EXHIBIT 10.24
FIRM GAS PURCHASE AND SALE AGREEMENT
between
COGEN TECHNOLOGIES LINDEN VENTURE, L.P.
and
SONAT MARKETING COMPANY L.P.
TABLE OF CONTENTS
Page
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TABLE OF CONTENTS i
ARTICLE 1: DEFINITIONS 1
ARTICLE 2: QUANTITIES 5
ARTICLE 3: NOMINATIONS 5
ARTICLE 4: PRICE 6
ARTICLE 5: RESERVATION CHARGES AND SUBSTITUTE FUELS 12
ARTICLE 6: PAYMENT 13
ARTICLE 7: TAXES 15
ARTICLE 8: POINT(S) OF DELIVERY 16
ARTICLE 9: PRESSURE 16
ARTICLE 10: MEASUREMENT 16
ARTICLE 11: QUALITY 16
ARTICLE 12: TRANSPORTATION AND IMBALANCE CHARGES 17
ARTICLE 13: TERM 18
ARTICLE 14: FORCE MAJEURE 18
ARTICLE 15: NOTICE 20
ARTICLE 16: LAWS, ORDERS & REGULATIONS 22
ARTICLE 17: APPLICABLE LAW 22
ARTICLE 18: WAIVER 22
ARTICLE 19: TITLE 23
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ARTICLE 20: ASSIGNMENT 23
ARTICLE 21: ARBITRATION 25
ARTICLE 22: DEFAULT 26
ARTICLE 23: GENERAL 27
ARTICLE 24: CONFIDENTIALITY 28
EXHIBIT A 30
EXHIBIT B 31
EXHIBIT C 32
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FIRM GAS PURCHASE AND SALE AGREEMENT
This AGREEMENT ("Agreement") is made and entered into this 1st day of July,
1997, by and between COGEN TECHNOLOGIES LINDEN VENTURE, L.P., (in the State of
New Jersey D/B/A COGEN TECHNOLOGIES LINDEN VENTURE, LIMITED PARTNERSHIP), a
Delaware limited partnership, hereinafter referred to as "Buyer," and SONAT
MARKETING COMPANY L.P., a Delaware Limited Partnership, hereinafter referred to
as "Seller;"
WHEREAS, Buyer requires a supply of gas for use in Buyer's cogeneration
facility in Linden, New Jersey; and
WHEREAS, Seller is willing to sell gas to Buyer on a firm basis to meet its
requirements.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties do hereby covenant and agree as follows:
ARTICLE 1: DEFINITIONS
----------------------
In addition to the terms "Buyer" and "Seller" which shall refer to the
parties identified above, or their duly designated agents or representatives,
the following terms shall have the specified meanings:
1.1 The term "Alternate Commodity Price" shall have the meaning set forth
in Section 4.3.
1.2 The term "Btu" shall mean the amount of heat required to raise the
temperature of one (1) pound avoirdupois pure water from fifty-eight and five-
tenths degrees (58.5 degrees) to fifty-nine and five-tenths degrees (59.5
degrees) Fahrenheit, as defined in
1
the American Gas Association Gas Measurement Manual and any subsequent
revisions.
1.3 The term "Cancellation Notice" shall mean the notice described in
Section
1.4 The term "Commodity Price" shall have the meaning set forth in
Section 4.2.
1.5 The term "Con Ed" shall mean The Consolidated Edison Company of New
York, Inc.
1.6 The term "Daily Contract Quantity" or "DCQ" shall mean nine thousand
five hundred and seventy-nine (9,579) MMBtu per day plus Transporter(s)' Market
Area Fuel.
1.7 The term "day" shall mean a period of twenty-four (24) consecutive
hours, beginning and ending at the time specified in the receiving
Transporter(s)' tariff(s) at the Point of Delivery.
1.8 The term "Delivery Period" shall mean a period of five (5) consecutive
months beginning with the commencement of deliveries of gas hereunder.
1.9 The term "Elizabethtown" shall mean Elizabethtown Gas Company.
1.10 The term "Facility" shall mean the cogeneration facility owned and
operated by Buyer that is located in Linden, New Jersey.
1.11 The term "force majeure" shall have the meaning set forth in Section
14.2.
1.12 The term "Gas" or "gas" shall mean any mixture of hydrocarbons or of
hydrocarbons and non-combustible gases, in a gaseous state, consisting
essentially of methane and shall include casinghead gas produced with crude oil,
natural gas from
2
gas wells, coal-bed methane gas, synthetic gas, coal gasification gas and
residue gas resulting from processing any of the foregoing.
1.13 The term "Lender" shall mean (i) any and all lenders (other than
Seller) providing the construction, interim or long-term financing or re-
financing of the Facility (including financing by way of a leveraged lease) and
any trustee or agent acting on their behalf, and (iii) any and all equity
investors or limited. partners providing any such financing or refinancing of
the Facility and any trustee or agent acting on their behalf. The Lender
initially shall be State Street Bank & Trust Company, as Trustee, and thereafter
such entity or entities as shall be designated in writing by Buyer to Seller.
1.14 The term "Market Area Fuel" shall mean the volume of gas retained by
Transporter(s) as fuel for the transportation of gas from the Point(s) of
Delivery to the Point(s) of Redelivery.
1.15 The term "Market Price" shall have the meaning set forth in Section
4.3.
1.16 The term "Minimum Quantity" shall mean one hundred percent (100%) of
the product of the DCQ and the number of days in each month of the Delivery
Period, as reduced by circumstances of force majeure.
1.17 The term "MMBtu" shall mean one million (1,000,000) Btus.
1.18 The term "month" shall mean the period commencing on the beginning of
the first day of a calendar month and ending on the beginning of the first day
of the succeeding calendar month.
1.19 The term "Nominated Quantity" shall have the meaning set forth in
Section 3.1.
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1.20 The term "Nomination Notice" shall mean the notice described in
Section 3.1 and Exhibit A to this Agreement.
1.21 The term "NYMEX" shall mean the New York Mercantile Exchange.
1.22 The term "NYMEX Forward Price" shall have the meaning set forth in
Section 4.7(b).
1.23 The term "NYMEX Price" shall have the meaning set forth in Section
4.7(a).
1.24 The term "Point(s) of Delivery" shall have the meaning set forth in
Article 8.
1.25 The term "Point(s) of Redelivery" shall mean the point or points on
Transporter(s)' pipeline system where gas is redelivered to or for the account
of Buyer, PSE&G or Elizabethtown on the PSE&G system in New Jersey.
