Gas Transmission
Company ("Algonquin")and Yankee Gas Services
Company ("Yankee").
10.75* Service Agreement #900145 for Capacity Re-
lease Umbrella Agreement #900145 dated June
1, 1993, between Texas Eastern Transmission
Company ("Texas Eastern") and Yankee Gas
Services Company ("Yankee").
10.76* LINKS Agreement dated June 1, 1993, between
Texas Eastern Transmission Company ("Texas
Eastern") and Yankee Gas Services Company
("Yankee").
10.77 Precedent Agreement for ITP Transportation
Service dated September 6, 1991 between Texas
Eastern and Yankee Gas Services Company.
(Filed in 1992 Form 10-K).
10.78 Precedent Agreement for ITP Transportation
Service dated October 15, 1991 between Algon-
quin and Yankee Gas (Filed in 1991 Form 10-
K).
MANAGEMENT CONTRACTS
10.79*+ Employment Agreement between the Company and
Mr. Philip T. Ashton dated January 1, 1993.
10.80*+ Employment Agreement between the Company and
Mr. Michael E. Bielonko dated January 1,
1993.
</TABLE>
* Filed herewith.
+ Management contract or compensatory plan required to be
filed as an exhibit to this form under Item 14c of this
report.
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
<S> <C>
10.81*+ Employment Agreement between the Company and
Mr. Charles E. Gooley dated January 1, 1993.
10.82*+ Employment Agreement between the Company and
Mr. Thomas J. Houde dated January 1, 1993.
10.83*+ Employment Agreement between the Company and
Mr. John J. Smith dated January 1, 1993.
MISCELLANEOUS CONTRACTS
10.84 $40 million Credit Agreement among Yankee Gas
and several banks dated June 20, 1989 (Filed
in Form S-1).
10.85 Memorandum of Understanding among Housatonic
and Iroquois partners relating to equity
contributions and guarantees dated March 13,
1991 (Filed in Form S-1).
10.86 Agreement for Systems Operations Services
among Yankee Gas and Integrated Systems Solu-
tions Corporation ("ISSC") dated August 12,
1991. (Filed in 1992 Form 10-K).
11* Statement re: Computation of per share earn-
ings.
13* 1993 Annual Report to Shareholders.
22* Subsidiaries of the registrant.
</TABLE>
* Filed herewith.
+ Management contract or compensatory plan required to be
filed as an exhibit to this form under Item 14c of this
report.
<PAGE>
EXHIBIT 10.71
GAS SALES AGREEMENT
This Agreement is made and entered into as of the first day of
November, 1992 by and between YANKEE GAS SERVICES COMPANY, a
Connecticut corporation ("Buyer"), and CHEVRON U.S.A. PRODUCTION
COMPANY, a division of CHEVRON U.S.A. INC., a Pennsylvania
corporation ("Seller"), both Buyer and Seller sometimes referred to
collectively as "Parties" or singularly as "Party".
I.Definitions
1.1 "Agreement" means the provisions of this document and
those contained in Exhibits A, B, C, and D, attached hereto, as
such may be amended from time to time.
1.2 "Alternate Delivery Point(s)" shall have the meaning set
forth in Paragraph 4.1 hereof.
1.3 "Btu" (British Thermal Unit) means the amount of heat
energy required to raise the temperature of one avoirdupois pound
of water from fifty-nine-degrees Fahrenheit (59 F) to sixty degrees
Fahrenheit (60 F).
1.4 "Ceiling Price" shall mean the maximum price per MMBtu to
be paid by Buyer for Protected Volumes of gas purchased hereunder.
A Ceiling Price may be established by agreement of the parties in
accordance with Paragraph 5.3 hereof.
1.5 "Contract Year" shall mean a period of twelve (12)
consecutive months from the date first written above, and annually
thereafter.
1.6 "Delivery Point(s)" shall be the point or points
identified in Exhibits A and B hereto, and shall include Primary
Delivery Point(s), Secondary Delivery Point(s), and Alternate
Delivery Point(s).
1.7 "Demand Charge" shall have the meaning as set forth in
Article V hereof.
1.8 "FERC" means the Federal Energy Regulatory Commission or
any successor governmental authority.
1.9 "Gas" or "Natural Gas" means any mixture of hydrocarbons
or of hydrocarbons and noncombustible gases, in a gaseous state,
consisting essentially of methane.
1.10 "Index Price" shall have the meaning as set forth in
Article V hereof.
1.11(a) "Liquefiable Hydrocarbons" means any hydrocarbons
contained in the vapor phase of the Gas stream which can be
liquefied and extracted from the Gas, plus such methane as is used
or consumed in the extraction process.
1
<PAGE>
1.11(b) "Liquid Hydrocarbons" means any hydrocarbons which,
in their natural state, are liquids and shall include any
Liquefiable Hydrocarbons that condense out of the Gas stream during
production or transportation.
1.12 "Locked Price," as used in Article V, shall mean the
price per MMBtu to be paid by Buyer for a Locked Quantity purchased
hereunder.
1.13 "Locked Quantity," as used in Article V, shall mean a
quantity of Gas to be delivered during any calendar month during
the term hereof which is equal to the MDQ multiplied by the number
of days in that month.
1.14 "Maximum Daily Quantity" or "MDQ" means ******** MMBtu of
Gas per day, plus fuel requirements to deliver Gas from the
Delivery Point(s) to Buyer s city-gate stations as imposed by
Tennessee under its FERC-approved tariff, as such may be revised
from time to time.
1.15 "MMBtu" means one million (1,000,000) Btu.
1.16 "Monthly Nominated Quantity" shall have the meaning set
forth in Paragraph 2.2(a) herein.
1.17 "Nomination Day," when used in the context of nominations
given to Tennessee, means (i) in the case of Gas to flow on Tuesday
through Saturday of any week, the Monday of that week through the
following Friday and (ii) in the case of Gas to flow on Sunday or
Monday, the preceding Saturday. The end of a Nomination Day for
each different type of nomination shall coincide with the deadline
for each such nomination as set forth in Transporter s or
Tennessee s tariff, as applicable, as such may be revised from time
to time.
1.18 "Price Protection Fee," as used in Article V, shall mean
the cost or credit per MMBtu at which Seller is able to establish
the Protected Price (including Ceiling Price, Floor Price, or both)
as requested by Buyer.
1.19 "Primary Delivery Point(s)" shall have the meaning set
forth in Paragraph 4.1 herein.
1.20 "Protected Price," as used in Article V, shall mean the
actual price per MMBtu to be paid by Buyer for a Protected Quantity
of Gas purchased hereunder. If between the Ceiling Price and the
Floor Price, the Protected Price shall equal the Index Price
established pursuant to Paragraphs 5.1(b), (c), or (d) hereof; but
in no event shall the Protected Price be less than the Floor Price,
if established as to an affected Protected Quantity, nor greater
than the Ceiling Price, if established as to an affected Protected
Quantity.
2
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
<PAGE>
1.21 "Protected Quantity," as used in Article V, shall mean a
quantity of Gas to be delivered during any calendar month during
the term hereof which is equal to the MDQ multiplied by the number
of days in that month.
1.22 "Secondary Delivery Point(s)" shall have the meaning set
forth in Paragraph 4.1 herein.
1.23 "Transporter" means the pipeline(s) transporting the Gas
delivered under this Agreement from the source of supply to the
Delivery Point(s).
1.24 "Tennessee" means Tennessee Gas Pipeline Company.
II. Quantity
2.1 Subject to the other provisions of this Agreement, Seller
shall sell and deliver and Buyer shall purchase and receive, on a
firm basis, at the Delivery Point(s) listed in Exhibits A and/or B,
the MDQ which, as defined, includes such additional quantities of
Gas as may be necessary to account for fuel requirements to deliver
Gas from the Delivery Point(s) to Buyer s city-gate stations as
imposed by Tennessee under its FERC-approved tariff, as such may be
revised from time to time.
2.2(a) On or before ******** Nomination Days prior to the
first-of-month nomination deadline for Tennessee, Buyer shall
notify Seller in writing of the quantity of Gas, not to exceed the
MDQ, that Buyer desires to purchase from Seller on each day of the
coming month ( Monthly Nominated Quantity ). To the extent
practicable, deliveries and receipts of Gas shall be at uniform
daily and hourly rates of flow.
2.2(b) Following Buyer s nomination of the Monthly
Nominated Quantity or any subsequent increase pursuant to Paragraph
2.2(c), Buyer may decrease its purchases from Seller by notifying
Seller in writing of Buyer s intention to decrease purchases at
least ******** Nomination Days prior to the nomination deadline. If
Buyer decreases its purchases as provided herein, such a decrease
shall be deemed to be a failure to purchase and receive the Monthly
Nominated Quantity as provided in Paragraph 2.9.
2.2(c) (i) At any time during a month, Buyer may increase
the Monthly Nominated Quantity, up to but not to exceed the MDQ, by
providing Seller with reasonable written notice of the additional
quantities over the previously applicable Monthly Nominated
Quantity that Buyer desires to purchase ( increased quantities );
provided however that Buyer may not so increase the Monthly
Nominated Quantity more than ******** times in any given month.
The increased quantities so nominated shall constitute part of the
Monthly Nominated Quantity as of the first day that Seller is
required to sell and deliver them. The demand charge applicable to
such increased quantities shall be as set forth in Paragraph
5.1(a)(ii) hereof. The Index Price for the increased quantities
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actually purchased shall be as set forth in Paragraph 5.1(c)
hereof.
(ii) If Buyer requests increased quantities pursuant
to the previous subparagraph; if Seller s proposed Index Price
pursuant to Paragraph 5.1(c) is not acceptable to Buyer in its sole
discretion; if a delegation or assignment is in effect pursuant to
Paragraph 3.1 hereof; and if Buyer is able to purchase from a third
party a gas supply that is within the area subject to delegation or
assignment, then Buyer shall have the right to require Seller to
nominate such third-party supply for transportation and delivery
pursuant to Seller s authority under the delegation or assignment.
In such event, Buyer s request for increased quantities of Gas
shall be deemed to have been null and void.
2.2(d) Upon mutual agreement as to both the Index Price and
Alternate Delivery Point(s) to be used (to be confirmed in writing,
within one business day after agreement has been reached, utilizing
the form appearing as Exhibit B hereto) Buyer may request Seller
to, and Seller shall, deliver any quantity of Gas to be sold and
delivered hereunder, up to the MDQ, to Alternate Delivery Point(s).
Seller's failure to deliver any quantity of Gas as agreed pursuant
to this Paragraph 2.2(d) shall be deemed to be a failure to sell
and deliver under Paragraph 2.8 hereof, and the remedy set forth
therein shall be available to Buyer.
2.3 Buyer and Seller shall cooperate to ensure that
nominations are timely made to Transporter and/or Tennessee and
that such nominations reflect the actual expected deliveries and
receipts. Seller shall be responsible for nominations upstream
from the Delivery Point(s); and Buyer shall be responsible for
nominations downstream from the Delivery Points(s) unless Seller is
delegated or assigned pursuant to Article III hereof any of
Buyer's rights under Buyer's firm transportation agreement with
Tennessee, in which case Seller shall be responsible for
nominations pursuant to such delegation or assignment.
2.4 If either Party becomes aware of any reason why the
quantities established or nominated in accordance with this Article
II may not be delivered or taken, then that Party shall notify the
other Party as soon as possible. The Parties will cooperate to
ensure that corrected nominations are provided to Transporter
and/or Tennessee as soon as possible. Nothing in this Section 2.4
shall affect the time limitations and notice requirements set forth
elsewhere in this Article II.
2.5 Should Buyer fail to nominate or take a quantity of Gas
in accordance with this Article II and should such failure result
in the imposition of a penalty, charge, or expense, then, as
between the Parties, Buyer shall be liable for and hold Seller
harmless for such amount. Should Seller fail to nominate or
deliver a quantity of Gas in accordance with this Article II and
should such failure result in the imposition of a penalty, charge,
or expense, then, as between the Parties, Seller shall be liable
for, and hold Buyer harmless for such amount.
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2.6(a) Seller will have and, subject to Article XI hereof,
will maintain throughout the term of this Agreement such Gas supply
and/or valid contracts to purchase gas for resale to Buyer, capable
of being delivered to the Delivery Point(s) for the account of
Buyer, as will enable Seller to sell and deliver one hundred
percent (100%) of the MDQ, as nominated by Buyer from time to time
under the terms of this Agreement. Seller will not release any Gas
supply, or sell or commit to sell such supply to any other party,
if such release, sale, or commitment to sell would render seller
unable to satisfy its obligations to Buyer as set out herein.
Seller shall use its best efforts, to the extent operationally
feasible, to preserve its ability to supply Buyer from different
supply sources in order to minimize the potential for a production-
related force majeure occurrence.
2.6(b) Buyer may request from Seller no more than ********
every Contract Year a summary of Seller s deliverability and firm
sales obligations, by field and/or receipt point on Tennessee, for
the remaining term of this Agreement. Seller shall comply with
such request within ******** days.
2.7 Buyer and Seller acknowledge that their obligations
hereunder to deliver and receive nominated volumes of Gas up to the
MDQ are firm. If for any reason, including force majeure, Seller
is unable to meet all of its sales obligations under this and other
contracts then being supplied from the same supply area, Seller
agrees that it will deliver its obligatory volumes under this
Agreement and other firm contracts prior to supplying any
interruptible customers ********. Notwithstanding the foregoing,
Seller shall be obligated to curtail deliveries to interruptible
customers only in the event, and only to the extent, that such
curtailment increases the supply of Gas available for delivery to
Buyer under this Agreement.
2.8(a) If Seller fails to sell and deliver the firm
quantity of Gas nominated by Buyer pursuant to this Agreement, and
if such failure is not otherwise excused under this Agreement,
then, subject to Paragraph 2.8(c), Buyer s sole remedy shall be to
obtain alternate supplies ******** to cover the quantity not
delivered by Seller (such alternate supplies obtained by Buyer are
referred to as Deficiency Gas ) and collect from Seller an amount
equal to the difference, if any, between the higher price paid for
the Deficiency Gas ******** less the price provided in this
Agreement ********. This difference shall then be multiplied by
the Deficiency Gas quantity. Provided, however, that Buyer shall
make reasonable efforts (with due consideration given to all
relevant circumstances) to obtain Deficiency Gas at the lowest cost
available.
2.8(b) Buyer s obtaining of Deficiency Gas and recovery of
Buyer s costs from Seller as specified in Paragraph 2.8(a), shall
be limited to those firm quantities underdelivered. Buyer s
recovery from Seller may be taken, at Buyer s choice, as a credit
against future purchases, a physical delivery of gas according to
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a mutually agreeable delivery schedule, and/or a cash payment in
accordance with Article XIV.
2.8(c) In order to recover the remedy provided in this
Paragraph 2.8, Buyer shall notify Seller, when it is planning to
obtain Deficiency Gas from a third party, except in cases where
such replacement is related to after-the-fact corrections. Within
no more than one (1) business day following receipt of such
notification, Seller shall have the right to replace the Gas;
provided, however, that in order to allow Buyer to make adequate
arrangements for replacement Gas, Seller must exercise the right to
replace the Gas and give notice of such exercise to Buyer prior to
Buyer s deadline to arrange for the transportation and delivery of
its replacement Gas. Seller s failure to replace the Gas within
such time shall constitute a waiver of Seller s right to replace
the Gas and shall then subject Seller to the credit or payment
requirements of this Paragraph 2.8. The remedy stated in this
Paragraph 2.8 shall be Buyer s exclusive remedy for Seller s
failure to deliver the nominated quantity, and all other remedies
are hereby waived.
2.8(d) The parties shall at all times use reasonable
efforts to arrange for the resumption of normal deliveries by
Seller.
2.9(a) If on any day during a month, Buyer fails to
purchase and receive the Monthly Nominated Quantity in effect
pursuant to Paragraph(s) 2.2(a), 2.2(c), and/or 2.2(d) hereof, then
Seller s remedy shall be to collect from Buyer an amount equal to
the price provided in this Agreement for the period of the failure
to purchase, less the lower price at which Seller in good faith and
in the exercise of reasonable judgment is able to sell some or all
of such supplies to an alternate market; provided, however, that
for purposes of determining the difference between the price
provided hereunder and the price to alternate markets, Seller s
price to such alternate markets shall be deemed to be either: (a)
as mutually agreed upon in writing by the Parties; or (b) if the
Parties are unable to agree, ******** most proximate in time to the
effective date of the decrease in purchases, for production from
the same region as the Delivery Point(s) during the term of
Buyer s failure to purchase. Such difference(s) shall then be
multiplied by the quantities not taken by Buyer.
2.9(b) Seller shall recover from Buyer the amount set forth
in this Paragraph 2.9 by invoicing Buyer in accordance with Article
XIV of this Agreement, and Buyer shall pay Seller in accordance
with Article XIV. The remedy stated in this Paragraph 2.9 shall be
Seller s exclusive remedy for Buyer s failure to purchase and
receive the nominated quantity, and all other remedies are hereby
waived.
2.10 In the event of interruption, proration, or curtailment
of quantities delivered to Buyer or for Buyer s account (including
deliveries to storage) due to force majeure, the following measures
shall apply:
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(a) If a force majeure event occurs upstream of
Tennessee s Station 219, the following shall apply:
(i) If a delegation or assignment is in effect
pursuant to Paragraph 3.1 hereof, Seller shall deliver
Gas to Buyer at Primary and/or Secondary Delivery
Point(s) located within the area subject to the
delegation or assignment; provided, however, that Seller
has or can obtain both Gas supply and transportation to
supply Buyer. Buyer shall use its best efforts to assist
Seller in making arrangements to deliver Gas in
accordance with this paragraph. The Index Price for Gas
sold and delivered to Buyer at Primary Delivery Point(s)
under this Paragraph 2.10(a)(i) shall be as set forth in
Paragraph 5.1(b)(i) hereof. The Index Price for Gas sold
and delivered to Buyer at Secondary Delivery Point(s)
under this Paragraph 2.10(a)(i) shall be as set forth in
Paragraph 5.1(c) hereof; and/or
(ii) If a delegation or assignment is in effect
pursuant to Paragraph 3.1 hereof but Seller is unable to
secure alternate supplies within the area subject to
delegation or assignment after first using its best
efforts to do so (with due consideration given to all
relevant circumstances), then Seller shall deliver Gas to
Buyer at Secondary Delivery Point(s) outside the
delegation or assignment area and/or under reasonably
priced alternate arrangements satisfactory to Seller and
Buyer; provided, however, that Seller has or can obtain
both Gas supply and transportation to supply Buyer.
Buyer shall use its best efforts to assist Seller in
making arrangements to deliver Gas in accordance with
this paragraph. The Index Price for Gas sold and
delivered to Buyer under this Paragraph 2.10(a)(ii) shall
be as set forth in Paragraph 5.1(c) hereof.
