Exhibit 10.1
*** INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED, ALL SUCH MATERIAL HAS BEEN FILED WITH THE
COMISSION PURSUANT TO RULE 24b OF THE SECURITIES EXCHANGE ACT OF 1934.
AGREEMENT
THIS AGREEMENT made and entered into this 14th day of Sep., 1999, by and
between BOSTON GAS COMPANY, a Massachusetts corporation, ESSEX GAS COMPANY, a
Massachusetts corporation and COLONIAL GAS COMPANY a Massachusetts corporation
hereinafter jointly referred to as "Buyer", and El Paso Energy Marketing
Company, a Delaware corporation, hereinafter referred to as "Seller"
WITNESSETH THAT:
WHEREAS, Buyer desires to retain a manager for certain of its natural Gas
resource portfolio under the terms and conditions of this Agreement; and
WHEREAS, Buyer desires to purchase natural Gas from Seller under the terms
and conditions of this Agreement; and
WHEREAS, Seller desires to provide portfolio management services under the
terms and conditions of this Agreement; and
WHEREAS, Seller desires to sell natural Gas to Buyer under the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and benefits to
be derived hereunder, Buyer and Seller agree as follows;
ARTICLE I
DEFINITIONS
Unless expressly stated otherwise, the following terms as used in this
Agreement shall mean:
1.1 The term "Algonquin" shall mean the Algonquin Gas Transmission Company.
1.2 The term "Btu" shall mean British Thermal Unit(s) which shall mean that
amount of heat energy required to raise the temperature of one
avoirdupois pound of water from fifty-nine-degrees Fahrenheit to
sixty-degrees Fahrenheit at standard atmospheric pressure, as determined
on a dry basis. All prices and charges paid hereunder shall be computed
on a "dry" Btu basis.
1.3 The term "Buyer's Unbundling Program" shall mean the methodology by
which Buyer, each Month, implements the mandatory assignment of a
pro-rata share Of its pipeline and underground storage resources and
certain Gas supplies to third party suppliers on behalf of existing
transportation customers and customers converting from sales to
transportation service.
1.4 The term "Canadian Index" shall mean a transfer price from Buyer to
Seller of $0.00 per MMBtu with title transfer of the Gas occurring at
the respective receipt points into Tennessee Gas Pipeline and Iroquois
Gas Transmission for those volumes reflected in Appendix 1 and
identified as Canadian Supply under the heading Gas Commodity Contract
Volumes. Both Buyer and Seller understand that these volumes are subject
to change each Month during the Term of this Agreement as a direct
result of Buyer's Unbundling Program.
1.5 The term "Day" shall mean the period of time beginning at 9:00 a.m.,
Central Clock Time, on a calendar day and ending at 9.00 a.m., Central
Clock Time, on the following calendar day.
1.6 The term "Delivery Points" shall mean those city gate meter stations
connected to the Tennessee Gas Pipeline and Algonquin Gas Transmission
system as listed in Appendix 1.
1.7 The term "DTE". shall mean the Massachusetts Department of
Telecommunications and Energy.
1.8 The term "Ending Underground Storage Balance" means the quantity of Gas
that is physically in Buyer's total underground storage accounts as of
October 31, 2002.
1.9 The term "Enron Index" shall mean those volumes identified in Appendix 1
as Enron Supply. Both Buyer and Seller understand' that these volumes
are subject to change each Month during the Term of this Agreement as a
direct result of Buyer's Unbundling Program. From time to time, Seller
shall be required to take title. to the Enron Supply at a $0.00 per
MMBtu transfer price at the interconnection between Tennessee and
Algonquin at Mendon, MA and redeliver like volumes, less applicable
transport fuel, to Boston Gas' Delivery Point(s) off of Algonquin. Upon
start up of the Sable Offshore Energy Project, ("SOEP") all or a portion
of the volumes identified as Enron Supply may be replaced, at Buyer's
option, with supplies delivered from Imperial Oil via Maritimes and
Northeast Pipeline and Tennessee to the Delivery Points. All Imperial
Oil volumes, not to exceed 43,200 MMBtu/Day, will be nominated,
scheduled and paid for by Buyer. Subsequent to the start up of SOEP, the
parties understand and agree that this index may include both the Enron
Supply and Imperial Oil volumes of up to 43,200 MMBtu/Day for a period
of up to ninety Days at Buyers discretion.
1.10 The term "FERC" shall mean the Federal Energy Regulatory Commission.
1.11 The term "Force Majeure" shall mean an event as defined in section 11.3
of this Agreement.
1.12 The term "Gas" shall mean quality Gas as defined in the FERC Gas Tariffs
of Texas Eastern Transmission, Texas Gas Transmission, Tennessee Gas
Pipeline, Transcontinental Pipeline, CNG Transmission, National Fuel Gas
Supply, Iroquois Gas Transmission, Honeoye Storage Company, Algonquin
Gas Transmission and Maritimes and Northeast Pipeline L,L.C.
1.13 The term "Gas Commodity Contract Volumes" means Buyer's Gas supply
contract volumes as identified on Appendix 1.
1.14 The term "Initial Underground Storage Balance" shall mean that quantity
of Gas that is physically in Buyer's total underground storage accounts
as of November 1, 1999.
1.15 The term "MMBtu" shall mean one million (1,000,000) Btus.
1.16 The term "Month" shall mean the period of time beginning on the first
Day of each calendar month and ending on the first Day of the following
calendar month.
1.17 The term "NYMEX" shall mean the New York Mercantile Exchange for Natural
Gas Futures Contracts.