1.26 The term "Power Purchase Agreement" shall mean Contract No. 344, dated
April 14, 1989, between Buyer and Con Ed, covering the sale of electricity from
the Facility, and any amendments thereto that may be made from time to time.
1.27 The term "PSE&G" shall mean Public Service Electric and Gas Company.
1.28 The term "Spot Market Price" shall mean the arithmetic average of the
prices reported in the weekly and bi-weekly updates of the reference pricing
reports during the month of delivery for the reference points set forth in
Exhibit "B" hereto.
1.29 The term "Texas Gas" shall mean Texas Gas Transmission Corporation.
1.30 The term "Transporter(s)" shall mean any pipeline(s) transporting gas
sold hereunder to and from the Point(s) of Delivery and to the Point(s) of
Redelivery.
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ARTICLE 2: QUANTITIES
---------------------
2.1 Buyer shall purchase and receive and Seller shall sell and deliver the
Nominated Quantity at the Point(s) of Delivery, except to the extent excused
under the provisions of this Agreement.
2.2 If during any month of the Delivery Period Buyer purchases and receives
less than the Minimum Quantity for each Point of Delivery except to the extent
excused under the provisions of this Agreement or due to Seller's unexcused
failure to deliver, then Buyer shall pay Seller an amount equal to the
difference between the price payable hereunder and the then effective Spot
Market Price of gas at the reference points set forth in Exhibit B, less $0.15
per MMBtu, multiplied by the difference between the Minimum Quantity and the
quantity of gas purchased and received by Buyer. Except in the case of Buyer's
willful misconduct or gross negligence and except as described in Articles 12,
14 and 22, this is the sole remedy available to Seller for any failure by Buyer
to purchase and receive gas.
ARTICLE 3: NOMINATIONS
----------------------
3.1 On or before the day prior to which pipeline nominations are required
to be nominated by Buyer and Seller to the applicable pipeline company(s)
referenced herein, and subject to the provisions of Sections 3.2 and 3.3, Buyer
shall notify Seller in writing by providing a Nomination Notice, substantially
in the form attached hereto as Exhibit A, specifying the daily quantity of gas,
in MMBtus, up to the DCQ, that Buyer shall purchase and receive from Seller
during the next month (hereinafter the "Nominated Quantity"). In the
alternative, Buyer may specify a standing Nominated
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Quantity to be effective until changed in writing pursuant to the first sentence
of this section.
3.2 The parties recognize that fluctuations in the production and
transportation of gas can occur on a daily basis. Buyer and Seller will attempt
to receive and deliver gas on a uniform hourly basis. Notwithstanding anything
to the contrary herein, any revisions to the Nominated Quantity shall be
implemented in accordance with Transporter(s)' nomination procedures, unless a
waiver of such procedures is received by either Buyer or Seller.
3.3 Buyer and Seller shall be responsible for nominations to their
respective Transporters and the nominations in each case shall reflect the
Nominated Quantity.
3.4 If no Nominated Quantity is submitted by Buyer in accordance with
Section 3.1, the DCQ shall be the Nominated Quantity.
ARTICLE 4: PRICE
----------------
4.1 For all gas nominated by Buyer and delivered by Seller during a month,
Buyer shall pay the Commodity Price or the Alternate Commodity Price per MMBtu,
rounded to the nearest $0.001.
4.2 The term "Commodity Price" shall mean the price of gas for each month
which shall be mutually agreed upon by the parties and subsequently confirmed in
writing prior to the date Buyer's nomination notice to Seller is due for the
month of delivery. In the event that the parties fail to reach agreement as to
the Commodity Price, the Alternate Commodity Price determined in accordance with
Section 4.3 shall apply.
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4.3 The term "Alternate Commodity Price" shall mean the arithmetic average
of the prices reported in the referenced issue of the month of delivery for the
price references included in the "Market Price Index," set forth in Exhibit B
LESS $0.12 PER MMBTU. The price references in the Market Price Index are
intended to reflect the price paid for gas delivered at the Point(s) of Delivery
under spot contracts (the "Market Price"). The price references in the "Backup
Price Index" set forth in Exhibit B are intended to serve as a substitute for
the price references in the Market Price Index in the event the latter price
references are not available or are "erroneous," as that term is defined in
Section 4.5.
4.4 Either party may request that a price reference be added to or deleted
from the Market Price Index or Backup Price Index by providing written notice to
the other party. For a price reference to be added to the Market Price Index or
Backup Price Index, the price reference must reflect the Market Price and be
from an independent publication which is not controlled by a buyer, seller or
broker of gas. For a price reference to be deleted from the Market Price Index
or Backup Price Index, such price reference must no longer reflect the Market
Price. If within thirty (30) days after the date of notice by a party, the
parties are unable to agree to add or delete a price reference, then the party
seeking such addition or deletion may submit the issue to arbitration which
shall be conducted pursuant to Article 21. A price reference shall be added or
deleted effective the first day of the month after notice by the requesting
party and the price ultimately determined by negotiation or arbitration will be
given retroactive effect to take into account the period of negotiation or
arbitration with interest assessed at the rate provided in Section 6.3. Unless
otherwise agreed by the
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parties, in no event may either party request that a price reference be added to
or deleted from the Market Price Index or Backup Price Index more than once
during the Delivery Period.
4.5 If during any month a price reference included in the Market Price
Index is not published, the Market Price Index will exclude such price reference
from the Market Price Index for so long as such price reference is not
published and the price reference(s) from the Backup Price Index shall be
substituted for the excluded price reference. If the excluded price reference is
the only price reference in the Market Price Index and no price references in
the Backup Price Index are published, then Section 4.6 below shall apply. If an
erroneous price is published and the publisher confirms such error, then the
correct price, if available, shall be used. If the publisher does not confirm
such error or if the correct price is not available, then the price reference
containing such erroneous price shall not be included in the Market Price Index
or Backup Price Index for such month. For purposes of Sections 4.3 and 4.5, the
term "erroneous" price shall mean any price reference that varies by more than
four percent (4%) from the average of the other price references included in the
Market Price Index and Backup Price Index for such Month.
4.6 If no Market Price Index and no Backup Price Index reference prices are
available or if, in the opinion of either party, there are no price references
which reasonably reflect the Market Price and the basis of such opinion is
provided in writing to the other party, then a new method to determine the
Alternate Commodity Price will be negotiated. If the parties are unable to agree
within thirty (30) days after notice by a party, then the matter of determining
whether a basis exists to invoke this provision
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and, if so, the determination of a new method to determine the Alternate
Commodity Price shall be submitted to arbitration pursuant to Article 21. During
a period of negotiation or arbitration, the last applicable Commodity Price or
Alternate Commodity Price shall remain in effect and shall be adjusted at the
conclusion of such negotiation or arbitration to give retroactive effect to the
result with interest assessed at the rate provided in Section 6.3.
