Exhibit 10 (d)(d)(d)
PG&E Energy Trading-Gas Corporation is not the same company as
Pacific Gas and Electric Company, the utility, PG&E
Energy Trading-Gas Corporation is not regulated by the
California Public Utilities Commission, and
you do not have to buy PG&E Energy Trading-Gas
Corporation's products in order to continue to
receive quality regulated services from the utility.
MASTER FIRM PURCHASE/SALE AGREEMENT
between
PG&E ENERGY TRADING-GAS CORPORATION
and
ROANOKE GAS COMPANY
dated
March 1, 1999
PG&E ENERGY TRADING-GAS CORPORATION
MASTER FIRM PURCHASE/SALE AGREEMENT
II
PG&E ENERGY TRADING-GAS CORPORATION, a California corporation ("Company"), and
ROANOKE GAS COMPANY, a Virginia Corporation ('Customer), referred to
collectively as the "Parties," enter into this Master Firm Purchase/Sale
Agreement (together with all Transactions, collectively, this "Agreement")
effective as of the 1st day of March, 1999 (the"Effective Date"). The PG&E
Energy Trading-Gas Corporation General Provisions set forth in Appendix "1"
shall apply to this Agreement.
ARTICLE 1. TERM This Agreement shall govern all Transactions for the firm
purchase or sale of gas and be in effect for a term of one year from the
Effective Date. It shall then continue in effect from Month to Month, unless
terminated by either Party upon 30 Days prior written notice to the other Party;
provided, this Agreement shall continue to apply to all Transactions then in
effect until all Transactions are completed. Termination of this Agreement in
all instances shall be subject to Section 8.4.
ARTICLE 2. SCOPE OF AGREEMENT 2.1. Scope of Agreement. Company and Customer from
time to time during the term hereof may, but are not obligated to, enter into
Transactions for the firm purchase and sale of Gas to which this Agreement shall
apply. Each Transaction shall be effectuated and evidenced as set forth in this
Article 2 and shall constitute a part of this Agreement and all Transactions,
together with this Agreement, shall constitute a single integrated agreement. It
is acknowledged that the Parties are relying upon the fact that all
Transactions, together with this Agreement, will form a single integrated
agreement and that the Parties would not otherwise enter into any Transactions.
Each Transaction shall be construed as one with this Agreement and any
discrepancy between this Agreement and a Transaction shall be resolved in favor
of the Transaction. Each Transaction shall provide whether the Transaction is
based upon DCQ quantity obligations or MinMQ or MinDQ and MaxDQ quantity
obligations, in which case the applicable alternative definitions and provisions
set forth in this Agreement shall apply.
2.2. Transaction Procedures. It is the intent of the Parties to facilitate
Transactions in accordance with the agreed procedures in this Article 2 and
assure that such Transactions are valid and enforceable as a result of the use
of these procedures for the mutual benefit of the Parties. Any Transaction may
be formed and effectuated (i) by a written paper-based Transaction Agreement in
the form of a Confirmation as set out on Exhibit B-1 executed by the Parties
(including by facsimile and/or counterparts) or (ii) in a recorded telephone
conversation between the Parties occurring on any Business Day during the
Pricing Hours whereby an offer and acceptance shall constitute the agreement of
the Parties to a Transaction as evidenced by the Transaction Tape; provided,
each Party may stipulate by prior notice to the other Party that any particular
contemplated Transaction may be effectuated and formed only by means of
procedure (i) above. The Parties shall be legally bound by each Transaction from
the time they agree to its terms in accordance with this Article 2 and
acknowledge that each Party will rely thereon in doing business related to the
Transaction. The Transaction Tape is adopted by the Parties as a means by which
a Transaction is reduced to tangible form, and the Parties to a Transaction are
identified and authenticate a Transaction. Any Transaction formed and
effectuated pursuant to the foregoing shall be considered to be a "writing" or
in "writing" and to have been"'signed" and any Transaction Tape shall be
considered to constitute an "original" document evidencing the Transaction. Each
Party consents to and has obtained any necessary consent of its employees to the
recording of its employees' telephone conversations without any further notice.
2.3. Equipment and Transaction Tape. Company shall at its expense maintain
equipment necessary to regularly record Transactions on Transaction Tapes and
retain Transaction Tapes in such manner as to protect its business records from
improper access; provided, Company shall not be liable for any malfunction of
equipment or the operation thereof in respect of any Transaction WITHOUT REGARD
TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT LIMITATION, THE
NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT,
OR ACTIVE OR PASSIVE. No Transaction shall be vitiated should a malfunction
occur in equipment regularly utilized for recording Transactions or retaining
Transaction Tapes or the operation thereof, and in such event, the Transaction
shall be evidenced by the written and computer records of the Parties concerning
the Transaction made contemporaneously with the telephone conversation.
2.4 Confirmations. In addition to, but not in lieu of, the foregoing, the
Parties agree that Company may confirm a recorded telephonic Transaction by
forwarding to Customer a facsimile Confirmation in the form set out on Exhibit B
and that a reasonable time for the receipt by Customer of a Confirmation is
within 24 hours of the Transaction formation. Company does hereby adopt its
letterhead, including its address, as its signature on any Confirmation as the
identification of Company and authentication by Company of the Confirmation, and
such letterhead shall be sufficient to verify that Company originated the
Confirmation. The Parties agree that any objections to the contents of the
Confirmation shall be made in writing on or before the Confirm Deadline for all
purposes hereunder and at law. Upon issuance of a Confirmation and the passage
of the Confirm Deadline, if no objection to the Confirmation has been then
received, the Confirmation shall be conclusive evidence of the Transaction made
the subject matter thereof and the final expression of all of its terms.
2.5 Enforcement of Transactions. The Parties agree not to contest or assert a
defense to the validity or enforceability of telephonic Transactions entered
into in accordance with this Agreement under laws relating to (i) whether
certain agreements are to be in writing or signed by the Party to be thereby
bound or (ii) the authority of any employee of the Party if the employee name is
stated in the Transaction Tape.
ARTICLE 3. QUANTITY OBLIGATIONS 3.1. Seller's Sales Obligation. Seller shall
Schedule, or cause to be Scheduled, at the Delivery Point(s) on a firm basis
each Gas Day a quantity of Gas equal to the quantity properly requested by Buyer
up to the DCQ or MaxDQ, if applicable ("Buyer's Requested Quantity"). Unless
otherwise agreed nothing in this Agreement, and in particular this Article 3,
shall require or permit either Party to Schedule Gas at a point other than a
Delivery Point or in excess of the DCO, Maximum Daily Delivery Point Quantity or
MaxDQ, as applicable.
3.2 Seller's Failure to Schedule. If on any Gas Day Seller fails to Schedule
Buyer's Requested Quantity, then such occurrence shall constitute a "Seller's
Deficiency Default" and "Seller's Deficiency Quantity" shall be the numerical
difference between Buyer's Requested Quantity and the amount of Gas Scheduled
for such Gas Day. In the event of a Sellers Deficiency Default, Seller shall pay
Buyer the sum of the following: (i) an amount equal to the product of the
Seller's Deficiency Quantity multiplied by the Replacement Price Differential,
plus (ii) liquidated damages equal to $0.15 per MMBtu multiplied by Sellers
Deficiency Quantity to cover Buyer's administrative and operational costs.
During any Month in which Settees nonperformance continues for a period of five
consecutive Gas Days Buyer may elect upon notice to Seller, without liability,
not to recommence Scheduling Gas hereunder for the remainder of such Month, but
for no longer period. Subject to offset pursuant to Section 3.5, payment to
Buyer shall be made on the later of the 25th Day of the Month or ten days after
Seller receives Buyers statement for same.
3.3. Buyers Purchase Obligation. Buyer shall Schedule, or cause to be Scheduled,
at the Delivery Point(s) on a firm basis each Gas Day a quantity of Gas equal to
the DCQ; provided, (I) if the MinMQ is applicable to a Transaction, Buyer shall
Schedule, or cause to be Scheduled, at the Delivery Point(s) on a firm basis
each Month a minimum quantity of Gas equal to the MinMO and (ii) if the MinDQ is
applicable to a Transaction, Buyer shall
Schedule, or cause to be Scheduled, at the Delivery Point(s) on a firm basis
each Day a minimum quantity of Gas equal to the MinDQ.
3.4. Buyer's Failure to Schedule. If on any Gas Day Buyer fails to Schedule the
DCQ or MinDQ, if applicable, then such occurrence shall constitute a "Buyer's
Deficiency Default" and "Buyer's Deficiency Quantity" shall be the numerical
difference between the DCQ or MinDQ, if applicable, and the quantity of Gas
Scheduled for such Gas Day; provided, if the MinMQ is applicable to a
Transaction, (i) the Buyer's Deficiency Default shall occur if Buyer fails to
Schedule the MinMQ for any Month and (ii) the Buyer's Deficiency Quantity shall
be the numerical difference between the MinMQ and the quantity of Gas Scheduled
for such Month. In the event of a Buyer's Deficiency Default, Buyer shall pay
Seller the sum of the following: (i) an amount equal to the product of Buyers
Deficiency Quantity multiplied by the Replacement Price Differential, plus (ii)
liquidated damages equal to $0.15 per MMBtu multiplied by Buyer's Deficiency
Quantity to cover Settees administrative and operational costs. With respect to
DCQ and MinDQ obligations, during any Month in which Buyers nonperformance
continues for a period of five consecutive Gas Days Seller may elect upon notice
to Buyer, without liability, not to recommence Scheduling Gas for the remainder
of such Month, but for no longer period. Subject to offset pursuant to Section
3.5, payment to Seller shall be made in accordance with the Financial Matters
provisions set forth in Appendix "l."
3.5. Netting. In the event that Buyer and Seller are each required under this
Agreement to pay an amount in the same Month hereunder, then such amounts with
respect to each Party may be aggregated and the Parties may discharge their
obligations to pay through netting, in which case the Party, if any, owing the
greater aggregate amount may pay to the other Party the difference between the
amounts owed.