(iii) If no delegation or assignment is in
effect pursuant to Paragraph 3.1 hereof, Seller shall
deliver Gas to Buyer at Secondary Delivery Point(s)
and/or under reasonably priced alternate arrangements
satisfactory to Seller and Buyer; provided, however, that
Seller has or can obtain both Gas supply and
transportation to supply Buyer. Buyer shall use its best
efforts to assist Seller in making arrangements to
deliver Gas in accordance with this paragraph. The Index
Price for Gas sold and delivered to Buyer under this
Paragraph 2.10(a)(iii) shall be as set forth in Paragraph
5.1(c) hereof.
(b) If a force majeure event occurs at or downstream of
********, Seller shall use its best efforts to provide a reasonably
priced supply of Gas accessible to Buyer s facilities, including,
but not limited to ********, and/or other delivery points or
arrangements satisfactory to Seller and Buyer; provided, however,
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that Seller has or can obtain both Gas supply and transportation to
supply Buyer. The Index Price for gas sold and delivered to Buyer
under this Paragraph 2.10(b) shall be as set forth in Paragraph
5.1(c) hereof. Buyer shall use its best efforts to assist Seller
in making arrangements to deliver Gas in accordance with this
paragraph.
(c) Subject to Paragraph 2.10(d), in supplying Gas to
Buyer under the measures set forth in Paragraphs 2.10(a) and
2.10(b), Seller must (i) first provide Buyer notice of its proposed
supply arrangements (including price); (ii) provide Buyer a
reasonable opportunity (commensurate with the circumstances in
obtaining such supply) to decline to purchase such Gas; and (iii)
make all necessary arrangements to deliver such Gas if Buyer does
not decline to purchase such Gas within a reasonable time
(commensurate with the circumstances in obtaining such supply)
after receiving Seller s notice of proposed arrangements. Buyer s
declining to purchase any Gas supply offered by Seller under this
Paragraph 2.10 will relieve Seller of its obligation to deliver Gas
under this Paragraph 2.10 for the duration of, and to the extent
of, such force majeure event. Buyer s declining to purchase shall
not constitute a failure to take under Paragraph 2.9 hereof, and
Seller shall not be considered to have failed to deliver under
Paragraph 2.8 hereof. In the event Buyer declines to purchase Gas
pursuant to this Paragraph 2.10(c), purchases and deliveries of Gas
shall resume immediately upon termination of the force majeure
event.
(d) If a delegation or assignment is in effect pursuant
to Paragraph 3.1 hereof and Buyer is able to purchase a gas supply
that is within the area subject to the delegation or assignment,
then Buyer shall have the right to require Seller to nominate such
supply ( Buyer-requested supply ) for transportation and delivery
pursuant to Seller s authority under the delegation or assignment.
Seller s failure to nominate a Buyer-requested supply shall be
deemed a failure by Seller to sell and deliver under Paragraph 2.8
hereof, and the remedy there provided shall be applicable;
provided, however, that Seller shall not be subject to such remedy
if it properly nominates such supply for transportation and
delivery and Buyer s failure to receive such supply is the fault of
either Buyer or some third party; and provided, further, that
Buyer s failure to receive such supply for any reason whatsoever
shall never be deemed a failure to take under Paragraph 2.9 hereof.
(e) When implementing the provisions of this Paragraph
2.10, if Seller has been supplying any portion of the Gas sold and
delivered hereunder from Secondary Delivery point(s) or under other
arrangements, Seller shall resume deliveries from the Primary
Delivery Point(s) set forth in Exhibit A to the extent that such
action will increase the total quantity of Gas delivered to Buyer
hereunder.
(f) The actions described in this Paragraph 2.10 are in
addition to any other actions which the Parties may undertake
toremedy or mitigate a force majeure condition. Buyer s exclusive
remedy for Seller s failure to deliver Gas which Seller has
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available in accordance with this Paragraph 2.10 shall be the
remedy described in Paragraph 2.8 hereof; provided, however, that
to the extent payments are made under Paragraph 2.8 hereof, Demand
Charges shall continue to be paid under Paragraph 5.1(a) hereof.
III. Transportation
3.1 During the term of this Agreement, Buyer and Seller may
agree that certain of Buyer's transportation rights and
responsibilities may be delegated or assigned to Seller. In such
event, the Parties shall deliver and execute mutually agreeable
documents fully setting forth the terms of such delegation or
assignment and the rights and responsibilities associated
therewith. Subject to Tennessee s offering an Operational
Balancing Agreement ( OBA ) or similar agreement on terms and
conditions agreeable to Seller, Seller agrees that it will, at all
times during the delivery and receipt of Gas, have an OBA or
similar agreement in effect with Tennessee for the purpose of
reducing the potential for imbalances under this Agreement. Seller
shall not be in breach of this provision, however, if Seller is not
able to obtain or maintain an OBA or similar agreement due to no
fault of Seller.
IV. Delivery Point(s)
4.1 The Primary Delivery Point(s) and Secondary Delivery
Point(s) shall be as set forth in Exhibit A hereto, as such may be
amended from time to time. The Alternate Delivery Point(s) shall
be as set forth in Exhibit B hereto, as such may be amended from
time to time. The Delivery Point(s) as set forth in Exhibits A and
B, may be changed by means of revised Exhibits A and/or B, and such
revised Exhibits may be executed on behalf of Seller and Buyer by
such authorized representative as each respective Party may
designate in writing. Except as provided in any delegation or
assignment under Article III hereof, such Delivery Point(s) shall
be the point(s) at which title to the Gas passes to Buyer and the
point(s) at which Gas is delivered for the account of the Buyer.
4.2 Seller shall be allowed to deliver Gas to Secondary
Delivery Point(s) in accordance with Buyer s transportation
agreement with Tennessee. Buyer agrees to use its best efforts to
add or delete Primary Delivery Point(s) upon the reasonable request
of Seller and to affirmatively seek such changes in its
transportation agreement with Tennessee. The Parties agree to
prepare, execute, and deliver an appropriate revised Exhibit A to
reflect such changes in Delivery Point(s).
V. Price
5.1 The price to be paid for Gas sold in accordance with this
Agreement shall be as set forth below:
5.1(a) Demand Charge
(i) Except as provided in Paragraphs 5.1(a)(ii), 5.2(g), and
5.3(g) hereof, the Demand Charge shall be calculated by multiplying
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******** times the MDQ, times the number of days in a month. The
Demand Charge, as calculated herein, shall be paid monthly by
Buyer, regardless of the quantity of Gas actually purchased and
received by Buyer during each month.
(ii) In addition to the Demand Charge under Paragraph
5.1(a)(i), Buyer shall also pay Seller an Incremental Demand Charge
of ******** for each MMBtu of the increased quantities nominated
pursuant to Paragraph 2.2(c) hereof. Such Incremental Demand
Charge shall be applicable as of the first day of any month in
which Seller is required to sell and deliver such increased
quantities, shall continue in effect through the end of such month,
and shall be paid by Buyer regardless of the increased quantities
actually purchased and received by Buyer during such month and
regardless of any subsequent decrease of Buyer's nomination
pursuant to Paragraph 2.2(b).
5.1(b) Index Price
Except as provided in Paragraphs 5.1(c) and (d), 5.2, and 5.3,
Buyer shall also pay Seller the Index Price for all quantities of
Gas purchased and received each month by Buyer under this
Agreement, as follows:
(i) Except as provided in Paragraph 5.1(b)(ii), the Index
Price under this Paragraph 5.1(b) shall be the ******** per MMBtu.
The IFGMR Index shall be determined using the first issue published
during the delivery month of Inside FERC s Gas Market Report
( IFGMR ), and the particular IFGMR price quote to be used shall be
the Index price quoted in the table entitled Prices of Spot Gas
Delivered to Pipelines (Per MMBtu dry) for deliveries during that
month to Tennessee in Louisiana (zone 1).
(ii) In the event the IFGMR Index is no longer published or is
no longer representative of prices for Gas delivered in the
vicinity of the Primary Delivery Point(s), then the Party which
becomes aware of such event shall notify the other Party, and the
Parties shall attempt in good faith to select an alternate
published index to serve as the basis of the new Index Price. If,
within sixty (60) days of receipt of such notice, the Parties have
not reached agreement on an alternate published index, then the new
Index Price shall be based on the Revised Price, determined by
using the following formula:
Revised Price = SP(avg) + D(avg)
Where
SP(avg) = The average of the closing Settlement Prices for
natural gas futures on the New York Mercantile Exchange
( NYMEX ) for the last three (3) days of trading prior to the
month in which the gas is delivered; and
D(avg) = the average of the differences, over the period
beginning with the date first written above and ending with
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the last month for which the IFGMR Index was utilized in
determining the Index Price, between (i) the applicable IFGMR
Index for each month of such period and (ii) the NYMEX gas
futures closing Settled Price for the Henry Hub for each month
of such period.
The preceding formula shall be used to calculate the basis of the
New Index Price for each month thereafter, with SP(avg) being
redetermined each month and D(avg) being held constant. The new
Index Price as determined under this Paragraph 5.1(b)(ii) shall be
effective as of the first day of the first month after notice is
given as specified herein and shall be ******** per MMBtu less than
the price determined from the alternate published index agreed on
by the parties or the Revised Price, as applicable.
5.1(c) Alternate Index Price
An Alternate Index Price shall apply to: (i) all increased
quantities of Gas sold and delivered to Buyer under Paragraph
2.2(c); (ii) all quantities of Gas sold and delivered to Buyer at
Secondary Delivery Point(s) pursuant to Paragraph 2.10(a); and
(iii) all quantities of Gas sold and delivered to Buyer under
mutually satisfactory arrangements pursuant to Paragraphs 2.10(a)
and (b). The Alternate Index Price shall be a mutually agreeable
price. If the Parties are unable to agree on a price in time to
permit all necessary delivery arrangements to be made, then the
Index Price for such Gas shall be one that reimburses Seller for
all reasonable costs (including, without limitation, the commodity
cost of the gas, and any transportation, storage, and other costs,
as applicable) that were communicated at least generically to Buyer
before the arrangements were concluded and were actually incurred
by Seller in making such deliveries, less ******** per MMBtu. In
determining reasonable costs for purposes of this Paragraph 5.1(c),
due consideration shall be given to all relevant circumstances.
5.1(d) Mutually Agreeable Index Price
The Index Price for quantities of Gas sold and purchased under
Paragraph 2.2(d) shall be the price agreed to by the Parties and
confirmed in writing as provided in Paragraph 2.2(d).
5.2 Locked Prices
In addition to the Demand Charge under Paragraph 5.1(a) and in
lieu of paying the Index Prices set forth in Paragraphs 5.1(b),
(c), and/or (d) or a Protected Price pursuant to Paragraph 5.3,
Buyer may elect to lock in and pay a Locked Price for a Locked
Quantity, as follows:
5.2(a) The Parties may lock the price for a Locked Quantity
to be purchased during any of the twelve (12) calendar months
immediately following Buyer s obtaining of a Locked Price that are
within the term of this Agreement. Locked Prices may be set by the
authorized representative(s) designated in writing by each Party,
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using the procedures set forth in Paragraphs 5.2(b) or (c) or both.
5.2(b) Buyer may request a specific Locked Price or Prices
for Gas to be delivered hereunder by telephone on any regular
Chevron business day, between the hours of 8:30 a.m. and 2:00 p.m.,
local Houston, Texas time, up to ******** hours (excluding weekends
and Chevron holidays) before the close of trading in natural gas
futures on the New York Mercantile Exchange ( NYMEX ) for the month
to which the Locked Price applies ( Trading Period ). As soon as
possible after Buyer s telephone request, but in any event within
twenty-four (24) hours thereafter (excluding weekends and Chevron
holidays), Seller shall confirm the Locked Price requested by Buyer
if there are, within such time period, any NYMEX natural gas
futures transactions reported at a price that is ******** or more
below the Locked Price requested by Buyer.
5.2(c) During the Trading Period, Buyer may request Seller
to propose a Locked Price for Gas to be sold and purchased
hereunder during one or more months, and Seller shall propose a
Locked Price as soon as practical. During the Trading Period,
Seller may also, on its own, propose to Buyer by telephone a
Locked Price for Gas to be sold and purchased hereunder during one
or more months. Buyer shall immediately accept or reject any such
proposals, and if accepted by Buyer the Locked Price proposed by
Seller shall be deemed confirmed. If Buyer does not accept
Seller s proposal, Seller s proposal shall be null and void.
5.2(d) If a Locked Price is confirmed pursuant to either
Paragraphs 5.2(b) or (c), then Seller shall forward to Buyer a
"Price Lock Confirmation similar to the form attached hereto as
Exhibit C, which specifies the terms to which the Parties have
agreed. Such Price Lock Confirmation shall be forwarded to Buyer
as soon as practical, but in any event prior to the beginning of
the calendar month in which deliveries are to be made. The terms
set forth in the Price Lock Confirmation shall be binding upon the
Parties unless Buyer notifies Seller in writing that Buyer disputes
one or more of the terms set forth in said Price Lock Confirmation
within forty-eight (48) hours, exclusive of weekends and Chevron
holidays, after Buyer receives the same. Any terms which remain
undisputed after expiration of said period shall be binding on the
Parties, and the Parties shall work together in good faith to
resolve any disputes as expeditiously as possible.
5.2(e) Buyer may request Locked Prices only on quantities
for the applicable months that are equal to the applicable Locked
Quantities.
5.2(f) Once a Locked Price has been established for a
delivery month hereunder, it shall be irrevocable as to the
affected Locked Quantity, and shall not thereafter be subject to
change.
5.2(g) If natural gas futures contracts cease to be traded
on the NYMEX or on any other mercantile exchange acceptable to
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Seller in its sole discretion, then after such cessation Seller
shall be relieved of any and all obligations to establish Locked
Prices hereunder, and the Demand Charge set forth in Paragraph
5.1(a)(i) hereof shall be reduced by ******** per MMBtu; provided,
however, that if a Demand Charge reduction has already been made
pursuant to Paragraph 5.3(g), no further reduction shall be made
pursuant to this Paragraph 5.2(g).
5.3 Protected Prices
In addition to the Demand Charge under Paragraph 5.1(a) and in
lieu of paying Index Prices pursuant to Paragraphs 5.1(b), (c),
and/or (d) or Locked Prices pursuant to Paragraph 5.2 hereof, Buyer
may request the establishment of a Ceiling Price, a Floor Price, or
both (a Protected Price ) for a Protected Quantity, as follows:
5.3(a) Through the authorized representative(s) designated
in writing by each Party, the Parties may establish a Protected
Price for a Protected Quantity to be purchased during any of the
twelve (12) calendar months immediately following the establishment
of such Protected Price(s) that are within the term of this
Agreement.
5.3(b) During the Trading Period defined in Paragraph
5.2(b), Buyer may request by telephone a Protected Price for Gas to
be delivered during the month to which the Protected Price applies.
5.3(c) As soon as possible after Buyer's telephone request,
but in any event within 24 hours (excluding weekends and Chevron
holidays), Seller shall determine the Price Protection Fee(s) which
Seller must charge Buyer in order to establish the Protected
Price(s) as requested, and shall notify Buyer's authorized
representative of such Price Protection Fee(s). If Buyer's
authorized representative accepts such Price Protection Fee(s),
then Seller shall forward to Buyer a Protected Price
Confirmation , similar to the form attached hereto as Exhibit D,
which specifies the terms to which the parties have agreed. Said
Protected Price Confirmation shall be forwarded to Buyer as soon as
practical, but in any event prior to the beginning of the calendar
month in which deliveries are to be made. The terms set forth in
the Protected Price Confirmation shall be binding upon the parties
unless Buyer notifies Seller in writing that Buyer disputes one or
more of the terms set forth in said Protected Price Confirmation
within forty-eight (48) hours, exclusive of weekends and Chevron
holidays, after Buyer receives the same. Any terms which remain
undisputed after expiration of said period shall be binding on the
parties, and the parties shall work together in good faith to
resolve any disputes as expeditiously as possible.
5.3(d) Buyer may request Protected Prices only on
quantities for the applicable months that are equal to the
applicable Protected Quantities.
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5.3(e) Once a Protected Price (whether involving a Floor
Price, a Ceiling Price, or both) has been established for a
delivery month hereunder, it shall be irrevocable as to the
affected Protected Quantity, and shall not thereafter be subject to
change.
5.3(f) The Price Protection Fees for Protected Quantities
shall be discrete charges or credits to Buyer, and shall be
included in the next monthly invoice sent to Buyer following such
request for a Protected Price. Said Price Protection Fees shall be
charged or credited, as applicable, for all Protected Quantities,
whether all such quantities are taken and/or paid for by Buyer or
not.
5.3(g) If natural gas futures contracts cease to be traded
on the NYMEX or on any other mercantile exchange acceptable to
Seller in its sole discretion, then after such cessation Seller
shall be relieved of any and all obligations to establish Protected
Prices hereunder, and the Demand Charge set forth in Paragraph
5.1(a)(i) hereof shall be reduced by ******** per MMBtu; provided,
however, that if a Demand Charge reduction has already been made
pursuant to Paragraph 5.2(g), no further reduction shall be made
pursuant to this Paragraph 5.3(g).
5.4 The price as specified herein is a price per MMBtu (dry),
measured in accordance with this Agreement.
5.5 Seller and Buyer hereby agree that all Gas purchased and
sold under this Agreement is decontrolled and not subject to any
maximum lawful price.
VI. Responsibility
6.1 Except as provided in any delegation or assignment of any
of Buyer s transportation rights, all charges, expenses, fees,
taxes, damages, injuries, cash-outs, payments and/or imbalance
charges, and other costs incurred in or attributable to the
handling or transportation of the Gas delivered in accordance with
this Agreement (or otherwise caused by or attributable to the Gas)
prior to delivery to Buyer at the Delivery Point(s) shall be the
responsibility of Seller, as between the Parties hereto, and Seller
shall indemnify, defend, and hold Buyer harmless from all such
costs; provided, however, that if Buyer is required by law to remit
such taxes to the collecting authority, Buyer shall do so and
deduct the taxes so paid on Seller s behalf from payments otherwise
due to Seller hereunder.
6.2 Seller shall be responsible for the maintenance and
operation of any of its facilities (including those it owns an
interest in) and shall indemnify, defend, and hold Buyer harmless
from any and all costs arising from any act or accident in
connection with the installation, presence, maintenance, and
operation of Seller's facilities.
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6.3 All charges, expenses, fees, taxes (including sales or
transfer taxes and other taxes levied on or in connection with the
transactions under this Agreement by the State in which the Gas is
consumed or otherwise used), damages, injuries, cash-outs, payments
and/or imbalance charges, and other costs incurred in or
attributable to the purchase and transfer, transportation, and
handling of the Gas (or otherwise caused by or attributable to the
Gas) from and after delivery shall be the responsibility of Buyer,
as between the Parties hereto, and Buyer shall indemnify, defend,
and hold Seller harmless from all such costs; provided, however,
that if Seller is required by law to remit such taxes so paid on
Buyer s behalf to the collecting authority, Seller shall do so, and
Buyer shall reimburse Seller for all amounts so paid. If Buyer
claims exemption from any such taxes, Buyer shall provide Seller a
tax exemption certificate or other appropriate documentation
thereof.
