E99-11-024
CON
POWER SALES AGREEMENT
between
ELECTRIC CLEARINGHOUSE, INC.
and
CAP ROCK ELECTRIC COOPERATIVE, INC.
Sales by Electric Clearinghouse Inc. will be made
pursuant to Electric Clearinghouse, Inc.'s FERC Rate
Schedule No. 1 (Docket No. ER94-968)
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS 1
ARTICLE 2
TRANSACTIONS AND COMMITMENTS OF THE PARTIES 3
ARTICLE 3
QUANTITY AND INTERRUPTIONS OF FIRM TRANSACTIONS 4
ARTICLE 4
RELIABILITY GUIDELINES 5
ARTICLE 5
PRICE 5
ARTICLE 6
TERM AND DEFAULT 5
ARTICLE 7
BILLING AND PAYMENT 8
ARTICLE 8
DELIVERY POINT, TITLE TRANSFER AND LIABILITY 9
ARTICLE 9
ASSIGNMENT AND SUCCESSION 10
ARTICLE 10
FORCE MAJEURE 11
ARTICLE 11
TAXES 11
ARTICLE 12
MISCELLANEOUS 12
EXHIBIT "A"
FORM OF CONFIRMATION LETTER
POWER SALES AGREEMENT
THIS POWER SALES AGREEMENT (the "Agreement"), made and entered into
this 1st day of May, 1999 by and between Electric Clearinghouse, Inc., a
Texas corporation, hereinafter referred to as Cap Rock Electric Cooperative,
Inc., (Counterparty), a Texas corporation, hereinafter referred to as
"Counterparty" or "Buyer" (individually, the "Party" and collectively, the
"Parties").
WITNESSETH:
WHEREAS, ECI and Counterparty are not end users of Power and the
Power purchased hereunder will not be used for Counterparty's consumption; and
WHEREAS, ECI and Counterparty may from time to time enter into Power
purchase and sale Transactions pursuant to which ECI delivers and sells Power
and Counterparty receives and purchases Power at one or more mutually
agreeable Delivery Points; and
WHEREAS, the Parties desire to set forth certain terms and
conditions applicable to these transactions;
NOW, THEREFORE, in consideration of the mutual agreements, covenants
and conditions herein contained, ECI and Counterparty hereby agree as follows:
ARTICLE 1.
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the
following definitions shall apply hereunder:
"AFFILIATE" means with respect to any person, any other person
(other than an individual) that, directly or indirectly, through one or more
intermediaries. controls, or is control led by or is under common control
with, such person. For purposes of the foregoing definition, "control" means
the direct or indirect ownership of more than fifty percent (50%) of the
outstanding capital stock or other equity interests having ordinary voting
power.
"BUSINESS DAY" means any day on which Federal Reserve member banks
in New York City are open for business.
"BUYER" means the Party to a Transaction hereunder who is obligated
to purchase Power during the Period of Delivery specified for that
Transaction.
"CONFIRMATION LETTER" means a written notice setting forth the
specific terms of a Transaction substantially in the form set forth on
Exhibit "A".
"CONTRACT PRICE" means the agreed price for the purchase and sale of
Power in a Transaction.
"CONTRACT QUANTITY" means that quantity of Power which Seller agrees
to sell to Buyer, and which Buyer agrees to purchase from Seller, in a
Transaction.
"DELIVERY POINT" means the point(s) of delivery agreed to in the
Transaction.
"INTEREST RATE" means the lesser of (i) Prime Rate plus two percent
and (ii) the maximum lawful rate permitted by applicable law.
"NATURE OF TRANSACTION" means whether the Transaction is nonfirm, as
set forth in Section 2.2 of this Agreement, or firm, as set forth in Section
2.3 of this Agreement.
"NEW TAXES" means (i) any Taxes enacted and effective after the date
the New Tax Affected Transaction ("New Tax Affected Transaction" as defined
in Section 11.2 of this Agreement) was entered into, including, without
limitation, that portion of any Taxes or New Taxes that results in an
increase in liability to either Party, or (ii) any law, order, rule or
regulation, or interpretation thereof, enacted and effective after the date
the New Tax Affected Transaction was entered into resulting in such an
increase.
"PENALTIES" means any fees, liabilities, assessments or similar
charges assessed by a Transmission Provider as a result of a Party's failure
to comply with its obligations hereunder.
"PERIOD OF DELIVERY" means the period of time measured from the date
deliveries are to commence under a Transaction through the date deliveries
are to terminate under a Transaction, which period shall not exceed twelve
(12) months.
"POWER" means electric capacity and/or energy.
"PRIME RATE" means for any date, the per annum rate of interest
announced from time to time by Citibank, N.A., as its "prime" rate for
commercial loans, effective for such date as established from time to time by
such bank.
"REGULATORY APPROVALS" means, for any Transaction. all applicable
state and federal regulatory authorizations, consents. or approvals required
for the Transaction to occur.
"SCHEDULE" OR "SCHEDULING" means communicating with and confirming
with a Transmitting Utility that a particular amount of Power is to be
delivered or received and providing all such information and satisfying all
such requirements as may be necessary to cause such Transmitting Utility to
recognize and confirm the delivery or receipt of the Power
"SELLER" means the Party to a Transaction hereunder who is
obligated to sell Power during the Period of Delivery specified for that
Transaction.
"SYSTEM RESOURCES" means the electrical systems on which, or the
third parties with which, Buyer and Seller have arranged, respectively, to
make on behalf of Seller or to take on behalf of Buyer delivery of Power
under this Agreement.
"TAXES" means all ad valorem, property, occupation, utility, gross
receipts, sales, use, excise and other taxes, governmental charges, emission
allowance costs, licenses, permits and assessments, other than taxes based on
net income or net worth.
2
"TRANSACTION" means a particular, specifically agreed to purchase or
sale of Power to be performed under this, as evidenced by the agreement of
the Parties documented in accordance with Section 2.1 of this Agreement.
"TRANSMITTING UTILITY" means the utility or utilities transmitting
Power (not Buyer or Seller) to or from the Delivery Point(s) in an individual
Transaction hereunder.
ARTICLE 2.
TRANSACTIONS AND COMMITMENTS OF THE PARTIES
2.1 FORM OF CONTRACT. A Transaction shall be entered upon
agreement of the Parties in writing, including an electronic means of
communication, or orally. The specific terms of individual Transactions for
the sale and delivery and purchase and receipt of Power hereunder shall be
established by the Parties at the time the Transaction is agreed to and shall
be confirmed by the Parties in the manner set forth in this Section 2.l. The
specific terms to be established by the Parties shall include at a minimum
(i) the Period of Delivery, (ii) the Contract Price, (iii) the Delivery
Point(s), (iv) the Contract Quantity and (v) the Nature of Transaction. Each
Transaction, and the Confirmation Letter, shall constitute an integral part
of this Agreement and shall be read and construed as one with this Agreement.