4.7 Alternatively, and in lieu of the price calculated pursuant to Sections
4.2 and 4.3 hereof, the parties may mutually agree to a NYMEX Price or a NYMEX
Forward Price based on the NYMEX posting for the natural gas futures contract,
calculated as follows:
(a) On or before the business day prior to the NYMEX Settlement day,
Buyer may propose that the price under this Agreement for gas nominated by
Buyer for delivery in the applicable month be the NYMEX Price, plus or minus
the basis differentials that may be mutually agreed upon at the time of Buyer's
proposal. The NYMEX Price shall be the arithmetic average of the NYMEX
settlement price of the natural gas futures contract for the last three trading
days applicable to the month of delivery. Buyer's proposal shall designate the
volume of gas for delivery in the applicable month at the proposed price, up to
the volume nominated in accordance with Section 3.1 of this Agreement. Upon
receipt of Buyer's proposal, the parties shall confer by telephone as soon as
possible and decide whether or not to use the NYMEX Price, which decision
shall ultimately be made by Buyer and Seller no later than 11:00 a.m. Central
Time on the business day before the last trading day of the applicable natural
9
gas futures contract. In the event the parties agree to use the NYMEX Price and
agree on the basis differential, the parties' agreement shall be set forth in a
confirmation prepared by Buyer and transmitted by telecopy to Seller. The
parties' agreement shall be deemed conclusive upon receipt of the confirmation
(as evidence by electronic confirmation of transmission) unless Seller objects
promptly in writing following receipt of the confirmation. Either party shall
have the right to withhold agreement on any price proposed under this Section
4.7(a) at its sole discretion, in which case the price under this Agreement will
be calculated under Sections 4.2 or 4.3 hereof If the parties are unable to
agree on the basis differentials, or methodology for determining the basis, the
NYMEX Price shall be deemed to be rejected. In the event the parties agree to
use the NYMEX Price, the nominated volumes which are covered by the NYMEX Price
shall remain in effect during the applicable month and shall not be reduced or
increased pursuant to Sections 3.2 or 3.3 of this Agreement.
(b) In addition to the NYMEX Price, Buyer shall have the right to propose
that the NYMEX Forward Price, plus or minus the basis differentials that may be
mutually agreed upon at the time of Buyer's proposal, be the price to be paid
under this Agreement during any calendar months designated by Buyer. The NYMEX
Forward Price shall be the NYMEX posting for the natural gas futures contract
applicable to the month or months selected by Buyer and prevailing at the time
Buyer's proposal is communicated to Seller by telephone and confirmed by Seller.
Buyer's proposal shall designate the volume of gas for delivery during the
designated months at the proposed price, up to the volume
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that can be nominated in accordance with Section 3.1 of this Agreement. Upon
receipt of Buyer's proposal, the parties shall confer by telephone and decide
whether or not to use the NYMEX Forward Price, which decision shall be made no
later than 11:00 a.m. Central Time on the first business day following Seller's
receipt and confirmation of Buyer's proposal. In the event the parties agree to
use. the NYMEX Forward Price and agree on the basis differential or methodology
for determining the basis, the parties' agreement shall be set forth in a
confirmation prepared by Buyer and transmitted by telecopy to Seller. The
parties' agreement shall be deemed conclusive upon receipt of the confirmation
(as evidenced by electronic confirmation of transmission) unless Seller objects
promptly in writing following receipt of the confirmation. Either party shall
have the right to withhold agreement on any price proposed under this Section
4.7(b), at its sole discretion, prior to the execution of the NYMEX transaction,
in which case the price under this Agreement will be calculated under Sections
4.2 or 4.3 hereof. If the parties are unable to agree on the basis
differentials, or methodology for determining the basis, the NYMEX Forward Price
shall be deemed to be rejected. Nothing in this subsection (b) shall be
construed to prevent Buyer from proposing the NYMEX Forward Price in any
designated month if either of the parties had previously rejected the NYMEX
Forward Price for that month. In the event the parties agree to use the NYMEX
Forward Price, the nominated volumes which are covered by the NYMEX Forward
Price shall remain in effect during the designated months and shall not be
decreased or increased pursuant to Sections 3.2 or 3.3 of this Agreement. In
addition,
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should the parties agree to use the NYMEX Forward Price, the selection of that
option shall remain in effect during the months selected by the parties unless
the parties mutually agree to use a different pricing option.
ARTICLE 5: RESERVATION CHARGES AND SUBSTITUTE FUELS
---------------------------------------------------
5.1 If during any month Seller sells and delivers less than ninety percent
(90%) of the Nominated Quantity multiplied by-the number of days in the month,
except to the extent excused under the provisions of this Agreement or due to
Buyer's unexcused failure to receive, then, Seller shall reimburse Buyer its
actual costs incurred for the purchase and/or production and transportation of
alternate supplies of fuel equal to the undelivered volume, including but not
limited to any imbalance carrying charges and/or cash-out costs and penalties
imposed by Transporter(s), PSE&G and/or Elizabethtown, less the costs that Buyer
would have otherwise incurred for the purchase and transportation of gas under
this Agreement. Buyer shall use commercially reasonable efforts to minimize its
incremental actual costs for acquiring alternate supplies of fuel. In the
exercise of its commercially reasonable efforts, Buyer shall exercise diligent
good faith efforts to purchase least cost substitute fuel, including purchasing
gas under existing agreements with other sellers which win enable Buyer to
utilize its transportation rights used to transport gas hereunder. Because of
environmental restrictions on Buyer's use of fuels other than gas at the
Facility, Buyer shall have the sole discretion whether to purchase gas or an
alternate fuel as a substitute for gas not delivered by Seller hereunder, oven
where gas is more expensive. Except in the case of Seller's willful misconduct
or gross negligence and except as
12
described in Articles 12, 14 and 22, these are the sole and exclusive remedies
available to Buyer for any failure by Seller to deliver gas.