ARTICLE 4. DEFAULTS AND REMEDIES 4.1.Early Termination. If a Triggering Event
(defined in Section 4.2) occurs with respect to either Party at any time during
the term of this Agreement, the other Party (the "Notifying Party") may (i) upon
two Business Days written notice to the first Party, which notice shall be given
no later than 60 Days after the discovery of the occurrence of the Triggering
Event, establish a date on which any or all Transactions selected by it and this
Agreement in respect thereof will terminate ("Early Termination Date") except as
provided in Section 8.4, and (ii) withhold any payments due in respect of such
Transactions; provided, upon the occurrence of any Triggering Event listed in
item (iv) of Section 4.2 as it may apply to any party, all Transactions and this
Agreement in respect thereof shall automatically terminate, without notice, as
if an Early Termination Date had been immediately declared except as provided in
Section 8.4. If an Early Termination Date occurs, the Notifying Party shall in
good faith calculate its damages, including its associated costs and attorneys'
fees, resulting from the termination of the terminated Transactions (the
"Termination Payment."). The Termination Payment will be determined by (I)
comparing the value of (a) the remaining term, quantities and prices under each
such Transaction had it not been terminated to (b) the equivalent quantities and
relevant market prices for the remaining term either quoted by a bona fide third
party offer or which are reasonably expected to be available in the market under
a replacement contract for each such Transaction and (ii) ascertaining the
associated costs and attorneys' fees. To ascertain the market prices of a
replacement contract the Notifying Party may consider, among other valuations,
any or all of the settlement prices of NYMEX Gas futures contracts, quotations
from leading dealers in Gas swap contracts and other bona fide third party
offers, all adjusted for the length of the remaining term and the basis
differential. All terminated Transactions shall be netted against each other and
upon the netting of all terminated Transactions, if the calculation of the
Termination Payment does not result in damages to the Notifying Party, the
Termination Payment shall be zero. The Notifying Party shall give the Affected
Party (defined in Section 4.2) written notice of the amount of the Termination
Payment, inclusive of a statement showing its determination. The Affected Party
shall pay the Termination Payment to the Notifying Party within 10 Days of
receipt of such notice. At the time for payment of any amount due under this
Article 4, each Party shall pay to the other Party all additional amounts
payable by it pursuant to this Agreement, but all such amounts shall be netted
and aggregated with any Termination Payment payable hereunder. If the Affected
Party disagrees with the calculation of the Termination Payment, the issue shall
be submitted to arbitration pursuant to this Agreement and the resulting
Termination Payment shall be due and payable within three Days after the award.
4.2. Triggering Event. shall mean, with respect to a Party (the "Affected
Party"): (i) the failure by the Affected Party to make, when due, any payment
required under this Agreement ff such failure is not remedied within five
Business Days after written notice of such failure is given to the Affected
Party; provided, the payment is not the subject of a good faith dispute as
described in the Billing and Payment provisions or (ii) any representation or
warranty made by the Affected Party in this Agreement shall prove to have been
false or misleading in any material respect when made or deemed to be repeated
or (iii) the failure by the Affected Party to perform any covenant set forth in
this Agreement (other than its obligations to make any payment or obligations
which are otherwise specifically covered in this Section 4.2 as a separate
Triggering Event), and such failure is not excused by Force Majeure or cured
within five Business Days after written notice thereof to the Affected Party or
(iv) the Affected Party shall (a) make an assignment or any general arrangement
for the benefit of creditors, (b) file a petition or otherwise commence,
authorize or acquiesce in the commencement of a proceeding or cause under any
bankruptcy or similar law for the protection of creditors, or have such petition
filed against it and such proceeding remains undismissed for 30 Days, (c)
otherwise become bankrupt or insolvent (however evidenced) or (d) be unable to
pay its debts as they fall due or (v) Settees unexcused failure to Schedule the
Buyer's Requested Quantity requested by Buyer for a cumulative period of 30 or
more Gas Days in a 12 Month period in any one Transaction or (vi) Buyer's
unexcused failure to Schedule the DCQ or MinDQ for a cumulative period of 30 or
more Gas Days in a 12 Month period in any one Transaction, or, if applicable,
the MinMQ for a cumulative period of three Months in a 12 Month period in any
one Transaction, or (vii) the occurrence of a Material Adverse Change of the
Affected Party; provided, such Material Adverse Change shall not be considered
if the Affected Party establishes, and maintains throughout the term hereof, a
Letter of Credit (naming the Notifying Party as the beneficiary) in an amount
equal to the sum of (in each case rounding upwards for any fractional amount to
the next $100,000) (a) the Notifying Party's Termination Payment plus (b) if the
Notifying Party is Seller, the aggregate of the amounts Seller is entitled to
receive under each Transaction for Gas Scheduled during the 60 Day period
preceding the Material Adverse Change (the amount of said Letter of Credit to be
adjusted quarterly to reflect amounts owing at that point in time) or (viii) the
Affected Party fails to establish, maintain, extend or increase a Letter of
Credit when required pursuant to this Agreement, or after reasonable notice
fails to replace the issuing bank with another bank acceptable to the
beneficiary or (ix) with respect to Company, at any time, Company shall have
defaulted on its indebtedness to third parties resulting in an acceleration of
obligations of Company in excess of $20,000,000 or with respect to Customer, at
any time, Customer shall have defaulted on its indebtedness to third parties,
resulting in an acceleration of obligations of Customer in excess of $500,000.
4.3 Other Events. In the event Buyer under a Transaction 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, such action shall not operate to excuse Buyer from
performance of any obligation nor shall such action give rise to any right of
Buyer to any refund or retroactive adjustment of the Contract Price provided in
any Transaction. Notwithstanding the foregoing, if the Affected Party's
activities hereunder become subject to regulation of any kind whatsoever under
any law (other than with respect to New Taxes) 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) materially adversely affects the
business of the Affected Party, with respect to its financial position or
otherwise, then in the case of (i) above, either Party, and in the case of (ii)
above, only the Affected Party, shall at such time have the right to declare an
Early Termination Date in accordance with the provisions hereof; provided,
notwithstanding the rights of the Parties to declare an Early Termination Date
as above stated, the Affected Party shall be liable for payment of the
Termination Payment calculated by the non-Affected Party as provided in Section
4.1.
4.4. Offset. Each Party reserves to itself all rights, set-offs, counterclaims
and other remedies and defenses consistent with Section 8.3 (to the extent not
expressly herein waived or denied) which such Party has or may be entitled to
arising from or out of this Agreement. All outstanding Transactions and the
obligations to make payment in connection therewith or under this Agreement may
be offset against each other, set off or recouped therefrom.
4.5. Collateral Requirement/General. It is understood and agreed by the Parties
that either Party may request a Letter of Credit or other collateral prior to
consummating any Transaction hereunder; provided, nothing herein shall obligate
any Party to provide such a Letter of Credit or other collateral without having
made an agreement so to do in respect of such Transaction.
ARTICLE 5. FORCE MAJEURE This Article 5 is the sole and exclusive excuse of
performance permitted under this Agreement and all other excuses at law or in
equity are WAIVED to the extent permitted by law. Except with respect to payment
obligations, in the event either Party is rendered unable, wholly or in part, by
Force Majeure to carry out its obligations hereunder, it is agreed that upon
such Party's giving notice and full particulars of such Force Majeure to the
other Party as soon as reasonably possible (such notice to be confirmed in
writing), the obligations of the Party giving such notice, to the extent they
are affected by such event, shall be suspended from the inception and during the
continuance of the Force Majeure for a period of up to 60 Days in the aggregate
during any 12 Month period, but for no longer period. The Party receiving notice
of Force Majeure may immediately take such action as it deems necessary at its
expense for the entire 60 Day period or any part thereof. The Parties expressly
agree that upon the expiration of the 60 Day period Force Majeure shall no
longer apply to the obligations hereunder and both Buyer and Seller shall be
obligated to perform. The cause of the Force Majeure shall be remedied with all
reasonable diligence and dispatch; provided, unless otherwise agreed no
provision herein shall require or permit Seller or Buyer to Schedule quantities
of Gas (i) in excess of the DCQ, Maximum Daily Delivery Point Quantity or MaxDQ,
as applicable, or (ii) at points other than the Delivery Point(s).
ARTICLE 6. TAXES 6.1. Allocation of Taxes. The Contract Price includes, and
Seller is liable for and shall pay, cause to be paid, or reimburse Buyer if
Buyer has paid, all Taxes applicable to the Gas upstream of the Delivery
Point(s). In the event Buyer is required to remit such Taxes, the amount thereof
shall be deducted from any sums becoming due to Seller hereunder. The Contract
Price does not include, and Buyer is liable for and shall pay, cause to be paid,
reimburse Seller if Seller has paid or pay to Seller if Seller is required by
law to pay to a taxing authority, all Taxes applicable to the Gas downstream of
or at the Delivery Point(s), including, but not limited to, any Taxes imposed or
collected by a taxing authority with jurisdiction over Buyer and any Taxes
imposed on the sale of Gas to Buyer, on Buyer's purchase, possession,
transportation, consumption, use, sale or other disposition of Gas, or on any
payment by Buyer to Seller.