Any conflict not reasonably capable of reconciliation between this Agreement
and the Confirmation Letter shall be resolved in favor of the Confirmation
Letter. This Agreement does not obligate either Party to engage in any
specific Transaction.
2.2 NONFIRM TRANSACTIONS. For purposes of this Agreement, a
Transaction shall be deemed nonfirm to the extent either Party may be excused
from Scheduling Power for any reason specified in the documentation of the
Transaction (other than an event of force majeure as defined in Article 10).
In the event and to the extent the Transaction is a nonfirm Transaction,
neither Party shall be liable in damages or otherwise to the other for an
interruption of the Scheduling of Power due to one or more event(s) or
cause(s) specified in the documentation of the Transaction. except and to the
extent a Party fails to give to the other Party timely notice of
interruption. Either Party may, at its sole discretion and without liability
(except for failure to provide notice of interruption within the time
specified for such notice in the documentation of the Transaction).
interrupt. in whole or in part, the Scheduling of Power at any time for any
reason, provided that notice of interruption shall be given to the other
Party, and that no such interruption shall be retroactive to any time prior
to giving of notice of interruption. In the event the interrupting Party
fails to give timely notice of interruption. the interrupting Party" shall be
liable only for direct actual damages (as set forth in Section 3.2 below)
resulting from the failure to timely notify and shall only be liable in the
event the non interrupting Party has exercised all reasonable efforts to
Minimize and avoid such damages. The Parties hereby agree that such actual
direct damages shall he computed in the same manner as damages for the
interruption of firm transactions as set forth in Article 3 hereof with
respect to volumes of Power not scheduled for delivery or receipt prior to
notice of interruption and that such damages shall be the sole and exclusive
remedy for such event. Both Parties hereby stipulate that such liquidated
damages are reasonable in light of the anticipated harm and the difficulty of
estimation or calculation of actual damages and each Party hereby waives the
right to contest such damages as an unreasonable penalty.
2.3 FIRM TRANSACTIONS. For purposes of this Agreement, a
Transaction shall be deemed firm to the extent, as specified in the terms of
a Confirmation Letter, a Party may be excused from either Scheduling and
delivering, if the Party is the Seller, or Scheduling and if the Party is the
Buyer, the Contract Quantity only for reasons of force majeure, as defined in
Section 10.1 of this
3
Agreement, or pursuant to the provisions of the last sentence of this
Section. If a Transaction is a firm Transaction and a Party interrupts either
the Scheduling and delivering, if the Party is the Seller, or Scheduling and
receiving, if the Party is the Buyer, of Power for reasons other than those
authorized in the prior sentence, then the interrupting Party shall have the
obligations set forth in Section 3.2 of this Agreement. In addition, the
Parties may agree in specific Transactions to specific circumstances under
which either Party may interrupt without liability.
ARTICLE 3.
QUANTITY AND INTERRUPTIONS OF FIRM TRANSACTIONS
3.1 QUANTITY. The quantity of Power to be Scheduled for
delivery and receipt, subject to the other provisions of the Agreement and in
each Transaction hereunder, shall be the Contract Quantity. The Seller and
the Buyer shall be responsible for any transmission losses and loss charges
relating to the transmission of Power, in the case of the Seller, to the
Delivery Point, and in the case of the Buyer, from the Delivery Point.
3.2 INTERRUPTIONS OF FIRM TRANSACTIONS. If the Transaction is a
firm Transaction, then with respect to the unauthorized failure to Schedule
in whole or in part deliveries or receipts in accordance with this Agreement:
(a) As an alternative to the liquidated damages provision of
Section 3.2(b) below, if the Parties both agree, the nonperforming
Party may Schedule deliveries or receipts, as the case may be, pursuant
to such terms as the Parties agree in order to discharge some or all of
the obligation to pay liquidated damages. In the absence of such
agreement, the liquidated damages provisions of Section 3.2(b) below
shall apply.
(b) If Seller fails to Schedule for delivery the Contract Quantity
then Seller shall pay Buyer an amount for each unit of such deficiency
equal to the positive difference between (i) the price at which Buyer
is, or would be, able to obtain comparable supplies of Power at a
commercially reasonable price and (ii) the applicable Contract Price
(as adjusted to reflect reasonable differences in transmission costs,
if any). If Buyer fails to Schedule for receipt the Contract Quantity,
Buyer shall pay Seller on the date payment would otherwise be due in
accordance with this Agreement an amount for each unit of such
deficiency equal to the positive difference between (i) the applicable
Contract Price (as adjusted to reflect reasonable differences in
transmission costs. if any) and (ii) the price at which Seller is or
would be able to sell comparable supplies of Power at a commercially
reasonable price. The Parties agree further that such payments will
become immediately due and payable hereunder and that the non-
performing Party will pay the aggrieved Party and amounts due pursuant
to this Section 3.2(b) immediately upon demand within two (2) Business
Days of receipt by the non-performing Party of a demand for payment
setting forth the basis and calculation of the amount demanded, such
demand to be sent in accordance with Section 12.3.
(c) Both Parties hereby stipulate that the liquidated damages set
forth in Section 3.2(b) above are reasonable in light of the
anticipated harm and the difficulty of estimation or calculation of
actual damages and each Party hereby waives the right to contest such
damages as unfair, unreasonable, inadequate or void as a penalty.
4
(d) In the event either Buyer or Seller fails to pay to the other
Party any amounts in accordance with Section 3.2(b) above when due, the
aggrieved Party shall have the right to suspend performance under the
Transaction for which such amounts are due until such amounts plus
interest, at the Interest Rate, have been paid, and/or exercise any
remedy available at law or in equity to enforce payment of such amount
plus interest at the Interest Rate.
(e) Unless otherwise specifically agreed in writing, the remedy
set forth in this Section 3.2 shall be the sole and exclusive remedy of
the aggrieved Party for the failure of the other Party to sell or
purchase the Contract Quantity and all other damages and remedies are
hereby waived, provided that this provision in no way limits the
Parties' indemnification obligations as set forth in other provisions
of this Agreement.
ARTICLE 4.
RELIABILITY GUIDELINES
4.1 RELIABILITY GUIDELINES. Each Party agrees to specifically
adhere to the applicable operating policies, criteria and/or guidelines of
the North American Electric Reliability Council ("NERC") and any regional or
subregional requirement.
ARTICLE 5.
PRICE
5.1 PRICE. Buyer agrees to pay Seller the Contract Price for
Power Scheduled. The Contract Price will be the total consideration paid by
Buyer to Seller for Power Scheduled hereunder subject to Article 11.
ARTICLE 6.
TERM AND DEFAULT
6.1 TERM. Subject to the other provisions of this Agreement.
the term of this Agreement shall commence on the date first written above and
shall remain in effect until terminated by either Party upon 30 days prior
written notice; provided, however. no such termination notice shall be
effective as to any ongoing Transaction hereunder until both Parties have
fulfilled all their obligations hereunder with respect to such Transaction.
