EXHIBIT 10-8
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Request for Confidential Treatment
SUPPLY PORTFOLIO MANAGEMENT AGREEMENT
BETWEEN
MIDCON GAS SERVICES CORP.
AND
ROCHESTER GAS AND ELECTRIC CORPORATION
This Supply Portfolio Management Agreement ("Agreement") made this 1st day
of July, 1995 by and between MidCon Gas Services Corp. ("MGSC"), a Delaware
corporation, and Rochester Gas and Electric Corporation ("RG&E"), a New York
corporation, collectively referred to herein as the "Parties" and individually
as a "Party."
WITNESSETH:
WHEREAS, RG&E has contractual rights to natural gas supply and
transportation and storage services;
WHEREAS, RG&E desires to optimize the use of its contractual rights to
natural gas supply and transportation and storage services in order to achieve
the least cost reliable service for its customers;
WHEREAS, MGSC is engaged in the business of providing natural gas supply,
transportation and storage portfolio management services to other entities,
including local gas distribution companies such as RG&E;
WHEREAS, RG&E desires to utilize the services of MGSC to assist RG&E in
the cost-effective management of RG&E's natural gas supply and transportation
and storage service rights consistent with RG&E's policies;
WHEREAS, MGSC desires to provide such services to RG&E;
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NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and with the intent to be legally bound hereby, RG&E and MGSC
agree as follows:
ARTICLE I
DEFINITIONS
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For the purposes of this Agreement, the following terms shall be defined as
stated herein, unless otherwise expressly provided:
1.1 (a) "ANR" shall mean ANR Pipeline Company.
(b) "Assets" shall mean all of RG&E's firm contractual rights to natural
gas supply and transportation and storage services, which RG&E
represents are the Transportation Assets, Storage Assets and Term
Supply Contracts as enumerated in Attachment A to this Agreement, plus
any firm transportation, firm storage or firm supply contracts entered
into by RG&E during the Term and added to the Assets pursuant to
Attachment A. If an Assets contract terminates or expires, then,
subject to Attachment A to this Agreement, the expired or terminated
Contract shall be deleted from the Assets.
(c) "Authorization Procedure" shall mean the Authorization Procedure
referenced in Section 2 of Attachment B of this Agreement.
(d) "Authorized Transactions" shall mean the transactions by MGSC
involving the Assets which are authorized under Sections 2.1 or 2.2 of
Attachment B or which do not require authorization under Section
2.1(a) of Attachment B or which have been pre-authorized under Section
2.3 of Attachment B.
(e) "Benchmark Assumptions" shall mean the Benchmark Assumptions
referenced in Section 2 and other Sections of Attachment C to this
Agreement.
(f) "Bid Week" shall commence five Business Days prior to the earliest
Pipeline nomination deadline for first of the month deliveries and end
at the last Pipeline nomination deadline for first of the Month
deliveries.
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(g) "Billing Invoice" shall mean the monthly invoice submitted pursuant
to Section 5.1 of this Agreement.
(h) "Business Day" shall mean any Monday, Tuesday, Wednesday, Thursday
or Friday which is not an employee holiday for either RG&E or MGSC.
(i) "City Gate" shall mean the interconnections between RG&E's natural
gas distribution system and the natural gas transmission systems of
either CNGT or Empire.
(j) "Closing Report" shall mean the Closing Report referenced in Section
1.6 of Attachment B to this Agreement.
(k) "Compensation" shall mean the Compensation referenced in Attachment
D to this Agreement.
(l) "CNGT" shall mean CNG Transmission Corporation.
(m) "Contract Year" shall mean either (1) the period from July 1, 1995
through June 30, 1996 (the first Contract Year) or (2) the period from
July 1, 1996 through June 30, 1997 (the second Contract Year), or (3)
the period from July 1, 1997 through June 30, 1998 (the third Contract
Year); provided that if pursuant to the terms set forth herein the
Agreement terminates on a day other than June 30, the last Contract
Year shall instead end on the date of such termination.
(n) "Continuity Clause" shall mean Rule 6 (A) of RG&E's Gas Tariff,
contained on Original Leaf 76 filed June 19, 1987 and effective July
19, 1987, which states:
The Company [RG&E] will endeavor at all times to provide a regular
and uninterrupted supply of service (except where the terms and
conditions of a particular Service Classification provide otherwise)
but in case the supply of service shall be interrupted or irregular or
defective or shall fail from causes beyond the Company's control
(including without limiting the generality of the foregoing, executive
or administrative rules or orders issued from time to time by state or
federal officers, commissions, boards or bodies having jurisdiction)
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or because of the ordinary negligence of the Company [RG&E], its
employees, servants or agents, the Company [RG&E] will not be liable
therefor[].
(o) "Core Customers" shall mean all natural gas customers of RG&E except
those taking service under Service Classification No. 3, Option 1, of
RG&E's Gas Tariff.
(p) "Daily Log" shall mean the report provided each Business Day
pursuant to Section 1.6 of Attachment B to this Agreement.
(q) "Day" shall mean a 24-hour period commencing 8:00 A.M. Eastern time.
(r) "Empire" shall mean Empire State Pipeline.
(s) "Event of Default" shall mean the following occurrences or any of
them by or against either Party: an unexcused failure by MGSC to meet
the Reliability Requirement for ten consecutive days; failure to pay
an undisputed Billing Invoice within sixty days after notice thereof;
filing of a voluntary or involuntary petition (in the event of an
involuntary petition, the affected Party shall have sixty days to
cure) in bankruptcy; insolvency, assignment of assets for the benefit
of creditors; or failure to provide adequate assurances of a Party's
ability to perform its duties and obligations hereunder within fifteen
(15) days of receipt of a request for such assurances provided that
the requesting Party has a reasonable basis upon which to make such a
demand.
(t) "FERC" shall mean the Federal Energy Regulatory Commission or any
successor agency.
(u) "Financial Transaction" shall mean any financial transaction, such
as a gas option, future, put, call or swap, undertaken by MGSC for
risk management purposes pursuant to this Agreement.
(v) "Force Majeure" shall have the meaning described in Article VII of
this Agreement.
(w) "Fuel" shall mean the charge attributable to fuel gas pursuant to
the Storage Assets or the Transportation Assets.
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(x) "Gas" shall mean natural gas meeting the quality specifications of
the applicable Pipeline transporting natural gas to RG&E.
(y) "Gas Tariff" shall mean the schedule of services and rates filed by
RG&E with the PSC designated as "P.S.C. No. 11 -- GAS," as amended
from time to time.
(z) "Goals" shall mean the Goals referenced in Section 1 of Attachment B
of this Agreement.
(aa) "Great Lakes" shall mean Great Lakes Gas Transmission Limited
Partnership.
(bb) "MDQ" shall mean the maximum daily quantity of Gas which is
available to RG&E on a firm basis under the Term Supply Assets.
(cc) "Market Index Price" shall mean the indices used to determine the
market price under the Term Supply Contracts.
(dd) "Month" shall mean a calendar month starting on the first Day of
such month.
(ee) "Manager Liaison" shall mean the Manager Liaison of MGSC or RG&E
referenced in Section 1.8 of Attachment B.
(ff) "Monthly Plan" shall mean the Monthly Plan referenced in Section
3.3 of Attachment B of this Agreement.
(gg) "Non-Financial Transaction" shall mean a transaction in which
Assets are physically used for delivery, transportation, exchange,
pooling, storage or balancing of gas.
(hh) "NYMEX" shall mean the New York Mercantile Exchange.
(ii) "Occidental" shall mean Occidental Petroleum Corporation.
(jj) "Optimization of Asset Value" shall mean the Optimization of Asset
Value referenced in Section 1.2 of Attachment B to this Agreement.
(kk) "Party" shall mean MGSC or RG&E.
(ll) "Pipeline" shall mean CNGT, ANR, Empire, TransCanada, Union, Great
Lakes, Transcontinental Gas Pipeline Corporation, Texas Eastern
Transmission Corporation, Tennessee Gas Pipeline Company or Texas Gas
Transmission Corporation.
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(mm) "Plan of Operations" shall mean the Plan of Operations referenced
in Section 3.2 in Attachment B to this Agreement.
(nn) "Plan of Procedures" shall mean the Plan of Procedures referenced
in Section 3.1 in Attachment B to this Agreement.
(oo) "PSC" shall mean the Public Service Commission of New York.
(pp) "Regulatory Agency" shall mean any governmental agency having or
asserting jurisdiction over any of the Parties hereto.
(qq) "Reliability Requirement" shall mean the Reliability Requirement
referenced in Section 1.1 in Attachment B to this Agreement.
(rr) "Savings" shall mean the Savings referenced in Attachment C to this
Agreement.
(ss) "Schedule" or "Scheduling" shall mean nominations by MGSC of RG&E's
Gas to the applicable Pipelines in order to meet the Reliability
Requirement.
(tt) "SEC" shall mean the United States Securities and Exchange
Commission.
(uu) "Spot Assets" shall mean the gas supply, transportation and storage
assets that RG&E acquires for the first of the Month and/or mid-Month,
as contemplated in Section 1.10 and Section 3.2 of Attachment B.
(vv) "Storage Plan" shall mean the Storage Plan referenced in Section
3.4 in Attachment B to this Agreement.
(ww) "Strike Month" shall mean the contract and/or delivery month(s)
specified in the contract underlying a Financial Transaction.
(xx) "Supply Contracts" shall mean the Term Supply Assets plus the Spot
Assets.
(yy) "Supplemental Assets" shall have the meaning set forth in Section
1.11 of Attachment B.
(zz) "Term" shall mean the Term referenced in Article IV of this
Agreement.
(aaa) "Term Supply Assets" shall mean the firm Term Supply contracts
referenced in Attachment A to this Agreement.
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(bbb) "Term Transportation Assets" shall mean the firm Transportation
Assets referenced in Attachment A to this Agreement.
(ccc) "Term Storage Assets" shall mean the firm Storage contracts
referenced in Attachment A to this Agreement.
(ddd) "TransCanada" shall mean TransCanada Pipe Lines Limited.
(eee) "Unauthorized Transactions" shall mean the Unauthorized
Transactions referenced in Section 2.4 of Attachment B to this
Agreement.
(fff) "Union" shall mean Union Gas Limited.
ARTICLE II
DUTIES AND OBLIGATIONS OF THE PARTIES
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2.1 The respective duties and obligations of each of the Parties are specified
in Attachment B to this Agreement which is made a part hereof. The
Parties agree that, although MGSC will strive to achieve the Goals, RG&E
ultimately is responsible as a public utility to authorize transactions
pursuant to this Agreement which meet its utility obligations to achieve
the acquisition and delivery of the least cost reliable supplies of
natural gas at RG&E's City Gates. The Parties agree that as an agent
under this Agreement MGSC shall not exercise any substantial influence
over the policies and actions of RG&E. Further, as RG&E's agent, MGSC's
duties and obligations hereunder will be subject to and consistent with
RG&E's policies at least insofar as they are conveyed to MGSC.
2.2 RG&E hereby designates MGSC as its agent for all purposes with respect to
the duties and authorizations designated in Attachment B. RG&E and MGSC
may agree in writing from time to time to release and/or assign Assets to
MGSC, as further set forth in Attachment B.
ARTICLE III
SAVINGS, COMPENSATION AND GUARANTEE
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3.1 MGSC shall achieve Savings for RG&E during the first Contract Year in an
amount not less than the Savings Floor identified in Attachment D to this
Agreement. The Savings shall be calculated as specified in Attachment C.
3.2 The Monthly and Contract Year Compensation for the first Contract Year to
MGSC for its activities pursuant to Attachment B to this Agreement shall
be determined as specified in Attachment D to this Agreement. The
exclusive Compensation to MGSC for any and all services performed on
behalf of RG&E with respect to this Agreement shall be the payments
explicitly provided under this Agreement.
3.3 MGSC shall provide RG&E with a Guarantee by MidCon Corp. of MGSC's
performance under this Agreement in the form of Attachment E hereto
contemporaneously with the execution of this Agreement.
ARTICLE IV
TERM, TERMINATION AND EXTENSION OF TERM
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4.1 Except as otherwise provided in this Agreement, this Agreement shall take
effect on July 1, 1995 and shall expire on June 30, 1998 (the "Term").
4.2 This Agreement supersedes and cancels the Supply Portfolio Management
Services Letter Agreement dated May 12, 1995 ("Letter Agreement").