6.2. New Taxes. A. If (i) a New Tax occurs and (ii) Buyer or Seller would be
responsible for such New Tax if it were a Tax under Section 6.1 and (iii) such
New Tax is, due to and on the basis of laws, regulations and applicable
contracts of Buyer in effect as of the effective date of the New Tax, of the
type which Buyer can pass directly through to, or be reimbursed by, another
person or entity in the chain of Gas supply, such Buyer shall pay or cause to be
paid, or reimburse Seller if Seller has paid, all such New Taxes; provided, if
Buyer does not identify its contracts for long-term fixed sourcing in the
ordinary course of its business and cannot identify applicable contracts, this
Paragraph A shall not apply. B. If (i) a New Tax occurs and (ii) either Buyer or
Seller would be responsible for such New Tax if it were a Tax under Section 6.1,
and (iii) Paragraph A does not apply, such responsible Buyer or Seller (the
"Taxed Party") shall be entitled to declare an Early Termination Date in
accordance with the provisions of this Agreement subject to the following
conditions; provided, prior to and including the initial Agreement Period (below
defined) invoked under this Section 6.2, New Taxes shall be allocated as if they
were Taxes as provided in Section 6.1: (a) the Taxed Party must give the
non-Taxed Party at least 30 Days prior written notice (the"'Agreement Period")
of its intent to declare an Early Termination Date (and which notice shall be
given no later than 90 Days after the later of the enactment or effective date
of the relevant New Tax), and prior to the proposed Early Termination Date Buyer
and Seller shall attempt to reach a mutual agreement as to the sharing of the
New Tax, (b) if a mutual sharing agreement is not reached, the non-Taxed Party
shall have the right, but not the obligation, upon written notice to the Taxed
Party within the Agreement Period, to pay the New Tax for any continuous period
it so elects on a Month to Month basis, and in such case the Taxed Party shall
not have the right during such continuous period to declare the Early
Termination Date on the basis of the New Taxes, (c) should the non-Taxed Party
at its election agree to pay the New Tax on a Month to Month basis, then upon 30
Days prior written notice to the Taxed Party of its election to cease payment of
such New Tax, the Taxed Party shall then be liable for the payment of the New
Tax and the Parties shall again be subject to this Section 6.2 as if the New Tax
had an effective date as of the date the non-Taxed Party ceases payment of such
New Tax, (d) if a mutual sharing agreement is not reached and the non-Taxed
Party does not elect to pay the New Tax for any period of time within the
Agreement Period, the Early Termination Date shall take effect and all
Transactions must be terminated and be subject to the same Early Termination
Date, (e) the Early Termination Date shall be effected as if a Triggering Event
had occurred and the Termination Payment calculated as set forth in Section 4.1
shall be payable; provided, both Seller and Buyer pursuant to Section 4.1 shall
calculate their respective Termination Payments resulting from the termination
of all Transactions as if they each were a Notifying Party; provided further, if
the calculation of the Termination Payments results in either the non-Taxed
Party's or the Taxed Party's having either a gain or loss (after netting its
gains against its losses), the Parties shall share equally such net gain due, or
be responsible to pay to the Party having the net loss, one-half of the
Termination Payment and (o such Termination Payment shall be payable as provided
in Section 4.1 and its calculation shall be subject to arbitration as provided
in the PG&E Energy Trading-Gas Corporation General Provisions.
6.3 Documentation Supporting Exemptions or Deductions. If Buyer asserts that an
exemption or deduction from Taxes applies, or if Seller requests in writing that
Buyer provide documentation in support of the application of an exemption or
deduction, Seller shall claim the exemption or deduction only after Buyer has
timely provided to Seller all documents required by law in order for the
exemption or deduction to apply; provided, however, Seller shall have no duty or
obligation: (i) to request such documentation; or (ii) to file a claim for
refund for any Taxes paid for any prior period. Seller's failure to request such
documentation shall not alter the rights and obligations of the Parties under
this Article 6.
6.4 Billing and Payment of Taxes Due Seller. Any Taxes for which Buyer has an
obligation to pay Seller pursuant to Article 6 shall be billed and paid in
accordance with the Financial Matters provision set forth in Appendix 1.
ARTICLE 7. TITLE, RISK OF LOSS, INDEMNITY AND BALANCING 7.1. Title, Risk of Loss
and lndemnity. As between the Parties, Seller shall be deemed to be in exclusive
control and possession of Gas Scheduled hereunder and responsible for any damage
or injury caused thereby prior to the time the same shall have been delivered to
Buyer at the Delivery Point(s). After delivery of Gas to Buyer at the Delivery
Point(s), Buyer shall be deemed to be in exclusive control and possession
thereof and responsible for any injury
or damage caused thereby. Title to Gas Scheduled hereunder and risk of loss
therefor shall pass from Seller to Buyer at the Delivery Point(s). Seller and
Buyer each assumes all liability for and shall indemnify, defend and hold
harmless the other Party from any Claims, including injury to and death of
persons, arising from any act or incident occurring when title to the Gas is
vested in the Indemnifying Party; provided, however, no Party shall have any
obligation under this Article 7.1 with regard to Taxes, the entire obligation of
any Party regarding Taxes being fully set forth under Article 6. IT IS THE
INTENT OF THE PARTIES THAT THIS INDEMNITY AND THE LIABILITY ASSUMED UNDER IT BE
WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING, WITHOUT LIMITATION,
THE NEGLIGENCE OF ANY INDEMNIFIED PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT
OR CONCURRENT, OR ACTIVE OR PASSIVE; PROVIDED, NEITHER PARTY SHALL BE LIABLE IN
RESPECT OF ANY CLAIM TO THE EXTENT SAME RESULTED FROM THE GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR BAD FAITH OF THE INDEMNIFIED PARTY.
7.2. Correction of Imbalances, Cashouts and Penalties. Differences between
Scheduled quantities and actual quantities delivered and received hereunder
("Imbalances") will be corrected or settled in cash or Gas or by offset as the
Parties agree. Additionally, in the event of (i) an Imbalance on Buyer's
Transporters system caused by Seller or Sellers Transporter's delivery of less
or more than the Scheduled quantity for any Gas Day (in which case Seller shall
be the "Responsible Party" - ) or (ii) an Imbalance on Seller's Transporter's
system caused by Buyer or Buyer's Transporter's receipt of more or less than the
Scheduled quantity for any Gas Day (in which case Buyer shall be the
"Responsible Party"), the Responsible Party shall be liable for and reimburse to
the other Party any associated Transporter penalties or cashout costs and losses
incurred by such other Party. In the event the tariff of either Buyer's or
Seller's Transporter provides for cashouts on the basis of the aggregation of
all overdeliveries and underdeliveries between such Transporter and Buyer or
Seller, respectively (the "Aggregate Transporter Imbalance" ), and the nature of
the Imbalance (overdelivery or underdelivery) attributable to the Responsible
Party is the same as the Aggregate Transporter Imbalance (overdelivery or
underdelivery), the Responsible Party shall participate in the other Party's
cashout settlement of the Aggregate Transporter Imbalance on the basis of only
the Responsible Party's pro-rata share thereof.
ARTICLE 8. MISCELLANEOUS 8.1. Notices. All notices, including, without
limitation, consents, and communications made pursuant to this Agreement shall
be made as specified in Exhibit "A." Notices required to be in writing shall be
delivered in written form by letter, facsimile or other documentary form. Notice
by facsimile or hand delivery shall be deemed to have been received by the close
of the Business Day on which it was transmitted or hand delivered (unless
transmitted or hand delivered after close in which case it shall be deemed
received at the close of the next Business Day) or such earlier time confirmed
by the receiving Party. Notice by overnight mail or courier shall be deemed to
have been received two Business Days after it was sent or such earlier time
confirmed by the receiving Party. Any notices given hereunder in respect of the
declaration of an Early Termination Date shall be also sent to the address or
facsimile number so specified in Exhibit "A." Any Party may change its addresses
by providing notice of same in accordance herewith.
8.2. Transfer. This Agreement, including, without limitation, each
indemnification, shall inure to and bind the permitted successors and assigns of
the Parties; provided, neither Party shall transfer this Agreement without the
prior written approval of the other Party which may be withheld entirely at the
option of such Party; provided further, either Party may transfer its interest
to any parent or affiliate by assignment, merger or otherwise or transfer, sell,
pledge encumber or assign this Agreement or the accounts, revenues or proceeds
hereof in connection with any financing or other financial arrangements without
the prior approval of the other Party, but no such transfer shall operate to
relieve the transferor Party of its obligations hereunder. Any Party's transfer
in violation of this Section 8.2 shall be void.
8.3 Limitation of Remedies, Liability and Damages and Mitigation. THE PARTIES DO
HEREBY CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN
THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY
PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS HEREIN PROVIDED,
SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY
HEREUNDER, THE OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH
PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF
NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, THE OBLIGOR'S
LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER AND ALL OTHER REMEDIES
OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED,
NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY
OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, IN
TORT, CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. NOTWITHSTANDING ANY
OTHER PROVISION IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY PENALTIES OR CHARGES ASSESSED BY ANY TRANSPORTER OR OTHER ENTITY FOR THE
UNAUTHORIZED RECEIPT OF GAS BY THE OTHER PARTY. IT IS THE INTENT OF THE PARTIES
THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE
WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT
LIMITATION, THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT
OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE
PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE
DIFFICULT OR IMPOSSIBLE TO DETERMINE, OTHERWISE OBTAINING AN ADEQUATE REMEDY IS
INCONVENIENT AND THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF
THE HARM OR LOSS. BUYER ACKNOWLEDGES THAT IT HAS ENTERED INTO THIS AGREEMENT AND
IS CONTRACTING FOR THE GOODS TO BE SUPPLIED BY SELLER BASED SOLELY UPON THE
EXPRESS REPRESENTATIONS AND WARRANTIES HEREIN SET FORTH AND SUBJECT TO SUCH
REPRESENTATIONS AND WARRANTIES, ACCEPTS SUCH GOODS 'AS-IS' AND 'WITH ALL FAULTS.
SELLER EXPRESSLY NEGATES ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR
WARRANTY WITH RESPECT TO CONFORMITY TO MODELS OR SAMPLES, MERCHANTABILITY, OR
FITNESS FOR ANY PARTICULAR PURPOSE. EACH PARTY HEREBY WAIVES ALL RIGHTS UNDER,
ARISING OUT OF OR ASSOCIATED WITH TEXAS & BUSINESS COMMERCE CODE SECTIONS 17.41
THROUGH 17.63 KNOWN AS THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT TO
THE EXTENT ALLOWED BY LAW. The Parties acknowledge the duty to mitigate damages
hereunder. In this connection, the Parties recognize that the ability to
effectuate arrangements for the sale or purchase of Gas is conditioned upon the
volatility of Gas markets, the creditworthiness and reliability of potential
customers, the complexity and size of the portfolios of contracts managed by
each Party and the need to conduct market business in an orderly manner.
Therefore, the Parties agree that (i) three Business Days is a commercially
reasonable period to purchase or sell Gas in respect of a Seller's or Buyer's
Deficiency Default and (ii) three Business Days after the end of the Month in
which the Early Termination Date occurs is a commercially reasonable period
after the establishment of an Early Termination Date to determine the
Termination Payment; provided, notwithstanding the foregoing, if Gas volumes
made the basis of a Seller's or Buyer's Deficiency Default or a Party's
determination of the Termination Payment are in excess of 20,000 MMBtu/Gas Day,
the Parties recognize that a longer period may ordinarily be required to
effectuate cover or determine the Termination Payment in an orderly manner so as
not to adversely affect the Gas market. Each Party may utilize its discretion,
with commercially reasonable foresight, to adjust the timing and staggering of
the
purchases or sales of Gas volumes in its efforts to mitigate damages. No claim
that a Party failed to mitigate damages shall be grounded solely on the basis of
counter Gas market movement.