6.2 EVENTS OF DEFAULT. A Party shall be deemed in default
under this Agreement upon the occurrence of any one or more of the following
events (an "Event of Default"):
(a) FAILURE TO PAY. Unexcused failure by a Party to make timely
payment of any amounts. not in dispute due to the other Party under
this Agreement, within three (3) Business Days of the non-paying
Party's receipt of a written demand for such payment;
(b) BREACH OF AGREEMENT. Unexcused failure by a Party to perform
fully any other material provision of this Agreement within five (5)
Business Days of the non-performing Party's receipt of a written
demand for such performance (where timely payment of liquidated
damages constitutes performance);
(c) RECEIVERSHIP. Appointment of a receiver or liquidator or
trustee of such Party or of any of the property of such Party by order
of a court of competent jurisdiction;
5
(d) BANKRUPTCY. Filing by such a Party of a voluntary petition in
bankruptcy under any provision of any Federal or State bankruptcy law
or consent to the filing of any bankruptcy or reorganization petition
against it under any similar law; filing of a petition or answer or
consent seeking relief or assisting in seeking relief in a proceeding
under any of the provisions of the Federal Bankruptcy Code, as it now
exists or as it may be amended or pursuant to any other similar State
statute applicable to such Party, as it is or may be in effect or an
answer admitting the material allegations of a petition filed against
it in such a proceeding; or if such Party makes a general assignment
for the benefit of its creditors, admits in writing its inability to
pay its debts generally as they become due; or if such Party consents
to the appointment of a receiver(s) or trustee(s) or liquidator(s) of
it or of all or part of its property; and
(e) ASSURANCE. The failure to provide adequate assurance of its
ability to perform all of its outstanding obligations to the
Non-Defaulting Party under this Agreement, any Transaction or otherwise
within a period not to exceed 48 hours (but at least one Business Day)
of a demand therefore when the Non-Defaulting Party has reasonable
grounds for insecurity.
6.3 RIGHTS OF NON-DEFAULTING PARTY. When an Event of Default
exists, the Party not in default (the "Non-Defaulting Party") shall have the
right:
(a) To terminate this Agreement in accordance with the provisions
in Section 6.4 and/or:
(b) To pursue any other remedy provided under this and/or;
(c) To suspend Scheduling, receipt and/or delivery of Power
hereunder.
6.4 TERMINATION RIGHTS AND RIGHT TO CURE. If a Party is in
default hereunder (the "Defaulting Party"), then the Non-Defaulting Party
may, at its option, notify in writing the Defaulting Party of the effective
date of termination of the Agreement if the default is not cured as
hereinafter provided. If the Defaulting Party does not remedy the default
within the cure period provided in Section 6.2, the Non-Defaulting Party
shall have the right to liquidate and terminate all Transactions then
outstanding between the parties (except to the extent that in the good faith
opinion of the Non-Defaulting Party certain of such Transactions may not be
closed out and liquidated under applicable law) at any time and from time to
time. and shall calculate, in a commercially reasonable manner, a Settlement
Amount for each such Transaction that is a Firm Transaction as of the time of
its termination or as soon thereafter as is reasonably practicable and shall
net such Settlement Amounts in the manner provided for in Section 6.4(b).
(a) "Settlement Amount" shall mean with respect to a Firm
Transaction and the NonDefaulting Party. the losses and costs (or
gains). expressed in U.S. Dollars. that such party incurs as a result
of the liquidation, including, but not limited to, losses and costs (or
gains) based upon the then current replacement value of such Firm
Transaction together with, at the Non-Defaulting Party's option, but
without duplication, all losses and costs which such party incurs as a
result of maintaining, terminating, obtaining, or re-establishing any
hedge or related trading positions. The Settlement Amount shall be due
to or from the Non-Defaulting Party as appropriate. In calculating a
Settlement Amount, the Non-Defaulting Party shall discount to present
value (in a commercially reasonable manner based on the Prime Rate for
the applicable period) any amount that would otherwise have been due at
a later date and shall add interest at the Prime Rate to and amount due
prior to the date of the calculation.
6
(b) The Non-Defaulting Party shall set off (i) all such Settlement
Amounts that are due to the Defaulting Party, plus any Margin then
available to the Non-Defaulting Party, plus- (at the Non-Defaulting
Party's election) any or all other amounts due to the Defaulting Party
under the Agreement against (ii) all such Settlement Amounts that are
due to the Non-Defaulting Party, plus any Margin then available to the
Defaulting Party. plus (at the Non-Defaulting Party's election) any or
all other amounts due to Non-Defaulting Party under the Agreement, so
that all such amounts shall be netted to a single liquidated amount
(the "Termination Payment") payable by one Party to the other. "Margin"
shall m&an cash, securities or other property held by or due from one
Party to guarantee or secure obligations of the other Party under the
Agreement.
(c) Notice that a liquidation pursuant to the Section 6.4 has
occurred shall be given by the Non-Defaulting Party to the Defaulting
Party before the close of business on 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. The
notice shall specify the amount of the Termination Payment and whether
it is owed by or to the Defaulting Party. The Termination Payment shall
be made by the Party that owes it on the second Business Day after such
notice is given.
(d) Notwithstanding any contrary provision of this Section 6.4,
where an Event of Default specified in Section 6.2(d) is governed by a
system of laws that does not permit the liquidation of Transactions to
take place upon or after the occurrence of the relevant Event of
Default in accordance with the other terms of this Section 6.4. the
liquidation of all outstanding Transactions shall automatically take
place upon the occurrence of such an Event of Default as of a time
immediately preceding the occurrence of such Event of Default and, upon
the occurrence of any such automatic liquidation, the Defaulting Party
shall indemnify the Non-Defaulting Party on demand against all expense,
loss, damage or liability that the Non-Defaulting Party may incur in
respect of the Agreement as a consequence of movements in Power prices
or other relevant prices or rates between the date of such automatic
liquidation and the Business Day on which the Non-Defaulting Party
first becomes aware that such automatic liquidation has occurred.
(e) If the Defaulting Party disputes the Non-Defaulting Party"s
calculation of the Termination Payment. in whole or in part, the
Defaulting Party shall, within two (2) Business Days of receipt of
Non-Defaulting Party's calculation of the Termination Payment, provide
to the Non-Defaulting Party a detailed written explanation of the basis
for such dispute and, if the Termination Payment is due from the
Defaulting Party", shall promptly pay to the Non-Defaulting Party such
portion thereof as is conceded to be correct. The Parties shall make
every attempt to resolve such dispute amicably.
6.5 SETOFFS. Without limiting its rights under this Article 6
or otherwise after an Event of Default, the Non-Defaulting Party may from
time to time set off any or all amounts the Defaulting Party owes to it
against any or all amounts it owes the Defaulting Party (whether under the
Agreement or otherwise and whether or not then due), provided that any amount
not then due is included in such setoff shall be discounted to present value
(in the manner specified in Section 6.4) as at the time of setoff (to take
account of the period between the date of setoff and the date on which such
amount would have otherwise been due).