4.3 Notwithstanding Paragraphs 4.1 and 4.2, above, the Parties recognize that:
(a) Attachments C and D to this Agreement may result in Compensation being
paid to MGSC following the termination date of this Agreement and (b) the
Savings for the period between June 1, 1995 and June 30, 1995 and earned
pursuant to the Letter Agreement shall be included in the calculation of
the Compensation pursuant to Attachment D to this Agreement.
4.4 Notwithstanding Paragraph 4.1 above, the Parties recognize that this
Agreement may be terminated earlier than the stated termination date under
certain specified conditions as set forth in Sections 4.5, 6.1, 8.2 and
8.3, as well as by either Party on not less than ten days notice upon the
occurrence of an Event of Default.
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4.5 During the month of April 1996, RG&E will make a good faith projection,
based on all available information and review by MGSC, of whether MGSC
will achieve the Savings Floor by June 30, 1996. If it reasonably appears
that MGSC will achieve the Savings Floor by such date and is performing
consistent with the Goals, the Parties shall negotiate in good faith the
terms and conditions by June 1, 1996 for the second Contract Year to
extend this Agreement until June 30, 1997. If it does not reasonably
appear that MGSC will achieve the Savings Floor by June 30, 1996, RG&E
shall have a right to terminate the Agreement effective June 30, 1996.
Regardless of whether it reasonably appears that MGSC will achieve the
Savings Floor by June 30, 1996, in the event that the Parties fail to
achieve agreement on the terms and conditions for the second Contract
Year, this Agreement shall terminate effective June 30, 1996.
Assuming this Agreement is in effect for the second Contract Year, in
April 1997, RG&E will make a good faith projection, based on all available
information and review by MGSC, of whether MGSC will achieve the Savings
Floor for the second Contract Year ending on June 30, 1997. If it
reasonably appears that MGSC will achieve the Savings Floor by June 30,
1997, and is performing consistent with the Goals, the Parties shall
negotiate in good faith the terms and conditions by June 1, 1997 for a
third Contract Year to extend the Agreement until June 30, 1998. If it
does not reasonably appear that MGSC will achieve the Savings Floor that
is agreed upon for the second Contract Year by June 30, 1997, RG&E shall
have the right to terminate the Agreement effective June 30, 1997.
Regardless of whether it reasonably appears that MGSC will achieve the
Savings Floor for the second Contract Year by June 30, 1997, in the event
that the Parties fail to achieve agreement on the terms and conditions for
the third Contract Year, this Agreement shall terminate on June 30, 1997.
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4.6 Upon any termination or expiration of this Agreement, MGSC shall within
one (1) month, deliver to RG&E (a) all documents, records, accounts, files
and other materials which were identified by RG&E as being confidential
when provided by RG&E to MGSC, (b) copies of all documents, records,
accounts, files and other materials provided by RG&E to MGSC (or the
originals thereof if requested by RG&E) and (c) copies of all written
documents, records, accounts, files and other written materials developed
by MGSC (other than information that is proprietary or confidential to
MGSC) documenting (i) the physical uses of the Assets, (ii) the physical
Gas supply needs or market profile of RG&E or RG&E's customers or (iii)
the financial transactions conducted pursuant to this Agreement.
4.7 In the event of any termination of this Agreement, the Parties shall
cooperate to effectuate such termination without disruption of the
Reliability Requirement, which shall include, at RG&E's sole discretion,
MGSC helping RG&E as a consultant until the end of the month following the
month of termination in furtherance thereof. Such termination shall
result in the recall of any released Assets, the reassignment of any
assigned Assets and the cancellation of any agency arrangement hereunder.
The Parties shall also cooperate to effectuate the transfer of title, if
necessary, to any gas injected but not yet withdrawn from storage pursuant
to the Assets by the expeditious execution of any necessary documents.
For the above referenced period after termination, RG&E's only payment
obligation shall be to reimburse MGSC for MGSC's reasonable out-of-pocket
costs for acting as a consultant hereunder.
ARTICLE V
BILLINGS AND PAYMENT
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5.1 Agreement, other than payments to third Parties which shall be handled
under Attachment B, the Party claiming entitlement to such payment shall
render to the other Party, on or before the tenth (10th) day of the month
following the month in
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which the obligation arose, a Billing Invoice showing in detail sufficient
for auditing purposes the reasons for such payment or such other
information as the other Party may reasonably request. The Party receiving
such Billing Invoice shall make pay ment to the other Party within ten
(10) days of receipt. All invoices and payments shall be made as follows:
Notices Notices
------- -------
Rochester Gas and Electric Corp. MidCon Gas Services Corp.
89 East Avenue P. O. Box 283
Rochester, NY 14649 Houston, TX 77001-0283
Attn: Julie White Attn: Gas Purchase
Phone: (716) 771-2239 Accounting Department
Fax: (716) 724-8142 Fax: (713) 963-3036
Payments Payments
-------- --------
Rochester Gas and Electric Corp. MidCon Gas Services Corp.
89 East Avenue P. O. Box 201689
Rochester, NY 14649 Houston, TX 77216-1689
Attn: Treasury Department Fax: (713) 963-3324
Fax: 716-724-8432
Payment shall be made by wire transfer of funds as follows:
RG&E MGSC
---- ----
Wire Transfer to: Wire Transfer to:
Confirmation of Transfer:
Paul Panhorst
Phone: (708) 691-2568
Every notice, statement or bill provided for in this Agreement shall
be in writing and directed to the Party to whom given, made and delivered
at such Party's address. All communications and invoices ("Notices")
required hereunder may be sent by telecopier or generally accepted
electronic means, a nationally recognized overnight courier service, first
class mail or hand delivered. Notices sent by telecopy
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shall be deemed to have been received upon the sending Party's receipt of
its telecopier's confirmation thereof. Notice by overnight mail or
courier shall be deemed to have been received on the next Business Day
after it was sent or such earlier time as is confirmed by the receiving
Party. Notice delivered by hand shall be deemed to be received at the
time it is delivered to an officer or to a responsible employee of the
receiving Party. Notice via first class mail shall be considered
delivered five Business Days after mailing.
5.2 In the event a Party fails to pay the amount due under the Billing Invoice
when the same is due, the unpaid balance shall bear interest from the date
when such amount is due until the same is paid at a variable rate
("Variable Rate") equal to the prime rate of interest charged by Citibank,
N.A., plus three percent, for short term loans to large businesses with
the highest credit rating, each change in the Variable Rate to be
effective without notice on the effective date of each change in the prime
rate; provided, however, that the Variable Rate chargeable hereunder shall
not exceed the maximum non-usurious interest rate permitted by applicable
law. In addition to any other rights and remedies available to a Party,
including those available under this Agreement, a Party may suspend
performance under this Agreement in the event the other Party has not paid
any amount in a Billing Invoice on or before the 20th Day following notice
that payment is ten Days overdue and has not disputed such amount pursuant
to Section 5.3. The Party due payment hereunder shall also reimburse the
other Party for all third Party collection costs and attorneys' fees
incurred by such Party to collect such amount due. Notwithstanding
anything to the contrary in the Contract, in no event may MGSC suspend
performance under this Agreement as a result of a good faith disputed bill
pursuant to Section 5.3.
5.3 In the event a dispute arises as to the amount payable in any Billing
Invoice, the Party shown in the Billing Invoice as owing money shall
nevertheless pay the total amount payable to the other Party under such
Billing Invoice pending resolution of the dispute, unless such Party
provides good faith written documentation of the
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reason why the Billing Invoice is disputed and provides the documentation
supporting such Party's position. Payment shall not be deemed to be
waiver of the right by a Party to recoup any overpayment, which shall be
repaid by the other Party together with interest calculated under the
method set forth in Section 5.2 hereof from the date such overpayment was
received by such other Party.
5.4 In the event a volumetric or pricing error is discovered in a Billing
Invoice, such error shall be adjusted within thirty (30) Days of the
discovery of this error.
ARTICLE VI
LIABILITY, INDEMNIFICATION AND DAMAGES
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6.1 Notwithstanding any other provision in this Agreement, MGSC shall be
liable to RG&E for any failure by MGSC to serve RG&E's actual demand at
the City Gates, as such liability is further limited by this Article VI;
provided, however, that (a) where such actual demand is equal to or
greater than RG&E's design day requirement, which design day may be
changed pursuant to the terms of Attachment B, MGSC shall not be liable
beyond the design day; (b) to the extent that the quantities of Gas
available to RG&E under the Term Supply Assets are reduced below the level
shown in Attachment A and MGSC has not concurred in RG&E's determination
to make such reduction, MGSC's liability to RG&E shall be diminished to
the extent that any failure of service is less than or equal to the amount
of such reduction, but MGSC shall not thereby be relieved of the
obligation to exercise good faith reasonable efforts to obtain
Supplemental Assets, as described in Attachment B, to serve such actual
demand; (c) if RG&E reduces the level of the Term Transportation and
Storage Assets below the level shown in Attachment A and MGSC has not
concurred in RG&E's determination to make such reduction, MGSC may
exercise a right to terminate this Agreement, effective on the date the
Term Transportation and Storage Assets are reduced; provided, however,
MGSC shall receive no compensation or share of savings pertaining to such
reduction of the
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Transportation and Storage Assets; and (d) to the extent that MGSC's
failure to serve such actual demand results from the actions of RG&E or
third parties not affiliated with MGSC or from the occurrence of a
condition of Force Majeure, MGSC shall not be liable for such failure.
6.2 To the extent that MGSC is liable under Section 6.1 to RG&E for failure to
serve RG&E's actual demand at the City Gates and subject to the other
provisions of this Article VI, MGSC shall, only to such extent, be liable
to RG&E for (a) any direct incremental costs RG&E may reasonably incur as
a result of such failure, such as repair or replacement of RG&E's
facilities and relighting customer pilot lights, and (b) the excess, if
any, of (i) all costs of any kind which RG&E reasonable incurs to obtain
and receive substitute supplies of (1) Gas and any storage and
transportation service associated with delivering such supplies to the
City Gates or (2) alternative fuels over (ii) the cost that RG&E would
have incurred absent MGSC's failure. In no event, however, shall MGSC be
liable to RG&E pursuant to this Paragraph 6.2 for payments in an aggregate
amount greater than thirty million dollars ($30,000,000) per Contract Year
during the Term of this Agreement. To the extent that costs incurred by
RG&E exceed the limits stated in the preceding sentence, RG&E shall be
entitled to offset such additional costs against any share of Savings or
other Compensation to which MGSC would otherwise be entitled pursuant to
Attachments C and D.
6.3 To the extent that MGSC is liable under Section 6.1 to RG&E for MGSC's
failure to serve RG&E's actual demand at the City Gate and subject to the
provisions of this Article VI, in the event that RG&E is held liable in
damages of any kind, despite the Continuity Clause in RG&E's Tariff, to
any Core Customer for any interruption in the supply of Gas to such Core
Customer at the City Gates during the Term, MGSC shall indemnify and hold
RG&E harmless against such damages only to the extent that MGSC shall have
breached its obligations under this Agreement and such breach
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shall have caused the interruption in the supply of Gas to the Core
Customers at the City Gate giving rise to RG&E's liability.
6.4 The sole and exclusive remedies of RG&E for a failure by MGSC to carry out
its duties and obligations pursuant to this Agreement shall be the non-
payment consequences specifically identified in Article IV ("Term,
Termination and Extension") and the payment obligations specifically
identified in Article VI ("Liability, Indemnification and Damages") of
this Agreement. Except as provided in Section 6.3, each Party hereby
waives all punitive, consequential, incidental and special damages under
this Agreement for activities conducted by the other Party pursuant to
this Agreement.
6.5 In order to assure payment of any amount that may become due to RG&E under
this Article VI, the Guarantee furnished by MGSC to RG&E pursuant to
Paragraph 3.3 hereof shall be sufficient to cover such payment, as well as
any payment that may be required pursuant to Paragraph 6.3.
6.6 Subject to the other provisions of this Article VI, each Party shall be
responsible for the acts and omissions of its own officers, directors,
employees, agents, assigns and contractors, and shall indemnify, hold
harmless and defend the other Party regarding any claims, costs, or other
actions arising from the acts of any Party for which it is responsible.
RG&E agrees to indemnify and hold MGSC harmless for any claim, demand,
lawsuit, loss, damage, cause or causes of action (collectively referred to
herein as "claim") to the extent that such claim results from the sole,
concurrent or other type of negligence of RG&E or third parties in causing
the failure to deliver RG&E's actual demand at the City Gates or any
damages after Gas is delivered to the City Gate that arise from the action
of RG&E, customers of RG&E or third parties; provided, that such third
parties are not affiliated with MGSC and do not have a contractual
relationship with MGSC pertaining to the service hereunder. Such
indemnification will include payment of all attorneys' fees and other
costs of defending against any such claims, costs and actions.