6.4 Except as provided in Article XII herein, Buyer warrants
that it has all necessary regulatory approvals and authorizations
for the purchase of Gas by Buyer hereunder.
6.5 Buyer shall be responsible for the maintenance and
operation of any of its facilities (including those it owns an
interest in) and shall indemnify, defend, and hold Seller harmless
from any and all costs arising from any act or accident in
connection with the installation, presence, maintenance, and
operation of Buyer's facilities.
6.6 As used in this Agreement, indemnify, defend, and hold
harmless , means that the indemnifying Party shall pay any and all
costs incurred by the indemnified Party (including, but not limited
to, attorneys fees and court costs) associated with or relating to
any breach of warranty or any responsibility or risk assigned to
the indemnifying Party under this Agreement.
VII. Term
7.1 The term of this Agreement shall commence as of the date
first written above, and shall continue for a term of ********
Contract Years thereafter.
7.2 If the Parties desire to extend the effectiveness of this
Agreement beyond the term provided in Paragraph 7.1, they shall
commence negotiations no later than the last day of the ********
Contract Year. The failure of one Party to request negotiations by
such deadline shall be adequate grounds for the other Party to
assume that the first Party has no interest in any such extension.
VIII.Measurement
8.1 The quantity of Gas delivered at the Delivery Point(s)
shall be calculated from the measurements taken by Tennessee at the
Delivery Point(s) and from the heating value determined by the
instruments operated by Tennessee at the Delivery Point(s). The
unit of measurement shall be one MMBtu, calculated on a dry basis.
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IX. Quality and Pressure
9.1 The Gas delivered to Buyer at the Delivery Point(s) shall
be of merchantable quality and shall meet the quality and pressure
specifications (including the specifications regarding heating
content) of Tennessee s currently effective FERC Gas Tariff. If
any of the Gas delivered hereunder fails to meet the quality and
pressure specifications described in this paragraph, then Buyer
will have the right to refuse to accept deliveries of such
nonconforming Gas, and, should Seller fail to replace the
nonconforming Gas as soon as possible (but in no event later than
the first day for which Tennessee will accept Gas from Seller to
replace the nonconforming Gas), such failure shall be deemed to be
a failure by Seller to sell and deliver a quantity of Gas under
Paragraph 2.8 hereof, and Buyer may purchase Deficiency Gas and be
reimbursed for the cost of such purchases provided therein.
9.2 To the extent Buyer accepts Gas delivered by Seller at
the Delivery Point(s), Seller shall be deemed to have complied with
the quality and pressure specifications contained herein.
X. Processing Rights and Injection of Liquids
10.1 Seller hereby reserves the right to process all or any
portion of the gas deliverable to Buyer hereunder for the removal
of all or any constituents thereof other than methane, and to
remove such methane as is necessary in the operation of the
processing facilities; provided, however, that Seller s exercise of
such rights shall not have the effect of reducing the quantities of
Gas (determined on a thermal basis) sold and delivered hereunder
below the quantities nominated by Buyer pursuant to Article II
hereof; and provided further that any such reduction below the
quantities nominated by Buyer shall be deemed to be a failure to
sell and deliver under Paragraph 2.8 hereof, and the remedy there
provided shall be applicable. Such processing rights may be
exercised either upstream of or, if Tennessee allows, downstream of
the Delivery Point(s) and may be accomplished by Seller or by any
assignee or designee of Seller; provided, however, that if Seller
elects to process Gas downstream of the Delivery Point(s), Seller
shall deliver to Tennessee for Buyer s account any additional
quantities of Gas necessary to account for any reduction in
quantity and/or heating value that may result from such processing.
When Seller is exercising its right to process the Gas (and such
right may be exercised at any time and from time to time during the
term of this Agreement), title to the liquid and liquifiable
hydrocarbons and other constituents removed or consumed during
processing shall not pass to Buyer, but shall remain at all times
in Seller. Buyer and Seller agree that they will cooperate in good
faith to facilitate the exercise of Seller s processing rights,
including, without limitation, taking the actions described in the
remainder of this Article 10.
10.2 Regardless of whether or not Seller initially elects to
process the Gas, Buyer shall make reasonable efforts to ensure that
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all transportation agreements entered into by Buyer for
transportation of the Gas downstream of the Delivery Point(s)
contain a provision acknowledging and providing for the exercise of
Seller s processing rights upon reasonable terms and conditions at
a mutually agreeable point on the system of Tennessee.
10.3 When and if Seller elects to exercise its processing
rights, Buyer and Seller will establish reasonable accounting and
billing procedures so that (a) Buyer will pay only for the
quantities of residue Gas remaining after processing, and (b) all
charges of the Transporter will be equitably allocated between
Buyer and Seller, with Seller paying all costs attributable to the
exercise of its processing rights (including any cash-outs imposed
by Tennessee) and Buyer paying all costs attributable to the Gas
purchased by it hereunder.
10.4 It is understood that Seller s Gas wells may produce
liquid hydrocarbons (condensate) along with the gas-well Gas to be
delivered hereunder. To the extent that any Delivery Point
provided for in this Agreement is located on an offshore platform,
Buyer agrees that Seller may inject condensate into the Gas stream
delivered hereunder for transportation and redelivery to Seller at
a separation facility to be located onshore. Buyer shall make
reasonable efforts to ensure that all transportation agreements
entered into by Buyer for transportation of the Gas downstream of
any offshore Delivery Point(s) contain a reservation in favor of
Seller of the right to inject and have such condensate transported
in Tennessee s pipeline for redelivery to Seller at the onshore
separation facility. Seller agrees to bear, or reimburse Buyer
for, all charges of the Tennessee attributable to the injection,
transportation, and redelivery of Seller s condensate.
10.5 Buyer shall furnish Seller with documentation
establishing the actual charges incurred by Buyer and borne by
Seller under Paragraphs 10.3 and 10.4. Such documentation shall
reflect the method of allocation of such charges between Buyer and
Seller.
10.6 Seller shall indemnify and save Buyer harmless from all
losses, damages, expenses, and liabilities (including reasonable
attorneys fees) that may occur or be asserted by reason of
accidents or occurrences resulting from Seller s or any third
party s operations as authorized by this Article X.
XI. Force Majeure
11.1 In the event that either Seller or Buyer is rendered
unable, by reason of an event of force majeure, to perform wholly
or in part any obligation or commitment set forth herein, then,
provided that such Party gives notice and reasonably full
particulars of such event as soon as practicable after the
occurrence thereof, the obligations of both parties, except for
unpaid financial obligations arising prior to such event of force
majeure, and except for the alternative delivery options arising
under Paragraph 2.10 hereof, shall be suspended to the extent of,
and insofar as they are affected by such force majeure event and
for the duration of the force majeure event.
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11.2 The term force majeure as employed herein shall mean
acts of God, strikes, lockouts, or industrial disputes or
disturbances, civil disturbances, arrests and restraints of rulers
and peoples, interruptions by government or court orders, necessity
for compliance with any court order, law, statute, ordinance, or
regulation promulgated by a governmental authority having
jurisdiction, acts of the public enemy, war, riots, blockades,
insurrections, inability to secure labor or materials, including
inability to secure materials by reason of allocations promulgated
by authorized governmental agencies, inability to obtain Gas
supplies at any price, epidemics, landslides, lightning,
earthquakes, fire, storms, floods, washouts, inclement weather that
would necessitate extraordinary measures and expense to construct
facilities and/or maintain operations, explosions, breakage or
accident to machinery or wells or lines of pipe, freezing of wells
or pipelines, inability to obtain or delays in obtaining easements
or rights of way, shutting-in of facilities for the making of
repairs, alterations, or maintenance to wells, pipelines, or
plants, or any other cause not reasonably within the control of the
Party claiming force majeure; provided, however, that neither the
loss of markets by Buyer nor the inability of Seller to acquire
supplies at prices satisfactory to Seller shall be considered force
majeure events.
11.3 To the extent such force majeure situation can be
mitigated or eliminated by the exercise of due diligence by the
Party claiming force majeure, such Party shall act to remedy the
situation with all reasonable dispatch; provided, however, that
settlement of strikes and lockouts will be entirely within the
discretion of the Party affected, and the requirement that any
event of force majeure be remedied with all reasonable dispatch
will not require the settlement of strikes and lockouts by acceding
to the demands of the parties directly or indirectly involved in
such strikes or lockouts when such course is inadvisable in the
discretion of the Party having the difficulty.
XII. Government Regulation
12.1 This Agreement shall be subject to all valid, applicable
state, federal, and local laws, rules, orders, and regulations; and
either Party hereto shall be entitled to regard all such laws,
rules, and regulations as valid and may act in accordance therewith
until such time as the same may be held invalid by final judgment
in a court of competent jurisdiction. Nothing herein shall be
taken to preclude Buyer or Seller or both from contesting the
validity of any such laws, rules, or regulations.
12.2 Notwithstanding Paragraph 12.1, if at any time during the
term of this Agreement any governmental authority shall take any
action whereby the purchase, sale, delivery, transportation,
redelivery, or resale of Gas as contemplated hereunder is
proscribed or made subject to terms, conditions, regulation,
restraints, or rate or price controls that (i) would render the
performance of this Agreement impossible or commercially
impracticable or (ii) would cause the performance of this Agreement
to be substantially more burdensome or substantially less
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profitable for either Party, or (iii) would cause the Buyer to be
unable to recover from its resale customers the cost of Gas
purchased hereunder ( adverse governmental action ), then the Party
so affected may elect, in writing, to renegotiate the terms of this
Agreement as reasonably necessary to eliminate the effect of such
adverse governmental action. If the Parties are unable, after
sixty (60) days following the date on which a Party's written
election to renegotiate is delivered to the other Party, to reach
mutual agreement on such renegotiated terms, either Party shall
have the right to cancel this Agreement by giving written notice to
the other Party at least one hundred twenty (120) days in advance;
provided, however, that such notice must be given within thirty
(30) days after completion of the sixty-day renegotiation period.
Unless otherwise agreed, the provisions of this Agreement shall
remain in effect until the termination of this Agreement pursuant
to this Paragraph 12.2.
12.3 Notwithstanding Paragraphs 12.1 and 12.2, Seller shall
have the right, in the event of a Major Governmental Action (as
hereinafter defined) to terminate this Agreement effective on the
last day before the effective date of the Major Governmental
Action. For purposes of this Paragraph, the term Major
Governmental Action shall mean either the passage by any
governmental authority having jurisdiction over this Agreement of
a rule, regulation, or order that would require, or the passage by
either house of a two-house legislative body of a bill that would
require, if it should subsequently become law, that Seller seek and
obtain approval or abandonment authority from a governmental
authority before discontinuing sales to Buyer after the term of
this Agreement has expired or this Agreement has otherwise
terminated according to its terms. If operation of this Paragraph
results in retroactive termination of this Agreement, then
settlement between the Parties related to transactions occurring
between the retroactive termination date and the triggering of this
Paragraph 12.3 (the Interim Period ) shall be handled according to
the winding-up principles set forth in Paragraph 12.4.
12.4 Unless otherwise agreed by the Parties, if it should be
necessary for the Parties to reach settlement with respect to
transactions that occurred during the Interim Period, the following
winding-up principles shall apply:
(a) No refunds of amounts already paid (and not in dispute
between the Parties) shall be required;
(b) For any transaction as to which settlement has not
occurred, the amount due shall be at the same price level as was
last paid for a similar transaction, whether under Paragraph
12.4(a) hereof or under the other provisions of this Agreement when
they were effective; and
(c) Any disputes as to the amounts due shall be settled by
arbitration, pursuant to Article XIII hereof, so as to promote
overall fairness between the Parties, giving due consideration to
all relevant circumstances.
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XIII. Arbitration
13.1 Any dispute or controversy between the Parties arising
out of this Agreement may be settled by arbitration; provided,
however, that arbitration shall not be available with respect to:
(i) applicability and level of the Demand Charge under Paragraph
5.1(a); (ii) the Revised Prices, if any, under Paragraph
5.1(b)(ii); and (iii) any action taken by either Party or both
Parties pursuant to Paragraph(s) 12.2, 12.3, and 12.4, except as
provided under Paragraph 12.4(d). The arbitration shall be
conducted in Houston, Texas, unless otherwise mutually agreed.
Arbitration of any such dispute or controversy, as well as all
recourse to the courts from any decision of the arbitrator(s),
shall be subject to the United States Arbitration Act, as codified
at 9 U.S.C. Sec. 1-16 (1991) and the Commercial Arbitration Rules of
the American Arbitration Association except to the extent either
the United States Arbitration Act or the Commercial Arbitration
Rules conflicts with the provisions herein. In the event of
conflict between the United States Arbitration Act and the
Commercial Arbitration Rules, the United States Arbitration Act
shall govern.
13.2 Either Party may request arbitration pursuant to this
Article XIII by providing written notice to the other Party. The
Parties shall attempt to agree upon a single arbitrator within
fifteen (15) days following receipt of such notice. In this event,
the dispute shall be arbitrated by this single arbitrator. If the
Parties are unable to agree upon a single arbitrator within such
fifteen (15) day period, then each Party shall select an arbitrator
within fifteen (15) days of the failure to agree upon a single
arbitrator. The two arbitrators shall select a third arbitrator
within fifteen (15) days after selection of such arbitrators.
Should the two arbitrators fail to agree on a third arbitrator
within the fifteen (15) day period, either party may apply to the
Senior Judge of the United States District Court for the Southern
District of Texas for appointment of the third arbitrator. The
dispute shall then be arbitrated by the three arbitrators chosen as
set forth above.
13.3 All arbitrators shall be qualified to decide the matter
in dispute, by education and experience within the natural gas
industry, and shall be licensed attorneys. No arbitrator shall be
a current or former employee, agent, or the beneficial owner of any
interest or common stock of either Party, any affiliate of either
Party, or any direct competitor of either Party, or a partner or
employee of a law firm that has represented either Party within the
five years preceding the invocation of arbitration.
13.4 The arbitrator(s) shall schedule the time and place for
hearings or the submission of written statements, at which time
each Party shall submit evidence. Pre-trial discovery shall be
available to both Parties. The decision of the arbitrator(s) shall
be made within thirty (30) days after the conclusion of any
hearings or the submission of written statements of the Parties.
The decision of the arbitrator(s) shall be in writing, shall state
with particularity the decision, shall be signed by the
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arbitrator(s) or a majority of them, and shall be subject to court
review in accordance with the United States Arbitration Act. A
judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
13.5 Both Parties shall submit evidence in their separate
proposals to the arbitrator(s) setting forth clearly their relative
positions with respect to the dispute. Following the presentation
of the evidence, each Party shall submit its final proposal for
resolution of the matter in dispute. The arbitrator(s) shall be
limited to selecting either Buyer s or Seller s final proposal.
13.6 Each Party shall pay the expenses of the arbitrator
selected by it, and of its counsel, witnesses, and employees, and
all other costs of arbitration shall be equally divided between the
Parties.
XIV. Billing and Payment
14.1(a) On or before the fifteenth (15th) day of each
calendar month, Seller shall submit to Buyer (by telecopy, mail, or
other means, at Seller s option) a statement showing the amount of
Gas purchased during the preceding month and the amount due Seller
for such purchases, calculated in accordance with the terms of this
Agreement. If actual amounts are unavailable, billing and payment
shall be made on estimates, subject to adjustment in succeeding
months. Buyer shall make payment of the amount due hereunder on or
before the twenty-fifth (25th) day of the calendar month by wire
transfer as follows:
********
14.1(b) On or before the twentieth (20th) day of each
calendar month, Buyer shall submit to Seller (by telecopy, mail, or
other means, at Buyer s option) a statement showing the amount(s)
due Buyer hereunder, if any, related to transactions occurring in
the preceding month. If actual amounts are unavailable, billing,
and payment shall be made on estimates subject to adjustment in
succeeding months. Statements shall be sent to the following
address:
Chevron U.S.A. Production Co.
P.O. Box J - Section 980
Concord, California 94524
Attn: Gas Accounting - Section 980
Seller shall make payment of the amount due hereunder on or before
the tenth (10th) day after submission of such bill by Buyer by wire
transfer as follows:
********
14.2 Should either Party fail to pay part or all of the other
Party s statement as provided in Paragraph 14.1, then interest on
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the unpaid portion shall accrue at the prime interest rate
established by Chase Manhattan Bank, N.A. plus two percent (2%) (or
the maximum lawful rate, whichever is less) from the due date until
the date of payment.
14.3(a) Should Buyer fail to pay all or part of any
statement on or before the due date, Seller, subject to Paragraph
14.4, but in addition to any other remedy it may have (and without
affecting those remedies), may suspend delivery of Gas to Buyer
upon written notice. Buyer shall have the right to have deliveries
reinstated by paying the full amount due, including interest within
ten (10) days of the date when deliveries were suspended.
14.3(b) Should Seller fail to pay all or part of any
statement on or before the due date, Buyer, subject to Paragraph
14.4, but in addition to any other remedy it may have (and without
affecting those remedies), may suspend receipts of Gas and payment
of demand charges to Seller upon written notice. Seller shall have
the right to have receipts of Gas and payment of demand charges
resumed by paying the full amount due, including interest, within
ten (10) days of the date when receipts were suspended.
14.4 If either party in good faith shall dispute the amount of
any invoice or part thereof rendered under any provision of this
Agreement, and shall pay to the other Party such amounts as it
concedes to be correct and, at any time within thirty (30) days
after a demand made by the Party to be paid, shall furnish a good
and sufficient surety bond guaranteeing payment to the Party to be
paid of the amount ultimately found due after a final
determination, which may be reached either by agreement of the
Parties, arbitration pursuant to Article XIII, or final judgment of
the courts, the Party to be paid shall not be entitled to suspend
deliveries or receipts of Gas and payment of demand charges until
default be made in the conditions of such bond. The amount related
to any dispute which is ultimately determined to be owed to either
party shall be paid in full, with interest which shall accrue at
the rate provided for in Paragraph 14.2 from the date payment of
such amount was originally due, until the date of payment.
14.5 During the term of this Agreement and for six (6) years
thereafter, the Parties shall have reasonable access to each
other s books and records to determine accurate measurement,
billing, and payment under this Agreement. Each Party also agrees
to make available to the other Party any relevant records of
Tennessee or Transporter to which the first Party has access. All
books and records of either Party pertaining to deliveries and
billings under this Agreement shall be retained for at least six
years after the end of the month to which such books or records
pertain.
14.6 If Seller owes funds to Buyer hereunder, Seller may
offset any amounts owed Buyer with amounts Buyer owes Seller
hereunder. If Seller makes such offset, it shall be noted on
Seller s statement.