6.6 SUSPENSION OF PERFORMANCE. ln addition to the Seller's
remedies under this Article 6 hereof, if either Party is in default under
Article 7 and such failure is not remedied within five (5) Business Days of
the Defaulting Party receiving written notice of such failure, the other
Party shall have
7
the right to suspend performance under any or all Transactions until such
amount, including interest at the Interest Rate, is paid; provided, if the
Defaulting Party, in good faith, disputes the amount of any such billing or
part thereof and pays to the other Party the undisputed amounts, the other
Party shall continue to perform hereunder.
6.7 OTHER TERMINATING EVENTS. In the event Buyer is regulated
by a federal, state or local regulatory body, and such body shall disallow
all or any portion of any costs incurred or yet to be incurred by Buyer under
any provision of this Agreement or in respect of any Transaction, such action
shall not operate to- excuse Buyer from performance of any obligation
hereunder nor shall such action give rise to any right of Buyer to any refund
or retroactive adjustment of the Price of any Transaction. Notwithstanding
the foregoing, if performance by either Party (an "Affected Party") under
this Agreement or in respect of any Transaction becomes subject to regulation
of any kind whatsoever under any law, rule, regulation, order or the like,
including any change by the Federal Energy Regulatory Commission regarding a
Party's authority to sell wholesale power at market-based rates, to a greater
or different extent than that existing on the Effective Date and such
regulation either (i) renders this Agreement illegal or unenforceable. or
(ii) would render performance by the Affected Party of some or all
outstanding Transactions (the "Affected Transactions") illegal, unenforceable
or commercially impracticable, or (iii) materially adversely affects the
business of such Affected Party with respect to its financial position or
otherwise, then such Party (or either Party if both Parties are Affected
Parties) may declare a termination of the Affected Transactions in the manner
contemplated by Section 6.4 above, which shall be referred to hereinafter as
declaring an Early Termination Date. In the event of such a declaration. the
Affected Party shall provide the other Party written notice. which notice
shall specify the basis for declaring such Early Termination Date and (in the
circumstances described in clause (ii) above) identify which Transactions are
Affected Transactions, If an Early Termination Date is declared under
circumstances described in clause (i) above, both Parties shall calculate
their respective Gains, Losses or Costs in respect of terminated Transactions
as provided in Section 6.4, and endeavor in good faith to agree upon the
Termination Payment payable by either Party, and if an Early-Termination Date
is declared under circumstances described in clause (ii) or (iii) above, only
the Party that is not the Affected Party" shall calculate its Gains, Losses
and Costs in respect of all terminated Transactions and notify the Affected
Party of the Termination Payment, as provided in Section 6.4. Only the
Affected Transactions shall be terminated on the Early Termination Date under
the circumstances described in clause (ii) above. All other Transactions
shall remain unaffected as if no Early Termination Date had been declared.
ARTICLE 7.
BILLING AND PAYMENT
7.1 STATEMENTS. For each Transaction. Seller shall render to
Buyer (by facsimile to the facsimile number specified for invoices in Section
12.3 of this Agreement) for each calendar month during which purchases/sales
are made, a statement setting forth the total quantity of Power Buyer was
obligated to purchase under this Agreement at the Delivery Point(s) during
the preceding month and the amounts due to Seller from Buyer therefor.
7.2 PAYMENTS. On or before ten (10) days after receipt of
Seller's statement or if such day is not a Business Day, the immediately
preceding Business Day, Buyer shall render to Seller by electronic funds
transfer (wire transfer or ACH), the amount set forth on such statement to
the payment address provided in Section 12.3 of this Agreement. If Buyer
fails to pay all of the amount of any statement when that amount becomes due,
Buyer shall pay Seller a late charge on the unpaid balance that shall accrue
on each calendar day from the due date at the Interest Rate. If Buyer, in
good faith, disputes
8
any part of any statement, Buyer shall provide a written explanation of the
basis for the dispute and pay the portion of such statement conceded to be
correct no later than the due date as calculated in accordance with the
preceding sentence.
7.3 AUDIT. Each Party or any third party representative of a
Party has the right, at its sole expense and during normal working hours, to
examine the records of the other Party to the extent reasonably necessary to
verify the accuracy of any statement, charge or computation made pursuant to
the provisions of this Agreement. If any such examination reveals any
inaccuracy in any statement, the necessary adjustments in such statement and
the payments thereof shall be made prior to the lapse of two years from the
rendition thereof, and provided further that this provision of this Agreement
will survive any termination of the Agreement for a period of two years from
the date of such termination for the purpose of such statement and payment
objections.
7.4 PAYMENT NETTING. Payments in the same currency owing by
each Party under this Agreement shall be offset on a monthly basis so that
only the net amount shall be paid by the Party having the greater payment
obligation during relevant calendar month. The payment date subject to this
Section 7.4 shall be the 25th day of the relevant calendar month following
the month of deliveries, or if such day is not a Business Day, the
immediately preceding Business Day.
ARTICLE 8.
DELIVERY POINT, TITLE TRANSFER AND LIABILITY
8.1 DELIVERY POINT. Seller shall deliver and Buyer shall
receive the Contract Quantity at the Delivery Point.
8.2 TITLE TRANSFER. Title to, possession of, and risk of loss
of Power shall transfer from Seller to Buyer at the applicable Delivery
Point. Seller warrants title to the Power sold and delivered hereunder and
the right of Seller to sell such Power.
8.3 PENALTIES. Buyer shall assume all liability for and
reimburse Seller within thirty (30) days of presentation of invoice for any
Penalties incurred as a result of Buyer's failure to (i) notify Seller of a
failure to Schedule or a change in a Schedule or (ii) abide by a Transmitting
Utility-'s tariff and scheduling policies. Seller shall assume all liability
for and reimburse Buyer within thirty (30) days of presentation of invoice
for any Penalties incurred as a result of Seller's failure to (i) notify
Buyer of a failure to Schedule or a change in a Schedule or (ii) abide by a
Transmitting Utility's tariff and scheduling policies. The parties shall
promptly notify each other as soon as possible of any imbalance that is
occurring or has occurred. and shall cooperate to eliminate imbalances and
minimize Penalties to the extent possible.
8.4 SELLER INDEMNIFICATION. Seller hereby agrees to indemnify,
defend and hold harmless Buyer, its agents, servants, partners, officers,
directors and employees (collectively, "Buyer's Indemnitees") of each, from
and against any and all losses, claims damages or liabilities to third
parties (including reasonable attorneys' fees actually incurred and
including, without limitation, penalties or fines imposed by government
authorities) relating to Power delivered under this Agreement until such
Power has been delivered to Buyer at the Delivery Point including, without
limitation, the loss or claims for loss or damage to property, except to the
extent caused by the fraud, negligence or the willful misconduct or breach of
obligation under this Agreement of the Buyer's Indemnitees and provided that
Seller shall be promptly notified in writing of any such claim or suit
brought against any such Buyer
9
Indemnitee and shall be permitted, upon accepting financial responsibility,
to control a defense against or settlement (other than any settlement
involving criminal liability or admission of guilt or responsibility by such
Buyer Indemnitee) of such claim or suit through counsel of its choice. The
foregoing notwithstanding, Seller's obligations under This Agreement towards
any Buyer Indemnitee are conditioned upon such Buyer Indemnitee providing
such cooperation as Seller may reasonably request in connection with its
defense or settlement of the claim or suit against such Buyer Indemnitee.