1.18 The term "Off-Peak Period" shall mean the period of time beginning on
the first Day of May and ending on the last Day of October.
1.19 The term "Off-Peak Period Baseload Index" shall mean the weighted
average Gas price as reflected in Inside FERC First of the Month's
Pricing Report for Tennessee zone 0 and zone 1 and for the Tetco STX,
WLA ELA, and ETX supply areas, associated with Buyer's long haul
transportation contracts listed in Appendix 1 and not allocated to the
Canadian Index, Enron Index or Sonat Index.
1.20 The term "Off-Peak Period Swing Index" shall mean the weighted average
Gas price as reflected in Pasha's Gas Daily Pricing Report for Tennessee
zone 0 and zone 1 and for the Tetco STX, WLA, ELA, and ETX supply areas
associated with Buyer's long haul transportation contracts listed in
Appendix 1 and not allocated to the Canadian Index, Enron Index or Sonat
Index.
1.21 The term "Peak Period" shall mean the period of time beginning on the
first Day of November and ending on the last Day of April.
1.22 The term "Peak Period Baseload Index " shall mean the weighted average
Gas price as reflected in Inside FERC First of the Month's Pricing
Report for Gas Delivered to Pipelines for the applicable Month for the
applicable supply area capacity associated with the transportation
contracts listed in Appendix I not allocated to the Canadian Index,
Enron Index or Sonat Index.
1.23 The term "Peak Period Swing Index" shall mean the weighted average Gas
price as reflected in Pasha's Gas Daily Pricing Report for the
applicable supply capacity associated with the transportation contracts
listed in Appendix 1 not allocated to the Canadian Index, Enron Index,
or Sonat Index.
1.24 The term "Sonat Index" shall mean those volumes identified in Appendix 1
as Sonat Supply and shall have a $0.00 per MMBtu transfer price plus
applicable Variable Charges to the Delivery Points with title transfer
occurring at the Sonat and Buyer's supply aggregation agreement on
Tennessee's zone 0, 100 leg and zone 1, 500 leg, The Sonat Index will be
eliminated for purposes of the pricing hierarchy set forth in Article
III below effective April 1, 2000.
1.25 The term "Storage WACOG" shall mean the Buyer's weighted average cost of
all underground storage Gas.
1.26 The term "Tennessee" shall mean the Tennessee Gas Pipeline Company.
1.27 The term "Term" shall mean the period commencing on November 1, 1999 and
ending on October 31, 2002.
1.28 The term "Transporters" shall mean any of the following, Texas Eastern
Transmission, Texas Gas Transmission, Tennessee Gas Pipeline,
Transcontinental Gas Pipeline, CNG Transmission, National Fuel Gas
Supply, Iroquois Gas Transmission, Honeoye Storage Company, Algonquin
Gas Transmission Company and Maritimes and Northeast Pipeline L.L.C.
1.29 The term "Variable Charges" shall mean all applicable Transporter
transportation commodity and fuel charges and all Transporter storage
injection, withdrawal and fuel charges and any other surcharges
associated with delivery of Buyer's Gas to the Delivery Points, based
upon the pricing hierarchy as reflected in Section 3.1.
ARTICLE-II
QUANTITY AND NOMINATIONS
2.1 Nominated Quantity . Subject to the terms and conditions of this
Agreement, Buyer will nominate, purchase and receive and Seller will
sell and deliver on a firm basis on each Day of the Term hereof, a
quantity of Gas up to the MDQ as defined in section 2.2 below.
2.2 Maximum Daily Quantity ("MDQ"). Notwithstanding anything to the contrary
herein, the MDQ of Gas that Buyer is entitled to purchase and receive
and that Seller is obligated to sell and deliver on each Day of the Term
hereof, shall be as follows: for the period November 16 through April 15
the MDQ is 536,011 MMBtu, for the period April 16, through May 31, the
MDQ is 517,038 MMBtu, for the period June 1 through September 30, the
MDQ is 466,438 MMBtu, for the period October 1 through November 14 the
MDQ is 517,038, and for the Day of November 15, the MDQ is 507,689. Both
Buyer and Seller understand that the MDQ shall be adjusted Monthly and
or Daily to reflect certain instances including, but not limited to,
application of underground storage withdrawal ratchets, Buyer's
Unbundling Program and Transporters' restrictions affecting secondary
firm capacity.
2.2.1 Quantities in Excess of the MDQ. From time to time during the term of
this Agreement, Seller may sell and Buyer may purchase quantities in
excess of the MDQ. The price and terms of such excess sales will be
mutually agreed upon by Seller and Buyer prior to delivery. Provided
however, that nothing contained in this section 2.2.1 shall prevent
Buyer from purchasing quantities of Gas in excess of the MDQ from a
third party(s) other than Seller.
2.3 Nomination and Delivery Requirements.
2.3.1 Monthly Nomination. On or before 12:00 Noon Central Time and three
business Days prior to the first Day of the following Month, Buyer will
provide Seller with a nomination specifying the total daily quantity of
Gas to be purchased and received under this Agreement for each Day
during the following Month, ("Daily Nominated Quantity"). Such
nomination by Buyer shall include the volumes indicated as Peak Period
Index Baseload or Off-Peak Period Baseload Index volumes pursuant to
section 3.1.1 below.
2.3.2 Daily Adjustments. On or before the applicable Transporters nominations
deadlines for the next Day, Buyer may adjust its Daily Nominated
Quantity prospectively for any Day during the remainder of that Month.