8.4. Winding Up Arrangements. Upon the expiration of the Parties' sale and
purchase obligations under this Agreement, any monies, penalties or other
charges due and owing Seller shall be paid, any corrections or adjustments to
payments previously made shall be determined, and any refunds due Buyer made,
within 60 Days. Any Imbalances in receipts or deliveries shall be corrected to
zero balance within 60 Days. Notwithstanding the preceding provisions of this
Article 8.4, all indemnity and confidentiality obligations, audit rights, and
any rights and obligations with regard to Taxes pursuant to Article 6 shall
survive the termination of this Agreement. The Parties' obligations provided in
this Agreement shall remain in effect for the purpose of complying herewith.
8.5. Applicable Law. THIS AGREEMENT AND EACH TRANSACTION AND THE RIGHTS AND
DUTIES OF THE PARTIES ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE THAT
THIS AGREEMENT AND ALL TRANSACTIONS SHALL BE ACCEPTED AND FORMED IN THE STATE OF
TEXAS ACCORDING TO THE PROCEDURES HEREIN SET FORTH.
8.6. Document Record Retention and Evidence. This Agreement, the Exhibits and
Appendices hereto, if any, and each Transaction, constitute the entire agreement
between the Parties relating to the subject matter contemplated by this
Agreement. There are no prior or contemporaneous agreements or representations
(whether oral or written) affecting the subject matter other than those herein
expressed. Other than with respect to Transactions entered into in accordance
with the procedures set forth in this Agreement and as otherwise herein
expressly stated (the "Transaction Procedures". ), no amendment or modification
to this Agreement shall be enforceable, unless reduced to writing and executed
by both Parties. The conduct of the Parties in accordance with the Transaction
Procedures shall evidence a course of dealing and a course of performance
accepted by the Parties in furtherance of this Agreement and all Transactions
entered into by the Parties. The provisions of this Agreement shall not impart
rights enforceable by any person, firm or organization not a Party or not bound
as a Party, or not a permitted successor or assignee of a Party bound to this
Agreement. Except as otherwise herein stated, 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 a statutory change
will not otherwise affect the lawful obligations that arise under this
Agreement. The headings used for the Articles herein are for convenience and
reference purposes only. All Exhibits and Appendices referenced in this
Agreement, if any, are incorporated. Any original executed Agreement or
Transaction Agreement may be photocopied and stored on computer tapes and disks
(the "Imaged Agreement"). The Imaged Agreement, if introduced as evidence on
paper, the Confirmation, if introduced as evidence in automated facsimile form,
and the Transaction Tape, if introduced as evidence in its original form and as
transcribed onto paper, and all computer records of the foregoing, if introduced
as evidence in printed format, in any judicial, arbitration, mediation or
administrative proceedings, will be admissible as between the Parties to the
same extent and under the same conditions as other business records originated
and maintained in documentary form. Neither Party shall object to the
admissibility of the Transaction Tape, the Confirmation or the Imaged Agreement
(or photocopies of the transcription of the Transaction Tape, the Confirmation
or the Imaged Agreement) on the basis that such were not originated or
maintained in documentary form under either the hearsay rule, the best evidence
rule or other rule of evidence.
8.7. Confidentiality. Each Party shall not disclose the terms of any Transaction
to a third party (other than the Party's and its affiliates' employees, lenders,
counsel, accountants or prospective purchasers of any rights under any
Transactions who have agreed to keep such terms confidential) except in order to
comply with any applicable law, order, regulation or exchange rule; provided,
each Party shall notify the other Party of any proceeding of which it is aware
which 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 in accordance with Section 8.3.
The Parties have executed this Agreement in multiple counterparts to be
construed as one effective as of the Effective Date.
PG&E ENERGY TRADING-GAS CORPORATION
By: s/M.E. ▇▇▇▇▇
Title: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ - Exec VP & CEO
ROANOKE GAS COMPANY
By: s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: VP / SEC & Treas.
APPENDIX "l"
PG&E ENERGY TRADING-GAS CORPORATION PROVISIONS
* Usage and Definitions All references to Articles and Sections are to those
set forth in this Agreement. Reference to any document means such document as
amended from time to time and reference to any Party includes any permitted
successor or assignee thereof. The following definitions and any terms defined
internally in this Agreement shall apply to this Agreement and all notices and
communications made pursuant to this Agreement.
"Btu" means the amount of energy required to raise the temperature of
one pound of pure water one degree Fahrenheit from 59 degrees
Fahrenheit to 60 degrees Fahrenheit. The term "MMBtu"means one million
Btus.
"Buyer" means the Party to a Transaction who is obligated to purchase
Gas during a Period of Delivery.
"C.T." means Central Time.
"Claims" means all claims or actions, threatened or filed and whether
groundless, false or fraudulent, that directly or indirectly relate to
the subject matters of the indemnity, and the resulting losses,
damages, expenses, attrneys' fees and court costs, whether incurred by
settlement or otherwise, and whether such claims or actions are
threatened or filed prior to or after the termination of this
Agreement.
"Conformation" means a written notice confirming the specific terms of
a Transaction which may be in any form adequate at law; an example of
a Confirmation which may be utilized hereunder is shown in "Exhibit
B."
"Confirm Deadline" means two (2) business days after a Party receives
a Confirmation; provided, if the Confirmation is not received during a
Business Day it shall be deemed received at the open of the next
Business Day.
"Contract Price" means the price for the purchase or sale of Gas
pursuant to a Transaction.
"Daily Contract Quality" ("DCQ") means the quantity of Gas to be
Scheduled each Gas Day pursuant to a Transaction.
"Day" means a period of 24 consecutive hours, beginning at midnight
C.T. on any calendar Day. "Business Day" means a Day on which Federal
Reserve member banks in New York City are open for business and a
Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local
time. "Gas Day" means a period of 24 consecutive hours beginning at
the time of the applicable Transporters gas day.
"Delivery Point(s)" means the agreed point(s) of delivery pursuant to
a Transaction.
"Force Majeure" means an event not anticipated as of the Effective
Date, which is not within the reasonable control of the Party, or in
the case of third party obligations or facilities, the third party,
claiming suspension, and which by the exercise of due diligence such
Party, or third party, is unable to overcome or obtain or cause to be
obtained a commercially reasonable substitute performance therefor;
provided, neither (i) the loss of Buyer's markets nor Buyers inability
economically to use or resell Gas purchased hereunder nor (ii) the
loss or failure of Seller's Gas supply, including, without limitation,
depletion of reserves or other failure of production, nor Seller's
ability to sell Gas to a market at a more advantageous price, shall
constitute an event of Force Majeure. "Force Majeure" shall include an
event of Force Majeure occurring with respect to the facilities or
services of Buyer's or Seller's Transporter.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Gas" means methane and other gaseous hydrocarbons meeting the quality
standards and specifications of Buyer's Transporter.
"Indemnified Party" and "Indemnifying Party" mean the Party receiving
and providing an indemnity, respectively.
"Interest Rate" means, for any date, two percent over the per annum
rate of interest announced as the "Prime Rate" from time to time for
commercial loans by Citibank, N. A. as established by the
administrative body of such bank charged with the responsibility of
establishing such rate, as same may change from time to time;
provided, the Interest Rate shall never exceed the maximum lawful rate
permitted by applicable law.
"Letter of Credit" means an irrevocable standby letter of credit
established by a Party (the 'Account Party') and issued or confirmed
in a form and by a commercial bank acceptable to the Party in whose
favor it is issued (the "Beneficiary Party").
"Material Adverse Change" means with respect to the Customer, in the
reasonable opinion of the Company, a material change in the
creditworthiness, financial condition, or ongoing business of the
Customer that may adversely affect the Customers ability to perform
hereunder, or (ii) with respect to the Company, in the reasonable
opinion of the Customer, a material change in the creditworthiness,
financial condition, or ongoing business of the Company that may
adversely affect the Company's ability to perform hereunder.
"MaxDq" means the maximum quantity of Gas that Seller is required to
Schedule per Gas Day pursuant to a Transaction, if applicable.
"Maximum Daily Delivery Point Quantity" means the maximum quantity of
Gas which may be Scheduled per Gas Day at each Delivery Point where
there are multiple Delivery Points applicable to a Transaction.
"MinDQ" means the minimum quantity of Gas that Buyer is required to
Schedule per Gas Day pursuant to a Transaction, if applicable.
"MinDQ" means for any Month the minimum quantity of Gas per Gas Day
that Buyer is obligated to Schedule times the number of Days in the
Month pursuant to a Transaction, if applicable.
"Month" means a period of time beginning at midnight C.T. on the first
Day of any calendar Month and ending at midnight C.T. on the first Day
of the following calendar Month.
"New Taxes" means (I) any Taxes enacted and effective after the
Effective Date, including, without limitation, that portion of any
Taxes or New Taxes that constitutes an increase, or (ii) any law,
order, rule or regulation, or interpretation thereof, enacted and
effective after the Effective Date resulting in the application of any
Taxes to a new or different class of parties.
"Period of Delivery" means the period from the date Scheduling
obligations are to commence to the date same are to terminate under a
Transaction.
"Pipeline" means a company authorized to ship Gas on behalf of itself
or others on physical Gas transmission facilities.
"Pricing Hours" means the hours C.T. from 8:00 a.m. to 5:00 p.m. of
each Business Day.
"Replacement Price Differential" means (i) in the event of a Seller's
Deficiency Default, the positive difference, if any, obtained by
subtracting the Contract Price from the greater of (a) the cost to
Buyer, including incremental transportation costs and other basis
adjustments, to replace Sellers Deficiency Quantity for such Gas Day
(but excluding penalties or charges for unauthorized receipts of Gas
by Buyer) or (b) the Spot Price for the Gas Day in which Seller's
Deficiency Default occurred, and (ii) in the event of a Buyer's
Deficiency Default, the positive difference, if any, obtained by
subtracting the lesser of (a) the price obtained by Seller in an
incremental, arms-length sale(s) to a third party of a quantity equal
to Buyer's Deficiency Quantity for such Gas Day, less incremental
transportation charges to Seller, and including other basis
adjustments, or (b) the Spot Price for the Gas Day in which Buyer's
Deficiency Default occurred (or if the MinMQ is applicable, the Spot
Price for the middle Gas Day of the Month in which Buyers Deficiency
Default occurred), from the Contract Price.