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14.7 Either Party may change the addresses and account
information set forth in this Article XIV by giving written notice
to the other Party.
XV. Succession and Assignment
15.1 Either Party may, without relieving itself of any
obligations hereunder, assign, either on a permanent or temporary
basis, all or any part of its rights hereunder to any corporation,
partnership, joint venture, or other entity with which it is
affiliated. No other assignment of this Agreement or any of the
rights or obligations hereunder may be made unless and until the
Party seeking the assignment obtains the written consent thereto of
the non-assigning Party, which consent shall not be unreasonably
withheld; provided, however, that nothing in this Agreement in any
way prevents either Party from pledging or mortgaging all or any
part of such Party s property or rights hereunder as security for
mortgage, debt, or other similar obligations; and provided,
further, that nothing in this Agreement prevents any company or
other entity that purchases, merges, consolidates with, or
otherwise succeeds to the interests of either Party hereto,
substantially as an entirety, from assuming the rights or
obligations of its predecessor in interest under this Agreement.
No transfer of or succession to the interest of either Party
hereunder, wholly or partially, will affect or bind the non-
assigning Party until it has been furnished with written notice and
a true copy of such assignment or with other proper proof that the
claimant is legally entitled to such interest.
XVI.Financial Responsibility
16.1 Prior to the commencement of deliveries and sales of gas
hereunder, and at any time and from time to time thereafter upon
request from Seller, Buyer shall provide Seller credit information
as may reasonably be required by Seller to determine Buyer's
creditworthiness. If Seller determines in its reasonable judgment
that Buyer s credit is not sufficient, Buyer shall promptly provide
Seller a letter of credit, guaranty, or other good and sufficient
security of a continuing nature, satisfactory in form and amount to
Seller, as determined by Seller in its reasonable discretion.
Seller, in its reasonable discretion, may delay commencement of
deliveries, or suspend deliveries after they are commenced, pending
Buyer s full compliance with this Paragraph.
XVII. Notices
17.1 Any notice, demand, request, statement, or correspondence
provided for in this Agreement, or any notice which a Party may
desire to give to the other, shall be in writing (unless otherwise
provided) and shall be considered duly delivered when received by
mail, telecopy, or overnight courier, at the addresses below:
(i) To Seller:
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Correspondence and Operational Notices:
Chevron U.S.A. Production Co.
1301 McKinney
Houston, Texas 77010
Attention: Natural Gas Business Unit
Telecopy No.: (713) 754-5838
OR
Chevron U.S.A. Production Co.
P.O. Box 2100
Houston, Texas 77252
Attention: Natural Gas Business Unit
Telecopy No.: (713) 754-5838
Dispatching
Chevron U.S.A. Production Co.
P.O. Box 2100
Houston, Texas 77252
Attention: Natural Gas Business Unit
Telecopy No.: (713) 754-3840
Emergency Telephone No. (713) 754-7373
(ii) To Buyer:
Yankee Gas Services
P.O. Box 1030
599 Research Parkway
Meriden, Connecticut 06450-1030
Attention: Mr. Dave Egelson
Telecopy No.: (203) 639-4050
17.2 Either Party may change the information shown in
Paragraph 17.1 by giving written notice to the other Party.
XVIII. Confidentiality
18.1 Each Party agrees that it will maintain this Agreement
and all terms and conditions of this Agreement in strictest
confidence and that it will not cause or permit disclosure of this
Agreement or of the contents thereof to any third party without the
express written consent of the other Party hereto; provided,
however, that such third party restriction does not apply to
affiliated companies. Disclosures otherwise prohibited by this
Article 18 may be made by either Party only (a) to the extent
necessary for either Party to enforce this Agreement against the
other Party, or (b) to the extent to which a Party hereto is
required to disclose all or part of this specific Agreement by a
statute or by a court, agency, or other governmental body
exercising jurisdiction over the subject matter hereof, by order,
by regulation or by other compulsory process (including but not
limited to, deposition, subpoena, interrogatory, or request for
production of documents).
18.2 If either Party is or becomes aware of a statute,
regulation, order, other compulsory process, or a judicial or
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governmental proceeding that has resulted or may result in such
compulsory disclosure, it shall so notify the other Party
immediately and shall provide a copy of the order, regulation or
compulsory process as soon as it is available. Each Party further
agrees to cooperate to the fullest extent in seeking confidential
status to protect any material so disclosed.
18.3 The Parties hereto acknowledge that independent legal
counsel and outside consultants may, from time to time, be provided
with a copy of this Agreement and agree that such disclosure does
not require consent by the other Party.
XIX. Conflict of Interest
19.1 No director, employee, or agent of either Party shall
give or receive any commission, fee, rebate, gift, or entertainment
of significant cost or value in connection with this Agreement.
Any mutually agreeable representative(s) authorized by either Party
may audit the applicable records of the other Party solely for the
purpose of determining whether there has been compliance with this
Paragraph.
XX.Miscellaneous
20.1 This Agreement shall be governed in accordance with the
laws of the State of Connecticut (including the Uniform Commercial
Code as adopted in Connecticut) except for such laws concerning the
application of the laws of another jurisdiction. Except as
otherwise set forth herein, the Parties hereto waive any and all
rights, claims, or other cause of action arising under this
Agreement for incidental, consequential, or punitive damages.
20.2 THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT OF THE
PARTIES AND CANNOT BE ALTERED, MODIFIED, OR AMENDED EXCEPT IN A
WRITING SIGNED BY THE PARTY AGAINST WHOM IT IS TO BE ENFORCED.
THERE ARE NO WARRANTIES EXPRESS OR IMPLIED EXCEPT AS STATED IN THIS
AGREEMENT.
20.3 Any waiver of any default under this Agreement shall not
be construed as a waiver of any future defaults, whether of like or
different character.
20.4 This Agreement shall not be construed to create any third
party beneficiary relationship in favor of anyone not a Party to
this Agreement. In addition, the Parties waive and disclaim any
third party beneficiary status as to any of the contracts of the
other Party.
20.5 This Agreement may be executed in counterparts.
20.6 The covenant contained in Paragraph 18.1 survives the
term of this Agreement.
20.7 Buyer shall have the unilateral right to cancel this
Agreement at any time, effective at the end of any Contract Year,
upon giving 60 days prior written notice.
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NOW THEREFORE, the Parties evidence their consent and
agreement to the foregoing by executing below:
BUYER: SELLER:
YANKEE GAS SERVICES CHEVRON U.S.A. PRODUCTION COMPANY, a
COMPANY division of CHEVRON U.S.A. INC.
By: /s Thomas J. Houde By: /s D. H. MacLean
Title: Vice President - Title: Assistant Secretary
Rates & Resource Planning
Attest: /s Charles E. Gooley
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EXHIBIT 10.72
GAS SALES AGREEMENT
This Agreement is made and entered into as of the 26th of
March, 1992 by and between YANKEE GAS SERVICES COMPANY, a
Connecticut corporation ("Buyer"), and AQUILA ENERGY MARKETING
CORPORATION, a Delaware corporation ("Seller"), both Buyer and
Seller sometimes referred to collectively as "Parties" or
singularly as "Party".
I. Definitions
1.1 "Agreement" means the provisions of this document and
those contained in Exhibit "All attached hereto, as such may be
amended from time to time.
1.2 "Btu" (British Thermal Unit) means the amount of heat
energy required to raise the temperature of one avoirdupois pound
of water from fifty-nine-degrees Fahrenheit (59oF) to sixty degrees
Fahrenheit (60oF) , as determined on a dry basis.
1.3 "Contract Year" shall mean a period of twelve (12)
consecutive months from the first day of the first month following
the date of first deliveries of Gas under this Agreement, and
annually thereafter.
1.4 "Delivery Point(s)" shall be the point or points
identified in Exhibit "All hereto, and shall include both Primary
Delivery Point(s) and Secondary Delivery Point(s).
1.5 "Demand Charge" shall have the meaning as set forth in
Article V herein.
1.6 "FERC" means the Federal Energy Regulatory Commission or
any successor government authority.
1.7 "Gas" or "Natural Gas" means the effluent vapor stream
(including Liquid Hydrocarbons) in its natural state produced from
wells, including all hydrocarbon and nonhydrocarbon constituents
and including casinghead gas produced with crude oil, residue gas
resulting from the processing of gas well gas or casinghead gas,
liquified natural gas (LNG) in either liquid or vapor phase, gas
redelivered from storage fields or wells, or propane.
1.8 "Index Price" shall have the meaning as set forth in
Article V herein.
1.9(a) "Liquefiable Hydrocarbons" means any hydrocarbons
contained in the vapor phase of the Gas stream which can be
liquefied and extracted from the Gas by means of lean oil
processing, cryogenic processing, or other means, and shall in
any case mean natural gasoline (iso-pentanes plus heavier
hydrocarbons), butane, propane, and ethane and entrained methane.
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(b) "Liquid Hydrocarbons" means any hydrocarbons which, in
their natural state, are liquids and which shall include any
Liquefiable Hydrocarbons that condense out of the Gas stream during
production or transportation.
1.10 "Maximum Daily Quantity" or "MDQ" means ******** of Gas
per day, plus fuel requirements to deliver Gas from the Delivery
Point(s) to Buyer's city-gate stations as imposed by Tennessee
under its FERC-approved tariff, as such may be revised from time to
time.
1.11 "MMBtu" means one million (1,000,000) Btu.
1.12 "Monthly Nominated Quantity" shall have the meaning set
forth in Paragraph 2.2(a) herein.
1.13 "Primary Delivery Point(s)" shall be as set forth in
Paragraph 4.1 herein.
1.14 "Secondary Delivery Point(s)" shall be as set forth in
Paragraph 4.1 herein.
1.16 "Transporter" means the pipeline(s) transporting the Gas
delivered under this Agreement from the source of supply to the
Delivery Point(s).
1.17 "Tennessee" means Tennessee Gas Pipeline Company.
II. Quantity
2.1 Subject to the other provisions of this Agreement, Seller
shall sell and deliver and Buyer shall purchase and receive, on a
firm basis, the MDQ, which includes such additional quantities of
Gas as may be necessary to account for fuel requirements to deliver
Gas from the Delivery Point(s) to Buyer's city-gate stations as
imposed by Tennessee under its FERC-approved tariff, as such may be
revised from time to time. If the Parties mutually agree to a
quantity in excess of the MDQ, then such quantity shall be
delivered and received on a fully interruptible basis.
2.2(a) On or before five (5) business days prior to the
earlier of the first-of-the-month nomination deadline for
Transporter or Tennessee, Buyer shall notify Seller of the daily
quantity of Gas to be purchased, up to the MDQ, by Buyer from
Seller for the coming month (the "Monthly Nominated Quantity"). To
the extent practicable, deliveries and receipts of Gas shall be at
uniform hourly and daily rates of flow.
2.2(b) Buyer shall have the right during a month to
purchase a ******** by nominating to Seller, in accordance with
Paragraph 2.2(a), a Monthly Nominated Quantity ********.
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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2.2(c) Buyer may ******** from Seller during a month by
providing Seller at any time with notice of Buyer's intention to
******** at least ******** full business days prior to Tennessee's
nomination deadline to implement such changes; provided, however,
that if Buyer ******** as provided herein, such a ******** shall be
treated as a failure to purchase and receive the Monthly Nominated
Quantity. Buyer's notice to ******** shall include a good faith
estimate of the duration of such ******** and a statement of the
reason for such ********. At any time during a month, Buyer may
******** from Seller, up to the MDQ, by providing Seller with
notice of Buyer's request to ******** at least two (2) full
business days prior to Tennessee's nomination deadline to implement
such changes. Any such ******** from the Monthly Nominated
Quantity shall be priced in accordance with Paragraph-5.1(B)(ii).
2.3 Buyer and Seller shall cooperate to ensure that
nominations are timely made to Transporter and that such
nominations reflect the actual expected deliveries and receipts.
Seller shall be responsible for nominations upstream from the
Delivery Point(s) and Buyer shall be responsible for nominations
downstream from the Delivery Point(s), unless Seller is delegated
or assigned any of Buyer's rights under Buyer's firm transportation
agreements with Tennessee, in which case, Seller shall be
responsible for nominations pursuant to such delegation or
assignment.
2.4 If either Party becomes aware of any reason why the
quantities established or nominated in accordance with this Article
II may not be delivered or taken, then that Party shall notify the
other Party as soon as possible. The Parties will cooperate to
ensure that corrected nominations are provided to Transporter as
soon as possible.
2.5 Should Buyer fail to nominate or take a quantity of Gas
in accordance with this Article II and should such failure result
in the imposition of a penalty, charge or expense, then, as between
the Parties, Buyer shall be liable for and hold Seller harmless for
such amount. Should Seller fail to nominate or deliver a quantity
of Gas in accordance with this Article II and should such failure
result in the imposition of a penalty, charge or expense, then, as
between the Parties, Seller shall be liable for, and hold Buyer
harmless for such amount.
2.6 Seller will have and, subject to Article XI hereof, will
maintain throughout the term of this Agreement such valid contracts
and Gas supply available to Seller for resale to Buyer, capable of
being delivered to the Delivery Point(s) for the account of Buyer,
that will enable Seller to satisfy one hundred percent (100%) of
the quantity nominated by Buyer from time to time under the terms
of this Agreement. Seller shall supply Buyer from different supply
sources in order to minimize the potential for a production-related
force majeure occurrence. Buyer and Seller acknowledge that their
obligations hereunder are firm and that to the extent ********.
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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Seller will not ******** would, in Seller's reasonable judgment,
substantially impair the ability of Seller to satisfy its
obligations to Buyer as set out herein. Seller will notify Buyer
within thirty (30) days of any change in availability of Seller's
Gas supply or reserves that may materially adversely affect
Seller's ability to satisfy its obligations to Buyer hereunder.
2.7 Upon Buyer's reasonable request and at its sole expense,
but not more than ********, Seller shall within thirty (30) days of
receiving such request provide to an independent consultant,
current ******** information reasonably sufficient to allow such
independent consultant to ascertain Seller's ability to provide the
firm Gas supplies provided for herein. The independent consultant
shall: (a) be mutually agreed to by the Parties; (b) not represent
the interests of one Party over the other; and (c) maintain the
strict confidentiality of all of Seller's documents and information
by, among other things, (i) signing any reasonable confidentiality
agreements as requested by Seller, and (ii) not revealing to Buyer
or any other party, the names of the parties to any of Seller's
agreements which such consultant may review. The information that
Buyer or such independent consultant may request may include, but
is not limited to, ********; and ********; provided, however, that
Seller shall have the right to maintain the confidentiality of its
agreements with other parties, by providing copies with ********.
Upon Buyer's reasonable request, Seller shall allow the independent
consultant to inspect all such books, records or documents of
Seller, reasonably necessary to verify the data provided by Seller.
The independent consultant shall first report its findings to
Seller, who shall have the opportunity to explain, clarify, expand
or verify such findings. The independent consultant shall report
such findings, as revised, if applicable, to Buyer.
2.8(a) If Seller fails to sell and deliver a quantity of
Gas nominated by Buyer pursuant to this Agreement, then Buyer's
sole remedy shall be to ********. This difference shall then be
multiplied by the ********. Provided, however, that Buyer shall
first use its best efforts (with due consideration given to all
relevant circumstances) to obtain Deficiency Gas from the same
production region as the Delivery Point(s) during the term of
Seller's underdelivery before obtaining Deficiency Gas from other
regions and shall use its best efforts to obtain Deficiency Gas at
the lowest cost available.
(b) Such acquisition of Deficiency Gas by Buyer and recovery
of Buyer's costs from Seller as specified in Paragraph 2.8(a) shall
be limited to those quantities underdelivered and to the period of
underdelivery. Buyer's recovery from Seller may be, at Buyer's
choice, either a credit against future purchases or a cash payment
in accordance with Article XIV. Provided, however, that ********.
Within ******** business day following receipt of such
notification, ********. Seller's failure to replace the Gas within
******** business day following receipt of notification shall
constitute a waiver of Seller's right to supply the Deficiency Gas
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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and shall then subject Seller to the credit or payment requirements
of this paragraph; provided, however, that in order to allow Buyer
to make adequate arrangements for replacement Gas, Seller must
exercise the right to replace the Gas and give notice of such
exercise to Buyer prior to Buyer's deadline to arrange for the
transportation and delivery of its replacement Gas. The remedy
stated in this Paragraph 2.8 shall be ********.
2.9(a) If on any day during a month, Buyer fails to
purchase and receive the Monthly Nominated Quantity in effect for
such day, then Seller's remedy shall be to ********. Provided,
however, that for purposes of determining the ********, Seller's
price to such alternate market shall be deemed to be either: (a) as
mutually agreed upon in writing by the Parties; or (b) if the
Parties are unable to agree, deemed to be ********, most proximate
in time to the effective date of the decrease in purchases, for
production from the same region as the Delivery Point(s) ********
during the term of Buyer's failure to purchase; provided, further,
that if the Parties are unable to agree, Seller's price to such
alternate market shall be deemed to be ********. Such difference(s)
shall then be multiplied by the quantities not taken by Buyer.
(b) Seller shall recover from Buyer the amount set forth in
this Paragraph 2.9 by invoicing Buyer in accordance with Article
XIV of this Agreement, and Buyer shall pay Seller in accordance
with Article XIV. The remedy stated in this Paragraph 2.9 shall be
Seller's exclusive remedy for Buyer's failure to purchase and
receive the nominated quantity, and all other remedies are hereby
waived.
2.10 In the event of interruption, proration, or curtailment
of quantities delivered to Buyer or for Buyer's account (including
deliveries to storage) due to force majeure, the following measures
shall apply:
(a) If a force majeure event occurs ********, the following
shall apply:
(i) If a ******** is in effect pursuant to ********
hereof, Seller shall deliver Gas to Buyer at Primary
and/or Secondary Delivery Point(s) located within the
area subject to the ********; provided, however, that
Seller has both Gas supply and transportation available
to supply Buyer. Buyer shall use its best efforts to
assist Seller in making arrangements to deliver Gas in
accordance with this paragraph. The Index Price for Gas
sold and delivered to Buyer at Primary Delivery Point(s)
under this Paragraph 2.10(a)(i) shall be as set forth in
Paragraph 5.1(B)(i) hereof. The Index Price for Gas sold
and delivered to Buyer at Secondary Delivery Point(s)
under this Paragraph 2.10(a)(i) shall be as set forth in
Paragraph 5.1(B)(iii) hereof; and/or
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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(ii) If a ******** is in effect pursuant to ********
hereof but Seller is unable to secure alternate supplies
within the area subject to delegation or assignment after
first using its best efforts to do so (with due
consideration given to all relevant circumstances), then
Seller shall deliver Gas to Buyer at Secondary Delivery
Point(s) ********; provided, however, that Seller has
both Gas supply and transportation available to supply
Buyer. Buyer shall use its best efforts to assist Seller
in making arrangements to deliver Gas in accordance with
this paragraph. The Index Price for Gas sold and
delivered to Buyer at Secondary Delivery Point(s) under
this Paragraph 2.10(a)(ii) shall be as set forth in
Paragraph 5.1(B)(iii) hereof. The Index Price for Gas
sold and delivered under alternate arrangements
satisfactory to Seller and Buyer shall be as set forth in
Paragraph 5.1(B)(iv) hereof.