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6.7 In the event that a Party is subject to a fine, penalty or assessment
charged by any governmental agency or body which is based upon the acts or
omissions of the other Party which are inconsistent with its obligations
under this Agreement, then such other Party shall, subject to the
provisions of this Article VI, pay such fine, penalty or assessment, or in
the event of such fine, penalty or assessment has been paid by the first
Party, then such other Party shall reimburse the first Party. The Party
subject to payment of reimbursement shall be afforded a reasonable
opportunity to dispute such fine, penalty or assessment including, if
applicable, notice and hearing. The payment obligations set forth in
Article V shall govern any amounts due hereunder.
6.8 Both parties agree to mitigate any damages which may accrue and a Party
shall not be liable for damages which the other Party fails to mitigate.
Each Party agrees that it will assert all defenses available to it at law
and equity with respect to any indemnification obligation of the other
Party hereunder. Each Party further agrees that it will not settle any
claim for which the other Party is providing indemnification hereunder
without first obtaining the other Party's approval. Furthermore, the
indemnifying Party shall be entitled to fully participate with the other
Party in the legal defense of any claim for which such indemnification is
to be provided.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be
sought pursuant to the preceding paragraph, such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may
be sought (the "indemnifying party") in writing and the indemnifying
party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to
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retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them.
ARTICLE VII
FORCE MAJEURE
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7.1 The term Force Majeure means an event: (i) that was not within the
control of the Party claiming its occurrence; (ii) that could not have
been prevented or avoided by such Party through the exercise of due
diligence; and (iii) that prohibits or prevents such Party from performing
its obligations under this Agreement. Events that may give rise to a
claim of Force Majeure include:
(a) Acts of God, including earthquakes, epidemics, fires, floods,
hurricanes, landslides, lightning, storms, washouts, freezing of wells
or lines of pipe used to supply or transport the Gas described in this
Agreement and other similar natural calamities;
(b) Acts of the public enemy, wars, blockades, insurrections, riots, civil
disturbances and arrests;
(c) Strikes, lockouts or other industrial disturbances;
(d) Explosions, breakage, accidents to equipment, facilities or lines of
pipe used to supply the Gas under this Agreement or explosions,
breakage, accidents to equipment, facilities or lines of pipe used to
enable RG&E and MGSC to receive the Gas described in this Agreement;
(e) The imposition by a Regulatory Agency, court or other governmental
authority having jurisdiction of binding laws, conditions,
limitations, orders, rules or
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regulations that prevent or prohibit either Party from performing,
provided such governmental action has been or is being resisted in
good faith by all reasonable legal means;
(f) The failure of Pipelines, pursuant to firm transportation or storage
agreements, to receive, transport or deliver the Gas described in this
Agreement;
(g) Force majeure or breach by a third party or RG&E under an Assets
Contract;
(h) Any other cause of a similar type.
7.2 If an occurrence of Force Majeure renders either Party to this Agreement
unable to observe or perform, in whole or in part, any of its covenants or
obligations, then the Party subject to the Force Majeure occurrence shall
as soon as reasonably possible give the other Party notice and full
particulars of the occurrence in writing by telecopier or overnight
delivery service. The performance and obligations of both Parties shall
be suspended to the extent that they are affected by such occurrence
during the continuance of any such event, but for no longer period.
Neither RG&E nor MGSC will be liable in damages to the other for any act,
omission or circumstances caused by an event of Force Majeure, provided
that such event shall not relieve any Party from its obligations to make
payment of amounts then due under the Agreement.
7.3 Neither Party shall be entitled to the benefit of Force Majeure under any
of the following circumstances:
(a) to the extent such Party was negligent, in whole or in part, in
causing such Force Majeure or to the extent that such Force Majeure is
the result of acts, omissions or the negligence of such Party's
affiliates;
(b) to the extent such Party failed to use due diligence or failed to
utilize all reasonable dispatch and reasonable efforts in removing or
overcoming such Force Majeure;
(c) to the extent such Party's inability to perform was caused by that
Party's lack or funds; or
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(d) to the extent such Party's inability to perform was caused by such
Party's failure to maintain the Assets for the benefit of RG&E or by
Unauthorized Transactions entered into by MGSC; or
(e) the inability of RG&E to pass through the amounts relating to this
Agreement to MGSC in its rates to its customers.
(f) In the event that the Reliability Requirement was not met by MGSC due
to the Force Majeure and MGSC failed to give reasonable written
notice, as described in Section 7.2, of the full particulars of such
Force Majeure to the other Party as soon as reasonably possible, to
the extent such notice would have allowed RG&E to avoid all or part of
such delivery deficiency.
ARTICLE VIII
LAWS AND REGULATORY BODIES
--------------------------
8.1 This Agreement and the rights and obligations of the Parties hereunder
shall be subject to all valid applicable United States and Canadian
federal, state, provincial and local laws, rules, regulations, ordinances,
orders and decisions issued or promulgated for or by any court or
Regulatory Agency.
8.2 In the event that any court or Regulatory Agency takes any action or
issues any determination that directly or indirectly prohibits performance
under this Agreement or otherwise makes such performance illegal or
impossible, such action or determination will be considered to be a Force
Majeure occurrence and provided further that such notice may not be based
on any inability of RG&E to pass through costs associated with this
Agreement to its customers. In the event that any court or Regulatory
Agency takes any action or issues any determination that directly or
indirectly effects a material adverse change in any substantive provision
of this Agreement, in the terms of performance or as to the rights or
obligations of either Party (in that Party's reasonable good faith
opinion), then the Party materially adversely affected may: (a) proceed
with this Agreement so changed, (b) seek to renegotiate the terms of this
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Agreement so affected by providing written notice to the other Party of
its desire to renegotiate, or (c) terminate this Agreement by providing
one Month prior written notice to the other Party; provided that, if such
action or determination is rescinded prior to the effectiveness of such
notice, such notice shall be invalid. In the event that this Agreement is
terminated under this Paragraph 8.2, and except as otherwise provided in
Article IV, all further rights and obligations of the Parties under this
Agreement shall be null and void. Each Party shall provide reasonable
notice to the other as to any regulatory proceedings or actions described
herein that could affect the rights and obligations of the Parties.
8.3 In the event that, as a result of this Agreement, the PSC or any other
Regulatory Agency attempts to assert jurisdiction over MGSC or to assert
jurisdiction directly over the performance of MGSC or the Securities and
Exchange Commission attempts to assert jurisdiction over Occidental,
MidCon Corp. or MGSC under the Public Utility Holding Company Act, MGSC
will have the right to terminate this Agreement upon ten days written
notice (or if MGSC determines in its sole discretion that such assertion
of such jurisdiction would not begin before a future date, the day before
such future date), without any liability whatsoever; provided, however,
that in the event that MGSC determines in its sole discretion, that such
assertion or attempt will be entirely avoided by particular changes made
in this Agreement agreeable to MGSC consistent with the purpose of this
Agreement, then MGSC shall propose a written amendment to this Agreement
within said ten day period as to the terms on which MGSC is willing to
continue this Agreement. If such written amendment is proposed by MGSC,
RG&E shall have five days to execute such amendment. If such amendment is
not so timely executed, this Agreement shall terminate.
8.4 RG&E shall reimburse MGSC for all costs incurred and pay MGSC for all
Compensation due pursuant to this Agreement and earned in compliance with
all MGSC's duties and obligations hereunder regardless of whether RG&E,
the PSC or any other
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Regulatory Agency subsequently decides that the costs did not yield least
cost reliable service or will not permit the pass through of such cost
reimbursement.
8.5 THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, EXCLUDING ANY CONFLICT OF LAWS AND PRINCIPLES OF SAID
JURISDICTION THAT MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION. ANY ACTION AT LAW OR IN EQUITY WITH RESPECT TO THIS
AGREEMENT BROUGHT BY EITHER OF THE PARTIES SHALL BE COMMENCED IN THE
COURTS OF ANY COUNTY IN THE NORTHERN DISTRICT OF NEW YORK NOT SERVED BY
RG&E. MGSC AND RG&E HEREBY CONSENT TO SUCH JURISDICTION AND VENUE.
ARTICLE IX
DISPUTE RESOLUTION
------------------
9.1 In the event that a dispute arises between the Parties regarding the
interpretation or application of any provision of this Agreement, the
aggrieved Party shall notify the other Party of its intent to invoke the
dispute resolution mechanism of this Article IX within ten (10) days after
such dispute arises. If the Parties shall have failed to resolve the
dispute within twenty (20) days after delivery of such notice, each Party
shall, within five (5) days thereafter, nominate a senior officer of its
management to meet at RG&E's offices to resolve the dispute.
9.2 In the event that the Parties are unable to resolve the dispute to their
mutual satisfaction within thirty (30) days after the nomination of senior
officers in accordance with Paragraph 9.1, above, either Party is free to
pursue any legal remedies it may have under this Agreement, subject to
Article VI hereof.
ARTICLE X
CONFLICT OF INTEREST
--------------------
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10.1 In order to avoid any conflict of interest with RG&E's gas business, the
Parties agree that during the Term (a) for each local distribution company
that has an amount of transportation or storage
MGSC may undertake new similar portfolio management agreements
(defined to mean the fully integrated portfolio management of gas
management functions; but shall not include separate gas sales,
transportation, storage, storage management or risk management services)
with such customer, but with the following volume characteristics: (i)
and (ii)
; and (b) MGSC shall Schedule deliveries of supplies from the Term
Supply Assets to which MGSC is a Party based on the same criteria that
MGSC Schedules the Term Supply Assets to which MGSC is not a Party in a
manner which does not unfairly favor MGSC over other suppliers. Subject
to the provisions above, MGSC shall not be limited in the services MGSC
may offer to potential customers.
10.2 It is recognized and agreed that MGSC can trade financial instruments at
its sole discretion for its own account with restriction, obligation or
conflict as a result of this Agreement. MGSC's sole obligation shall be
to inform RG&E of the trades executed pursuant to an authorized Risk
Management Plan. Furthermore, MGSC may bid, offer, sell or buy financial
instruments contemporaneously for itself or others at prices higher or
lower than prices pursuant to a RG&E and MGSC Risk Management Plan without
obligation or liability to RG&E for any proceeds relating to the purchase
or sale of any financial instruments other than those expressly executed
pursuant to an authorized Risk Management Plan.
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ARTICLE XI
CONFIDENTIALITY AND PUBLICITY
-----------------------------
11.1 Except as required by law, regulation, order of governmental authority
(including, but not limited to, any filings required by the SEC, the FERC
or the PSC), order of a court, or upon written consent of the other Party,
MGSC and RG&E, and their respective agents, employees, officers, directors
and attorneys, shall keep and maintain this Agreement and all terms and
provisions hereof, as well as all information identified as confidential
that is supplied to either Party pursuant hereto, in strict confidence
during the Term (including any extensions) hereof and shall not transmit,
reveal, disclose or otherwise communicate the substance or any of the
terms or provisions of this Agreement or such confidential information to
any other person; provided, however, that the terms of this Agreement may
be disclosed to an agent or contractor of RG&E or MGSC only if and to the
extent such terms are directly related to the work of such agent or
contractor on behalf of MGSC or RG&E. In the event that the terms of this
Agreement are required to be produced in any judicial or administrative
proceeding or audit by a governmental agency, RG&E and MGSC shall each use
its best efforts to obtain a protective order or agreement in a form
satisfactory to both MGSC and RG&E before disclosing any of the terms
hereof. If disclosure is so required, no consent shall be required, but
notice of such disclosure shall be given to the other Party prior to such
disclosure, or as soon thereafter as possible. No Party shall be required
to exercise a higher degree of care than exercised with respect to its own
proprietary information. The Parties hereto may extend the term of this
Paragraph 11.1 my mutual written agreement.
11.2 No publicity releases, including news releases and advertising, relating
to this Agreement or to Party-specific information contained herein shall
be issued by either Party without the prior written approval of the other
Party. Nothing contained in this Paragraph 11.2 shall affect RG&E's
ability, consistent with Paragraph 11.1, above, to release information
describing the nature of this Agreement to the PSC, Parties to
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PSC proceedings involving RG&E's natural gas business, shareholders of
RG&E, securities analysts or the SEC.