"Scheduling" or "Schedule," when used in reference to Seller, means to
make Gas available, or cause Gas to be made available, at the Delivery
Point(s) for delivery to or for the account of Buyer, including making
all Pipeline nominations, and when used in reference to Buyer, means
to cause Buyees Transporter to make available at the Delivery Point(s)
transportation capacity sufficient to permit Buyer's Transporter to
receive on a firm basis the quantities Seller has available at such
Delivery Point(s), including making all Pipeline nominations. Gas
shall be deemed to have been Scheduled when confirmed by Transporter.
"Seller" means the Party to a Transaction who is obligated to sell Gas
during a Period of Delivery.
"Spot Price"means the price set forth in Gas Daily (Pasha
Publications, Inc.), or successor publication, in the column 'Daily
Price Survey' under the listing applicable to the geographic location
agreed pursuant to a Transaction for the relevant Gas Day. If there is
no single
price published for that particular Gas Day, but there is published a
range of prices under the above column and listing, then the Spot
Price shall be the average of such high and low prices. In the event
that no price or range of prices is published for that particular Gas
Day, then the Spot Price shall be the average of the following: the
price (determined as stated above) for each of the first Gas Day
immediately preceding and following the Gas Day in which the default
occurred for which a Spot Price can be determined.
"Taxes" means any or all ad valorem, property, occupation, severance,
production, extraction, first use, conservation, Btu or energy,
gathering, transport, Pipeline, utility, gross receipts, gas or oil
revenue, gas or oil import, privilege, sales, rentals, use,
consumption, excise, lease, transaction, and other taxes or New Taxes,
franchise fees, governmental charges or fees, licenses, fees, permits
and assessments, or increases therein, and any interest or penalties
on such taxes, charges, licenses, fees, permits, New Taxes and
assessments, other than taxes based on net income or net worth.
"Transaction" means an agreement and any amendment or modification
thereof made in accordance herewith for the purchase or sale of Gas to
be performed hereunder.
"Transaction Agreement" means a written paper-based agreement executed
by the Parties to form and effectuate a Transaction which may be
substantially in the form set forth in Exhibit "▇-▇."
"Transaction Tape" means the tape recording of a recorded Transaction
effectuated in accordance with Article 2.
"Transporter" means either the Pipeline delivering or receiving Gas at
a Delivery Point in a Transaction.
* Representations and Warranties As a material inducement to entering into this
Agreement, including each Transaction, each Party, with respect to itself,
hereby represents and warrants to the other Party continuing throughout the term
of this Agreement as follows: (i) there are no suits, proceedings, judgments,
rulings or orders by or before any court or any governmental authority that
materially adversely affect its ability to perform this Agreement or the rights
of the other Party under this Agreement, (ii) it is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, and it has the legal right, power and authority and is qualified to
conduct its business, and to execute and deliver this Agreement and perform its
obligations under the same and each Transaction, and all regulatory
authorizations have been maintained as necessary for it to legally perform its
obligations hereunder, (iii) the making and performance by it of this Agreement
is within its powers, has been duly authorized by all necessary action on its
part, and does not and will not violate any provision of law or any rule,
regulation, order, writ, judgment, decree or other determination presently in
effect applicable to it or its governing documents, (iv) each of this Agreement
and each Transaction when entered into constitutes a legal, valid and binding
act and obligation of it, enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, reorganization and other laws affecting
creditors rights generally, and with regard to equitable remedies, to the
discretion of the court before which proceedings to obtain same may be pending,
(v) there are no bankruptcy, insolvency, reorganization, receivership or other
arrangement proceedings pending or being contemplated by it, or to its knowledge
threatened against it, (vi) it has assets of $5,000,000 or more according to its
most recent financial statements prepared in accordance with GAAP and knowledge
and experience in financial matters that enable it to evaluate the merits and
risks of this Agreement, and (vii) it is not in a disparate bargaining position
with the other Party.
* Operations and Delivery Scheduling Requests. Not later than two Business Days
prior to the earlier of Buyer's or Seller's Transporter's nomination deadline
for the first Gas Day of each Month during a Period of Delivery, Buyer agrees to
provide to Seller facsimile notice of the quantities Buyer requests Seller to
Schedule for each Gas Day of such Month. Should Buyer desire to change the
requested quantities Scheduled, Buyer shall provide to Seller facsimile notice
thereof not later than one Business Day prior to the earlier of Buyer's or
Sellers Transporters nomination deadline for the applicable Gas Day. In the
event the nomination or Scheduling deadline of a Transporter conflicts with
these notification dates, Buyer and Seller agree to modify the notification
dates accordingly. Scheduling requests to Seller will be accepted at the
telephone number and shall be confirmed by facsimile as set forth in Exhibit
"A." Transportation. Seller shall obtain, or cause to be obtained,
transportation to the Delivery Point, and Buyer shall obtain, or cause to be
obtained, transportation from the Delivery Point. Gas Specifications. Seller
represents that all Gas delivered hereunder shall meet or exceed the
specifications of Buyer's Transporter. Multiple Delivery Point Utilization. In
the event a Transaction shall contain more than one Delivery Point, the Parties
shall specify a Maximum Daily Delivery Point Quantity for each Delivery Point.
The Delivery Points which shall be utilized for delivery of Gas and the
quantities of Gas to be Scheduled for delivery at such Delivery Points shall be
determined by Seller in its sole discretion within each applicable Maximum Daily
Delivery Point Quantity. Seller shall provide to Buyer a list of Delivery Points
and quantities determined by it within a period of time necessary to permit
Buyer to make nominations. Operational Flow Orders. Should either Party receive
an operational flow order or other order or notice from a Transporter requiring
action to be taken in connection with this Agreement or Gas flowing under this
Agreement ("O FO"), such Party shall immediately notify the other Party of the
OFO and provide the other Party a copy of same by facsimile. The Parties shall
take all actions required by the OFO within the time prescribed. Each Party
shall indemnify, defend and hold harmless the other Party from any Claims,
including, without limitation, all non-compliance penalties and aftorneys' fees,
associated with an OFO (i) of which the Indemnifying Party failed to give the
Indemnified Party the notice required hereunder or (ii) under which the
Indemnifying Party failed to take the action required by the OFO within the time
prescribed.
* Financial Matters Billing, Invoice Date, Charges and Payment. By the 10th Day
of each calendar Month following the Month in which Gas was Scheduled under a
Transaction, Seller shall provide Buyer with a written statement setting forth
Gas Scheduled during the preceding Month, and other charges due Seller,
including, without limitation, deficiency charges under Article 3, and any Taxes
for which Buyer has an obligation to pay Seller pursuant to Article 6. If Seller
becomes aware, at a later time, of any Taxes for which Buyer has an obligation
to pay Seller pursuant to Article 6, Seller shall render to Buyer a written
statement setting forth such Taxes, and Buyer shall render payment of such
statement in accordance with this Financial Matters provision. Billing and
payment will be based on Scheduled quantities. Within five Business Days of the
request of either Party, the other Party shall provide, to the extent it has a
legal right of access thereto and/or such statement is then available, a copy of
the Transporter's allocation or imbalance statement applicable to Gas sold
hereunder for the requested period. The difference, if any, between Scheduled
and actual quantities delivered or accepted shall be treated as Imbalances under
Article 7. Buyer shall remit any amounts due on the later of the 25th Day of the
Month in which Seller's statement was received or ten days after receipt of
Sellers invoice. If the due date for any payment to be made under this Agreement
is not a Business Day, the due date for such payment shall be the following
Business Day. Payment of all funds shall be made in U. S. currency and as
indicated in Exhibit "A" in such manner that funds are immediately available to
the payee on the applicable due date. Each Party shall take all actions
necessary to effect payments in accordance with the process stated in Exhibit
"A." If Buyer or Seller should fail to remit any amounts in full when due
hereunder, interest on the unpaid portion shall accrue from the date due at a
rate equal to the Interest Rate. ▇▇▇▇▇▇▇▇, payments and statements shall be made
to the accounts or the addresses/facsimiles specified in Exhibit "A."
Suspension of Performance. If either Party fails to make a timely payment and
such failure is not remedied within two Business Days after such Party receives
written notice of default, the nondefaulting Party, in addition to other
remedies, may suspend the Scheduling of Gas until such amount, including
interest, is paid; provided, if the defaulting Party, in good faith, shall
dispute the amount of any such billing or part thereof and shall pay such
amounts as it concedes to be correct, no suspension shall be permitted.
Audit Rights. During the term of this Agreement and for a period of two years
from the date of termination of a Transaction, Buyer or Seller or any third
party representative thereof shall have the right, upon reasonable notice and at
reasonable times, to examine the books and records of the other to the extent
reasonably necessary to verify the accuracy of any billing statement, payment
demand, charge, payment or computation made under this Agreement. The records of
the Parties shall be retained in accordance with Section 8.6 for a like period
to facilitate the audit rights of the Parties.
Financial Information. If requested by Customer, Company shall deliver (i)
within 120 Days following the end of each fiscal year, a copy of the annual
report of PG&E Corporation containing consolidated financial statements for such
fiscal year certified by independent certified public accountants and (ii)
within 60 Days after the end of each of its first three fiscal quarters of each
fiscal year, a copy of the quarterly report of PG&E Corporation containing
unaudited consolidated financial statements for such fiscal quarter. If
requested by Company, Customer shall deliver (i) within 120 Days following the
end of each fiscal year, a copy of its annual report containing consolidated
financial statements for such fiscal year certified by independent certified
public accountants and (ii) within 60 Days after the end of each of its first
three fiscal quarters of each fiscal year, a copy of its quarterly report
containing unaudited consolidated financial statements for such fiscal quarter.
In all cases the statements shall be for the most recent accounting period and
prepared in accordance with GAAP; provided, should any such statements not be
timely due to a delay in preparation or certification, such delay shall not be
considered a default so long as such Party diligently pursues the preparation,
certification and delivery of the statements.
* Warranty of Title to Gas Seller in any Transaction warrants that title to Gas
to be Scheduled by Seller is free from all production burdens, liens and adverse
claims and warrants its right to sell the same. Seller agrees to indemnify,
defend and hold harmless Buyer against all Claims to or against the title of
said Gas. In the event any Claim is asserted to said Gas, Buyer, in addition to
other remedies, may suspend its obligation to pay for said Gas up to the amount
of such Claim.