2.3.3 Intra-Day Adjustments. On or before the applicable intra-Day
Transporters nomination deadline, Buyer may adjust its Daily Nominated
Quantity for the remainder of that Day. In the event that Buyer requests
an intra-Day adjustment, the Parties shall work together to utilize the
intra-Day flexibility associated with the contracts listed in Appendix I
in making such adjustments.
2.3.4 Manner of Submitting Nominations. Buyer may provide the nominations set
forth above in this section either orally or by fax, but any oral
nomination must be followed by written confirmation within twenty-four
(24) hours. By 3:30 P.M. Eastern time each Day, Seller shall provide
volume allocations by contract and delivery point consistent with
Buyer's nominations for the following Day.
2.3.5 Points of Delivery. Seller will deliver volumes of Gas nominated by
Buyer to points designated by Buyer as provided by the applicable
contracts or such other points as the parties may mutually agree.
2.4 Remedies for Failure to Deliver.
2.4.1 Seller's Failure to Deliver. Except for an event of Force Majeure, if
Seller fails to deliver to Buyer the Daily Nominated Quantity, and such
failure to deliver is not excused under this Agreement, then Seller
shall reimburse Buyer an amount, if positive, between the price Buyer
pays for a delivered substitute supply of Gas and the Commodity Price,
multiplied by the quantity of Gas Seller fails to deliver in accordance
with this section, plus $ *** per MMBtu, multiplied by the quantity of
Gas Seller fails to deliver. Buyer agrees to act in good faith in
purchasing such substitute supplies of Gas so as to minimize Seller's
reimbursement costs hereunder. In the event Seller fails to deliver for
any continuous period in excess of one (1) Day, Buyer may terminate this
Agreement in accordance with the provisions of section 5.2 below.
2.4.2 Liquidating Damages. Should Seller's failure to deliver occur on a Day
Buyer is unable, utilizing reasonable efforts, to obtain a delivered
substitute supply, then in addition to any amounts owed by Seller to
Buyer pursuant to Section 2.4.1, Seller shall pay to Buyer $ *** per
MMBtu multiplied by the quantity Seller fails to deliver. Such amount
represents Buyer's damages difficult to quantify and constitute
liquidated damages and not a penalty.
2.4.3 Sole and Exclusive Remedy. The remedies set forth in Sections 2.4.1 and
2.4.2 shall be Buyer's sole and exclusive remedy for Seller's failure to
deliver Gas hereunder.
2.4.4 Corporate Guaranty. Seller shall cause its parent corporation, which
shall have total stockholders' equity of at least $200,000,000, to
execute and maintain in effect throughout the term of this Agreement a
valid and binding guaranty of Seller's obligations under this Agreement
to Buyer substantially in the form attached hereto as Appendix 2, or
provide such other form of guaranty as may be acceptable to Buyer in its
sole discretion.
ARTICLE III
PRICE
3.1 Commodity Price.
3.1.1 Quantities Within MDQ. The price for Gas delivered hereunder up to the
MDQ will be referred to as the "Commodity Price" and shall be equal to
the following pricing hierarchy:
CANADIAN INDEX: 0 up to the sum total of Buyer's entitlements on the
Canadian contracts identified in Appendix 1 stated in MMBtu's
per Day shall be equal to the Canadian Index plus applicable
Variable Charges.
ENRON INDEX: The next quantities., as specified below, shall be equal to
the Enron Index plus applicable Variable Charges, Provided
however, the maximum volumes to be priced at the Enron Index
shall be adjusted each Month in accordance with the Buyer's
Unbundling Program.
(a) prior to the start up of the Sable Offshore Energy
Project, 35,000 MMBtu/Day;
(b) for the first 90 Days after the start up of the Sable
Offshore Energy Project, quantities selected by Buyer at
its discretion but not less than 35,000 MMBtu/Day (except
that Buyer may select a volume less than 35,000 MMBtu/Day
consistent with adjustments made to the Enron Supply as a
result of Buyer's Unbundling Program) nor more than 78,200
MMBtu/Day;
(c) More than 90 Days after the start up of the Sable Offshore
Energy Project, 43,200 MMBtu/Day.
SONAT INDEX: The next 17,300 MMBtu's per Day shall be equal to the Sonat
Index plus applicable Variable Charges. The Sonat Index will
terminate effective April 1, 2000.
PEAK PERIOD
BASELOAD INDEX: In the Peak Period the next volumes, up to the amount
indicated by Buyer in accordance with this section, but not to
exceed Buyer's MDQ less the Storage WACOG tier, less the
Canadian Index tier, less the Enron Index tier and less the
Sonat Index tier, shall be equal to the Peak Period Baseload
Index plus applicable Variable Charges. On or before the 25th
Day of each Month, Buyer will indicate the volumes that will
be subject to the Peak Period Baseload Index for the following
Month. If Buyer fails to take delivery of volumes it indicates
as Peak Period Baseload index volumes, and such failure to
take is not excused under the Agreement, then, Buyer shall
reimburse Seller the amount, if any, by which the price Seller
is able to obtain by reselling volumes not taken is exceeded
by the Peak Period Baseload Index. Seller shall act in good
faith to resell such volumes in a commercially reasonable
manner so as to minimize Buyer's reimbursement costs
hereunder.
PEAK PERIOD
SWING INDEX: In the Peak Period the next volumes, up to Buyer's MDQ less
the Storage WACOG tier, less the Canadian Index tier, less the
Enron Index tier, less the Sonat Index tier and the less the
Peak Period Baseload Index tier shall be equal to the Peak
Period Swing Index plus applicable Variable Charges.