8.5 BUYER INDEMNIFICATION. Buyer hereby agrees to indemnify,
defend and hold harmless Seller, it agents, servants, partners, officers,
directors and employees (collectively, "Seller's Indemnitees") of each, from
and against any and all losses, claims damages or liabilities to third
parties (including reasonable attorneys' fees actually incurred and
including, without limitation, penalties or fines imposed by governmental
authorities) relating to Power received under this Agreement by Buyer at and
after the Delivery Point, including, without limitation, the loss or claims
for loss or damage to property, except to the extent caused by the fraud,
negligence or the willful misconduct or breach of obligation under this
Agreement of Seller's Indemnitees and provided that Buyer shall be promptly
notified in writing of any such claim or suit brought against any such Seller
Indemnitee and shall be permitted, upon accepting financial responsibility,
to control a defense against or settlement (other than any settlement
involving criminal liability or admission of guilt or responsibility by such
Seller Indemnitee) of such claim or suit through counsel of its choice. The
foregoing notwithstanding, Buyer's obligations under this Agreement towards
any Seller Indemnitee are conditioned upon such Seller Indemnitee providing
such cooperation as Buyer may reasonably request in connection with its
defense or settlement of the claim or suit against such Seller Indemnitee.
8.6 LIMITATION OF LIABILITY. FOR BREACH OF ANY PROVISION FOR WHICH
AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT, THE
LIABILITY OF THE DEFAULTING PARTY SELL BE LIMITED AS SET FORTH IN SUCH
PROVISION, AND ALL OTHER DAMAGES OR REMEDIES HEREBY ARE WAIVED. IF NO REMEDY
OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING
PARTY SELL BE LIMITED TO DIRECT, ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES
AND REMEDIES ARE WAIVED. IN NO EVENT SELL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES
IN TORT, FOR CONTRACT OR OTHERWISE.
8.7 NO RECOURSE. The obligations of the Parties under this
Agreement are obligations of the Parties only. and no recourse shall be
available against any officer, director, stockholder, or partner of a Party
or its Affiliate except to the extent that an Affiliate provides a guaranty.
ARTICLE 9.
ASSIGNMENT AND SUCCESSION
9.1 ASSIGNMENT AND SUCCESSION. Neither Party shall assign this
Agreement or its rights hereunder without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed.
Upon any assignment made in compliance with this Section 9.1, this Agreement
shall inure to and be binding upon the successors and assigns of the
assigning Parties. Notwithstanding the foregoing, either Party may, without
the need for consent from the other Party (and without relieving itself from
liability hereunder), (a) transfer, pledge, or assign this Agreement as
security for any financing with financial institutions; (b) transfer or
assign this Agreement to an Affiliate of such Party provided that such
Affiliate has substantially equivalent financial capability to that of the
assigning Party, or (c) transfer or assign this Agreement to any creditworthy
person or entity succeeding to all or
10
substantially all of the assets of such Party; provided, however, that any
such assignee shall agree to be bound by the terms and conditions hereof,
ARTICLE 10.
FORCE MAJEURE
10.1 FORCE MAJEURE. In the event either Party is rendered
unable, by an event of FORCE MAJEURE, to carry out wholly or in part its
obligations under a Transaction and such Party gives notice and full
particulars of such event of FORCE MAJEURE to the other Party as soon as
practicable after the occurrence of the event relied on, then the obligations
of the Party affected by such event of FORCE MAJEURE pursuant to such
Transaction, other than the obligation to make payments then due or becoming
due hereunder, shall be suspended from the inception and throughout the
period of continuance of any such inability so caused, but for no longer
period, and such event of FORCE MAJEURE shall, so far as practicable, be
remedied with all reasonable dispatch; provided, however, that no provision
of this Agreement shall be interpreted to require Seller to deliver, or Buyer
to receive, Power at points other than the Delivery Point(s). The term "FORCE
MAJEURE" means any cause the Party claiming FORCE MAJEURE (the "Claiming
Party"), or the Claiming Party's System Resources, was unable. in the
exercise of due diligence and in the observance of the applicable operating
policies, criteria and/or guidelines of NERC and any regional or subregional
requirement, to avoid and which is beyond the control, and without the fault
or negligence. of the Claiming Party or the Claiming Party's System
Resources. FORCE MAJEURE includes. but is not restricted to: flood;
earthquake: tornado; storm; fire; civil disturbance or disobedience; labor
dispute: labor shortage; sabotage; action or restraint by court order or
public or governmental authority (so long as the Claiming Party has not
applied for or assisted in the application for, and has opposed where and to
the extent reasonable, such government action); and government action that
results in the price at which Power may be made available under a Transaction
being fixed or established by any government authority at a level that
results in a price that may be charged under that Transaction that (i) in the
case of Seller, is lower than the Contract Price and (ii) in the case of
Buyer. is higher than the Contract Price: provided, however, that such
government action does not include the imposition of any Taxes. Nothing
contained herein shall be construed to require a Claiming Party to settle any
strike or labor dispute. In a firm Transaction, interruption by a
Transmitting Utility shall not be deemed to be an event of FORCE MAJEURE
unless (i) the Party contracting with such Transmitting Utility shalt have
made arrangement with such Transmitting Utility for the firm transmission of
the Power to be Scheduled hereunder and (ii) such interruption is due to an
event of FORCE MAJEURE (or similar occurrence) as defined under the
Transmitting Utility"s tariff.
ARTICLE 11.
TAXES
11.1 ALLOCATION OF AND INDEMNITY FOR TAXES. The Contract Price
paid hereunder includes full reimbursement for and Seller is liable for and
shall pay or cause to be paid, or reimburse Buyer if Buyer shall have paid,
all Taxes applicable to the Power sold hereunder prior to the Delivery
Point(s) ("Seller's Taxes"). In the event Buyer is required to rem it any of
Seller's Taxes. the amount thereof shall be deducted from any sums becoming
due to Seller hereunder. Seller shall indemnify, defend and hold Buyer
harmless from any liability against all Seller's Taxes. The Contract Price
does not include reimbursement for and the Buyer is liable for and shall pay,
cause to be paid or reimburse Seller if Seller shall have paid, all Taxes
applicable to the Power sold hereunder at and after delivery at the Delivery
Point(s) including Taxes imposed by a taxing authority with jurisdiction over
the Buyer ("Buyer's
11
Taxes"). Buyer shall indemnify, defend and hold Seller harmless from any
liability against all Buyer's Taxes.