ARTICLE 6: PAYMENT
------------------
6.1 Seller shall render an invoice on or before the tenth 10th day of each
month setting forth the actual quantity of gas nominated by Buyer and delivered
by Seller hereunder during the preceding month, the Commodity Price, Alternate
Commodity Price, NYMEX Price or NYMEX Forward Price, any amounts due under
Sections 2.2 and 12.2 and the total amount due. In the event that the actual
quantity delivered, the Alternate Commodity Price is not known at the time the
invoice is rendered, an estimated quantity, and Alternate Commodity Price, based
on the best available information, shall be used. Buyer shall pay Seller for the
amount due by wire transfer with immediately available funds to Seller's account
in accordance with instructions contained in Seller's invoice. Payment shall be
due on or before the twenty-first (21st) day of such month or ten (10) days
from the date of such invoice, whichever is later. If Con Ed fails to pay Buyer
under the Power Purchase Agreement by the twentieth (20th) day of the month,
Buyer's obligation to pay Seller shall be suspended from the twenty-first (21st)
day of the month, or ten (10) days from the date of Seller's invoice, until one
(1) day following Buyer's receipt of Con Ed's payment, but, in such a case,
Buyer's obligation to pay Seller shall not be suspended past the twenty-fifth
(25th) day of the month. When the actual quantity or Alternate Commodity Price
becomes known and if an adjustment is necessary, an invoice containing the
adjustment for the difference between the actual value and the estimated value
will be rendered. Payment will be made in subsequent months' payment cycles.
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6.2 Buyer shall submit an invoice on or before the tenth (10th) day of the
month, if necessary, for any amount due pursuant to Sections 5.1 and 12.2.
Seller shall pay Buyer in accordance with instructions contained in Buyer's
invoice. Payment shall be due on or before the twenty-fifth (25th) day of such
month or ten (10) days from the date of such invoice, whichever is later.
6.3 Should either party fail. to pay any amount not in dispute when due,
interest thereon shall accrue at the lesser of (i) the rate of one percent (1%)
above the prime commercial rate charged by Citibank, N.A., New York, New York,
compounded annually from the due date or (ii) the maximum lawful contract rate
permitted by applicable law, until. the amount due and interest have been paid
in fun. Such interest shall be in addition to any other rights and remedies the
owed party may have for the owing party's failure to pay any amount not in
dispute. Should the owing party dispute the amount invoiced, such party shall
pay the undisputed amount and notify the other party of any disputed amount by
the due date. Both parties will mutually resolve the disputed amount in a timely
manner with interest accruing from the original due date on any disputed amount
determined to be a valid amount due. Notwithstanding the foregoing or any other
provision herein, if Buyer fails to pay any amount within five (5) days after
receiving written notice from Seller that payment is delinquent, Seller may
withhold deliveries and, should said nonpayment continue for a period of thirty
(30) days after such notice, subject to the provisions of Article 22, Seller may
terminate this Agreement upon written notice.
6.4 Upon reasonable notice, each party shall have the right at reasonable
times to have an independent public accounting firm examine the books, records,
and
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charts controlled by the other party to the extent necessary to verify the
accuracy of any statement, payment, charge, or computation made pursuant to this
Agreement. In the event an error is discovered in any statement, payment,
charge, or computation, the adjusted amount shall be due within thirty (30) days
of the determination thereof, provided that any statement, payment, charge, or
computation shall be final as to both parties unless objected to in writing
within twelve (12) months after payment has been made.
6.5 If either party pays any amount shown due and owing upon the invoice of
the other party, and such amount is subsequently determined by agreement,
arbitration or judgment of court not to have been due and owing when paid, the
payee will refund such amount to the paying party together with interest from
the date of payment to the date of refund at the interest rate set forth in
Section 6.3 hereof.
ARTICLE 7: TAXES
----------------
7.1 Seller shall pay, or cause to be paid, all taxes, assessments, fees or
other charges now and hereafter lawfully levied and imposed by federal, state,
or local authorities upon Seller with respect to the gas prior to the Point(s)
of Delivery. In the event Buyer is required to remit such taxes, assessments,
fees or charges, Seller shall reimburse Buyer for such amount. Seller shall
furnish Buyer with a copy of the exemption certificate in situations in which
exemption from any such imposition is claimed by Seller.
7.2 Buyer shall pay, or cause to be paid, all taxes, assessments, fees or
other charges (including, but not limited to, sales and value added taxes) now
and hereafter lawfully levied and imposed by federal, state, or local
authorities upon Buyer with
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respect to the gas at and subsequent to the Point(s) of Delivery. In the event
Seller is required to remit such taxes, assessments, fees or charges, Buyer
shall reimburse Seller for such amount. Buyer shall furnish Seller with a copy
of the exemption certificate in situations in which exemption from any such
imposition is claimed by Buyer.
ARTICLE 8: POINT(S) OF DELIVERY
-------------------------------
The "Point(s) of Delivery" shall be the point(s) on Transporter(s)'
pipeline system(s) where gas is delivered by Seller to Transporter(s) for
Buyer's account, as specified in Exhibit C attached hereto and made a part
hereof. As between the parties hereto, title, risk of loss, and liabilities
associated with delivered gas shall pass to and vest in Buyer at the Point(s) of
Delivery. Changes in the Point(s) of Delivery shall require the mutual consent
of the parties.
ARTICLE 9: PRESSURE
-------------------
Seller shall deliver gas at the Point(s) of Delivery at a pressure
sufficient to effect delivery into the receiving Transporter(s)' facilities.
ARTICLE 10: MEASUREMENT
-----------------------
All measurements of gas delivered and sold hereunder shall be in accordance
with the provisions of the receiving Transporter(s)' tariff at the Point(s) of
Delivery.
ARTICLE 11: QUALITY
-------------------
The gas delivered and sold by Seller to Buyer at the Point(s) of Delivery
shall meet the quality specifications set forth in the receiving Transporter(s)'
tariff at the Point(s) of Delivery. Buyer shall have the right to be represented
and to participate in all tests of gas delivered hereunder performed by Seller,
and to inspect any
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equipment used in such tests to determine the nature of the quality of gas
delivered hereunder. In the event the gas does not meet such quality
specifications, Buyer may refuse delivery of the gas. Seller's delivery of gas
refused by Buyer for failure to meet quality specifications shall not constitute
delivery for the purposes of Articles 2, 5 and 6. Buyer's sole remedy for such
failure of gas to meet quality specifications shall be to refuse receipt of the
gas and receive the remedy specified in Article 5.
ARTICLE 12: TRANSPORTATION AND IMBALANCE CHARGES
------------------------------------------------
12.1 Transporter(s)' rules, guidelines, operational procedures and
policies, as may be changed from time to time, may define and set forth the
manner in which gas delivered and sold under this Agreement is transported.
Seller and Buyer agree to provide to the other, in as prompt a manner as
reasonable, all information necessary to permit scheduling pursuant to such
requirements. Seller shall give Buyer the highest ranking given to any other
purchaser of Seller's gas in any priority queue when nominating or allocating
volumes to Transporter(s) for delivery to Buyer under this Agreement.