OFF-PEAK PERIOD
BASELOAD INDEX: In the Off-Peak Period the next volumes, up to the amount
indicated by Buyer pursuant to this section, but not to exceed
Buyer's MDQ less the Storage WACOG tier, less the Canadian
Index tier, less the Enron Index tier and less the Sonat Index
tier, shall be equal to the Off-Peak Period Baseload Index
plus applicable Variable Charges. On or before the 25 th Day
of each Month, Buyer will indicate the volumes that will be
subject to the Off-Peak Period Baseload Index for the
following Month. If Buyer fails to take delivery of volumes it
indicates as Off-Peak Period Baseload Index volumes, and such
failure to take is not excused under the Agreement, then,
Buyer shall reimburse Seller the amount, if any, by which the
price Seller is able to obtain by reselling volumes not taken
is exceeded by the Off-Peak Period Baseload Index. Seller
shall act in good faith to resell such volumes in a
commercially reasonable manner so as to minimize Buyer's
reimbursement costs hereunder.
OFF-PEAK PERIOD
SWING INDEX: In the Off-Peak Period the next volumes up to Buyer's MDQ less
the Storage WACOG tier, less the Canadian Index tier, less the
Enron Index tier, less the Sonat Index tier and less the
Off-Peak Period Baseload Index tier shall be equal to the
Off-Peak Period Swing Index plus applicable Variable Charges.
STORAGE WACOG: All remaining volumes, up to Buyer's MDQ, shall be equal to
the Storage WACOG plus applicable Variable Charges.
3.1.2 Buyer's Right to Fixed Pricing. Buyer shall retain the right to convert
any Baseload Volume Index price to a fixed price for any portion of the
MDQ for any Month(s) during the Term of this Agreement, provided any
converted volumes are specifically within the following Commodity Price
tiers: Sonat Index, Peak Period Baseload Index, Peak Period Swing Index,
Off-Peak Period Baseload Index or Off-Peak Period Swing index. Such
fixed pricing shall be defined as the applicable NYMEX based price plus
a mutually agreed upon basis differential, Buyer must notify Seller of
any change to fixed pricing for any Month on or before three (3) full
business Days prior the last Day of trading for the applicable NYMEX
future contract Month(s). In addition, if Buyer elects to convert to a
fixed price for any of its MDQ, then Buyer will be required to purchase
on each Day during the applicable converted period 100 percent of the
volume that Buyer elected to convert to a fixed price.
3.2 Guaranteed Payment. Buyer agrees to invoice Seller on or before the 15th
Day of each Month during the Term and Seller agrees to pay Buyer an
amount of $ *** , payable in thirty six (36) equal installments of $ ***
on or before the 25th Day of each Month during the Term of this
Agreement to compensate Buyer for the use of Buyer's portfolio. Such
payments shall be made by wire transfer at such location as Buyer may
from time to time designate in writing.
3.3 Transportation and Underground Storage Cost Reimbursement. Buyer shall
reimburse Seller for 100 percent of the transportation and underground
storage reservation charges associated with capacities assigned from
Buyer to Seller pursuant to Article IV during the Term of this
Agreement. In addition, Buyer shall reimburse Seller for 100 percent of
the applicable transportation and underground storage Variable Charges
associated With the delivery of Gas by Seller to Buyer's Delivery Points
up to the MDQ and based upon the pricing hierarchy as reflected in
section 3.11. All Transporter refunds and credits applicable to the Term
of this Agreement associated with capacities assigned from Buyer to
Seller during the Term of this Agreement shall belong to Buyer.
3.4 Underground Storage Refill.
***
3.5 Suspension of Indices, If, during the Term of this Agreement, a
specified index as defined in sections 1.19, 1.20, 1.22 and 1.23 ceases
to be published or is not published for a given Month, or, if a more
appropriate index becomes available then Buyer and Seller shall mutually
agree upon a replacement index.
ARTICLE IV
TRANSPORTATION AND UNDERGROUND STORAGE ASSIGNMENTS
4.1 Assignment of Transportation and Under-ground Storage Contracts to
Seller. Each Month, Buyer shall assign or otherwise provide agency
rights to the specified transportation and underground storage contracts
and related quantities as listed in Appendix 1, as attached hereto. Such
quantities are subject to recall and will be adjusted each Month in
accordance with Buyer's Unbundling Program requirements. Subject to
Article 11 of this Agreement and the limitations set forth in section
4.2.4 below, Seller shall have full and complete control over the
utilization of the contracts and related quantities listed in Appendix
1, including without limitation the manner and timing of any
transportation, injections, and withdrawals of Gas under such contracts,
provided that Seller shall maintain maximum withdrawal rights on each of
the Tennessee FS-MA contract numbers 527, 524 and 2272 at all times
throughout the term of this Agreement and further that Seller shall not
release any Tennessee capacity on contracts 2062, 2025, and 435 upstream
of Zone 4 at any time during the Months of December, January and
February Any incremental charges incurred by either Buyer or Seller as a
result of such utilization by Seller shall be the sole responsibility of
Seller, and Seller shall either pay or credit Buyer for any such charges
incurred by Buyer. All assignments or agency rights from Buyer to Seller
shall be in accordance with all the applicable Transporters' tariff
provisions and shall terminate upon the expiration of this Agreement.