11.3 Neither Party shall publish or release any technical paper, article,
publication or announcement in connection with this Agreement, during or
after the Term of this Agreement, without the prior written approval of
the other Party; provided, however, that nothing contained in this
Paragraph 11.3 shall affect either Party's ability to file any evidence or
make required reports pertaining to the subject matter hereof to any
Regulatory Agency.
ARTICLE XII
MISCELLANEOUS
-------------
12.1 This Agreement shall be binding on and inure to the benefit of the Parties
and their respective successors and assigns; provided, however, that
neither Party shall assign its interest herein to another entity without
first having obtained the prior written consent of the other Party, which
consent shall not be unreasonably withheld. In the event that an
assignment is made pursuant to this Paragraph 12.1, the assignee shall be
entitled to the rights and benefits, and shall be subject to the duties
and obligations, of the assignor, but the assignor shall not be released
from any of its duties and obligations to the other Party, except with the
latter's prior written consent, which consent shall not be unreasonably
withheld.
12.2 The headings of the Articles used throughout this Agreement are inserted
for reference purposes only and are not to be considered or taken into
account in construing the terms or provisions of any Article, or to be
deemed in any way to qualify, modify or explain the effect of any such
terms or provisions.
12.3 Subject to the limitations of Articles IV and VI, should either party
exercise any rights to cancel or terminate this Agreement afforded by the
several provisions thereof, such Party shall nevertheless retain all
rights in both law and equity which such Party would have otherwise. This
Agreement shall survive expiration, cancella-
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tion or termination to the extent necessary to permit the Parties to
extinguish any and all duties, obligations and liabilities to each other
which arose prior to such expiration, cancellation or termination.
12.4 All waivers shall be in writing and a waiver by either Party of any one or
more defaults by the other hereunder shall not operate as a waiver of any
future default or defaults, whether of like or of different character.
12.5 There is no third-Party beneficiary of this Agreement. The provisions of
this Agreement do not impart enforceable rights in anyone who is not a
Party, or successor or assignee of a Party hereto.
12.6 This Agreement shall not be construed as creating a partnership, joint
venture or association between the Parties or to impose any partnership
obligation or liability upon either or both of the Parties.
12.7 Except as otherwise provided in Paragraph 8.2, above, any provision of
this Agreement which is construed to be prohibited or unenforceable shall
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or the validity or
unenforceability of this Agreement as a whole.
12.8 This Agreement contains the entire understanding of the Parties concerning
the subject matter hereof and supersedes and cancels any prior agreement
between the Parties concerning such subject matter, whether written or
oral.
12.9 This Agreement shall be amended or modified only by an instrument in
writing executed by duly authorized representatives of both Parties.
12.10 Attachments A through F attached to this Agreement are hereby incorporated
into this Agreement and made a part hereof.
12.11 To the extent there may be any conflict between the Agreement and the
Attachments, the Agreement shall govern any dispute.
12.12 This Agreement may be executed in counterparts.
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IN WITNESS WHEREOF, the Parties hereto have caused these presents to be
executed by their respective representatives thereunto duly authorized as of the
day and year first written above.
Witness: MIDCON GAS SERVICES CORP.
________________________ By: _________________________________
Name:
Title:
Witness: ROCHESTER GAS AND ELECTRIC
CORPORATION
________________________ By: ________________________________
Name:
Title:
[THIS IS THE SIGNATURE PAGE TO THE SUPPLY PORTFOLIO MANAGEMENT AGREEMENT BETWEEN
MIDCON GAS SERVICES CORP. AND ROCHESTER GAS AND ELECTRIC CORPORATION DATED JULY
1, 1995.]
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LIST OF ATTACHMENTS
-------------------
A Assets
B Duties and Obligations of the Parties
C Savings
D Compensation
E Guarantee
F Master Natural Gas Sales/Purchase Agreement
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ATTACHMENT A
To the Supply Portfolio Management Agreement between MidCon Gas
Services Corp. and Rochester Gas and Electric Corporation
dated July 1, 1995
ASSETS
1. Asset List
Except as specifically noted in this Attachment A (Exhibit A-1) or unless
the term of an agreement for an Asset expires, the Savings as defined in
Attachment C resulting from any changes to the Assets will be included in
the calculation of Savings.
2. CNGT Agreement
MGSC has been advised by RG&E that RG&E has an existing agreement
("Replacement Marketing Agreement") with CNGT whereby CNGT has non-
exclusive rights to market certain storage and pipeline capacity. RG&E has
provided MGSC with a copy of the Replacement Marketing Agreement excepting
Attachments B, C, and D. This capacity includes 58,891 MMBtu/d of upstream
capacity, 60,000 MMBtu/d of CNGT storage delivery capability, and 3,039,000
MMBtu of storage capacity. A portion of these quantities has been re-
marketed under the "Chambersburg Agreements" listed in the attached table
(Exhibit A-2).
RG&E is near agreement with Public Service Electric and Gas Company,
through the Replacement Marketing Agreement, to permanently release the
following assets.
Pipeline Service Contract Quantity
Number MMBtu/d
CNG - FTNN Firm 100021 2,850
Transportation
CNG - GSS Storage 300084 581,000
MMBtu
capacity
7,000
withdrawal
capacity
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TGP - FTA First 2,916
Transportation
3. Ramp-up Assets and other De-contracting
The Asset list includes transportation and storage capacity scheduled and
contractual increases on the "ANR" Assets, as follows:
Pipeline Service Contract Quantity
Number MMBtu/d
ANR SE Firm 8,293
Transportation
ANR SW Firm 8,636
Transportation
ANR Storage 39,194
Withdrawal
ANR Storage Capacity 2,188,404
Great Lakes Firm 56,444
Transportation
TCPL - St. Clair Firm 55,934
to Dawn Transportation
Union/1/ Firm 55,934
Transportation
TCPL - Kirkwall Firm 55,934
to Chippewa Transportation
Empire Firm 55,000
Transportation
The Assets listed on this table are defined as the "Ramp-up Assets."
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_______________________
/1/ It is contemplated that the Union transportation may be subsumed
within a portion of the TCPL transportation contract at some time.
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4. Term Supply Contract Re-negotiation
5. Storage Hedges
6. Additional Changes to Savings
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7. Adjustments to Assets
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==================================================================================
RG&E Firm Transportation and Storage Assets (note 1)
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Prior to 1 Nov 95
- ----------------------------------------------------------------------------------
Affected by
System Chambers- Contract Max Max
(ANR or Time burg Pipeline MDQ Storage Storage
CNG) Period (Yes/No) Company K# Tariff Dt/day Demand Quantity
==================================================================================
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Chambersburg Agreements
The following list is taken directly from the FERC ruling. See also attached
notes.
CAPACITY RELEASE TRANSACTIONS BY RG&E
Pursuant to the Settlement
CUSTOMER SERVICE COMMENCE TYPE OF RELEASE QUANTITY (Dt)
- ---------- -------------- -------- --------------- -------------
PSCNC Tetco FT-1 11/1/95 Permanent 5,188/day
FTNN 11/1/95 Permanent 6,000/day
GSS (Capacity) 4/1/95 Permanent 720,000
GSS (Demand) 4/1/95 Permanent 12,000/day
FTNN-GSS 11/1/95 Permanent 12,000/day
FTNN 11/1/96 Permanent 4,000/day
GSS (Capacity) 4/1/96 Permanent 360,000
GSS (Demand) 4/1/96 Permanent 6,000/day
FTNN-GSS 11/1/96 Permanent 6,000/day
VNG Tenn, FT-A 11/1/95 Permanent 8,698/day
Tetco, FT-1 11/1/95 Permanent 8,698/day
FTNN 11/1/95 Permanent 20,000/day
GSS (Capacity) 4/1/95 Permanent 1,040,000
GSS (Demand) 4/1/95 Permanent 20,000/day
FTNN-GSS 11/1/95 Permanent 20,000/day
Upstream FT 11/1/97 Permanent 6,000/day
FTNN 11/1/97 Permanent 6,000 day
GSS (Capacity) 4/1/97 Permanent 260,000
GSS (Demand) 4/1/97 Permanent 6,000/day
FTNN-GSS 11/1/97 Permanent 6,000/day
WGL Tenn, FT-A 11/1/95 Until 3/31/96 5,117/day
Tetco, FT-1 11/1/95 Until 3/31/96 5,117/day
FTNN 11/1/95 Until 3/31/96 11,250/day
GSS (Capacity) 4/1/95 Until 3/31/96 1,031,250
GSS (Demand) 4/1/95 Until 3/31/96 13,750/day
FTNN-GSS 11/1/95 Until 3/31/96 13,750/day
Tetco, FT-1 11/1/96 Until 3/31/97 4,500/day
FTNN 11/1/96 Until 3/31/97 4,500/day
GSS (Capacity) 4/1/96 Until 3/31/97 412,500
GSS (Demand) 4/1/96 Until 3/31/97 6,500/day
FTNN-GSS 11/1/96 Until 3/31/97 6,500/day
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Notes Accompanying Chambersburg Agreements
Customer Service Note
- -------- ------- ----
PSCNC FTNN The release on 11/1/96 includes 4,000 Dt/day of primary receipt
points in Appalachia.
VNG FTNN The release on 11/1/95 includes 3,000 DT/day of primary receipt
points in Appalachia.
WGL FTNN The release from 11/1/95 to 3/31/96 includes 1,250 Dt/day of
primary receipt points in Appalachia.
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=================================================================================
RG&E Term Supply Contract Assets
=================================================================================
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Length of
Supply Contract Contract Contract
Company Start Date (yrs.) Quantity (Dt/day) Dlivery Point Ref. Letter
=================================================================================
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ATTACHMENT B
To the Supply Portfolio Management Agreement between MidCon Gas
Services Corp. and Rochester Gas and Electric Corporation
dated July 1, 1995
DUTIES AND OBLIGATIONS OF THE PARTIES
1. Operational Duties
The definitions of Reliability Requirement and Optimization of Asset Value
shall be collectively known as the "Goals."
1.1 Reliability Requirement
Subject to the other terms and conditions of this Agreement, MGSC shall
provide gas to RG&E's City Gates in the actual quantities required by
RG&E's Core Customers as limited in Section 6.1 of this Agreement
("Reliability Requirement"). If RG&E changes the design day requirements,
it will give MGSC notice as set forth in Section 3.5 hereof and the Parties
will in good faith attempt to agree upon the corresponding changes, if any,
to this Agreement, and if unable to agree, will enter into dispute
resolution per Article IX of the Agreement.
1.2 Optimization of Asset Value
Subject to the other terms and conditions of the Agreement, MGSC shall meet
the Reliability Requirement while seeking to minimize the annual delivered
cost of Gas ("Optimization of Asset Value").
1.3 Agency
RG&E hereby designates MidCon as RG&E's agent with authorization to act on
behalf of RG&E for all purposes under the Assets, Spot Assets and
Supplemental Assets; provided, however, that the invoices for the contracts
covering the Assets, Spot Assets and Supplemental Assets shall be sent
directly to RG&E and RG&E shall pay such invoices consistent with such
contracts directly to the other party under such contracts whenever
possible. Except as otherwise agreed, MGSC shall manage the Assets, Spot
Assets and Supplemental Assets as agent for RG&E consistent with the
authorization procedures specified in Section 2 of this Attachment B.
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1.4 Release of Pipeline Assets to Manager
RG&E shall work with MGSC to utilize alternative means of achieving the
Goals, including capacity release agreements, where deemed more effective
than agency arrangements by both Parties for particular Transportation and
Storage Assets.
Such alternative means of effecting MGSC's actions shall be mutually agreed
to and adjusted if necessary, by the Parties to optimize the Goals with due
regard to RG&E's obligation to provide least-cost reliable service to its
customers while enabling MGSC to manage the Assets.
1.5 Assignment of Term Supply Contracts to Manager
RG&E shall work with MGSC to utilize alternative means of achieving the
Goals, including assignments of the Term Supply Contracts and the purchase
of other gas supplies as agent for RG&E, where deemed more effective than
agency arrangements by both Parties. RG&E shall retain all payment and
financial obligations under the assigned Term Supply Contracts.
Such alternative means of effecting MGSC's actions shall be mutually agreed
to and adjusted if necessary, by the Parties to optimize the Goals with due
regard to RG&E's obligation to provide least-cost reliable service to its
customers while enabling MGSC to manage the Assets.
1.6 Reporting and Record Keeping Requirements
MGSC shall work in close communication with RG&E toward achieving the
Goals, informing RG&E of planned approaches and developing additional
reports, if any, which RG&E reasonably requires.