* Alternate Price Redetermination If any or all of the indices used to determine
the Spot Price or the Contract Price are not available in the future, the
Parties agree to promptly negotiate a mutually satisfactory alternate index for
the Spot Price or Contract Price (each an "Alternate Price"). If the Parties
cannot agree by the end of the first Month for which the Spot Price or Contract
Price could not be determined, then Seller and Buyer shall each prepare a
prioritized list of up to five alternative published reference postings or
prices representative of spot prices for Gas delivered in the same geographic
area. Each Party shall submit its list to the other within 10 Days after the end
of the first Month for which the price could not be determined. The first listed
index appearing in Seller's list that also appears in Buyers list shall
constitute the replacement index. If no common indices appear on the lists, each
Party shall submit a new list adding two indices within 10 Days. If either Party
fails to provide timely a list, such Party's list shall not be considered. From
and after the "Renegotiation Date," which shall be the date the Spot Price or
Contract Price is no longer available, until the Alternate Price is determined,
the Alternate Price shall be the average of the Spot Price(s) or Contract
Price(s) in effect during the 12 Months preceding the Month in which the
Renegotiation Date occurred, which price shall be effective until the Alternate
Price is determined. Upon determination of a new Alternate Price, the Spot Price
or Contract Price, as applicable, will be adjusted retroactively to the
Renegotiation Date.
* Effect of Waiver or Consent No waiver or consent by either Party, express or
implied, of any one or more defaults by the other Party in the performance of
any provision of this Agreement shall operate or be construed as a waiver or
consent of any other default or defaults whether of a like or different nature.
Failure by a Party to complain of any act of the other Party or to declare the
other Party in default with respect to this Agreement, regardless of how long
that failure continues, shall not constitute a waiver by that Party of its
rights with respect to that default until the applicable statute of limitations
period has run.
* Indemnifications With respect to each indemnification included in this
Agreement the indemnity is given to the extent authorized by law and the
following provisions shall be considered applicable. The Indemnified Party shall
promptly notify the Indemnifying Party in writing of any Claim and the
Indemnifying Party shall have the right to assume the investigation and defense
thereof, including the employment of counsel, and shall be obligated to pay the
related aftorneys' fees; provided, the Indemnified Party shall have the right to
employ separate counsel and participate in the defense of any Claim, however,
the attorneys' fees of such counsel shall be paid by the Indemnified Party
unless the employment of such counsel has been consented to in writing by the
Indemnifying Party or the Indemnifying Party has failed to assume the defense
and employ counsel in a timely manner, provided further, if the named parties to
any Claim include both Parties, and the Indemnified Party shall have been
advised by counsel that there may be a legal defense available to it which is
different from those available to the Indemnifying Party, the Indemnified Party
may elect to employ separate counsel at the expense of the Indemnifying Party,
in which case the Indemnifying Party shall pay all attorneys' fees of such
counsel and shall not have the right to assume the defense of the Claim on
behalf of the Indemnified Party. The Parties shall use reasonable efforts to
cooperate in the defense of any Claim. The Indemnifying Party shall not be
liable for any settlement of a Claim without its express written consent
thereto. The Indemnified Party shall reimburse the Indemnifying Party for
payments made or costs incurred in respect of an indemnity with the proceeds of
any judgment, insurance, bond, surety or other recovery made with respect to an
event covered by the indemnity.
*Arbitration Disputes to be Arbitrated. Any and all claims, demands, causes of
action, disputes, controversies, and other matters in question arising out of or
relating to this Agreement, any of its provisions, or the relationship between
the Parties created by this Agreement, whether sounding in contract, tort, or
otherwise, whether provided by statute or the common law, for damages or any
other relief, including, without limitation, all Claims (all of which are
referred to herein as "Disputes"), shall be resolved by binding arbitration
pursuant to the Federal Arbitration Act. The arbitration may be initiated by
either Party by providing to the other a written notice of arbitration
specifying the Disputes to be arbitrated. If a Party refuses to honor its
obligations to arbitrate, the other Party may seek to compel arbitration in
either federal or state court. The arbitration proceeding shall be conducted in
Houston, Texas, or other location mutually agreed upon by the Parties. Within 30
Days of the notice initiating the arbitration procedure, each Party shall
designate one arbitrator, who need not be impartial. If a Party fails to
designate an arbitrator, the other Party may have an arbitrator appointed by
applying to the senior active United States District Judge for the Southern
District of Texas. The two arbitrators shall select a third arbitrator. If the
two arbitrators chosen by the Parties fail to agree upon the third arbitrator,
both or either of the Parties may apply to the senior active United States
District Judge for the Southern District of Texas for the appointment of a third
arbitrator. The third arbitrator shall take an oath of neutrality.
Arbitration Procedures. The three arbitrators shall make all of their decisions
by majority vote. The enforcement of this Agreement to arbitrate, the validity,
construction, and interpretation of this Agreement to arbitrate, and all
procedural aspects of the proceeding pursuant to this Agreement to arbitrate,
including, without limitation, the issues subject to arbitration, the scope of
the arbitrable issues, allegations of fraud in the inducement' to enter into
this entire Agreement or to enter into this Agreement to arbitrate, allegations
of waiver, delay or defenses to arbitrability, and the rules governing the
conduct of the arbitration, shall be governed by and construed pursuant to the
Federal Arbitration Act. In deciding the substance of the parties' Disputes, the
arbitrators shall apply the substantive laws of the State of Texas (excluding
Texas choice-of-law principles that might call for the application of some other
State's law). The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except as
modified in this Agreement. It is contemplated that although the arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, the arbitration proceeding will be
selfadministered by the Parties; provided, if a Party believes the process will
be enhanced if it is administered by the American Arbitration Association, such
Party shall have the right to cause the process to become administered by the
American Arbitration Association by applying to the American Arbitration
Association and, thereafter, the arbitration shall be conducted pursuant to the
administration of the American Arbitration Association. In determining the
extent of discovery, the number and length of depositions, and all other pre-
hearing matters, the arbitrators shall endeavor to the extent possible to
streamline the proceedings and minimize the time and cost of the proceedings.
There shall be no transcript of the hearing. The final hearing shall be
conducted within 120 days of the selection of the third arbitrator. The final
hearing shall not exceed 10 Business Days, with each Party to be granted onehalf
of the allocated time to present its case to the arbitrators. All proceedings
conducted hereunder and the decision of the arbitrators shall be kept
confidential by the Parties.
Arbitration Award. Only damages allowed pursuant to this Agreement may be
awarded. IT IS EXPRESSLY AGREED THAT THE ARBITRATORS SHALL HAVE NO AUTHORITY TO
AWARD TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY CIRCUMSTANCES
REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER TEXAS LAW. THE PARTIES
HEREBY WAIVE THEIR RIGHT, IF ANY, TO RECOVER TREBLE, EXEMPLARY OR PUNITIVE
DAMAGES IN CONNECTION WITH ANY DISPUTE, EITHER IN ARBITRATION OR IN LITIGATION.
The arbitrators shall render their final decision within 20 Days of the
completion of the final hearing fully resolving all of the Disputes that are the
subject of the arbitration proceeding. The arbitrators' ultimate decision after
final hearing shall be in writing. The arbitrators shall certify in their
decision that no part of their award includes any amount for treble, exemplary
or punitive damages not allowed hereunder. The arbitrators' decision shall be
final and non-appealable to the maximum extent permitted by law. Any and all of
the arbitrators' orders and decisions may be enforceable in, and judgment upon
any award rendered in the arbitration proceeding may be confirmed and entered
by, any federal or state court having jurisdiction.
* Authority for Transactions Each Party represents to the other Party that each
of its employees has authority to enter into Transactions pursuant to this
Agreement on its behalf. Identification and authority of a Party's employee
engaging in a recorded telephonic Transaction shall be conclusively established
for all purposes by a statement on the Transaction Tape by the employee of the
employee's name; provided, failure to state the employee name shall not evidence
any lack of authority of the employee to effectuate and form a Transaction.
* Trigger Pricing During the Period of Delivery for a Transaction expressly
providing for "Trigger Pricing" in the Confirmation, either Party may request a
price other than the original Contract Price, being a Fixed Price, Fixed Basis
Price or Floating Basis Price (each below defined) by contacting the other Party
during Pricing Hours requesting any such price for a specified quantity of Gas
to be Scheduled during selected Months within the Period of Delivery; provided,
such request must be made prior to 12:00 CT on the last trading day of the
applicable exchange (NYMEX Gas futures contract for the selected Month or KCBT
Gas futures contract for the selected month). The terms of this Agreement,
including, without limitation, Article 2, shall apply to Trigger Pricing in
respect of any Transaction hereunder. A Confirmation may be sent by Company to
Customer confirming the Trigger Pricing agreement in accordance with Section
2.4. "Fixed Price" means a fixed dollar amount agreed to by the Parties. "Fixed
Basis Price" means a price agreed to by the Parties on the basis of the Gas
futures contract for the applicable exchange then trading for the applicable
Month, or (unless otherwise indicated in the Confirmation) if no such price is
agreed prior to the Trigger Deadline as set out on the Confirmation, the price
shall be the last posted price by the applicable exchange for any contract month
for Gas futures contracts then trading on the applicable exchange plus a fixed
dollar amount basis adjustment agreed to by the Parties. "Floating Basis Price"
means a price equal to the sum of a fixed dollar amount agreed to by the Parties
plus the difference between the selected reference price for the Delivery
Point(s) and the Average Settlement Price for the applicable Month. The price
for all Gas for which a Flexible Price has not been agreed by the Parties shall
be the original Contract Price applicable to the Transaction.