4.1.1 Transfer of Gas in Underground Storage. The Initial Underground Storage
Balance shall be under the control and discretion of Seller effective
with the Term of this Agreement and title to such Initial Underground
Storage Balance shall transfer to Seller as of the effective date of
this Agreement at no cost to Seller. No resale agreement or other
indicia of the transfer other than this Agreement shall be necessary to
evidence such transfer of title. Buyer warrants title to the Initial
Underground Storage Balance and that such Gas is free from liens and
adverse claims of every kind. Buyer will indemnify and save Seller
harmless against all loss, damage and expense of every character on
account of adverse claims to the Initial Underground Storage Balance
prior to transfer of title to Seller. Seller shall ensure that all
tariff provisions and other compliance requirements of underground
storage vendors applicable to Gas in underground storage are met and
penalties are avoided. Any penalties incurred by Buyer or Seller as a
result of Seller's utilization of Gas in underground storage shall be
the sole responsibility of Seller. Prior to April 1st of each year,
Seller and Buyer will agree on underground storage refill volumes to be'
injected into underground storage over the following seven Month period,
such volumes to be priced in accordance with section 3.4 above. Unless
otherwise agreed to in writing prior to March 15, 2002, at the end of
this Agreement, Seller shall cause Buyers underground storage to be 95
percent full and return control, discretion and title of such Gas in
underground storage to Buyer. Buyer and Seller agree to work together in
complying with all contract termination provisions, including but not
limited to the two (2) underground storage contracts that Buyer is
holder of on National Fuel Gas Supply.
4.1.2 Gas Commodity Contract Volumes. For those Gas Commodity Contract Volumes
identified in Appendix 1, Buyer will transfer and Seller will accept
title to such volumes at the delivery point(s) applicable to each such
Gas Commodity Contract Volumes. All volumes delivered will be adjusted
Monthly in accordance with Buyer's Unbundling Program requirements.
4.2 Responsibility for Transportation and Underground Storage Contracts.
4.2.1 Responsibility for Administration. Subject to the limitations in section
4.2.4 below, Seller shall assume all obligations and rights under the
transportation and underground storage contracts listed in Appendix 1,
including without limitation, the obligation to submit nominations to
all applicable Transporters and to pay all Transporter invoices.
4.2.2 Operational Balancing Agreements. Buyer shall retain all
responsibilities for confirming all of Sellers daily deliveries to
Buyer's city gates covered under Buyers Operational Balancing Agreements
(OBA) for both Tennessee and Algonquin. As such, any imbalances caused
by Seller over or under delivering Buyer's Daily Nominated Quantities
shall be the physical and financial responsibility of Seller. Any
imbalances caused by Buyer physically taking greater or less than Buyers
Daily Nominated Quantities shall be the physical and financial
responsibility of Buyer.
4.2.3 Projected Requirements. Buyer shall periodically provide Seller
information concerning Buyer's expected Gas requirements on its
distribution system. Buyer will also provide Seller information
concerning any known or expected events that will cause material changes
in Buyers daily Gas requirements as soon as the information becomes
known to Buyer. Buyer and Seller agree to work together on a daily basis
to ensure that nominations (including any necessary adjustments thereto)
are made timely on all applicable Transporters and such nominations
reflect, as much as reasonably possible, Buyer's expected requirements.
4.2.4 Modification of Contracts. Seller will fully comply with all terms and
conditions of the contracts listed in Appendix 1. Seller shall not
amend, extend or cause the early termination of any transportation,
underground storage or Gas Commodity Contract of Buyer which is subject
to this Agreement without the prior consent of Buyer. In the event such
consent is provided orally it shall be followed up in writing by Buyer
within 24 hours.
ARTICLE V
TERM OF AGREEMENT
5.1 Primary Term. This Agreement shall become effective on November 1, 1999
and shall remain in full force and effect through October 31, 2002,
5.2 Early Termination. If either Party commits and has been notified in
writing of a material breach of any provision of this Agreement not
excused by a Force Majeure event, and fails to cure such breach within
twenty four hours of such written notice, this Agreement may be
immediately terminated by the non-breaching party.
5.3 Winding Up. At the end of the primary term or any other termination of
this Agreement, Seller shall immediately assign back to Buyer all of
Buyer's right, title and interest in the contracts listed on Appendix I
free and clear of all claims, liens, encumbrances, restrictions and
defects in title of any nature incurred as a result of Seller's acts or
omissions.
ARTICLE VI
TITLE AND TAXES
6.1 Transfer of Title, Possession and Control. Title to the Gas sold
hereunder shall pass from Seller to Buyer upon delivery of said Gas to
the Delivery Points as reflected in Appendix 1. As between the Parties
hereto, Seller shall be deemed to be in control and possession of all
Gas delivered hereunder and shall indemnify and hold Buyer harmless from
any damage, injury or losses which occur prior to the delivery to Buyer
at the Delivery Points; otherwise, Buyer shall be deemed to be in
exclusive control and possession thereafter and shall indemnify and hold
Seller harmless from any other injury, damage or losses.
6.2 Warranty of Title. Except as set forth below, Seller warrants title to
all Gas delivered hereunder by Seller, including the Ending Underground
Storage Balance or that Seller has the right to sell the same, and that
such Gas is free from liens and adverse claims of every kind. Seller
will indemnify and save Buyer harmless against all loss, damage and
expense of every character on account of adverse claims to the Gas
delivered by it before delivery to Buyer.
6.3 Taxes. Other than ad valorem taxes on underground storage Gas which are
subject to section 6.4 below, Buyer shall reimburse Seller for any
taxes, fees or charges other than an income tax, which are levied by a
governmental or regulatory body on the Gas sold under this Agreement.