Each Business Day, MGSC shall provide a Daily Log of all transactions
undertaken (and/or only changes to transactions from the previous day if so
elected by RG&E) to supply RG&E's gas requirements and to optimize RG&E's
Assets ("the Daily Log") at the earliest reasonably possible time, but, not
later than the Business Day next following the Day of the transaction.
MGSC shall provide a report of the Month's estimated transactions by noon
of the second Business Day following the end of the month ("Closing
Report"). The Closing Report shall contain sufficient details of the
operations of the supply contracts to allow RG&E to verify the supply
contract invoices and sufficient detail of all transactions to allow RG&E
to close its books by noon of the third Business Day.
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MGSC shall keep for 6 years the records of all transactions and activities
under this Agreement sufficient to permit full inspection and auditing by
RG&E and independent auditors.
MGSC may propose the forms of the Daily Logs and Closing Reports, and
propose revisions to such forms from time to time based on the experience
of the Parties under this Agreement, in order to provide RG&E with an
efficient format for its review; provided however, RG&E shall have
reasonable discretion to elect the forms of all Daily Logs and Closing
Reports.
1.7 Billing, Invoice Verification, Invoice Payment For Third Party
Payments
The purpose of this Section 1.7 is to set forth the payment
responsibilities of the Parties to third Parties under Assets, Spot and
Supplemental Asset contracts.
RG&E and MGSC shall make reasonable efforts to try to arrange for all
invoices relating to Assets, Spot Assets and Supplemental Assets used for
deliveries on behalf of RG&E to be sent directly to both RG&E and MGSC. In
the event this arrangement is not reasonably possible, then (a) the
invoices for all Term, Spot and Supplemental Assets contracts assigned to
MGSC for which RG&E retains all payment and financial obligations, shall be
sent directly to RG&E for payment by RG&E, (b) the invoices for all Assets,
Spot and Supplemental Assets contracts for which MGSC act as agent for RG&E
shall be sent to RG&E for direct payment by RG&E and, (c) the invoices for
all Term Transportation Assets and Term Storage Assets released to MGSC
pursuant to pipeline capacity release tariff provisions shall be sent to
MGSC for direct payment by RG&E.
The Parties shall send by fax or overnight mail to the other Party a copy
of each invoice for which RG&E is responsible for payment. MGSC shall
verify the invoices associated with the Non-Financial Transactions and the
statements of account for the Financial Transactions. The Parties shall
cooperate in supplying daily nomination, receipt volume and other data as
necessary so that such payments may be timely paid.
RG&E shall:
(x)
; and
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(y)
MGSC shall be responsible for late payment charges set forth in Article V
of this Agreement, if any, resulting from MGSC's failure to pay on a timely
basis or failure to give RG&E proper notice and/or verification under
subparagraphs a, b and c above. RG&E shall be responsible for late payment
charges set forth in Article V of this Agreement, if any, resulting from
RG&E's failure to pay on a timely basis, provided that the relevant notice
and verification and supporting documentation for subparagraphs a, b and c
was received by RG&E at least five Business Days prior to the payment due
date. If RG&E did not receive the invoices and supporting documentation by
such date prior to the payment due date, RG&E's payment obligation shall be
extended by the same number of days of such delay of receipt.
1.8 Staffing
MGSC shall provide the personnel necessary to perform its obligations under
this Agreement. MGSC shall designate one person as it "Manager Liaison" to
oversee its activities and to coordinate communications with RG&E on how
MGSC is meeting its obligations under this Agreement. RG&E shall have the
right to review and approve the appointment of such person, which approval
shall not be unreasonably withheld. The Manager Liaison shall visit RG&E
as necessary to carry out his/her duties as set forth in this Agreement.
The Manager Liaison or designate shall be available 24 hours per day. RG&E
shall designate one or more persons as its "Manager Liaison(s)" to
coordinate communications with MGSC.
1.9 Cooperative Work Periods
MGSC shall allow RG&E to work alongside MGSC's staff from time to time
while performing its duties and obligations under this Agreement.
1.10 Spot Assets
MGSC shall arrange for RG&E to purchase any additional first of the Month
and/or mid-Month Spot Assets that are necessary to meet the Reliability
Requirement based on the Requirements Forecasting supplied by RG&E for such
month and the Monthly Plan in Section 3.3 and the Plan of Operations in
Section 3.2.
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1.11 Supplemental Assets
If, on any day, for any reason, RG&E's demand exceeds that available from
the combined Term Assets, available storage withdrawals and Spot Assets
previously arranged by MGSC for such day, MGSC shall (1) try to obtain
RG&E's approval for MGSC to purchase Supplemental Assets on RG&E's behalf
at market prices to meet such demand, or (2) if RG&E does not timely
respond to MGSC's request to purchase Supplemental Assets, MGSC shall be
authorized by RG&E to use good faith reasonable efforts to purchase
Supplemental Assets on RG&E's behalf at available market prices to meet
such increased demand and the Reliability Requirement and RG&E agrees to
fully reimburse MGSC for any such Supplemental Assets purchased.
The purchase and sale of Supplemental Assets and any Spot Assets can be
made pursuant to the Master Natural Gas Sales/Purchase Agreement attached
as Attachment F. The foregoing sales shall be made a point upstream of New
York State.
1.12 Change of Assumptions
RG&E and MGSC shall work together in good faith to reach the Goals of this
Agreement. If MGSC in good faith proposes transactions to help meet the
Goals, RG&E must timely authorize the transactions unless RG&E has valid
contrary economic, regulatory or operational reasons. MGSC's only
liability for failure to meet Goals is the liability for failure to provide
the quantity of gas set forth in Article VI. MGSC shall not be liable for
failure to meet its obligations under the Agreement to the extent that RG&E
refused to authorize recommended transactions.
2. Authorization Procedure
The following Authorization Procedure shall apply to transactions
undertaken or proposed to be undertaken to implement the purposes of the
Agreement.
2.1 Non-Financial Transactions
a. For all recallable uses of Assets for Non-Financial Transactions of
one Month or less duration, MGSC is authorized to undertake the
transaction without RG&E approval.
b. For (i) all non recallable Non-Financial Transactions of 6 Months or
less duration and (ii) all recallable Non-Financial Transactions of
6 Months or less duration, but of more than one Month duration, MGSC
shall obtain approval by fax under the signature of RG&E's Principal
Analyst, Gas Supply Management or designate.
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c. For all Non-Financial Transactions of more than 6 Months duration,
MGSC shall obtain approval by fax under the signature of RG&E's
Group Manager, Gas Supply Management, or designate.
2.2 Financial Transactions
MGSC shall only perform Financial Transactions pursuant to this Agreement
to the extent authorized by Risk Management Plan(s) submitted by MGSC from
time to time and authorized under the signature of RG&E's Group Manager,
Gas Supply Management, or designate.
RG&E also represents that it has the necessary authority to authorize
Financial Transactions and Risk Management Plans to be entered into by MGSC
pursuant to this Agreement. RG&E further warrants that such Risk
Management Plans and Financial Transactions do not have to be filed with
the PSC before they are effective and that such agreements are effective on
the date they are fully executed.
2.3 Pre-Authorized Transactions
MidCon may recommend the pre-authorization by RG&E of Non-Financial
Transactions(s) subject to Sections 2.1(b) or (c) of this Attachment B on
either a non-recallable or recallable basis, where MidCon advises that the
use of the Assets is consistent with achieving the Goals. The
recommendation must specify the proposal in detail including the specific
Assets involved, the quantity, whether the use of the Assets is non-
recallable or recallable, and the recommended term or, if applicable,
whether the release is permanent.
If such Non-Financial Transaction(s) are approved by RG&E's management (at
the management level specified under Sections 2.1(b) and (c) of this
Appendix B), MGSC shall be authorized to perform the recommended Non-
Financial Transaction(s) on a pre-approved basis. MidCon shall report the
initiation of such pre-authorized transactions on the next following Daily
Log.
2.4 Unauthorized Transactions
MGSC shall not enter into Unauthorized Transactions utilizing the Assets.
MGSC shall not receive reimbursement from RG&E of any losses and/or costs
MGSC incurs from Unauthorized Transactions. Any gains resulting from such
Unauthorized Transactions utilizing the Assets shall be paid to RG&E, but
shall not count towards the Savings defined in Attachment C. In addition,
Unauthorized Transactions may lead to additional liability for MGSC in the
event the Unauthorized Transactions result in a physical shortage of Gas as
provided in Section 6.3 of this Agreement.
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3. Planning Duties
MGSC's actions in accordance with the plans set forth herein, and
consistent with the authorized procedure in Section 2, shall be considered
Authorized Transactions. The plans herein described are good faith efforts
and have no associated liability.
3.1 Plan of Procedures
MGSC shall develop and submit for RG&E's approval, which shall not be
unreasonably withheld, a "Plan of Procedures" which shall outline the
operating steps which shall be the responsibility of MGSC. The Plan of
Procedures shall be based upon an annual, seasonal (winter and summer),
Monthly, Bid Week, and Daily time frame. The Plan of Procedures shall be
in effect until either party determines a need to revise such plan, at
which time MGSC shall develop and submit for RG&E's approval, which shall
not be unreasonably withheld, a revised "Plan of Procedures."
3.2 Plan of Operations
Each Month by the Business Day following the 18th of the Month, MGSC shall
submit a "Plan of Operations" which shall outline MGSC's proposed actions
to meet the Goals during the following Month. The Plan of Operations shall
emphasize the physical actions to be undertaken and the underlying
rationale for those actions. RG&E shall notify MGSC of any objections to
such Plan of Operations within three (3) Business Days of receipt thereof,
identifying its requested changes. MGSC shall issue a revised Plan of
Operations within three (3) Business Days of receipt thereof in accordance
with such RG&E objections.
3.3 Monthly Plan
Each Month by the Business Day following the 7th of the Month, MGSC shall
submit a rolling 24 month plan (the "Monthly Plan"). The Monthly Plan
shall provide a projection of the estimated cash flow obligations for the
supply portfolio. The Monthly Plan shall begin with the current Month and
specify the associated estimated cash flows which are required to meet the
Goals. RG&E shall notify MGSC of any objections to such Monthly Plan
within ten (10) Business Days of receipt thereof, identifying its requested
changes. MGSC shall issue a revised Monthly Plan within three (3) Business
Days of receipt thereof in accordance with such RG&E objections.
3.4 Storage Plan, Risk Management Plan
From time to time, MGSC shall develop and submit for RG&E's authorization,
which shall not be unreasonably withheld, a "Storage Plan" or series of
Storage Plans which
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shall outline the steps necessary for MGSC to increase its ability to meet
the Goals on an annual, Monthly, Bid Week and Daily time frame. If MGSC
determines that the use of Financial Transactions will increase its ability
to meet the Goals, a Risk Management Plan shall be developed. MGSC will
provide a detailed description of the use of these Financial Transactions
and a discussion of the risks which the use of such Financial Transactions
may involve.
Each Storage Plan and/or Risk Management Plan shall identify the specific
authorizations which RG&E is being requested to authorize. Such
authorization shall be obtained in accordance with Sections 2.1, 2.2 or 2.3
of this Attachment B before any action is taken on behalf of RG&E.
3.5 Requirements Forecasting
RG&E shall work in close communication with MGSC to achieve the Goals,
informing MGSC of changes in Reliability Requirements as soon as possible.
RG&E will give MGSC 120 Days prior notice of any design day changes.
RG&E shall, in good faith, submit to MGSC the following Reliability
Requirements forecasts using RG&E's best available data:
a. each Month by the Business Day following the 15th of the Month, a
rolling 24 Month forecast of Reliability Requirements, including
RG&E's Design Day Requirements commencing with the following Month.
b. each Day by 8 AM Eastern time a rolling 72 hour Reliability
Requirements forecast, which forecast shall separately detail
projected usage for the immediate Day, the second Day and the third
Day.
c. as soon as is reasonably practicable, any revision made to a
Reliability Requirements forecast previously submitted to MGSC.
RG&E's forecasts shall specify the delivery constraints by city gate, if
any.
3.6 Meetings for Monitoring and Reporting of Market and Industry Trends and
Events
MGSC and RG&E shall meet no less frequently than every 3 months to discuss,
at a minimum:
a. market, regulatory, and industry trends and how those impact the
Reliability Requirement and the Optimization of Asset Value.
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b. ways of improving the Parties' performance in their efforts to
achieve the Goals.
To the extent feasible, the Parties shall alternate the location of the
meetings between their respective offices.