11.2 NEW TAX. If any New Tax is imposed for which Buyer or
Seller is responsible, (i) if such New Tax can be passed by Buyer to another
person or entity, Buyer shall pay. cause to be paid or reimburse the Seller
for such New Tax; (ii) if (i) does not apply, the Party affected by the New
Tax ("New Tax Affected Party") may require the other Party to enter into good
faith negotiations to apportion liability for the New Tax equitably between
the Parties. If, after fifteen Business Days the Parties are not able to
resolve the issue, the New Tax Affected Party may terminate such "New Tax
Affected Transaction", upon thirty days written notice. Unless otherwise
agreed, the New Tax Affected Transaction shall be liquidated as though the
New Tax Affected Party has defaulted on the New Tax Affected Transaction
without taking into effect the impact of the New Tax.
11.3 COOPERATION. Both parties shall use reasonable efforts to
administer this Agreement and implement the provisions in accordance with
their intent to minimize Taxes. If the Buyer is entitled to an exemption from
any Taxes under this Agreement, Buyer shall be responsible for furnishing an
exemption certificate to Seller in order to obtain the exemption.
ARTICLE 12.
MISCELLANEOUS
12.1 REGULATORY. It is understood by the Parties that this
Agreement and performance hereunder is subject to all present and future
valid and applicable laws, orders, statutes, and regulations of courts or
regulatory bodies (state or federal) having jurisdiction over Seller.
Counterparty, or any Transaction hereunder. The rights of the Parties
hereunder to Schedule the purchase and sale of Power shall not be effective
until all Regulatory Approvals have been obtained; PROVIDED, HOWEVER, that if
Regulatory Approvals are not issued by applicable governmental authorities by
the scheduled commencement of such Transaction, either Party may terminate
such Transaction without further obligation or liability to the other Party.
12.2 AUTHORIZATIONS. The Parties hereto represent that they have
(or will have at the time of documentation of any Transaction and at the time
of delivery or receipt of Power thereunder) all requisite corporate and
governmental authorizations necessary or proper to consummate such
Transactions.
12.3 NOTICES. Any notice, request, demand, statement, or payment
provided for in this Agreement shall be confirmed in writing and shall be
made as specified below, provided, however, that notices of interruption and
communications to Transmitting Utility(ies) may he provided verbally,
effective immediately and, upon request, confirmed in writing. A notice sent
by facsimile transmission shall be deemed received by the close of the
Business Day on which such notice was transmitted or such earlier time as
confirmed by the receiving Party and notice by overnight mail or courier
shall be deemed to have been received two (2) Business Days after it was sent
or such earlier time as is confirmed by the receiving Party unless it
confirms a prior verbal communication in which case any such notice shall be
deemed received on the day sent. The addresses of the Parties are as follows:
ECI:
NOTICES & CORRESPONDENCE PAYMENTS BY ELECTRONIC FUNDS
TRANSFER
Electric Clearinghouse, Inc. The First National Bank of Chicago
12
1000 Louisiana Account Title: Electric
Suite 5800 Clearinghouse, Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Account Number: 552 7651
Attn: Director, Trading & Operations ABA Number: 071 000 013
COUNTERPARTY:
NOTICES & CORRESPONDENCE INVOICES
ATTENTION: ▇▇▇▇ ▇▇▇▇▇▇ VP/CFO SAME
------------------------------------- ----------------------------------
CAP ROCK ELECTRIC
------------------------------------- ----------------------------------
▇▇▇ ▇. ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
------------------------------------- ----------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------- ----------------------------------
FAX No.: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------
or to such other address as Counterparty or Company shall from time to time
designate by letter properly addressed.
12.4 ENTIRETY. This Agreement, the Exhibits hereto, and the
documentation of each Transaction hereunder pursuant to Section 2. I
constitute the entire agreement between the Parties hereto. There are no
prior or contemporaneous agreements or representations affecting the same
subject matter other than those herein expressed. Except for those matters
which, in accordance with Section 2.1 of this Agreement, may be resolved by
verbal agreement between the Parties and documented, it is further agreed
that no amendment, modification or change herein shall be enforceable, except
as specifically provided for in this Agreement, unless reduced to writing and
executed by both Parties.
12.5 GOVERNING LAW. INCLUDING ANY COUNTERCLAIMS AND CROSS CLAIMS
ASSERTED IN SUCH ACTION, THIS AGREEMENT SELL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF TEXAS, WITHOUT REGARD TO THE LAWS OF TEXAS
REQUIRING THE APPLICATION OF THE LAWS OF ANOTHER STATE.
12.6 NON-WAIVER. No waiver by either Party hereto of any one or
more defaults by the other in the performance of any of the provisions of
this Agreement shall be construed as a waiver of any other default or
defaults whether of a like kind or different nature. Any delay, less than any
applicable statutory period of limitations, in asserting or enforcing any
rights under this Agreement. shall not be deemed a waiver of such rights.
Failure of either Party to enforce any provision of this Agreement or to
require performance by the other Party of and of the provisions hereof shall
not be construed to waive such provision, or to affect the validity of this
Agreement or any part thereof, or the right of either Party thereafter to
enforce each and every provision hereof.
12.7 SEVERABILITY. Except as otherwise stated herein, any
provision, article or section declared or rendered unlawful by a court of law
or regulatory agency with jurisdiction over the Parties, or deemed unlawful
because of statutory change. will not otherwise affect the lawful obligations
that arise under this Agreement.
12.8 HEADINGS. The headings used for the Articles herein are for
convenience and reference purposes only and shall in no way affect the
meaning or interpretation of the provisions of this Agreement.
13
12.9 SECURITY. Should Counterparty's ability to make payment
under this Agreement become unsatisfactory to ECI in its reasonably exercised
discretion at any time during which this Agreement is in effect, ECI may
require at its option either (i) the posting of a letter of credit, or (ii)
cash prepayments or, (iii) other security in a form acceptable to it before
proceeding with any Transaction pursuant to this Agreement. Any credit
agreement between the Parties shall become part of this Power Sale Agreement
and any Transactions hereunder.
12.10 CONFIDENTIALITY. Neither Party shall disclose the terms of
any Transaction to a third party (other than such Party's and its affiliates'
employees, lenders, counsel or accountants) except in order to comply with
any applicable law, order, regulator or exchange rule; provided each Party
shall notify the other Party of any proceeding of which it is aware that may
result in disclosure and use reasonable efforts to prevent or limit the
disclosure. The provisions of the Agreement other than the terms of any
Transaction are not subject to this confidentiality obligation. The Parties
shall be entitled to all remedies available at law or in equity to enforce,
or seek relief in connection with, this confidentiality obligation; provided,
all monetary damages shall be limited to actual direct damages and a breach
of this section shall not give rise to a right to suspend or terminate any
ongoing Transaction under this Agreement.