6.4 Ad Valorem Taxes. If any underground storage Gas is subject to ad
valorem property taxes during the term of this Agreement, Buyer shall be
responsible for payment of such taxes regardless of whether title to
such underground storage Gas is held by Buyer or Seller except if Seller
injects Gas into underground storage for its own account or withdraws
Gas from underground storage for purposes other than meeting the city
gate requirements of Buyer, then Seller shall be responsible for payment
of all applicable ad valorem taxes on the amounts so injected or
withdrawn.
ARTICLE VII
QUALITY AND PRESSURE
7.1 Pressure Requirements. All Gas delivered at the Delivery Points shall be
at the pressure existing in Tennessee and Algonquin's facilities.
Neither Seller nor Buyer shall be obligated to install or operate
compression facilities.
ARTICLE VIII
MEASUREMENT AND TESTS
8.1 Measurement Point. All Gas sold hereunder shall be measured at the
Delivery Points on Tennessee and Algonquin systems at pressures in
existence at the time of delivery and shall be measured to the unit of
one MMBtu.
8.2 Standards for Measurement and Tests. Unless specified herein to the
contrary, the standards for measurement and tests shall be governed by
those standards set forth in the currently effective Tennessee and
Algonquin tariffs.
ARTICLE IX
BILLING AND PAYMENT
9.1 Billing and Payment. Seller shall render to Buyer, at the address
indicated in Section 12.2 hereof, on or before the third business Day of
each Month an estimate of all Gas volumes purchased during the preceding
Month and on or before the fifteenth (15th) Day of each calendar Month
an invoice for all Gas purchased during the preceding Month, according
to the measurements, computations, and prices provided herein. Invoices
may be based initially upon estimates, but will be corrected to actual
as soon as possible. Buyer agrees to make payment hereunder to Seller
for its account in available funds by wire transfer or by mail at such
location as Seller may from time to time designate in writing. Payment
shall be made by Buyer within ten (10) Days of the date of receipt of
Sellers invoice. Notwithstanding the above, if a good faith dispute
arises between the Parties over the amounts due under the invoice for
any matters, other then any reimbursement for the demand or reservation
charges under the firm transportation and underground storage contracts,
then Buyer will pay that portion of the invoice(s) not in. dispute on or
before the due date and both Parties will continue to perform their
obligations under this Agreement during such dispute.
9.2 Review of Books and Records. For a period of two years after the date of
final billing for the last Month in the Term of this Agreement, Buyer
and Seller shall have the right to inspect and examine, at reasonable
hours, the books, records and charts of the other pertaining to any term
or condition of this Agreement to the extent necessary to verify the
accuracy of any invoice, charge or computation made pursuant to this
Agreement.
ARTICLE X
REGULATORY BODIES
10.1 Laws and Regulations. This Agreement shall be subject to review and
approval by the DTE. In the event such approval is not obtained on or
before October 15 1999 in a form acceptable to Buyer, then this
Agreement shall be null and void and the services contemplated hereunder
shall not commence. This Agreement shall also be subject to all valid
applicable governmental laws and orders, including but not limited to
the FERC and DTE, regulatory authorizations directives, rules and
regulations of any governmental body or official having jurisdiction
over the Parties, their facilities, the Gas or this Agreement or any
provision thereof, but nothing contained herein shall be construed as a
waiver of any right to question or contest any such law, order, rule or
regulation in any forum having jurisdiction.
10.2 Applicable Law. This Contract shall be construed in accordance with the
laws of the Commonwealth of Massachusetts, excluding any conflict of
laws and principles of said jurisdiction that might require the
application of the laws of another jurisdiction.
10.3 Changes in Law or Regulation. If any federal or state statute or
regulation or order by a court of law or regulatory authority directly
or indirectly (i) prohibits performance under this Agreement, (ii) makes
such performance illegal or impossible, or (iii) effects a change in a
substantive provision of this Agreement which has a significant material
adverse impact upon the ability of either Party to perform its
obligations under this Agreement, then the Parties will use all
reasonable efforts to revise the Agreement so that:
(a) performance under the Agreement is no longer prohibited, illegal,
impossible or is no longer impacted in a material adverse fashion,
and
(b) the Agreement is revised in a manner that preserves, to the
maximum extent possible, the respective positions of the Parties.
Each Party will provide reasonable and prompt notice to the other Party
as to any proposed law, regulations or any regulatory proceedings or
actions that could affect the rights and obligations of the Parties. If
the Parties are unable to revise the Agreement in accordance with the
above, then the Party whose performance is rendered prohibited, illegal,
impossible or is impacted in a material adverse manner shall have the
right, at its sole discretion, to suspend this Agreement upon written
notice to the other Party. Either Party may then terminate this
Agreement upon 30 Days written notice to the other Party.
ARTICLE XI
FORCE MAJEURE
11.1 Suspension of Receipt and Delivery obligations. If Buyer or Seller is
rendered unable, wholly or in part, by Force Majeure to perform
obligations under this Agreement, other than the obligation to make
payments due under this Agreement, it is agreed that the performance of
the respective obligations of Seller and Buyer to deliver or purchase
and receive Gas, so far as they are affected by Force Majeure, shall be
excused and suspended from the inception of any such inability until it
is corrected, but for no longer period. Buyer or Seller, whichever is
claiming such inability, shall give notice thereof to the other as soon
as practicable after the occurrence of the Force Majeure, Such notice
may be given orally or in writing but, if given orally, it shall be
promptly confirmed in writing, giving reasonably full particulars. Such
inability shall be promptly corrected to the extent it may be corrected
through the exercise of reasonable diligence by the Party claiming
inability by reason of Force Majeure.