4. Compliance with Constraints and Tariffs
MGSC shall administer and monitor all of RG&E's Gas purchase,
transportation, and storage agreements to meet the Goals and to ensure
compliance with contract terms of the Assets and applicable transporting
Pipeline tariffs during the term of this Agreement.
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ATTACHMENT C
To the Supply Portfolio Management Agreement between MidCon Gas
Services Corp. and Rochester Gas and Electric Corporation
dated July 1, 1995
SAVINGS
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ATTACHMENT D
To the Supply Portfolio Management Agreement between MidCon
Gas Services Corp. and Rochester Gas and Electric Corporation
dated July 1, 1995
COMPENSATION
1. Definitions
2. Compensation Schedule
Portions omitted pursuant to
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3. Compensation Adjustments
5. Billing
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ATTACHMENT E
To the Supply Portfolio Management Agreement between MidCon Gas
Services Corp. and Rochester Gas and Electric Corporation
dated July 1, 1995
GUARANTEE
GUARANTEE, dated as of July 1, 1995 by MidCon Corp., a Delaware corporation
(the "Guarantor") in favor of Rochester Gas and Electric Corporation
("Counterparty").
1. Guarantee. For value received, and to induce Counterparty to enter
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into transactions with MidCon Gas Services Corp. (the "Company"), a Delaware
corporation and a direct, wholly-owned subsidiary of the Guarantor, pursuant to
the Agreement (as defined below), the Guarantor unconditionally and irrevocably
guarantees to Counterparty, its successors, endorsees and assigns, the full and
prompt payment and performance when due (taking into account all applicable
notice or grace periods) of all present and future obligations of all kinds of
the Company to Counterparty pursuant to the certain Supply Portfolio Management
Agreement dated July 1, 1995 between the Company and Counterparty (the
"Agreement"), including, without limitation, all liabilities for damages arising
from a breach by Company thereof, whether secured or unsecured, absolute or
contingent, joint or several, and regardless of whether the Guarantor shall then
be the parent company of the Company (the "Obligations"). The Guarantor further
agrees to pay to Counterparty, on demand, all costs and expenses (including
court costs and reasonable legal expenses) incurred or expended by Counterparty
in connection with the enforcement of this Guarantee.
2. Nature of Guarantee. This Guarantee is a guarantee of payment and not
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of collection. Counterparty shall not be obligated to file any claims relating
to the Obligations owing to it in the event that the Company becomes subject to
a bankruptcy, reorganization or similar proceeding, and the failure of
Counterparty to so file shall not affect the Guarantor's obligations hereunder.
In the event that any payment to Counterparty in respect to any Obligations is
rescinded or must otherwise be returned for any reason whatsoever, the Guarantor
shall remain liable hereunder in respect to such Obligations as if such payment
has not been made. The Guarantor reserves the right to assert defenses which
the Company may have to payment or performance of any Obligation other than
defenses arising from the bankruptcy or insolvency of the Company and other
defenses expressly waived hereby.
3. Consents, Waivers and Renewals. To the fullest extent permitted by
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applicable law, Counterparty may, at any time and from time to time, consent to
or waive any breach of the Company of, or any act, omission or default of the
Company under, the Agreement without incurring any responsibility to the
Guarantor, and without impairing or releasing the obligations of the Guarantor
hereunder, in whole or in part. Except as provided with respect
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to any such consent or waiver, the Company may agree to modify the Obligations
or the Agreement between Counterparty and the Company, without in any way
impairing or affecting this Guarantee. The Guarantor hereby waives notice of
acceptance of this Guarantee, and also presentment, protest and notice of
protest or dishonor or any evidences of the Obligations hereby guaranteed.
4. Covenants. The Guarantor agrees that (a) so long as any of the
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Obligations remain unpaid, undischarged or unsatisfied it will maintain a
consolidated total stockholder's equity, determined in accordance with generally
accepted accounting principles ("GAAP"), at an amount not less than
$1,000,000,000; and (b) for the term of the Agreement, the Guarantor shall
provide Counterparty, on or before 120 days after the Guarantor's fiscal year
end, consolidated financial statements of the Guarantor for the year then ended
(consisting of a consolidated balance sheet, income statement and statement of
cash flows) prepared in accordance with GAAP and audited by the Guarantor's
independent public accountants and accompanied by such accountants' report.
5. Subrogation. Guarantor hereby waives any claim, right or remedy which
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Guarantor may now have or hereafter acquire against the Company that arises
hereunder, including, without limitation, any claim, remedy, right of
subrogation, reimbursement, exoneration, indemnification, or participation in
any claim, right or remedy of Counterparty against the Company, or any security
which Counterparty now has or hereafter acquires, whether or not such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise.
6. Representations and Warranties. The Guarantor hereby represents and
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warrants to Counterparty that: (i) The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power to execute and deliver this Guarantee and to perform
its obligations contemplated hereby; (ii) the execution, delivery and
performance of this Guarantee have been duly authorized by all requisite
corporate action of the Guarantor; (iii) this Guarantee constitutes a legal,
valid and binding obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms; and (iv) the execution, delivery and performance
of this Guarantee do not contravene any now existing applicable law, regulation,
order or contractual restriction binding upon the Guarantor.
7. Termination. This Guarantee shall remain in full force and effect
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during the term of the Agreement; provided, however, that this Guarantee shall
remain in full force and effect thereafter until all Obligations arising under
the Agreement shall be finally and irrevocably paid in full.
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8. Governing Law. This Guarantee shall be governed by and construed in
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accordance with the laws of the State of New York (without reference to conflict
of law rules or principles).
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed
by its duly authorized officer as of the date appearing on page one.
MIDCON CORP.
By: _____________________________
Name: _____________________________
Title: ___________________________
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ATTACHMENT F
To the Supply Portfolio Management Agreement between MidCon Gas
Services Corp. and Rochester Gas and Electric Corporation
dated July 1, 1995
BASE CONTRACT FOR SALE AND PURCHASE OF NATURAL GAS
THIS BASE CONTRACT, made and entered into this July 1 of 1995, by and
between MidCon Gas Service Corp. ("MGSC"), a Delaware corporation and Rochester
Gas and Electric Corporation ("RG&E"), a New York corporation.
ARTICLE I PURPOSE AND PROCEDURES
1.1 This Base Contract establishes the terms governing purchases, sales
and/or exchanges of Gas during the period this Base Contract is in effect. The
Base Contract anticipates that the role of a party may change from time to time
and that role may in some cases be that of the Seller and in other cases be that
of the Buyer. As used herein, the term "Buyer" refers to the party receiving
Gas and the term "Seller" refers to the party delivering Gas.
1.2 The terms and conditions incorporated in this Base Contract are intended
to facilitate the entering into by Buyer and Seller of a variety of types of
transactions with specific pertinent terms and durations. The types of
transactions covered by this Base Contract are defined in Section 3.1:
(i) Interruptible (I)
(ii) Secondary Firm (SF)
(iii) Primary Firm (PF) or
(iv) Exchange of Futures for Physicals (EFP)
1.3.1 The parties will use the following Transaction Confirmation procedure.
Should the parties come to an agreement regarding a Gas purchase or sale
transaction for a particular Delivery Period, Seller will, and Buyer may, record
that agreement on a Transaction Confirmation and communicate such Transaction
Confirmation to the other party by the close of the Business Day following the
date of agreement.
1.3.2 If a sending party's Transaction Confirmation is contrary to the
receiving party's understanding of the agreement, such receiving party shall
notify via telecopy the sending party before the close of the second Business
Day following receipt if such receiving party has not previously sent a
Transaction Confirmation to the sending party. The Buyer's failure
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to so notify Seller in writing within the aforementioned time period constitutes
Buyer's agreement to the terms of the transaction described in the Seller's
Transaction Confirmation.
1.3.3 If there are any differences in a material term between Seller's and
Buyer's Transaction Confirmations, then any transaction contemplated under
Section 1.2 will not be governed by this Contract until or unless such
differences are resolved.
1.4 The entire agreement between the parties shall be those provisions
contained in the Base Contract and any effective Transaction Confirmation
("Contract"). In the event of a conflict between the terms of any Transaction
Confirmation and the terms of this Base Contract, the terms of the Transaction
Confirmation shall govern.
ARTICLE II DEFINITIONS
2.1 "British Thermal Unit" or "Btu" shall mean the amount of heat required to
raise the temperature of one pound of pure water from 59 degrees Fahrenheit to
60 degrees Fahrenheit at a constant pressure of 14.73 pounds per square inch
absolute (psia). MMBtu shall mean one million British Thermal Units.
2.2 "Business Day" shall mean any day except Saturday, Sunday or bank holidays.
2.3 "Contract" shall mean the legally-binding relationship established by (i)
this Base Contract and (ii) the provisions contained in any effective
Transaction Confirmation(s).
2.4 "Contract Quantity" shall mean the quantity of Gas to be delivered and
taken as set forth in the Transaction Confirmation.
2.5 "Cover Costs" shall have the meaning set forth in Section 4.1.
2.6 "Cover Standard" shall mean that if there is an unexcused failure to take
or deliver any quantity of Gas pursuant to this Contract, then the non-
defaulting party shall use commercially reasonable efforts, consistent with the
amount of notice provided by the defaulting party; the immediacy of the Buyer's
Gas consumption needs or Seller's Gas sales requirements, as applicable; the
quantities involved; and the anticipated length of failure by the defaulting
party, to obtain or sell Gas at a price reasonable for the delivery or
production area, as applicable.
2.7 "Day" shall mean a period of twenty-four (24) consecutive hours,
coextensive with a "day" as defined in the tariff of the Transporter delivering
Gas to the Delivery Point in a particular transaction.
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2.8 "Delivery Period" shall be the period during which deliveries are to be
made as set forth in the Transaction Confirmation.
2.9 "Delivery Point" shall have the meaning as set forth in Section 8.1.
2.10 "Gas" shall mean any mixture of hydrocarbons or of hydrocarbons and non-
combustible gases in a gaseous state consisting essentially of methane.
2.11 "Imbalance Charges" shall mean any scheduling penalties, imbalance
penalties, overpull or unauthorized overrun penalties, operational flow order
penalties, Cash Out Charges, banking charges, or similar penalties, fees or
charges assessed by a Transporter for failure to satisfy the Transporter's
balance and/or nomination requirements.
2.12 "Month" shall mean the period beginning on the first day of the calendar
month and ending on the first day of the next calendar month.
2.13 "Schedule" or "Scheduled" shall refer to the act of seller, Buyer, and the
Transporter(s) notifying, requesting, and confirming to each other the quantity
of Gas to be delivered hereunder on any given Gas Day during the Delivery
Period.
2.14 "Transaction Confirmation" shall mean the form attached in Exhibit A.
2.15 "Transporter(s)" shall mean all Gas pipeline companies, or the physical
facilities thereof, transporting Gas for Seller or Buyer upstream or downstream,
respectively, of the Delivery Point pursuant to a particular Transaction
Confirmation.
ARTICLE III PERFORMANCE OBLIGATION
3.1 The Performance Obligation shall be designated in each Transaction
Confirmation from one of the following:
3.1.1 "Interruptible" shall mean that either party may interrupt its
performance at any time for any reason, whether or not caused by an event of
force majeure, with no liability, except such interrupting party is responsible
for any Imbalance Charges as set forth in Section 6.3 related to its
interruption after the nomination is made to the Transporter.
3.1.2 "Secondary Firm" shall mean that either party may interrupt its
performance to the extent that such performance is prevented for reasons of
Force Majeure or curtailment of such party's interruptible transportation and/or
storage, transportation between secondary firm points or recallable firm
transportation, with no liability except such interrupting party is responsible
for any Imbalance Charges related to its interruption after the
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nomination is made to the Transporter. If a party interrupts for any other
reason or curtails a Secondary Firm customer before curtailing similarly
situated Interruptible or Priority Interruptible customers, the non-breaching
party's exclusive remedy shall be that it may recover its Cover Costs.
3.1.3 "Primary Firm" shall mean that either party may only interrupt
its performance to the extent that such performance is prevented for reasons of
Force Majeure or curtailment of firm transportation and/or storage, with no
liability except that such interrupting party is responsible for any Imbalance
Charges related to its interruption after the nomination is made to the
Transporter. If a party interrupts for any other reason or curtails a Primary
Firm customer before curtailing similarly affected Interruptible, Priority
Interruptible or Secondary Firm customers, the non-breaching party's exclusive
remedy shall be that it may recover its Cover Costs.