EXHIBIT "A"
PG&E ENERGY TRADING-GAS CORPORATION
MASTER FIRM PURCHASE/SALE AGREEMENT
NOTICE / COMMUNICATION / PAYMENT
TO COMPANY:
Notices/Correspondence:
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Contract Administration
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Termination Notice Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Duns No.: ▇▇-▇▇▇-▇▇▇▇
Fed. Tax I.D. No.: ▇▇-▇▇▇▇▇▇▇
Invoices:
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Accounting
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Payments:
Boston Safe Deposit & Trust
Medford, MA
For the account of PG&E Energy Trading-Gas Corporation
ABA No.: 01 ▇▇▇▇▇▇▇
Account No.: 101036
Confirmations:
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Nominations:
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
TO CUSTOMER:
Notices/Correspondence:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,@ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.:▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Duns. No.: ▇▇-▇▇▇-▇▇▇▇
Fed. Tax I.D. No.:
Invoices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Accounting
Payments:
Bank Name: First Union National Bank of Virginia
City & State: Roanoke, VA
For the account of: ---------------------
-----------------------------------------
ABA No.: ▇▇▇▇-▇▇▇▇-▇
Account No.:2001005287087
Confirmations:
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Nominations:
Telephone No.:▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
TRANSACTION CONFIRMATION
FOR IMMEDIATE DELIVERY
EXHIBIT B
Date:
PG&E Energy Trading - Gas Corporation Transaction Confirm No.:
This Transaction Confirmation is subject to the Master Contract between Seller
and Buyer dated . The terms of this Transaction Confirmation are binding unless
disputed in writing on or before the "Confirm Deadline" specified in the Master
Contract. PG& E Energy Trading-Gas Corporation adopts the confirming letterhead
as its signature on this Transaction Confirmation
Seller: Buyer:
Attn: Attn:
Phone: Phone:
Fax: Fax:
Contract No.: Contract No.:
Pricing Terms:
Delivery Period: Begin: Delivery Point:
End:
Performance Obligation and Contract Quantity:
Firm (Fixed Quantity): Interruptible:
MMBtus/day (DCQ) MMBtus/day
[ ] EFP
Special Conditions:
TRANSACTION CONFIRMATION Exhibit B-1
PG&E Energy Trading - Gas Corporation Date: October 25, 1999
PG&E Energy Trading is not the same company as Pacific Gas and Electric Company,
the utility; Transaction Confirm No.: ROANOKEGAS-P/S-01 PG&E Energy Trading is
not regulated by the California Public Utilities Commission and you do not have
to buy PG&E Energy Trading's products in order to continue to receive quality
regulated services Trade Date: October 8, 1999 from the utility.
-------------------------------------------------------------------------------
Seller: Buyer:
PG&E Energy Trading-Gas Corporation ("PG&E ET") Roanoke Gas ("RGC")
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------
Pricing Terms:
Baseload Supply
RGC will be charged for the monthly baseload based upon an average of relevant
(points) published prices in Inside F.E.R.C.'s Gas Market Report. The relevant
points are based upon an average of RGC's current transportation entitlements.
In effect, PG&E ET will supply an "Index Basket" of baseload supply at IFERC
"Index Basket" flat.
Winter baseload deliveries will be priced according to the following rates:
--------------------------------------------------------------------------
Commodity Supply: Weighted average of the following Indices
7.4% Inside F.E.R.C. Gas Market Report's FOM Tennessee Gas
Pipeline Co. - Texas (Zone 0) index
31.5% Inside F.E.R.C. Gas Market Report's FOM Tennessee
Gas Pipeline Co. - La. & Offshore (Zone 1) index
38.2% Inside F.E.R.C. Gas Market Report's FOM Columbia
Gulf Transmission Co. - Louisiana index
9.2% Gas Daily Monthly Contract Index for Columbia,
Mainline
13.7% Inside F.E.R.C. Gas Market Report's FOM Chicago
Citygate (Midwestern)
Variable Charges: $.06425 Commodity Charges
5.0939% Fuel Retainage
Summer baseload deliveries will be priced according to the following rates:
--------------------------------------------------------------------------
Commodity Supply: Same as Winter Commodity Supply (see above)
Variable Charges: $.05849 Commodity Charges
4.78% Fuel Retainage
Deliveries TO Columbia Gas Storage will be priced according to the following
----------------------------------------------------------------------------
rates:
-----
Commodity Supply: Weighted average of the following Indices
62.6% Inside F.E.R.C. Gas Market Report's FOM Columbia
Gulf Transmission Co. - Louisiana index
15.4% Gas Daily Monthly Contract index for Columbia,
Mainline
22% Inside F.E.R.C. Gas Market Report's FOM Tennessee Gas
Pipeline Co. - La. & Offshore (Zone 1) index
Variable Charges: $.05987 Commodity Charges
5.6719% Fuel Retainage
Deliveries TO Tennesee Gas Storage will be priced according to the following
----------------------------------------------------------------------------
rates:
-----
Commodity Supply: Weighted average of the following Indices
19% Inside F.E.R.C. Gas Market Report's FOM Tennessee Gas
Pipeline Co. - Texas (Zone 0) index
45.8% Inside F.E.R.C. Gas Market Report's FOM Tennessee
Gas Pipeline Co - La. & Offshore (Zone 1)index
35.2% Inside F.E.R.C. Gas Market Report's FOM Chicago
Citygate (Midwestern)
Variable Charges: $.06233 Commodity Charges
1.5933% Fuel Retainage
Deliveries TO Virginia Gas Storage will be priced according to the following
----------------------------------------------------------------------------
rates:
-----
Commodity Supply: Weighted average of the following Indices
19% Inside F.E.R.C. Gas Market Rcport's FOM Tennessee Gas
Pipeline Co. - Texas (Zone 0) index
45.8% Inside F.E.R.C. Gas Market Report's FOM Tennessee
Gas Pipeline Co - La. & Offshore (Zone 1) index
35.2% Inside F.E.R.C. Gas Market Report's FOM Chicago
Citygate (Midwestern)
Variable Charges: $.07313 Commodity Charges
3.1481% Fuel Retainage
Further, the Contract Price shall be adjusted for any item(s) set forth under
Special Conditions.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Pricing Terms (continued):
Swing Supply
PG&E ET will supply additional swing supply at the Midpoint of Gas Daily's -
Daily Price Survey - Columbia, App. flat. The Gas Daily price billed to RGC will
be dependent upon the day in which the additional supply is actually purchased
by PG&E ET. In addition to the commodity price paid, RGC will also be
responsible for the variable Deportation costs (commodity and fuel retainage
rates) associated with the Columbia, App.
Supply.
PG&E ET will purchase excess baseload supply from RGC at the lower of the
Midpoint of Gas Daily's - Daily Price Survey - Louisiana, Onshore -Columbia flat
or IFERC Columbia Gulf Louisiana flat. The price paid to RGC will be based upon
the day in which the additional supply is actually re-sold in the market by PG&E
ET. PG&E ET will reimburse RGC for any variable transportation costs charged on
the monthly baseload quantity which is sold back to PG&E ET under the
aforementioned method.
-------------------------------------------------------------------------------
Delivery Period: Begin: November 1, 1999 Delivery Point: Roanoke Gas citygate
End: October 31, 2000
-------------------------------------------------------------------------------
Performance Obligation and Contract Quantity:
Full Requirements, not to exceed 74,531 MMBtus/day (DCQ)
Baseload Deliveries (Fixed Quantity):
Nov99 - 15,210 MMBtus/day May00 - 20,642 MMBtus/day
Dec99 - 23,441 MMBtus/day Jun00 - 17,534 MMBtus/day
Jan00 - 27,520 MMBtus/day Jul00 - 17,413 MMBtus/day
Feb00 - 22,026 MMBtus/day Aug00 - 17,561 MMBtus/day
Mar00 - 15,224 MMBtus/day Sep00 - 17,542 MMBtus/day
Apr00 - 27,233 MMBtus/day Oct00 - 24,392 MMBtus/day
Swing Deliveries/Purchases:
On any day in which the net natural gas requirements of RGC exceed the monthly
baseload as determined by PG&E ET, PG&E ET will supply the necessary additional
supply up to the Contract Quantity of 74,531 MMBtus/day.
On any day in which the net natural gas requirements of RGC are less than the
monthly baseload established by PG&E ET, PG&E ET will purchase the excess
baseload supply from RGC.
-------------------------------------------------------------------------------
Special Conditions:
Asset Release: RGC will (i) appoint PG&E ET as its agent for
all of its storage capacity (see Exhibit A, First
Amendment) and (ii) release its transportation
contracts to PG&E ET (see Exhibit C). To facilitate
RGC's release of its transportation contracts, PG&E ET
will pay all pipeline demand charges, but will be
subsequently reimbursed by RGC. At the expiration of
the transaction, all storage assets will be returned
to the control of RGC with inventory levels equal to
those that existed on 10/31/99.
Supply Contracts: RGC will sell all existing supply contracts
to PG&E ET. PG&E ET will reimburse RGC for their costs
associated with this supply, exclusive of demand
charges (see Exhibit D). RGC will pay all supply
invoices.
Demand Payment: Throughout the term of the deal, PG&E ET will pay a
monthly demand charge to RGC equal to $68,348.17.
Extension of Term: PG&E ET will have the unilateral right to
extend the term of this transaction through October
31, 2001. Should PG&E wish to exercise this right,
RGC must be notified prior to the close of business
on February 29, 2000. Should the term of the
transaction be extended and RGC so desire, PG&E ET
will work in good faith to develop a plan which would
provide for PG&E ET to take assignment of RGC's
storage capacity and own RGC's storage gas until
delivery of aforementioned storage
gas to the RGC city-gate.
Storage Billing RGC will be billed monthly for a ratable storage
withdrawal/injection. During the winter, the total
daily withdrawals billed will be equal a citygate
delivery of 14,853/day (9,947/day TCO/3,722/day
TGP/1,184/day Va. Gas). During the summer, the total
daily injections billed equal to 10,550/day (7,065/day
TCO/2,644/day TGP 841/day Va. Gas).
Storage Costs: In addition to the commodity and variable cost
charged to RGC for deliveries to storage facilities,
RGC will also be charged for any variable charges
associated with delivery into storage. RGC will not
pay for the commodity when it is withdrawn from
storage but will be responsible for the associated
variable withdrawal charges.
Variable Charges All variable charges associated with this
transaction are based upon the current commodity and
fuel rates as presented in the applicable pipeline
tariff. These rates will be adjusted to continuously
reflect the most up to date tariff rates.