(iii) If no ******** is in effect pursuant to
******** hereof, Seller shall deliver Gas to Buyer at
Secondary Delivery Point(s) and/or under reasonably
priced alternate arrangements satisfactory to Seller and
Buyer; provided, however, that Seller has both Gas supply
and transportation available to supply Buyer. Buyer
shall use its best efforts to assist Seller in making
arrangements to deliver Gas in accordance with this
paragraph. The Index Price for Gas sold and delivered to
Buyer under this Paragraph 2.10(a)(iii) shall be as set
forth in Paragraph 5.1(B)(iv) hereof.
(b) If a force majeure event occurs ********, Seller shall
use its best efforts to provide a ******** supply of Gas
accessible to Buyer's facilities, including, but not limited
to ********, and/or other delivery points or arrangements
satisfactory to Seller and Buyer; provided, however, that
Seller has both Gas supply and transportation available to
supply Buyer. Buyer shall use its best efforts to assist
Seller in making arrangements to deliver Gas in accordance
with this paragraph.
(c) In supplying Gas to Buyer under the measures set forth in
Paragraphs 2.10(a) and 2.10(b), Seller must (i) first provide
Buyer with notice of its proposed supply arrangements
(including price); (ii) provide Buyer with a reasonable
opportunity (commensurate with the circumstances in obtaining
such supply) to decline to purchase such Gas; and (iii) make
all necessary arrangements to deliver such Gas if Buyer does
not decline to purchase such Gas within a reasonable time
(commensurate with the circumstances in obtaining such supply)
after receiving Seller's notice of proposed arrangements.
Buyer's declination to purchase such Gas will relieve Seller
of its obligation to deliver Gas under this Paragraph 2.10 for
the duration of, and to the extent of, such force majeure
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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event. Buyer's declination shall not constitute a failure to
take under Paragraph 2.9 hereof, and Seller shall not be
considered to have failed to deliver under Paragraph 2.8
hereof. In the event Buyer declines to purchase Gas pursuant
to this Paragraph 2.10(c), purchases and deliveries of Gas
shall resume immediately upon termination of the force majeure
event.
(d) The actions described in this Paragraph 2.10 are in
addition to any other actions which the Parties may undertake
to remedy or mitigate a force majeure condition. Buyer's
exclusive remedy for Seller's failure to deliver Gas which
Seller has available in accordance with this Paragraph 2.10
shall be the remedy described in Paragraph 2.8 hereof;
provided, however, ********.
III. Transportation
3.1 During the term of this Agreement, Buyer and Seller may
agree that certain of Buyer's transportation rights and
responsibilities may be delegated or assigned to Seller. In such
event, the Parties shall deliver and execute a mutually agreeable
document fully setting forth the terms of such delegation or
assignment and the rights and responsibilities associated
therewith. Further, Seller agrees to enter into and maintain an
Operational Balancing Agreement ("OBA") with Tennessee, containing
terms and conditions acceptable to Seller. Seller shall not be in
default of this provision, however, if it is unable to enter into
or maintain such OBA due to no fault of its own.
IV. Delivery Point(s)
4.1 The Primary Delivery Point(s) and Secondary Delivery
Point(s) shall be as set forth in Exhibit "All hereto, as such may
be amended from time to time. Such Delivery Point(s) shall be the
point(s) at which title to the Gas passes to Buyer and the point(s)
at which Gas is delivered for the account of the Buyer.
4.2 Seller shall be allowed to deliver Gas to Secondary
Delivery Point(s) in accordance with Buyer's transportation
agreement with Tennessee. Buyer agrees to use its best efforts to
add or delete Primary Delivery Point(s) upon the reasonable request
of Seller and to affirmatively seek such changes in its
transportation agreement with Tennessee. The Parties agree to
prepare, execute and deliver an appropriate revised Exhibit "All to
reflect such changes in Delivery Point(s).
V. Price
5.1 The price to be paid for Gas sold in accordance with this
Agreement shall be as set forth below:
(A) ********
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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From the date of initial deliveries through the end of
the fifth Contract Year, the ******** shall be calculated by
********. Beginning no later than ******** prior to the end
of ********, the Parties shall enter into good faith
negotiations to arrive at a new ********. If the Parties
cannot agree on a new ******** prior to the beginning of the
********, such issue shall be subject to arbitration in
accordance with Article XIII herein. Unless otherwise agreed,
during the period of arbitration, the ******** shall be that
amount in effect as of the end of the ********; and further,
unless otherwise agreed, the ******** determined through
arbitration shall be effective as of the ********.
The ********, as calculated herein, shall be paid monthly
by Buyer, based on the MDQ, regardless of the quantity of Gas
actually purchased and received by Buyer during each month.
(B) ********
Buyer shall also pay Seller the Index Price for all
quantities of Gas purchased and received each month by Buyer
in accordance with the terms of this Agreement.
(i) For the ******** be the ******** under the
applicable heading as designated below:
For deliveries into: ********
******** ********
(ii) For ******** made in accordance with Paragraph
2.2(c), the ********, under the applicable heading as
designated below. If the Parties are unable to agree
********, then the ******** shall be ********.
For deliveries into: ********
******** ********
(iii) For all quantities of Gas sold and delivered to
Buyer at Secondary Delivery Point(s) pursuant to Paragraphs
2.10(a)(i) and (ii) hereof, the ******** shall be ********.
If the Parties are unable to agree on a price, then the Index
Price for such Gas shall be as follows:
(a) the ******** (for each day of delivery, for
each Secondary Delivery Point where such Gas is
delivered) if prices are ******** and the point is a
valid point for pricing purposes); or
(b) if there is no ******** for the Secondary
Delivery Point or if that point is not a valid point for
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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pricing purposes, then the ******** (for each day of
delivery, for each Secondary Delivery Point where such
Gas is delivered) shall be ********.
For the purposes of this Paragraph 5.1(B)(iii), a "valid point
for pricing purposes" shall be a point that, for the day for
which a price is sought, has downstream transportation
available, and has Gas available for purchase.
(iv) For all quantities of Gas sold and delivered to
Buyer under the mutually satisfactory arrangements described
in Paragraph 2.10(a)(ii) and under Paragraphs 2.10(a)(iii) and
2.10(b), the ********. If the Parties are unable to agree on
a price, then the ********. In determining reasonable costs
for the purposes of this Paragraph 5.1(B)(iv), due
consideration shall be given to all relevant circumstances.
5.2 The price as specified herein is a price per MmBtu as
measured in accordance with this Agreement.
5.3 Seller and Buyer hereby agree that all Gas purchased and
sold under this Agreement is decontrolled and not subject to any
maximum lawful price and is subject to all of the provisions of the
Natural Gas wellhead Decontrol Act of 1989.
5.4 In the event ******** are no longer published or are no
longer representative of prices for Gas delivered in the vicinity
of the Delivery Point(s), then the Party which becomes aware of
such event shall notify the other Party, and the Parties shall
attempt in good faith to select an alternate index. If, within
thirty (30) days of receipt of such notice, the Parties have not
reached agreement on an alternate index, then such issue shall be
subject to arbitration pursuant to Article XIII herein.
5.5 The price(s) as set forth in this Article V are inclusive
of all costs or expenses incurred by Seller to deliver Gas to the
Delivery Point(s); provided, however, that in the event ********,
Buyer shall reimburse Seller for ******** as are related to Gas
purchased and sold hereunder.
VI. Responsibility
6.1 Except as provided in any ********, all charges,
expenses, fees,, taxes, damages, injuries, and other costs incurred
in or attributable to the handling or transportation of the Gas
delivered in accordance with this Agreement (or otherwise caused by
or attributable to the Gas) prior to delivery to Buyer at the
Delivery Point(s) shall be the responsibility of Seller, as between
the Parties hereto, and Seller shall indemnify, defend, and hold
Buyer harmless from all such costs.
6.2 Seller shall be responsible for the maintenance and
operation of any of its facilities (including those it owns an
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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interest in) and shall indemnify, defend, and hold Buyer harmless
from any and all costs arising from any act or accident in
connection with the installation, presence, maintenance, and
operation of the facilities.
6.3 All charges, expenses, fees, taxes (including sales or
transfer taxes), damages, injuries, and other costs incurred in or
attributable to the purchase and transfer, transportation, and
handling of the Gas (or otherwise caused by or attributable to the
Gas) from and after delivery shall be the responsibility of Buyer,
as between the Parties hereto, and Buyer shall indemnify, defend,
and hold Seller harmless from all such costs. Buyer shall provide
Seller with an exemption certificate applicable to any sales or
similar taxes or charges on purchases and sales under this
Agreement.
6.4 Except as provided in Article XII herein, Buyer warrants
that it has all necessary regulatory approvals and authorizations
for the purchase of Gas by Buyer hereunder.
6.5 Buyer shall be responsible for the maintenance and
operation of any of its facilities (including those it owns an
interest in) and shall indemnify, defend, and hold Seller harmless
for any and all costs arising from any act or accident in
connection with the installation, presence, maintenance, and
operation of the facilities.
6.6 As used in this Agreement, "indemnify, defend, and hold
harmless", means that the indemnifying Party shall pay any and all
costs incurred by the indemnified Party (including, but not limited
to, attorneys' fees and court costs) associated with or relating to
any breach of warranty or any responsibility or risk assigned to
the indemnifying Party under this Agreement.
VII. Term
7.1 The term of this Agreement shall commence as of the date
first written above; however, the obligations to sell and deliver
and to purchase and receive Gas and to make payments hereunder
shall commence ********, shall continue for a term of ********;
provided, however, that the term hereof shall be extended until
********.
7.2 The term of this Agreement shall be extended beyond the
period described in Paragraph 7.1 for ********, unless terminated
by either Party ********.
VIII. Measurement
8.1 The quantity of Gas delivered at the Delivery Point(s)
shall be calculated from the measurements taken by the Transporter
transporting the Gas to the Delivery Point(s) and from the heating
value determined by the instruments operated by the Transporter at
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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the Delivery Point(s). The unit of measurement shall be one MmBtu.
IX. Quality and Pressure
9.1 The Gas delivered to Buyer at the Delivery Point(s) shall
be of merchantable quality and shall meet the quality and pressure
specifications (including the specifications regarding heating
content) of Tennessee's FERC-approved tariff. If any of the Gas
delivered hereunder fails to meet the quality and pressure
specifications described in this paragraph, then Buyer will have
the right to refuse to accept deliveries of such nonconforming Gas,
and such failure shall be deemed to be a failure by Seller to sell
and deliver a quantity of Gas nominated by Buyer under Paragraph
2.8 hereof.
9.2 To the extent Buyer accepts Gas delivered by Seller at
the Delivery Point(s), Seller shall be deemed to have complied with
the quality specifications contained herein.
9.3 Seller shall cause the Gas to be delivered to Buyer at a
pressure sufficient to enable the Gas to enter Transporter's
pipeline at the Delivery Point(s). Without relieving Seller of its
obligations to sell and deliver Gas, Seller shall not be obligated
to install or provide any additional compression.
X. Processing
10.1 Subject to the requirements of Article IX, ******** at
the Delivery Point(s). In the event ******** the Gas, ******** and
all costs (including related transportation costs) shall be paid by
Seller and Seller shall indemnify, defend and hold Buyer harmless
therefrom. In the event ********, Seller shall deliver into
Buyer's transportation agreement with Tennessee without charge to
Buyer any additional quantities of Gas necessary to account for any
reduction in quantity and/or heating value that may result from
such processing.
XI. Force Majeure
11.1 In the event that either Seller or Buyer is rendered
unable, by reason of an event of force majeure, to perform, wholly
or in part, any obligation or commitment set forth herein, then,
provided that such Party gives notice and reasonably full
particulars of such event as soon as practicable after the
occurrence thereof, the obligations of both Parties, except for
unpaid financial obligations arising prior to such event of force
majeure, and except for the obligations arising under Paragraph
2.10 hereof, shall be suspended to the extent of, and insofar as
they are affected by such force majeure event and for the duration
of the force majeure event.
11.2 The term "force majeure" as employed herein shall mean
acts of God, strikes, lockouts, or industrial disputes or
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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disturbances, civil disturbances, arrests and restraints of rulers
and peoples, interruptions by government or court orders, necessity
for compliance with any court order, law, statute, ordinance or
regulation promulgated by a governmental authority having
jurisdiction, acts of the public enemy, war, riots, blockades,,
insurrections, inability to secure labor or materials, including
inability to secure materials by reason of allocations promulgated
by authorized governmental agencies, epidemics, landslides,
lightning, earthquakes, fire, storms, floods, washouts, inclement
weather that would necessitate extraordinary measures and expense
to construct facilities and/or maintain operations, explosions,
breakage or accident to machinery or lines of pipe, freezing of
wells or pipelines, inability to obtain or delays in obtaining
easements or rights of way, shutting-in of facilities for the
making of repairs, alterations, or maintenance to wells, pipelines,
or plants, or any other cause not reasonably within the control of
the Party claiming force majeure; provided, however, that loss of
markets by Buyer and the inability of Seller to obtain supply shall
not be considered events of force majeure.
11.3 To the extent such force majeure situation can be
mitigated or eliminated by the exercise of due diligence by the
Party claiming force majeure, such Party shall act to remedy the
situation with all reasonable dispatch; provided, however, that
settlement of strikes and lockouts will be entirely within the
discretion of the Party affected, and the requirement that any
event of force majeure be remedied with all reasonable dispatch
will not require the settlement of strikes and lockouts by acceding
to the demands of the parties directly or indirectly involved in
such strikes or lockouts when such course is inadvisable in the
discretion of the Party having the difficulty.
11.4 If during the term of this Agreement either Party claims
a suspension of obligation by reason of one or more events of force
majeure and if ********.
XII. Government Regulation
12.1 This Agreement shall be subject to all valid applicable
state, federal, and local laws, rules, and regulations; and either
Party hereto shall be entitled to regard all such laws, rules, and
regulations as valid and may act in accordance therewith until such
time as the same may be held invalid by final judgment in a court
of competent jurisdiction. Nothing herein shall be taken to
preclude Buyer or Seller or both from contesting the validity of
any such laws, rules, or regulations.
12.2 If at any time during the term of this Agreement any
governmental authority shall take any action whereby the purchase,
sale, delivery, transportation, redelivery, or resale of Gas as
contemplated hereunder is proscribed or made subject to terms,
conditions, regulations, restraints, or rate or price controls that
(i) would render the performance of this Agreement ********, or
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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(ii) would cause the ********, or (iii) would ******** ("adverse
governmental action"), then the Party so affected may ********. If
the Parties are unable, after ********, either Party may ********
as to the changes necessary to eliminate the effect of such adverse
governmental action, pursuant to ********. Upon completion
********, but either Party shall have the ******** upon written
notice given to the other Party at least ******** in advance;
provided, however, that such notice must be given within ********
of receipt of ********.
XIII. Arbitration
13.1 Arbitration under this Agreement shall be available only
for the determination of the issues as presented under ********.
Arbitration of such issues, discovery pursuant to such arbitration,
as well as all recourse to the courts from any decision of the
arbitrator(s) shall be subject to the United States Arbitration
Act, as codified at 9 U.S.C. Sec. 1-16 (1991), and the Commercial
Arbitration Rules of the American Arbitration Association. In the
event of a conflict between the provisions of the United States
Arbitration Act and the provisions of the Commercial Arbitration
Rules of the American Arbitration Association, the provisions of
the United States Arbitration Act shall prevail. The Parties agree
that all other provisions of this Agreement, and any issues arising
thereunder, are non-arbitrable.
13.2 Either Party may request arbitration pursuant to this
Article XIII upon providing written notice to the other Party. The
Parties shall attempt to agree upon a single arbitrator within
fifteen (15) days following receipt of such notice. In this event,
the dispute shall be arbitrated by this single arbitrator. If the
Parties are unable to agree upon a single arbitrator within such
fifteen (15) day period, then each Party shall select an arbitrator
within fifteen (15) days of the failure to agree upon a single
arbitrator. The two arbitrators shall select a third arbitrator
within fifteen (15) days after selection of such arbitrators. In
this event, the dispute shall be arbitrated by these three
arbitrators.
13.3 All arbitrators shall be qualified to decide the matter
in dispute, by education and experience within the natural gas
industry, and shall be licensed attorneys. No arbitrator shall be
an employee, agent, or the beneficial owner of any interest or
common stock of either Party, any affiliate of either Party, or any
direct competitor of either Party.
13.4 The arbitrator(s) shall schedule the time and place for
hearings or the submission of written statements, at which time
each Party shall submit evidence. The Parties may only submit
evidence which is material and relevant to the dispute. At the
initiation of arbitration, the Parties shall agree on reasonable
evidentiary rules to govern the use and admissibility of evidence.
If the Parties fail to agree to such rules, then the arbitrator(s)
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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shall prescribe such reasonable rules to be applied. The decision
of the arbitrator(s) shall be made within thirty (30) days after
the conclusion of any hearings or the submission of written
statements of the Parties. The decision of the arbitrator(s) shall
be in writing, shall state with particularity the findings of fact
and conclusions of law used to make the decision, shall be signed
by the arbitrator(s) or a majority of them, and shall be subject to
court review in accordance with the United States Arbitration Act.
Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
13.5 Both Parties shall submit evidence in their separate
proposals to the arbitrator(s) establishing their relative
positions with respect to the dispute, or, in the event of a
pricing dispute, to establish a pricing mechanism that reflects a
price that is responsive to the market and fairly reflects the
prices of Gas dedicated to long-term sale in the interstate market
and delivered to Tennessee in the same region as the Delivery
Point(s) hereunder. The arbitrator(s) shall be limited to
selecting either Buyer's or Seller's proposal, provided that such
proposal: (i) ********; and (ii) ********.
13.6 Each Party shall pay the expenses of the arbitrator
selected by it, and of its counsel, witnesses and employees, and
all other costs of arbitration shall be equally divided between the
Parties.
XIV. Billing and Payment
14.1(a) On or before the tenth (10th) day of each calendar
month, Seller shall submit to Buyer (by telecopy, mail, or other
means, at Seller's option) a statement showing the amount of Gas
purchased during the preceding month and the amount due Seller for
such purchases as calculated in accordance with the terms of this
Agreement. If actual amounts are unavailable, billing and payment
shall be made on estimates subject to adjustment in succeeding
statements. Buyer shall make payment of the amount specified in
Seller's statement on or before the twentieth (20th) day of the
calendar month by wire transfer as follows:
********
14.1 (b) On or before the twentieth (20th) day of each
calendar month, Buyer shall submit to Seller (by telecopy, mail, or
other means, at Buyer's option) a statement showing the amount(s)
due Buyer hereunder, if any, related to transactions occurring in
the preceding month. If actual amounts are unavailable, billing
and payment shall be made on estimates subject to adjustment in
succeeding statements. Seller shall make payment of the amount
specified in Buyer's statement within ten (10) calendar days of the
statement, by wire transfer as follows:
********
<F1> ******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION
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14.2 Should either Party fail to pay part or all of the other
Party's statement as provided in Paragraph 14.1, then interest on
the unpaid portion shall accrue at the prime rate as charged by The
Chase Manhattan Bank, N.A. of New York, plus two percent (2%) (or
the maximum lawful rate, whichever is less) from the due date until
the date of payment.