11.2 Liability During Force Majeure. Neither Buyer nor Seller shall be liable
to the other for any losses or damages, regardless of the nature thereof
and however occurring, whether such losses or damages be direct or
indirect, immediate or remote, by reason of, caused by, arising out of
or in any way attributable to suspension of the performance of any
obligation of either Party to the extent that such suspension occurs
because a Party is rendered unable, wholly or in part, by Force Majeure
to perform its obligations.
11.3 Force Majeure. 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:
11.3.1 Acts of God. The term acts of God, including earthquakes, epidemics,
fires, floods, landslides, lightning, storms, washouts, weather related
events such as hurricanes or freezing or failure of wells or lines of
pipe used to supply the Gas described in this Agreement which prevents
delivery to the delivery points, and other similar, unusual and severe
natural calamities.
11.3.2 Acts of the public enemy, wars, blockage, insurrections, riots. civil
disturbances and arrests.
11.3.3 Strikes, lockouts or other industrial disturbances.
11.3.4 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 Buyer to receive Gas under this Agreement, including without
limitation to equipment, facilities or lines of pipe related to Buyers
liquefied natural gas facilities.
11.3.5 The temporary inability of Transporters to receive, transport or deliver
the Gas described in this Agreement; or
11.3.6 Any other cause of a similar type, provided that such cause satisfies
each of the three conditions referenced in Section 11.3 hereof (i.e.
"(i)-(iii)"
11.4 Termination. If a Force Majeure event continues for a period of two (2)
Days, and the parties, working together in good faith, have been unable
to resolve such Force Majuere event, then the Party which did not claim
such Force Majeure may at any time thereafter terminate this Agreement
upon forty eight (48) hours prior written notice to the extent the Force
Majeure event has not been corrected prior to the expiration of such
notice period.
ARTICLE XII
MISCELLANEOUS
12.1 Confidentiality. Except as otherwise provided herein, Seller and Buyer
agree to maintain the confidentiality of the price provisions of this
Agreement and Seller and Buyer agree not to divulge same to any third
Party except to the extent, and only to the extent, required by law,
court order or the order or regulation of an administrative agency
having jurisdiction over Buyer and Seller, or the subject matter of this
Agreement. If required to be disclosed, then the Party subject to the
disclosure requirement shall (a) notify the other Party immediately, and
(b) cooperate to the fullest extent in seeking whatever confidential
status may be available to protect any material so disclosed.
12.2 Notices. Except as otherwise expressly provided in this Agreement, every
notice, request, statements and invoices provided in this Agreement
shall be in writing and directed to the Party to whom given, made or
delivered at such Party's address as follows:
Buyer: Boston Gas Company
One Beacon Street
Boston, MA 02108
Attention: Elizabeth C. Danehy
Director of Gas Acquisition & Transportation Services
Telephone: 617-723-5512 ext. 2225
Fax: 617-367-6463
For Payments:
Boston Gas Company
Fleet Bank of Massachusetts
Account # 02-0000-4039-00101
ABA # 011-500-101
Seller: El Paso Energy Marketing Company
1001 Louisiana Street
Houston, TX 77002
Attention: Russell A. Mahan
For Payments:
El Paso Energy Marketing Company
Mellon Bank
Account # 043000261
ABA # 0209517
Either Buyer or Seller may change one or more of its addresses for
receiving invoices, statements, notices and payments by notifying the
other in writing.
12.3 Headings. The Table of Contents and the headings of any article, section
or subsection of this Agreement are for purposes of convenience only and
shall not be interpreted as having meaning or effect.
12.4 Waiver of Default. No waiver by either Party of one or more defaults or
breaches by the other in performance of any of the terms or provisions
of this Agreement shall operate or be construed as a waiver of any
future default or breach, whether of a like or of a different character.
12.5 Entire Agreement. The terms and conditions contained herein constitute
the full and complete agreement between the Parties and any change to be
made must be submitted in writing and agreed to by both Parties,
12.6 Enforceability. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective heirs, successors and
assigns. Each Party represents that it has all necessary power and
authority to enter into and perform its obligations under this Agreement
and that this Agreement constitutes a legal, valid and binding
obligation of that Party enforceable against it in accordance with its
terms, except as such enforceability may be affected by any bankruptcy
law or the application of principles of equity.
12.7 Assignment and Organizational Changes. Seller shall not assign its
rights or obligations under this Agreement without the express written
consent of Buyer. In the event of a Change of Control of Seller
occurring during the term of this Agreement, Buyer shall have the right
to terminate this Agreement upon thirty (30) Days written notice to
Seller. For purposes of this section, 12.7 "Change of Control" means the
occurrence of any one or more of the following events: (a) the
shareholders of Seller approve a merger or consolidation of Seller with
any other entity, (b) the shareholders of Seller approve a plan of
liquidation of Seller or an agreement for the sale or disposition by
Seller of all or substantially all of its assets, or (c) if a majority
of the key individuals at Seller, who at the beginning of this Agreement
are providing the services for Buyer under this Agreement are no
longer employed by Seller.