3.1.4 "EFP" shall mean the purchase, sale or exchange of natural Gas
as the "physical" side of an exchange for physical transaction involving futures
contracts on the New York Mercantile Exchange. EFP shall incorporate the
meaning and remedies of Primary Firm.
3.2 If a party interrupts its performance, such party will curtail each
customer group in the order indicated in Section 3.1 and within each priority
group, excluding Interruptible customers, in a fair and reasonable manner giving
similar treatment to similarly affected customers.
ARTICLE IV DEFAULTS AND REMEDIES
4.1 Subject to Section 4.3, the exclusive and sole remedy of the parties in the
event of a breach of the Performance Obligation shall be recovery of the
following Cover Costs: (i) in the event of a breach by Seller, payment by
Seller to Buyer in an amount equal to the difference between the Contract Price
and the purchase price paid by Buyer utilizing the Cover Standard for
replacement Gas, adjusted for reasonable incremental transportation costs to or
from the Delivery Point(s), multiplied by the quantity of Gas agreed upon but
not delivered by Seller ("Buyer's Cover Costs"); or (ii) in the event of a
breach by Buyer, payment by Buyer to Seller in an amount equal to the difference
between the Contract Price and the price received by Seller utilizing the Cover
Standard from the resale of such Gas, adjusted for reasonable incremental
transportation costs to or from the Delivery Point(s), multiplied by the
quantity of Gas agreed upon but not taken by Buyer ("Seller's Cover Costs");
(iii) in the event that Buyer has used commercially reasonable efforts to
replace the Gas or Seller has used commercially reasonable efforts to sell the
Gas to a third party, and no such replacement or sale is available, then the
exclusive remedy of the non-breaching party shall be the difference between the
Contract Price and the price that would have been paid or
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received utilizing the Cover Standard multiplied by the quantity of Gas agreed
upon but not delivered by Seller.
4.2 IN NO EVENT WILL EITHER PARTY BE RESPONSIBLE, EITHER UNDER THIS ARTICLE IV
OR UNDER ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, FOR INCIDENTAL,
CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES.
4.3 In the event that the non-defaulting party terminates the Contract under
Section 15.1, the non-defaulting party shall have the right to designate an
early termination date ("Early Termination Date") as any date on or after the
event of default under Section 15.1. Upon the Early Termination Date, the non-
defaulting party shall have the right to liquidate any and all Transactions
under this Contract (including any portion of a Transaction not yet fully
delivered) then outstanding by:
(i) Closing out each Transaction being liquidated at its Market
Value, as defined below, so that each such Transaction is cancelled and
a settlement payment in an amount equal to the difference between such
Market Value and the Contract Value, as defined below, of such
Transaction shall be due to the Buyer under the Transaction if such
Market Value exceeds the Contract Value and to the Seller if the
opposite is the case; and
(ii) Discounting each amount then due under clause (i) above to
present value in a commercially reasonable manner as at the time of
liquidation (to take account of the period between the date of
liquidation and the date on which such amount would have otherwise been
due pursuant to the relevant Transaction); and
(iii) Setting off or aggregating, as appropriate, any or all
settlement payments (discounted as appropriate) and (at the election of
the non-defaulting party) any or all other amounts owing between the
parties under this Contract so that all such amounts are aggregated
and/or netted to a single liquidated amount payable by one party to the
other. The net amount due from any such liquidation shall be paid by
the close of business on the Business Day following the Early
Termination Date.
For purposes of this Section 4.3, "Contract Value" means the amount of
the Gas remaining to be delivered or purchased under a Transaction multiplied by
the Contract Price per unit, and "Market Value" means the amount of Gas
remaining to be delivered or purchased under a Transaction multiplied by the
market price per unit determined by the non-defaulting party in a commercially
reasonable manner using the Cover Standard. The rate of interest used in
calculating net present value shall be determined by the non-defaulting party in
a commercially reasonable manner. The parties agree that a Transaction under
this Section
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4.3 shall constitute a "forward contract" within the meaning of the United
States Bankruptcy Code.
The non-defaulting party's rights under this Section 4.3 and to Cover
Costs accrued prior to the termination date are the sole and exclusive remedy of
the non-defaulting party. The non-defaulting party shall give notice that a
liquidation pursuant to this Section 4.3 has occurred to the defaulting party no
later than the Business Day following such liquidation, provided that failure to
give such notice shall not affect the validity or enforceability of the
liquidation or give rise to any claim by the defaulting party against the non-
defaulting party.
ARTICLE V TRANSPORTATION AND DISPATCHING
5.1 Seller shall have the sole responsibility for transporting the Gas, or
ensuring that the Gas is transported, to the Delivery Point. Buyer shall have
the sole responsibility for transporting the Gas, or ensuring that the Gas is
transported after the Delivery Point.
5.2 If the supply or transportation necessary to deliver or receive the
Contract Quantity is unavailable for any reason, the party responsible for or
having notice of such interruption shall promptly notify the other party by
telecopy. Seller and Buyer shall then cooperate in all reasonable actions to
avoid penalties imposed by the Transporter(s). Notwithstanding the above, any
notice of interruption shall not be considered an amendment of the Performance
Obligation.
ARTICLE VI QUANTITY, SCHEDULING AND IMBALANCES
6.1 Seller agrees to sell and deliver, and Buyer agrees to receive and
purchase, the Contract Quantity for a particular transaction in accordance with
the terms of this Contract.
6.2 The parties shall coordinate their Scheduling requirements by telephone
with immediate confirmation in writing by telecopy. Ample time must be given to
meet the Scheduling deadlines of the affected Transporter(s). Each party's
dispatcher shall give the other party's dispatcher timely prior notice,
sufficient to meet the requirements of all Transporter(s) involved in the Gas
delivery to Buyer, of the quantities of Gas to be delivered and purchased each
Day. Such notice shall be at least twenty-four hours prior to the earliest
regularly scheduled nomination deadline of the Transporters receiving or
delivering Gas commencing on the first day of a month, and two hours earlier
than such deadline for any subsequent nomination if intramonth changes are
authorized. Should either party become aware that actual deliveries at the
Delivery Point(s) are greater or lesser than the Scheduled
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Gas, such party shall notify immediately the other party's Gas Control
dispatcher by telephone to be followed up with written telecopy notice within
twenty-four hours.
The parties shall use all reasonable efforts to avoid imposition by any
Transporter of Imbalance Charges. If, during any Month, Buyer or Seller
receives an invoice from a Transporter which includes Imbalance Charges, the
parties shall use their best efforts to promptly determine the validity as well
as the cause of such Imbalance Charges. If the parties determine that the
Imbalance Charges were incurred as a result of Buyer's actions or inactions
(which shall include, but shall not be limited to, Buyer's failure to accept
quantities of Gas equal to the Scheduled Gas), then Buyer shall pay for such
Imbalance Charges or reimburse Seller for such Imbalance Charges paid by Seller
to the Transporter. If the parties determine that the Imbalance Charges were
incurred as a result of Seller's actions or inactions (which shall include, but
shall not be limited to, Seller's failure to deliver quantities of Gas equal to
the Scheduled Gas), then Seller shall pay for such Imbalance Charges, or
reimburse Buyer for such Imbalance Charges paid by Buyer to the Transporter.
ARTICLE VII QUALITY
7.1 All Gas delivered by Seller shall meet the quality and heat content
requirements of Transporter(s)' tariff(s), as may be amended from time to time.
ARTICLE VIII DELIVERY POINT AND DELIVERY PRESSURE
8.1 The Delivery Point(s) for all Gas delivered hereunder shall be such points
as are mutually agreed upon between Seller and Buyer as set forth in the
Transaction Confirmation.
8.2 Gas delivered hereunder shall be at commercial operating pressures
sufficient to deliver such quantities at the Delivery Point(s).
ARTICLE IX MEASUREMENT
9.1 The unit of quantity measurement for purposes of this Contract shall be one
MMBTUs.
9.2 Measurement of Gas quantities hereunder shall be in accordance with the
tariff of the first Transporter immediately downstream of the Delivery Point(s).
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ARTICLE X PRICE
10.1 The Contract Price for all Gas delivered hereunder shall be expressed in
U.S. Dollars per MMBTUs ($/MMBtu). The price shall be agreed to by Buyer and
Seller for each specific transaction and shall be included in the Transaction
Confirmation.
ARTICLE XI TAXES
11.1 Seller shall pay or cause to be paid, all taxes, fees, levies, penalties,
licenses or charges imposed by any government authority ("Taxes") on or with
respect to the Gas prior to its delivery at the Delivery Point(s). Buyer shall
pay or cause to be paid, all Taxes on or with respect to the Gas after its
delivery at the Delivery Point(s); provided, however, that if the sale and/or
purchase occurs in the State of New York, RG&E shall reimburse MGSC for any
federal, state or local taxes assessed MGSC for such transaction. If a party is
required to remit or pay Taxes which are the other party's responsibility
hereunder, such party shall promptly reimburse the other party for such Taxes.
If Buyer is entitled to an exemption of such Gas from any such Taxes or charges,
Buyer shall furnish Seller any necessary exemption or resale certificate
covering the Gas delivered hereunder at the Delivery Ponit(s).
11.2 If any Goods and Service Tax ("GST") imposed pursuant to the Excise Tax
Act (Canada), as amended from time to time is payable in connection with Gas
purchased hereunder, such GST shall be paid by Buyer to Seller, as agent for the
federal government of Canada, and Seller shall remit such GST as required by
law.
ARTICLE XII BILLING, PAYMENT AND AUDIT
12.1 On or before the tenth day following the Month of deliveries of Gas
hereunder, Seller shall deliver to Buyer a statement for the preceding Month
properly identified as to the Delivery Point and applicable Transaction
Confirmation showing the total quantity of Gas delivered and the amount due. If
the actual quantity delivered is not available by the contractual billing date,
billing will be prepared based on the Scheduled quantities. The Scheduled
quantity will then be corrected to the actual quantity on the following Month's
billing or as soon thereafter as actual delivery information is available.
12.2 Buyer shall remit by the method (check, Automated Clearing House (ACH) or
wire transfer) indicated on the Transaction Confirmation the amount due pursuant
to Seller's invoice instructions, by the later of the 25th day of the Month in
which the statement was rendered or ten days after receipt of the statement by
Buyer; provided that if the 25th day is not a Business Day, payment is due on
the next Business Day following that date. If Buyer
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fails to remit the full amount payable by it when due, interest on the unpaid
portion shall accrue at a rate equal to
If Buyer, in good faith, disputes the amount of any such statement or
any part thereof, Buyer will pay to Seller such amount as it concedes to be
correct; provided, however, if Buyer disputes the amount due, Buyer must provide
supporting documentation acceptable in industry practice from its Transporter to
verify the amount paid. If it is ultimately determined that Buyer owes the
disputed amount, Buyer will pay Seller that amount with interest as determined
above immediately upon such determination.
12.3 The parties shall have the right, upon reasonable notice and at reasonable
times, to examine the books and records of the other party to the extent
reasonably necessary to verify (i) the accuracy of any statement, charge,
payment, computation made under the Contract or (ii) any curtailment of service
under Section 3.2. Any such audit and any claim based upon errors in any
statement or unauthorized curtailment must be made within two years of (i) the
date of such statement or any revision thereof or (ii) the last Day of the Month
during which any such alleged unauthorized curtailment occurs. Following such
two year period, a billing statement as adjusted shall be final. Errors in a
party's favor shall be rectified in full, with interest as calculated above, by
such party within 30 days of notice and substantiation of such inaccuracy.
12.4 Nothing in receipt of any invoice or statement or any information
concerning a transaction and nothing in the act of payment or partial payment
shall constitute accord and satisfaction, waiver, release, full payment,
satisfaction, laches, estoppel or other defense to a claim by or against the
Seller or Buyer for the true and actual amount accurately due and payable for
the full period of two years in arrears.
ARTICLE XIII TITLE, WARRANTY AND INDEMNITY
13.1 Title to the Gas shall pass from Seller to Buyer at the Delivery Point(s).
Seller shall have responsibility for and assume any liability with respect to
the Gas prior to its delivery to Buyer at the specified Delivery Point(s).
Buyer shall have responsibility for and any liability with respect to said Gas
after its delivery to Buyer at the Delivery Point(s).
13.2 Seller warrants that it will have good and merchantable title to or will
have the right to deliver all Gas sold hereunder and delivered by it to Buyer,
free and clear of all liens, encumbrances, and claims.