Non-Performance Notwithstanding any other provisions in this
Transaction Confirmation, RGC shall have a unilateral
right to terminate the Agreement between the parties
as evidenced hereby, before March 31, 2000, upon 10
days' notice to ENERGY TRADING, for inadequate
performance. "Inadequate performance" shall only
mean ENERGY TRADING's failure to supply the firm
citygate natural gas volumes to RGC, as contracted by
the parties, unless ENERGY TRADING's performance is
excused under the Master Firm Agreement
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Seller: PG&E Energy Trading-Gas Corporation Buyer: Roanoke Gas
----------------------------------- -----------------------------
By: By: s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III
----------------------------------- -----------------------------
Name/Title: Name/Title: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ / CEO
----------------------------------- -----------------------------
Date: Date: Oct. 27, 1999
----------------------------------- -----------------------------
-------------------------------------------------------------------------------
EXHIBIT C
EXHIBIT C TO MASTER AGREEMENT
Roanoke Gas Company - Commodity Pricing and Associated Variable Charges
*Winter baseload deliveries will be priced according to the following rates:
Winter Fuel Winter Fuel Winter Fuel Cumulative Commodity Commodity
IFERC Location Weighting pipeline 1 pipeline 2 pipeline 3 Winter Fuel pipeline 1 pipeline 2
-------------- ---------- ---------- ---------- ---------- ------------ ---------- -----------
Tennessee Gas-Texas (ZO) 7.4% TGP ZO to ETN to RGC 2.790% 2.220% 4.948% $0.0691 $0.0108
Tennessee Gas-La. (Z1) 17.80% TGP Z1 to ETN to RGC 1.910% 2.220% 4.088% $0.0594 $0.0108
Tennessee Gas-La. (Z1) 13.70% TGP Z1 to TCO to RGC 4.990% 2.116% 7.000% $0.0895 $0.0229
Columbia Gulf-La. 38.20% CGT FTS2 to FTS1 to TCO to RGC 0.590% 2.988% 2.116% 5.601% $0.0039 $0.0192
Columbia Mainline* 9.20% CGT FTS1 to TCO to RGC 2.988% 2.116% 5.041% $0.0192 $0.0229
Midwester** 13.70% MGT to TGP Z1 to ETN to RGC 0.500% 0.500% 2.220% 3.195% $0.0031 $0.0594
5.0939% Fuel
Commodity Total
pipeline 3 Commodity
---------- ---------
$0.0799
$0.0702
$0.1124
$0.0229 $0.0460
$0.0421
$0.0108 $0.0733
$0.06529 Commodity
*(GD - Monthly Contract Index)*
**Midwestern Index = IFERC Chicago Winter Index Basket - Variable Charges
------------------------------------------------------------------------------
*Summer baseload deliveries to the citygate will be priced according to the following rates:
Summer Fuel Summer Fuel Summer Fuel Cumulative Commodity Commodity
IFERC Location Weighting pipeline 1 pipeline 2 pipeline 3 Summer Fuel pipeline 1 pipeline 2
-------------- ---------- ---------- ---------- ---------- ----------- ---------- -----------
Tennessee Gas-Texas (ZO) 7.40% TGP ZO to ETN to RGC 2.440% 1.580% 3.981% $0.0691 $0.0108
Tennessee Gas-La.(Z1) 17.80% TGP Z1 to ETN to RGC 1.700% 1.580% 3.253% $0.0594 $0.0108
Tennessee Gas-La.(Z1) 13.70% TGP Z1 to TCO to RGC 4.290% 2.116% 6.315% $0.0895 $0.0229
Columbia Gulf-La. 38.20% CGT FTS2 to FTS1 to TCO to RGC 0.590% 2.988% 2.116% 5.601% $0.0039 $0.0192
Columbia Mainline* 9.20% CGT FTS1 to TCO to RGC 2.988% 2.116% 5.041% $0.0192 $0.0229
Midwester** 13.70% MGT to TGP Z1 to ETN to RGC 0.500% 0.500% 2.220% 3.195% $0.0031 $0.0594
4.7800% Fuel
Commodity Total
pipeline 3 Commodity
---------- ---------
$0.0799
$0.0702
$0.1124
$0.0229 $0.0460
$0.0421
$0.0108 $0.0733
$0.06529 Commodity
Summer Index Basket - Variable Charges
-----------------------------------------------------------------------------
* The commodity price of storage injections will be based upon the following
rates:
1) Virginia Gas Storage
Fuel Fuel Fuel Cumulative Commodity Commodity
IFERC Location Weighting pipeline 1 pipeline 2 pipeline 3 Summer Fuel pipeline 1 pipeline 2
-------------- ---------- ---------- ---------- ---------- ------------ ---------- ----------
Tennessee Gas-Texas (ZO) 19.00% TGP ZO to ETN to Va. Gas 2.440% 1.580% 3.981% $0.0691 $0.0108
Tennessee Gas-La. (Z1) 45.80% TGP Z1 to ETN to Va. Gas 1.700% 1.580% 3.253% $0.0594 $0.0108
Midwester** 35.20% MGT to TGP Z1 to ETN to Va .Gas 0.500% 0.500% 1.580% 2.562% $0.0031 $0.0594
3.1481% Fuel
Commodity Total
pipeline 3 Commodity
---------- ---------
$0.0799
$0.0702
$0.0108 $0.0733
$0.07313 Commodity
Variable Charges to Storage
(Variable charges into Storage will be based on actual Storage
Service injected to)
2)Tennessee Storage
Summer Fuel Summer Fuel Cumulative Commodity Commodity Total
IFERC Location Weighting pipeline 1 pipeline 1 Summer Fuel pipeline 1 pipeline 2 Commodity
-------------- ---------- ---------- ---------- ----------- ---------- ----------- ---------
Tennessee Gas-Texas (ZO 19.00% TGP ZO to TGP FS 2.440% 2.440% $0.0691 $0.0691
Tennessee Gas-La. (Z1) 45.80% TGP Z1 to TGP FS 1.700% 1.700% $0.0594 $0.0594
Midwester** 35.20% MGT to TGP Z1 to TGP FS 0.500% 0.500% 0.997% $0.0031 $0.0594 $0.0625
Variable Charges to Storage 1.5933% Fuel $0.06233 Commodity
(Variable charges into Storage will be based on actual Storage Service injected to)
3) Columbia Gas Storage
Fuel Fuel Fuel Cumulative Commodity
IFERC Location Weighting pipeline 1 pipeline 2 pipeline 3 Summer Fuel pipeline 1
-------------- ---------- ---------- ---------- ---------- ------------ ----------
Columbia Gulf-La. 62.60% CGT FTS2 to FTS1 to TCO to TCO FSS 0.590% 2.988% 2.116% 5.601% $0.0039
Columbia Mainline* 15.40% CGT FTS1 to TCO to TCO FSS 2.988% 2.116% 5.041% $0.0192
Tennessee Gas-La. (Z1) 22.00% TGP Z1 to TCO to TCO FSS 4.290% 2.116% 6.315% $0.0895
5.6719% Fuel
Commodity Commodity Total
pipeline 2 pipeline 3 Commodity
----------- ---------- ---------
$0.0192 $0.0229 $0.0460
$0.0229 $0.0412
$0.0229 $0.1124
$0.05987 Commodity
Variable Charges to Storage
(Variable charges into Storage will be based on actual Storage
Service injected to)
EXHIBIT D
EXHIBIT D TO TRANSACTION CONFIRMATION
Roanoke - Capacity Detail
-------------------------
Pipeline Type Contract # Recpt. No Recpt. Name Receipt Vol Delivery No Delivery Name Delivery Volume
-------- ----- ---------- --------- ----------- ----------- ----------- ------------- ---------------
Tennessee FT 26446 011353 ▇▇▇▇▇▇ I 322 5000
020001 Broad Run TCO 5000
Tennessee FT 24376 012447 MGT 5293
020289 ETN 5293
Tennessee FT 5487 010031 Union-E Tx Deh 708
010706 Mobil E Cam 64 1624
011119 Chevron-S Mar 1660
011970 Amoco El 224a 1835
012197 Tejas- King Ran 2000
070017 Bear Ck 310
070020 Portland 1189
020289 ETN
Midwestern FT 24377 017025 Nor. Border 5293
027086 TGP 5293
East Tennessee FT 4267 753101 TGP 9226
759009 Va Gas Sto 857
759004 Clearbrook 5974
759105 CS 55
759110 ▇▇▇▇▇▇▇▇ 129
759003 Salem 3925
East Tennessee FT 24724 753101 TGP 5150
759004 Clearbrook 5150
Columbia Gulf FTS-2 40432 4041 Dominion 750
4046 PG & E -Lake 3998
433 CGT -▇▇▇▇ A 1750
512 Badger- Lak 750
646 Apache-Lak 750
701 Santa Fe -L 3000
706 Santa Fe -L 3000
2700010 CGT-Rayne 13998
Columbia Gulf FTS-1 38026 2700010 CGT-Rayne 17349
801 Tco-▇▇▇▇▇ 17349
Columbia FTS 38098 A02 Flat Top 8550
B9 Broad Run 5000
801 Tco-▇▇▇▇▇ 9959
62 RGC 23509
Columbia FTS 57449 B4 Kenova 3425
62 RGC 3425
Columbia NTS 57449 801 Tco-▇▇▇▇▇ 7000
62 RGC 7000
Columbia SST 38085 STOW Storage With 19475
62 RGC 19475
Columbia SST 50420 STOW Storage With 5889
62 RGC 5889
EXHIBIT E
EXHIBIT E TO MASTER AGREEMENT
Supply Contracts
Roanoke, Natural Gas
Supplier Receipt Term Max Volume Min Volume Commodity Demand
Pipeline Point Start End Dth/day Dth/day Index Price Chg Optionality
-------- ----- ----- --- ------- ------- ----- ------ --- -----------
Engage Cgt On Pool 11/1/97 10/31/00 3,000 3,000 IFGMR FOM, CGT LA 1+.01 NO
Engage Cgt On Pool 12/1/96 11/30/99 1,500 1,500 IFGMR FOM, CGT LA 1+.0125 NO
Coral Cgt orTg On or 500 Pool 11/1/98 10/31/01 1,500 1,500 IFGMR FOM, CGT LA or TGP Z1 1+.0075 YES
Cabot Tco ▇▇▇▇▇▇▇/▇▇▇▇▇▇ 12/1/97 11/30/00 4,400 0 IFGMR FOM, TCO Appl 1+.035 YES
CES Tco A02 12/1/98 11/30/01 4,400 0 IFGMR FOM, TCO Appl Flat 0.015 YES
Engage Tgp 500 Pool 12/1/97 11/30/00 2,000 2,000 IFGMR FOM, TGP Z1 1+.01
16,800 8,000
Notification Contact Phone Notes
------------ ------- ----- -----
NA baseload
NA baseload
4 days prior to NYMEX close ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇ baseload
6 bus. days prior to month end ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇ must take CGT thru 3/31/00, then our option
5 bus. days prior to month end ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇ monthly swing
NA monthly swing
baseload
baseload