12.2 Each party agrees to make all reasonable efforts to cooperate with the
other in operating under this Agreement to avoid pipeline imbalance charges,
cash-out costs and penalties. Buyer shall bear any under or over delivery
charges, cash-out costs and penalties assessed by Transporter(s), PSE&G and
Elizabethtown which are caused by variances (including variances due to events
of force majeure declared by Buyer) in Buyer's receipts from the Nominated
Quantity and Seller shall bear any under or over delivery charges, cash-out
costs and penalties assessed by Transporter(s), PSE&G and Elizabethtown which
are caused by variances (including variances due to
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events of force majeure declared by Seller) in Seller's deliveries from the
Nominated Quantity.
12.3 Seller shall be responsible for transportation to the Point(s) of
Delivery and payment of all transportation charges relating thereto. Buyer shall
be responsible for transportation from the Point(s) of Delivery and payment of
all transportation charges relating thereto. The parties recognize that, the gas
purchased hereunder may be transported by Transporter(s) whose transportation
rates and related charges such as fuel reimbursement and take-or-pay surcharges
are subject to refund. The party which pays the Transporter(s) for
transportation of gas hereunder shall be entitled to retain any refunds
associated therewith.
ARTICLE 13: TERM
----------------
This Agreement shall be effective from the date first set forth above and,
unless sooner terminated under the provisions of this Agreement, shall continue
for five (5) months from the commencement of deliveries of gas hereunder. The
commencement of deliveries of gas hereunder shall be November 1, 1997, unless
otherwise agreed by the parties. The term of this Agreement may be extended by
mutual agreement of the Parties.
ARTICLE 14: FORCE MAJEURE
-------------------------
14.1 If, by reason of force majeure either party is rendered unable, wholly
or in part, to carry out its obligations under this Agreement, and such party
provides written notice and full particulars of such event of force majeure as
soon as practicable after the occurrence thereof, the obligations of such
affected party shall be suspended to the extent and for the period of such event
of force majeure, except for the payment
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of monies in respect of obligations that have accrued hereunder prior to such
event of force majeure. The cause of suspension other than strikes or lockouts
shall be remedied so far as possible with reasonable dispatch. Settlement of
strikes and lockouts shall be wholly within the discretion of the party having
the difficulty.
14.2 The term "force majeure" shall mean any act or event which wholly or
partially prevents or delays the performance of obligations arising under this
Agreement if such act or event is not reasonably within the control of and not
caused by the fault or negligence of the party claiming force majeure and which
by the exercise of due diligence such party is unable to prevent or overcome,
including, without limitation by the following enumeration: acts of God, the
public enemy or the elements; fire, accidents, breakdowns, shutdowns for
purposes of necessary repairs, maintenance, relocation or construction of
facilities; breakage, freezing or accidents to wells, machinery or lines of
pipe; the necessity of making repairs or alterations to machinery or lines of
pipe; inability to obtain materials, supplies, permits, or labor to perform or
comply with any obligation or condition of this Agreement; any curtailment of
firm gas transportation service to, of electricity or steam purchases from, or
of resale service by PSE&G and Elizabethtown to, the Facility; strikes and any
other industrial, civil or public disturbances; any laws, orders, rules,
regulations, acts, restraints of any government or governmental body or
authority, civil or military which have the effect of prohibiting performance of
a party's obligations. The term "force majeure" shall also expressly include the
imposition upon Buyer of any gross receipts, franchise or other gas consumption
tax which Buyer is not obligated to pay on the date of execution of
19
this Agreement, which tax Buyer determines has a material economic impact on its
ability to continue to purchase gas at the prices or in the quantities set forth
herein.
14.3 Except as provided in Section 14.2, neither party may rely upon
changes in market conditions, curtailment of interruptible transportation, or
denial by a regulatory authority of the pass through of the cost of gas
purchased under this Agreement as events of force majeure. In the event of force
majeure that causes Seller to curtail its deliveries hereunder, Seller shall
treat Buyer on a pro rata basis with Seller's other firm customers and shall
give Buyer priority of service over all interruptible customers.
14.4 In the event Buyer fails to take or Seller fails to make available,
due to a declared event of force majeure, at least fifty percent (50%) of the
aggregate DCQ for period of sixty (60) consecutive days, then the non-declaring
party may terminate this Agreement upon written notice, provided that such
notice is given prior to the date the force majeure is remedied.
ARTICLE 15: NOTICE
------------------
Any notice, request, demand, statement, or bill provided for in this
Agreement shall be in writing and delivered by hand, mail, or telecopy. All such
written communications shall be effective upon receipt by the other party at the
address of the parties hereto as follows:
Buyer:
Notices & Statements
--------------------
Cogen Technologies Linden Venture, L.P.
c/o Cogen Technologies, Inc.
Suite 5000, 50th Floor
20
1600 Smith Street
Houston, TX 77002
Attention: Vice President - Fuel Supply
-----------
Telephone No.: (713) 951-7768
Telecopy No.: (713) 951-7803
Seller:
Notices & Statements
--------------------
Sonat Marketing Company L.P.
4 Greenway Plaza
Houston, TX 77046
Attention: Mr. Todd Zerecheck
-----------
Telephone No.: (713) 693-6206
Telecopy No.: (713) 693-6007
Accounting Matters:
-------------------
Attention: Gas Accounting
-----------
4 Greenway Plaza
Houston, TX 77046
Telephone No.: (713) 693-6330
Nomination Notices:
-------------------
Attention: Fernando Mendiola
-----------
Texas Gas Nominations
4 Greenway Plaza
Houston, TX 77046
Telephone No.: (713) 693-6307
Telecopy No.: (713) 693-6007
Either of the parties may designate a further or different address by giving
written notice to the other party.
21
ARTICLE 16: LAWS, ORDERS & REGULATIONS
--------------------------------------
This Agreement, and all terms and provisions contained herein, and the
respective obligations of the parties are subject to valid laws, orders, rules,
and regulations of duly constituted authorities having jurisdiction over Buyer,
Seller, Transporter(s), PSE&G or Elizabethtown. In the event that any regulatory
or government body asserting jurisdiction over Transporter(s), PSE&G,
Elizabethtown or either party prohibits any of the transactions described in
this Agreement or any transportation or delivery agreement between
Transporter(s), PSE&G, Elizabethtown and/or Buyer covering the transportation
and delivery of the gas sold hereunder, or otherwise conditions such
transactions in a form that is unacceptable in the reasonable judgment of the
party affected thereby, then either party hereto so affected or prohibited may,
by giving one (1) month's prior written notice to the other party, terminate
this Agreement and each party shall be held harmless as a result of such
termination except for obligations which were incurred prior to termination;
provided, however, such termination shall be effective immediately where
required by law, rule or regulation.