14.3 (a) Should Buyer fail to pay part or all of any statement
on or before the due date, Seller, subject to Paragraph 14.4, but
in addition to any other remedy it may have (and without affecting
those remedies), may suspend delivery of Gas to Buyer upon notice.
Buyer shall have the right to have deliveries reinstated by paying
the full amount due, including interest, within ten (10) days of
the date when deliveries were suspended.
14.3(b) Should Seller fail to pay part or all of any
statement on or before the due date, Buyer, subject to Paragraph
14.4, in addition to any other remedy it may have (and without
affecting those remedies), may suspend receipts of Gas from Seller
and payment of the Demand Charge upon notice. Seller shall have
the right to have receipts and payment of the Demand Charge resumed
by paying the full amount due, including interest, within ten (10)
days of the date when receipts were suspended.
14.4 If either Party in good faith shall dispute the amount of
any invoice or part thereof rendered under any provision of this
Agreement, and shall pay to the other Party such amounts as it
concedes to be correct and at any time within thirty (30) days
after a demand made by the Party to be paid, shall furnish a good
and sufficient surety bond guaranteeing payment to the Party to be
paid of the amount ultimately found due after a final
determination, which may be reached either by agreement of the
Parties, arbitration pursuant to Article XIII, or final judgment of
the courts, the Party to be paid shall not be entitled to suspend
deliveries or receipts of Gas and payment of Demand Charges until
default be made in the conditions of such bond. The amount related
to any dispute which is ultimately determined to be owed to either
Party shall be paid in full, with interest which shall accrue at
the rate provided for in Paragraph 14.2 from the date payment of
such amount was originally due, until the date of payment.
14.5 The Parties shall have reasonable access to each other's
books and records to determine accurate measurement, billing and
payment under this Agreement.
14.6 If Seller owes funds to Buyer under another arrangement,
Seller may offset any amounts owed Buyer with amounts Buyer owes
Seller pursuant to this Agreement. If Seller makes such offset, it
shall be noted on Seller's statement.
XV. Succession and Assignment
15.1 Either Party may, without relieving itself of any
obligations hereunder, assign any of its rights hereunder to any
corporation, partnership, joint venture, or other entity with which
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it is affiliated, either on a permanent or temporary basis. But no
other assignment of this Agreement or any of the rights or
obligations hereunder may be made unless and until the Party
seeking the assignment obtains the written consent thereto of the
non-assigning Party, which consent shall not be unreasonably
withheld; provided, however, that nothing in this Agreement in any
way prevents either Party from pledging or mortgaging all or any
part of such Party's property or rights hereunder as security for
mortgage, debt, or other similar obligations; and provided,
further, that nothing in this Agreement prevents any company or
other entity that purchases, merges, consolidates with, or
otherwise succeeds to the interests of either Party hereto,
substantially as an entirety, from assuming the rights or
obligations of its predecessor in interest under this Agreement.
No transfer of or succession to the interest of either Party
hereunder, wholly or partially, will affect or bind the non-
assigning Party until it has been furnished with written notice and
a true copy of such assignment or with other proper proof that the
claimant is legally entitled to such interest.
XVI. Financial Responsib ility
16.1 If the financial responsibility of Buyer becomes or is
discovered to be impaired or unsatisfactory to Seller, Seller shall
have the right to demand a letter of credit satisfactory to Seller
to be received by Seller within thirty (30) days from the date of
notice by Seller or Seller may elect to terminate this Agreement.
XVII. Notices
17.1 Any notice, demand, request, statement, or correspondence
provided for in this Agreement, or any notice which a Party may
desire to give to the other, shall be in writing (unless otherwise
provided) and shall be considered duly delivered when received by
mail, telecopy, or overnight courier, at the addresses below:
(i) To Seller:
Aquila Energy Marketing Corporation
2533 North t Avenue
Suite 200
Omaha, Nebraska 68164-8618
Attention: Vice President, Long-Term Marketing Telecopy
No.: (402) 498-4595
(ii) To Buyer:
Yankee Gas Services Company
P.O. Box 1030
Meriden, Connecticut 06450-1030
Attention: Mr. Dave Egelson
Telecopy No.: (203) 639-4050
17.2 Either Party may change the information shown in
Paragraph 17.1 by giving written notice to the other Party.
16
XVIII. Confidentiality
18.1 The terms of the Agreement, including, but not limited
to, the price paid for Gas, the quantities of Gas purchased or sold
and all other terms of this Agreement shall be kept confidential
by the Parties hereto, except to the extent such information is
disclosed to outside counsel or consultants of the Parties, or must
be disclosed for the purpose of effectuating transportation of Gas
or as may be required to be disclosed by regulatory bodies or
courts.
XIX. Miscellaneous
19.1 This Agreement shall be governed in accordance with the
laws of the State of Nebraska (including the Uniform Commercial
Code as adopted in Nebraska) except for laws concerning the
application of the laws of another jurisdiction. The Parties
hereto waive any and all rights, claims or other cause of action
arising under this Agreement for incidental, consequential or
punitive damages. Any damages resulting from a breach of this
Agreement by either Party shall be limited to actual damages
incurred by the Party claiming such damages.
19.2 THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT OF THE
PARTIES AND CANNOT BE ALTERED, MODIFIED, OR AMENDED EXCEPT IN A
WRITING SIGNED BY THE PARTY AGAINST WHOM IT IS TO BE ENFORCED.
THERE ARE NO WARRANTIES EXPRESS OR IMPLIED EXCEPT AS STATED IN THIS
AGREEMENT.
19.3 Any waiver of any default under this Agreement shall not
be construed as a waiver of any future defaults, whether of like or
different character.
19.4 No action, regardless of form, arising out of this
Agreement may be brought by either Party more than one (1) year
after the cause of action has arisen.
19.5 This Agreement shall not be construed to create any third
party beneficiary relationship in favor of anyone not a Party to
this Agreement. In addition, the Parties waive and disclaim any
third party beneficiary status as to any of the contracts of the
other Party.
19.6 This Agreement-may be executed in counterparts.
19.7 The covenant contained in Paragraph 18.1 survives the
term of this Agreement.
NOW THEREFORE, the Parties evidence their consent and
agreement to the foregoing by executing below:
BUYER: SELLER:
YANKEE GAS SERVICES COMPANY AQUILA ENERGY MARKETING CORP
By: /s Philip T. Ashton By: /s Scott M. Potter
Title: President & Title: Vice President
CEO
Attest:/s Mary J. Healey Attest: Assistant Secretary
17
<PAGE>
EXHIBIT 10.73
GAS SALES AGREEMENT
This Agreement is made and entered into as of the first day of
August, 1992 by and between YANKEE GAS SERVICES COMPANY, a
Connecticut corporation ("Buyer"), and NATURAL GAS CLEARINGHOUSE,
a Colorado partnership with its principal office located at 13430
Northwest Freeway, Suite 1200, Houston, Texas 77040 ("Seller"),
both Buyer and Seller sometimes referred to collectively as
"Parties" or singularly as "Party".
I.Definitions
1.1 "Agreement" means the provisions of this document and
those contained in Exhibits "A" and "B" attached hereto, as such
may be amended from time to time.
1.2 "Btu" (British Thermal Unit) means the amount of heat
energy required to raise the temperature of one avoirdupois pound
of water from fifty-nine-degrees Fahrenheit (59oF) to sixty
degrees Fahrenheit (60oF), as determined on a dry basis.
1.3 "Contract Year" shall mean a period of twelve (12)
consecutive months from the date first written above, and
annually thereafter.
1.4 "Delivery Point(s)" shall be the point or points
identified in Exhibit "A" hereto, and shall include both Primary
Delivery Point(s) and Secondary Delivery Point(s).
1.5 "Demand Charge" shall have the meaning set forth in
Article V herein.
1.6 "FERC" means the Federal Energy Regulatory Commission
or any successor government authority.
1.7 "Gas" or "Natural Gas" means the effluent vapor stream
(including Liquid Hydrocarbons) in its natural state produced
from wells, including all hydrocarbon and nonhydrocarbon
constituents and including casinghead gas produced with crude
oil, residue gas resulting from the processing of gas, well gas
or casinghead gas, liquefied natural gas (LNG) in either liquid
or vapor phase, gas redelivered from storage from storage fields
or wells, or propane.
1.8 "Index Price" shall have the meaning set forth in
Article V hereof.
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1.9(a) "Liquefiable Hydrocarbons" means any hydrocarbons
contained in the vapor phase of the Gas stream which can be
liquefied and extracted from the Gas by means of lean oil
processing, cryogenic processing, or other means, and shall in
any case mean natural gasoline (iso-pentanes plus heavier
hydrocarbons), butane, propane, and ethane and entrained methane.
1.9(b) "Liquid Hydrocarbons" means any hydrocarbons
which, in their natural state, are liquids and shall include any
Liquefiable Hydrocarbons that condense out of the Gas stream
during production or transportation.
1.10 "Maximum Daily Quantity" or "MDQ" means ******** of Gas
per day, plus fuel requirements to deliver Gas from the Delivery
Point(s) to Buyer s city-gate stations as imposed by Tennessee
under its FERC-approved tariff, as such may be revised from time
to time.
1.11 "MMBtu" means one million (1,000,000) Btu.
1.12 "Monthly Nominated Quantity" shall have the meaning set
forth in Paragraph 2.2(a) herein.
1.13 "Nomination Day", when used in the context of
nominations given to Tennessee, means (i) in the case of Gas to
flow on Tuesday through Saturday of any week, the Monday of that
week through the following Friday and (ii) in the case of Gas to
flow on Sunday or Monday, the preceding Saturday. The end of a
Nomination Day for each different type of nomination shall
coincide with the deadline for each such nomination as set forth
in Tennessee s tariff, as such may be revised from time to time.
1.14 "Primary Delivery Point(s)" shall have the meaning set
forth in Paragraph 4.1 herein.
1.15 "Secondary Delivery Point(s)" shall have the meaning
set forth in Paragraph 4.1 herein.
1.16 "Transporter" means the pipeline(s) transporting the
Gas delivered under this Agreement from the source of supply to
the Delivery Point(s).
1.17 "Tennessee" means Tennessee Gas Pipeline Company.
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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II. Quantity
2.1 Subject to the other provisions of this Agreement,
Seller shall sell and deliver and Buyer shall purchase and
receive, on a firm basis, the MDQ, which, as defined, includes
such additional quantities of Gas as may be necessary to account
for fuel requirements to deliver Gas from the Delivery Point(s)
to Buyer s city-gate stations as imposed by Tennessee under its
FERC-approved tariff, as such may be revised from time to time.
2.2(a) On or before three (3) Nomination Days prior to
the earlier of the first-of-month nomination deadline for
Transporter or Tennessee, Buyer shall notify Seller of the
quantities of Gas, not to exceed the MDQ, that Buyer desires to
purchase from Seller on each day of the coming month. The
various quantities scheduled for the different days of each month
shall collectively constitute the Monthly Nominated Quantity .
Notwithstanding the foregoing, Buyer may nominate quantities in
excess of the MDQ, and Seller shall exercise its best efforts to
deliver the excess quantities. Such excess volumes shall not
form a part of the Monthly Nominated Quantity. To the extent
practicable, deliveries and receipts of Gas on each day shall be
at uniform hourly rates of flow.
2.2(b) Buyer shall have the right to purchase on any day
during a month a daily quantity of Gas ********, in accordance
with Paragraph 2.2(a); provided, however, that no daily quantity,
nominated pursuant to Paragraph 2.2(a), ********; and provided,
further, that Buyer may ********.
2.2(c) Following Buyer s nomination of the Monthly
Nominated Quantity, and in the event that Buyer experiences a
reduction in demand for system supply, Buyer may ********. If
Buyer decreases its purchases as provided herein, such a decrease
shall be treated ******** the Monthly Nominated Quantity as
provided in Paragraph 2.9. Buyer s notice to decrease purchases
shall include a good faith estimate of the duration of such
decrease and a statement of the reason for such decrease. At any
time during a month, Buyer may ********, by providing Seller
with notice of Buyer s request to ******** at least two (2)
Nomination Days prior to Tennessee s nomination deadline to
implement such changes. The Index Price for such increases over
the original quantities nominated pursuant to Paragraph 2.2(a)
( first-of-month nominations ) shall be as set forth in Paragraph
5.1(c) hereof.
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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2.3 Buyer and Seller shall cooperate to ensure that
nominations are timely made to Transporter and that such
nominations reflect the actual expected deliveries and receipts.
Seller shall be responsible for nominations upstream from the
Delivery Point(s) nominated by Buyer; and Buyer shall be
responsible for nominations downstream from such Delivery
Points(s) unless Seller is delegated or assigned pursuant to
Article III hereof any of Buyer's rights under Buyer's firm
transportation agreement with Tennessee, in which case Seller
shall be responsible for nominations pursuant to such delegation
or assignment.
2.4 If either Party becomes aware of any reason why the
quantities established or nominated in accordance with this
Article II may not be delivered or taken, then that Party shall
notify the other Party as soon as possible. The Parties will
cooperate to ensure that corrected nominations are provided to
Transporter as soon as possible. Nothing in this Section 2.4
shall affect the time limitations and notice requirements set
forth elsewhere in this Article II.
2.5 Should Buyer fail to nominate or take a quantity of Gas
in accordance with this Article II and should such failure result
in the imposition of a penalty, charge, or expense, then, as
between the Parties, Buyer shall be liable, and hold Seller
harmless, for such amount. Should Seller fail to nominate or
deliver a quantity of Gas in accordance with this Article II and
should such failure result in the imposition of a penalty,
charge, or expense, then, as between the Parties, Seller shall be
liable, and hold Buyer harmless, for such amount.
2.6 Seller will have and, subject to Article XI hereof,
will maintain throughout the term of this Agreement such valid
contracts and Gas supply available to Seller for resale to Buyer,
capable of being delivered to the Delivery Point(s) for the
account of Buyer, as will enable Seller to satisfy one hundred
percent (100%) of the quantity nominated by Buyer from time to
time under the terms of this Agreement. Seller shall use its
best efforts, to the extent operationally feasible, to supply
Buyer from different supply sources in order to minimize the
potential for a production-related force majeure occurrence.
Seller will not release any Gas supply, or sell or commit to sell
such supply to any other party if such release, sale, or
commitment to sell would substantially impair the ability of
Seller to satisfy its obligations to Buyer as set herein. Seller
will notify Buyer within thirty (30) days of any change in
availability of Seller s Gas supply or reserves that may
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
4
materially and adversely affect Seller s ability to satisfy its
obligations to Buyer hereunder.
2.7 Buyer and Seller acknowledge that their obligations
hereunder are firm. If for any reason, including force majeure,
Seller is unable to meet all of its firm sales obligations
hereunder with Seller s available supplies, Seller will supply
all of its obligations under this Agreement ********.
Notwithstanding the foregoing, Seller shall be obligated to
********.
2.8 (a)If Seller fails to sell and deliver the firm
quantity of Gas nominated by Buyer pursuant to this Agreement,
and if such failure is not otherwise excused under this
Agreement, then, subject to Paragraph 2.8(c), Buyer s sole remedy
shall be to obtain alternate supplies (including, for example,
propane or penalty Gas) to cover the quantity not delivered by
Seller (such alternate supplies obtained by Buyer are referred to
as Deficiency Gas ) and collect from Seller an ********, for as
long as Deficiency Gas is required ( Deficiency Gas Credit(s) ).
The Deficiency Gas Credits shall then be multiplied by the
Deficiency Gas quantity(ies). Provided, however, that Buyer and
Seller may mutually agree on the Deficiency Gas arrangements to
be undertaken; and provided, further, that in the absence of such
an agreement, Buyer shall first use its best efforts (with due
consideration given to all relevant circumstances) to ********.
2.8(b) Buyer s obtaining of Deficiency Gas and recovery
from Seller as specified in Paragraph 2.8(a), shall be limited to
those firm quantities underdelivered and to the period of
underdelivery; provided, however, that Buyer and Seller shall use
their best efforts to arrange for the resumption of normal
deliveries by Seller in a manner, and according to a schedule,
that minimizes the total costs associated with obtaining
Deficiency Gas. Neither Party shall take unilateral action to
resume normal deliveries until after discussing the proposed
action with the other Party. Buyer s recovery from Seller of the
Deficiency Gas Credits may be, at Buyer s choice, ********.
2.8(c) In order to recover the amounts provided in
Paragraph 2.8(a), Buyer must follow the procedures set forth in
this Paragraph 2.8(c). Buyer must first notify Seller of its
intention to obtain Deficiency Gas from a third party. For no
more than one (1) Nomination Day following receipt of such
notification, Seller shall have the exclusive right to commence
deliveries of Deficiency Gas; provided, however, that in order to
allow Buyer to make adequate arrangements for obtaining its own
Deficiency Gas, if necessary, Seller must give notice to Buyer
of the exercise of such right prior to Buyer's deadline to
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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arrange for its own Deficiency Gas. If Seller fails to give the
requisite notice within the applicable deadline or fails to
commence deliveries within one (1) Nomination Day following
receipt of notification from Buyer, Seller shall no longer have
the exclusive right to supply Deficiency Gas, but shall be
entitled to continue its efforts to arrange for the delivery of
Deficiency Gas on a non-exclusive basis until Buyer notifies
Seller that it has arranged for the purchase of Deficiency Gas
from a third party. Subject to Section 2.8(b), in the event
Buyer makes arrangements with a third party or parties for
Deficiency Gas, Seller shall not have the right to supply
Deficiency Gas for so long as Buyer is purchasing Deficiency Gas
from a third party. If Buyer has commenced purchases of
Deficiency Gas from such others, Buyer shall make reasonable
efforts, if requested by Seller, to purchase Deficiency Gas from
Seller.
2.8(d) Deliveries of Deficiency Gas by Seller under
Paragraph 2.8(c) shall be limited to those firm quantities
underdelivered and to the period of underdelivery, and the Index
Price for such Gas shall be as set forth in Paragraph 5.1(f)
hereof.
2.9(a) If on any day during a month, Buyer fails to
purchase and receive the nominated quantity in effect for such
day pursuant to Paragraph 2.2(a) hereof, then Seller s remedy
shall be to ******** for those days as to which Buyer provides
the notice to decrease purchases as provided in Paragraph 2.2(c).