12.11 SURVIVAL. Any provision of this Agreement (including, but
not limited to, indemnification provisions) that expressly or by implication
comes into or remains in force following the termination or expiration of
this Agreement shall survive such termination or expiration.
12.12 RECORDING. Each Party consents to the recording of all
telephone conversations between its employees and the employees of the other
Party. Any such recordings may be introduced to prove the intent of a
Transaction; provided, however, that nothing herein shall be construed as a
waiver of any objection to the introduction of such evidence on the grounds
of relevance. Absent manifest error, any conflict between such a recording
and written documentation of a Transaction that is executed by both parties
shall be resolved in favor of such written documentation.
12.13 UNIFORM COMMERCIAL CODE/WARRANTY. Except as otherwise
provided for herein. the provisions of the Uniform Commercial Code ("UCC") of
the state whose laws govern this Agreement shall be deemed to apply to all
transactions, and energy and capacity shall be deemed to be goods for
purposes of the UCC. EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER EXPRESSLY
NEGATES ANY REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO
CONFORMITY OR MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY
PARTICULAR PURPOSE.
12.14 REPRESENTATIONS. In connection with the negotiation of the
entering into, and The confirming of the execution of this Contract. each
Party represents that: (i) it is acting as principal (and not as agent or in
any other capacity. fiduciary or otherwise): (ii) the other party is not
acting as a fiduciary or financial or investment advisor for it; (iii) it is
not relying upon any representations (whether written or oral) of the other
party other than the representations expressly set forth in this Contract;
(iv) the other party has not given to it (directly or indirectly through any
other person) any advice, counsel. assurance, guarantee, or representation
whatsoever as to the expected or projected success, profitability, return,
performance, result, effect, consequence, or benefit (either legal,
regulatory, tax, financial, accounting, or otherwise) of this Contract; (v)
it has consulted with its own legal, regulatory, tax, business, investment.
financial, and accounting advisors to the extent it has deemed necessary, and
it has made its own investment, hedging, and trading decisions based upon its
own judgment and upon any
14
advice from such advisors as it has deemed necessary, and not upon any view
expressed by the other party; (vi) all trading decisions have been the result
of arms length negotiations between the parties; and (vii) it is entering
into this Contract with a full understanding of all of the risks hereof and
thereof (economic and otherwise), and it is capable of assuming and willing
to assume (financially and otherwise) those risks.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
duplicate originals to be effective as of the day and year first written
above.
"ECI" "Counterparty"
ELECTRIC CLEARINGHOUSE, INC. CAP ROCK ELECTRIC COOPERATIVE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- -------------------------------
Title: Executive Vice President Title: VP/CFO
------------------------- ------------------------------
15
BUYER
Address
Address
Atm:
19
EXHIBIT "A"
FORM OF CONFIRMATION LETTER
RE: Power Sales Agreement Dated:
(ECLContract#: ____________
Confirmation Number:
CONFIRMATION LETTER
This letter shall confirm the agreement reached ON ___________ 19 between
______________ "Buyer") and Electric Clearinghouse, Inc. ("Seller") regarding
the purchase of Power under the terms and conditions as follows:
PERIOD U/DELIVERY:
CONTRACT QUANTITY.
NATURE OF TRANSACTION, (FIRM/NON-FIRM)
(TON/RACE PRICE:
DELIVERY POINT:
SCHEDULING:
$_______/MWI-I
SPECIAL PROVISIONS:
SEE ADDENDUM II ATTACHED HERETO AND B THIS REFERENCE MADE A
THIS CONFIRMATION LETTER IS BEING PROVIDED PURSUANT TO AND IN ACCORDANCE WITH
THE POWER SALES AGREEMENT ("AGREEMENT") REFERENCED ABOVE, BETWEEN BUYER AND
SELLER, AND CONSTITUTES PART OF AND IS SUBJECT TO ALL OF THE TERMS AND
PROVISIONS OF SUCH AGREEMENT. NOTWITHSTANDING ANY CONTRARY PROVISIONS IN THE
AGREEMENT, ANY CONFLICT BETWEEN THIS CONFIRMATION LETTER AND THE AGREEMENT
SHALL BE RESOLVED IN FAVOR OF THIS CONFIRMATION LETTER. TERMS USED BUT NOT
DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE AGREEMENT.
PLEASE CONFIRM THAT THE TERMS STATED HEREIN ACCURATELY REFLECT THE AGREEMENT
BETWEEN YOU AND ECI BY RETURNING AN EXECUTED COPY OF THIS LETTER BY FACSIMILE TO
TIC! AT ▇▇▇-▇▇▇-▇▇▇▇. IF YOU DO NOT RETURN THIS CONFIRMATION LETTER OR OBJECT TO
THIS CONFIRMATION LETTER WITHIN TWO (2) BUSINESS DAYS OF YOUR RECEIPT OF IT, YOU
WILL HAVE ACCEPTED AND AGREED TO ALL OF THE TERMS INCLUDED HEREIN, INCLUDING THE
TERMS AND PROVISIONS OF THE AGREEMENT. IF YOU HAVE ANY QUESTIONS, PLEASE CALL ME
AT ▇▇▇-▇▇▇-▇▇▇▇/8848.
"SELLER" "BUYER"
ELECTRIC CLEARINGHOUSE, INC.
BY: BY:
------------------------------ ------------------------------
NAME: NAME:
------------------------------ ----------------------------
TITLE: TITLE:
--------------------------- ---------------------------
DATE: DATE:
---------------------------- ----------------------------
DAMAGES FOR NON-PERFORMANCE:
NOTWITHSTANDING ANYTHING IN THE AGREEMENT TO THE CONTRARY, THE PARTIES' SOLE
REMEDIES FOR FAILURE TO PERFORM IN ACCORDANCE WITH THE TERMS OF THIS
TRANSACTION SHALL BE AS FOLLOWS: IF THIS TRANSACTION IS FIRM, PERFORMANCE IS
EXCUSED ONLY IF RENDERED IMPOSSIBLE BY AN EVENT OF FORCE MAJEURE, AS DEFINED
IN THE AGREEMENT. IF SELLER FAILS TO DELIVER POWER AND/OR CAPACITY IN
ACCORDANCE WITH THE TERMS HEREIN, SELLER SHALL BE LIABLE TO BUYER [OR BUYER'S
REASONABLY-INCURRED COST OF REPLACING THE POWER AND/OR CAPACITY SELLER FAILED
TO DELIVER TO THE EXTENT THOSE COSTS EXCEED THE CONTRACT PRICE STATED HEREIN.