ARTICLE 17: APPLICABLE LAW
--------------------------
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
ARTICLE 18: WAIVER
------------------
No waiver by either party of any one or more defaults in the performance of
any provision of this Agreement shall operate or be construed as a waiver of any
future default, whether of a like or a different character.
22
ARTICLE 19: TITLE
-----------------
Seller warrants title to, or good right to sell, all gas delivered
hereunder by Seller, and that such gas is free from hens and adverse claims of
every kind. Seller win pay, or cause to be paid, all royalties and other sums
imposed on the production, gathering, or transportation of the gas prior to its
delivery by Seller to Buyer. Seller will indemnify and save Buyer harmless
against all loss, damage, and expense of every character on account of adverse
claims to the gas delivered by it or of royalties, payments or other charges
thereon applicable before delivery to Buyer. If any adverse claim of any
character is asserted with respect to Seller's right to deliver gas hereunder,
or with respect to Seller's right to receive payment for such gas, or if
Seller's title is questioned or involved in any action, then Buyer shall
immediately notify Seller of such adverse claim and then may withhold that
portion of sums due hereunder reasonably related to such claim until such claim
is finally determined or title is clear, or until such time as Seller furnishes
a corporate undertaking conditioned to save Buyer harmless from such claim.
ARTICLE 20: ASSIGNMENT
----------------------
Either party may, without relieving itself of its obligations under this
Agreement, assign any of its rights hereunder to an entity with which it is
affiliated, but otherwise no assignment of this Agreement or any of the rights
or obligations hereunder shall be made unless there first shall have been
obtained the consent thereto in writing of the other party, which consent shall
not be unreasonably withheld. Any successor-in-interest of Buyer or Seller shall
be entitled to the rights and shall be subject to the obligations of its
predecessor-in-interest under this
23
Agreement. It is agreed, however, that the restrictions on assignment contained
in this paragraph shall not in any way prevent either party to this Agreement
from pledging, mortgaging or assigning its rights hereunder as security for its
indebtedness. In connection with any such pledge, mortgage or assignment by
Buyer, Seller will execute an appropriate consent to any such pledge, mortgage
or assignment as reasonably requested by Buyer's lender. Any such consent will
acknowledge, in effect, that this Agreement has been duly authorized and is
valid and enforceable against Seller and that this Agreement is in full force
and effect; that Seller will not agree to any amendment to this Agreement
without the lender's approval in writing, which approval shall not be
unreasonably withheld by the lender; that Seller will make all payments due to
Buyer hereunder in accordance with the instructions of the lender; that Seller
will not terminate this Agreement by reason of Buyer's default or by reason of
force majeure, without giving the lender notice of default and notice of
termination and the same opportunity to cure provided to Buyer under this
Agreement (plus any longer period as may be necessary, not to exceed one (1)
month, if the lender in good faith is endeavoring to obtain possession of the
Facility and pays Seller in accordance with the terms of this Agreement during
such period); that Seller win deliver to the lender a copy of each notice of
default and notice of termination at the same time that such notice is delivered
to Buyer; and that in the event the lender exercises its rights under its loan
documentation or partnership documentation with Buyer, Seller win accept
performance by the lender or any successor or assign thereof, provided that the
lender or any such successor or assign pays all sums then due to Seller
hereunder and is also otherwise in compliance with this Agreement.
24
ARTICLE 21: ARBITRATION
-----------------------
21.1 Should an issue be submitted to binding arbitration pursuant to the
provisions of this Agreement, the parties shall each appoint one (1) arbitrator
and the two (2) arbitrators so appointed will select a third arbitrator, all of
such arbitrators to be qualified by education, knowledge, and experience to
resolve the dispute or controversy. If either party fails to appoint an
arbitrator within ten (10) days after a request for such appointment is made by
the other party in writing, or if the two (2) appointed fail, within ten (10)
days after the appointment of the second, to agree on a third arbitrator, the
arbitrator or arbitrators necessary to complete a board of three (3) arbitrators
will be appointed upon application by either party therefor by the American
Arbitration Association.
21.2 The jurisdiction of the arbitrators will be limited to the single
issue or issues referred to arbitration and the arbitration shall be conducted
pursuant to the guidelines set forth by the American Arbitration Association;
provided, however, that should there be any conflict between such guidelines and
the procedures set forth in this Agreement, the terms of this Agreement shall
control.
21.3 Within fifteen (15) days following selection of the third arbitrator,
each party shall furnish the arbitrators in writing its position and supporting
arguments regarding the issue or issues being arbitrated. The arbitrators may,
if they deem necessary, convene a hearing regarding the issue or issues being
arbitrated. All hearings shall be held at a location to be agreed upon among the
arbitrators in Houston, Harris County, Texas. Within thirty (30) days following
the later of the appointment of the third arbitrator or of the hearing, if one
is held, the arbitrators
25
shall. notify the parties in writing as to which of the two (2) positions
submitted with respect to the issue or issues in question is most consistent
with the intent of this Agreement. Such decision shall be binding on the parties
hereto until and unless changed in accordance with the provisions of this
Agreement.
21.4 Enforcement of the award maybe entered in any court having
jurisdiction over the parties.
21.5 Each party will pay the expense of the arbitrator selected by or for
it, and its counsel, witnesses and employees. All other costs of arbitration
will be equally divided between the parties.
ARTICLE 22: DEFAULT
-------------------
22.1 In the event either party fails to perform any of the material
covenants or obligations imposed upon it under and by virtue of this Agreement,
the party not in default hereto, having first given thirty (30) days written
notice to the party in default stating specifically the nature of the default
and declaring it to be the intention of the party giving notice to cancel this
Agreement (the "Cancellation Notice"), may, at its option, cancel this Agreement
in accordance with this Article 22. If within said period of thirty (30) days
the party in default remedies or removes said default, including payment of sums
due with interest at the rate set forth in Section 6.3 hereof, or provides
adequate security to fully indemnify the party not in default for any and all
direct damages of such breach, including payment of sums due with interest at
the rate set forth in Section 6.3 hereof, then such Cancellation Notice shall be
withdrawn and this Agreement shall continue in full force and effect; provided,
however, that if the default is the failure to pay sums due hereunder, then the
party not in default shall
26
have the right to suspend gas deliveries or takes, as the case may be, after
service of the Cancellation Notice.