Such difference(s) shall then be multiplied by the quantities not
taken by Buyer.
2.9(b) Seller shall recover from Buyer the amount set
forth in this Paragraph 2.9 by invoicing Buyer in accordance with
Article XIV of this Agreement, and Buyer shall pay Seller in
accordance with Article XIV. The remedy stated in this Paragraph
2.9 shall be Seller s exclusive remedy for Buyer s failure to
purchase and receive the nominated quantity, and all other
remedies are hereby waived.
2.10 In the event of an interruption, proration, or
curtailment of quantities to be delivered to Buyer hereunder due
to force majeure, as defined in Article XI hereof, the measures
set forth in the following Sections 2.10(a) through 2.10(g) shall
apply. The Parties acknowledge that Seller may not have firm
transportation arrangements in place permitting delivery of Gas
to the Harrison Delivery Point, as defined in Section 2.10(a), or
to any Secondary Delivery Point(s). The Parties further
acknowledge and agree that nothing in Sections 2.10(a) through
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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2.10(g) shall be construed to require Seller to enter into any
such firm transportation arrangements or to hold Seller liable in
any fashion for failing to enter into such firm transportation
arrangements.
2.10(a) If a force majeure event occurs upstream of
Tennessee s interconnection with CNG Transmission Corporation at
Tennessee s meter 060004 (the Harrison Delivery Point ) and
********. Buyer shall assist Seller in making arrangements to
deliver Gas in accordance with this Paragraph.
2.10(b) If a force majeure event occurs upstream of the
Harrison Delivery Point and Seller does not have the ability to
transport and deliver at the Harrison Delivery Point the entire
quantity of firm Gas nominated by Buyer hereunder, ********. If
prorationing is applicable, Buyer s pro rata share of Gas shall
be calculated after deduction of a quantity of Gas not to exceed
********. In the event the third-party purchasers ******** do
not nominate and take delivery of the ********, the volumes not
nominated and delivered shall be considered available for pro
rata delivery to Buyer and other similarly situated firm
customers of Seller.
Notwithstanding the foregoing, the Parties recognize that
the ******** applies only to Gas ********, and, consequently,
Buyer shall be entitled to receive no less than its pro rata
share of Gas ********.
As an illustration of the foregoing, if Buyer nominates
******** and Seller has the ability to transport and deliver only
******** at the Harrison Delivery Point, and Seller has the
ability to deliver an ********, then after supplying Buyer with
******** at any Delivery Point(s), the next ******** of supply
may be subject to the ******** available for pro rata delivery to
Buyer and Seller s remaining firm customers. If in the preceding
illustration the ******** nominate and take delivery of only
********, an additional ******** is available for Buyer and for
Seller s remaining firm customers on a pro rata basis.
The Index Price for Gas sold and delivered at Secondary
Delivery Point(s) under this Paragraph 2.10(b) shall be as set
forth in Paragraph 5.1(d) hereof. The Index Price for Gas sold
and delivered under alternate arrangements satisfactory to Seller
and Buyer shall be as set forth in Paragraph 5.1(e) hereof.
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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2.10(c) If a force majeure event occurs at or downstream
of the Harrison Delivery Point, Seller, at Buyer s option, shall
use its best efforts to provide a supply of Gas accessible to
Buyer s facilities, including, but not limited to, ********.
Buyer shall assist Seller in making arrangements to deliver Gas
in accordance with this Paragraph. The Index Price for Gas sold
and delivered under this Paragraph 2.10(c) shall be as set forth
in Paragraphs 5.1(d) and/or 5.1(e) hereof, as applicable.
2.10(d) Subject to Paragraph 2.10(e), in supplying Gas to
Buyer under Paragraphs 2.10(b) and (c), Seller must (i) first
provide Buyer with notice of its proposed supply arrangements
(including price); (ii) provide Buyer with a reasonable
opportunity (commensurate with the circumstances in obtaining
such supply) to decline to purchase such Gas; and (iii) make all
necessary arrangements to deliver such Gas if Buyer does not
decline to purchase such Gas within a reasonable time
(commensurate with the circumstances in obtaining such supply)
after receiving Seller's notice of proposed arrangements.
Provided, however, that Seller shall not be required to provide
Buyer with such notice and opportunity to decline to purchase
such Gas if Seller determines in its reasonable discretion that
the delay associated with such procedures may jeopardize or
adversely affect Seller s ability to acquire such supply of Gas
for delivery to Buyer; and provided, further, that in such event
Seller shall be entitled to acquire such supply for sale and
delivery to Buyer, and the Index Price for such supply shall be
as provided in Paragraph 5.1(d). Buyer s declining to purchase
such Gas will relieve Seller of its obligation to deliver Gas
under this Paragraph 2.10 for the duration of, and to the extent
of, such force majeure event. Buyer's declining to purchase such
Gas shall not constitute a failure to take under Paragraph 2.9
hereof, and Seller shall not be considered to have failed to
deliver under Paragraph 2.8 hereof. In the event Buyer declines
to purchase Gas pursuant to this Paragraph 2.10(d), purchases and
deliveries of Gas shall resume immediately upon termination of
the force majeure event.
2.10(e) If a delegation or assignment is in effect
pursuant to Paragraph 3.1 hereof and Buyer is able to purchase a
Gas supply that is within the area subject to the delegation or
assignment and appropriate transportation is available, then
Buyer shall have the right to require Seller to nominate such
supply ("Buyer-requested supply") for transportation and delivery
pursuant to Seller s authority under the delegation or
assignment. Seller s failure to nominate a Buyer-requested
supply ********; provided, however, that Seller shall not be
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
8
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subject to such remedy if it properly nominates such supply for
transportation and delivery and Buyer s failure to receive such
supply is the fault of either Buyer or some third party; and
provided, further, that Buyer s failure to receive such supply
for any reason whatsoever shall never be deemed a failure to take
under Paragraph 2.9 hereof.
2.10(f) Buyer shall assist Seller in making arrangements
to deliver Gas in accordance with this Paragraph.
2.10(g) The actions described in this Paragraph 2.10 are
in addition to any other actions which the Parties may undertake
to remedy or mitigate a force majeure condition.
III. Transportat ion
3.1 During the term of this Agreement, Buyer and Seller may
agree that certain of Buyer's transportation rights and
responsibilities may be delegated or assigned to Seller. In such
event, the Parties shall deliver and execute mutually agreeable
documents fully setting forth the terms of such delegation or
assignment and the rights and responsibilities associated
therewith. Subject to Tennessee s offering an Operational
Balancing Agreement ( OBA ) or similar agreement on terms and
conditions agreeable to Seller, Seller agrees that it will, at all
times during the delivery and receipt of Gas, have an OBA or
similar agreement in effect with Tennessee for the purpose of
reducing the potential for imbalances under this Agreement. Seller
shall not be in breach of this provision, however, if Seller is not
able to obtain or maintain an OBA or similar agreement due to no
fault of Seller.
IV. Delivery Point(s)
4.1 The Primary Delivery Point(s) and Secondary Delivery
Point(s) shall be as set forth in Exhibit "A" hereto, as such may
be amended from time to time. Such Delivery Point(s) shall be the
point(s) at which title to the Gas passes to Buyer and the point(s)
at which Gas is delivered for the account of the Buyer.
4.2 Seller shall be allowed to deliver Gas to Secondary
Delivery Point(s) in accordance with Buyer s transportation
agreement with Tennessee. Buyer agrees to use its best efforts to
add or delete Primary Delivery Point(s) upon the reasonable request
of Seller and to affirmatively seek such changes in its
transportation agreement with Tennessee. The Parties agree to
prepare, execute, and deliver an appropriate revised Exhibit "A" to
reflect such changes in Delivery Point(s).
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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V. Price
5.1 The price to be paid for Gas sold in accordance with this
Agreement shall be as set forth below:
5.1(a) Demand Charge
The Demand Charge shall be calculated by multiplying ********.
The Demand Charge, as calculated herein, shall be paid monthly by
Buyer, based on the MDQ, ********.
5.1(b) Index Price
Except as provided in Paragraphs 5.1(c) through (f) hereof,
Buyer shall also pay Seller an Index Price for all quantities of
Gas purchased and received each month by Buyer under this
Agreement, as follows:
(i) The Index Price under this Paragraph 5.1(b) shall be
determined using the prices reported for the month of delivery in
the ********.
(ii) If a delegation or assignment is in effect pursuant to
Article III hereof, a ******** applicable to all quantities sold
and delivered hereunder, irrespective of the source of the Gas,
shall be computed by ********:
********
(iii) If no delegation or assignment is in effect pursuant
to Article III hereof, the Index Price shall be the price reported
for the month of delivery in the ******** under the applicable
heading as designated below:
********
5.1(c) In addition to the Demand Charge under Paragraph
5.1(a), Buyer shall also pay Seller, for all quantities of Gas
purchased by Buyer in excess of its first-of-month nominations
pursuant to Paragraph 2.2(c) hereof, an ********. If the Parties
are unable to agree on such a price, then the Index Price for such
Gas shall be a ********:
********
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
11
<PAGE>
5.1(d) In addition to the Demand Charge under Paragraph
5.1(a), Buyer shall also pay Seller, for all quantities of Gas sold
and delivered to Buyer at Secondary Delivery Point(s) pursuant to
Paragraphs 2.10(b) and (c), an Index Price, which shall be a
********. If the Parties are unable to agree on the price prior to
delivery, ********. In such circumstances the Commodity Charge
payable to Seller shall be the greater of:
(i) ********. If there is no Index Price ********, then the
Index Price for each Secondary Delivery Point where such Gas
is delivered shall be the ********.
or
(ii) The ******** that reflects, through the exercise of its
best efforts, the ******** Seller s delivery obligation under
Section 2.10(b) or (c), as applicable, ******** by Seller in
delivering the Gas (or causing it to be delivered) to the
Secondary Delivery Point, ********.
In the event Seller determines that the Index Price is based on
(ii) above, Seller shall furnish Buyer with documentation
sufficient to permit Buyer to verify that Seller exercised its best
efforts to ********. In determining reasonable costs for purposes
of Paragraph 5.1(d)(ii), due consideration shall be given to all
relevant circumstances.
5.1(e) In addition to the Demand Charge under Paragraph
5.1(a), Buyer shall also pay Seller, ********. If the Parties are
unable to agree on such a price, then the Index Price shall be one
********. In determining ******** for purposes of this Paragraph
5.1(e), due consideration shall be given to all relevant
circumstances.
5.1(f) In addition to the Demand Charge under Paragraph
5.1(a), Buyer shall also pay Seller, ******** pursuant to Paragraph
2.8(c) hereof, ********; provided, however, that the Deficiency Gas
Credit(s) applicable under Paragraph 2.8(a) hereof shall also apply
to all such quantities of Deficiency Gas.
5.2 The price as specified herein is a price per MMBtu as
measured in accordance with this Agreement.
5.3 Seller and Buyer hereby agree that all Gas purchased and
sold under this Agreement is decontrolled and not subject to any
maximum lawful price and is subject to all of the provisions of the
Natural Gas Wellhead Decontrol Act of 1989.
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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5.4 In the event either ********, then the party which
becomes aware of such event shall notify the other party, and the
parties shall attempt in good faith to select an alternate index.
If, within thirty (30) days of receipt of such notice, the Parties
have not reached agreement on an alternate index, then the issue of
revised Index Prices shall be subject to arbitration pursuant to
Article XIII hereof.
VI.Responsibility
6.1 Except as provided in any delegation or assignment of any
of Buyer s transportation rights, all charges, expenses, fees,
taxes, damages, injuries, and other costs incurred in or
attributable to the handling or transportation of the Gas delivered
in accordance with this Agreement (or otherwise caused by or
attributable to the Gas) prior to delivery to Buyer at the Delivery
Point(s) shall be the responsibility of Seller, as between the
Parties hereto, and Seller shall indemnify, defend, and hold Buyer
harmless from all such costs.
6.2 Seller shall be responsible for the maintenance and
operation of any of its facilities (including those it owns an
interest in) and shall indemnify, defend, and hold Buyer harmless
from any and all costs arising from any act or accident in
connection with the installation, presence, maintenance, and
operation of the facilities.
6.3 All charges, expenses, fees, taxes (including sales or
transfer taxes and other taxes levied on or in connection with the
transactions under this Agreement by the state in which the Gas is
consumed or otherwise used), damages, injuries, and other costs
incurred in or attributable to the purchase and transfer,
transportation, and handling of the Gas (or otherwise caused by or
attributable to the Gas) from and after delivery shall be the
responsibility of Buyer, as between the Parties hereto, and Buyer
shall indemnify, defend, and hold Seller harmless from all such
costs.
6.4 Except as provided in Article XII herein, Buyer warrants
that it has all necessary regulatory approvals and authorizations
for the purchase of Gas by Buyer hereunder.
6.5 Buyer shall be responsible for the maintenance and
operation of any of its facilities (including those it owns an
interest in) and shall indemnify, defend, and hold Seller harmless
from any and all costs arising from any act or accident in
connection with the installation, presence, maintenance, and
operation of the facilities.
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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<PAGE>
6.6 As used in this Agreement, "indemnify, defend, and hold
harmless," means that the indemnifying Party shall pay any and
all costs incurred by the indemnified Party (including, but not
limited to, attorneys fees and court costs) associated with or
relating to any breach of warranty or any responsibility or risk
assigned to the indemnifying Party under this Agreement.
VII.Term
7.1 The term of this Agreement shall commence as of the
date first written above. However, the ********, and, subject to
Paragraphs 7.2 and 11.4, shall continue for a term of ********
Contract Years thereafter; provided, however, that the term shall
be extended to the next April 1st if the term hereof would
otherwise expire between November 1st of any Contract Year and
the following March 15th.
7.2 The term of this Agreement shall be extended beyond the
period described in Paragraph 7.1 for additional successive
Contract Years, unless terminated by either Party by giving
******** prior notice of such termination.
VIII. Measurement
8.1 The quantity of Gas delivered at the Delivery Point(s)
shall be calculated from the measurements taken by Tennessee at
the Delivery Point(s) and from the heating value determined by
the instruments operated by Tennessee at the Delivery Point(s).
The unit of measurement shall be one MMBtu.
IX. Quality and Pressure
9.1 The Gas delivered to Buyer at the Delivery Point(s)
shall be of merchantable quality and shall meet the quality and
pressure specifications (including the specifications regarding
heating content) of Tennessee s FERC-approved tariff. If any of
the Gas delivered hereunder fails to meet the quality and
pressure specifications described in this paragraph, then Buyer
will have the right to refuse to accept deliveries of such
nonconforming Gas, and, should Seller be unable to replace the
nonconforming Gas on the day it was rejected, such failure shall
be deemed to be a failure by Seller to sell and deliver a
quantity of Gas under Paragraph 2.8 hereof.
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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<PAGE>
<PAGE>
9.2 To the extent Buyer accepts Gas delivered by Seller at
the Delivery Point(s), Seller shall be deemed to have complied
with the quality specifications contained herein.
9.3 Seller shall cause the Gas to be delivered to Buyer at
a pressure sufficient to enable the Gas to enter Transporter s
pipeline at the Delivery Point(s). In the event Seller does not
provide any necessary compression, Buyer may, without affecting
any other remedies it may have, provide or arrange for the
provision of such compression and withhold the costs of such
compression from Seller s payments.
X. Processin g
10.1 Subject to the requirements of Article IX, Seller may
process the Gas to remove any Liquid Hydrocarbons or Liquefiable
Hydrocarbons prior to and after the delivery of the Gas to Buyer
at the Delivery Point(s). In the event Seller elects to process
the Gas, any hydrocarbons so removed shall be Seller s sole
responsibility and all costs (including related transportation
costs) shall be paid by Seller, and Seller shall indemnify,
defend and hold Buyer harmless therefrom. In the event Seller
elects to process Gas downstream of the Delivery Point(s), Seller
shall deliver into Buyer s transportation agreement with
Tennessee without charge to Buyer any additional quantities of
Gas necessary to account for any reduction in quantity and/or
heating value that may result from such processing.
XI. Force Majeure
11.1 In the event that either Seller or Buyer is rendered
unable, by reason of an event of force majeure, to perform wholly
or in part, any obligation or commitment set forth herein, then,
provided that such Party gives notice and reasonably full
particulars of such event as soon as practicable after the
occurrence thereof, the obligations of both parties, except for
unpaid financial obligations arising prior to such event of force
majeure, and except for the alternative delivery options arising
under Paragraph 2.10 hereof, shall be suspended to the extent of,
and insofar as they are affected by, such force majeure event and
for the duration of the force majeure event.
11.2 The term "force majeure" as employed herein shall mean
acts of God, strikes, lockouts, or industrial disputes or
disturbances, civil disturbances, arrests and restraints of rulers
and peoples, interruptions by government or court orders, necessity
for compliance with any court order, law, statute, ordinance, or
regulation promulgated by a governmental authority having
jurisdiction, acts of the public enemy, war, riots, blockades,
insurrections, inability to secure labor or materials, including
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<PAGE>
inability to secure materials by reason of allocations promulgated
by authorized governmental agencies, inability to obtain Gas
supplies at any price, epidemics, landslides, lightning,
earthquakes, fire, storms, floods, washouts, inclement weather that
would necessitate extraordinary measures and expense to construct
facilities and/or maintain operations, explosions, breakage or
accident to machinery or wells or lines of pipe, freezing of wells
or pipelines, inability to obtain or delays in obtaining easements
or rights of way, shutting-in of facilities for the making of
repairs, alterations, or maintenance to wells, pipelines, or
plants, or any other cause not reasonably within the control of the
Party claiming force majeure; provided, however, that neither the
loss of markets by Buyer nor the inability of Seller to acquire
supplies at prices satisfactory to Seller shall be considered force
majeure events.
11.3 To the extent such force majeure situation can be
mitigated or eliminated by the exercise of due diligence by the
Party claiming force majeure, such Party shall act to remedy the
situation with all reasonable dispatch; provided, however, that
settlement of strikes and lockouts will be entirely within the
discretion of the Party affected, and the requirement that any
event of force majeure be remedied with all reasonable dispatch
will not require the settlement of strikes and lockouts by acceding
to the demands of the parties directly or indirectly involved in
such strikes or lockouts when such course is inadvisable in the
discretion of the Party having the difficulty.
11.4 If during the term of this Agreement either Party claims
a suspension of obligation by reason of one or more events of force
majeure and if such suspension extends for thirty (30) days or
more, then the term of this Agreement will be extended by the
number of days for which such force majeure condition is claimed.
XII. Government Regulation
12.1 This agreement shall be subject to all valid applicable
state, federal, and local laws, rules, and regulations; and either
Party hereto shall be entitled to regard all such laws, rules, and
regulations as valid and may act in accordance therewith until such
time as the same may be held invalid by final judgment in a court
of competent jurisdiction. Nothing herein shall be taken to
preclude Buyer or Seller or both from contesting the validity of
any such laws, rules, or regulations.