13.3 Seller and Buyer each warrants that it is engaged in the direct commercial
use of natural Gas in the ordinary course of its business, as producer,
processor, merchant, or consumer or otherwise has knowledge of the practices
associated with the purchase or sale of
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natural Gas. Each further warrants that it has and will maintain all the
regulatory authorizations, certificates, and documentation as may be necessary
and legally required to transport, buy, or make sales for resale of Gas sold or
purchased hereunder.
13.4 If any claim related to the title to the Gas sold hereunder is asserted at
any time, Buyer may withhold payment of up to the amount of such claim without
interest, as security for the performance of Seller's obligations hereunder
until such claim has been finally determined, or until Seller has furnished a
bond or other acceptable assurances to Buyer under terms and conditions
satisfactory to Buyer, and in an amount with surety satisfactory to Buyer.
13.5 Seller agrees to indemnify Buyer and save it harmless from all suits,
actions, debts, accounts, damages, costs, losses, liabilities and expenses
arising from or out of claims of title, personal injury or property damage from
any or all persons to said Gas or other charges thereon which attach before
title passes to Buyer. Buyer agrees to indemnify Seller and save it harmless
from all suits, actions, debts, accounts, damages, costs, losses, liabilities
and expenses arising from or out of claims regarding payment, personal injury or
property damage from said Gas or other charges thereon which attach after title
passes to Buyer.
ARTICLE XIV NOTICES
14.1 All Transaction Confirmations and other communications ("Communications")
made pursuant to the Contract shall be made as follows:
Rochester Gas and Electric Corp. MidCon Gas Services Corp.
89 East Avenue P. O. Box 283
Rochester, NY 14649 Houston, TX 77001-0283
Attn: Julie White Attn: Gas Purchase Accounting Dept.
Phone: (716) 771-2239 Fax: (713) 963-3036
Fax: (716) 724-8142
14.2 All invoices and payments shall be made as follows:
Rochester Gas and Electric Corp. MidCon Gas Services Corp.
89 East Avenue P. O. Box 201689
Rochester, NY 14649 Houston, TX 77216-1689
Attn: Treasury Department Fax: (713) 963-3036
Fax: (716) 724-8432
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Wire Transfer: Wire Transfer:
RG&E MGSC
---- ----
Confirmation of Transfer:
Paul Panhorst
Phone: (708) 691-2568
14.3 Either party may modify any information specified above by written
notice to the other party.
14.4 All Communications, invoices and payments ("Notices") required hereunder
may be sent by telecopier or generally accepted electronic means, a nationally
recognized overnight courier service, first class mail or hand delivered.
14.5 Notices sent by telecopy shall be deemed to have been received upon the
sending party's receipt of its telecopier's confirmation thereof. Notice by
overnight mail or courier shall be deemed to have been received on the next
Business Day after it was sent or such earlier time as is confirmed by the
receiving party. Notice delivered by hand shall be deemed to be received at the
time it is delivered to an officer or to a responsible employee of the receiving
party. Notice via first class mail shall be considered delivered two Business
Days after mailing.
ARTICLE XV FINANCIAL RESPONSIBILITY
15.1 When reasonable grounds for insecurity of payment arise either party may
demand adequate assurance of performance. Adequate assurance shall mean
sufficient security in the form and for the term specified by Seller, including,
but not limited to, a standby irrevocable letter of credit, a prepayment, a
security in an asset acceptable to Seller or a guarantee by a credit worthy
entity. In the event either party shall (i) make an assignment or any general
arrangement for the benefit of creditors; (ii) default in the payment obligation
to the other party; (iii) file a petition or otherwise commence, authorize, or
acquiesce in the commencement of a proceeding or cause under any bankruptcy or
similar law for the protection of creditors or have such petition filed or
proceeding commenced against it; (iv) otherwise become bankrupt or insolvent
(however evidenced); (v) be unable to pay its debts as they fall due; or (vi)
fail to give adequate assurance of its ability to perform its obligations under
the Contract within forty-eight (48) hours of a reasonable request by the other
party, then the other party shall have the right to either withhold and/or
suspend deliveries, or terminate the Contract without prior notice, in addition
to any and all other remedies available hereunder.
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Seller may immediately suspend deliveries to Buyer hereunder in the event Buyer
has not paid any amount due Seller hereunder on or before the second day
following the date such payment is due.
15.2 Each party reserves to itself all rights, set-offs, counterclaims, and
other defenses which it is or may be entitled to arising from or out of the
Contract.
ARTICLE XVI FORCE MAJEURE
16.1 Except with regard to a party's obligation to make payments due under
the Contract, neither party shall be liable to the other for a failure to
perform its obligations hereunder, if such failure was caused by Force Majeure.
As used herein, the term "Force Majeure" shall mean an unforeseen occurrence or
event beyond the control of the party claiming excuse which partially or
entirely prevents that party's performance of its obligations, except the
obligation to make payments due under any transaction.
16.2 The party whose performance is prevented by Force Majeure must provide
notice to the other party. Initial notice may be given orally; however, written
notification with particulars of the event or occurrence is required as soon as
reasonably possible. Upon providing written notification of Force Majeure to
the other party, the affected party will be relieved of its obligation to
make/accept delivery of Gas to the extent and for the duration of Force Majeure
and neither party shall be deemed to have failed in such obligations to the
other during such occurrence or event.
16.3 Force Majeure shall include but not be limited to the following: (i)
physical events such as acts of God, landslides, lightning, earthquakes, fires,
storms or storm warnings which result in evacuation of the affected area,
floods, washouts, explosions, breakage or accident or necessity of repairs to
machinery or equipment or lines of pipe, weather related events such as
hurricanes or freezing or failure of wells or lines of pipe which affects an
entire geographic region; (ii) acts of others such as strikes, riots, sabotage,
insurrections or wars; (iii) governmental actions such as necessity for
compliance with any court order, law, statute, ordinance, or regulation
promulgated by a governmental authority having jurisdiction; and (iv) any other
causes, whether of the kind herein enumerated or otherwise not reasonably within
the control of the affected party. Seller and Buyer shall make reasonable
efforts to avoid Force Majeure and to resolve the event or occurrence once it
has occurred in order to _____ne performance.
16.4 Neither party shall be entitled to the benefit of the provisions of
Force Majeure to the extent performance is affected from any or all of the
following circumstances: (i) the sole or contributory negligence of the party
claiming excuse; (ii) the party claiming excuse failed to remedy the condition
and to resume the performance of such covenants or obligations with
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reasonable dispatch; (iii) economic hardship. Force Majeure shall not excuse
the party's, claiming Force Majeure, responsibility for Imbalance Charges.
16.5 Notwithstanding anything to the contrary herein, the parties agree that
the settlement of strikes, lockouts or other industrial disturbances shall be
entirely within the discretion of the party experiencing such disturbance.
ARTICLE XVII GOVERNMENTAL REGULATION
17.1 This Contract and all provisions herein will be subject to all
applicable and valid statutes, rules, orders and regulations of any Federal,
State, or local governmental authority having jurisdiction over the parties,
their facilities, or Gas supply, this Base Contract or Transaction Confirmation
or any provisions thereof.
17.2 Neither party will be held in default for failure to perform under this
Contract, if such failure is due to compliance with such rules, regulations,
laws, orders or directives of any State, Federal or other governmental
regulatory authority.
ARTICLE XVIII TERM
18.1 This Base Contract shall remain in effect for one month from the date
hereof and from month to month thereafter unless terminated by either party on
thirty (30) days advance written notice; provided, however, that, except as
provided in Section 4.3 if one or more Transaction Confirmations are in effect,
termination shall not be effective until the expiration of the latest Delivery
Period of such Transaction Confirmation(s). The obligations of Buyer to make
payment hereunder for Gas which has been delivered and the obligation of Seller
to indemnify Buyer, and Buyer to indemnify Seller, pursuant hereto shall survive
the termination or cancellation of the Contract or Transaction Confirmation.
ARTICLE XIX DISPUTE RESOLUTION
19.1 In the event a dispute arises between Buyer and Seller, or the
successors or assigns of either of them, regarding the application or
interpretation of any provision of this Base Contract or a Transaction
Confirmation, the aggrieved party shall promptly notify the other party of its
intent to invoke this dispute resolution procedure after such dispute arises.
If the parties shall have failed to resolve the dispute within ten Business Days
after delivery of such notice, each party shall, within five Business Days
thereafter, nominate a senior officer of its management to meet at a mutually
agreed location to resolve the dispute.
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ARTICLE XX MISCELLANEOUS
20.1 This Contract shall be binding upon and inure to the benefit of the
successors, assigns, personal representatives, and heirs of the respective
parties hereto, and the covenants, conditions, and obligations of this Contract
shall run for the full term of this Contract. No assignment of this Contract,
in whole or in part, will be made without the prior written consent of the non-
assigning party, which consent will not be unreasonably withheld.
20.2 If any provision in this Contract is determined to be invalid, void or
unenforceable by any court having jurisdiction, such determination shall not
invalidate, void, or make unenforceable any other provision, agreement or
covenant of this Contract.
20.3 No waiver of any breach of this Contract shall be held to be a waiver of
any other or subsequent breach. All remedies afforded in this Contract shall be
taken and construed as cumulative.
20.4 This Contract sets forth all understandings between the parties
respecting the subject matter of each transaction and any prior contracts,
understandings and representations, whether oral or written, representing this
subject matter are merged into and superseded by the Base Contract and any
effective Transaction Confirmation(s). This Contract may only be amended in
writing.
20.5 This Contract may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument. As used herein, the singular of any term shall include the
plural.
20.6 The interpretation and performance of this Contract shall be governed by
the laws of New York, excluding, however, any conflict of laws rule which would
apply to the law of another jurisdiction.
20.7 The terms of this Contract and of any Transaction Confirmation entered
into pursuant hereto, including but not limited to the Contract Price, the
Contract Quantity, the Delivery Period, the identified Transporter(s), and all
other material terms thereof shall be kept confidential by the parties hereto
for one year from the expiration of such Transaction, except to the extent that
any information must be disclosed to a third party for the purpose of
effectuating transportation of Gas subject to the Contract or to meet New York
Mercantile Exchange requirements or governmental filing requirements where
necessary, in which case the disclosing party will immediately notify the other
party.
20.8 No party shall record any discussion between the parties without first
obtaining the written consent of the other party. The parties agree that any
unauthorized recording may not be used in any proceedings between the parties.
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20.9 Compliance with the confirmation procedures of Article I satisfies any
"writing" requirements imposed under the Uniform Commercial Code or any other
applicable contract law.
IN WITNESS WHEREOF, parties hereto have caused their names to be signed
and executed in duplicate on this ____ day of ____________, 199__.
________________________________
(Company)
By: ___________________________
Title: ____________________________
________________________________
(Company)
By: ___________________________
Title: ____________________________
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EXHIBIT A
--------------------------------------------------------------
Date: ____________, 199__
TRANSACTION CONFIRMATION Transaction Confirmation #: ___________________
--------------------------------------------------------------
====================================================================================================================
Please deliver to ____________________________ immediately.
Please notify _________________ in writing by tomorrow's Business Day if you are NOT in Agreement.
SELLER: BUYER:
______________________________________________________ ____________________________________________________________
______________________________________________________ ____________________________________________________________
______________________________________________________ ____________________________________________________________
Attn: ________________________________________________ Attn: ______________________________________________________
Phone: _______________________________________________ Phone: _____________________________________________________
Fax: _________________________________________________ Fax: _______________________________________________________
- --------------------------------------------------------------------------------------------------------------------
Contract Price: $__________/MMBtu Delivery Period:
From _____________, 199__ to _____________, 199__
- --------------------------------------------------------------------------------------------------------------------
Contract Quantity: Payment Method:
[ ] ________ MMBtus/____ [ ] Check
(No Intramonth Swing) [ ] Wire
[ ] From ________ to ________ MMBtus/day [ ] ACH
(Intramonth Swing)
- --------------------------------------------------------------------------------------------------------------------
(If a pooling point is used, list a specific geographic and pipeline location)
Delivery Point(s): _________________________________________________________
- --------------------------------------------------------------------------------------------------------------------
Performance Obligation: Select One
[ ] Interruptible
[ ] Priority Interruptible
[ ] Secondary Firm
[ ] Primary Firm
[ ] EFP
Special Conditions:
- --------------------------------------------------------------------------------------------------------------------
[ ] This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated _________, 199__.
- --------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------
By: (Buyer) ______________________________________ By: (Seller) ______________________________________________
Title: ____________________________________________ Title: _____________________________________________________
Date: _____________________________________________ Date: ______________________________________________________
====================================================================================================================
W1:41317
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