22.2 If the party in default does not so remedy or remove the default or
does not provide adequate security to fully indemnify the party not in default
for any and all direct damages of such breach, and fails to represent that
further defaults shall not occur and that steps have been taken to avoid such a
recurrence, within said period of thirty (30) days, this Agreement, at the
option of the party not in default, shall be canceled upon written notice to the
defaulting party. Cancellation of this Agreement, pursuant to the provisions of
this Article 22, shall be without prejudice to any other rights and remedies the
party not in default has available to it. Further, such cancellation of this
Agreement or failure to cancel shall be without prejudice to the right of Seller
to collect any amounts then due Seller for gas delivered prior to the time of
cancellation.
ARTICLE 23: GENERAL
-------------------
23.1 The headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
23.2 Any modification, revision or amendment of this Agreement made
subsequent to its execution shall be valid and effective only if and when made
in writing and duly executed by the parties hereto.
23.3 This Agreement and any Exhibit hereto shall constitute a single
agreement, superseding all prior agreements or undertakings between the parties
on the subject matter hereof This Agreement contains the entire agreement of the
27
parties and, except as stated herein, there are no promises, agreements,
warranties, obligations, assurances or conditions precedent or otherwise
affecting it.
23.4 By executing this Agreement, each of the individuals so executing
warrants that (i) the individual has all necessary corporate power and authority
to enter into and execute this Agreement and (ii) this Agreement constitutes the
valid and binding obligation of the party on whose behalf it is executed,
enforceable in accordance with its terms, subject to applicable bankruptcy and
insolvency laws.
23.5 The parties shall execute such additional documents and shall cause
such additional action to be taken as may be required, or, in the reasonable
judgment of any party, as may be necessary or desirable, to effect or evidence
the provisions of this Agreement and the transactions contemplated hereby.
23.6 The parties acknowledge that each provision to this Agreement
constitutes their joint work product.
ARTICLE 24: CONFIDENTIALITY
---------------------------
24.1 The terms of this Agreement and information disclosed pursuant to this
Agreement, including but not limited to the price paid for gas, shall be kept
CONFIDENTIAL BY SELLER AND BUYER, (a) except to the extent any information must
be disclosed to (i) Transporter(s), PSE&G and Elizabethtown for the purpose of
effectuating transportation and resale of the gas sold and purchased under this
Agreement, (ii) Con Ed for the purpose of complying with Article 4.6 of the
Power Purchase Agreement and (iii) Buyer's lender and (b) except as required by
law, regulation or request of governmental authority.
28
IN WITNESS WHEREOF, by execution in duplicate originals, the parties hereto
have caused this Agreement to be effective as of the day and year first above
written.
"BUYER"
COGEN TECHNOLOGIES LINDEN
VENTURE, L.P.
By: Cogen Technologies Linden, Ltd.
(in the State of New Jersey d/b/a
Cogen Technologies Linden, Limited
Partnership), a Texas limited
partnership, its general partner
By: Cogen Technologies, Inc., a
Texas corporation, its general partner
By: /s/ W. COLIN HARPER
------------------------------------
W. Colin Harper
Vice President - Fuel Supply
Date: August 1, 1997
"SELLER"
SONATMA MARKETING COMPANY L.P.
By: /s/ DUNCAN RHODES
--------------------------------------
Name: Director
Title:
Date: August 8, 1997
29
EXHIBIT A
---------
Attached to and made a part of that Firm Gas Purchase and Sale Agreement
effective July 1, 1997, by and between COGEN TECHNOLOGIES LINDEN VENTURE, L.P.,
as Buyer, and SONAT MARKETING COMPANY L.P., as Seller.
NOMINATION NOTICE
-----------------
Date:
-------------
Reference: Firm Gas Purchase and Sale Agreement
Dated: July 1, 1997
Buyer: Cogen Technologies Linden Venture, L.P.
Seller: Sonat Marketing Company L.P.
Point of Delivery:
Contract No.:
Sonat Marketing Company L.P.
4 Greenway Plaza
Houston, TX 77046
Attention: Mr. Todd Zerecheck
Gentlemen:
Pursuant to Section 3.1 of the subject Agreement, Cogen Technologies Linden
Venture, L.P., hereby nominates the following:
Month of Delivery:
Nominated Quantity (MMBtu/D):
Very truly yours,
/s/ W. COLIN HARPER
- -----------------------------------------
W. Colin Harper
Vice President - Fuel Supply
30
EXHIBIT B
---------
Attached to and made a part of that Firm Gas Purchase and Sale Agreement
effective July 1, 1997, by and between COGEN TECHNOLOGIES LINDEN VENTURE, L.P.,
as Buyer, and SONAT MARKETING COMPANY L.P., as Seller.
MARKET PRICE INDEX (TEXAS GAS/CARTHAGE)
---------------------------------------
Publication* Table Row Column
Natural Gas Week Spot Prices on Texas Gas Bid Week
(first report in Interstate Pipeline Transmission Corp. (current month)
applicable month) Systems; Delivered to Zone 1, North
Pipeline ($/MMBtu) Louisiana
Inside FERC's Gas Prices of Spot Gas; Texas Gas Index
Market Report (first Delivered to Pipelines Transmission Corp.
report in applicable (per MMBtu dry) Zone 1
month)
BACKUP PRICE INDEX (TEXAS GAS/CARTHAGE)
---------------------------------------
Publication* Table Row Column
Natural Gas Spot Gas Prices; Region - East Texas; Contract Index
Intelligence - Weekly Delivered to Pipelines Texas (current month)
Gas Price Index (30 Day Supply Gas Zone 1
(first report in Transactions)
applicable month)
31
EXHIBIT C
---------
Attached to and made a part of that Firm Gas Purchase and Sale Agreement
effective July 1, 1997, by and between COGEN TECHNOLOGIES LINDEN VENTURE, L.P.,
as Buyer, and SONAT MARKETING COMPANY L.P., as Seller.
POINT(S) OF DELIVERY
--------------------
The Point(s) of Delivery shall be:
A. The existing point(s) of interconnection between the facilities of
Texas Gas and the Union Pacific Resources Company Carthage Gas
Processing Plant in Panola County, Texas, at the tailgate of the
Plant.
32
STATE OF TEXAS )
)SS.
COUNTY OF HARRIS )
On this 1st day of August 1997, before me, Joy R Toups, the undersigned
personally appeared, W. Colin, known to me to be the person whose name is
subscribed to the within instrument and acknowledged that Technologies, Inc., as
General Partner of Technologies Linden, Ltd. Technologies Linden, Limited
Partnership), in turn acting as General Partner of Technologies Linden Venture,
L.P. Cogen Technologies Linden Venture, Limited Partnership) executed the same
for the purpose therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ JOY R. TOUPS
(SEAL) ---------------------------------
Notary Public in and for the
State of Texas
STATE OF TEXAS )
)SS.