IF BUYER FAILS TO TAKE POWER AND/OR CAPACITY IN ACCORDANCE WITH THE TERMS
HEREIN, BUYER SHALL BE LIABLE TO SELLER FOR THE POSITIVE DIFFERENCE BETWEEN
THE CONTRACT PRICE STATED HEREIN FOR THE POWER AND/OR CAPACITY BUYER FAILED
TO TAKE AND THE AMOUNT FOR WHICH SELLER, USING COMMERCIALLY REASONABLE
EFFORTS TO MITIGATE DAMAGES, IS ABLE TO RESELL THE POWER AND/OR CAPACITY
BUYER FAILED TO TAKE. IF THE TRANSACTION IS NON-FIRM OR INTERRUPTIBLE, EITHER
PARTY MAY INTERRUPT DELIVERIES OR RECEIPTS HEREUNDER WITHOUT PENALTY. BOTH
PARTIES HEREBY STIPULATE FLOAT SUCH LIQUIDATED DAMAGES ARE REASONABLE IN
LIGHT OF TILE ANTICIPATED HARM AND THE DIFFICULTY OF ESTIMATION OR
CALCULATION OF ACTUAL DAMAGES AND EACH PARTY HEREBY WAIVES THE RIGHT TO
CONTEST SUCH DAMAGES AS AN UNREASONABLE PENALTY. NEITHER PARTY SHALL HE
LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL
DAMAGES TIN FAILURE TO DELIVER OR RECEIVE POWER IN ACCORDANCE WITH THE TERMS
OF THIS TRANSACTION.
TAXES:
(1) EXPENSES: SELLER SHALL BE RESPONSIBLE FOR ANY COSTS OR CHARGES IMPOSED ON
OR ASSOCIATED WITH THE DELIVERY OF THE CONTRACT QUANTITY, INCLUDING CONTROL
AREA SERVICES, INADVERTENT POWER FLOWS. PENALTIES OR SIMILAR CHARGES IMPOSED
BY THE TRANSMISSION PROVIDER, TRANSMISSION LOSSES AND CHARGES RELATING TO THE
TRANSMISSION OF THE CONTRACT QUANTITY, UP TO THE DELIVERY POINT. BUYER SHALL
HE RESPONSIBLE FOR ANY COSTS OR CHARGES IMPOSED ON OR ASSOCIATED WITH THE
CONTRACT QUANTITY, INCLUDING CONTROL AREA SERVICES, INADVERTENT POWER FLOWS,
PENALTIES OR SIMILAR CHARGES IMPOSED BY THE TRANSMISSION PROVIDER,
TRANSMISSION LOSSES AND LOSS CHARGES RELATING TO THE TRANSMISSION OF THE
CONTRACT QUANTITY, AT AND FROM THE DELIVER POINT.
(2) ALLOCATION OF AND INDEMNITY FOR TAXES: THE CONTRACT PRICE PAID HEREUNDER
INCLUDES LULL REIMBURSEMENT FOR AND SELLER IS LIABLE FOR AND SHALL PAY OR
CAUSE TO BE PAID. OR REIMBURSE BUYER IF BUYER SHALL HAVE PAID, ALL TAXES
APPLICABLE TO THE POWER SOLD HEREUNDER PRIOR TO THE DELIVERY POINT(S)
("SELLER'S TAXES"). IF BUYER IS REQUIRED TO REMIT ANY OF SELLER'S TAXES, THE
AMOUNT THEREOF SHALL BE DEDUCTED FROM AN SUMS BECOMING DUE TO SELLER
HEREUNDER. SELLER SHALL
INDEMNIFY, DEFEND AND HOLD BUYER HARMLESS FROM ANY LIABILITY AGAINST ALL
SELLER'S TAXES. THE CONTRACT PRICE DOES NOT INCLUDE REIMBURSEMENT FOR AND THE
BUYER IS LIABLE FOR AND SHALL PAY. CAUSE TO BE PAID OR REIMBURSE SELLER IF
SELLER SHALL HAVE PAID, ALL TAXES APPLICABLE TO THE POWER SOLD HEREUNDER AT
AND AFTER DELIVERY AT THE DELIVERY POINT(S) INCLUDING TAXES IMPOSED BY A
TAXING AUTHORITY WITH JURISDICTION OVER THE BUYER ("BUYER'S TAXES"). BUYER
SHALL INDEMNIFY, DEFEND AND HOLD SELLER HARMLESS FROM ANY LIABILITY AGAINST
ALL BUYER'S TAXES. IF THE BUYER IS ENTITLED TO
AN EXEMPTION FROM ANY TAXES UNDER THIS TRANSACTION, BUYER SHALL BE
RESPONSIBLE FOR FURNISHING AN EXEMPTION CERTIFICATE TO SELLER IN ORDER TO
OBTAIN THE EXEMPTION. "TAXES." MEANS- ALL AD VALOREM, PROPERTY, OCCUPATION,
UTILITY, GROSS RECEIPTS, SALES, USE, EXCISE AND OTHER TAXES, GOVERNMENTAL
CHARGES, EMISSION ALLOWANCE COSTS, LICENSES, PERMITS AND ASSESSMENTS, OTHER
THAN TAXES BASED ON NET INCOME OR NET WORTH.
(3) NEW TAXES: IF ANY NEW TAX IS IMPOSED FOR WHICH BUYER OR SELLER IS
RESPONSIBLE, (i) IF SUCH NEW TAX CAN BE PASSED BY BUYER TO ANOTHER PERSON OR
ENTITY, BUYER SHALL PAY, CAUSE TO BE PAID OR REIMBURSE THE SELLER FOR SUCH
NEW TAX; (ii) IF (i) DOES NOT APPLY, THE PARTY AFFECTED BY THE NEW TAX ("NEW
TAX AFFECTED PARTY") MAY REQUIRE THE OTHER PARTY TO ENTER INTO GOOD FAITH
NEGOTIATIONS TO APPORTION LIABILITY FOR THE NEW TAX EQUITABLY BETWEEN THE
PARTIES. IF, AFTER FIFTEEN BUSINESS DAYS THE PARTIES ARE NOT ABLE TO RESOLVE
THE ISSUE, THE NEW TAX AFFECTED PARTY MAY TERMINATE SUCH "NEW TAX AFFECTED
TRANSACTION", UPON THIRTY DAYS WRITTEN NOTICE. UNLESS OTHERWISE AGREED, THE
NEW TAX AFFECTED TRANSACTION SHALL BE LIQUIDATED AS THOUGH THE NEW TAX
AFFECTED PARTY HAS DEFAULTED ON THE NEW TAX AFFECTED TRANSACTION WITHOUT
TAKING INTO EFFECT THE IMPACT OF THE NEW TAX. "NEW TAXES" MEANS (i) ANY TAXES
ENACTED AND EFFECTIVE AFTER THE DATE THIS TRANSACTION WAS ENTERED INTO,
INCLUDING, WITHOUT LIMITATION, THAT PORTION OF ANY TAXES OR NEW TAXES THAT
RESULTS IN AN INCREASE IN LIABILITY TO EITHER PARTY, OR (ii) ANY LAW, ORDER,
RULE OR REGULATION, OR INTERPRETATION THEREOF, ENACTED AND EFFECTIVE AFTER
THE DATE THIS TRANSACTION WAS ENTERED INTO RESULTING IN SUCH AN INCREASE.