12.2 If at any time during the term of this Agreement any
governmental authority shall take any action whereby the purchase,
sale, delivery, transportation, redelivery, or resale of Gas as
contemplated hereunder is proscribed or made subject to terms,
conditions, regulations, restraints, or rate or price controls that
(i) would render the performance of this Agreement impossible or
16
<PAGE>
commercially impracticable or (ii) would cause the cost of
continued performance by the Seller hereunder to be more than the
amounts to be received by the Seller hereunder, or (iii) would
cause the Buyer to be unable to recover from its resale customers
the cost of Gas purchased hereunder ("adverse governmental
action"), then the Party so affected may elect to renegotiate the
terms of this Agreement as reasonably necessary to eliminate the
effect of such adverse governmental action. If the Parties are
unable, after thirty (30) days following the date on which a
Party s election to renegotiate is communicated to the other Party,
to reach mutual agreement on such renegotiated terms, either Party
may seek arbitration in an attempt to remedy the adverse impact of
the governmental action, pursuant to the procedures available under
Article XIII hereof. Upon completion of the arbitration process,
the arbitrators decision shall become final as provided in Article
XIII. Notwithstanding the foregoing, either Party shall have the
right to cancel this Agreement following arbitration upon written
notice given to the other Party at least six (6) months in advance;
provided, however, that such notice must be given within thirty
(30) days of receipt of the arbitrators ruling.
XIII. Arbitration
13.1 Any dispute or controversy between the Parties arising
out of this Agreement will be settled by arbitration; provided,
however, that the applicability and level of the Demand Charge
under Paragraph 5.1(a) and the Administrative Fee under Paragraph
5.1(d)(ii) shall not be subject to arbitration; and provided,
further, that the foregoing proviso shall not be applicable in the
event of an arbitration pursuant to Paragraph 12.2 hereof in which
revision of the Demand Charge and/or the Administrative Fee is
necessary in order to eliminate the effect of any adverse
governmental action. Arbitration of such dispute or controversy,
as well as all recourse to the courts from any decision of the
arbitrator(s) shall be subject to the United States Arbitration
Act, as codified at 9 U.S.C. Sec. 1-16 (1991) and the Commercial
Arbitration Rules of the American Arbitration Association except to
the extent either the United States Arbitration Act or the
Commercial Arbitration Rules conflict with provisions herein. In
the event of conflict between the United States Arbitration Act and
the Commercial Arbitration Rules, the United States Arbitration Act
shall govern.
13.2 Either Party may request arbitration pursuant to this
Article XIII upon providing written notice to the other Party. The
Parties shall attempt to agree upon a single arbitrator within
fifteen (15) days following receipt of such notice. In this event,
the dispute shall be arbitrated by this single arbitrator. If the
Parties are unable to agree upon a single arbitrator within such
fifteen (15) day period, then each Party shall select an arbitrator
within fifteen (15) days of the failure to agree upon a single
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<PAGE>
arbitrator. The two arbitrators shall select a third arbitrator
within fifteen (15) days after selection of such arbitrators.
Should the two arbitrators fail to agree on a third arbitrator
within the fifteen (15) day period, either party may apply to the
Senior Judge of the United States District Court for the Southern
District of Texas or of the Superior Court of Connecticut for New
Haven County for appointment of the third arbitrator. In this
event, the dispute shall be arbitrated by these three arbitrators.
13.3 All arbitrators shall be qualified to decide the matter
in dispute, by education and experience within the natural gas
industry, and shall be licensed attorneys. No arbitrator shall be
a current or former employee, agent, or the beneficial owner of any
interest or common stock of either Party, any affiliate of either
Party, or any direct competitor of either Party, or a partner or
employee of a law firm that has represented either Party within the
five years preceding the invocation of arbitration.
13.4 The arbitrator(s) shall schedule the time and place for
hearings or the submission of written statements, at which time
each Party shall submit evidence. Pre-trial discovery, shall be
available to both Parties. The decision of the arbitrator(s) shall
be made within thirty (30) days after the conclusion of any
hearings or the submission of written statements of the Parties.
The decision of the arbitrator(s) shall be in writing, shall state
with particularity the decision, shall be signed by the
arbitrator(s) or a majority of them, and shall be subject to court
review in accordance with the United States Arbitration Act. A
judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
13.5 Both Parties shall submit evidence in their separate
proposals to the arbitrator(s) establishing their relative
positions with respect to the dispute. In the event of arbitration
concerning revised Index Prices, the arbitrator(s) shall follow the
guidelines set out in Paragraph 13.6; and in the event of
arbitration pursuant to Paragraph 12.2 hereof, the arbitrator(s)
shall follow the guidelines set out in Paragraph 13.7 hereof, as
applicable. Following the presentation of the evidence, each Party
shall submit its final proposal for resolution of the matter in
dispute. The arbitrator(s) shall be limited to selecting either
Buyer s or Seller s final proposal.
13.6 In the event of an arbitration to establish revised Index
Prices, the arbitrator(s) shall establish revised Index Prices or
a revised price methodology that best approximates the prices for
transactions of the kind that were ********, as applicable, at the
time of execution of this Agreement as follows:
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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13.6(a) With respect to the first-of-month Index Prices
******** and utilized in setting prices pursuant to Paragraphs
5.1(b)(i), (ii), and (iii), and 5.1(d)(i), the transactions
reflected in these indexes predominantly had the following
characteristics:
********
********
********
********
13.6(b) With respect to the Index Prices ******** and
utilized in setting prices pursuant to Paragraphs 2.9(a) and
5.1(c), the transactions reflected in those indexes generally were
fully interruptible sales for very short terms (i.e., one day or
more but less than thirty days).
13.7 In any arbitration where revision of the Demand Charge
and/or the Administrative Fee is required pursuant to Paragraph
12.2, the arbitrators shall establish a pricing mechanism that
results in prices that are responsive to the market and fairly
reflect the prices of Gas dedicated to recently executed (relative
to the time of arbitration) contracts for long-term sale in the
interstate market, or to long-term contracts providing for market
sensitive pricing, under which Gas is delivered to Tennessee in the
same region as the Delivery Point(s) hereunder.
13.8 Each Party shall pay the expenses of the arbitrator
selected by it, and of its counsel, witnesses, and employees, and
all other costs of arbitration shall be equally divided between the
Parties.
XIV. Billing and Payment
14.1(a) On or before the fifteenth (15th) day of each
calendar month, Seller shall submit to Buyer (by telecopy, mail, or
other means, at Seller s option) a statement showing the amount of
Gas purchased during the preceding month and the amount due Seller
for such purchases as calculated in accordance with the terms of
this Agreement. If actual amounts are unavailable, billing and
payment shall be made on estimates subject to adjustment in
succeeding months. Buyer shall make payment of the amount
specified in Seller s statement on or before the twentieth (20th)
day of the calendar month by wire transfer as follows:
********
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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14.1(b) On or before the twentieth (20th) day of each
calendar month, Buyer shall submit to Seller (by telecopy, mail, or
other means, at Buyer s option) a statement showing the amount(s)
due Buyer hereunder, if any, related to transactions occurring in
the preceding month. If actual amounts are unavailable, billing,
and payment shall be made on estimates subject to adjustment in
succeeding months. Seller shall make payment of the amount
specified in Buyer s statement on or before the twenty-fifth (25th)
day of the calendar month by wire transfer as follows:
********
14.2 Should either Party fail to pay part or all of the other
Party s statement as provided in Paragraph 14.1, then interest on
the unpaid portion shall accrue at the prime interest rate
established by Chase Manhattan Bank, N.A. plus two percent (2%) (or
the maximum lawful rate, whichever is less) from the due date until
the date of payment.
14.3(a) Should Buyer fail to pay all or part of any
statement on or before the due date, Seller, subject to Paragraph
14.4, but in addition to any other remedy it may have (and without
affecting those remedies), may suspend delivery of Gas to Buyer
upon notice. Buyer shall have the right to have deliveries
reinstated by paying the full amount due, including interest within
ten (10) days of the date when deliveries were suspended.
14.3(b) Should Seller fail to pay all or part of any
statement on or before the due date, Buyer, subject to Paragraph
14.4, but in addition to any other remedy it may have (and without
affecting those remedies), may suspend receipts of Gas and payment
of Demand Charges to Seller upon notice. Seller shall have the
right to have receipts and payment of Demand Charges resumed by
paying the full amount due, including interest, within ten (10)
days of the date when receipts were suspended.
14.4 If either party in good faith shall dispute the amount of
any invoice or part thereof rendered under any provision of this
Agreement, and shall pay to the other Party such amounts as it
concedes to be correct and at any time within thirty (30) days
after a demand made by the Party to be paid, shall furnish a good
and sufficient surety bond guaranteeing payment to the Party to be
paid of the amount ultimately found due after a final
determination, which may be reached either by agreement of the
Parties, arbitration pursuant to Article XIII, or final judgment of
the courts, the Party to be paid shall not be entitled to suspend
deliveries or receipts of Gas and payment of Demand Charges until
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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default be made in the conditions of such bond. The amount related
to any dispute which is ultimately determined to be owed to either
party shall be paid in full, with interest which shall accrue at
the rate provided for in Paragraph 14.2 from the date payment of
such amount was originally due, until the date of payment.
14.5 The Parties shall have reasonable access to each other s
books and records to determine accurate measurement, billing and
payment under this Agreement.
14.6 If Seller owes funds to Buyer under another arrangement,
Seller may offset any amounts owed Buyer with amounts Buyer owes
Seller pursuant to this Agreement. If Seller makes such offset, it
shall be noted on Seller s statement.
XV. Succession and Assignment
15.1 Either Party may, without relieving itself of any
obligations hereunder, assign any of its rights hereunder to any
corporation, partnership, joint venture, or other entity with which
it is affiliated, either on a permanent or temporary basis. But no
other assignment of this Agreement or any of the rights or
obligations hereunder may be made unless and until the Party
seeking the assignment obtains the written consent thereto of the
non-assigning Party, which consent shall not be unreasonably
withheld; provided, however, that nothing in this Agreement in any
way prevents either Party from pledging or mortgaging all or any
part of such Party s property or rights hereunder as security for
mortgage, debt, or other similar obligations; and provided,
further, that nothing in this Agreement prevents any company or
other entity that purchases, merges, consolidates with, or
otherwise succeeds to the interests of either Party hereto,
substantially as an entirety, from assuming the rights or
obligations of its predecessor in interest under this Agreement.
No transfer of or succession to the interest of either Party
hereunder, wholly or partially, will affect or bind the non-
assigning Party until it has been furnished with written notice and
a true copy of such assignment or with other proper proof that the
claimant is legally entitled to such interest.
XVI. Financial Responsibility
16.1 If the financial responsibility of Buyer becomes or is
discovered to be impaired or unsatisfactory to Seller, Seller shall
have the right to demand a letter of credit satisfactory to Seller
to be received by Seller within thirty (30) days from the date of
notice by Seller or Seller may elect to terminate this Agreement.
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XVII. Notices
17.1 Any notice, demand, request, statement, or correspondence
provided for in this Agreement, or any notice which a Party may
desire to give to the other, shall be in writing (unless otherwise
provided) and shall be considered duly delivered when received by
mail, telecopy, or overnight courier, at the addresses below:
(i) To Seller:
Statements and all accounting matters:
Natural Gas Clearinghouse
13430 Northwest Freeway, Suite 1200
Houston, Texas 77040
Attention: Stephen W. Bergstrom
Telecopy No.: (713) 744-1795
(ii) To Buyer:
Yankee Gas Services
599 Research Parkway
Meriden, Connecticut 06450-1030
Attention: Mr. Dave Egelson
Telecopy No.: (203) 639-4050
17.2 Either Party may change the information shown in
Paragraph 17.1 by giving written notice to the other Party.
XVIII. Confidentiality
18.1 The terms of the Agreement, including, but not limited
to, the price paid for Gas, the quantities of Gas purchased or
sold, and all other terms of this Agreement shall be kept
confidential by the Parties hereto, except to the extent such
information is disclosed to outside counsel or consultants of the
Parties or must be disclosed for the purpose of effectuating
transportation of Gas or as may be required to be disclosed by
regulatory bodies or courts.
XIX. Supply Assurance
19.1(a) Seller s Affidavit. Upon Buyer s request, but not
more than once annually, Seller shall, within forty-five (45) Days
of receiving such request, deliver to Buyer an affidavit stating
********. The affidavit setting forth Seller's ******** ( Executed
Affidavit ) shall reflect Seller s reasonable, good faith
determination of the full extent to which it is capable of
performing the supply obligations provided for herein, and shall
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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take account of Seller s ********, and/or other relevant
information reasonably available to Seller as of the date the
Executed Affidavit is submitted. Seller may at any time provide a
new Executed Affidavit under this Section 19.1 without having first
received a request from Buyer.
19.1(b) Procedures. Buyer s request shall state the
purpose for which it is requesting the Executed Affidavit, such as
Buyer's reasonable, well founded concern that Seller ********,
Buyer s need to secure financing for new facilities, Buyer's desire
to enter into new contractual commitments based on sufficient Gas
supplies, or other reasonable purposes for which Buyer may need an
accurate understanding of Seller's ********. The averments
contained in the Executed Affidavit shall conform to the averments
contained in the draft affidavit set forth in Exhibit "B" to this
Agreement ("Sample Affidavit"); provided, however, that any
averment contained in the Sample Affidavit may be added to, deleted
from, or otherwise modified in the Executed Affidavit pursuant to
the mutual agreement of the Parties. The Executed Affidavit shall
be provided by any officer of Seller or by another representative
of Seller who is mutually agreeable to the Parties (which agreement
shall not be unreasonably withheld) and who is authorized by Seller
to make each of the averments contained in the Executed Affidavit
on Seller's behalf ("Authorized Affiant"). The Executed Affidavit
shall be based upon the Authorized Affiant s personal knowledge of
********. Seller hereby expressly waives its rights to contest in
a court of law, arbitration, or other proceeding respecting this
Agreement either (i) the authority or intent of the Authorized
Affiant to make each of the averments contained in the Executed
Affidavit on Seller s behalf, or (ii) the sufficiency of the
Authorized Affiant s review of the aforementioned information
forming the basis of the averments contained in the Executed
Affidavit; provided, however, that it shall be a defense to a claim
of liability under Section 19.3 hereof that the Authorized Affiant
deliberately provided a false Executed Affidavit with the intent to
subject Seller to the risk of liability thereunder.
19.2 Failure to Produce Affidavit. If Seller shall willfully
fail to produce an Executed Affidavit within the time required by
Section 19.1 hereof, Buyer shall have the sole and exclusive option
for thirty (30) days thereafter either (i) to ******** or (ii) to
********. If Buyer elects to ********, Buyer shall send Seller an
********, and Seller shall ********. Buyer s election to ********
shall not have any other effect on this Agreement, and it shall
still continue in effect without modification. If Buyer elects to
******** shall be specified in Buyer s notice to Seller and shall
fall within the period between ninety (90) and one hundred and
eighty (180) Days after the date of Buyer s notice to Seller. If
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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this Agreement is ******** neither Party ********, nor shall Buyer
have any right to ******** arising out of the event that gave rise
to the ********.
19.3 Subsequent Failure to ********. In the event Seller
provides an Executed Affidavit and thereafter fails to ******** at
least to the extent indicated by such Executed Affidavit on any
******** or more Days during any ********, other than for reasons
of force majeure, then, anything in this Agreement to the contrary
notwithstanding, Buyer may ******** as set forth in Section 19.4
hereof; provided, however, that none of the following events shall
be considered a ******** for purposes of this Paragraph 19.3: (i)
a ******** (ii) ******** indicated by the Executed Affidavit; and
(iii) retroactive changes to the ********. Should any such
liability be incurred by Seller, any subsequent liability under
this Section 19.3 shall be based on a new 180-Day Period beginning
after the end of the previous 180-Day Period. If Seller provides
a new Executed Affidavit as permitted under Section 19.1, the level
of performance required under this Section will be as set forth in
the new Executed Affidavit as of the date such new Executed
Affidavit is received by Buyer, but the new Executed Affidavit
shall not start a new 180-Day Period.
19.4 Damages. In the event Seller ******** to the extent
required in Section 19.3 hereof, Seller shall be ********, due to
Buyer s reliance on Seller s Executed Affidavit; provided, however,
that, in lieu of seeking damages, Buyer shall have the sole and
exclusive option for thirty (30) Days after the end of such 180-Day
Period to ********. Any action to ******** from Seller must be
brought no later than two (2) years after the end of the 180-Day
Period during which liability arises; provided, however, that such
action may not be commenced longer than five (5) years after Seller
has provided the Executed Affidavit on which Buyer bases its claims
********. If Buyer elects to ********, the effective date of
******** shall be specified in Buyer s notice to Seller and shall
fall within the period between ninety (90) and one hundred and
eighty (180) Days after the date of Buyer s notice to Seller.
******** as provided in this Section 19.4, neither Party shall have
any further obligation after the effective date of such ********
other than as provided herein, nor shall Buyer have any right to
recover damages arising out of the event that gave rise to the
right to ********.
XX. Miscellaneous
20.1 This Agreement shall be governed in accordance with the
laws of the State of Connecticut (including the Uniform Commercial
Code as adopted in Connecticut) except for such laws concerning the
******** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS
DELETED INFORMATION.
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application of the laws of another jurisdiction. Except as
provided in this Agreement, the Parties hereto waive any and all
rights, claims, or other causes of action arising under this
Agreement for incidental, consequential, or punitive damages.
20.2 THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT OF THE
PARTIES AND CANNOT BE ALTERED, MODIFIED, OR AMENDED EXCEPT IN A
WRITING SIGNED BY THE PARTY AGAINST WHOM IT IS TO BE ENFORCED.
THERE ARE NO WARRANTIES EXPRESS OR IMPLIED EXCEPT AS STATED IN THIS
AGREEMENT.
20.3 Any waiver of any default under this Agreement shall not
be construed as a waiver of any future defaults, whether of like or
different character.
20.4 Except as provided in Article XIX, no action, regardless
of form, arising out of this Agreement may be brought by either
Party more than one (1) year after the cause of action has arisen.
20.5 This Agreement shall not be construed to create any third
party beneficiary relationship in favor of anyone not a Party to
this Agreement. In addition, the Parties waive and disclaim any
third party beneficiary status as to any of the contracts of the
other Party.
20.6 This Agreement may be executed in counterparts.
20.7 The covenant contained in Paragraph 18.1 survives the
term of this Agreement.
NOW THEREFORE, the Parties evidence their consent and
agreement to the foregoing by executing below:
BUYER: SELLER:
YANKEE GAS SERVICES COMPANY NATURAL GAS CLEARINGHOUSE
By: /S Thomas J. Houde By: /s
Title: Vice President - Rates Title: Executive Vice President
& Resource Planning Marketing, Supply & Transportation
Attest: /s Mary J. Healey Attest: /s