COUNTY OF )
On this 14th day of August, 1997, before me, Rebecca Stuart, the
undersigned officer, personally appeared, Duncan Rhodes, known to me to be the
person whose name is subscribed to the within instrument and acknowledged that
Marketing Company L.P., executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
/s/ REBECCA B. STUART
(SEAL) ---------------------------------
Notary Public in and for the
State of Texas
33
GUARANTY AGREEMENT
------------------
THIS AGREEMENT, shall be effective July 1, 1997, by and between SONAT, INC.
(hereinafter referred to as "Guarantor") and COGEN TECHNOLOGIES LINDEN VENTURE,
L.P. d/b/a/ COGEN TECHNOLOGIES LINDEN VENTURE, LIMITED PARTNERSHIP (hereinafter
referred to as "Cogen").
WITNESSETH:
WHEREAS, Cogen and Sonat Marketing Company L.P., (hereinafter referred to
as "Sonat"), a subsidiary of Guarantor, contemporaneously herewith are entering
into a Firm Gas Purchase and Sale Agreement effective July 1, 1997, as amended
from time to time (the "Agreement"), pursuant to which Cogen will purchase from
Sonat natural gas for a cogeneration facility (the "Facility") located in
Linden, New Jersey, in the quantities and upon the terms and conditions that are
set forth in the Agreement; and
WHEREAS, Cogen desires assurances that Guarantor will be responsible for
obligations of Sonat set forth in the Agreement in the event Sonat does not
satisfy such obligations; and
WHEREAS, Guarantor desires that the Agreement be executed and, therefore,
desires to give such assurances.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and other valuable consideration, the adequacy and receipt of
which are hereby acknowledged, Guarantor and Cogen hereby agree as follows:
1. Guarantor hereby irrevocably and unconditionally guarantees to Cogen the
full, prompt and complete performance of the obligations of Sonat set forth in,
and
subject to the terms of, the Agreement. If Sonat fails to perform any of its
obligations then due under the Agreement, Guarantor shall cause Sonat to perform
said obligation in accordance with the terms of the Agreement. Without limiting
the generality of the foregoing, the Guarantor agrees that the occurrence of any
one or more of the following shall not affect the liability of the Guarantor
hereunder: (a) at any time or from time to time, without notice to the
Guarantor, the time for any performance of or compliance with any of the
obligations of Sonat set forth in the Agreement or such obligations shall be
extended, or such performance or compliance shall be waived, (b) any of the acts
mentioned in any of the provisions of the Agreement shall be done or omitted or
(c) any right under the Agreement shall be waived.
The Guarantor hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that Cogen or
any lender (as defined in the Agreement) exhaust any right, power or remedy or
proceed against Sonat under the Agreement.
2. This Guaranty Agreement shall be assignable to the lenders as defined in
the Agreement under the same terms and conditions set forth in the Agreement.
Any other assignment shall not be permitted, in whole or in part, except with
the consent of the other party, which consent shall not be unreasonably
withheld. This Guaranty Agreement shall be binding upon the parties hereto and
their permitted successors and assigns.
3. This Guaranty Agreement is for the sole and exclusive benefit of the
parties hereto and any permitted successors and assigns. Nothing expressed or
implied herein is intended to benefit any other person, firm or corporation not
a party
2
hereto. None of such other persons shall have any legal or equitable right,
remedy or claim under this Guaranty Agreement or under any provisions hereof.
4. Notwithstanding anything contained herein, if any claim or demand is
made against Guarantor pursuant to this Guaranty Agreement, Guarantor shall be
subject to all rights, set-offs, counterclaims and defenses to which Sonat may
be entitled, except for defenses arising out of bankruptcy, insolvency,
liquidation or dissolution of Sonat.
5. This Guaranty Agreement shall remain in full force and effect until
the termination of all obligations under the Agreement.
6. Guarantor agrees to indemnify Cogen from and against any and all claims
of every nature arising from the obligations of Sonat under the Agreement,
including but not limited to damages suffered by Cogen as a result of Sonat's
non-performance, incomplete performance or other default of Sonat under the
Agreement, provided, however, notwithstanding any provisions to the contrary
herein, that Guarantor's liability hereunder shall be equal to (and neither less
than nor greater than) that of Sonat under the express terms of the Agreement,
including any modifications thereof.
7. No delays on the part of Cogen in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by Cogen of
any right or remedy shall preclude other or further exercise thereof or the
exercise of any right or remedy. No actions of Cogen permitted hereunder shall
in any way impair or affect this Guaranty Agreement.
8. WHEREVER POSSIBLE, EACH PROVISION OF THIS GUARANTY AGREEMENT SHALL BE
INTERPRETED IN SUCH MANNER TO BE EFFECTIVE AND
3
VALID UNDER TEXAS LAW; BUT IF ANY PROVISIONS OF THIS GUARANTY AGREEMENT SHALL BE
PROHIBITED OR INVALID UNDER SUCH LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE
EXTENT OF SUCH PROHIBITION OR INVALIDITY WITHOUT INVALIDATING THE REMAINDER OF
SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS GUARANTY AGREEMENT.
9. The Guarantor represents and warrants as follows:
(a) The Guarantor is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation.
(b) The execution, delivery and performance by the Guarantor of this
Guaranty Agreement are within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i) the
Guarantor's certificate of incorporation or by-laws or (ii) any law, rule,
regulation or order, or any restriction contained in any material agreement or
instrument, binding on or affecting the Guarantor.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Guarantor of this Guaranty
Agreement, except such as have been duly obtained or made and are in full force
and effect.
(d) This Guaranty Agreement is a legal, valid and binding obligation of
the Guarantor enforceable against the Guarantor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
4
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceeding in equity or at law).
(e) The Guarantor owns, directly or indirectly, all the issued and
outstanding capital stock of Sonat.
IN WITNESS WHEREOF, this instrument is executed as of the day and year
first above written.
SONAT, INC.
(GUARANTOR)
By: /s/ JAMES E. MOYLA, JR.
--------------------------
Its: Senior Vice President and
Chief Financial Officer
COGEN TECHNOLOGIES LINDEN
VENTURE, L.P.
By: Cogen Technologies Linden, Ltd.
(in the State of New Jersey d/b/a
Cogen Technologies Linden, Limited
Partnership), a Texas limited
partnership, its general partner
By: Cogen Technologies, Inc., a
Texas corporation, its general partner
By: /s/ W. COLIN HARPER
---------------------------
W. Colin Harper
Vice President - Fuel Supply
Date: August 1, 1997
5