12.8 Y2K Compliance. Seller expressly warrants and represents that all
computer hardware or software used in Seller's performance of this
Agreement are and will continue to be year 2000 compliant. For purposes
of this section 12.8, the term "year 2000 compliant" means that date
data outside of the range of 1900-1999 will be correctly processed in
any level of computer hardware or software including but not limited to,
microcode, firmware, application programs, files and data bases. In no
event shall any Y2K related failure of any computer hardware or software
relied upon by Seller in the performance of this Agreement be deemed a
Force Majeure event.
12.9 GISB Compliance. Seller warrants and represents that all computer
hardware or software used in Seller's performance of this Agreement is
and will continue to be compatible with the latest software release of
the Gas Industry Standards Board.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed by their respective officers thereunto duly authorized as of the Day
and year first written,
BOSTON GAS COMPANY EL PASO ENERGY MARKETING COMPANY
By: /s/ William R. Luthern By: /s/ Kathleen Eisbrenner
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Signature Signature
William R. Luthern Kathleen Eisbrenner
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Print Name Print Name
Vice President Vice President
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Buyer Seller
ESSEX GAS COMPANY COLONIAL GAS COMPANY
By: /s/ William R. Luthern By: /s/ William R. Luthern
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Signature Signature
William R. Luthern William R. Luthern
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Print Name Print Name
Vice President Vice President
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Buyer Buyer
AMENDMENT TO THE GAS RESOURCE PORTFOLIO MANAGEMENT
AND GAS SALES AGREEMENT BETWEEN BOSTON GAS COMPANY,
COLONIAL GAS COMPANY, AND ESSEX GAS COMPANY AS BUYER
AND EL PASO ENERGY MARKETING COMPANY AS SELLER
DATED SEPTEMBER 14,1999
Whereas, Boston Gas Company, Colonial Gas Company and Essex Gas Company
(hereinafter jointly referred to as "Buyer") and El Paso Energy Marketing
Company ("Seller") are parties to a certain Gas Resource Portfolio Management
and Gas Sales Agreement dated September 14, 1999 (the "Agreement"; and,
Whereas, the parties wish to clarify certain provisions of the Agreement with
respect to the timing of transfer of title to natural gas in Underground
Storage;
And Whereas, the Department of Telecommunications and Energy's October 18, 1999
order in D.T.E. 99-76 approving the Agreement required that the Agreement be
amended to include certain reporting requirements by Seller to Buyer;
Now therefore in accordance with section 12.5 of the Agreement, the parties
agree to the following revisions to the Agreement:
I. Section 4.1.1 of the Agreement is deleted and replaced with the following
Section 4.1.1
4.1.1 Transfer of Gas in Underground Storage. The Initial Underground Storage
Balance shall be under the control and discretion of Seller effective
with the Term of this Agreement. Title to such Initial Underground
Storage Balance shall reside with Buyer so long as the Gas remains in
inventory and shall transfer to Seller upon withdrawal at no cost to
Seller. No resale agreement or other indicia of the transfer other than
this Agreement shall be necessary to evidence such transfer of title.
Buyer warrants title to all Gas withdrawn from Underground Storage and
delivered to Seller hereunder, and further warrants that such Gas is free
from liens and adverse claims of every kind upon such delivery. Buyer
will indemnify and save Seller harmless against all loss, damage and
expense of every character on account of adverse claims to such Gas prior
to the transfer of title from Seller to Buyer. Seller shall ensure that
all tariff provisions and other compliance requirements of underground
storage vendors applicable to Gas in underground storage are met and
penalties are avoided. Any penalties incurred by Buyer or Seller as a
result of Sellers utilization of Gas in underground storage shall be the
sole responsibility of Seller. Prior to April 1st of each year. Seller
and Buyer will agree on underground storage refill volumes to be injected
into underground storage over the following seven Month period, such
volumes to be priced in accordance with section 3.4 above. Unless
otherwise agreed to in writing prior to March 15, 2002, at the end of
this Agreement, Seller shall cause Buyer's underground storage to be 95
percent full and return control, discretion and title of such Gas in
underground storage to Buyer. Buyer and Seller agree to work together in
complying with all contract termination provisions, including but not
limited to the two (2) underground storage contracts that Buyer is holder
of on National Fuel Gas Supply,
II. The phrase "including the Ending Underground Storage Balance" is deleted
from the second line of Section 6.2 of the Agreement.
III. The following section 12.10 is added to the Agreement:
12.10 Affiliate Transactions
Seller shall inform Buyer quarterly as to the terms of any release or
assignment of the portfolio assets listed in Appendix I to a competitive
affiliate, or customers of a competitive affiliate. Such reports shall
indicate that Seller has not released or assigned the portfolio assets
without simultaneously posting the offering electronically on the
bulletin board of the applicable interstate pipeline. For the purposes of
these reports, competitive affiliate shall be defined as any unregulated
affiliate that is engaged in the sale or marketing of products or
services on a competitive basis.
All other terms and conditions of the Agreement shall remain in full force and
effect.
BOSTON GAS COMPANY COLONIAL GAS COMPANY
By: William R. Luthern By: William R. Luthern
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Print Name Print Name
/s/ William R. Luthern /s/ William R. Luthern
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Signature Signature
Vice President Vice President
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Title Title
4 Nov. 99 4 Nov. 99
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Date Date
ESSEX GAS COMPANY
By: William R. Luthern
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Print Name
By: /s/ William R. Luthern
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Signature
Vice President
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Title
4 Nov. 99
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Date
EL PASO ENERGY MARKETING COMPANY
By: Steve Durio
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Print Name
/s/ Steve Durio
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Signature
Vice-President, Marketing
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Title
4 Nov. 99
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Date